VERIZON TM Row:Plaintiff’s Burden to Prove Award of Punitive Damage

November 15, 2017

Verizon Trademark Services LLC vs Mr. Parth Solanki & Anr.

Date of Judgment: November 09, 2017

In this recent case, the Delhi High Court was confronted with the issue of infringement of Verizon trademark by Defendant’s Varizon Trademark. The Court in the case issued permanent injunction restraining the Defendant from infringing or in any manner using the Plaintiff’s mark Verizon or a deceptively similar mark. However, the Court in the case did not award any punitive damages on the ground that the Plaintiff in the case had not led evidence to prove the damages.

Factual Matrix in the case: In the case, the Plaintiff approached the Court for declaration of the mark VERIZON as a well-known trademark and issue of permanent injunction restraining alleged infringement of trademark VERIZON by the Defendant. The Plaintiffs in the case alleged that the Defendant were using deceptively similar mark VARIZON which is phonetically similar to the registered trade mark of the plaintiffs with a view to ride upon their goodwill and reputation. The Court in 2016 granted an ex-parte ad interim injunction in favour of the Plaintiffs and restrained the Defendants from using the trademarks VARIZON, VARIZON TECH, the domain name www.varizontech.com, or any other trade mark which is identically or deceptively similar including the infringing trade mark VARIZON.

The said mark was adopted by the plaintiff No.1 in 2000 and since March 2000 the plaintiffs have used the said trademark extensively and continuously in an uninterrupted manner in India. Plaintiff a part of the VERIZON group of companies which has granted an exclusive licence by virtue of Clause 1 (A) of the Exclusive Licence Agreement to plaintiff No. 2 for the use of trademark VERIZON and the VERIZON logos in connection with various products and services, including communications, real estate, development and construction services. Plaintiff No.2 has further granted a sub-licence to plaintiff No.3. It is stated in the plaint that the plaintiffs have numerous trademark registrations in India as well globally. In India, the plaintiffs have secured registrations in, inter alia, class 42 of the Trade Marks Act, 1999 with respect to web-hosting and web-development related services.

Bench’s Verdict

Infringement of VERIZON Trademark- That due to extensive worldwide use over substantial period of time, the plaintiffs’ VERIZON trademarks have acquired reputation and goodwill in the marks globally as well as in India. That from the evidence on record, it is apparent that without any explicit permission or authorisation, the defendants have malafidely been using the plaintiffs trademark VERIZON.

That in view of the facts and circumstances, the allegation that the trademark VERIZON used by defendants amounts to infringement of plaintiffs trademark, is correct. The use of the impugned mark by the defendants is bound to cause incalculable losses, harm and injury to the plaintiffs and immense public harm.

Award of Punitive Damages- That since the plaintiffs have not led any evidence with respect to the quantum of damages suffered by the plaintiffs, the same cannot be granted in light of the Division Bench judgment of this Court in Hindustan Unilever Limited Vs. Reckitt Benckiser India Limited and Super Cassettes Industries Private Limited Vs. HRCN Cable Network, wherein it was held that…However, this Court is not satisfied on the evidence led in the present case that the compensation awarded is inadequate in the circumstances having regard to the three categories in Rookes v. Barnard, [1964] 1 All ER 367 and also the five principles in Cassell & Co. Ltd. v. Broome, 1972 AC 1027. In the event punitive damages are awarded in the present case, it would be an ad-hoc judge centric award of damages, which the Division Bench specifically prohibited in Hindustan Unilever Limited (supra)…..”

Rookes v. Barnard, [1964] 1 All ER 367– In this case, the House defined three categories of case in which such damages might be awarded:

  1. Oppressive, arbitrary or unconstitutional action any the servants of the government;
  2. Wrongful conduct by the defendant which has been calculated by him for himself which may well exceed the compensation payable to the claimant; and
  3. Any case where exemplary damages are authorised by the statute.

Cassell & Co. Ltd. v. Broome, 1972 AC 1027– In this case, the Court outlined five principles for awarding punitive damages as under:

  • That the burden of proof rests on the plaintiff to establish the facts necessary to bring the case within the categories;
  • That the mere fact that the case falls within the categories does not of itself entitle the jury to award damages purely exemplary in character
  • That the Jury shall be satisfied that the punitive or exemplary element is not sufficiently met within the figure which they have arrived at for the plaintiff’s solatium;
  • That, in assessing the total sum which the defendant should pay, the total figure awarded should be in substitution for and not in addition to the smaller figure which would have been treated as adequate solatium;
  • That the use of the word “fine” in connection with the punitive or exemplary element in damages, where it is appropriate. Damages remain a civil, not a criminal, remedy, even where an exemplary award is appropriate, and juries should not be encouraged to lose sight of the fact that in making such an award they are putting money into a plaintiff’s pocket, and not contributing to the rates, or to the revenues of central government

Declaration that VERIZON is a well-known trademark- In this context the Court observed that the mark VERIZON satisfied the criteria of a well-known trademark as prescribed under Section 2(1)(zg) of Trademark Act, 1999 read with Sections 11(6), (7) and (8) of Trademark Act. However, since the Defendants have not contested the proceedings, the Court refrained from passing order declaring the VERIZON trademarks and logos as well-known trademarks.

In the instant case, the Delhi High Court while deciding the infringement of VERIZON trademark has articulated two essential legal principles:

Firstly, that if the Plaintiff has not led any evidence to prove that damages has been caused due to infringement the Court would not be inclined to award punitive or exemplary damages in such case. Secondly, in a proceeding for declaring that Plaintiff’s trademark is well-known it is incumbent that the Defendant contests the same.

About the Author

Shilpi Sharan

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Shilpi Sharan is the Editor at Vakilno1.com – an Advocate with extensive knowledge in myriad fields of Law. She has a flair of writing and has legal publications in national and international law magazines to her credit. She focuses on legal research and aims at raising public awareness of laws in India.