India: A Trademark Falsified Or Falsely Applied Is A Cognizable Offence

Last Updated: 29 August 2012
Article by Abhai Pandey

The Trade Marks Act is probably the most important piece of legislation when it comes to combating counterfeit goods. It empowers the authorities to take action to prevent the infringement of both registered and unregistered trademarks and makes the falsification of a trademark and the application of a false description to goods or services a punishable offence. The legislation also empowers courts to grant interim injunction orders and restrain a defendant from disposing of its assets. In addition, it authorizes the police to enter premises in order to search for and seize goods involved in committing an offence. It also establishes prison terms and fines for infringers.

The falsification of trademarks related to food and drugs is a cognizable offence, which the police can investigate without permission from a court. Tata Tea Ltd (Respondent/complainant) lodged a complaint with the Assistant Commissioner of Police (Crime Branch) IPR Section, Delhi against unknown persons for falsely applying its mark TATA TEA registered and used since 1988. The police conducted a raid and pursuant to that a first information report (FIR) was registered in which the complainant alleged that the recovered tea pouches contains spurious tea and has the mark 'Tata Tea' falsely applied to them. The police concluded its investigation and charge sheet was filed, however the Additional Chief Metropolitan Magistrate (ACMM) held that the whole proceeding from investigation stood vitiated as police did not seek any permission from the court to conduct investigation. Rajesh Garg (Petitioner), as a result, was discharged of all allegations in the FIR.

The Respondent preferred a criminal revision petition challenging the order of the ACMM. The Additional Sessions Judge (ASJ) held the proceeding to be legal and valid while setting aside the ACMM's order on the ground that offences relating to trademark infringement when committed qua food products are cognizable offences and therefore can be initiated by the police by filing a charge sheet under S.179 Cr.P.C. after registering a FIR. As regards whether "Tea" is a food item, the definition of "food" under Prevention of Food Adulteration Act, 1954 (PFA Act) was relied upon to conclude that "Tea" is a food article.

The Petitioner sought quashing of the ASJ's order (Rajesh Garg Vs Tata Tea Ltd & Anr Crl. Rev. P. No. 688/2003 and Crl. M.A. 1221/2003; Delhi High Court) inter alia on the ground that "Tea" is not "Food" within the provisions, under Trademarks law, providing penalty for applying false trademarks and selling goods to which a false trademark is applied. The Court reasoned that "Tea" is a food item for purposes of the PFA Act and merely relying on an instance (S. Samuel, M.D., Harrisons Malayalam and Anr. v. UOI and Ors. 2003(9) SCALE 442) considering "Tea" not to be food for the purposes of the Essential Commodities Act, 1955, is no ground to conclude that "Tea" will not qualify as a food for the purposes of penalizing falsification of trademarks under Trademarks law.

The Court dismissed the petition finding no merit in it and categorically pointed out that this is a case of alleged packing of counterfeit tea, which may have an adverse effect on its consumers due to its poor quality, and also that such infringement of trademarks with respect to a food article makes this case fit to be interfered with the ACMM's order in the interest of public policy.

The complaint by Tata Tea Ltd was filed under Sections 76 and 78 of the Trade and Merchandise Marks Act, 1958. The provisions are penal in nature and provides penalty for applying false marks and selling goods to which a false trademark is applied respectively. The sections also have a proviso under which when the offence is in relation to "food" as defined in the PFA Act then there is an enhancement in punishment (an extra year of imprisonment). The current law, The Trade Marks Act 1999 (in force since 15th September 2003), has these provisions under sections 103 and 104 without the proviso of the earlier legislation however the penalty has been more concretized i.e. the actions are punishable with imprisonment for a term not less than six months which may extend to three years with fine not less than fifty thousand rupees which may extend to two lakh rupees (0.2 million).

Under the Trade Marks Act, police officers those with the rank of Deputy Superintendent of Police and above have the power to carry out search & seizure operations for infringing goods if they are satisfied that a falsification of a trademark has been, is being, or is likely to be committed. The police officer, before making any search and seizure, shall obtain the opinion of the Registrar of Trade Marks on facts involved in the offence relating to trademark and shall abide by the opinion. A petition filed under S. 482 Cr.P.C., (Anil Kumar Vs. State of Punjab & Anr. Crl. Misc. No. M-9229 of 2009; High Court of Punjab & Haryana), for quashing of a FIR registered against selling fake shoes and chappals (slippers) of established brands Adidas and Reebok at original price, was disposed by quashing the FIR by the Court in view of S. 115 of the Trade Marks Act, 1999 postulating on Cognizance of certain offences and the powers of police officer for search and seizure.

The Court held that –

As per sub clause (4) of S. 115 of the Act, no police officer below the rank of Deputy Superintendent of Police could search and seize goods regarding offence under Sections 103, 104 and 105. Secondly, as per the proviso, the said police officer will have to obtain opinion of the Registrar of Trade Marks on facts involved in the offence relating to Trade Marks Act 1999 and shall abide by the opinion before such search and seizure is carried out. In the present case, admittedly the Sub Inspector has done the search and seizure without taking any opinion from the Registrar. Hence, the proceedings are vitiated. The word "shall" in the proviso is indication of the fact that the provision is indeed mandatory. Moreover, the Officer not below the rank of Deputy Superintendent of Police could have only investigated the said offences.

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