2012 Supreme(Del) 1959

High Court of Delhi
THE HONOURABLE MR. JUSTICE PRADEEP NANDRAJOG & THE HONOURABLE MR. JUSTICE SIDDHARTH MRIDUL
Kapil Wadhwa & Others
Versus
Samsung Electronics Co. Ltd. & Another
FAO. (OS) 93 OF 2012
Decided on : 03-10-2012

The Trade Marks Act 1999 embodies the National Exhaustion Principle.

Headnote:

Whether the Trade Marks Act 1999 embodies the International Exhaustion Principle or the National Exhaustion Principle when the registered proprietor of a Trade Mark places the goods in the market under the registered trade mark.

Fact of the Case:

Samsung Electronics Company Ltd. and Samsung India Electronics Pvt. Ltd. are companies incorporated as per laws of Korea and India respectively; the latter being a subsidiary of the former. They are a part of ‘Samsung Group of Companies’ having 14 listed companies and 285 worldwide operations. The respondents manufacture and trade in electronic goods such as colour televisions, home appliances, washing machines, microwaves, air-conditioners, computers, printers & cartridges etc. The business is done under the brandname/ corporate-name using the Trade Mark ‘SAMSUNG/Samsung’. In India, the first respondent has licensed the use of the Trade Mark ‘SAMSUNG/Samsung’ to the second respondent as per Trade Mark Agreement dated July 08, 2003 which has been filed for registration in the Trade Mark’s Registry. The respondents are the registered proprietor/user of the Trade Mark as under:- Sl.No TRADE MARK CLASS REGISTRATION NO. 1. Samsung 7 591127 2. SAMSUNG 7 1055554 3. Samsung 9 591128 4. SAMSUNG 9 1055555 5. Samsung 11 591126 6. SAMSUNG 11 1055556 7. SAMSUNG 7,9,11 1240403 The grievance of the respondents is that the appellants are purchasing, from the foreign market, printers manufactured and sold by respondent No.1 under the Trade Mark ‘SAMSUNG/Samsung’ and after importing the same into India are selling the product in the Indian market under the Trade Mark ‘SAMSUNG/Samsung’ and are thereby infringing the registered Trade Mark of the respondents in India. Respondents allege that the appellants operate their website by meta-tagging the same to the website of the respondents. Respondents allege that not only this constitutes an infringement of their registered Trade Mark in India, but also allege injury caused to the consumer in India who may be paying less for the printers in question, but are misled to believe that they are purchasing an authorized Samsung product in India sold with the permission of the respondents, in ignorance of the fact that the printers imported and sold by the respondents are materially different to the ones which are sold in the Indian market by the respondents.

Finding of the Court:

The court held that the Trade Marks Act 1999 embodies the National Exhaustion Principle.

Issues: 1. Whether the Trade Marks Act 1999 embodies the International Exhaustion Principle or the National Exhaustion Principle when the registered proprietor of a Trade Mark places the goods in the market under the registered trade mark. 2. The Trade Marks Act 1999 embodies the National Exhaustion Principle.

Ratio Decidendi: The court interpreted various provisions of the Trade Marks Act 1999, including Sections 29 and 30, and concluded that the Act adopts the National Exhaustion Principle. The court reasoned that the language of the Act, its legislative history, and the international context all support this conclusion. The court also considered the arguments of the parties and found that the National Exhaustion Principle is more consistent with the objectives of the Act and the interests of consumers.

Final Decision: The appeal is partially allowed. Impugned judgment and order dated February 17, 2012 is set aside insofar the appellants have been restrained from importing printers, ink cartridges/toners bearing the trade mark Samsung/SAMSUNG and selling the same in India. The appellants shall continue to remain injuncted from meta-tagging their website to that of the respondents. But, while effecting sale of Samsung/SAMSUNG printers and ink cartridges/toners, the respondents shall prominently display in their showrooms that the product sold by them have been imported from abroad and that the respondents do not give any warranty qua the goods nor provide any after sales service and that the warranty and after sales service is provided by the appellants personally.