The court upheld a settlement agreement in a trademark infringement suit where the defendant acknowledged the plaintiff's prior rights and undertook to cease using a deceptively similar mark, leading to a decree in terms of the consent agreement.

O R D E R

1. This suit is instituted on behalf of the Plaintiff inter alia seeking a decree of permanent injunction restraining the Defendants and all others acting on their behalf from manufacturing, selling, offering for sale, advertising and/or directly or indirectly dealing in products bearing the impugned mark ZENTEQ GEL and/or any other mark deceptively similar to Plaintiff’s trademark ZENTEL amounting to infringement of trademark and/or passing off.

2. Mr. Vikas, Director of Defendant No. 1 Company is present in Court and submits that all inter se disputes with the Plaintiff have been amicably resolved and settlement terms have been drawn up. Copy of the consent terms has been handed over and is taken on record. The terms of settlement are as follows:-

“1. Defendant No. 1 acknowledges the Plaintiffs prior rights in the trade mark ZENTEL.

2. Defendant No. 1 agrees and undertake not to adopt or use or seek registration of any trade mark identical or deceptively similar to the Plaintiffs trade mark ZENTEL in the future. Further, Defendant No. 1 will not object to the registrability of or challenge the validity of the Plaintiffs trade mark ZENTEL.

3. Defendant No. 1 undertakes that the only manufactured stock of the product under the Impugned Mark ZENTEQ GEL in its possession is 5000 units bearing Batch No. AT55 with expiry date of 07/2027 and that they will not manufacture any new products under the Impugned Mark. Defendant No. 1 submits that it shall exhaust the existing stock of the impugned products within 6 months of the date of order of this Hon’ble Court and will destroy any unsold stock of ZENTEQ GEL along with any offline marketing or promotional materials after the exhaustion period and share proof of the same with the counsel for Plaintiff.

4. Defendant No. 1 will take all relevant steps to remove online listings for products under ZENTEQ GEL within 5 days from the date of order of this Hon’ble Court.

5. Defendant No. 1 shall apply for withdrawal of the trademark application under no. 6103390 for the mark ZENTEQ GEL in class 5 before the Trade Marks Registry within 5 days from the date of the order of this Hon’ble Court.

6. Defendant No. 1 will issue a letter to Defendant No. 2 apprising it of the settlement arrived inter se the parties and instructing it to permanently cease any further manufacture of pharmaceutical preparations under the Impugned Mark ZENTEQ GEL at the behest of Defendant No. 1.

7. In view of the above undertakings, the Plaintiff is agreeable to forego its claim of rendition of accounts, delivery up, damages and legal costs as prayed for in paragraph 42 (d), (e), (f) and (g) of the Plaint against Defendant No. 1. Further, the claim in paragraph 42 (c) of the Plaint stands satisfied in terms of paragraph 4 above.

8. The reliefs prayed on in paragraph 42 (a) and (b) may accordingly be granted in favour of the Plaintiff and against the Defendants No. 1 restraining the Defendant No. 1 from using the mark ZENTEQ GEL in any manner whatsoever and the suit be decreed in consonance with the other terms contained herein.

9. The Plaintiff further submits that subject to the Defendant No. 1 writing a letter in terms of paragraph 6 above, the Plaintiff is agreeable to forego the prayed reliefs against Defendant No. 2.

10. The parties agree that the terms of the settlement shall be binding on the Parties’ successors, assignees, franchisees, both current and future, legal representatives, servants, agents, and upon any business in which the Parties may be directly or indirectly involved.”

3. Learned counsel for the Plaintiff, on instructions, does not press the reliefs against Defendant No. 2, who is a contract manufacturer of Defendant No. 1.

4. Accordingly, with the consent of the parties, the suit is decreed in terms of paragraph 42(a) and (b) in favour of the Plaintiff and against Defendant No. 1. Relief sought in paragraph 42(c) stands satisfied and reliefs claimed in paragraph 42(d), (e)