Former Voltas Service Centre Must Pay ₹5 Lakh in Damages for Continued Use of Its Mark, Plus ₹5.07 Lakh in Costs: Delhi HC

In brief

The question

1. Whether Voltas was entitled to damages for Defendant Nos. 3 and 5’s unauthorised use of its mark and, if so, what amount was justified on the evidence.

The court held

The Court disposed of the application by awarding Voltas ₹5,00,000 in damages and ₹5,07,500 in legal costs against Defendant Nos. 3 and 5.

It also directed

It directed those Defendants, jointly and severally, to pay the total amount within four weeks, in addition to the permanent injunction already granted; the decree sheet was to be drawn up and the suit finally disposed of.

01Facts

Voltas Limited, registered proprietor of the mark “VOLTAS,” sued the Defendants for, among other things, unauthorised use of its mark on air-conditioners and related materials.

pp. 2–3 · ¶ 4–5

A Local Commissioner appointed by the Court found and seized air-conditioner units, packaging, remotes and a visiting card bearing the mark from the premises of Defendant Nos. 3 and 5.

pp. 2–3 · ¶ 4–5

A permanent injunction was subsequently decreed against those Defendants; the remaining claims were for damages and legal costs.

pp. 3–4 · ¶ 9–12

Voltas sought ₹7,84,656.25 in damages, exemplary damages and ₹8,80,282 in legal costs, relying on the Local Commissioner’s report, recovered invoices and other documents.

pp. 9–10 · ¶ 13.15 · p. 15 · ¶ 27

Defendant Nos. 3 and 5 denied selling counterfeit products and maintained that they dealt in scrapped, damaged or refurbished goods.

pp. 10–11 · ¶ 14.1–14.4

02Issues

i.1. Whether Voltas was entitled to damages for Defendant Nos. 3 and 5’s unauthorised use of its mark and, if so, what amount was justified on the evidence.

p. 12 · ¶ 15 · pp. 13–14 · ¶ 20–24

ii.2. Whether the evidence justified exemplary damages and the legal costs claimed by Voltas.

pp. 14–15 · ¶ 25–29

03Law Applied

The application was brought under Order XIII-A read with Section 151 of the Code of Civil Procedure, 1908.

p. 1 · ¶ 1

In assessing damages, the Court applied Rule 20 of the Intellectual Property Rights Division Rules, 2022, which identifies relevant considerations including the injured party’s lost profits, the infringing party’s profits, potential royalties or licence fees, the duration and intention underlying the infringement, and the infringer’s conduct in mitigating loss.

p. 14 · ¶ 22

The Court also considered Johnson & Johnson v. Pritamdas Arora T/A Medserve, relied on by Voltas for exemplary damages, but distinguished it on its facts.

p. 15 · ¶ 25–26

Provisions in the judgment · 1 · Linked ones open on LawLens

Code of Civil Procedure, 1908 Section 151

04Reasoning

The Local Commissioner’s findings and documents showed continued use of the VOLTAS mark in business activities after the Defendants’ former association with Voltas had ended, and the Defendants’ prior relationship supported the conclusion that the use was not innocent.

pp. 12–14 · ¶ 17–19, 21

However, the invoice values did not establish the Defendants’ profits: Voltas had not accounted for procurement, repair or refurbishment costs, nor quantified its own losses.

pp. 13–14 · ¶ 20, 23–24

The Court therefore rejected the claim for the full invoice amount but, considering the transactions, duration and deliberate nature of the unauthorised use, assessed damages at ₹5,00,000.

pp. 13–14 · ¶ 20, 23–24

Exemplary damages were not warranted because the evidence did not establish the sale of counterfeit products comparable to the non-sterile, contaminated or falsified-expiry medical products involved in Johnson & Johnson.

p. 15 · ¶ 25–26

The Court awarded ₹5,07,500 in costs, comprising court fees, Local Commissioner’s fees and a reasonable contribution to counsel’s fees.

p. 15 · ¶ 27–29