Petitioner Memorial revolving around Intellectual property rights issues, Study Guides, Projects, Research of Mock Trial and Moot Court

Download Petitioner Memorial revolving around Intellectual property rights issues and more Study Guides, Projects, Research Mock Trial and Moot Court in PDF only on Docsity! 1 Team Code AMITY UNIVERSITY, DUBAI- INTERNAL MOOT 2024 BEFORE THE HON’BLE HIGH COURT OF KARNATAKA MEMORIAL ON BEHALF OF THE PETITIONER CHERISH ETERNAL (PETITIONER) VS. GETNOW & FASTGRAM (RESPONDENT 2 TABLE OF CONTENTS S.NO Topic Page Number 1. Index of Authorities 3-4 2. List of Abbreviations 5 3. Statement of Jurisdiction 6 4. Statement of Facts 7 5. Statement of Issues 8 6. Summary of Pleadings 9-10 7. Pleadings 11-25 8. Prayer 26 5 LIST OF ABBREVIATIONS S.NO Abbreviations Full Form 1. Hon’ble Honourable 2. CPC Cost Per Click 3. MLM Multi-level Marketing 4. IT Information Technology 5. Ad Advertisement 6 STATEMENT OF JURISDICTION The Hon’ble High Court of Karnataka has the jurisdiction to hear the instant matter under Section 134 of Trademark Act 1999 Section 134 of Trademark Act, 1999- Suit for infringement 1) No suit-- (a) for the infringement of a registered trade mark; or (b) relating to any right in a registered trade mark; or (c) for passing off arising out of the use by the defendant of any trade mark which is identical with or deceptively similar to the plaintiff's trade mark, whether registered or unregistered, shall be instituted in any court inferior to a District Court having jurisdiction to try the suit. (2) For the purpose of clauses (a) and (b) of sub-section (1), a "District Court having jurisdiction" shall, notwithstanding anything contained in the Code of Civil Procedure, 1908 (5 of 1908) or any other law for the time being in force, include a District Court within the local limits of whose jurisdiction, at the time of the institution of the suit or other proceeding, the person instituting the suit or proceeding, or, where there are more than one such persons any of them, actually and voluntarily resides or carries on business or personally works for gain. For the purposes of sub-section (2), "person" includes the registered proprietor and the registered user. Further Section 134 of the Trademarks Act, 1999 refines the jurisdictional framework as laid down in Section 20 of the Code of Civil Procedure, 1908. It allows the plaintiff to file a trademark infringement suit in the District Court or the High Court within whose local jurisdiction the defendant resides or carries on business, or where the cause of action arises, wholly or in part. This provision grants flexibility to the plaintiff in selecting the forum that best suits their interests. 7 STATEMENT OF FACTS 1. CherishEternal, an Indian company, promotes a healthy lifestyle with plant-based products like protein powders, collagen shots, and health drinks. 2. They offer nutrition advice, exercise programs, and one-on-one counseling through their website and mobile app. 3. Direct selling is their distribution model, ensuring quality and providing employment opportunities, with a focus on accountability and customer satisfaction. 4. GetNow, a company in Hyderabad, sold CherishEternal products on Fastgram without authorization, offering them at a heavily discounted price. 5. CherishEternal issued Cease and Desist Legal Notice to GetNow and Fastgram, alleging product tampering, trademark infringement, and violation of Direct Selling Guidelines. 6. Fastgram claimed intermediary status, stating it could not monitor transactions and required a court order to take an action. 7. CherishEternal filed a trademark infringement suit against GetNow and Fastgram in the High Court of Karnataka, seeking reliefs and an ex parte ad interim injunction. 10 ISSUE IV: WHETHER FASTGRAM IS WITHIN THE AMBIT OF “INTERMEDIARIES” AND IS ENTITILED TO PROTECTION UNDER THE “SAFE HARBOUR” PROVISIONS ENUMERATED UNDER THE INFORMATION TECHNOLOGY ACT, 2000 AND THE INTERMEDIARY GUIDELINES OF 2011? It is most humbly submitted before this Hon’ble High Court that “Fastgram” does not fall under the ambit of “Intermediaries” as prescribed under Section 2(w) of the IT Act, 2000 and therefore does not become eligible for “safe harbor” for intermediaries under the IT Act, 2000 and the Intermediary Guidelines of 2011. 11 PLEADINGS 1. WHETHER THE SUIT IS MAINTAINABLE BEFORE THE HIGH COURT OF KARNATAKA? It is humbly submitted before this Hon'ble High Court that the suit is maintainable before the High Court of Karnataka seeking appropriate reliefs, along-with an application seeking an ex parte interim injunction against GetNow, and also making Fastgram as a party to the infringement suit. 1.1 That the suit is maintainable before this Court 1. (i) Section 29 of The Trade Marks Act, 1999 states that Basic Infringement: If someone uses a mark that is the same or very similar to a registered trademark for selling goods or services that the trademark is registered for, and it's likely to confuse people into thinking it's the registered trademark, that's infringement. 1 2. Causing Confusion: Using a mark that's either identical or similar to a registered trademark can be infringement if it confuses people because: • The goods or services are similar to those of the registered trademark; • The goods or services are the same or similar; or • The goods or services are identical. If the goods or services are identical, the court will assume people are likely to be confused. 3. Infringement by Non-similar Goods/Services: If a mark is the same or similar to a registered trademark and is used for different goods or services but the trademark has a reputation in India, and the use damages or takes unfair advantage of the trademark's reputation, that's infringement. 4. Infringement by Advertising: Advertising that uses a registered trademark can be infringement if it: • Takes unfair advantage or is against honest commercial practices; • Harms the uniqueness of the trademark; or 1 Trade Marks Act, 1999, §, 29, No. 47, Acts of Parliament, 1999 (India) 12 • Damages the trademark's reputation. 5. In the landmark judgment Clinique Laboratories LLC and Anr vs Gufic Limited and Anr, the Court held that a suit for infringement by a registered trade mark owner/proprietor is certainly maintainable against another registered trade mark owner/proprietor. It was further held that Section 124(5) of the Act also allows the grant of an interim injunction in such suits for infringement. 2 6. As per Section 29 (4) of the Act, infringement suit can be filed even when the goods/services with respect to which identical/similar trade marks are used are entirely different, if the trade mark for which the suit is filed has acquired reputation and goodwill in India. 7. In the case of CEAT Tyres of India Ltd. vs. Jai Industrial Services and Anr, the Court observed that “The trademark 'CEAT' has achieved lot of reputation and has become very common and the plaintiff has been marketing goods under the said trademark running into substantial amounts and had incurred lot of expenditure on having wide publicity. So even though for the sake of arguments it is to be assumed that the goods manufactured by the defendants have no trade connection with the good marketed by the plaintiffs, still the common customer who is purchasing the goods is likely to be deceived with the new products of the defendants in all probabilities considering the same as manufactured by the plaintiff because they are being marketed under the same trade mark”.3 8. “The absolute identical of the two competing marks or their close resemblance is only one of the tests for determining the question of likelihood of deception or confusion. It was emphasized that the trade connection between the different goods is another such test. Ex hypothesis, this latter test applies only when the' goods are different and these tests are independent tests. The Supreme Court observed that there is no reason why the test of trade connection between different goods should not apply. The Court assumed that liquid glucose is used in the manufacture of biscuits with glucose and held that there is a trade connection between the glucose and biscuits and a likelihood of confusion or deception arising there from would appear from the fact stated by the appellant that it received from a tradesman an inquiry for biscuits manufactured by it under its 2 Clinique Laboratories LLC and Anr vs Gufic Limited and Anr, 217/2009 in CS (OS) 3CEAT Tyres of India Ltd. vs. Jai Industrial Services and Anr, 1991(1) ARBLR33(DELHI), 45(1991) DLT405 15 2. WHETHER THE DIRECT SELLING GUIDELINES, 2016 ARE VALID AND BINDING ON GETNOW AND IF SO, TO WHAT EXTENT? It is most humbly submitted before this Hon’ble High Court that the Direct Selling Guidelines 2016 is valid but NOT applicable completely on GetNow for selling the products of Cherish Eternals as GetNow is NOT a listed Direct Seller under the contract with CherishEternal. 2.1 That GetNow does not fall under the ambit of Direct Seller 16. As per Direct Selling Guidelines of 2016, “Direct Seller” means a person appointed or authorized, directly or indirectly, by a Direct Selling Entity through a legally enforceable written contract to undertake direct selling business on principal to principal basis”. 7The Direct Selling Guidelines 2016 are considered valid and binding on entities that engage in direct selling activities in India. They are issued as guiding principles for state governments to regulate the businesses of direct selling and multi-level marketing (MLM) and strengthen the existing regulatory mechanism on direct sellers and MLM, for preventing fraud and protecting the legitimate rights and interest of consumers. 17. The Direct Selling Guidelines 2016 define “Direct Selling as marketing, distribution, and sale of goods or providing of services as a part of a network of direct selling other than under a pyramid scheme”.8 Based on the information provided, GetNow is selling CherishEternal products on Fastgram without Cherish Eternal’s knowledge or authorization, and it is not listed as a direct seller of CherishEternal. This suggests that GetNow's activities do not align with the traditional direct selling model as outlined in the Direct Selling Guidelines 2016. 18. The DSG 2016 mandate that direct selling companies must submit an undertaking to the Department of Consumer Affairs, provide written contracts to participants, ensure no entry or 7 Krishi Bhawan, Advisory to State Governments/Union Territories: Model Framework for Guidelines on Direct Selling, CONSUMER AFFAIRS (Sept. 09, 2016), https://consumeraffairs.nic.in/sites/default/files/file- uploads/direct-selling/Direct%20Selling%20Guidelines%20Final%20_0.pdf 8 Krishi Bhawan, Advisory to State Governments/Union Territories: Model Framework for Guidelines on Direct Selling, CONSUMER AFFAIRS (Sept. 09, 2016), https://consumeraffairs.nic.in/sites/default/files/file- uploads/direct-selling/Direct%20Selling%20Guidelines%20Final%20_0.pdf 16 renewal fees, and prohibit pyramid schemes and money circulation schemes. It also emphasizes the importance of transparency, fair practices, and consumer protection. 19. Given these considerations, it appears that GetNow's activities do not fully comply with the Direct Selling Guidelines of 2016. Specifically, GetNow is not a listed direct seller under the contract by CherishEternal and it is selling products without the necessary compliance with the guidelines, such as obtaining an undertaking from the Department of Consumer Affairs and providing written contracts to participants. 20. Therefore, the Direct Selling Guidelines of 2016 are valid and binding to the extent that they apply to entities engaging in direct selling activities in India, but their applicability to GetNow is limited due to GetNow's unauthorized sale of CherishEternal products and lack of compliance with the guidelines. 3. WHETHER GETNOW’S SALE OF COUNTERFEIT PRODUCTS BEARING THE MARK ‘CHERISHETERNAL’ USING FASTGRAM AMOUNTS TO AN ACT OF INFRINGEMENT UNDER THE TRADE MARKS ACT, 1999? It is humbly submitted before the Hon'ble Court that the use of Petitioner's mark by the Defendant clearly constitutes 'use of a mark' under Section 2(2)(c)9 of the Trade mark Act, 1999. 21. The Hon'ble Supreme Court in the case of S.M. Dyechem Ltd. v. Cadbury (India) Ltd. 10 held that "a plaintiff in a suit on basis of infringement has to provide not only that his trademark is infringed by a person who is not a registered proprietor of the mark or a registered user thereof but that the said person is using a mark which is identical with or deceptively similar to the trademark of the plaintiff, in such a manner as to render the use of the mark likely to be mistaken as the registered trademark." 9 The Trade Marks Act, 1999, § 2(2)(c), No. 47, Acts of Parliament, 1999 (India) 10 S.M. Dyechem Ltd. v. Cadbury (India) Ltd. AIR 2000 SUPREME COURT 2114 17 3.1 That a Registered Proprietor has exclusive rights to use the Trademark 22. Section 28(1)11 of the Trademarks Act, 1999 gives the registered proprietor exclusive right to use the trademark in relation to the goods in respect to which trademark is registered. In the case of Ramdev Food Products v. Arvindbhai Rambhai Patel,12 the Hon'ble Supreme Court observed that Section 28 confers exclusive right to the proprietor who has a right to obtain relief in respect of infringement of trademark as provided under the Act. Such right is, thus, absolute.13 In the present case it is evident that the CherishEternal being aware of their Intellectual Property Rights, have acquired the mark under the appropriate classes under the Act and is the registered proprietor of the word "CherishEternal". 23. Hence, it is submitted that CherishEternal has exclusive rights to use the trademark registered by them. 3.2 That the exclusive right to use the Trademark has been infringed It is humbly submitted that a trademark is said to be infringed, when a person who is not the registered proprietor uses a mark which is identical to the trademark in relation to the goods in respect of which the trademark is registered as mentioned in Section 29(1)14 of the Act. 24. GetNow’s sale of CherishEternal products, through unauthorised channels such as social networking websites like Fastgram, is without consent, and it does not guarantee the authenticity and quality of such products. The unauthorized affixiation of CherishEternal’s trademark to goods and its packaging, the sale and the advertisement of the products by GetNow on Fastgram, clearly amounts to infringement as enshrined under Section 29(1) and 29(6)15. 25. Further, a registered trademark is infringed when an unauthorized person uses a registered mark and that use is likely to cause confusion on the part of the public due to its identity with the 11 The Trade Marks Act, 1999, § 28(1), No. 47, Acts of Parliament, 1999 (India) 12 Ramdev Food Products Pvt. Ltd. v. Arvindbhai Rambhai Patel, AIR 2006 SUPREME COURT 3304 13 S. Syed Mohideen v. P. Sulochana Bai, (2016) 2 S.C.C. 683 14 The Trade Marks Act, 1999, § 29(1), No. 47, Acts of Parliament, 1999 (India) 15 The Trade Marks Act, 1999, § 29(6), No. 47, Acts of Parliament, 1999 (India) 20 34. The Doctrine of Exhaustion implies that once a valid transaction of sale takes place then the owner of the intellectual property in question cannot control or prevent the further sale of the goods bearing the said intellectual property. 35. However, the Doctrine of Exhaustion cannot give legitimacy to tampering and mutilation of the products. Section 30(3) would not come to the aid of GetNow when there are changes in warranties, refund/return policies, changes in packaging, removal of codes of the products, and other conduct which has caused damage to the reputation of CherishEternal. 36. Section 30(4) states that Section 30(3) shall not apply where there exist legitimate reasons for the proprietor to oppose further dealings in the goods, where the condition of the goods, has been changed or impaired after they have been put on the market. The same was enunciated in Kapil v. Samsung23 holding that the registered proprietor of a trademark would have the right to oppose further dealing, if physical condition of goods is changed as it would no longer be the same goods. 37. GetNow has been selling products with broken safety seals or no safety seal at all, outside the authorized distribution network which triggers Section 30(4), thereby making exhaustion not a defence. 38. Further, reliant on Foreign Court rulings24, the Court in the case of Amazon Seller Services Pvt Ltd v. Modicare Ltd & Ors25, with respect to physical condition being changed or impaired, even in the absence of a statutory provision, the registered proprietor of a trademark would have the right to oppose further dealing in those goods as they would be the same goods improperly so, or to put it differently, if a physical condition of goods is changed, it would no longer be the same goods. Section 30(4) embraces all legitimate reasons to oppose further dealings, which includes physical and non-physical changes made by the infringing party. Changes in guarantee and post- sale service was also held to be material difference entitling the proprietor to oppose such sale. 39. CherishEternal maintains an effective system for addressing grievances where within 30 days of purchase, consumers may choose to return the product. However, the sales conducted on 23 Kapil Wadhwa & Ors. v. Samsung Electronics Co. Ltd., FAO(OS) 93/2012 24 Osawa & Co v. B& H Photo, 589 F, Supp 1163 (1984) 25 Amazon Seller Services Pvt Ltd v. Modicare Ltd & Ors, AIRONLINE 2020 DEL 169 21 Fastgram restrains the consumer to claim the same leading to consumer confusion. Therefore, GetNow’s unlicensed sale of products constitutes infringement, entitling CherishEternal to oppose such a sale. A complete change in the refund, return, guarantee and warranty policy of the Plaintiff’s products, clearly results in impairment of the products themselves, as the customer’s trust in the product is completely eroded.26 40. Therefore, it can be concluded that CherishEternal can oppose, the action of counterfeiting, the resale of its products by parties outside its network of selective distribution, though the same parties purchased the articles from licensed or authorized dealers. Infact, an unauthorized importation may well turn an otherwise ‘genuine’ product into a ‘counterfeit’27. Due to tampering/removal of safety seals, even if the products were genuine, the Defendants do not qualify to claim the defence of Section 30 of the Trade Marks Act, 1999.28 3.4 Harmonious Construction of Section 28 & 29 with Section 30 41. It is submitted that trademark rights are property rights and have to be safeguarded as any other legal right of a citizen. The object of the whole Act is to provide for registration and better protection of trademarks for goods and services and for the prevention of the use of fraudulent marks.29 It aims to protect the interest of owners of trade marks as well as interests of public. 42. In A.D. Padmasingh Issac v. Sudali Aachi Provisions,30 the Court held that in view of the Principle of Harmonious Construction, Courts must read Sections 28 to 30 of the Trade Marks Act, 1999, in connection with each other to understand the intending purpose and object. Sections 28 and 29 of the Act should be read conjunctively along with Section 30 of the Act, as Section 30 read in isolation would render the aforesaid Sections 28 and 29 purposeless. 43. The very object of getting ones trademark registered is to have exclusivity and if that is taken away by any dubious interpretation, it would render the purpose of the entire statute meaningless. 26 Amazon Seller Services Pvt Ltd v. Modicare Ltd & Ors, AIRONLINE 2020 DEL 169 27 Id. 28 Id. 29 The Trade Marks Act, 1999, Preamble, No. 47, Acts of Parliament, 1999 (India) 30 A.D. Padmasingh Issac v. Sudali Aachi Provisions, 2022 LawSuit(Mad) 2540 22 44. The mere fact that the customers are knowledgeable does not rule out the element of confusion when counterfeit and spurious products are present on the social media. There is no way for the consumer to be aware if the goods being sold to it are genuine or not.31 Proviso Section 30(4) has been inserted to eradicate the mischief which GetNow has been committing. 45. Further, the well-established maxim quandoa liquid prohibetur, prohibetur et omne per quod devcintur ad illud32which means, “When anything is prohibited, everything by which it is reached is prohibited also”. Therefore, the activities of GetNow to trade upon the reputation and goodwill of the Plaintiff should not be acknowledged by this Court. This Hon’ble Court has an incumbent duty to safeguard the vested rights of the Petitioner by holding GetNow liable for infringement of their registered mark. 46. Therefore it can be concluded that only when Section 28 and 29 of the Act is read along with Section 30, the purpose of the Trade Marks Act, 1999 is achieved. 3.5 Failure of Fastgram to take-action has led to further infringment 47. It is humbly submitted that it has been established in the case of MySpace Inc. v. Super Cassettes Industries Ltd.33 that it is the duty of the intermediary to ensure that it does not host any infringed intellectual property, when it receives knowledge about such infringement. 48. In the present case, it appears that Fastgram has regarded themselves as an intermediary in its reply notice dated 12.1.2021. If so, it was the duty of Fastgram to recity such unlawful activity, when it receives a knowledge about such infringement. Fastgram received notice of such infringement on 2.1.2021 but chose not to take any action and refused to restrain GetNow from selling the impugned products immediately, allowing such infringement to continue. Wilful blindness to an illegality has to be equated to lack of due diligence.34 31 Amazon Seller Services Pvt Ltd v. Modicare Ltd & Ors, AIRONLINE 2020 DEL 169 32 Swantraj & Ors. v. State of Maharashtra, AIR 1974 SC 517 33 MySpace Inc. v. Super Cassettes Industries Ltd., (2017) 236 DLT 478 (DB) 34 Amazon Seller Services Pvt Ltd v. Modicare Ltd & Ors, AIRONLINE 2020 DEL 169 25 immediately take down all infringing listings which were connected to Puma’s registered trademarks. 58. In another case of Google LLC vs. DRS Logistics (P) Ltd.,39 the Court held that e-commerce platforms must diligently protect intellectual property rights of others and they cannot claim ‘safe harbor’ under Section 79 of the IT Act, 2000 and the Intermediary Guidelines of 2011, if the platforms are used to abet counterfeiting. 59. Hence, Fastgram cannot avail the provisions for “safe harbor” because it is not an intermediary and just does not advertise the products of a business but also actively controls the content sharing and display of advertisements on their platform which also gives them a monetary benefit. 39 Google LLC vs. DRS Logistics (P) Ltd, FAO(OS)(COMM) 2/2022 26 PRAYER WHEREFORE in light of issues raised, arguments advanced and authorities cited, it is most humbly prayed before this Hon’ble High Court that it may be pleased to declare and adjudge: - 1. The Petition is maintainable before the Hon’ble High Court of Karnataka. 2. The Direct Selling Guidelines are valid but not completely binding on GetNow. 3. GetNow’s sale of counterfeit products veering the mark ‘CherishEternal’ using Fastgram amounts to an act of infringement. 4. Fastgram is not an ‘Intermediary’ and is not entitled to protection under the ‘Safe harbor’ Provisions. AND/OR Pass such further or other order/orders as this Hon’ble High Court may deem fit and proper in the circumstances of the given case and in the interest of Justice, Equity and Good Conscience and thus render justice. And for this act of kindness and justice the Petitioner shall be duty bound and forever pray.