India follows International Exhaustion - Delhi HC

In a most recent and landmark judgment on the issue of "exhaustion principle" in Indian trademark law, a Division Bench of the Delhi High Court has held that Indian trademark law follows an “international exhaustion” regime. 

The Bench comprising of Justices Pradeep Nandrajog and Siddharth Mridul partially allowed the appeal filed by Kapil Wadhwa and others (Appellants) against the judgment of Single Judge Justice Manmohan Singh in Samsung Electronics Co. Ltd. & Anr. v. Kapil Wadhwa & Ors., wherein the Single Judge had held the Appellants guilty of trademark infringement and had ruled that trademark law prohibits the sale of imported genuine products without the authorization of the registered proprietor in India.

 

The appeal was partially allowed by the Division Bench, thereby setting aside the judgment dated February 17, 2012 insofar as the Appellants had been restrained from importing printers, ink cartridges/toners bearing the trade mark Samsung/SAMSUNG and selling the same in India. However, the Appellants have still been injuncted from meta-tagging their website to that of Samsung. 

 

Way back in the single bench judgment of this case, Samsung Electronics Co. and its Indian subsidiary Samsung India had initially filed a suit claiming that the Appellants were selling genuine and unaltered Samsung printers imported directly from foreign markets into India without due authorization.  The Single Judge had held that the Appellants were guilty of trademark violation. It was against this judgment, the Appellants had filed an appeal.

 

Samsung was reprsented by Pravin Anand of Anand & Anand while the Kapil Wadhwa and others were represented Saikrishna Rajagopal on instructions from Shwetasree Majumdar of Fidus Law Chambers.

 

The Court observed that the single judge adopted an “erroneous approach” to conclude that unless goods are imported into India by the consent of the registered proprietor of a trade mark “the act of importation is not permitted” as per sub Section 3 of Section 30 (of the Trademarks Act), which provision provides for “acquisition by consent for the purposes of import”. In the appeal, the Court recognized the the principle of international exhaustion under the Trademarks Act, 1999 and observed that the same was clear from the fact that the term ‘in any geographical area’, in the Statement of Objects and Reasons to the Trade Mark Bill 1999 “clearly envisaged that the legislative intent was to recognize the principle of international exhaustion of rights to control further sale of goods once they were put on the market by the registered proprietor of the trade mark”. 

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Copy of the Judgment