Anti-Counterfeiting Practice at Khurana and Khurana (K&K)
Counterfeiting is a significant issue, where unauthorized reproductions of branded goods flood the market, undermining the value and reputation of legitimate brands. The imitation of packaging is often so precise that it becomes difficult to distinguish the essential features of the merchandise from those of genuine products. Counterfeiting, also referred to as the act of copying brands, is a phenomenon that affects every sector, however, some of the most counterfeited industries are fashion and cosmetics. Counterfeiters often copy not only the packaging but also the trademark directly on the clothing. Counterfeits are not limited to luxury products; even toothpaste, shampoo, washing powders, and dishwashing products are counterfeited on a commercial scale. Counterfeiting has increased because consumers buy such products to stay in trend by purchasing from big fashion houses without spending excessively. This is why many in the industry believe that counterfeiting is theft and that those who buy counterfeit products are responsible for fueling criminal activity.
The world of fashion is as competitive as any industry can get. When a design is stolen, the fashion house could lose an entire season because consumers might buy the counterfeited products, either because they are cheaper or due to confusion. Counterfeits result from a violation of intellectual property rights like trademarks or copyrights, with people all over the world buying counterfeit products or “fakes”. To some, the counterfeiting of luxury fashion does not seem like a big deal. They view it as harmless copying that allows people who cannot afford name brands the opportunity to have that status symbol. However, counterfeits are problematic because they can lead to countries not wanting to invest for fear of lacking protection for their products. Counterfeits have a major impact on brands since luxury brands gain their prestige from their reputation and the limited quantity that is available. Counterfeits pollute the supply with similar-looking goods that are of lower quality and not made with the same care.
Laws in India provide a wide array of remedies against counterfeiting under various statutes, though there is no specific law solely addressing counterfeiting. Instead, our legislators have provided statutory, civil, criminal, and administrative remedies through various statutes. Intellectual property (IP) laws play a critical role in combating counterfeiting by providing legal frameworks to protect trademarks, copyrights, and designs. Trademark law helps prevent the unauthorized use of brand names and logos, ensuring that consumers can distinguish genuine products from fakes. Trademark law also necessitates appropriate action against instances of passing off. Copyright law protects the artistic elements of fashion designs and offers remedies against plagiarism, while design law offers protection for new and original patterns and styles. Together, these IP laws empower brands to take legal action against counterfeiters, secure their creative assets, and maintain the integrity of their products in the marketplace. Effective enforcement of these laws not only safeguards the interests of fashion companies but also protects consumers from substandard and potentially harmful counterfeit goods. It is imperative to protect the intellectual property of fashion houses so they have the incentive to create amazing designs without worrying that their creativity and brand image will be exploited by counterfeiters.
Attorneys at Khurana & Khurana have developed significant experience in anti-counterfeiting, particularly in the FMCG, Pharmaceuticals, Apparel, Footwear, and Medical Devices sectors. They can assist in devising comprehensive strategies to curb counterfeit products by outlining all possible risks and assumptions and mapping them with the costs involved in each step, enabling clients to make judicious and objective decisions.
Attorneys at K&K have actively initiated criminal actions and obtained seizure orders from various Indian courts against individuals and businesses involved in manufacturing and distributing counterfeits. K&K is also highly proficient in Trade Mark Registrations and Customs enforcement. Our team has secured criminal convictions for many counterfeiters, made possible by our strong understanding of the procedures involved, experience in handling criminal actions, proficiency in filing suits in the right jurisdictions, and an established network to enforce orders with the assistance of local police authorities. We offer a wide range of anti-counterfeit services, including civil suits, criminal suits, and investigations into alleged counterfeit goods.
Criminal Enforcement of IP
Counterfeiting has only grown and become more proliferated with the advancing technology. This menace has deeply penetrated the markets worldwide, leading to availability of copies of items of high end brands, sold in small random street shops or on myriad websites, both lesser known and popular websites. As a criminal wrong, counterfeiting involves infringement of Intellectual Property Rights. Though these rights exist as private rights and are, at most times, enforceable by civil litigation, criminal sanctions can also be issued against their infringement. This is a direct result of the growing instances of counterfeit, passing off and piracy leading to economic damages in huge scores. Statutes such as Trademarks Act, the Copyright Act, and the Geographical Indications Act do provide for criminal remedies. The punishment varies between 6 months and 3 years of imprisonment and a fine ranging from INR 50,000 to 200,000/-. These statutes acknowledge counterfeit as cognizable crime, wherein the police can take action and carry out search and seizure on a court warrant. Khurana & Khurana has considerable experience in providing relief to its Client through Criminal recourse against Counterfeiters, as provided in the following statutes.
Indian Penal Code, 1860: The Indian Penal Code outlines punishments for cheating, counterfeiting and possession of instruments that are being used to make counterfeit goods etc. under Chapter XII of the Code. These provisions can be invoked when dealing with criminal actions and liabilities. These provisions can also be applied in conjunction with provisions of other statutes.
Copyright Act,1957: This Act empowers the Police to seize all infringed copies of any copyrighted work. The Act further empowers the Registrar of Copyright to investigate any ship, dock or premises for any infringed works and order them to be confiscated. Section 63 of the Act also provides for imprisonment up to three years and fine for indulging in copyright infringing activities.
The Trade Marks Act, 1999: Section 103 of this Act provides penalty for applying false trademark and/or trade description, etc. with imprisonment up to three years and fine ranging from fifty thousand to two lakh rupees.
The Patents Act, 1970: The Patents Act does not provide for specific criminal remedies. However, criminal liability arises where an article or process is misrepresented in order to be patented. Criminal liability under this Act also arises if the secrecy requirements as provided under the Act, are breached.
Geographical Indications Act, 1999: This Act provides for the GI owners to claim interim and permanent reliefs in cases of GI infringement. Chapter VIII of the Act also provides for criminal remedies where the term of imprisonment may vary from 6 months to 3 years and a fine from ₹ 50,000 to ₹ 2 lacs.
Anti-Counterfeiting regulations under the Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007: The IPR Rules, 2007 empowers the competent authority at Customs to seize counterfeit goods and/or to suspend the clearance of such goods at the port. These Rules also empower the Customs Department to destroy goods that infringe upon a proprietor’s IP rights.
Civil Enforcement of IP
Each IP owner, in cases of infringement, has the liberty to decide for themselves to agitate a criminal or civil proceeding. That being said, interim or permanent injunctions adjudicated in cases of infringing or misrepresenting sale or manufacture, and orders administering preservation of information and/or rendition of an infringer's accounts, are some of the most effective remedies in IP cases. These remedies are often prompt, best suited and long-lasting, whereas criminal remedies may be drawn out and expensive. However criminal responses tend to have a better deterring effect on counterfeiters.
In cases of counterfeit goods, civil remedies that can be prayed for include injunctions, damages and rendition of accounts. The mandate of civil remedy is to stop distribution, manufacturing, and retail of the infringing product. Another important mandate of the aforementioned civil remedies is to forbid an infringer from creating a false impression that the offerings under its intellectual property have an association, nexus or affiliation with the products of the original proprietor of the concerned Intellectual Property.
A civil court is empowered to grant an ex-parte injunction against the counterfeit product. Further, the courts have widened their scope to deal with serious issues of counterfeiting and jurisprudence under this subject is developing quickly as courts are now more likely to grant interim reliefs under civil remedies, if the counsel can effectively demonstrate a prima-facie case. Few of such remedies are:
Anton Pillar Order: which gives right to the right holder to visit the defendant’s premises along with the local commissioner appointed by the court, to search and seize the counterfeit goods. These goods are returned to the defendant with an undertaking that the goods will be safely preserved until further orders of the court.
John Doe Order: It is similar to Anton Pillar order, the only difference here is that the defendants are unknown/ or not known. Moreover, this action is taken when it is difficult to identify the counterfeiter or where the counterfeiter is operating out of temporary premises.
Counterfeiting is a widespread commercial evil rather than a conventional crime. The legislature has also established a commercial court in High Courts, in 2016. These courts have the jurisdiction to try cases of counterfeiting.
Border Measures
Since counterfeit is an international concern, various mechanisms have been developed to prevent the practice and discourage the drain on a nation’s wealth. The primary line of defence at borders is the National Customs and Border protection. The Customs Act governs the import and export of goods. Section 11 of this Act aims to enforce IP rights and enables prohibition of certain goods to prevent patents, trademark or copyright infringement. This section also empowers custom officials to confiscate goods that were unlawfully traded. Additionally the statute now enables IP proprietors to submit their grievances with Customs officials for immediate and prompt seizure of the copied goods at the port itself.
The aforementioned Anti-Counterfeiting regulations under the Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007, were notified and enacted in an effort to strengthen custom and trade provisions under the Customs Act 1962 in with special focus on IPR protection at borders.
Khurana & Khurana is experienced in getting civil remedies for its clients such as Injunctions against Counterfeiters and getting favourable enforcement orders in relation to IPs. We also provide protection of IP rights and IP enforcement at Borders of the Indian territories in compliance with Customs Act 1962, read with the Intellectual Property Rights (Imported Goods) Enforcement Rules 2007.
Investigation Conducted For Cases Of Counterfeit
Raids (IPR enforcement action) are conducted in compliance with either civil or criminal laws. The initial steps that are taken before carrying out raids are:
Identifying Counterfeited Product
(i) Determining known areas that deal with the counterfeit products
(ii) Determining identity of the person or business using it;
(iii) Where and what type of goods and services are being sold; and
(iv) If the products are sold through retail, wholesale, or distributorships.
Collect Evidence
(i) Verification of compliance with existing licensing agreements and ‘cease and desist’ letters or warnings. (ii) Verification of compliance with existing licensing agreements and ‘cease and desist’ letters or warnings. (iii) Carry out an undercover surveillance of a person or business entity.
Approval from Client for Conducting Civil or Criminal Raids or Combination of Both
Raids
Khurana and Khurana is thoroughly experienced in investigating counterfeit incidents and thereby takes necessary civil or criminal action against the counterfeiters. Khurana and Khurana investigate in the following ways:
Criminal Action Civil Action
Exemplary Cases of Investigation conducted at Khurana & Khurana
IP Enforcement against Anti- Counterfeit Products - Woodland
Khurana & Khurana successfully conducted several raids at Mumbai for counterfeit products (trousers) falsifying themselves to be that of the product under the brand name of Woodland. The raids were successfully carried out and the matter proceeded, leading to registration of FIR, generation of chargesheet, and imposition of penalty on and imprisonment of the accused.
IP Enforcement against Anti- Counterfeit Products - Intex
We diligently and efficiently carried out investigation and found out few retailers/whole sellers who were engaged with manufacturing and distributing LED Televisions falsifying the trademark of Intex and were being imported by China. The raids were successfully carried out and the matter proceeded, leading to registration of FIR, generation of chargesheet, and imposition of penalty on and imprisonment of the accused.
Practice Contacts
Vinod Khurana (Senior Partner and Trademark Attorney)
An ISO 9001:2015 Certified Firm
Khurana & Khurana successfully conducted several raids at Mumbai for counterfeit products (trousers) falsifying themselves to be that of the product under the brand name of Woodland. The raids were successfully carried out and the matter proceeded, leading to registration of FIR, generation of chargesheet, and imposition of penalty on and imprisonment of the accused.
We diligently and efficiently carried out investigation and found out few retailers/whole sellers who were engaged with manufacturing and distributing LED Televisions falsifying the trademark of Intex and were being imported by China. The raids were successfully carried out and the matter proceeded, leading to registration of FIR, generation of chargesheet, and imposition of penalty on and imprisonment of the accused.