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Bombay HC Imposes INR 5 Crores Penalty In Nippon Steel & Sumitomo Metal’s Seamless Pipe Counterfeiting Case

Steel News - Published on Fri, 07 Jun 2019

Image Source: Hindustan Times
The Bombay High Court has passed an order in Nippon Steel & Sumitomo Metal Corporation Vs Kishor D Jain & Anr imposing costs of INR 5 Crore to be paid by the defendants who were caught counterfeiting the Plaintiff’s mark and goods. The present case also relates to Trademark counterfeiting. The Defendants admitted on producing unbranded pipes from the local markets/manufacturers and imprinting the Plaintiff’s registered trademarks upon the same. These counterfeit goods were then exported by the Defendants to Saudi Arabian company- YANBU Steel Company to be used for laying pipes in oil plants. So, the suit for permanent injunction against the defendants was based on a complaint by YANBU regarding the quality of certain carbon seamless pipes for use in oil plants that it had sourced from the defendants, believing the same to have been manufactured by the plaintiff. The pipes supplied by the defendants were accompanied by fabricated inspection certificates issued in relation to the counterfeit goods to show that the same emanate from the Plaintiff as it was bearing plaintiff trademark and logo.

The Plaintiff submitted that the pipes in question are specialized seamless pipes which are used in the oil industry and can have disastrous consequences if the same do not meet the required standards of safety. The Plaintiff submitted that apart from causing serious damage to its goodwill and reputation coupled with possibility of accidents, the acts of the Defendants have in fact brought disrepute to the reputation of the Country and therefore heavy and unprecedented costs should be imposed on the Defendants.

By an ex-parte order dated 26 March 2019, the Bombay High Court has restrained Kishor D Jain & Anr (Defendants) from infringing the registered trade-marks `Nippon Steel’ and its variants owned by Nippon Steel & Sumitomo Metal Corporation (Plaintiff).

The court took cognizance of the fact that the plaintiff’s products are used in extremely sensitive areas where quality of apparatus is of utmost importance and that the defendants’ illicit activities were bound to have disastrous consequences. Going further, the court observed that the reputation of the nation is also affected by such activities. Determined to convey that the courts in India are no longer willing to tolerate such activities and shall deal with them with an “iron hand”, the judge awarded punitive costs of 5 Crore which was directed to be paid to a charitable organisation called the Tata Memorial Hospital, Mumbai – a specialist centre for the prevention, treatment and research on cancer.

Such decision really helps in reducing counterfeit and other kinds of IPR infringements. This is the first time that the Bombay High Court has imposed such heavy costs upon a defendant in a trade mark counterfeiting case. In this case the defendant has used false trade mark by falsely applying the existing trademark of the plaintiff for defendant own benefit and affecting the reputation of the plaintiff in the global market. Since low quality goods were exported, so this also affected reputation of the nation. That’s why Court understood that it is need of the hour to take strict penal actions which includes heavy compensation amount. This decision would act as a deterrent for someone who undertakes such kind of trademark counterfeiting in future.

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Posted By : Ratan Singh on Fri, 07 Jun 2019
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