Granting an ex-parte ad-interim injunction against Masala King Exports Trading Private Limited and 11 other companies from exporting products manufactured by Patanjali Ayurved Limited (PAL) in the international market, the Delhi High Court has ruled in favour of Patanjali. Justice Sanjeev Narula clarified that the defendant companies may continue to sell the plaintiff Patanjali's products in the domestic market and the injunction was restricted to export of products in the international market only.
Patanjali (plaintiffs) contended they had discovered that the defendant companies have been procuring the goods of PAL, which are meant exclusively for sale in the domestic market, and then illegally exporting them without any authorization from them and resultantly the defendants are infringing upon the exclusive right to use the registered trademark of PAL.
Senior Counsel Dayan Krishnan appeared on behalf of Patanjali along with Rohan Ahuja and Sonali Dhir of Athena Legal. Krishnan submitted that in order to prevent such illegal export, PAL issued letters to the Customs authorities, however, the illegal exports have continued. PAL has also lodged complaints with the Commissioner of Customs, however, the Customs authorities stated that the intellectual property rules do not apply to exports and no action has been taken on the complaint, Krishnan said. He submitted that PAL presently does not have any authorized channel for export of its products and the entire export is being done solely by PAL itself through its own IEC No. 0506062686. The packaging of the products that are meant for domestic sale is completely different from those that are meant for export, Krishnan submitted. Krishnan informed the court that Patanjali has come across instances where its goods have been tampered with or altered, thereby creating a risk towards the quality of the goods and the reputation of PAL attached with them. Specifically, it was found that a sticker on a packet of Patanjali's wheat flour that is indicated to be fit for consumption within four months from the date of manufacture was replaced by a second sticker which stated that the product was fit for consumption within nine months. Advocate Amit Bansal appeared on behalf of the Commissioner of Customs (Exports), who is also one of the defendants. Order Referring to the averments of altering and tampering of Patanjali products by exporters in the international market, Justice Narula noted that the doctrine of the first sale would be limited to selling the branded item in the same condition that it was sold- "In view of the categorical stand taken in the suit that the Plaintiff Company does not authorise any dealer to carry out the export of its product, the acquisition of the products for the purpose of export could only be done through the Plaintiff. The goods that are being exported are meant only for domestic sale. Thus, export of such products would conflict the rights of the Plaintiff and prima facie, it would also be an infringement under Section 29 (1) read with Section 29 (6) of the Act. It also prima facie appears that in case the Defendants No. 1 to 13 are permitted to alter the product in question, in the manner which is alleged to have been done, it would attract the provisions of Section 30(4) of the Trade Mark Act 1999." Finally, the court granted an ad-interim injunction against all 12 defendant exporters and said- "In view of the material placed on record, it appears that the Plaintiffs have made a strong prima facie case for grant of ex-parte ad-interim injunction against the Defendants. Balance of convenience is in favour of the Plaintiff and irreparable harm will be caused if, the Defendants are not restrained from continuing the illegal export of the Plaintiff's product in international market." Notice was issued to all the defendants.