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Written by Maria Therese Syriac, Legal intern, and verified by Sunil Jose, Managing Attorney, Suns Legal.
Arun Kumar vs. State of Punjab (2024:PHHC:155158).
In a significant ruling, the Punjab and Haryana High Court in Arun Kumar vs. State of Punjab (2024) (2024:PHHC:155158) handled a criminal case involving local counterfeit manufacturing, where a Ludhiana-based manufacturer was arrested for producing fake PUMA branded garments.
PUMA, a brand that has adorned athletes and fashion enthusiasts worldwide since 1948, found itself at the center of this legal battle in Ludhiana, Punjab’s manufacturing powerhouse, where the famous logo of the leaping Puma was misused to make these garments. The case emerged when authorities discovered alleged counterfeit PUMA-branded garments being manufactured and sold in the local market. What makes this case particularly intriguing is not just the alleged infringement itself but how it exposed critical gaps in the enforcement procedures of India’s IP laws.
The judgment, delivered by Justice Karamjit Singh, went beyond a typical counterfeiting case; it became a pivotal decision that exposed critical flaws in criminal investigation procedures for intellectual property violations, particularly highlighting the statutory requirements for investigating authorities under both trademark and copyright law in India. Like a thread pulling apart a poorly stitched garment, the case unraveled the complexities of applying both the Copyright Act of 1957 and the Trade Marks Act of 1999, revealing legal implications that would impact future enforcement actions across the country.
The case
The matter originated when a complaint was registered alleging that one Mr. Arun Kumar, the petitioner, was manufacturing counterfeit Puma-branded apparel in his Ludhiana factory. According to the complaint, Kumar operated a manufacturing unit that allegedly engaged in the unauthorized manufacture of caperies (capers) and pajamas bearing counterfeit PUMA labels. These garments were reportedly being sold in the market at premium prices, capitalizing on PUMA’s brand value and reputation.
Based on this information, local law enforcement conducted a raid under the guidance of Inspector Vijay Kumar, resulting in the seizure of allegedly counterfeit garments and the subsequent arrest of the accused.
The police initially registered charges under Sections 63 and 65 of the Copyright Act of 1957. Later in the proceedings, additional charges under Sections 103 and 104 of the Trade Marks Act, 1999 were imposed by the trial court for using the false trademarks or descriptions. However, an appeal was filed by the petitioner against the decision of the trial court under Section 482 of the Criminal Procedure Code, as these legal actions faced scrutiny for their procedural and jurisdictional validity.
The Core Legal Issues
At the heart of the judgment lay two fundamental issues that ultimately proved fatal to the prosecution’s case.
The first centered around a misunderstanding regarding the scope of copyright law in India. Section 13 of the Copyright Act of 1957 provides clear boundaries about what can be protected under copyright. The law extends its protection to original literary works, dramatic and musical compositions, artistic creations, films, and sound recordings. However, when it comes to the manufacture and sale of garments, even those bearing counterfeit trademarks fall outside the ambit of these protected categories. This aligns perfectly with copyright law’s principle, that is, it protects original creative expressions, not commercial products or their manufacturing processes.
The second issue revolved around procedural compliance in trademark enforcement. The Trade Marks Act of 1999, specifically Section 115(4), sets forth strict requirements for search and seizure operations in trademark infringement cases. The law mandates that such investigations must be conducted by police officers not below the rank of Deputy Superintendent. Additionally, before any search or seizure can take place, the investigating officer must obtain and follow the opinion of the Trade Marks Registrar regarding the alleged offense. In this case, both crucial requirements were overlooked. Inspector Vijay Kumar, despite his best intentions, did not have the authority to conduct the raid, and no one sought the Registrar’s opinion before taking action.
These procedural lapses, combined with the misapplication of copyright law, proved fatal to the prosecution’s case.
The Court’s Verdict and the Impact
On November 25, 2024, the High Court quashed the entire proceedings, including the FIR, the final report, and the additional charges order.
It opined that the said Act did not attract the offenses under Sections 63 and 65 of the Copyright Act, 1957, as held in Deepak vs. State of Haryana (2024:PHHC:016623) by the coordinate bench with respect to the manufacturing of spurious pipes being manufactured under the name of M/s Supreme Industries Limited.
The judgment emphasized that the prosecution under both the Copyright Act and the Trademarks Act was legally unsustainable.
The ripple effects extend to various stakeholders in IP protection. For brand owners, it indicated the need to understand which IP rights apply to different aspects of their business. They must ensure enforcement actions are pursued under appropriate legal provisions and maintain careful coordination with law enforcement to ensure procedural compliance.
Looking ahead
The High Court’s decision to quash the proceedings due to procedural irregularities highlights the areas for improvement in trademark and copyright enforcement mechanisms.
To strengthen future enforcement actions, a few measures can be considered. First, law enforcement agencies must adhere to the mandated investigation protocols under Section 115(4) of the 1999 Act, ensuring that only officers of appropriate rank conduct raids and seizures in trademark violation cases. Second, investigators must obtain the opinion from the Registrar of Trademarks before conducting searches and seizures, as required by the Act. Third, there is a clear need for better training and awareness among law enforcement officials regarding the distinct requirements of the Copyright Act and Trademarks Act violations, preventing the conflation of these legal frameworks.
The ruling creates a legal ambiguity of whether the copyright lies in the use of the logo itself or in the counterfeit product where the said logo is used. It is expected that future judicial decisions will provide clarification and address the ambiguities surrounding the application of laws regarding similar trademarks and copyright violations.