A.K. Sikri, J.

( 1. ) The present suit has been filed for permanent injunction restraining infringement of trademark, passing off and dilution, mandatory injunction directing withdrawal of an application for registration of the trademark, damages, delivery up and costs. The plaintiffs are public companies incorporated under the laws of Sweden and represented through their Constituted Attorney Col.(Retd.) J.K. Sharma. Plaintiff No. 1 assigned the right, title and interest in the trademark VOLVO including the subsisting goodwill to the plaintiff No. 3 through a Global Deed of Assignment dated 26th February 1999. By way of a Supplementary Deed of Assignment dated 23rd March 2001, the plaintiff No. 1 has assigned registered trademarks and applications pertaining to the trademark VOLVO in various classes in India. Thus, the plaintiff No. 2 is the registered proprietor of the trademark VOLVO in various classes. By way of Global License Agreement dated 28th February 1999, plaintiff No. 2 has licensed the use of the trademark VOLVO to the plaintiff No. 1 and plaintiff No. 3 within their respective businesses. Plaintiff No. 1 is among the world leaders in heavy commercial vehicles such as trucks, buses and construction equipment, as well as in drive systems for marine and industrial applications, aircraft engines and space propulsion components. Plaintiff No. 3 occupies a prominent position as a car producer within its segment. It is claimed that plaintiff No. 2s trademark VOLVO is a well-known trademark as per Section 11(6) of the Trade Marks Act, 1999.

( 2. ) Grievance of the plaintiffs in the suit is that the defendants who are engaged in the business of manufacture and sale of electric motors and pumps, domestic flour mills, submersible pump sets, self priming pumps have also adopted trade mark VOLVO.

( 3. ) The defendant vide the trademark application No. 1252754 filed before the Registrar of Trade Marks applied for registration of the mark VOLVO in respect of electric motors and pumps, domestic flour mills, submersible pump set, self priming pump in class 7. The defendants application was advertised in Trade Marks Journal No. 1327 Suppl. (1) dated 3rd January 2005 and has been filed and exhibited as Ex. PW-1/21. The plaintiff filed a Notice of opposition against the defendants application that was withdrawn by the defendants. The learned Registrar of Trade Marks has by on Order dated 11th August 2005 declared the defendants applications as withdrawn that has been filed and exhibited as Ex. PW-1/22.

( 4. ) On coming across the defendants application, an investigation was conducted which confirmed that the defendants were manufacturing and selling electric motors and pumps, domestic flour mills, submersible pump sets, self priming pumps under the trade mark VOLVO. During the investigation, the plaintiffs investigator took the defendants visiting card as also made a sample purchase of VOLVO branded induction motor from the defendants. Digital photograph of the defendants product, cash memo as also defendants visiting card has been filed and exhibited as Ex. PW-1/23 and Ex. PW-1/24 (Colly.).

( 5. ) The contention of the plaintiffs is that the use of the trade mark VOLVO by the defendants in respect of their products is illegal and unauthorised and amount to infringement of the plaintiffs trade mark under Section 29 of the Trade Marks Act, 1999. Therefore, the plaintiffs have prayed for not only injunction but damages as well. Along with the plaint the plaintiff has filed application under Order 39 Rules 1 and 2 of the Code of Civil Procedure (IA No. 4580/2005 ) as well. When the suit and the aforesaid application came up for hearing on the first date, vide order dated 30th May 2005 while issuing summons in the suit and notice in the injunction application to the defendant by all the prescribed modes, returnable on 24th October, 2005 , ex parte ad interim injunction was granted. While granting this order allegation of the plaintiff was noted that the defendants had earlier been using the trade mark Krishna Brand and recently started using trade mark VOLVO which was identical to the plaintiffs trade mark. The Court had also appointed Local Commissioner to visit the premises of the defendants at Rajkot to make inventory and seal all the infringing labels, brochures, literatures, cartons, stationery, dyes, moulds etc. bearing the impugned trade mark VOLVO or any other infringing trade mark. After preparing the inventory the Local Commissioner was to hand over the infringing goods to the defendants on Superdari on their undertaking to produce the same before the Court as and when so required. The Local Commissioner was also directed to sign all books of accounts, including ledgers, cash books and sale records etc.

( 6. ) The Local Commissioner executed the commission and filed his report dated 4th July 2005 as per which, he had met defendant No. 1, sole proprietor of the defendant No. 2 as well as his son and explained them the purpose of his visit. Defendant No. 1 and his son co-operated with him in executing the commission. He found infringing goods/material etc. as mentioned below:-

(a) Brochures - 479 bearing the trademark VOLVO (b) Visiting Cards - 700 bearing the trademark VOLVO (c) Stickers - 446 bearing the trademark VOLVO. (d) Tin labels for flour mills - 250 bearing the trademark VOLVO. (e) Tin plates - 256 for self Printing Pump bearing the trademark VOLVO. (f) Tin plates for induction motors - 35% bearing the trademark VOLVO.

( 7. ) Thereafter he sealed the aforesaid goods in two cartons as A and B and gave the same to defendant No. 1 on superdari. In spite of service of summons on the defendants they failed to make appearance. Accordingly, vide order dated 24th October 2005 the defendants were proceeded against ex parte. The plaintiffs were permitted to file evidence by way of affidavits. Affidavit of Col. J.K. Sharma (Retd.), who is the constituted attorney of the plaintiff companies, is filed. He has made on oath the averments which are contained in the plaint and noted above. He has also proved execution of Power of Attorney in his favour as Ex. PW-1/1, PW-1/2 and PW-1/3. The registration of trade mark VOLVO in various classes of goods in India are proved as Ex. PW-1/4, PW-1/5, PW-1/17 to PW-1/20. Catalogues of the plaintiffs products are proved as Ex. PW-1/6, PW-1/7, PW-1/8, PW-1/10 and PW- 1/11. Print outs of the various news reports appearing in Internet/online editions of Indian newspapers pertaining to the plaintiffs business available on various websites have been filed and exhibited as Ex. PW-1/13 (Colly.). The extract from "The Worlds Greatest Brands" are filed and exhibited as Ex. PW-1/14 and that from "Brands-An International Review by Interbrand" as Ex. PW-1/15. The defendants application which was advertised in Trade Marks Journal dated 3rd January 2005 is produced as Ex. PW-1/21. Order dated 11th August 2005 of the Registrar of Trade Marks declaring that defendants application was withdrawn is filed as Ex. PW-1/22. Digital photographs of the defendants product, cash memo as well as defendants visiting cards have been filed and exhibited as Ex. PW-1/23 and 1/24 (Colly).

( 8. ) From the aforesaid unrebutted testimony the plaintiffs have been able to prove that they are the registered owner of the trade mark VOLVO. Further the trade mark VOLVO is a well-known trade mark as per Section 11 (c) of the Trade Marks Act, 1999 in view of the fact that not only it is an innovative word, coined and adopted by the plaintiffs, but it has all the trappings of an invented trade mark as it has no obvious meaning and is not fond in any authoritative dictionaries of English language. Judicial finding to this effect has already been recorded by a Division Bench of this Court in Aktiebolaget Volvo v. Volvo Steel Ltd., PTC (18) 47 (DB) as is clear from the following passage:-

"Undoubtedly word Volvo is a Latin word meaning thereby re-rolling, to roll up, to roll together and form my rolling. However, it is requires (sic) to be appreciated that hardly any one in India knows Latin and it is extremely improbable that anybody would translate the word volvo when one hears or reads the same. Latin being almost a dead and obscure language and hardly anybody in India knowns (sic) Latin. The word Volvo for average Indian would not mean anything and would not be a descriptive word. On the other hand we find great substance in the submission of Shri Tulzapurkar that the word volvo is invented and a fancy word."

( 9. ) The plaintiffs have also been able to substantiate long and continuous of their trade mark VOLVO from the documents on record and also the fact that the trade mark VOLVO has been extensive in terms of geographical spread involving several countries with large volumes of sales across the globe. It has acquired definite reputation not only because of quantum of sales, which it has achieved, but because of extensive advertisement and promotion of their trade mark as well. Dispute is respect of domain name "thevolvooceanrace.com" has also been decided by WIPO Arbitration and Mediation Centre in its decision dated 12th June 2000 in favour of the plaintiffs. The defendants were earlier using the trade mark Krishna Brand in respect of their products. Adoption of trade mark VOLVO by the defendants is, therefore, clearly unauthorised and with ulterior motives to ride on the reputation of the plaintiffs trade mark with an attempt to pass off their goods as that of the plaintiffs. Therefore, the adoption of trade mark VOLVO is not only violative of Section 29 of the Trade Marks Act, 1999 but amounts to passing off and dilution as well. In Caterpillar, Inc. v. Mehtab Ahmed, 2002 (25) PTC 438 [LQ/DelHC/2002/1416] , injunction was granted in similar circumstances as is clear from the following passage:-

"18. Another important question that arises with regard to doctrine of dilution is whether this doctrine can be pressed into service where the case is one of competitive or closely similar goods or services. One view is that dilution theory is restricted to is original purpose i.e. where marks are very similar but the products are so different that there is no likelihood of confusion of source or connection. Another view is that dilution theory is applicable even where parties are competitive. The view holding field is that the concept of dilution does not substitute the rule relating to likelihood of confusion when the parties happened to be competitors. Where dispute relates to difference in wording or format of the marks, the dilution theory becomes inapplicable. Dilution of a mark can also flow from the unauthorised use.

19. Let us examine the case of the plaintiff on the touchstone of aforesaid principles and theories governing grant or refusal of injunction against the use of trade mark which has been in prior and long use and has established transborder reputation, goodwill and strength.

20. Plaintiffs trademark CATERPILLAR and CAT are registered in 175 countries all over the world. Apart from several other goods including heavy machineries, footwear and clothing also sold under the trademark CAT and CATERPILLAR. These trademarks are represented in a distinctive stylized manner wherein the horizontal bar of the letter A in CAT is depicted with the tip of an arrowhead like device cutting it and the rest of the said device blotting out the base of the letter A. Another character associated with this mark is the depiction of the arrowhead device in a bright ochre colour and slanting stripes in alternating bright ochre and block colours accompanying the marks. Every licensed product of the plaintiff carries a circular seal bearing the CAT logo within an inner circle and the statement A Licensed Product of Caterpillar Inc." on the tongue. So far as footwear are concerned, the catchphrase is Walking Machine. Various kinds of machines manufactured by the plaintiff like Internal Combustion engines and diesel engines, tractors, tractor engines and equipment and fittings etc. are sold under the trademark CAT. Tractors, tractor engines and equipments are sold under the trademark CATERPILLAR.

21. Defendants 1 and 2 are having a shop in Ballimaran. Trademarks CAT and CATERPILLAR have been adopted by the defendants in respect of footwear i.e. shoes. They have copied both the trademarks in entirety including arrowhead. Again label on defendants product is identical to the label apparent on the trademark CAT and CATERPILLAR.

22. As is apparent by copying and reproducing plaintiffs distinctive trademark, label, colour scheme and arrangement of features and getup, defendants have infringed copy right of the plaintiff. The only object of the defendants is to create deception amongst the trade and public by clearly misrepresenting that their goods are either licensed by the plaintiff or they are passing off these goods as the goods of the plaintiff. Since the goods are identical it has immense effect of diluting the identification value of plaintiffs mark. Such dilution is accompanied with confusion as to source, affiliation or connection. Unauthorised use of mark on the goods in question which are competiting goods itself results in dilution. Potential purchasers are bound to be confused as to source, sponsorship, connection or licence. It is nothing but poaching upon plaintiffs goodwill, reputation and strong trade name as the plaintiff has been engaged in the business on footwear for long many years and has wide spread global reputation. It has earned reputation and goodwill by spending considerable and substantial amount of money to make its trademark and name famous."

The plaintiff is accordingly entitled to the injunction as prayed for.

( 10. ) The plaintiffs have also claimed damages under Section 135 of the Trade Marks Act, 1999, apart from the injunction. The defendants have remained ex parte. However, from the report of the Local Commissioner it is established that the defendants were using the trade mark VOLVO in respect of their goods. Though in the absence of exact figures of sales etc. by the defendants under the infringing trade mark, exact damages are not proved, the principles to award damages in such cases are stated in the following Judgments:- (i) Time Incorporated v. Lokesh Srivastava, 2005 (30) PTC 3 (ii) Hero Honda Motors Ltd. v. Shree Assuramji Scooters, 2006 32 PTC 117 (Delhi).

( 11. ) Time Incorporated (supra) was also a case where the defendants chose to remain ex parte. While refusing to grant damages on the ground that nothing was proved on record as to how these damages were calculated, the Court still granted punitive and exemplary damages of Rs. 5 lacs. It would be apposite to reproduce discussion on this aspect contained in paras 6 to 8 of the judgment:-

"6. The plaintiff has claimed a decree of Rs. 12.5 lacs on account of damages suffered by the plaintiff or an order of rendition of accounts of the profits illegally earned by the defendants by use of the impugned trade mark. In view of the fact that the defendants have not chosen to turn up and face these proceedings, this Court is of the considered view that an order of rendition of accounts is fully warranted and called for. Damages in the sum of Rs. 12.5 lacs as claimed cannot be awarded on account of the fact that the plaintiff has not succeeded in proving on record as to how and on what basis these damages have been calculated. Damages of Rs. 5 lacs are claimed on account of loss of reputation of the plaintiff. These can be awarded inasmuch as the readers who might have read the defendants TIME ASIA SANSKARAN, must have formed a very poor opinion about the plaintiffs Magazine and as such, the reputation and goodwill of the plaintiff has suffered.

7. Coming to the claim of Rs. 5 lacs as punitive and exemplary damages for the flagrant infringement of the plaintiffs trade mark, this Court is of the considered view that a distinction has to be drawn between compensatory damages and punitive damages. The award of compensatory damages to a plaintiff is aimed at compensating him for the loss suffered by him whereas punitive damages are aimed at deterring a wrong doer and the like minded from indulging in such unlawful activities. Whenever an action has criminal propensity also the punitive damages are clearly called for so that the tendency to violate the laws and infringe the rights of others with a view to make money is curbed. The punitive damages are founded on the philosophy of corrective justice and as such, in appropriate cases these must be awarded to give a signal to the wrong doers that law does not take a breach merely as a matter between rival parties but feels concerned about those also who are not party to the lis but suffer on account of the breach. In the case in hand itself, it is not only the plaintiff, who has suffered on account of the infringement of its trade mark and Magazine design but a large number of readers of the defendants Magazine TIME ASIA SANSKARAN also have suffered by purchasing the defendants Magazines under an impression that the same are from the reputed publishing house of the plaintiff company.

8. This Court has no hesitation in saying that the time has come when the Courts dealing actions for infringement of trade marks, copy rights, patents etc. should not only grant compensatory damages but award punitive damages also with a view to discourage and dishearten law breakers who indulge in violations with impunity out of lust for money so that they realize that in case they are caught, they would be liable not only to reimburse the aggrieved party but would be liable to pay punitive damages also, which may spell financial disaster for them. In Mathias v. Accor Economy Lodging, Inc. 347 F.3d 672 (7th Cir. 2003) the factors underlying the grant of punitive damages were discussed and it was observed that one function of punitive damages is to relieve the pressure on an overloaded system of criminal justice by providing a civil alternative to criminal prosecution of minor crimes. It was further observed that the award of punitive damages serves the additional purpose of limiting the defendants ability to profit from its fraud by escaping detection and prosecution. If a tortfeasor is caught only half the time he commits torts, then when he is caught he should be punished twice as heavily in order to make up for the times he gets away. This Court feels that this approach is necessitated further for the reason that it is very difficult for a plaintiff to give proof of actual damages suffered by him as the defendants who indulge in such activities never maintain proper accounts of their transactions since they know that the same are objectionable and unlawful. In the present case, the claim of punitive damages if of Rs. 5 lacs only which can be safely awarded. Had it been higher even, this Court would not have hesitated in awarding the same. This Court is of the view that the punitive damages should be really punitive and not flee bite and quantum thereof should depend upon the flagrancy of infringement."

( 12. ) In Hero Honda Motors (supra) the Court granted punitive damages of Rs. 5 lacs after taking note of its earlier judgement in Time Incorporated (supra) is clear from the following passages:-

"18. I am in agreement with the aforesaid submission of learned counsel for the plaintiff that damages in such cases must be awarded and a defendant, who chooses to stay away from the proceedings of the Court, should not be permitted to enjoy the benefits of evasion of Court proceedings. Any view to the contrary would result in a situation where the defendant who appears in Court and submits its account books would be liable for damages, while a party which chooses to stay away from Court proceedings would escape the liability on account failure of the availability of account books. A party who chooses to not participate in Court proceedings and stay away must, thus, suffer the consequences of damages as stated and set out by the plaintiff. Of course, this would not imply that the plaintiff would be entitled to any figure quoted by it which may be astronomical. The figure of Rs. 5 lacs as damages can hardly be said to be astronomical keeping in mind the nature of deception alleged by the plaintiff which not only causes direct loss to the plaintiff, but also affects the reputation of the plaintiff by selling sub-standard goods in the market where the public may be deceived in buying the goods thinking the same to be that of the plaintiff. There is a larger public purpose involved to discourage such parties from indulging in such acts of deception and, thus, even if the same has a punitive element, it must be granted. R.C. Chopra, J. has very succinctly set out in Time Incorporateds case (supra) that punitive damages are founded on the philosophy of corrective justice. That was the case where the publishes of Time Magazine had come to Court and one of the factors which weighed while awarding punitive damages was that the readers had been sufferers of the infringement of the mark of the plaintiff. The only difference is that in the present case it is the consumer of the products of the plaintiff, who have suffered as a consequence of the infringement of the mark and logo of the plaintiff by the defendant.

19. The second aspect emphasized in Times Incorporateds case (supra) has also material bearing as the object is to relive the pressure on over-loaded system of criminal justice by providing civil alternative to criminal prosecution of minor crimes. The defendant could have been prosecuted for such counterfeiting, but the plaintiff has considered appropriate to confine the relief to civil proceedings.

20. Learned counsel for the plaintiff also rightly points out that instead of plaintiff utilising its energy for expansion of its business and sale of its products, the resources have to be spread over a number of such litigations to bring to book the offending traders in the market. In such a case, both compensatory and punitive damages ought to be granted apart from the costs incurred by the plaintiff in such litigation."

( 13. ) Going by the ratio of the aforesaid two cases it is a fit case where punitive damages of Rs. 5 lacs should be granted. Accordingly, punitive damages of Rs. 5 lacs are granted in this case as well.

( 14. ) The suit is accordingly decreed in the following terms:- (A) decree of permanent injunction is passed in favour of the plaintiffs and against the defendants in terms of para 29 (i), (ii) and (iii); (B) decree for damages in the sum of Rs. 5 lacs is also passed in favour of the plaintiffs and against the defendants; (C) an order for delivery-up is also passed and the defendants are directed to deliver the goods seized by the Local Commissioner which were given to the defendants on Superdari in boxes marked A and B. The plaintiffs are permitted to destroy these goods. (D) cost of the suit is also awarded in favour of the plaintiffs. Decree be drawn accordingly.