In 2021 , Nestlé Maggi released an advertisement that attempted to educate the consumers about counterfeit products. The official website of the company states, “Our consumers can buy Maggi products manufactured according to our high quality standards and sold in authorised distribution channels. We take the counterfeiting issue seriously. This is an illegal activity to mislead consumers. When we are aware of the existence of counterfeit Nestlé products, we work closely with the competent national authorities to ensure their removal from the market.”
Re-packing and sale of expired goods is an issue that plagues the Indian market. Counterfeiters or entities who sell such goods often cleverly imitate the packaging/colour scheme/shape/design/logo/trademark of popular brands and/or tamper with the original packaging to sell expired goods. Simply put, a counterfeit good/product is a replica of a branded product which misleads consumers into thinking that it originates from the legitimate brand owner. For example, selling fake inferior quality Louis Vuitton bags or Nike shoes at cheap prices amounts to counterfeiting. It is prevalent both in the FMEG (fast-moving electrical goods) and FMCG (fast-moving consumer goods) industries.
At the outset, it is important to understand that re-packing/sale of expired goods/counterfeiting of goods includes but is not limited to merely copying, imitating, or infringing the trademark or essential elements of a trademark/copyright of a popular brand or company in relation to same or similar goods or services. Re-packing and sale of expired goods/counterfeiting of goods go a step further by making the same imitation product, by packaging or reusing the packaging to sell an inferior quality or even expired product. For instance, using the popular soft drinks trademark “MIRINDA” in relation to alcoholic beverages would be a case of trademark infringement, violation, passing off but using the mark or packaging of MIRINDA to sell inferior quality or expired soft drinks would be a case of both trademark violation and counterfeiting.
“Counterfeit products not only attack the name and value of a known business, but, in many cases, can cause harmful, and sometimes fatal, consequences for the unsuspecting buyer,” according to an American law-enforcement officer.
It is important to acknowledge that counterfeiting poses serious threats to public safety and public health:
i. Counterfeit or expired food products can severely affect the health of consumers.
ii. Counterfeit airbags and their components can cause severe malfunctions ranging from non-deployment, under inflation, over inflation to explosion of metal shrapnel during deployment in a crash.
iii. Counterfeit prescription drugs may not contain the active ingredient or could lead to accidental overdose.
iv. Counterfeit cosmetics can cause severe skin reactions.
According to Sita Lakshmi Narayan Swamy, a brand and consumer expert, counterfeit products usually target those who are not fluent in English. People who counterfeit/imitate make the product look very similar to the original brand by using the same colour, pattern scheme, and slightly altered typography or alphabets.
Recently, the Hershey Company, a well-known chocolate manufacturer, filed a suit before the Hon’ble Delhi High Court seeking an injunction before the Diwali festival against Defendant, Atul Jalan, trading as Akshat Online Traders from selling expired chocolates by re-packaging the same. Accordingly, the Court directed the Delhi Police Crime Branch to investigate he re-packaging and sale of counterfeit chocolates of the popular brand Hershey’s along with a broader investigation of re-packaging and sale of expired food products in the territory of Delhi. Justice Pratibha M Singh observed while hearing the case: “It appears that a large quantity of goods especially on e-commerce platforms, which achieve expiry dates, are some how purchased by unscrupulous persons, the manufacturing and expiry dates are changed and re-introduced into the stream of commerce.” Due to the urgent and serious nature of the allegations, the Hon’ble Court instructed that two Food Safety and Standards Authority of India (FSSAI) Inspectors accompany the Local Commissioners appointed by the Court to conduct a thorough inspection and testing of all products sold by the defendant. Additionally, the FSSAI was given specific directions to ensure that perishable and food products, which are either expired and repackaged or counterfeit, are not sold, particularly during the festive season.
The initial investigation by way of the Local Commission revealed that the Defendant did not have an FSSAI license to sell or resell the Plaintiff’s products, and he did not respond to inquiries about violating the provisions of the FSSAI Act, 2006. Approximately 25-30 boxes of ‘Hershey Kisses Moments’ were displayed, with many more unopened cartons and boxes present. These products were found to have expired in August 2023, with new information stickers covering the original manufacturing and expiry dates, and the MRP. The Central Food Safety Officers issued a notice to the Defendant for destruction of these expired products, deemed unfit for human consumption, and mandated the sub-mission of a destruction report with evidence. However, this is not the first instance where a popular brand’s intellectual property (IP) rights have been infringed by counterfeiters. Reputed brands like ITC, Samsung, Nike, Louis Vuitton etc. have faced such issues in the past. It is pertinent to mention that the rights of the corporate giants were duly protected by Indian courts on several occasions. However, the problem becomes graver when expired or inferior quality food items are injected into the market.
In 2019, a corporate intelligence firm representing Britannia filed a complaint against the manufacture and sale of counterfeit Britannia biscuits.
Police investigation revealed that fake Britannia biscuit wrappers were found in the godown of the defendant/infringer/violator, but they contained biscuits manufactured by another firm. The colour, design and logo of Britannia were copied by the infringers to sell biscuits.
ITC Limited approached the Hon’ble Delhi High Court in 2019 to restrain counterfeiters from counterfeiting the packaging of “atta? sold by ITC under the registered trade mark “AASHIRVAAD”. The Court accordingly restrained the defendants from manufacturing or getting manufactured, selling, offering for sale, advertising atta? or any other product under the impugned packaging or any other deceptive variant thereof, including by using the trademarks/logos “AASHIRVAAD”, “ITC” and / or their derivatives formatives and the identical or nearly identical deceptively similar trade-dress/get-up/ay-out etc. of the plaintiff?s “AASHIRVAAD” atta, so as to result in violation of the plaintiff’s statutory and common law rights thereby resulting in infringement, passing off, dilution etc.
Thus, it is evident that brands and corporates take counterfeiting issues very seriously. Dspite such awareness campaigns, efforts and legal actions, the issue of counterfeiting persists in India. This problem goes beyond the issue of infringement of intellectual property rights when food items are involved as they directly affect the health of the consumers. What can be done to stop such counterfeiting activities?
1. A consumer complaint can be filed by the affected consumer before the appropriate consumer forum.
2. A criminal complaint can be filed by the brand owner(s) for selling/manufacturing/dealing with counterfeit products thereby resulting in the violation of their trademark/copyright.
a. Section 103 & 104 of the Trade Marks Act, 1999 provide for the penalties for applying false trademarks, trade descriptions and for selling goods or providing services to which false trademarks or false trade description is applied which incudes imprisonment for a term not less than six months which may extend up to three years and fine not less than fifty thousand rupees which may extend up to two lakh rupees. Further, Section 105 specifies the enhanced penalty on second or subsequent convictions punishable with imprisonment for a term not less than one year which may extend to three years and with fine not less than one lakh rupees which may extend to two lakh rupees. The procedure for filing a criminal complaint for infringement of trademark is also provided under Section 115 which states that the offences under section 103, 104 and 105 shall be cognizable and any police officer, not below the rank of Superintendent of Police or equivalent, if satisfied that any such offence has been or is likely to be committed, shall search and seize without warrant, any goods, block, machine, plate or other instruments or things involved in committing the offence in accordance with the opinion of the Registrar;
b. Section 63 of the Copyright Act, 1957 states that any person who knowingly infringes or abets the infringement of the copyright shall be punishable with imprisonment for a term not less than 6 months but which may extend to three years and with fine which shall not be less than fifty thousand rupees but may extend up to two lakh rupees. The enhanced penalty for second or subsequent convictions as laid down under Section 63A is imprisonment for a term not less than one year but which may extend up to 3 years and with fine which shall not be less than one lakh rupees but which may extend to two lakh rupees. Further, under Section 64 of the Act, a direct complaint can be made to the police and any police officer, not below the rank of Sub-inspector may, if satisfied that any offence with respect to infringement of copyright has been or is likely to be committed, shall search & seize without warrant, all copies of the work, and all plates used for the purpose of making infringing copies of the work and all copies and plates so seized shall be produced before the Magistrate as soon as practicable.
3. A civil commercial suit can be filed by the brand owners for violation/infringement/passing off of their intellectual property in the form of counterfeit packaging/logo/colour scheme/design et cetera. By way of filing a suit before the appropriate court of law, the following remedies can be sought by the brand owner:
a. A permanent injunction/restraining order to restrain the defendant(s)/infringer from selling/manufacturing/distributing/promoting/advertising et cetera the impugned product(s)/packaging;
b. An order to recall all stocks of impugned products/material;
c. A temporary/ ad interim injunction to restrain the known as well as the unidentified or unknown defendant(s) (referred to as John Doe or Ashok Kumars)/ infringer from selling/manufacturing/distributing/promoting/advertising et cetera the impugned product(s)/packaging;
d. Appointment of local commissioner(s) to visit the premises of the defendant(s)/infringer, without notice, with the view to ascertain the nature and extent of the operations of the defendant(s) and seize the infringing products/material, if any;
e. Invoke the Food Safety and Standards Act, 2006.
(The writer is Assistant Professor, Jindal Global Law School)