TIME for punitive damages, says Indian court


In Time Incorporated v Srivastava (Case CD (OS) 2169/1999, January 3 2005), the Delhi High Court has awarded punitive damages to the plaintiff in addition to compensatory damages.

Until recently, the concept of awarding costs and damages in IP disputes had not been fully developed by the Indian courts. More often than not, infringers do not maintain proper records of the transactions made and therefore damages cannot easily be quantified. Also, since the process of determining damages on the basis of actual or potential loss suffered by right holders is particularly difficult, right holders would generally give up such claims. Thus, there were no financial deterrents to infringers. Increasingly, the Indian courts are now recognizing a need to impose financial penalties, in the form of damages awards, as a way of discouraging parties from violating IP rights.

In the case at hand, in addition to compensatory damages, the Delhi High Court went a step further and also awarded punitive damages with a view to punish and deter the defendant, an individual named Lokesh Srivastava, from misusing the plaintiff Time Incorporated's IP rights.

Time publishes the magazines Time and Time Asia, which have acquired worldwide reputation and goodwill. The front page design of Time's magazines have a distinctive red border recognized by readers all over the world. Srivastava started printing, publishing and distributing for sale in India a magazine titled Time Asia Sanskaran using the word 'Time' in an identical script and font style as that of Time. The magazine also featured a similar red border cover design, which included the phrases "now in hindi" and "a news magazine of international standards". Time filed suit against Srivastava, claiming that he and his associates had infringed its rights in the TIME mark and the copyright in the cover design of its Time Asia magazine. The High Court upheld the claim.

The court was of the opinion that imposing not only compensatory but also punitive financial damages on law breakers would serve the purpose of (i) making piracy less profitable, and (ii) relieving the pressure on an overloaded system of criminal justice by providing a civil alternative to criminal prosecution. The court held that punitive damages are founded on the philosophy of corrective justice and where appropriate should be awarded to give a message to wrongdoers that by violating IP laws, they are liable not only to the respective right owners but also to the public at large who suffer due to the breach. Further, the court reasoned that the quantum of punitive damages should be proportionate to the degree of infringement caused.

As the case was not contested by Srivastava, it will be interesting to see whether the courts award punitive damages in contested cases and the counter arguments produced by defendants in such cases.

Rachna Bakhru, Rouse & Co International, Dubai

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