Madras HC Injuncts Indian Distributor From Passing Off Italian Manufacturer Rubinetterie Bresciane's Products

The Madras High Court recently granted a permanent injunction in favour of Italian plumbing products manufacturer Rubinetterie Bresciane Bonomi SpA, restraining its former Indian distributor, Lehry Instrumentation, from using its trademark.

The court set aside a Single Judge's judgment that had dismissed the company's passing-off suit and decreed Lehry's defamation claim.

A Division Bench of Justice P. Velmurugan and Justice K. Govindarajan Thilakavadi set aside a Single Judge's common judgment that had dismissed Rubinetterie's suit for passing off and decreed Lehry's suit for defamation.

The Single Judge had held that Rubinetterie failed to produce material objects or clear and convincing evidence to establish counterfeiting, and that its communications to customers were unjustified and had harmed Lehry's reputation.

Before the Division Bench, Rubinetterie contended that during the subsistence of the distributorship, it discovered that Lehry was circulating non-genuine products bearing its “RB” mark. It pointed to instances where quality certificates accompanying products were generated internally by Lehry based on earlier certificates, which were capable of creating a misleading impression regarding the origin and authenticity of the goods.

The company further submitted that Lehry had sourced similar products from third-party manufacturers, including from China, stored them alongside genuine goods, and declined to disclose the identity of such manufacturers, citing business secrecy.

The Court found that the Single Judge had adopted an “unduly strict approach” by insisting on conclusive technical proof of counterfeiting.

"It is therefore not necessary for the appellant to establish actual counterfeiting by strict proof, so long as the materials reasonably indicate a likelihood of misrepresentation. The failure to adopt this approach has resulted in a narrow and restrictive assessment of the materials on record," the bench observed.

On an overall assessment, the court held that the cumulative circumstances, including internal generation of certification documents, sourcing from undisclosed manufacturers, and invoices indicating products not shown to have been manufactured by the appellant, were sufficient to establish a likelihood of misrepresentation and confusion on a preponderance of probabilities.

On the issue of defamation, the bench clarified that communications issued in good faith, based on a reasonable apprehension and for the protection of legitimate commercial interests, would not ordinarily amount to actionable defamation.

It noted that the communications were issued after termination of the distributorship and in response to customer complaints.

The court further held that Lehry had failed to produce convincing material to show any actual loss of reputation or business directly caused by the communications. In the absence of such proof, the award of damages could not be sustained.

Accordingly, the Division Bench partly decreed Rubinetterie's suit by granting a permanent injunction restraining Lehry and its agents from using the plaintiff's trademark or any deceptively similar mark in a manner likely to cause confusion. However, the Court rejected Rubinetterie's claim for damages for want of proof of quantifiable loss.

The court also set aside the decree passed in Lehry's defamation suit and closed all connected pleas.