Trademark Infringement: Gurugram Commercial Court Awards Rs.55 Lakh Compensation To Microsoft

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In a significant ruling, a commercial court recently ordered permanent injunction against Retnec Solutions, a company that was operating fake call centres in Gurugram, for trademark infringement, restraining them from using Microsoft’s trademarks like ‘Outlook’, ‘Hotmail’ etc. Court also awarded a compensation of Rs.55 Lakh in damages to Microsoft.

Presiding Judge Mahavir Singh was hearing the civil suit filed by Microsoft against Retnec Solutions, its directors and others. The suit was filed for restraining Infringement of trademark, passing off, unfair trade practices, dilution and for seeking damages under sections 27, 29 and 135 of the Trade Marks Act, 1999.

Case Background

As per Microsoft, they provide their customers with the option of sharing their grievances by submitting reports of scams conducted by fraudsters, on their online portal available at https://www.microsoft.com/enus/concern/scam (hereinafter referred to as the Complaint Portal).

This online Complaint Portal has options of providing details of the incidents, which include providing the name of offending company, the point of contact for the victims, the contact number the scammers used to communicate with the victims, the option of confirming if callers referred themselves as being related to or claiming to be a partner of plaintiffs, the amount of money asked by the fraudster, and the type of currency etc.

Traditionally, the entities engaged in technical support frauds use methods like “pop-up” messages on the consumers’ screens with a number to call, cold calls impersonating tech companies or “search engine optimization” techniques for presenting themselves as official support of technology companies. Modus operandi and the extent of such surreptitious operations of defendants came to light only when plaintiffs started receiving multiple reports from aggrieved victims.

In 2016, plaintiffs came across defendants’ infringing activities. Within a span of a few months thereafter, plaintiffs received plethora of complaints against defendants no.4 to 12 on their complaint Portal. Plaintiffs on the basis of such victim complaints, initiated investigations to gather further information. Considering that defendants conduct their activities clandestinely, the investigations took substantial time. Eventually, in mid-2018, plaintiffs came to a preliminary view that defendant no.1 is likely pursuing its illegal activities through its call centre located in India. The preliminary enquiries also indicated that defendants no.1 to 3 were likely working in connivance with defendants No.4 to 12. Plaintiffs then got an investigation conducted relating to activities of defendant no.1 and its associated companies. Meanwhile in October 2018, plaintiffs also received a victim complaint against defendant no.1 on their Complaint Portal. Thereafter, the investigation, which got concluded in October 2018, confirmed that defendant no.1 was indeed operating a call center from Gurugram, India. It was further revealed that defendant no.1 was making unsolicited calls to innocent customers/victims using “pop-up” messages. The inquiries revealed that defendant no.1 was in the business of making wrongful monetary gains by pretending to be Microsoft’s authorized Technical Support Team executives.

Based on their internal investigations and inquiries, the authorized representative of plaintiff no.2 filed a criminal complaint, which was registered as FIR dated November 28, 2018 at Police Station Sector 17/18, Gurugram. Pursuant to Registration of the FIR, the officials from Gurugram Police conducted searches at eight different call centre including premises of defendant no.1 at GP-43, Sector-18, Udyog Vihar, Gurugram, Haryana on November 28, 2018. On the day of search and seizure, Mr.Zayed Sahaye and Mr. Akshay Anand, defendants no.2 and 3 who are Directors of defendant no.1 were arrested by the Gurugram Police from premises of defendant no.1.

During the search, 18 CPUs, 17 Hard Drives, 1 Server and several other types of incriminating digital evidence and documents were seized from the premises of defendant no.1.

Conclusion

After going through the facts of the case, Court observed –

“Considering the facts and circumstances of the case, the defendants no.1 to 3 are liable to pay damages amounting to ₹50 lakhs to the plaintiffs including punitive and exemplary damages. Similarly, defendants no.7 and 8 are also liable to pay ₹5 lakhs including punitive and exemplary damages. Beside this plaintiffs are also entitled to legal cost of ₹20,65,926/- as legal cost including cost of litigation as per certificate and affidavit filed by the counsel for the plaintiffs.”

Court permanently restrained the defendants from using the Microsoft marks, Microsoft “Hotmail”, “Outlook”, “Office 365” or any other mark deceptively or confusingly similar to plaintiffs’ Microsoft marks.

 

 

Author: Nitish Kashyap

 

 

 

 

 

 

 

 

 

 

 

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