By June 19, 2019 December 20th, 2019 No Comments

The practice of Defendant Masking is a questionable
trend whereby the Plaintiff arrays the main Defendant as Defendant Number 2 or
3 with an intent to deceive and thereby, bar them from appearing on the first
date of the suit which aids in obtaining an ex
parte injunction against the
Defendants. By preventing the principal defendant of being given notice of
pending litigation against him, the Plaintiff robs him of an opportunity to set
up a defence and be given a fair trial. This happens because in general, the
Courts lists the cases coming up for hearing as ‘ABC v. XYZ and others’ and therefore
if the main defendant is listed as defendant number 2, its name will not appear
in the list as it will be counted with ‘as others’, thereby preventing it from
approaching the courts to challenge ex parte hearings.

Along with this, it entraps innocent or small-scale
dealers by arraying them as the principal defendant.
If innocuous dealers are pinned as the main
contesting defendant, it is likely that due to their comparative small size,
they would not be able to create a strong defence, thereby being prejudicial on
the grounds of discrepancies in wealth accumulation. Since, the practice
contemplates the parent company arraying itself as any defendant other than the
principal one, it was largely of their convenience to throw any small dealer
under the bus. However, the said dealer is like any other dealer whose
businesses are scattered throughout the country.

This practice has been condemned by the High
Court of Delhi in
Micolube India Ltd. v. Maggon Auto
Centre & Anr.
[1], and
recently in Bata India Ltd. v. Chawla Boot House & Anr.[2]

(Supra), the principal defendant was Motor
Industries Co. Ltd. which had been arrayed as Defendant Number 2 whereas Maggon
Auto Centre was arrayed as Defendant Number 1. This was done to avoid detection
of the suit in the cause list by the principal defendant.
The Court went
on to note that the practice amounts to material suppression of facts and
disentitles the Plaintiff from seeking an equitable relief.

India Ltd
. (Supra), a shopkeeper trading under the name and design of Chawla
Boot House was arrayed as Defendant Number 1. The main Defendant was Leayan
Global Pvt. Ltd., which was arrayed as Defendant Number 2. The Delhi High Court
further bolstered the position
by deleting the name of Defendant Number 1 and termed the practice
impermissible. The Court
directed the Registry to ensure strict
compliance of the judgment in the Micolube India (Supra).

To ensure that the party which claims relief
comes to the Court with clean hands, the High Court of Delhi, vide Office Order
bearing number 600/Original/DHC/2019, dated April 16, 2019, directed the
Registry to seek an undertaking of the Plaintiff in IPR cases where there are
multiple Defendants, that the Defendant No.1 being arrayed is the main
contesting defendant in the suit.

In intellectual property cases typically, it is necessary to
array all the relevant parties such as the
retail store, the parent company that owns the store, the store chain if the
store is part of a franchise, and the manufacturer of the product. 
office order, however, leaves scope for ambiguous conclusions. It does not lay
down the directions as to how to select the main contesting defendant where the
several defendants that are arrayed are of largely the same scale and hold
similar market shares.

Further, in cases where it is the employee or
retail outlet which has promoted the infringed trademark more widely than the
offending company and earned goodwill because of the same, it would be grossly
unjust to array the company as the principal defendant. For instance, if
Company X infringes the trademark of Company Y and distributes the products to
various retailers, one particular Retailer A advertises the products widely and
creates an expanded customer base because of it. Herein, both the parties are
at fault but due to the large scale operations of the company, it will be
arrayed as the main contesting defendant.

Thus, though the issued office order is well
intended, it is vague in as much as it is open ended and leaves room for doubt
as to a plurality of different conclusions flowing from it. Whether the cause
list should be made in such a manner where the names of all Defendant are
reflected so that the scope of defendant masking can be curtailed.

[1] 2008 (36) PTC 231 (Del)
[2] CS (COMM) 110/2019

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