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December 11, 2020

“Reasonable Restrictions” On Trade Can be Imposed As A Relief In An IP Infringement Suit

Author: Manavi Jain

 In Refread Solutions Private Limited v. Scientific EResource Productions & Ors. [TM No. 20/2018], the Additional District Judge of the Central Tiz Hazari Court, Delhi, vide an order dated October 13, 2020, imposed punitive damages amounting to Rs. 5 lakh on the Defendant, along with a 3 years’ restriction on the Defendant’s trading activities in India.

 The Plaintiff claimed to be engaged in the business of providing digital/online libraries. Towards this, the Plaintiff claimed to have launched its web-based software product under the name “Refread”.

 As per the Plaintiff, the Defendants, in 2017, had approached the Plaintiff to inter alia represent the Plaintiff before the end client/customers. Thereafter, as claimed, the Plaintiff and one of the Defendants entered into an Agency Representation Agreement. In October 2017, the Plantiff claims to have been made aware of the Defendant promoting a product under “Read Smart Digital” in an international book fair. On investigating further, the Plaintiff claims to have found that the Defendant had duplicated and copied content from the Plaintiff’s website/product under “Refread”. The Plaintiff instituted the present suit inter alia for breach of Agreement and copyright infringement. The proceedings took place ex parte.

After a thorough consideration of the evidence placed on record by the Plaintiff, the Court decreed the suit in favour of the Plaintiff while awarding Rs. 5 lakhs as punitive damages. On the Plaintiff’s prayer vis-à-vis restraining the Defendants from engaging in any business similar to theirs, the Court held “…as per Section 27 Indian Contract Act reasonable restrictions for a reasonable period of time can be imposed upon the defendant… So far as imposition of restriction of 3 years is concerned such restriction seems to be reasonable…such restrictions…should be according to the territorial jurisdiction of the court…so far as imposition of restriction for a period of three years upon the defendant is concerned, it would be appropriate that it should be extended only to the Indian market.”

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