Unauthorized Stock Dump and Trademark Infringement
Facts:The case centers on a trademark dispute in the luxury perfume industry between Fontaine Limited, the owner of the world-famous CREED brand, and several related Indian companies and their directors known as the defendants. CREED, started in 1760, is a high-end perfume house famous for its unique scents for men and women, built on years of use, ads, and strict quality checks that have created huge trust among buyers. Fontaine took over the CREED business in India in 2020 through deals that gave it full rights to the brand's trademarks, including the CREED device mark registered in India under Class 3 for perfumes and protected under Classes 3, 4, and 35 via the Madrid Protocol since early 2022.
Before Fontaine's takeover, a company called Erol International had a deal with Defendant No. 2 from 2017 to bring in, sell, and spread CREED products in India as the only allowed seller, with rights to use ads and promo stuff. Defendant No. 1, linked to Defendant No. 2, ran a CREED store in Delhi's Chanakya Mall. After Fontaine bought the business, it kept supplying products to Defendants 1 and 2. But starting in June 2021, Defendant No. 2 delayed payments on bills, paying late only in February 2022 after reminders. Because of these repeats and no responses, Fontaine let the deal end on 9 August 2022 and asked for a smooth close-up. Under the deal's rules, after it ended, Defendants 1 and 2 lost rights to buy, sell, or use CREED marks.
Even after warnings, Defendants 1, 3, and 4— all part of the same group—kept selling CREED items through wrong channels like side shops and WhatsApp under names like 'CREED the Chanakya' to fool buyers into thinking they were still official. Defendants 5 to 7 were the bosses running daily work for these companies. Fontaine sent stop notices on 30 August 2022 and 7 July 2023, offering to buy back good stock at cost price and destroy bad stuff under watch, but Defendants ignored them and kept going, hurting Fontaine's name and sales.
Procedural Detail:Fontaine filed the suit in August 2023 for a full stop order against the misuse, plus orders to hand over and destroy wrong items, plus money for losses and costs. Right away, on 18 August 2023, the court gave a quick one-sided stop order against using CREED marks or selling through wrong ways, and sent a checker to look at Defendants' spots. The checker went on 29 August 2023 and found empty boxes, bags, booklets, signs, and a screen with CREED marks at Defendant No. 1's place, plus a list of leftover stock that matched Fontaine's info.
Defendant No. 1 answered on 28 December 2023 but skipped admitting or denying many papers, and admitted running the store till 29 April 2023 even after the deal ended. Defendants 2 to 7 got papers but didn't show up, so on 21 February 2024, the court shut their chance to answer. On 1 May 2024, the quick stop became lasting. Fontaine then asked on 20 September 2024 for a fast win under Order 13-A CPC and IP rules. Defendant No. 1 added a late paper answer on 8 April 2025. Hearings happened, and the full 24-page order came on 14 November 2025.
Dispute:The main fight was over whether Defendants could keep selling leftover CREED stock after their deal ended on 9 August 2022 without permission, using the CREED name on the store and WhatsApp to trick buyers. Fontaine said this broke the deal's end rules, hurt its good name, and cheated customers by pretending to be official sellers, asking for a forever stop, stock handover, and money for lost sales and costs around Rs. 45 lakhs. Defendant No. 1 agreed to the stop but fought the money part, saying no proof of sales after end date and that all stock was tossed by late 2023. Others didn't fight at all. The key was if Fontaine proved the wrong sales with papers like checker reports, buy tests, and chats, and if a fast win fit without full trial since no real fight back.
Detailed Reasoning:The court used the easy three-step check for quick wins in business cases: if the claim looks strong on first look, if waiting for full proof would waste time without real doubt, and if no strong reason needs a full hearing. Here, since Defendant No. 1 agreed to the stop and others skipped court, there was no real fight, making trial needless.
The court first explained CREED's fame and Fontaine's full rights via 2020 deals, noting registrations and how Defendants got short-term okay under the 2017 deal that ended naturally. It stressed deal rules required giving back good stock at cost and stopping all use, but Defendants kept the store open till April 2023 and sold via WhatsApp in mid-2023, fooling buyers. The court saw this as clear misuse under the Trademarks Act, 1999, hurting trust and sales.
For the fast win, the court leaned on Su-Kam Power Systems Ltd. v. Kunwer Sachdev (2019 SCC OnLine Del 10764), where a same-level bench said business suits aim for quick ends, and trials aren't always needed if no real chance to win for the other side—'real' means solid, not just dreams. Here, no real doubt since Defendant No. 1 admitted the store ran post-end and didn't deny key papers like notices and checker finds, and others admitted everything by not showing up.
On money, the court matched it to Rule 20 of Delhi High Court IP Rules 2021, which helps figure losses from wrong use. It used the checker list of leftover stock (undisputed) and test buys (with bills showing Defendant links) to back Fontaine's math in Document 1: Rs. 37.43 lakhs profit grab from Rs. 2.1 crore sales. No counter proof like tax returns from Defendants sealed it. The court cited Aero Club v. M/s Sahara Belts (2023 SCC OnLine Del 7466) for using seized stock lists for damage math, and Hindustan Lever Ltd. v. Satish Kumar (2012 SCC OnLine Del 1378) and Ebay Inc. v. Mohd. Waseem (2022 SCC OnLine Del 3879) saying skippers can't dodge money claims—they admit faults.
For how bad the wrong was, the court used Koninlijke Philips v. Amazestore (2019 SCC OnLine Del 8198), listing bad acts like repeat wrongs (Defendants hit before in Yves Saint Laurent v. Brompton Lifestyle, CS(COMM) 789/2022 order 4 January 2024) as high-level bad, needing strong stops and money to scare off future cheats. This fit since Defendants are group-linked bosses who hid sales via side firms. The court said money covers lost chances, name harm, and unfair gains, plus costs (Rs. 7.97 lakhs for fees, checker, court) to make Fontaine whole.
All defendants shared blame jointly since linked, and must hand over seized stuff in 4 weeks or pay 12% interest. The quick stop from 18 August 2023 merged into the full order.
Decision
Decision:The application I.A. 40224/2024 allowed. Restraint order against using CREED marks or selling products wrong, handover/destroy of seized items, Rs. 37,42,737 damages, Rs. 7,97,000 costs, all joint on Defendants 1-7, payable in 4 weeks or with 12% interest. Suit decreed; no more dates.
Case Title: Fontaine Limited Versus Berkeley Beauty Brands Private Limited & Ors.
Order Date: 14 November 2025
Case Number: CS(COMM) 564/2023
Court: High Court of Delhi
Hon'ble Judge: Ms. Justice Manmeet Pritam Singh Arora
Disclaimer: The information shared here is intended to serve the public interest by offering insights and perspectives. However, readers are advised to exercise their own discretion when interpreting and applying this information. The content herein is subjective and may contain errors in perception, interpretation, and presentation.
Written By: Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi
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