Grave risks posed by counterfeit medical products
Justice Bansal emphasised that the counterfeiting of medical devices was not just a matter of intellectual property infringement but a serious offence that could endanger lives.
“The counterfeit medical products sold by the defendants pose a significant threat to public health. Counterfeiting of medical devices is not merely a case of trade mark infringement, it is a grave offence that endangers the lives of people. The defendants’ conduct demonstrates a deliberate effort to mislead the public, jeopardize consumer safety, and exploit consumer trust for financial gain,” the judgment stated.
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The Court also highlighted the irreparable harm caused to J&J’s goodwill and reputation.
“The defendants’ deliberate and fraudulent acts have also caused irreparable harm to the plaintiff’s goodwill and market reputation. By selling substandard counterfeit products under the plaintiff’s trade marks, the defendants have misled consumers and associated the plaintiff’s name with the counterfeit goods,” it noted.
Uncovering the counterfeit operation
The lawsuit, filed in 2019, accused the defendants of manufacturing, distributing, and selling counterfeit surgical products under J&J’s registered trademarks, including SURGICEL, ETHICON, and LIGACLIP. These products, which are critical for surgical procedures, were found to be non-sterile, contaminated, and inadequately oxidized, posing serious risks to patient safety.
The case gained momentum after a neurosurgeon at the University of Kentucky Medical Center in the United States detected irregularities in SURGICEL products during a brain surgery. Investigations traced the counterfeit supply chain through distributors in the UAE and the United States, ultimately linking it to M/s Medserve in New Delhi.
Deliberate infringement and financial gains
Justice Bansal ruled that the defendants had engaged in a calculated and wilful infringement of J&J’s intellectual property rights. The Court found that they had manufactured and sold counterfeit medical devices, repackaged expired products with falsified dates, and distributed them internationally, reaping significant profits.
Evidence presented during the trial included seized documents, electronic communications, and witness testimony from J&J representatives. Local Commissioners appointed by the Court recovered counterfeit products, invoices, and financial records from the defendants’ premises, corroborating J&J’s claims.
“The evidence presented before the Court, including invoices, bank receipts, and chat extracts, establishes without a doubt that defendant no. 1 has received substantial financial gains in the course of carrying out the infringing and counterfeiting activities,” the judgment stated.
₹3.34 crore in damages and permanent injunction
The Court awarded ₹2.34 crore in compensatory damages, calculated as 25% of the estimated ₹9.39 crore in sales generated by the defendants from counterfeit products. Additionally, ₹1 crore was imposed as exemplary damages to deter future infringements and penalise the defendants for their “dishonest and fraudulent” activities.
“I am convinced with the evidence presented and submissions made by the counsel for the plaintiff and conclude that a conservative profit margin of 25% can be assumed for awarding actual damages in favour of the plaintiff and against the defendants in the present case,” Justice Bansal stated.
The Court also issued a permanent injunction restraining the defendants from using J&J’s trademarks, selling counterfeit products, or engaging in any activities that could mislead consumers into believing they were purchasing genuine J&J products.
Johnson & Johnson was represented by Advocates Nancy Roy, Raghav Malik, Prakirti Varshney, and Prashan from the law firm Lall & Sethi.
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