Firms affected by IPR violations could press criminal charges as victim: SC

Business Standard

2 days ago

The Supreme Court has ruled that a company can be called a 'victim' under the Code of Criminal Procedure (CrPC) and file an appeal against an acquittal order in criminal cases, including intellectual property rights (IPR) violations. This means that corporate entities affected by IPR violations could now pursue criminal proceedings as the victim.
A bench of Justices Ahsanuddin Amanullah and Prashant Kumar Mishra was hearing a plea by Asian Paints, which had suffered losses due to the accused selling counterfeit paints. Asian Paints moved the apex court against the Rajasthan High Court's judgment dismissing its appeal against the acquittal of one Ram Babu, who was allegedly found selling counterfeit paint products under the brand name.
The High Court had dismissed the appeal under the proviso to Section 372 CrPC, reasoning that an agent of Asian Paints, and not the company, was the "complainant", and therefore the company could not file an appeal against the acquittal.
The Supreme Court, while disagreeing with this reasoning, questioned whether the appellant would fall under the definition of 'victim' in terms of Section 2(wa) read with the proviso to Section 372 of the CrPC, or whether Section 378 of the CrPC would prevail in the present case. ALSO READ:
The proviso to Section 372 grants victims the right to appeal against acquittal of the accused, conviction for a lesser offence, or inadequate compensation. If the court orders insufficient compensation for the victim, the victim can appeal.
The apex court bench held that 'Section 2(wa) of the CrPC has thoughtfully accorded an expansive understanding to the term 'victim' and not a narrow and restrictive meaning.'
'In the present case, there cannot be any two opinions that ultimately, it is the Appellant who has suffered due to the counterfeit/fake products being sold or attempted to be sold as having been manufactured by the Appellant. The Appellant would suffer financial loss and reputational injury if such products were bought by the public under the mistaken belief that they belonged to the Appellant's brand,' the apex court judgment said.
Asian Paints, a manufacturer in the paint industry for over 73 years, had engaged an IPR consultancy firm, M/s Solution, to track and take action against counterfeiters. During a market investigation in February 2016, the firm found counterfeit products resembling Asian Paints' trademarks at the shop of "Ganpati Traders" in Tunga, Rajasthan, owned by the accused Ram Babu. After a police inspection, 12 buckets of allegedly fake paint were seized.
The trial court acquitted Ram Babu, after which Asian Paints challenged the decision in the High Court. The High Court dismissed Asian Paints' appeal, prompting the company to move the Supreme Court. Advocate Ajay Singh and his team from Singh Law Chambers represented Asian Paints (petitioner), while Advocate Thakur Sumit and others appeared for the respondents.