7 August 2020TrademarksMohini V and Aarti Aggarwal

Financial compensation: the winding road to end backlog?

Damages under common law are a form of financial compensation which measures the harm caused to another in monetary terms, and are awarded to a suffering party due to a breach of duty, losses suffered, or injury caused on account of actionable wrongs.

Another form of financial compensation often meted out in suits is that of costs, ie, awarding expenses incurred in bringing a lawsuit such as cost of litigation, court fees, and attorneys’ fees.

Historically, in the context of IP suits in India, a sentiment of nominal costs and damages or no costs and damages at all pervaded legal jurisprudence. Decisions in Time Incorporated v Lokesh Srivastava (2005, now overruled), Microsoft Corporation v K. Mayuri & Ors (2007) and Hindustan Unilever v Reckitt Benckiser India (2008) greatly stirred the discourse around damages and were early bellwethers of a changing approach.

However, none of these cases was able to succinctly establish ground rules that could be followed uniformly across myriad cases, and nor did they entail large sums of damages being awarded.

Change has become much more palpable following the advent of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 (the act) and subsequent amendments in 2018.

Courts are now empowered to impose costs on parties found guilty of mala fide practices, even if the same have not been quantified by parties to a suit. Introduction of the act has led to increasing instances of grant of damages, including unprecedented amounts in deserving cases.

Costs at interim stage worth millions

In an important suit for design law in India, the High Court of Delhi while adjudicating interim injunction applications came down heavily on the plaintiff for obtaining injunction orders against several shoe manufacturers in India.

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