Vakil Help Desk News: the Delhi High Court has quashed a 2012 counterfeiting FIR under the Trade Marks and Copyright Acts after the parties settled, holding the dispute was predominantly commercial and a conviction was unlikely.
Vakil Help Desk News, IPR. Where a counterfeiting case between businesses is settled, the criminal proceedings can be quashed even though the offences are not formally compoundable. The Delhi High Court did so in Ashok Jain v. State (NCT of Delhi) & Anr., before Justice Manmeet Pritam Singh Arora.
The dispute
A brand owner alleged that counterfeit car speakers were sold under its registered "PIONEER" mark. An FIR was registered in 2012 under Sections 103 and 104 of the Trade Marks Act and Section 63 of the Copyright Act, and a chargesheet followed. The parties later settled through a written agreement, under which the accused agreed to pay ₹1 lakh.
What the Court held
- Applying the Supreme Court's guidelines on quashing on settlement, the dispute was predominantly commercial in nature.
- The possibility of the proceedings ending in a conviction was remote.
- The FIR, chargesheet and consequential proceedings were quashed against the settling parties; the seized counterfeit goods were ordered destroyed.
Why it matters
Many IP disputes have both civil and criminal sides. A negotiated settlement can bring closure, and courts can quash the criminal case where the matter is essentially commercial and a conviction is unlikely.
What this means for you
A counterfeiting or IP criminal case can often be resolved by a well-drafted settlement, and the court may quash the proceedings where the dispute is commercial. If you are a brand owner, a settlement with compensation and destruction of the counterfeit stock may serve you better than years of trial. If you are accused, early settlement can end the matter. We negotiate and document such settlements and file quashing petitions.