Four directors of Golden Tobacco Limited (GTL) were sentenced to two weeks in civil prison by the Madras High Court for contempt of court in a case relating to infringement of ITC Limited’s trademark of ‘Gold Flake’ brand of cigarettes. However, the bench of Justices S S Sundar and P B Balaji suspended its sentence till July 15 to enable the convicted directors S Khurana, Kokila Panchal, A K Joshi, and Bharat Merchant to appeal in the Supreme Court.
A Division Bench of Justices S S Sundar and P B Balaji delivered the verdict on a contempt of court petition moved by ITC Limited in 2019 accusing Golden Tobacco and its four directors of continuing to imitate the trade mark ‘Gold Flake’ for their cigarettes despite an interim injunction granted against it by the High Court on July 26, 2018. The dispute relates to a case by the ITC Limited challenging GTL’s manufacturing of the Gold Flake brand of cigarette.
ITC brand's Golden Flake infringement
The ITC manufactures Gold Flake, Classic and India Kings cigarettes, whereas GTL was known for its brands Panama, Flair and Chancellor. However, GTL obtained registration for Golden Flake with different features which ITC had challenged since 1979. ITC had initially moved the Calcutta High Court in 1979 and later filed two suits in Madras High Court accusing GTL of infringement of its ‘Golden Flake’ label. In July 2003, on the basis of a memoranda of compromise, GTL was allowed to use the words ‘Golden’s Gold Flake’ around a roundel with a lion inside on their cigarette packets.
GTL misused ITC label again in 2015
Nonetheless, in 2015 ITC complaint to the Madras High Court that GTL again misused the label. By an order July 26, 2018, the court had restrained GTL from infringing on the label. Despite the Supreme Court refusing to stay the order, GTL continued to deceptively use the label. Following this, ITC filed a case to punish GTL directors for contempt of court. GTL argued that it was unable to comply with the earlier direction due to change in governmental policy on branding of cigarettes as 85% space was used for anti-tobacco warning. Dismissing its argument, the court sentenced the directors to undergo two weeks civil imprisonment.