COMPETITION APPELLATE TRIBUNAL UTPE No.95 of 2007 C.A

COMPETITION APPELLATE TRIBUNAL UTPE No.95 of 2007 C.A. No. 45 of 2007

CORAM

Hon’ble Justice G.S. Singhvi Chairman

IN THE MATTER OF:

M/s. Adidas India Marketing Pvt. Ltd., Regd. Office at C-II, Ansal Villa, Satbari, New Delhi – 110074. …Complainant

Vs.

1. Nike India Pvt. Ltd., 701, Millenia, Tower B Murphy Road, Ulsoor, Bangalore – 560 002, India.

2. Board of Cricket For India, Brabourne Stadium (North Stand), Veer Nariman Road, Churchgate, Mumbai – 400 020.

3. Mr. Sachin Tendulkar, LA Mer, 10th & 11th Floor, Mistry Park, Kadeshwary Temple Road, Near Leelavathi Hospital, Bandra, West Mumbai – 400051.

4. M/s. Iconix, Palm Court, Ground Floor, 20/4, Sukhrali Chowk, Opposite HUDA Park, Sector – 14, Gurgaon – 122001 (Haryana) ….Respondents

Appearances: Shri C.Mukund with Ms. Firdouse Qutb Wani and Shri Vivek Anandh, Advocates for the Appelelant Shri N.Ganpathy, Advocate for Respondent No. 1 Shri Amit Sibal, Senior Advocate with Ms. Radhe Rangaswamy, Advocates for Respondent No. 2 Shri Anshuman Nandi, Advocate for Respondent No. 3

ORDER

The complainant and Respondent No. 1 are private limited companies incorporated under the Companies Act, 1959. The complainant is a subsidiary and representative of Adidas AG. Respondent No. 1 is a subsidiary and representative of

Nike Corporation of USA. Both are engaged in the business of manufacturing, distributing and selling quality footwear, sports equipments and other products and are competitors in the market. Respondent No. 2 is a society registered under the Tamil

Nadu Societies Registration Act. It is a member of the International Council of Cricket and is responsible for regulating and promoting the sports of cricket in India.

Respondent No. 3, Sachin Tedulkar, is a world renowned cricketer and sports icon.

2. The complainant’s products and brand have been endorsed by Respondent No. 3 since 1997. For this purpose, they have entered into agreement from time to time including the one dated 14.05.2004. The definitions of some of the terms and paragraphs 4.1, 4.7, 5.2, 5.3, 6(a), 6(b) and 6(c) of that agreement read as under :

1. Definitions

“Adidas Products” shall mean Products bearing any mark, logo, sign, symbol, or other identifier of the adidas brand but shall not include watches and eyewear.

“Athlete’s Endorsement” shall mean the Athlete’s – name, nickname, initials, autograph, voice, facsimile signature, photograph, motion picture, videotape, likeness or any other endorsement.

“Competitor” shall man any person, entity or organization (other than a member of the adidas Group) who or which, now or in the future, produces and/or solely distributes Products within the same or similar product categories as comprised by the Products.

“Contract Period” shall mean the period commencing on February 16, 2004 and ending on February 15, 2009 unless extended or sooner terminated in accordance with the terms and conditions hereof.

4. Obligation of the Athlete

4.1 At all times during the Contract Period, without impinging on Athlete’s other sponsor commitments (excluding competing products) and subject to the professional commitments of the Athlete under BCCI/ICC/IDI/Mumbai Cricket Association Regulations or Contracts, the Athlete shall exclusively wear, use and promote adidas Products throughout the Contract Territory whenever the Athlete: (a) is training or competing or otherwise involved in athletic events;

(b) is being filmed by promotional videotape or posing for photographs or otherwise engaged in promotional or other activities; (c) attends any athletic event or training session in the Contract Territory whether as an athlete, spectator, television commentator or in any other capacity; (d) appears in or is featured in any sporting, lifestyle or general interest articles or features in any newspapers, magazines or other publications which is pre-arranged by adidas; (e) participates in any public appearance or interview including but not limited to television, the Internet, wireless technology facilitating transmission to any portable wireless device which is capable of receiving data and voice and video communication and other press appearances in relation to both sporting and non-sporting events. (f) engages in sports or sports product promotional activities;

Provided that if it is necessary, as a result of the Athlete’s representation of or connection with any national or State team that the Athlete should wear or use any product not sold by any member of the adidas Group, then the wearing or use of that product by the Athlete whilst competing on behalf of that national or State team shall (subject to the provisions of this clause 4) not be a breach of this clause 4. If it is necessary as a result of the Athlete’s appearance on television as a commentator or during any other public appearance or social events or interview on television

to wear formal/casual wear then the wearing of formal/casual wear by the Athlete whilst so appearing shall not be a breach of the Athlete’s obligations under this clause 4. In such an event, the Athlete must not wear products from brands that compete directly or indirectly with adidas. A list of such brands is provided in Annexure I. 4.7 The Athlete shall not wear, promote, use or otherwise endorse any Product of a Competitor of adidas or any member of the adidas Group or any other goods of a Competitor of adidas or any member of the adidas Group which is sold or under the name, brand, logo, symbol or other feature which is also used in relation to Products subject to the following exceptions: · The Athlete may participate in a cricket event/tournament that may be organized or sponsored or endorsed by one of more of adidas’ competitors during the terms of the agreement in his official capacity as a member of the Indian cricket team and or state or regional cricket teams. · Participate in a charity event

· Participate in an international event where the athlete participates as a world renowned cricketer (e.g. World XI International matches) · Appear on television/radio or internet program provided that the promotions and advertisements in relation to such programs shall in no way depict or give the impression that the athlete is personally endorsing any Competitor of adidas and tht such programs are not titled using the Athlete’s name, image or surname in connection with names or marks of the Competitor of adidas. 5.2 Adidas shall be entitled to, subject to the total number of days as set out in Clause 4.8 above:

(a) the services of the Athlete as an on-camera or on-tape performer, either individually or as part of a group, for production of television or radio commercials or motion picture, videotape, radio, Internet or mobile wireless advertising or promotional materials, and/or

(b) the services of the Athlete, either individually or as part of a group, in photography sessions, for the purpose of making print or other

types of advertisement, or for use as promotional materials or as promotional means, including without limitation, in consumer magazines, newspapers, direct mail pieces, posters, catalogues, brochures and point-of-purchase displays and materials and in all forms of electronic media such as the Internet and mobile wireless technology now existing or hereafter developed.

5.3 All advertising and promotional materials produced hereunder shall be and remain the sole property of adidas, and the Athlete shall have no right, title or interest of any kind in or to such material, any component part, element or reproduction thereof, nor shall the Athlete be entitled to the payment of any amounts as royalties or otherwise in respect thereof. The Athlete hereby acknowledges that it does not have any rights whatsoever to use the adidas trade marks or any other names, designs or marks of adidas or of any member of the adidas Group or to license or authorize any third party so to do and in particular (without limitation) the Athlete undertakes that the Athlete shall not use such rights without obtaining the express prior written consent of adidas. The Athlete irrevocably and unconditionally waives any moral rights and performance rights which the Athlete might have in respect of any advertising or promotional materials to the extent permitted by law.

6.1 The Athlete represents and warrants that the Athlete :

(a) is free to enter into this Agreement and to fulfill and perform the Athlete’s obligations contemplated herein;

(b) is the sole owner of the promotional, endorsement and licensing rights (including the Athlete’s Endorsement) granted hereunder and that the Athlete has not granted, and agrees that the Athlete will not grant, any right, license or privilege, or any option relating thereto during the Contract Period or any extension thereof with respect to the Athlete’s promotional, endorsement or consulting rights and services to any Competitor of adidas or any member of the adidas Group;

(c) has not entered and will not enter into any other contractual commitment that will prevent or substantially impair the performance of the Athlete’s obligations under this Agreement;

(d) does not know of any existing health problem or medical condition which may significantly affect the Athlete’s ability as an athlete and the Athlete shall notify adidas if the Athlete becomes aware of any health problem or medical condition which subsequently arises during the Contract Period and which may significantly affect the Athlete’s ability as an athlete; and

(e) does not now, and did not during the year prior to the date of execution of this Agreement, and shall not during the Contract Period or any extension thereof, use or possess any drugs or other substances, the use or possession of which is prohibited by applicable law or any applicable rules or regulations of any sports federation or national or international sports organization with jurisdiction over the Athlete.

(Emphasis added)

3. On 15.12.2005, Respondent No. 2 invited tenders for sponsorship and supply of footwear, apparel and related cricketing accessories for a period of five years commencing from 01.01.2006. The complainant and Respondent No. 1 submitted their respective bids. After considering the same, Respondent No. 2 awarded contract to

Respondent No. 1. As a sequel to this, the parties signed an agreement on 23.12.2005 with the title SPONSORSHIP AND LICENSE AGREEMENT. The definitions of the relevant terms and clauses 5, 7, and 10 of agreement dated 23.12.2005 read as under :

(b) “National Team(s) shall mean the Men’s Senior National Team, Men’s A Team, Men’s Jr., Under 20, Under 18, Under 16 and other National Teams, which participate in “National Team Competition” (as such term is defined below), as well as any other national teams developed by BCCI, and the players, coaches and staff who comprise each team, and shall also include players and team participating in the BCCI academies.

(c) “National Team Competition” shall mean all international cricket competitions sanctioned by the ICC and/or BCCI, including all exhibitions, training matches and clinics in which a National Team participates as a team representative from India, and all other BCCI-sponsored events in which a National Team participates.

(f) “Staff” shall mean collectively, assistant coaches, physiotherapist, equipment managers, trainers and other field staff employed by BCCI or any National Team to provide coaching and support services to any such team and its players.

(j) “Licensed Marks” shall eman the BCCI name, logo and trademarks as set forth on Exhibit. A hereto and any other trademark now or hereafter owned or used by BCCI.

(k) “Products” shall mean:

(1) All formal uniforms including shirts, trousers, blazers, ties and socks;

(2) Clothing articles for the ODI and test teams including but not limited to shorts, shirts, pants and socks, training apparel, practice wear, windcheaters, caps, helmets and scarves which Players wear or may be reasonably expected to wear while participating in competitions;

(3) All accessories of an athletic or sports-related nature, limited to headwear, sunglasses, eyewear and carrying bags, headbands, wristbands, which Players normally wear; and

(4) Athletic Footwear.

(s) “Logo” shall, unless excluded otherwise specifically dealt with, means the trademarks/ Brand names as specified in schedule I hereunder written or As may be mutually acceptable between BCCI and Nike In writing, but subject to existing Standard Playing Conditions and Regulations and Restrictions of ICC including its size, specifications, Dimensions, modifications or exclusions as detailed in Schedule II hereunder mentioned.

(t) “Match” shall mean any test match or Match including tournaments, series or bi-lateral, Tours or otherwise which is officially recognized by BCCI and/ or ICC whether organized by BCCI or any other Cricket Board and/ or included in the ICC Calendar involving the Indian Team.

5. GRANT OF ENDORSEMENT RIGHTS & OFFICIAL SPONSORSHIP DESIGNATIONS

BCCI hereby grants to NIKE, and NIKE hereby accepts:

(i) The designation as “the exclusive supplier of the athletic footwear, apparel and accessory products of BCCI and Cricket India; and

(ii) The right to utilize (subject to the approval provisions of Paragraph 10 below) the Licensed Marks and/or Designations worldwide, in any media including, the worldwide web, CD-ROM and other interactive and multi- media technologies, in connection with the manufacture, advertising, marketing, promotion and sale of NIKE Products, and the NIKE brand, and in the creation and production of NIKE sports-themed games and broadcast programming, subject to clause 10 below

Such rights shall specifically include, the following:

(a) The exclusive right to supply Products for each Team and to use the Designations;

(b) Exclusive endorsement rights for the Athletic Product Category for BCCI grassroots activities and development programms;

(c) The right to manufacture and sell (subject to Paragraph 9 below) NIKE Product bearing or incorporating Licensed Marks and to conduct promotions with and through NIKE retain accounts; and

(d) The right to use, without additional cost (unless otherwise provided), in connection with the advertisement and promotion of NIKE Products and the NIKE brand, photographs and/or videotape/film footage of National Team game-action, National Team Players and/or Coaches (respectively, “BCCI Photos” and “BCCI Footage”) in their respective official National Team uniforms, NIKE-S use, if any, of BCCI Photos or Footage of minimum of 5 players who have not either entered into an endorsement agreement with NIKE or otherwise expressly granted permission to NIKE to use his or limited to use in a team

context or incidental use only to the extent necessary to effectuate the use in which such Player’s image or likeness appears as it may so decide provided that no such campaign or advertisement shall constitute personal endorsement of NIKE or any of its products or services or otherwise by any individual players (s) in any manner whatsoever nature.

7. SUPPLY OF PRODUCTS FOR TEAMS.

( a ) Apparel, Footwear & Accessories. In further consideration of the sponsorship benefits to be provided and licensing rights granted by BCCI, and of the other obligations undertaken by BCCI herein, each Contract Year, NIKE shall supply to BCCI, free of charge (unless otherwise specified), for non-returnable use during the Term by each National Team for use in National Team Competition by the Players, Coaches and Staff members of each such, NIKE Products (including balls). The exact quantities, styles, sizes and delivery dates of such NIKE Products shall be mutually determined by NIKE and BCCI; provided, however, that in no event shall the total quantities of Official Team Uniforms and NIKE footwear Products exceed the total retail value allocated for each Contract Year (“Product Supply Cap”) as follows:

2006: Rs. 72,000,000 (Rupees Seven Hundred Twenty lacs only)

2007: Rs. 72,000,000 (Rupees Seven Hundred twenty lacs only)

2008: Rs. 72,000,000 (Rupees Seven Hundred twenty lacs only)

2009: Rs. 72,000,000 (Rupees Seven Hundred twenty lacs only)

2010: Rs. 72,000,000 (Rupees Seven Hundred twenty lacs only)

Products allowance includes footwear for any non-personally endorsed athletes in the National Teams.

BCCI may order and purchase additional NIKE Products from NIKE at NIKE’s cost plus twenty percent (20%).

BCCI may at its sole discretion decide to pay for the product directly or thru its Team sponsor. If BCCI decides to do the same then BCCI will take the amount listed above towards base

compensation. Thus for computation purposes the amount listed above will count towards additional revenue to BCCI, and will be used to compute minimum payout to the BCCI in deciding who is the successful bidder under the tender terms.

( b) NIKE Acknowledges that the BCCI has given rights to a team sponsor whose logo shall prominently appear on the chest and leading arm of the player. This logo shall be faithfully reproduced by NIKE on all shirts. BCCI shall not permit any team or player to add any other trademark or logo other than BCCI, NIKE or ICC in accordance with ICC guidelines without NIKE’s prior written consent.

The team sponsor shall provide NIKE the right to produce and reproduce through registered trademarks or logos on the product and the advertising with NIKE intends to undertake pursuant to Clause No. 10 hereunder.

BCCI and NIKE agree that the team sponsor shall be a person or a company that is not directly engaged in a business in direct conflict with NIKE.

( c ) BCCI shall insure that the NIKE Product supplied pursuant to this Agreement shall not be altered in any way.

10. ADVERTISING AND LICENSED PRODUCT APPROVAL

( a) Advertising. In order to establish and maintain high standards of style, quality and propriety associated with BCCI and its teams, in the event NIKE desires to use Licensed Marks in any advertising or promotion, NIKE shall first submit the concept or a sample of the proposed use to BCCI for approval, which approval shall not be unreasonably withheld. Under no circumstances shall any use of Licensed Marks or the image or likeness of any Player, Coach or Staff member, which BCCI in good faith believes reflects unfavorably upon or disparages BCCI or its teams, be approved. BCCI shall use its best efforts to advise NIKE of its approval or disapproval of the concept or sample within fifteen (15) calendar days of its receipt of the concept or sample. If BCCI has not conveyed its approval or disapproval of the concept or sample in

writing within such 15-day period, it shall be deemed to have granted its approval of the concept or sample as submitted.

( b ) Quality Control and Licensed Product. All Licensed Product shall meet and conform to the high standards of quality, style and appearance of BCCI. Prior to any commercial production or distribution of any Licensed Product, NIKE shall, at its expense, submit to BCCI (or its Agent) for approval two samples of each Product. BCCI shall use best efforts to notify NIKE of the approval or disapproval of the submitted item within ten (10) calendar days of receipt thereof. BCCI’s approval, or disapproval, shall be final and in writing. Any submitted item that has not been disapproved within twenty (20) calendar days of receipt by BCCI (or its Agent) shall be deemed approved. Once the submitted item is approved, NIKE shall not depart there from in any material respect.

( c ) In the event BCCI desires to use the NIKE Marks in any advertising or promotion, BCCI shall first submit a sample or the concept of the proposed advertisement or promotion to NIKE for approval, which approval shall not be unreasonably withheld.

4. During the currency of its agreement with Respondent No. 2, Respondent No. 1 manufactured and sold T-shirts bearing the names of various members of Indian Cricket

Team including Respondent No. 3 and the number allotted to him by Respondent No. 2.

It also came out with series of T-shirts known as “Nike Cricket Hero Tees”. The names of the players were printed on the front as well as the reverse side of these shirts.

5. The complainant sent legal notice dated 20.10.2006 to Respondents Nos. 1 and

2 claiming that the manufacture and sale of T-shirts by Respondent No.1 with the names and personal attributes of Respondent No.3 amounted to breach of agreement dated 14.05.2004 and an unfair trade practice within the meaning of Section 36-A of the Act. In reply, the advocate for Respondent No.1 sent letter dated 27.10.2006 to the complainant’s counsel denying the allegation made on behalf of the complainant and, at the same time, sought time to send comprehensive reply, which was done on

17.11.2006. The relevant paragraph of that reply is reproduced below :

“Nike wishes to inform your client that its manufacture and sale of the merchandise in question and the use of all names and marks thereon is licensed by the Board of Control for Cricket in India (“BCCI”) which your client is aware, is the central gaoverning body of the game of cricket in India, and with whom Mr. Sachine Tendulkar as an Indian national team player has executed one or more contract. The use of the names of the players in the Indian national cricket team is not meant to signify an endorsement by these players of Nike’s products but only stems from the rights granted by BCCI in Nike’s favour as the official apparel sonsor of the India national cricket team. Please note that Nike is bound by certain obligations of confidentiality in the agreement it has entered into with the BCCI.” (emphasis added)

5. In the meanwhile, the complainant sent letter dated 8.11.2006 to Respondent

No. 1 annexing therewith a fax/letter of the same date received from M/s. Iconix on behalf of Respondent No. 3 that he had not endorsed any product of Respondent No. 1.

6. After some time the complainant filed complaint under Sections 36-A, 36-D, 10 and 37 of the Monopolies and Restrictive Trade Practices Act, 1969 (for short, ‘the Act’) and prayed that an enquiry be ordered into the alleged unfair and restrictive trade practices indulged by Respondent No. 1 and a direction be issued to it to discontinue such practices. The complainant further prayed that Respondent No. 2 may be directed to ensure that Respondent No. 1 does not indulge in such practices. The complainant also filed an application under Section 12-B read with Section 36D and Section 37 of the

Act with prayers substantially similar to those contained in the main complaint.

Paragraphs 17, 18, 19, 20, 21 and 22 of the complaint as also letter dated 8.11.2006 sent by M/s. Iconix on behalf of Respondent No. 3 are extracted below :

17. That, pertinently, a distinction has been consciously maintained in the agreement of BCCI & Nike India between the “product” which are the subject matter of the agreement and the “marks” which the

sponsoring companies are authorized to put upon such product. The product by itself means only the bare team uniform or product without any marks. The products are required to be marked in the manner provided in the agreement wherein only the licensed marks i.e. “BCCI name, logo and trademarks used by BCCI” are permitted to be marked upon such products. As stated above the name, number or personal details of any player are not in the nature of trademarks falling in the definition of Licensed Marks. Hence, Nike India cannot claim usage of name or personal details of any player or their image or likeness under its agreement with BCCI.

18. That in fact under the said Agreement, as per draft floated by BCCI, a clear distinction is also made by BCCI between the identity of the BCCI Team and the individual identity of a player. The agreement shows that conscious effort has been made by BCCI to prevent the said agreement to be used by Nike India as a personal endorsement of their product by any individual players. Prohibition to this effect is indicated in clause 5(d). Clause 8 (c) shows that BCCI does not recognize the right of Nike India to use the name, personal attributes or image of any individual player unless they have contractual endorsement relationship with such players. Clause 12 contains additional representation and warranty wherein under sub clause b(1) & (2), BCCI has acknowledged the intellectual property and other rights of third parties and its intention not to violate any such rights.

19. That in this regard it is categorically stated and claimed by Adidas India that the name and personal details of any individual players and more specifically Mr. Sachin Tendulkar are not part of name, logo or any trade mark belonging to BCCI. BCCI has no right or property in such name and personal details and none is in fact claimed by them to the understanding of Adidas India. Mr. Sachin Tendulkar is individually free to endorse any products of his choice. BCCI or Nike India and any trademarks used by them cannot interfere in such bonafide use of his name and other personal details for endorsement of the products of Adidas India as per the mandate of section 35 of the Trade marks Act. BCCI and Nike India cannot indulge in any conduct, which may interfere with or

violate the exclusive endorsement rights bonafide given by the said athlete to Adidas India. Nike India has, therefore, no right or authority to mark their products with the name and personal details of the said athlete.

20. That however it appears that Nike India, apparently misinterpreting their agreement with BCCI, has started manufacturing, distributing and selling T-shirts bearing the name and other personal details of Mr. Sachin Tendulkar purporting the same to be licensed product under its agreement with the BCCI. By doing so Nike India is projecting and falsely representing that they and their products have the personal approval of and/or affiliation/association with Mr. Sachin Tendulkar and are endorsed by him. This is strongly objected to by Adidas India who have the exclusive endorsement rights in this regard. However, Nike India who are fully aware of this position are consciously engaging in this unfair trade practice and passing off themselves and their products as having the privilege of such affiliation/association, approval and endorsement of Mr. Tendulkar. They are thereby fraudulently trading upon and devaluing/damaging the exclusive endorsement rights of Adidas by cheating and deceiving innocent consumers who are likely to purchase these products believing that these have the endorsement of Mr. Sachin Tendulkar and are affiliated with him and associated with his name.

21. That it may be pointed out that Nike India has come out with a series of T-shirts known as “Nike Cricket Hero Tees”. These are plain coloured T-shirts with name “Tendulkar” mentioned on the front as well as the reverse side. These are T-shirts of inferior quality and designs, which are sold at a price of Rs. 895.00 a piece only for the reason that the same has the name “Tendulkar” printed upon them. It is submitted that the T-shirts have no significant value except for the name of “Tendulkar” written on the same, which is the only reason for the purchase of such a T-shirt by any consumer at such a price. But, for the name of the player being so marked on these T-shirts, Nike India can’t possibly sell these at such a price. It is stated that in this manner Nike India are violating the rights of Respondent No.3, which have been

exclusively granted to the Adidas India and at the same time unjustly enriching themselves. A copy of the Printed Brochure issued by Nike India mentioning these T-shirts is annexed herewith and marked as Annexure P-4. Photographs of some of these T- shirts being so marked and sold by Nike India are annexed herewith and marked as Annexure P-4A.

22. That the above actions of Nike India are absolutely illegal and without any lawful authority to mark their products with the name or any other personal details or attributes of Mr. Sachin Tendulkar is in violation of exclusive endorsement right given of Adidas India. These actions are in violation of legal rights of Mr. Sachin Tendulkar as exclusively conferred on Adidas India. These actions also amount to an unfair trade practice under the provisions of Section 36A(1) (iv) & (v) of the Monopolies and Unfair Trade Practices Act. Such markings of the product by Nike India also amount to applying a false description to their products as per Section 2 (za) (viii) of the Trademark Act.

Letter/fax dated 08/11/2006 sent by M/s. Iconix :

“Under the provisions of the Clause 5.1 of the Agreement, Sachin has exclusively granted the right and license to use his endorsement (defined as “Athlete’s Endorsement” in the Agreement) only to Adidas and the members of the Adidas Group without any limitations whatsoever. As such, only Adidas and members of the Adidas Group can use the Athlete’s Endorsement in relation to manufacture, sale, distribution and promotion of their products to the exclusion of all their competitors including Nike. Sachin has adhered to his obligations & assurances under the various Clauses of the Agreement including those as specifically granted, represented and warranted by him under Clauses 5.1 & 6.1 (a), (b) & (c). We, on behalf of Sachin, again confirm all the representations, warranties & assurances given under the agreement.

He has no contractual commitment which would in any manner detract from or impair the performance of his obligations under the above quoted Agreement with Adidas.

Sachin and ICONIX are anguished and strongly resent the inactions of Nike India in marking Sachin’s name and particulars on their products being sold in the open market without his or our authority or consent. ICONIX, on his behalf, categorically declare that he does not endorse the products of Nike India and have no contractual or legal relationship with them.

Nike has no authority to use his name, particulars, image or likeness or any devise or materials suggestive or indicative of his personal endorsement or personal approval/affiliation for promotion of their brand or products. Sachin is aggrieved by the actions of Nike India, which is a cause of loss & injury to him, Adidas as well as to cricket fans who choose products based on his endorsements.”

7. On being noticed by the Commission, Respondents Nos. 1, 2 and 3 filed separate replies. While Respondent No. 3 supported the complaint, Respondents Nos. 1 and 2 raised a preliminary objection to the maintainability thereof on the ground that it was at best a case arising out of the alleged breach of contract. On merits, Respondent

No. 1 pleaded that it was associated with cricket since 1990 and sold cricket shoes under the brand names like “Air Flipper”, “Air Yorker”, “Air Century” and “Boundary” apart from other cricket accessories, that it had secured products used and endorsement contracts with top cricket players, namely Shane Warne (Australia) and

Ian Botham (England). According to Respondent No. 1, the agreement entered with

Respondent No. 2 is self explanatory and by manufacturing T-shirts including “Hero Tee

Shirts”, it has not violated any provisions of the Act. In paragraphs 8, 9 and 10 of the reply, Respondent No.1 made the following averments :

8. The averments contained in these paragraphs are not to the knowledge of this respondent and the petitioner is put to strict proof of the same. It is interesting to note that the petitioner claims its rights under a purported contract with the third respondent, but has failed to produce a copy of the same before this Hon’ble Commission. It is also interesting to note that the

purported contract between the third respondent and the petitioner has not been placed before this Hon’ble Commission. It is further submitted that from the averments in these paragraphs it would appear that the contract, if any exists, is restrictive and anti- competitive. Without prejudice to all of the foregoing it is submitted that this respondent is the official supplier of apparel to the second respondent and Cricket India. This respondent’s use of third respondent’s name and attributes in the manner actually used, is permitted by the second respondent. This respondent believes that this permission is granted in exercise of rights accrued to the second respondent under its contract with the third respondent. This respondent is entitled to use all licensed marks belonging to or otherwise used by the second respondent and the attributes of a player are held out to be a licensed mark, owned by the second respondent and this respondent has no reason to believe that this is not the case. It is relevant to point out that Clause 12(b)(1) of the agreement attached by the petitioner bears that the second respondent represented to this respondent that in performing the agreement it could not be violating any of the rights of any other person including the right to grant the benefits set forth in the agreement. It is interesting to note that although, in the process of exchange of notices leading to the institution of this petition, the third respondent was called upon to confirm whether or not he had granted the rights to the use of his attributes to the second respondent, he has not done so. The letter dated 18.01.2007 purportedly written by the third respondent is vague and evasive and will be exposed as such in the course of arguments.

9. It is submitted that the tenor of pleadings in the paragraphs under reply is argumentative and completely meritless. It is also submitted that the petitioner is for its own convenience demonstrating deliberate inconsistency in complaining about the first respondent’s use of the third respondent in this manner, as the Petitioner’s parent and group companies in other parts of the world have produced products bearing the name and attributes of prominent Nike-sponsored athletes such as Lebron James, Kobe

Bryant and Ronaldo, allegedly pursuant to rights obtained from contracts with their teams or federations. It is reiterated that the use of the third respondent’s attributes by this respondent on its products is permitted by the second respondent. Hereto annexed and marked Annexure-A is a copy of the art work of the Hero Tee Shirts which were specifically permitted to be used by the second respondent in accordance with the approval procedures in Clause 10(b) of the agreement. The copy produced bears that the same has been consented to by Mr. Lalit Modi who represents the second respondent. This respondent shall rely on documents on record in support of its contentions. All averments contrary to the stance of this respondent are denied as false.

10. It is belief of this respondent that the right to attributes of the individual players of the Indian national cricket team have been acquired by the second respondent. This respondent has been permitted to use these rights. It is denied that the activities of this respondent are in any manner contrary to law or infringing of any right whatsoever. It is further submitted that this respondent has not any point in time “interfered” in or “violated” the use of the attributes of the third respondent by the petitioner.”

8. In its reply Respondent No. 2 pleaded that it is a body responsible for promotion and administration of the game of cricket in the country and the players who play matches representing the country do so under the agreement entered with it; that the advertisement rights pertaining to the matches are the property of Respondent No. 2 and it has the discretion to award contract for such advertisement. Respondent No. 2 denied that Respondent No. 1 had indulged in any unfair and restrictive trade practice.

9. After hearing counsel for the parties and taking note of the statement made on behalf of Respondent No. 1 that it had stopped manufacturing T-shirts from October,

2006, the Commission directed an enquiry in the matter. Notice was also issued on the application filed under Section 12-B of the Act. Respondent No. 1 filed reply dated

29.4.2008 and reiterated the stand taken in the initial reply. It has further pleaded that

19 the complainant does not have the locus to institute proceedings under the Act. In a separate reply filed through its Secretary, Respondent No. 2 has raised an objection of the maintainability of the complaint on the ground that the dispute raised by the complainant is purely a contractual dispute of commercial nature and such dispute cannot be adjudicated by the Commission and that the remedy, if any, available to the complainant is to approach the Civil Court. Respondent No. 2 has relied upon Sections

2(o), (s), (u), 36-A and 36D of the Act and pleaded that no relief can be granted to the complainant because it (Respondent No. 2) is not engaged in any trade or trade practice as defined under the Act. In paragraph 10 of the reply, Respondent No. 2 has averred as under :

“10. Without prejudice to the preliminary objections raised hereinabove, I have the following to say on the merits : i) That the goods in question are ‘NIKE CRICKET Hero Tees’ which were allegedly sold by the respondent No. 1. It is clear that there is no public interest whatsoever involved in the question of whether or not the Respondent No. 1 should be restrained from selling the tee-shirts in question, for the following reasons : (a) There is no “unfair trade practice” involved because there is no possibility whatsoever of confusion among members of the general public as to whether the individual whose name appears on the shirt is sponsoring or approving the product. It is clear from a cursory examination of the shirt that the essence of the association evoked by the product is not with the individual but to the player as a member of the Indian cricket team : (i) the word “India” is prominently featured across the front of the shirt, establishing that Sachin Tendulkar is only referred to as a member of the Indian team; (ii) the number “10” which appears prominently on the front and back is the number allocated by the Answering Respondent to Mr. Tendulkar only in his capacity as a member of the Indian team; and (iii) shirts.

It would be absurd to suggest that the mere display for sale of a series of such shirts making prominent reference to the Indian cricket team bearing the names and numbers used by different players when they play for India would amount to any representation that each such player has individually endorsed the products of the manufacturer under Section 36A of the MRTP Act. Therefore, the sale of such shirts, without more, cannot be an “unfair trade practice” or “restrictive trade practice”.

(b) The fallacy in the Complainant’s argument is that any appearance of a name on a piece of clothing automatically amounts to a representation that the person named has endorsed the product regardless of the context. The shirts in question by definition evoke an association with the team that plays for India. The mere sale of shirts bearing the name and number of any player including Respondent No. 3 only promotes the game of cricket and cannot by itself signify in any way that the given player has endorsed that particular piece of clothing. Such team-oriented sports apparel in no way signifies the sponsorship or approval of any individual player. For instance, if several “Nike Cricket Hero Tee” shirts which are identical in all respects save in respect of the name of the individual player are displayed on hangers for sale at a store, no reasonable person would believe that each of the different players named on each of the identical shirts has endorsed it. The only interest involved in the present complaint is the commercial interest of the Complainant pitted against its trade rival, Respondent No. 1.

(c) When members of the public purchase such “Nike cricket hero tees” or similar clothing they are not concerned with whether the individual player has endorsed or approved the clothing. They purchase it because they wish to own the piece of clothing that evokes the Indian cricket tem and individuals as members of the team. Therefore there is no element of deception or lack of fairness in selling such clothing, and therefore no detriment to the public interest.

(d) The sale of such sports apparel which refers to and evokes identification with the Indian cricket team to the public is squarely in the public interest because it creases and promotes interest in

and enthusiasm for the team in particular and the game of cricket in general, and encourages the members of the general public to play cricket and watch cricket live at stadia, where the members of the public prefer to wear such apparel, and encourages interest in following cricket on TV and radio and on the internet. The use of the players’ attributes including their names and numbers assigned to them in the context of their performance of duties as members of the Indian cricket team to promote the sport of cricket is in the public interest.

(ii) Thus there is a fundamental distinction between the use of players’ attributes in a team context and the use of their attributes to signify that they endorse a product. The Nike Hero tees are an instance of the former not the latter, and sale of such shirts cannot be an “unfair trade practice” or “restrictive trade practice” under the Act.

(iii) The sale of the shirts in question is neither unfair nor deceptive. As admitted by the Complainant in para 3 of the Complaint, the BCCI is the sole apex body for the promotion and administration of the game of cricket in the country. It selects and promotes the team representing India and owns the events organized by it where such players play for the country. The players who play matches representing the country do so only under agreements entered into with the BCCI. The BCCI has the right to use players’ attributes including their names and numbers assigned to them in the context of their performance of duties as members of the BCCI team to promote the sport of cricket. The players of the Indian cricket team can enter into an agreement with third parties for only those rights which belong exclusively to them and not those which pertain to their performance on the field representing Team India which is selected and promoted by the BCCI. Even the Respondent No. 3 very clearly states in his counter affidavit that he is only concerned with the use of his player attributes for a commercial purpose in particular at paras 3(b), 3(e) and 3(g) of his affidavit dated 11.10.2007. he is by implication not concerned with the use of his attributes in the context of performance of his duties as

member of Team India to promote the sport of cricket, which duties are in the public interest.

(iv) Without prejudice to the contentions raised above, I further say that the respondent No. 1 and Answering Respondent have entered into a sponsorship and license agreement (hereinafter referred to as the “SLA”) dated 23.12.2005. It is submitted that the SLA does not permit any sale of products which signify endorsement of Nike India or its products by individual players.

(v) I further say that the allegations of the Complainant in respect of use of photographs/footage by Nike India also reflect the private commercial motive against Nike India as trade rival which solely drives the complaint. The allegations in this regard are also vague and devoid of material particulars. Significantly, however, the Complainant nowhere avers that photographs/footage of less than the minimum number of 5 players stipulated under the SLA has been used by Nike India. Clause 5(d) of the SLA grants Nike India the right to use, for the development and promotion of Nike India products and the Nike brand, photographs and/or video tape/film footage of national team game action, national team players and/or coaches in their respective official national team uniforms. Nike India’s use if any of the BCCI’s photos or footage of minimum of 5 players who have not either entered into an endorsement agreement with Nike India or otherwise expressly granted permission to Nike India to use his or her image or likeness for commercial purposes is limited to use in a team context or incidental use only to the extent necessary to effectuate the use in which such players image or likeness appears. The SLA expressly prohibits the use of such photographs or footage as personal endorsement of Nike India or any of its products or services or otherwise by any individual player in any manner whatsoever. Thus clause 5(d) of the SLA explicitly recognizes the distinction between use of footage/photographs in a team context on the one hand and their use to signify personal endorsement by an individual, a distinction that eludes the complainant.”

10. In the rejoinders filed by it, the complainant has reiterated its plea that

Respondent No. 1 is guilty of unfair and restrictive trade practices.

11. After enforcement of Section 66 of the Competition Act, 2002, all the matters

pending before the erstwhile Commission were transferred to this Tribunal. On

27.7.2010, the Tribunal framed the following issues :

1. Whether the proceedings in the present form are maintainable under

the Monopolies and Restrictive trade Practices Act, 1969 (in short “The

Act”)?

2. Whether R-1 is guilty of indulging in unfair and restrictive trade

practices as alleged?

3. Whether the complainant is entitled to compensation in terms of

Section 12-B of the Act?

4. If the answer to the Issues nos. 3 & 4 are in the affirmative, whether

the proceedings are in the public interest?

12. The complainant produced evidence in the form of affidavit of Ms. Neeru Bhalla, who was then working as Company Secretary. She was cross-examined on 6.8.2012,

9.11.2012 and 11,12,2012 by the counsel for Respondent No. 1 and on 20.2.2013 by the counsel for Respondent No. 2. Respondent No. 1 produced evidence in the form of affidavit of Jatin Paranjape who was Sports Marketing Head between May 2006 and

March 2012. He was cross-examined by the complainant’s advocate on 17.2.2014 and

21.2.2014. Respondent No. 2 filed an affidavit of Ratnakar Shetty (General Manager,

Cricket Development) of Respondent No. 2. He was cross-examined on 12.5.2014 and

11.8.2014.

13. Before proceeding further, I may mention that like other players, R-3 had signed agreement dated 04.01.2006 with Respondent No. 2. Clauses 4.1.1, 4.1.4, 5.1.1 and

5.1.3 thereof read as under :

“4.1 Use of the Player’s Attributes for Promotion of Cricket:

4.1.1 Subject to Clause 4.1.3, the Player grants to the BCCI a royalty-free license to use his Attributes for the publicity and promotion of cricket, in or on any materials including, but not limited to, newspapers, magazines, motion pictures, match programs, broadcasts, telecasts, web-casts, billboards and all other media provided that:

4.1.1.1 the Player’s Attributes will be given equal exposure along with at least five (5) other players drawn from different graded categories of the BCCI Team. Further provided however that this Clause 4.4.4.4 shall not apply to instances where the BCCI desires to use the Player’s Attributes for mementos, souvenirs and handbooks for the promotion and publicity of cricket; and 4.1.1.2 the BCCI must give the Player at least fifteen (15) days notice of its intention to use the Player’s Attributes in advertisements.

4.1.4. In the event the BCCI wishes to use the Players Attributes for commercial purposes (such as licensing and merchandising activities), the BCCI and the Player shall mutually agree the royalties to be paid to the Player, on a case to case basis and enter into a separate agreements for that purpose.

5. Sponsorship and Endorsements:

5.1.1. The Player acknowledges that the BCCI has the sole and exclusive right to permit any person to represent that they or their goods or services, have the sponsorship or approval of, or are in any way endorsed by or associated with the BCCI or any BCCI Team.

5.1.3. The Player agrees that the BCCI may allow the BCCI Sponsor to use the Player’s Attributes in promotional and advertising activities for the BCCI Sponsor, provided that (i) the BCCI gives the Player drawn from different graded categories of the BCCI Team ar also involved in such activities; (ii) such promotional and advertising activities do not exceed a total of six (6) working days ( for clarification a working day means not more than eight continuous hours) per annum; and (iii) the Player shall have the right of reasonable approval of commercials relating to the promotion and advertising of the BCCI Sponsor and the outline of any proposed

promotional campaign, provided, however, that the player shall not unreasonably withhold his approval. A copy of the story-board will be sent to the player two (2) weeks prior to the shoot of a commercial for his approval. If the BCCI does not get an approval in writing within five (5) working days of receipt f the story board by the Player it will be deemed as approved. With respect to usage of the Players Attributes in press and other below the line advertising, layouts of the advertising material will also be sent to the Player for his approval.”

(emphasis added)

14. It also needs to be mentioned that Respondent No. 1 had manufactured T-Shirts and “Nike Cricket Hero Tees” for a short span of less than six months during 2006. Out of these 5000 T-shirts bore the name “Tendulkar” and the number 10 assigned to him by Respondent No. 2 and during this period, the complainant had not manufactured and sold T-Shirts with the name and personal attributes of Respondent No. 3.

15. Shri C. Mukund, Learned counsel for the complainant extensively referred to the pleadings of the parties and various agreements and argued that Respondent No. 1, who is competitor in the business of manufacturing, distributing and selling foot-wear, sports equipments and other products should be declared guilty of indulging in unfair and restrictive trade practices because it deliberately manufactured T-Shirts with the name of Respondent No. 3 knowing that he has already entered into an agreement with the complainant not to endorse any such articles/goods manufactured/produced by any other person. Learned counsel emphasized that Respondent No. 1 misinterpreted and misuse the agreement entered with Respondent No. 2 and manufactured T-Shirts with the name and personal attributes of Respondent No. 3 with the sole object of enhancing its profits. Shri Mukund submitted that Respondent No.3 is a cricketer of international fame and with the object of encashing his popularity, Respondent No. 1 unauthorizedly manufactured, distributed and sold T-Shirts with his picture and name etc. Shri Mukund further argued that Respondent No. 1 cannot take advantage of

26 clause 5(d) of the agreement executed by it with Respondent No. 2 because there was no agreement between Respondent No. 1 and Respondent No. 3 authorising the former to use the name, photograph etc. of the latter in the goods manufactured by it. In support of his argument, Shri Mukund relied upon some portions of the affidavits filed by Jatin Paranjape and Ratnakar Shetty on behalf of Respondents Nos. 1 and 2 respectively and their cross-examination.

16. Shri N. Ganpathy, learned counsel for Respondent No. 1 argued that allegation of unfair and restrictive trade practices levelled against his client is baseless and the

Commission committed a jurisdictional error by entertaining the complaint filed by its competitor in business. Learned counsel referred to the photographs of T-Shirts, which are available at pages 212 to 225 of the paper book and submitted that Respondent No.

1 had manufactured the same with the express approval of Respondent No. 2 in conformity with agreement dated 23.12.2005 and the T-Shirts were exclusively meant for Team India. Learned counsel submitted that personal attributes of none of the players, including Respondent No. 3 were printed on any of the T-Shirts. Shri Ganpathy emphasized that the complainant has not produced any evidence to prove that any person had purchased T-Shirts solely because the name and number of Respondent No.

3 was printed on it. Learned counsel also relied upon the cross-examination of Ms.

Neeru Bhalla (page 596) wherein she admitted that during 2006 the complainant had not manufactured T-Shirts.

17. Shri Amit Sibal, learned senior counsel for Respondent No. 2 argued that the complaint should be dismissed as not maintainable because the complainant does not have the locus to seek an enquiry into the alleged unfair/restrictive trade practices indulged in by Respondent No. 1. Learned counsel relied upon the averments contained in paragraphs 10, 11, 22 and 40 of the complaint and reply given by Ms.

Neeru Bhalla in her cross-examination to show that the complainant is a competitor of

Respondent No. 1 in the business of manufacturing, distributing and selling foot-wear,

27 apparels and other sports goods and not a consumer or a registered consumers’ association or any trade association who could file a complaint of facts constituting unfair trade practice. Learned counsel submitted that this is also not a case falling under Section 36B(d) because the Commission had not initiated enquiry on the basis of own knowledge or information. Shri Sibal further argues that even if the complainant is held to have locus to seek an enquiry into the alleged unfair trade practice committed by Respondent No. 1, no relief should be granted to it because no evidence has been produced to prove that the said practice is prejudicial to public interest or to the interest of any consumer or consumers generally.

18. I have considered the irrespective arguments and carefully scanned the record.

For deciding whether the Commission could have initiated enquiry under Section 36-B into the alleged unfair trade practice committed by Respondent No. 1 and whether the

Commission (Now the Tribunal) can pass order under Section 36-D, it will be useful to notice Sections 2(n), (o), (s),(t), (u), 36-A (1) (iv), (v), 36-B and 36-D and the same read as under :

2(n) “registered consumers’ association” means a voluntary association of persons registered under the Companies Act, 1956 (1 of 1956) or any other law for the time being in force which is formed for the purpose of protecting the interests of consumers generally and is recognized by the Central Government as such association on an application made in this behalf in such form and such manner as may be prescribed;

“2(o) “restrictive trade practice” means a trade practice which has, or may have, the effect of preventing, distorting or restricting competition in any manner and in particular,-

(i) which tends to obstruct the flow of capital or resources into the stream of production, or (ii) which tends to bring about manipulation of prices, or conditions of delivery or to affect the flow of supplies in the

market relating to goods or services in such manner as to impose on the consumers unjustified costs or restrictions;”

2(s) “trade” means any trade, business, industry, profession or occupation relating to the production, supply, distribution or control of goods and includes the provision of any services; 2(t) “trade association” means a body of persons (whether incorporated or not) which is formed for the purpose of furthering the trade interests of its members or of persons represented by its members; 2(u) “trade practice” means any practice relating to the carrying on of any trade, and includes-

(i) anything done by any person which controls or affects the price charged by, or the method of trading of, any trader or any class of traders; (ii) a single or isolated action of any person in relation to any

trade;”

Section 36-A Definition of unfair trade practice – In this Part, unless the context otherwise requires, “unfair trade practice” means a trade practice which, for the purpose of promoting, the sale, use or supply of any goods or for the provision of any services, [adopts any unfair method or unfair or deceptive practice including any of the following practices], namely:-

(1) the practice of making any statement, whether orally or in writing or by visible representation which, --

(iv) represents that the goods or services have sponsorship, approval, performance, characteristics, accessories, uses or benefits which such goods or services do not have;

(v) represents that the seller or the supplier has a sponsorship or approval or affiliation which such seller or supplier does not have;”

“Section 36-B. Inquiry into unfair trade practices by Commission -

The Commission may inquire into any unfair trade practice,-

(a) upon receiving a complaint of facts which constitutes such practice [from any trade association or from any consumer or a registered consumers' association, whether such

consumer is a member of that consumers' association or not]; or (b) upon a reference made to it by the Central Government or a State Government; (c) upon an application to it by the Director General; or (d) upon its own knowledge or information.”

Section 36-D - Powers which may be exercised by the Commission inquiring into an unfair trade practice (1) The Commission may inquire into any unfair trade practice which may come before it for inquiry and, if, after such inquiry, it is of opinion that the practice is prejudicial to the public interest, or to the interest of any consumer or consumers generally, it may, by order direct that-

(a) the practice shall be discontinued or shall not be repeated;

(b) any agreement relating to such unfair trade practice shall be void or shall stand modified in respect thereof in such manner as may be specified in the order;

[(c) any information, statement or advertisement relating to such unfair trade practice shall be disclosed, issued or published, as the case may be, in such manner as may be specified in the order.]

(2) The Commission may, instead of making any order under this section, permit any party to carry on any trade practice, if it so applies and takes such steps within the time specified by the Commission as may be necessary to ensure that the trade practice is no longer prejudicial to the public interest or to the interest of a consumer or consumers generally, and in any such case, if the Commission is satisfied that necessary steps have been taken within the time so specified, it may decide not to make any order under this section in respect of that trade practice.

(3) No order shall be made under sub-section (1) in respect of any trade practice which is expressly authorised by any law for the time being in force.”

19. The term “registered consumers’ association” has been defined to mean a voluntary association of persons registered under the Companies Act, 1956 or any other law for the time being in force which is formed for the purpose of protecting the interests of consumers generally and is recognized by the Central Government as such association. The term “trade” means any trade, business, industry, profession or occupation relating to the production, supply, distribution or control of goods and includes the provision of any services. “Trade association” has been defined as a body of persons (whether incorporated or not) which is formed for the purpose of furthering the trade interests of its members or of persons represented by its members. The term

“trade practice” means any practice relating to the carrying on of any trade, and includes anything done by any person which controls or affects the price charged by or the method of trading of or any trader or any class of traders; a single or isolated action of any person in relation to any trade. Section 36-A defines the term “unfair trade practice” to mean a trade practice which for the purpose of promoting the sale, use or supply of any goods or for the provision of any services, adopts any unfair method or unfair or deceptive practice including the practice of making a representation that the goods or services have sponsorship, approval, performance, characteristics, accessories, uses or benefits which such goods or services do not have or represents that the seller or the supplier has a sponsorship or approval or affiliation which such seller or supplier does not have. Section 36-B which postulates an inquiry into unfair trade practices provides that the Commission may inquire into any unfair trade practice upon receiving a complaint of facts constituting such practice or from any trade association or from any consumer or a registered consumers’ association, whether such consumer is a member of that consumers’ association or not or upon a reference made to it by the Central

Government or the State Government or upon an application made to it by the Director

General or upon its own knowledge or information. Section 36-D lays down that if the

Commission, after making appropriate inquiry, forms an opinion that the unfair trade

31 practice in which an inquiry has been made is prejudicial to the public interest or to the interest of any consumer or consumers generally, then it can give directions enumerated in clauses (a)(b) and (c) of Section 36-D. Section 36-D(2) empowers the

Commission to defer making of an order in terms of Section 36-D(1) if the person indulging in such trade practice ensures that the particular trade practice is no longer prejudicial to public interest or to the interest of consumer or consumers generally.

20. The term ‘consumer’ has not been defined in the 1969 Act but keeping in view the language of Section 4(1) which declares that subject to the provision contained in

Section 4(2) or elsewhere in the Act, the provisions of the 1969 Act shall be in addition to, and not in derogation of, any other law for the time being in force, it would be reasonable to take cognizance of the definition of that term appearing in Section 2(d) of the Consumer Protection Act, 1986 which reads as under :

“(d) "consumer" means any person who,--

(i) buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment, when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or

(ii) [hires or avails of] any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who [hires or avails of] the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person [but does not include a person who avails of such services for any commercial purpose];

[Explanation.--For the purposes of this clause, "commercial purpose" does not include use by a person of goods bought and used by him and services availed by him exclusively for the purposes of earning his livelihood by means of self-employment]”

21. A bare reading of the above reproduced definition shows that a person who obtains goods for resale or for any commercial purpose is not a consumer except when the goods are sold for the purposes of earning livelihood by means of self-employment.

I may hasten to add that the definition of ‘consumer’ given in Section 2(f) of the

Competition Act, 2002 does not exclude a person who purchases goods for resale or for any commercial purpose. However, that definition is not relevant for deciding the objection raised by learned counsel for Respondent No. 2.

22. The complainant has neither pleaded nor produced any evidence to show that it has been buying goods or availing services for consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment.

Rather, as per its own showing, the complainant is engaged in the business of manufacturing, distributing and selling quality footwear, sports equipments and other products and is a competitor of Respondent No. 1 in the market. Thus, the complainant does not fall within the ambit of the terms consumer. It is also borne out from the record that the complaint has been filed by the complainant in its individual capacity and not as a member of any registered consumer association or any trade association. Therefore, the complainant cannot be treated as a consumer for purpose of

Section 36-D of the Act unfortunately, the Commission did not even consider the issue of the complainant locus to invoke the provisions of that section and initiated inquiry by assuming that the complainant is entitled to file an application under Section 36-B of the Act. It may also be mentioned that the Commission did not initiate inquiry into the so called unfair trade practice allegedly committed by Respondent No. 1 upon its own knowledge or information, as contemplated by Section 36-B(d) of the Act.

23. In conclusion, I hold that the Notice of Enquiry issued by the Commission was ultra vires the provisions of Section 36-B of the Act and on this ground alone the complaint is liable to be dismissed.

24. I also agree with Shri Amit Sibal, learned senior counsel for Respondent No. 2, that even if the Commission could order an inquiry in to the allegation of unfair trade practice, no order can be passed under Section 36-D of the Act because the complainant has neither pleaded nor adduced any evidence to prove that the so called unfair trade practice committed by Respondent No. 1 is prejudicial to public interest or to the interest of any consumer or consumers generally.

25. No doubt the complainant has alleged that the manufacture of T-shirts and Nike

Hero Cricket Tees violated the prohibition contained in agreement dated 14.05.2004 and Respondent No. 1 is not entitled to take shelter of clause 5(d) of agreement with

Respondent No. 2 and further that Respondent No. 1 had made false representation that its products have personal approval of Sachin Tendulkar and are endorsed by him, there is nothing in the complaint from which it can be inferred that the manufacture of

T-shirts by Respondent No. 1 was prejudicial to public interest or to the interest of any consumer or consumers generally. The only evidence produced by the complainant in support of its cause is in the form of affidavit of Ms. Neeru Bhalla (Company Secretary of the complainant) which is accompanied by several documents including copy of agreement dated 14.05.2004. In her detailed affidavit running into 70 paragraphs, Ms.

Neeru Bhalla has made several statements in the context of agreement dated

14.05.2004 entered between the complainant and Respondent No. 3, the contract awarded by Respondent No. 2 to Respondent No. 1 and claimed that the T-shirts manufactured by Respondent No. 1 did not have significant value except for the name of “Tendulkar” and that was the only reason for purchase of the T-shirts by the consumers (Paragraph 31 of the affidavit), and that this activity of Respondent No. 1 amounted to breach of the terms of agreement dated 14.05.2004 and further that this

34 activity of Respondent No. 1 constitutes an unfair trade practice, she has not said that such unfair trade practice was prejudicial to public interest or to the interest of consumer or consumers generally. In her cross-examination dated 06.08.2012, Ms.

Neeru Bhalla stated that she joined the complainant company in April, 2007 and that she was not present at the time of signing of agreement between the complainant and

Respondent No. 3. In her cross-examination dated 11.12.2012, Ms. Neeru Bhalla stated that she does not know the figures of the T-shirts marked with the name of Sachin

Tendulkar under the brand name Adidas during 2005-06-07 respectively. In her further cross-examination held on 20.02.2013, Ms. Neeru Bhalla admitted that the commitments of Respondent No. 3 in his agreement with the complainant are subject to his obligation to Respondent No. 2 and that the said agreement does not prohibit

Respondent No. 2 from using the name and attributes of Respondent No. 3 in a team context without signifying that they endorsed a product or a brand. She also admitted that the complainant and Respondent No. 1 are competitors in trade and that they competed for the tender for sponsorship of the Indian team. The complainant has not produced any other evidence to prove the ingredients necessary for enabling the

Commission to pass under Section 36-D. Therefore, the Tribunal cannot ordain that the practice in question should be discontinued and that too by overlooking the fact that Respondent No. 1 had discontinued manufacture of T-shirts with the name and number of team India even before filing the complaint.

26. Notwithstanding the above conclusions, I may advert to the pleadings and evidence of the parties and decide whether Respondent No.1 had indulged in unfair trade practice as defined under Section 36-A of the Act. The thrust of the complainant’s case is that despite the embargo contained in the agreement dated

14.05.2004 in terms of which Respondent No. 3 was not entitled to sponsor or promote any product etc. competing with those manufactured by the complainant and that

Respondent No. 1 misused the agreement entered with Respondent No. 2 and

35 manufactured T-shirts with the name and personal attributes of Respondent No. 3 to promote its products and thereby indulged in unfair trade practice. Respondent No. 1 and Respondent No. 2, have categorically denied the allegations levelled by the complainant. They have pleaded that the name of Sachin Tendulkar was used on the

T-shirts as a member of Indian cricket team and the same did not signify his endorsement to the products manufactured by Respondent No. 1. According to

Respondent No. 1, the manufacturer of T-shirts and Nike Cricket Hero Tees was in conformity with the terms of agreement entered with Respondent No. 2 and there was no violation of agreement signed by the complainant with Respondent No. 3.

Respondent No. 1 has relied upon clause 5(d) of agreement dated 23.12.2006 and averred that it was entitled to manufacture products to be used by team India. It has also pleaded that the personal attributes of Respondent No. 3 were not printed on any product and mere printing of name and number of the said respondent on the T-shirts did not amount to unfair trade practice.

27. As mentioned earlier, the complainant filed affidavit of Ms. Neeru Bhalla by way of evidence. Shri Jatin Paranjape, who was Sports Marketing Head of Respondent

No. 1 between May, 2006 and March, 2012 filed his affidavit to support the case set up by Respondent No. 1. In paragraphs 4 and 13 of his affidavit, Shri Paranjape made the following statements :

“4. I say that the Respondent No. 1 is the official supplier of apparel to the second respondent and to the Indian Cricket team. This respondent’s use of the third respondent’s name and attributes in the manner actually used, is permitted by the second respondent. This respondent believes that this permission is granted in exercise of rights accrued to the second respondent under its contract with the third respondent. This respondent is entitled to use all licensed marks belonging to or otherwise used by the second respondent and the attributes of a player are held out to be a licensed mark, owned by the second respondent and this respondent has no reason to believe that this is not the case. It is relevant to point

out that Clause 12(b)(1) of the agreement attached by the Complainant bears that the second respondent represented to this respondent that in performing the agreement it could not be violating any of the rights of any other person including the right to grant the benefits set forth in the agreement.

13. I say that in pursuance of its contractual rights, the first respondent had in August-September 2006 undertaken a one-time production of tee shirts in its “Hero Tees” range for marketing and sales in India in October-November 2006. This range of tee shirts was marketed and sold together using different Indian national team players, a team sponsored by the first respondent, and which in accordance with standard industry practice was regarded as ordinary usage of team imagery. Out of these tee shirts less than 5000 tee shirts bore the name of third respondent. At the time of the manufacture of these tee shirts, the first respondent decided independently, due to business and market considerations, that this range was to be for one selling season only, and not to continue to manufacture anymore tee shirts in this range for any subsequent quarterly selling seasons. Consequently, the marketing and sale of the entire “Here Tee” range was discontinued after the one time release in October – November 2006, which was before the commencement of these proceedings before this Hon’ble Tribunal.”

28. Along with his affidavit, Shri Jatin Paranjape annexed art work of T-shirts and

“Nike Cricket Hero Tees”. Some of the T-shirts have the logo of Respondent No. 2 and mark like “SAHARA INDIA” or “INDIA”. The names of the players like “Sachin

Tendulkar” or “Tendulkar”, “R. DRAVID or DRAVID”, “S. SREESANTH or SREESANTH”.

“I. KHAN or PATHAN” and “M S DHONI AND DHONI” were also printed. Some of the T- shirts also had the number of players printed on them. Each of the art work had been approved by Mr. Lalit Modi, who was then representing Respondent No. 2. In his cross- examination dated 21.02.2014, Mr. Jatin Paranjape made the following statements :

“Cross-examination by Sr. Advocate Amit Sibal for R-2:

Marking of document referred to as Ex.R1/1 in RW1/A is objected on the ground that the document has not been properly proved.

The permission referred to in para-4 of RW1/A is the permission under the sponsorship and license agreement dated 23.12.2005 between Respondent No.1 and Respondent No.2. The statements regarding permission that is referred to the aforesaid paragraph is based on my interpretation of the agreement. Q. Is it correct that all your statements in your affidavit regarding permission of R-2 are based on your interpretation of the clauses in the agreement? Ans. Yes. Also subject to the subsequent written approval obtained from the BCCI which is also under the sponsorship and license agreement. In this answer I am referring to the document Ex.R1/1. Presently, I am not in possession of the original Ex.R1/1. Q. Is it correct that the permission referred to in para-6 of RW1/A was sought by Respondent No.1? Ans. Yes. Q. I put it to you that the document Ex.R1/1 even if it were to be proved does not show consent by the BCCI to the shirts in question? Ans. It is incorrect to say so. Q. (The attention of the witness to the portion marked ‘E’ in para-4 of RW1/A is drawn) Which part of the definition of ‘Licensed Products’ in the sponsorship and license agreement refers to players’ attributes? (The question is objected to on the ground that the document is part of the record and that the document speaks for itself.) Ans. Clause 9, 10 and 12(b)(1) and (2). Q. Which part of the clauses 9, 10 and 12(b)(1) and (2) refer to players’ attributes? (The question is objected to on the ground that the document is part of the record and that the document speaks for itself.) Ans. The entire clauses. Q. Your reference to ‘the attributes of a player are held out to be a licensed mark’ in para – 4 of RW1/A - is this also based on your interpretation of the sponsorship and license agreement? Ans. It is based on the written approval obtained from the BCCI on the products. Q. Is it correct that according to you the alleged written approval is under provisions of the agreement? Ans. Yes. It is my view.”

29. Shri Ratnakar Shetty, who filed affidavit dated 09.05.2013 on behalf of

Respondent No. 2, made the following statements:

9. I say that the Sponsorship and Licensing Agreement (SLA) dated 23.12.2005 entered into between Nike India and the BCCI has permitted the attributes of Sachin Tendulkar and other members of the Indian team to be used in a team context. The said agreement did not permit any sale of products which signify endorsement of Nike India or its products by individual players. The said agreement is annexed and marked as Exhibit R2W/4.

10. I say that the Complaint does not anywhere state that photographs/footage of less than the minimum number of 5 players stipulated under the SLA has been used Nike India. Clause 5(d) of the SLA grants Nike India the right to use, for the development and promotion of Nike India products and the Nike brand, photographs and/or video tape/film footage of national team game action, national team players and/or coaches in their respective official national team uniforms. Nike India’s use if any of the BCCI’s photos or footage of minimum of 5 players who have not either entered into an endorsement agreement with Nike India or otherwise expressly granted permission to Nike India to use his or her image or likeness for commercial purposes is limited to use in team context or incidental use only to the extent necessary to effectuate the use in which such players image or likeness appears. The SLA expressly prohibits the use of such photographs or footage as personal endorsement of Nike India or any of its products or services or otherwise byany individual player in any manner whatsoever. Thus clause 5(d) of the SLA explicitly recognizes the distinction between use of footage/photographs in a team context on the one hand and their use to signify personal endorsement by an individual.

11. I say that in the agreement dated 14.05.2004 exhibited, Sachin Tendulkar has permitted the use of his attributes in a team context. I say that the team oriented sports apparels in no way signifies the sponsorship or approval of any individual player. I say that when the members of the public purchase such ‘Nike cricket hero tees’ or similar clothing they are not concerned with whether the individual player has endorsed or approved the clothing. They purchase it because they wish to own the piece of clothing worn by members of the Indian team and individuals as members of the team. Therefore there is no deciption or lack of fairness in selling such clothing, and therefore no detriment to the public interest. There is a distinction between the use of players attributes in a team

context and use of their attributes to signify endorsement of the product. The sale of Nike Hero tee shirts cannot be an “unfair trade practice” or “restrictive trade practice” under the Act.

12. I say that the Complainant and Nike India are trade rivals which is a motive of filing the complaint. The sponsorship and licensing agreement prohibits the use of photograph/footage as personal endorsement of Nike India or of any of its products or services or otherwise by any individual player in any manner whatsoever.

13. I say that Nike India is separate and independent and a legal entity which is not a subsidiary or of, agent or distributor of, or otherwise under the control of the BCCI. The same is reinforced by clause 21 of the SLA.

14. I say that by an agreement dated 04.01`.2006 between the BCCI and Sachin Tendulkar i.e. Respondent No. 3 the Respondent No. 3 has acknowledged that the BCCI has the sole and exclusive right to permit any person to represent that their goods have the sponsorship and approval of the BCCI or the team. The player is also agreed that the BCCI would allow its sponsor to use the players’ attributes in promotional and developmental activities. The said agreement is annexed and marked as Exhibit R2W/5.”

30. In his cross-examination held on 12.05.2014, Shri Ratnakar Shetty made the following statements :

“Q. Ex.R2W/4 is shown to the witness and attention of the witness is drawn to Clause 12(c)(3) in page 16 of the agreement. Please tell whether “National team players” in the said clause cover the affiliated players referred to in your previous answer? (The question is objected on the ground that the witness is asked to interpret a clause in the agreement which has already been defined in the agreement. And also that the bar under Section 91 of the Evidence Act is also attracted. This is objected on behalf of the Complainant on the ground that the question raised in context of the answer provided by the witness to the earlier question.)

Ans. The reference to national team players in the said Clause is to those players who are contracted with BCCI and represent the Indian team in international matches.

Q. I suggest that the affiliated players referred to in your answer aforesaid covers “National Team Players” in Clause 12(c)(3) of R2W/4? (Same objection as recorded to the previous question.)

Ans. My reply to the question whether an agreement was signed with all affiliated players was that we sign a player agreement only with such players who play in the Indian team and this covers the “National Team Player”.

Q. Is any permission from BCCI required before a player enters into an endorsement agreement in his personal capacity with any company for endorsing the company’s products?

Ans. The players contracted with the BCCI do not require any permission of the BCCI for their personal endorsements. However, they are required to ensure that the requirements of the BCCI’s sponsor takes precedence over his personal endorsements when playing for India and till he fulfills the requirements of the player agreement which he has signed with BCCI.

Q. At the time when BCCI’s sponsor agreement is entered into, does BCCI enquire with the players of any agreement that the player has entered into, in his personal capacity?

Ans. We do not have to enquire with the player or ask him about his personal endorsement because once he signs the BCCI Player Agreement, he is committed to ensure that he fulfills BCCI’s contract with its sponsors.

Q. At the time when R2W/4 was executed, was BCCI aware of the agreement between the Complainant and R3?

Ans. We are not concerned with the individual endorsements that a player may have and, therefore, there was no need to be aware of the same.

Q. Can you explain the term “Team Context” referred to in first sentence of para-9 of your affidavit of evidence?

Ans. Nike was appointed as the apparel sponsor for the India team vide the agreement dated 23.12.2005 and as per that agreement Nike was permitted to use the attributes of the players who represent the Indian team at that point of time being a part of team India.

Q. Ex.CW1/8 dated 14.5.2004 shown to the witness. Was BCCI aware of this agreement at the time when R2W/4 was signed?

Ans. No. I have already stated that there is no need for BCCI to be aware of individual endorsements of players.

Q. At any point of time after execution of R2W/4, was BCCI made aware of the Ex.CW1/8 agreement?

Ans. We came to know of this Ex.CW1/8 agreement only when the present dispute arose between Addidas and Nike. BCCI came to know about the agreement after the filing of the present complaint.

Q. At the time when reply dated 26th July 2007 on behalf of BCCI came to be filed in response to the complaint before this Forum, was BCCI aware of Ex.CW1/8 agreement?

Ans. I can not answer without referring to the reply.

Q. Reply is shown to the witness. Please answer the earlier question?

Ans. I suppose the said agreement CW1/8 must have been informed to the BCCI as it is referred to in the reply.”

31. If the affidavits and cross-examination of Ms. Neeru Bhalla, Mr. Jatin Paranjape and Mr. Ratnakar Shetty, are read in conjunction with the three agreements to which reference has been made hereinabove, it is not possible to record a finding that

Respondent No. 1 had manufactured T-shirts and Nike Cricket Hero Tees with the name and number of Respondent No. 3 in violation of agreement dated 14.05.2004. The affidavits of Jatin Paranjape and Ratnakar Shetty and their cross-examination show that the T-shirts and Nike Cricket Hero Tees were manufactured for the players of Team

India and this was in consonance with clause 5(d) of agreement dated 23.12.2005 entered between Respondent No. 1 and Respondent No. 2. Clause 4.1(f) and portions of 4.7 of agreement dated 14.05.2004 signed by the complainant with Respondent

No. 3 also made specific exception in favour use of any product by Respondent No. 3 as member of National or State team. Likewise, contract executed between Respondent

No. 2 and Respondent No. 3 on 04.01.2006 allowed use of the latter’s attributes for promotion of cricket. A conjoint reading of various clauses of agreements dated

14.05.2004, 23.12.2005 and 04.01.2006 leave no manner of doubt that the Sponsorship and License Agreement entered between Respondent No. 1 and Respondent No. 3 permitted the former to use the name and number of the members of the cricket team

for the purpose of advertising in different ways and this did not amount to unfair trade

practice.

32. On the basis of above discussion, I hold that :

1. The complainant does not have the locus to invoke Section 36-B of the Act;

2. The manufacturer of T-shirts and Nike Cricket Hero Tees by Respondent

No. 1 did not violate the agreement dated 14.05.2004 entered between the

complainant and Respondent No. 3 and Respondent No. 1 did not indulge in

any unfair trade practice as defined in Section 36-A of the Act.

3. The Tribunal cannot pass any order under Section 36-D because no evidence

has been produced by the complainant to prove that the so called unfair

trade practice indulged by Respondent No. 1 is prejudicial to public interest or

to the interest of any6 consumer or consumers generally.

33. In the result the complaint is dismissed.

34. In view of the finding recorded by the Tribunal on the issue of unfair trade practice, the application filed by the complainant under Section 12-B of the Act is also dismissed. In this connection, reference deserves to be made to the judgment of the

Supreme Court in Saurabh Prakash vs. DLF Universal Ltd., [2007] 1 SCC 228, paragraphs 33 to 35 which are extracted below:

“33 . The power of the Commission is enumerated under Section 12 of the Act. Section 12-A provides for the power of the Commission to grant temporary injunction. Power to award compensation by the Commission is contained in Section 12B of the Act, Sub-section (1) whereof reads as under:

“12B. Power of the Commission to award compensation.-(1) Where, as a result of the monopolistic or restrictive, or unfair trade practice, carried on by any undertaking or any person, any loss or damage is caused to the Central Government, or any State Government or any trader or class of traders or any consumer, such Government or, as the case may be, trader or class of traders or consumer may, without

prejudice to the right of such Government, trader or class of traders or consumer to institute a suit for the recovery of any compensation for the loss or damage so caused, make an application to the Commission for an order for the recovery from that undertaking or owner thereof or, as the case may be, from such person, of such amount as the Commission may determine, as compensation for the loss or damage so caused. ”

34. The power of the Commission to award compensation, therefore, is restricted to a case where loss or damage had been caused as a result of monopolistic or restrictive or unfair trade practice. It has no jurisdiction where damage is claimed for mere breach of contract.

35. It was not a case where a notice of inquiry had been directed. If there had been no inquiry, the petitioner has to file a suit wherein the relevant particulars are required to be stated as to how loss or damage occurred owing to one or the other trade practices referred to therein. The power of the Commission is not in addition to the power of the civil court. An application under Section 12B of the Act would not lie where a complaint is confined to a breach of contract. Purchases on the part of Respondent must necessarily relate to one or the other trade practices contemplated under Sub-section (1) of Section 12B of the Act.”

35. For filing a frivolous complaint and compensation application, the disposal of which has consumed substantial time of the Commission and the Tribunal, the complainant is saddled with cost of Rs. 1,00,000/-. This amount shall be deposited by the complainant within four weeks with the Registrar of Tribunal, who shall utilize the same for providing Legal Aid in deserving cases.

[G.S. Singhvi] Chairman

Dated : 21st January, 2015