Triology Solutions Private Limited v. Flipkart Internet Private Limited & Ors.

Delhi High Court · 28 Aug 2023 · 2023:DHC:6225

Prathiba M. Singh

CS(COMM) 709/2022

2023:DHC:6225

civil petition_allowed Significant

AI Summary

The Delhi High Court held that e-commerce platforms must prevent unauthorized sellers from latching onto registered trademark owners’ listings to sell counterfeit products and granted interim relief restraining such unauthorized latching on.

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CS(COMM) 709/2022
HIGH COURT OF DELHI
Date of Decision: 28th August, 2023

CS(COMM) 709/2022 and I.A. 16259/2023
TRIOLOGY SOLUTIONS PRIVATE LIMITED ..... Plaintiff
Through: Mr. Anshuman, Advocate.

VERSUS

FLIPKART INTERNET PRIVATE LIMITED, & ORS. ..... Defendants
Through: Mr. Sidharth Chopra, Ms. Shilpa Gupta, Ms. Surabhi Pande, Mr. Naman Tandon and Ms. Arushi Mann, Advocates for D-1 (M-
9899509779)

CORAM:

JUSTICE PRATHIBA M. SINGH Prathiba M. Singh, J. (Oral)

JUDGMENT

1. This hearing has been done through hybrid mode. I.A. 16259/2023 (for early hearing)

2. This is an application filed by the Plaintiff for early hearing of the application filed under Order XXXIX Rule 1 and 2 CPC.

3. Early hearing is allowed. Application is disposed of. I.A. 16723/2022 (u/O XXXIX Rule 1 and 2 CPC)

4. The Plaintiff - Triology Solutions Pvt. Ltd. is the proprietor of the trademark ‘MUUCHSTAC’ and its formations, and sells medicated and non-medicated cosmetic products on various online retail platforms such as Defendant No.1- Flipkart Internet Pvt. Ltd.

5. The Plaintiff has filed the present suit seeking protection of its registered mark ‘MUUCHSTAC’ bearing no. 391976[8] in Class 3. The grievance of the Plaintiff in the present suit is that Defendant No. 2- Saira Bano is indulging in sale and manufacturing of counterfeiting products on the Flipkart platform, wrongly portraying itself as one of the 'more sellers' of Plaintiff’s products. The allegation is that names portrayed as 'more sellers' on the website of Defendant No.1 of Plaintiff’s goods keep changing and are not constant and Defendant No. 1 authorizes them to interfere with Plaintiff’s product listings.

6. Vide order dated 31st October 2022, while noting that the larger issue of the feature ‘latching on’ was pending consideration before the ld. Division, the Court observed as follows: “25. Learned counsel further submits that insofar as relief of disabling the latching feature is concerned, the larger issue is pending before the Division Bench in FAO(OS)(COMM) 282/2022 and vide order dated 27.09.2022 the Division Bench has stayed the observations made by the learned Single Judge in paragraphs 17 to 20 of the impugned order therein.

26. In view of the fact that the larger issue of the feature of 'latching on' is pending consideration before the Division Bench, no relief can be granted to the Plaintiff at, this stage. However, it is open to the Plaintiff to inform Defendant No.1 of any infringing link and needless to state that looking to the fact that the products in question are cosmetic products, Defendant No.1 shall take prompt action to take down the links of all resellers appearing on the webpage relating to Plaintiff s products.”

7. The above order of the ld. Single judge in this matter rejected the prayer for interim relief at that stage owing to the order dated 27th September, 2022, passed in FAO(OS) (COMM) 282/2022 titled Flipkart Internet Private Limited v. Akash Aggarwal & Anr. dealing with the issue of `latching on’. The ld. Division Bench had observed as follows:

“7. In so far as the respondent (plaintiff) is concerned, the appellant has undertaken, without prejudice to its rights and contentions, that it would take down the link of all resellers appearing on the webpage relating to the respondnent’s products. However, it is submitted that the impugned judgment has wide ranging observations, which are not limited to the respondent’s (plaintiff) case alone. The impugned judgement effectively proscribes the appellant from using the feature of latching on or indicating “more sellers” in respect of seller of any goods. 8. Mr. Rajiv Nayyar, learned senior counsel appearing for the appellant has drawn the attention of this Court to Paragraphs 17,18,19 and 20 of the impugned order: …. 9. Mr. Nayyar submits that the observations, as set out above, effectively results in the appellant being restrained from using the feature of “latching on” on its site. He submits that the said feature per se does not infringe any law. 10. The assumption that the feature of “latching on” falls foul of the Trademarks Act, 1999 or amounts to passing off goods requires examination. Indisputably, it is permissible for the resellers of genuine products to also sell their products on the e-platform and the same would not infringe the Trademark Act. 11. Prima facie providing a link of another seller on the webpage of a particular seller, absent anything more, neither infringes that seller’s trade mark nor amounts to passing off.

12. The contentions advanced by Mr. Nayyar are prima facie substantial. The question whether a link provided on a web page, which permits a customer to access the site or a web page of another seller per se amounts to passing off requires examination.

13. Issue notice.

14. In view of Mr. Nayyar’s statement that in so far as respondent no. 1 is concerned, the feature of “latching on” has already been disabled; respondent no1’s grievance stands addressed at interim stage.

15. Considering the wider ramifications of the observations made regarding the feature of latching on; the observations made in Paragraph 17 to 20 of the impugned order, as quoted above, are stayed till the next date of hearing.”

8. The Plaintiff had then approached the Ld. Division Bench by way of an appeal, challenging the non-grant of interim relief. The ld. Division Bench, vide order dated 26th May 2023, disposed of the appeal against order dated 31st October 2022 with the following observations:

“1. The appellant in FAO(OS) (COMM) 282/2022 had instituted this appeal aggrieved by certain observations appearing in the order of the learned Single Judge dated 02 August 2022. The appellant in connected FAO(OS)(COMM) 304/2022 had questioned the correctness of the order of the learned Single Judge dated 31 October 2022. 2. Today, when the matter was taken up, learned counsel appearing for Triology Solutions apprised the court that Flipkart in recognition of it being a registered trademark holder has duly gated its products and that the latching on feature has been disabled. 3. In view of the aforesaid, both learned counsels appearing in the connected appeals state that the appeals may be disposed of subject to rights of parties

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to raise all contentions before the learned Single Judge in the pending suits being kept open. Ordered accordingly.”

9. As per the above order, Flipkart had made a statement before the Ld. Division Bench that the feature of `latching on’ qua the Plaintiff’s products was disabled as the Plaintiff’s mark had been registered. Thus, the appeal was disposed of.

10. The Plaintiff has now sought early hearing of the injunction application. The Plaintiff’s grievance is that despite the order passed by the ld. Division Bench on 26th May, 2023 in FAO(OS) (COMM) 282/2022 titled Flipkart Internet Private Limited v. Akash Aggarwal & Anr. the Plaintiff has discovered that some unauthorized seller has, latched onto the Plaintiff’s listings as a reseller and sold counterfeit cosmetic products bearing the Plaintiff’s mark, get up, lay out, etc. The ld. Counsel has taken the Court through listings by a seller called ‘M/s Neelkanth Traders’ who has sold counterfeit products.

11. Mr. Chopra, ld. Counsel appearing for the Defendant No. 1, submits that Defendant No. 1 is completely abiding by the order passed by the ld. Division Bench. However, in the case of M/s Neelkanth Traders, the said seller, in fact uploaded the Plaintiff’s registration document of the mark to bypass and circumvented the barrier put up by the Defendant No. 1 for preventing resellers from latching on. It is submitted that this was an inadvertent error due to the misrepresentation by the said seller, and immediately within two days after the Plaintiff notified of such activity, the said listings of the alleged products were taken down.

12. Early hearing application is allowed. Keeping in mind that these cosmetics products are used by men and are applied on the skin, the sale of such counterfeit products could have an adverse impact on users. The latching-on feature can also have adverse consequences for the quality control of products, leading to damage to brand reputation, and loss of potential revenue for the proprietor of a mark.

13. Considering the stand of Flipkart today, the application for interim injunction is disposed of taking on record the statement on behalf of the Defendant No. 1-Flipkart that it would not permit any latching-on of unauthorized sellers on the Plaintiff’s listings. Whenever any seller seeks to sell Plaintiff’s products on Flipkart using the latching-on feature, Flipkart would examine the matter at its own level. If any ambiguity or doubt arises, it would be free to seek a confirmation from the Plaintiff.

14. The above position shall enure in respect of all sellers who may seek to latch onto the Plaintiff’s listings. Thus, latching-on, insofar as the Plaintiff’s products are concerned, would not be permitted by Flipkart on its platform by any sellers or resellers. If any latching-on is noticed by the Plaintiff, Flipkart shall be immediately notified. Upon receiving any notification, Flipkart shall take steps to disable the latching-on feature immediately.

15. The Defendant No. 1-Flipkart shall file an affidavit on record explaining: ● The process of latching-on and steps taken by Flipkart to avoid confusion; ● How in the case of M/s Neelkanth Traders, the same could not be tracked and, ● The steps by Flipkart, to comply with the order. ● Sales made by M/s Neelkanth Traders on the Defendant no. 1- Flipkart’s platform shall also be placed on record by way of a tabulated chart along with the quantity of the products sold, and the monetary value.

16. Th application i.e., I.A. 16723/2023 is disposed of in the above terms.

17. List on 9th November, 2023.

PRATHIBA M. SINGH JUDGE AUGUST 28, 2023 Rahul/dn

Triology Solutions Private Limited v. Flipkart Internet Private Limited & Ors.

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