Case title:
Akash Aggarwal Vs. Flipkart
Date of Order:
2nd August 2022
Bench:
Justice Prathiba Singh
Parties:
Appellant- Akash Aggarwal
Respondent- Flipkart Ltd. & Co.
SUBJECT
The Delhi High Court recently ruled that e-commerce platform Flipkart's functionality that allows third-party merchants to 'latch on' to a more popular brand's name is nothing more than 'riding piggyback' and amounts to passing off. As a result, it asked Flipkart to stop the function.
According to Justice Pratibha M Singh, "it amounts to taking undue advantage of the Plaintiff's mark and business's goodwill."
The Court issued an interim injunction against Flipkart, prohibiting third-party vendors from 'latching on' to the brand 'V Tradition' or its product listings, in order to prevent third-party unauthorized sellers from misusing the same.
OVERVIEW
- The Plaintiff, Akash Aggarwal was the sole proprietor of an entity operating under the tag 'V Tradition,' which was involved in the business of selling women's clothes on different retail e-commerce platforms, including 'Amazon,' 'Meesho,' and 'Myntra,' as well as that of Defendant No.1 - Flipkart.
- The Plaintiff's complaint against Flipkart was that the platform encourages and allows third-party sellers to 'latch on’ and utilize the mark 'V Tradition,' as well as images of the Plaintiff's items, on the site.
- By doing so, various third-party vendors who were unrelated to the Plaintiff were able to market themselves as 'V Tradition' and capitalize on the demand of the Plaintiff's products and designs.
- Such third-party vendors additionally misappropriated the Plaintiff's images for his own items offered under the 'V Tradition' label.
- As a result, the Plaintiff launched this action to prevent Flipkart from allowing third-party merchants to 'hang on' to his name and merchandise.
- The suit requests that Flipkart refrain from allowing any person or party to depict itself and/or conduct its business on the webpage of Defendant No. 1 as 'more sellers' of products offered for sale by the Plaintiff based on his own product listings on the webpage of Defendant under the Plaintiff's Trademarks, and from permitting unpermitted sellers to use the product photos and title of the Plaintiff's product listings.
ISSUES RAISED
- Whether the ‘latching on’ feature violates the plaintiff's rights as a business owner?
ARGUMENTS ADVANCED BY THE PLAINTIFF
- The counsel explained that when a third-party seller wants to place a listing on Flipkart, the Flipkart operating system suggests 'V Tradition' products as being among the most popular listings and 'Best-Sellers' and enables such third-party vendors to add different products under the Plaintiff's mark 'V Tradition' into their own listings in addition to the Plaintiff's product photographs, using the 'Opportunities' option under the 'Listings' tab on the 'Flipkart website.
- It was claimed that a number of people have been harmed by Flipkart's 'latching on' function, which has led to the loss of revenue for small and medium-sized businesses. The affidavits produced by third-party merchants, who have also filed claims against Flipkart, are relied upon.
ARGUMENTS ADVANCED BY THE DEFENDANT
- The counsel for the defendant contended that the Plaintiff's mark 'V Tradition' was not registered, and so Flipkart had no way of knowing whether the mark was meant to be protected or not.
- However, it was submitted under instructions that, in the case of the mark 'V Tradition' and the Plaintiff's goods listings, Flipkart would remove the above mentioned listings within 48 hours of receiving the URLs for the same.
JUDGEMENT ANALYSIS
- The bench stated that allowing a third-party seller to 'latch on' to the Plaintiff's name/mark and product listings in this manner, in this Court's judgement, was nothing more than 'riding piggy back,' as is understood in the classic passing-off meaning.
- It amounted to taking undue advantage of the Plaintiff's mark and business's goodwill. The Court had no doubt that 'latching on' by unlicensed vendors results in and constitutes 'passing off' as it is called in the brick and mortar world. It was used as a method of profiting off the Plaintiff's carefully cultivated reputation.
- This Court was convinced that such a feature cannot be exploited to the prejudice of the brand's owner or the person who produced the original product. Before such action by any seller is permissible, the consent and authorization of the brand owner and the listing owner would be necessary.
- It was stated that the Plaintiff had established a prima facie case for the award of an interim injunction against Flipkart based on the facts and circumstances of the case. In the Court's opinion, the balance of convenience favored the Plaintiff, and failure to award an interim injunction would result in irreparable harm to the Plaintiff.
- As a result, until the next date of hearing, Flipkart was ordered to refrain from allowing any third-party sellers to 'latch on' to the mark 'V Tradition' used by the Plaintiff or the Plaintiff's product listings under the mark/name 'V Tradition', in order to prevent third-party unauthorised sellers from misusing the Plaintiff's name and product listings.
- It was stated that Flipkart must guarantee that the 'latching on' feature is disabled in relation to the Plaintiff's trademark 'V Tradition' until the next date of hearing. All such third-party sellers are further prohibited from 'latching on' to the Plaintiff's product listings and exploiting the product listings and mark/name 'V Tradition' in any way for advertising their items that are unrelated to the Plaintiff.
CONCLUSION
As a result, in order to safeguard the Plaintiff, his brand, and the investment that the Plaintiff has undertaken in his name, the Court held that any infringing third-party product listings should be removed.
The Court stated that the plaintiff would share the information of all 34 gamers who have already 'latched on' with Flipkart's lawyers, after which the e-commerce giant will remove them within 48 hours and grant an ad-interim order against the defendant.
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