The emergence of e-commerce has posed a number of difficulties for IPR rights protection. In the context of e-commerce, a passing off action that was formerly limited to goods with identical logos, markings, names, and labels has taken on a new meaning. E-commerce platforms give small and medium-sized business owners an alternative platform to market their goods and run their operations profitably. However, some aspects of these platforms can harm such organisations and business owners By virtue of passing off, the action of defending an unregistered trademark is well understood. As is evident from the current case, one such feature is the “latching-on” function offered by Defendant No. 1 – Flipkart on its e-commerce site.
Facts of the case:
In the case at hand the plaintiff, Mr. Akash Aggarwal, has reached the Hon’ble High Court of Delhi to seek a permanent and obligatory injunction prohibiting trademark and copyright infringement against the defendant Flipkart. The Plaintiff, Mr. Akash Aggarwal, is the sole proprietor of a firm that sells women’s clothes on different retail e-commerce platforms such as Meesho, Amazon, etc. Under the mark or name “V Tradition”. The Plaintiff asserts that he began producing and offering his goods for sale on the online platform Flipkart in August 2020 under the mark/name “V Tradition.” He asserts that he has had 1.41 billion clicks and more over 2.5 lakh orders from Flipkart alone. Since December 2020, the Plaintiff’s goods sold on Flipkart alone have generated total revenue of about Rs. 18 crores under the mark “V Tradition.” More than 82,000 customer reviews of the Plaintiff’s items are available on Flipkart. In this lawsuit, the plaintiff’s complaint against Flipkart is that the online marketplace encourages and permits third-party sellers to “latch on” and use the mark “V Tradition” together with images of the plaintiff’s items. These independent merchants also improperly utilise the plaintiff’s images to promote their own goods under the “V Tradition” brand. Thus, the Plaintiff brought the current lawsuit in an effort to prevent Flipkart from allowing other merchants to “latch on” to his brand and products. The plaintiff’s attorney explains that the Flipkart software itself recommends “V Tradition” products as one of the most popular listings and “Best-Sellers” and permits such third party sellers to add various products under the Plaintiff’s mark “V Tradition” into their own listings along with the Plaintiff’s product photographs by way of the “Opportunities” option under the “Listings” tab on the “Flipkart” website.
Defendants Submission:
The senior attorney for Defendant No. 1, Flipkart, argues that because the mark “V Tradition” used by the Plaintiff is not registered, Flipkart lacks the means to determine whether or not the mark is entitled to protection. He submits that with respect to the mark “V Tradition” and the Plaintiff’s product listings, Flipkart will remove the abovementioned listings within 48 hours of receiving the URLs for the same from the plaintiff.
Court Decision:
The Hon’ble High Court, New Delhi, was of the opinion that allowing a third-party seller to “latch on” to the plaintiff’s name, mark, and product listings in this way amounts to nothing more than “riding piggy back” in the sense of classic passing-off. It essentially amounts to utilising the plaintiff’s brand and company’s goodwill unfairly. This court is certain that unauthorised sellers “latching on” resulted in and qualifies as “passing off,” as it is called in the brick and mortar industry. It is a mode of encashing upon the reputation of the plaintiff which he has painstakingly built. This Court is satisfied that such a feature cannot be allowed to be used or offered, to the detriment of the owner of the brand or the person who has of the brand or the person who has created the original product. Consent and authorisation of the brand owner and the listing owner would be required.
The submissions of the plaintiff have made it prima facie that permitting third party seller to latch on to best seller’s results in various third-party sellers misusing the plaintiff’s brand/mark. Finally legal counsel for Flipkart was asked to get the URLs and any other pertinent information of any such infringing third-party product listings within two days. All of the aforementioned product listings must be deactivated or removed within 48 hours of receiving the same. The Plaintiff was given the liberty to avail remedies, in respect of such parties, in accordance with law.
Conclusion:
If someone has been using a certain mark for a given product or service for a significant length of time and developed a solid reputation, the mark can be considered a trademark even though it hasn’t been formally registered under the Trademark Act of 1999. The common law tort of “Passing off” can nevertheless provide protection for such an unregistered mark. So, under the common law of passing off, the owner of an unregistered trademark may be entitled to stop another party from using an infringing mark. According to Section 27 of the Trademark Act of 1999, the owner or proprietor of such an unregistered mark does not have the authority to file a lawsuit for infringement. But such a mark enjoys common law advantages. Therefore it is always better to get the trade mark registered so that the mark can avail all the benefits the act provides.
DUCTUS EDGE 