DELHI HIGH COURT ORDERS FLIPKART TO PREVENT UNAUTHORIZED LATCHING-ON IN PASSING OFF CASE

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Written by Ronsiya Roy, Legal Intern, and Verified by Sunil Jose, Managing Attorney, Suns Legal.

MODERN MOLD PLAST PVT. LTD. & ANR. V. FLIPKART INTERNET PT. LTD &ORS CS(COMM) 803/2024

Flipkart, one of India’s largest e-commerce platforms, recently faced a legal dispute in the Delhi High Court. The plaintiffs sued the platform and two other parties, alleging that third parties were exploiting Flipkart’s latching-on feature to sell counterfeit products, thereby misleading the public.

Modern Mold Plast Pvt. Ltd (hereinafter referred to as the “plaintiffs”) use the trademark ‘MAHARAJA’ and other MAHARAJA-formative trademarks, including ‘MODERN MAHARAJA,’ ‘MUKUT MAHARAJA,’ ‘METRO MAHARAJA,’ and ‘OMAHARAJA,’ in their business for various goods. Their original artistic works have become distinctive and are protected under the Copyright Act. Since 2009, the plaintiffs have adopted these marks honestly and in good faith, filing trademark applications to register them. However, opposition proceedings have prevented them from securing registrations for the marks. The plaintiffs conduct their business using these trademarks through their own interactive websites and e-commerce platforms like Amazon and Flipkart.

The plaintiffs filed the present suit under Section 134 of the Trademarks Act, 1999, and Sections 51 and 55 of the Copyright Act, 1957, seeking a permanent and mandatory injunction to restrain the passing off of their trademark and to prevent copyright infringement. They were aggrieved by Flipkart’s ‘latching-on’ feature, which allowed other sellers (defendants 2 and 3) to list counterfeit products under the plaintiffs’ listings, thereby misleading customers. ‘Latching-on,’ a feature provided by Flipkart, permits sellers who are not the original owners of a business or product to attach their products to an existing brand’s listing on the platform.

The plaintiffs submitted that defendants 2 and 3, sellers on Flipkart, added themselves as alternative sellers of the plaintiffs’ goods and sold the products at further discounted prices. However, they issued invoices bearing the plaintiffs’ name and trademark, thereby disguising their products as the plaintiffs’ genuine goods.

The Court held that defendants 2 and 3 cannot be allowed to sell their products by passing them off as the plaintiffs’ products. The Court acknowledged that the plaintiffs’ common law rights in the word mark ‘MAHARAJA’ are recognized by the Courts of Law.

In a similar suit for passing off filed by the plaintiffs, the District Court of Saket restrained the defendants from using the plaintiffs’ mark and recognized the plaintiffs as the prior users of the mark ‘MAHARAJA.’ The defendants appealed the District Court’s decision before the Delhi High Court, which also upheld the plaintiffs’ rights and affirmed them as the prior users of the mark ‘MAHARAJA’ (Rajendra Vardichand Jagetia & Anr. v. Modern Mold Plast Pvt. Ltd., FAO (COMM) 125/2023).

Therefore, in the present case, the Delhi High Court held that sellers cannot use the latching-on feature to sell counterfeit products or mislead the public into believing the products originate from a specific source when they do not. The Court ordered Flipkart to apply its ‘brand gating’ feature to the plaintiffs’ listings, in accordance with the platform’s policies.

The Court further directed Flipkart to accept the plaintiffs’ Flipkart Serial Numbers (FSN) and prevent unauthorized sellers from latching on to the plaintiffs’ listings. When a seller attempts to use the latching-on feature, Flipkart must examine the situation and, if there is any ambiguity, seek confirmation from the plaintiffs. Likewise, if the plaintiffs notice any latching-on, they should immediately notify Flipkart, which must take necessary steps as quickly as possible.

COMMENTS

Latching-on features provided by e-commerce platforms like Flipkart have been the subject of intellectual property disputes in several cases. In 2022, the Delhi High Court addressed a similar dispute in Akash Aggarwal v. Flipkart Internet Private Limited and Ors, CS (COMM) 492/2022, ruling that Flipkart’s latching-on feature amounts to ‘riding piggyback’ in the traditional passing off sense and cannot be allowed. In that case, the Court observed that sellers exploit this feature to gain financial benefits by leveraging the reputation established by another entity. However, despite the 2022 ruling, this feature still leads to the misuse of trademarks owned by rightful proprietors.

In the present case, the Court directed Flipkart to take necessary steps to prevent any loss suffered by the plaintiffs. Yet, the broader issue remains unresolved, as no proper guidelines have been issued to regulate this practice in the e-commerce sector. This growing concern, especially in the era of online shopping, requires the judiciary’s attention to safeguard intellectual property and prevent unauthorized individuals from exploiting it.

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