The Delhi High Court recently underscored the need for a legal framework to address 'e-infringement' of trademarks in the digital commerce landscape [Lifestyle Equities CV Vs Amazon]..The Court made the suggestion in a judgment directing Amazon to pay ₹340 crores in damages to Lifestyle Equities for trademark infringement.The judgment authored by Justice Prathiba Singh noted that traditionally, violations of trademark rights would take place in brick-and-mortar stores where the identity of the infringing party is easily determinable.However, with the rise of the internet, intellectual property (IP) owners face new challenges in protecting their brands against unauthorised exploitation, the Court added. Therefore, there is a need to put in place clear legal frameworks to address such evolving challenges, the Court opined."Clearly, the multi-layered nature of ecommerce has made it increasingly difficult to identify, attribute liability, and effectively enforce IP rights, necessitating clear legal frameworks to address the evolving challenges posed by online trademark infringement," the Court said..The Court highlighted that the rise of e-commerce is bound to give rise to a new category of trademark infringement or e-infringement. "The proliferation of e-commerce is now here to stay and is an irreversible reality, giving rise to a new species of infringement which can be termed as ‘e-infringement.’"The Court elaborated on the complexity of fixing responsibility in such cases since there may be multiple parties who could be involved in the violation of trademark rights, including brand owners, retailers, e-commerce platforms, and intermediaries handling warehousing, packaging, and delivery personnel. .The case before the Court concerned a trademark infringement suit filed by Lifestyle Equities CV against online e-commerce giant Amazon Technologies, Cloudtail India and Amazon Sellers Services. In 2020, Lifestyle Equities CV sued Amazon Technologies and others for trademark infringement, alleging the unauthorized use of its "BEVERLY HILLS POLO CLUB" logo on apparel sold through Amazon’s platforms. The lawsuit claimed that Amazon’s brand "Symbol" featured a deceptively similar mark, with Cloudtail India also involved in selling infringing products.The High Court granted an interim injunction on October 12, 2020, ordering Amazon to remove the infringing products. Amazon Technologies failed to appear in Court and was proceeded against ex-parte. The injunction was later made absolute. In 2023, Cloudtail India admitted to using the mark from 2015 to July 2020, generating ₹23,92,420 in revenue. Mediation efforts for a damages settlement failed..While deciding on the matter, the Court found that the e-commerce players being sued were closely linked. The Court went on to note that while e-commerce platforms expand accessibility for users, they also create challenges for intellectual property protection.It further observed that the defendants attempted to portray themselves as independent entities to evade liability, stating their clear intent was to "diffuse and dissipate the consequences of infringement.".To examine the relationship between Amazon and Cloudtail, the Court reviewed the Amazon Brand License and Distribution Agreement, which stated, "Amazon grants Distributor a non-exclusive, non-transferable, non-assignable and revocable right and license during the term of the Agreement to use, reproduce, perform, display, distribute and affix without alteration of any kind, the trade names, trademarks, service marks, specifications, designs, logos or symbols specified in Exhibit A attached hereto (‘Amazon Marks’)."The Court concluded that the clauses in this agreement clearly minimised Amazon’s ability to distance itself from the alleged trademark infringement committed by Cloudtail. It, therefore, held that the consequences of such trademark infringement squarely fell upon Amazon..The Court found that Lifestyle established that they were compelled to increase their marketing expenditures due to Amazon’s infringement. It explained that the necessity for enhanced advertising and promotional efforts by Lifestyle arose as a direct and foreseeable consequence of Amazon’s actions since Lifestyle had to act to restore confidence in its brand. The Court, thus, opined that damages should be awarded to Lifestyle for having to increase its advertising and promotional expenses. In view of this, the Court held that Lifestyle is entitled to compensatory damages amounting to USD 5 million.The Court added that damages to be paid to Lifestyle by Amazon for dilution and tarnishing Lifestyle’s brand cannot be precisely computed and must be estimated based on the available records. Upon reviewing the pleadings, documents, and evidence, the Court determined that Lifestyle was entitled to compensatory damages for lost royalties amounting to USD 33.78 million, equivalent to ₹292,70,37,000 (₹292.7 crores approximately).As a result, the total compensatory damages awarded to Lifestyle was set at USD 38.78 million (approximately ₹336 crores on the date of the judgment), which included USD 33.78 million for lost royalties and USD 5 million for increased advertising and promotional expenses.The Court also ordered Amazon to pay Lifestyle litigation costs and court fees, bringing the total fine amount payable by Amazon to approximately ₹340 crores (₹339.25 crores apart from court fee)."A decree of damages to the tune of $38.78 million, as on date equal to ₹336,02,87,000.00/- is granted in favour of the Plaintiffs against Defendant No.1.... A decree of costs to the tune of ₹ 3,23,10,966.60/- along with the Court Fee," the Court said. .Lifestyle was represented by Senior Advocate Gaurav Pachnanda with Advocates Sidhant Goel, Mohit Goel, Deepankar Mishra,Abhishek Kotnala, Karmanya Dev Sharma Avni Sharma, Vivek Pratap Singh and Jyotika Jain..[Read Judgment]
