Aastha Thakur
Published on: 06 August 2022 at 18:49 IST
The Delhi High Court recently observed that e-outlets on digital platform like Flipkart’s permits third-party sellers to ‘latch on’ to a more popular brand’s name is nothing but ‘riding piggy back’ and constitutes passing off.
It, therefore, issued orders to disable the alleged feature.
Latching is process to allow third party seller’s product to list it along with the photographs and details without obtaining their consent. It is possible through ‘Opportunities’ option given under the ‘Listings’ tab on the ‘Flipkart’ website.
Justice Pratibha Singh said that the feature amounts to take unfair advantage of the goodwill i.e., intangible asset of the brand or business and amount to dishonest way to encash upon their reputation.
The order said, “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 created the original product. Consent and authorisation of the brand owner and the listing owner would be required before such conduct by any seller is permitted.”
The Judge observed that the advent of e-commerce has added new dimensions to Intellectual Property (IP) and that an action for passing off – which was traditionally restricted to products having similar logos, marks, names and labels in the real world – has now taken on a new dimension in this context.
The Court agreed that the platforms are wide enough widow although some of the features like the ‘latch on’ can cause damage. The stated statement was –
“The ‘latch on’ feature on Flipkart allows for latching onto various sellers. Such a feature cannot be used to the detriment of a brand. Flipkart has allowed third parties to latch onto these. Accordingly, Flipkart shall stand restrained from latching onto the plaintiff’s products, so as to enable third-party players from encashing upon their goodwill and reputation…The ‘Latching on’ feature must be disabled by Flipkart.”
The present suit was filed by one Akash Aggarwal, sole proprietor operating his business under mark/name ‘V Tradition’, who sought a permanent and mandatory injunction restraining trademark and copyright infringement, passing off, delivery up, rendition of accounts, damages and other relief.
He claims that his cloth line for women is available on various retail e-commerce platforms, such as Amazon, Meesho, Myntra, as well as Flipkart.
It was argued that Flipkart had allowed third parties, including several unconnected sellers, to portray themselves as ‘V Tradition’ and ride on the popularity of the products and designs of the plaintiff by using the mark ‘V Tradition’, in addition to using the photographs of the plaintiff’s products.
Counsel for the plaintiff submitted that various people were affected due to the ‘latching on’ feature and that there was a loss of business to micro, small and medium enterprises (MSMEs) and small businesses.
Flipkart’s lawyer said that if an affidavit including the list of all third-party owners is sent to the e-commerce giant, it would take them down within 48 hours.
Justice Singh directed Flipkart to disable the ‘latching on’ feature on its website with respect to the present plaintiff so as to prevent third parties from deriving benefit from the goodwill of the V Tradition trademark.
The Court said that the plaintiff will share the details of all the 34 players that were already ‘latched on’ with Flipkart’s counsel, subsequent to which the e-commerce giant will take them down within 48 hours.