Mr. Akash Aggarwal, operating under the mark/ name ‘V Tradition,’ a female clothing brand present on various e-commerce platforms, including Flipkart. Mr. Aggarwal was aggrieved by the fact that Flipkart has allowed and is allowing various unrelated third-party sellers to latch on to his popular products sold under his brand ‘V Tradition,’ through a feature on Flipkart which enables these third-party sellers to become ‘more sellers’ of popular best-selling goods.
Before moving forward, it may be understood that the “latch on” feature offered by Flipkart allows . an existing or prospective seller on Flipkart to become a ‘More Seller’ of someone else’s product on Flipkart by:
- Any existing or prospective seller can latch on by selecting the ‘listing’ tab on Flipkart, ‘opportunities’ will be shown as one of the drop-down options under the tab.
- The ‘Listing Opportunities’ tab will allow an existing or prospective third-party seller to become ‘more seller’ of a best-selling product, which in this case was the ‘V Tradition’s’ best-selling products, one of which is exhibited below.
- Flipkart also encouraged third-party sellers to become ‘more sellers’ of a popular product and also suggested competitive prices to such sellers.
- Further, by clicking on ‘add listing’, an unauthorized third-party seller can become a ‘more seller’ for a popular high-demand product and start selling such product under the name of the third party.
Mr. Aggarwal, the aggrieved party, pointed at this feature and even showed that the Flipkart software itself suggests ‘V Tradition’ products as one of the most popular listings and ‘Best-Sellers’ and allows third-party sellers to use the representative photographs or promotions (as replicated hereinbelow), and successively approached the Delhi High Court for restraining Flipkart from permitting and facilitating third-party sellers on its platform from ‘latching on to the mark/ name ‘V Tradition and his products sold under it.
Image 1: The authentic and original product of ‘V Tradition'
Image 2: Unauthorized third-party seller using the original product and photograph of ‘V Tradition’.
Source- Judgement
Mr. Aggarwal contended that when a third-party seller wishes to place a listing on Flipkart, the Flipkart software itself suggests ‘V Tradition’ products as one of the most popular listings and ‘Best-Sellers’ and allows such unauthorized/ third party sellers to add various products sold under his mark ‘V Tradition’ into their listings along with Mr. Aggarwal’s product photographs, by way of the ‘Opportunities’ option under the ‘Listings’ tab on the ‘Flipkart’ website. Mr. Aggarwal contented that there are various persons/ sellers, who have been adversely affected by the said ‘latching on’ feature provided by Flipkart, which has resulted in a loss of business to such small and medium entrepreneurs. Mr. Aggarwal substantiated his claims by producing the affidavits filed by third-party sellers, who have also filed suits against Flipkart.
Mr. Aggarwal further added that invoices issued by one such unauthorised seller have his mark ‘V Tradition’ on them.
On the other hand, Flipkart informed the Court that, since Mr. Aggarwal’s mark/ name ‘V Tradition’ is not a registered trademark, hence it would have no method to check whether the mark is entitled to protection, or not. However, Flipkart did agree to take down the listings/ URLs of third-party sellers within 48 hours of being provided the same.
After hearing both the parties, the Court made the following important observation:
“The advent of e-commerce has created various challenges to the protection of IPR rights. An action for passing off, which was traditionally restricted to products having similar logos, marks, names, and labels, in the real world, now has a new dimension in the context of e-commerce.
E-commerce platforms provide an alternate platform to small and medium entrepreneurs to showcase their products and conduct their businesses in a profitable manner. However, certain features on these platforms can also cause damage to such entities and entrepreneurs. One such feature, as is clear from the present case” …”The fact that such a feature is made available is not even disputed by Flipkart.”
Therefore, the Court held that permitting a third-party seller to ‘latch on’, in this manner, to a brand owner’s name/ mark and product listings is nothing but `riding piggyback’ as is known in the traditional passing-off sense. It amounts to taking unfair advantage of the goodwill that resides in Mr. Aggarwal’s mark and business.
In the context of e-commerce, the Court had no doubt that ‘latching on’ by unauthorised seller’s results in and constitutes ‘passing off’ as known in the brick-and-mortar world. It is a mode of encashing upon the reputation of Mr. Aggarwal which he has painstakingly built.
The Court further added that the affidavits filed by Plaintiff also need to be further looked into as this seems to be a recurring difficulty that IP owners appear to be facing.
This Court was 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.
Hence the Court granted an interim injunction in favour of Mr. Aggarwal and restrained Flipkart from using the latch on feature against Mr. Aggarwal’s mark/ name ‘V Tradition’ and also ordered Flipkart to provide the URLs of all such third-party infringing products and take them all down within 48 hours.
A para may be written on the significance of this decision as a conclusion
