By Kamya Pandey
The Delhi High Court has stayed its previous judgment directing Amazon Technologies to pay $39 million (roughly Rs 340 crores) in damages as part of a trademark infringement lawsuit between the e-commerce giant and Lifestyle Equities on July 1.
In 2020, Lifestyle Equities filed a lawsuit against Amazon Tech, stating that it was selling products with copied logos, misrepresenting its brand 鈥楤everly Hills Polo Club鈥. The products 鈥 which were manufactured by Cloudtail 鈥 were sold under the brand name Symbol, which Amazon owned.
In May this year, Amazon Tech (a subsidiary of Amazon) challenged the court鈥檚 decision, arguing that Lifestyle Equities had failed to produce any evidence of infringement. It urged the court to conduct a detailed examination of the matter. In its appeal, Amazon Tech mentioned that it did not get to present its side before the Delhi High Court, which left the evidence of trademark infringement untested. It also argued against the 鈥渃olossally enhanced claim鈥 from Rs 2 crore to Rs 340 crore, even though Lifestyle Equities made no argument on record supporting such a major escalation. Amazon Tech stated that it was never made aware of the change in the claim.
While the court has stayed the original judgment, this is subject to Amazon submitting an undertaking that it will comply with the judgment if its current appeal fails.
Why had the court originally ruled against Amazon Tech?
In the original case, the Delhi High Court held Amazon Tech responsible in the trademark infringement case because of the licensing agreement it had with Cloudtail to sell products under the brand name Symbol. Based on its assessment of the agreement, the court believed that Amazon Tech had control over the trademark usage, licensing, and distribution of the infringing mark, thereby making it directly liable for the unauthorized use.
The court argued that Amazon Tech deliberately chose to remain absent from the suit, despite having full knowledge of it. It also emphasized the connection between Cloudtail and Amazon Tech, and Amazon Tech鈥檚 awareness of the ongoing dispute became evident when Cloudtail鈥檚 lawyer represented Amazon Tech鈥檚 interests before the court during a 2022 hearing.
When considering damages, the court took note of Amazon Tech鈥檚 dominant position, which it could utilize to promote its own products and also products it might otherwise wish to promote. The court also mentioned that Amazon Tech had engaged in deep discounting of its own products to compete with Lifestyle Equities. Based on these facts, it awarded damages for both sales and royalties to Lifestyle Equities. It relied on trademark agreements the company had with major brands licensed to use the trademark in India and neighboring markets. The court noted that Lifestyle claimed to have increased marketing expenses to counteract the adverse effects of the infringement.
Amazon Tech鈥檚 concerns with the court鈥檚 original decision:
Amazon Tech argues that it was Cloudtail that sold products with the allegedly infringed trademark, based on its sole discretion. Cloudtail had even conceded the same before the court in 2023, stating that Amazon Tech had no liability in the matter. Based on this, the Delhi High Court asked Cloudtail to pay Rs 4.7 lakh in damages.
After the court directed Cloudtail to pay damages, the trial for the case began, and no party from the opposing side was present to contest the suit. Further, it was only after this direction that Lifestyle Equities raised the damages claim against Amazon Tech.