Delhi HC stays single judge’s order penalising Amazon of Rs 340 crore for trademark infringement

Lifestyle Equities CV and Lifestyle Licensing BV, dealing in manufacturing, distribution and sale of a wide range of products including garments, apparels, accessories, had asserted they are the rightful proprietors of the Beverly Hills Polo Club (BHPC) mark, which comprises a distinctive logo featuring a charging polo pony with a mounted rider wielding a raised polo stick.

Lifestyle had also contended that the defendants — Amazon Technologies, Cloudtail India Private Ltd and Amazon Seller Service Private Limited — have infringed the BHPC trademark by its unauthorised use on its platforms, causing consumer confusion and dilution of the plaintiffs’ mark and goodwill.

The single judge had taken an adverse view against the defendants for not disclosing the exact relationship between them before the court. Amazon Technologies Inc had subsequently appealed against the single judge’s order before a division bench of the Delhi High Court. 

While staying the operation of the single judge’s order, the division bench of Justices C Hari Shankar and Ajay Digpaul said the single judge “materially erred in law and on facts” by proceeding ex parte against Amazon Technologies Inc when they were not issued summons in the case.

“No amount of service, on the defendant, of the papers relating to the suit, by the plaintiff, absent actual summons issued by the suit, can compel a defendant, in law, to enter appearance. The law does not permit a defendant to be proceeded ex parte, even before summons in the suit are served on it. This is plain, and elementary. The learned Single Judge could not, therefore, have proceeded against Amazon Tech ex parte on 20 April 2022, even before formal summons in the suit had been served on it,” the division bench said Tuesday.

“The learned Single Judge has adversely commented on what she perceives as Amazon Tech’s deliberate absence from the proceedings in the suit. Even if it were to be presumed, merely for the sake of argument, that Amazon Tech took a conscious decision not to participate in the suit proceedings, that cannot justify mulcting it with damages of ₹ 336,02,87,000/-.The case, therefore, is one of awarding, against Amazon Tech and in favour of Lifestyle, of damages of ₹ 336,02,87,000/-, without any sustainable finding of infringement, or of complicity in infringement, against Amazon Tech,” the bench observed.

Ruling that “there is, in fact, no material to indicate involvement of Amazon Tech in the allegedly infringing activities of Cloudtail,” the bench went on to observe that the single judge “made out a case in favour of Lifestyle which it itself did not plead.”

The bench went on to stay the operation of the single judge’s order, and directed for an award of damages of over Rs 336 crore, and costs of Rs 3.23 crore.

The appeal continues to be pending.