Akash Agarwal v Flipkart Internet Private Limited, CS (COMM) 492 of 2022, decided on 02-08-2022.

The Delhi High Court recently ruled that e-commerce platform Flipkart’s feature allowing third-party merchants to ‘latch on’ to a more successful brand’s name is nothing more than ‘riding piggyback’ and constitutes passing off. As a result, it asked Flipkart to stop such function for the Plaintiff’s listings created under his brand.

Latching on is a procedure that allows third-party sellers to include multiple goods from a certain brand in their own listings, along with images of those products. This is achievable by visiting the Flipkart website and selecting the ‘Opportunities’ option under the ‘Listings’ page.

According to Justice Prathiba Singh, the feature amounts to unfairly getting the benefit of the goodwill that lives in the more popular brand or firm, and is a method of cashing in on their reputation.

‘‘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 authorization of the brand owner and the listing owner would be required before such conduct by any seller ispermitted,’’the decision stated.

The Learned Judge noted that the introduction of e-commerce has introduced new aspects to Intellectual Property (IP) Rights and that a passing off action, which was previously limited to items with identical logos, markings, names, and labels in the real world, has now taken on a fresh dimension in this matter.
However these platforms provide a large window and some elements, such as the ‘latch on’ feature, might cause injury, according to the Court.

“Flipkart’s ‘latch on’ function allows you to latch onto multiple merchants. A feature like this cannot be utilized to harm a brand. Flipkart has given other parties access to these. As a result, Flipkart must refrain from latching onto the plaintiff’s items in order to allow third-party participants to profit from their goodwill and reputation… Flipkart must disable the ‘Latching On’ function”the Court ordered.

Mr. Akash Aggarwal is the sole owner of a firm operating under the mark/name ‘V Tradition,’ which is involved in the business of selling women’s clothes on different retail e-commerce sites, including ‘Amazon’, ‘Meesho’ and ‘Myntra’ as well as that of Defendant No.1 – Flipkart.

Plaintiff claims that he utilizes the mark/name ‘V Tradition’ on all clothing, he manufactures and sells. Plaintiff claims that he began producing and selling his items under the mark/name ‘V Tradition’ on the e-commerce platform Flipkart.

He claims to have gotten more than 2.5 lakh orders from Flipkart alone, with 1.41 crore clicks. Plaintiff’s items bearing the trademark ‘V Tradition’ have sold about Rs.18 crores on Flipkart alone. According to Plaintiff, Plaintiff’s items have over 82,000 user reviews on Flipkart. Plaintiff’s goods listings on Flipkart conspicuously display the mark ‘V Tradition’ on all of his products. Plaintiff claims to have spent a significant amount of money on the manufacture of clothing for women, as well as on hiring women models to wear Plaintiff’s garments and whose images are used to showcase and promote Plaintiff’s wares on e-commerce platforms such as Flipkart.

Plaintiff’s accusation on Flipkart in the current claim is that the said platform encourages and allows third-party merchants to use the technique of ‘latching on’ and utilize the mark ‘V Tradition’ along with images of plaintiff’s products on the aforementioned platform. As a result, various third-party merchants that are unrelated to Plaintiff are able to depict ‘V Tradition’ and capitalize on the popularity of Plaintiff’s products and designs. Such third-party vendors additionally misappropriate Plaintiff’s images for his own items offered under the ‘V Tradition’ label.

As a result, Plaintiff has launched this claim to prevent Flipkart from allowing third-party merchants to ‘hang on to his brand and merchandise’. The suit requests that Flipkart refrain from allowing any individual or entity to represent itself and/or operate its business on the website of Defendant No. 1 as ‘more sellers’ of goods offered for sale by Plaintiff on his own product listings on the official site of Defendant No. 1-Flipkart under the Plaintiff’s trademarks and from allowing unauthorized sellers to use the pictures of the Plaintiff’s product listings and name.

Mr. Nayar, Senior Advocate for Defendant No.1 – Flipkart, contends that the mark ‘V Tradition’ used by Plaintiff is not registered; hence, Flipkart has no way of knowing whether the mark is protected or not. Without prejudice to the foregoing, he submitted under instructions that, according to Plaintiff, there are known to be 45 third-party vendors that have already begun exploiting Plaintiff’s trademark ‘V Tradition’ product descriptions and similar images. Flipkart would remove the aforementioned listings within 48 hours of receiving the URLs for the same.

Mark Shield was pleased to assist Plaintiff- Akash Aggarwal for representing his case before Hon’bleHigh Court of Delhi with combined efforts of Mr. Anshuman Upadhyay, Mr. Naseem and Mr. Prashant, Advocates.

Defendant No.1 –Flipkart was represented by Mr. Rajiv Nayyar, Sr. Advocate with Ms. Manjra, Mr. Sidharth Chopra, Ms. Shilpa Gupta, Ms. Surabhi Pande and Mr. Kuber, Advocates.
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