Introduction

The Delhi High Court delivered a landmark judgement on February 25 2025, in the case of Lifestyle Equities CV & Anr. v. Amazon Technologies, Inc. & Ors[i]. This decision has clarified certain key aspects of trademark infringement, particularly in the context of the e-commerce intermediary’s obligations and methodology for calculating compensation.

The case highlights the obstacles of enforcing intellectual property rights (“IPR”) against digital platforms involved in ‘e-infringement’ while also establishing an essential precedent for determining compensation in instances of systematic brand dilution.

Background

Lifestyle Equities CV (“LECV”) along with Lifestyle Licensing BV (“LLBV”) (the “Plaintiffs”), the owners of globally popular ‘Beverly Hills Polo Club’ (“BHPC”) brand, filed a lawsuit against Amazon Technologies Inc, Amazon Seller Services Private Limited and Cloudtail India Private Limited[ii].  (the “Defendants”)

The Plaintiffs had alleged that Cloudtail India Private Limited (“Cloud Tail”) private label ‘Symbol[iii]’ used a logo very deceptively similar like BHPC’s ‘polo pony device’ and such unauthorised use constituted a trademark infringement. Plaintiffs[iv] claimed that the infringing products were sold at 10% of BHPC’s price, which diminished their brand value and disrupted their sales, inflicting lasting reputational damage and substantial consumer confusion.

Key Legal Issues

The key issue in this case revolves around the trademark infringement of the BHPC brand, arising from Amazon’s use of a logo that closely resembled the registered BHPC trademark. This was claimed to be a violation of Sections 29(1) and 29(2) of the Trade Marks Act, 1999 (“Trade Marks Act”), which prohibit the use of a mark that is identical or deceptively similar to a registered trademark in a manner likely to cause confusion.

The case also raises concerns about e-commerce platforms like Amazon, which incurred significant e-commerce liability issues due to its dual role of acting as an intermediary platform for third-party transactions and as a direct seller of Cloud Tails branded products. The ‘intermediary’ defence, which protects online platforms against third-party liability, has also raised doubts about Amazon’s potential protection against legal responsibilities stemming from these actions.

Finally, the decision also addressed the issue of appropriate penalties for such trademark violations, considering the widespread impact on brand reputation and the potential economic losses arising from infringement in the e-commerce sector.

Court’s Analysis

(a) Trademark Infringement and the ‘Triple Identity Test’:

The court applied the ‘triple identity test’ consisting of identical marks, goods, and trade channels to determine infringement. The court determined that Amazon’s ‘Symbol’ logo and BHPC’s logo (a charging polo pony with a rider) displayed ‘slavish imitation’ qualities because they caused confusion among consumers.  During the proceedings, the court rejected Amazon’s attempt to distance itself from Cloud Tail due to its contractual relationship under the Amazon Brand License and Distribution Agreement. The Amazon Brand License and Distribution Agreement established that Amazon retained control of its brand elements, leading the courts to find the company responsible for Cloudtail’s infringing sales activities.

(b) E-Commerce Liability and ‘E-Infringement’:

This case introduced the concept of ‘e-infringement’, as a new concept recognizing the challenges of online trademark violations to tackle unique trademark offenses that exist within digital spaces. The court dismissed the defence raised by Amazon under Section 79 of the Information Technology Act, 2000 which provides a safe harbour to intermediaries, on the grounds that Amazon was functioning both as a marketplace operator and a brand owner, thereby disqualifying itself from intermediary protection.

(c) Assessment of Damages:

The court awarded USD 38.78 million (₹336.02 crores) in compensatory damages, comprising of Lost Royalties (USD 33.78 million), which was calculated using the plaintiff’s Trademark License Agreement (“TLA”) with Apparel Group India that stipulated a 7.5% royalty on sales. Further, punitive damages were considered but denied to the defendants. Damages are only awarded for conduct that is “oppressive,” “arbitrary,” or “unconstitutional.”

Conclusion

This decision marks a landmark shift in Indian Trademarks laws, setting a clear framework for handling online trademark infringement and calculating damages when a brand’s reputation is harmed. It has tried to strike a balance between promoting e-commerce on one end and protecting IPRs on the other end, to ensure the protection of brand owners from exploitation of trademark infringement at e-commerce platform level.

This case further emphasizes the need to constantly monitor online platforms and quick action against potential infringements. The use of advanced tools to spot violations in real-time by businesses and take steps like sending ‘cease and desist’ notices and strategic litigation can serve as powerful deterrents. Additionally, e-commerce platforms must be careful with their private label strategies to avoid legal risks. Brand owners and e-commerce operators should adopt transparent practices and strong compliance policies to reduce risks and maintain a fair market.

References:

[i] Lifestyle Equities CV & Anr. v Amazon Technologies, Inc. & Ors. CS(COMM) 443/2020 (Delhi HC, 25 February 2025).
[ii] Cloudtail is a wholly owned subsidiary of Prione Business Services, which is a joint venture between Catamaran and Amazon.
[iii] Amazon India introduced “Symbol”, a private label fashion brand launched by Cloudtail India Private Limited, on Amazon India web platform
[iv] The Plaintiffs have been operating in India since 2007 pursuant to license agreements with Spencer’s Retail and Apparel Group India for the exclusive manufacture, marketing, distribution, and sale of products under the Beverly Hills Polo Club (BHPC) trademark.