Indian Court orders Amazon to pay $39million in damages for trade mark infringement

Amazon has been dealt another blow in their trade mark infringement battle with Lifestyle Equities. 

Following the loss at the UK Supreme Court last year in which listings of infringing goods on Amazon.com were held to be “targeting” UK consumers, Amazon has now been ordered by the Delhi High Court to pay $39million in damages to Lifestyle Equities for another infringement of the Beverly Hills Polo Club logo mark. The Court has also issued a permanent injunction preventing the future sale of the infringing products in India. 

Often, e-commerce platforms can escape liability for trade mark infringement on the grounds that they are merely an intermediary. In this case, the link between the seller and Amazon was such that Amazon was held to be equally responsible for the infringement. Surely this and the UK Supreme Court decision will force Amazon to review its practices to ensure that they cannot be held liable for further trade mark infringement, not only of Lifestyle Equities' marks. 

Background

In 2020, Lifestyle Equities brought a claim against Cloudtail India and Amazon for trade mark infringement based on the sale of clothing goods on Amazon.in under the following sign:

(Source: https://x.com/adityakalra/status/1895004128423919890)

Cloudtail was created in 2014 as a joint venture between Amazon and Catamaran Ventures; however, Amazon parted ways with Cloudtail in 2021 in the midst of allegations of preferential treatment. 

Interestingly in this case, Amazon Technologies Inc owns the Indian trade mark registrations for the SYMBOL brand operated by Cloudtail under which the products bearing the infringing horse logo were sold. 

Cloudtail complied with the initial interim injunction back in 2020 which prevented them from continuing to infringe Lifestyle Equities' marks through use of the horse logo. However, Amazon cited a brand license and distribution agreement with Cloudtail which they claimed excluded them from liability for damages in this matter. 

Decision

The case made its way back to Court, where it was held that the defendant companies (Cloudtail and two Amazon entities) are “closely related to or interlinked with each other”, despite having tried to demonstrate the opposite, which was held to be “clearly with an intent to avoid fastening of liability” (paragraph 47 of the decision). 

In particular, the license agreement between Amazon and Cloudtail was held to be ”demonstrative of the direct commercial and operational nexus between the Defendants, making it evident that Amazon cannot escape liability under the guise of being a mere intermediary" (paragraph 101 of the decision).

Amazon was therefore held to be equally responsible for the infringing conduct in this case and the Court noted that Amazon was “well-aware” of Lifestyle Equities' rights in the Beverly Hills Polo Club logo mark given the past litigation between the companies in countries such as the UK. 

Furthermore, the judge held that Amazon has:

“…ways and means to utilize its dominant presence in the e-commerce space to promote its own products as also products which it might otherwise wish to promote. [Amazon] also has the leverage through its own platforms to dilute [Lifestyle Equities'] brand/logo by indulging in deep-discounting of its own products which compete with [Lifestyle Equities] by using a similar mark/logo. In the present facts, [Amazon] is placing products priced at 10% of [Lifestyle Equities'] product cost.” (paragraph 99 of the decision)

This resulted in a resounding success for Lifestyle Equities and a significant award of damages for both lost royalties and to compensate them for an increase in their advertising and promotional expenses.