Delhi High Court
Western Digital Technologies Inc. & Anr vs Geonix International Private Limited, … on 9 March, 2026
Author: C. Hari Shankar
Bench: C. Hari Shankar
$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: 19 December 2025
Pronounced on: 9 March 2026
+ FAO(OS) (COMM) 146/2024, CM APPL. 39898/2024 & CM
APPL. 39900/2024
WESTERN DIGITAL TECHNOLOGIES
INC. & ANR. .....Appellants
Through: Mr. Pravin Anand, Mr. Saif
Khan, Mr. Shobhit Agarwal, Ms. Shayal
Anand, Mr. Prajjwal Kushwaha and Ms.
Meghana Kudligi, Advs.
versus
GEONIX INTERNATIONAL PRIVATE LIMITED,
THROUGH ITS DIRECTORS, MR. GAURAV JAIN MR.
SAURABH JAIN & ANR. .....Respondents
Through: Ms. Rashi Bansal, Mr. Saurabh
Lal and Ms. Deepti Thapa, Adv.
Mr. R.V. Sinha and Mr. A.S. Singh, Advs.
for R-2 and 3.
+ FAO(OS) (COMM) 147/2024, CM APPL. 40344/2024 & CM
APPL. 40346/2024
WESTERN DIGITAL TECHNOLOGIES
INC. & ANR. .....Appellants
Through: Mr. Pravin Anand, Mr. Saif
Khan, Mr. Shobhit Agarwal, Ms. Shayal
Anand, Mr. Prajjwal Kushwaha and Ms.
Meghana Kudligi, Advs.
versus
DAICHI INTERNATIONAL & ANR. .....Respondents
Signature Not Verified
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KUMAR
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16:58:32
Through: Ms. Rashi Bansal, Mr. Saurabh
Lal and Ms. Deepti Thapa, Adv.
+ FAO(OS) (COMM) 148/2024, CM APPL. 40350/2024 & CM
APPL. 40352/2024
WESTERN DIGITAL TECHNOLOGIES
INC & ANR. .....Appellants
Through: Mr. Pravin Anand, Mr. Saif
Khan, Mr. Shobhit Agarwal, Ms. Shayal
Anand, Mr. Prajjwal Kushwaha and Ms.
Meghana Kudligi, Advs.
versus
CONSISTENT INFOSYSTEMS PRIVATE
LIMITED & ORS. .....Respondents
Through: Mr. Dushyant K. Mahant and
Mr. Vimlesh Kumar, Advs. for R-1
Ms. Rashi Bansal, Mr. Saurabh Lal and Ms.
Deepti Thapa, Adv.
+ FAO(OS) (COMM) 151/2024, CM APPL. 40711/2024 & CM
APPL. 40713/2024
SEAGATE TECHNOLOGY LLC .....Appellant
Through: Mr. Ranjan Narula, Mr. Shakti
Priyan Nair and Mr. Parth Bajaj, Advs.
versus
CONSISTENT INFOSYSTEMS PRIVATE LIMITED AND
ANR & ANR. .....Respondents
Through: Mr. Dushyant K. Mahant and
Mr. Vimlesh Kumar, Advs. for R-1.
+ FAO(OS) (COMM) 152/2024, CM APPL. 40762/2024 & CM
APPL. 40764/2024
SEAGATE TECHNOLOGY LLC .....Appellant
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Through: Mr. Ranjan Narula, Mr. Shakti
Priyan Nair and Mr. Parth Bajaj, Advs.
versus
DAICHI INTERNATIONAL .....Respondent
Through: Ms. Rashi Bansal, Mr. Saurabh
Lal and Ms. Deepti Thapa, Adv.
+ FAO(OS) (COMM) 104/2025, CAV 230/2025, CM APPL.
36440/2025 & CM APPL. 36441/2025
WESTERN DIGITAL TECHNOLOGIES,
INC. AND ANR. .....Appellants
Through: Ms. Shwetasree Majumder, Mr.
Prithvi Singh, Ms. Devyani Nath and Ms.
Vanshika Singh, Advs.
versus
HANSRAJ DUGAR .....Respondent
Through: Mr. Sidharth Chopra, Mr.
Kanishk Kumar, Mr. Angad Makkar and Mr.
Priyansh Kohli, Advs.
CORAM:
HON'BLE MR. JUSTICE C. HARI SHANKAR
HON'BLE MR. JUSTICE OM PRAKASH SHUKLA
JUDGMENT
% 09.03.2026
C. HARI SHANKAR, J.
Facilitative Index to the Judgment
S. No. Subject Para Nos
1 A The lis 1-3
FAO (OS) (Comm) 146/2024, FAO (OS) (Comm) 147/2024, FAO (OS)
(Comm) 148/2024, FAO (OS) (Comm) 151/2024 and FAO (OS) (Comm)
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152/2024
2 B Facts 4 – 11
3 C The Issues 12 – 16
4 D Sections 29, 30(3) and 30(4) and the decision in Kapil Wadhwa
5 I Sections 29, 30(3) and 30(4) 20 – 45
6 II The decision in Kapil Wadhwa 46 – 52
7 E The Impugned Judgment
8 I Facts of the case as noted in the impugned 53 – 54
judgment
9 II Appellants’ contentions before learned Single Judge 55 – 62
10 III Respondents’ contentions before learned Single 63 – 68
Judge
11 IV Observations and findings in the impugned judgment
12 IV.1 Re. Importation and sale 70 – 72
13 IV.2 Sale to refurbisher 73
14 IV.3 Right to repair 74
15 IV.4 The aspect of infringement under the Act 75 – 78
16 IV.5 Reverse passing off 79
17 IV.6 Conclusions of learned Single Judge 80 – 81
18 F Rival Contentions before this Court 82
19 I Submissions of Mr. Pravin Anand for WD
20 II Submissions of Mr. Ranjan Narula for Seagate
21 III Submissions of Ms. Shwetasree Majumder for WD in FAO (OS)
(Comm) 104/2025
22 IV Submissions of Mr. Dushyant Mahant for Consistent
23 V Submissions of Ms. Rashi Bansal for Daichi and Geonix
24 VI Submissions of Mr. Sidharth Chopra for Hansraj Dugar
25 G Analysis
26 I Re. the pleas of “passing off” and “reverse passing off”
27 I.1 Plea of “reverse passing off” is foreign to our trade 83 – 94
mark jurisprudence, and does not clothe the
appellants with an enforceable cause of action
28 I.2 Ingredients of “passing off” and “reverse passing 95 – 109
off” are absent
29 II Re. infringement
30 II.1 Neither Section 30(3) nor Section 30(4) calls for 110 – 115
invocation, as no case of infringement within the
meaning of Section 29 is made out
31 II.2 Assuming Section 30(3) is at all invocable, its 116 – 127
ingredients are fully satisfied
32 II.3 Section 30(4) is not applicable 128 – 137
33 II.4 The sequitur 138
34 III Other submissions 139 – 142
35 IV Re. concluding directions by the learned Single 143 – 147
Judge
36 H Itemising our findings 148
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37 I Conclusion 149
FAO (OS) (Comm) 104/2025
38 J Facts 150 – 155
39 K Analysis 156 – 165
40 L Conclusion 166 – 168
41 A closing remark 169
A. The lis
1. The appellants Western Digital Technologies Inc.1 and Seagate
Technology LLC2 manufacture Hard Disk Drives3, which are sold to
Original Equipment Manufacturers4 located outside India, who
integrate these HDDs into personal computers5, laptops, servers and
similar equipment. The appellants provide warranty for the HDDs up
to a particular period, after which they are regarded as “end-of-life”.
An end-of-life HDD does not lose its functionality; it is only that the
manufacturer of the HDD does not provide any further warranty. The
HDDs are extracted from the equipment in which they were integrated
and imported into India.
2. These appeals fall into two categories. The respondents in FAO
(OS) (Comm) 146/2024 (Geonix International Pvt Ltd6), FAO (OS)
(Comm) 147/2024 (Daichi International7) and FAO (OS) (Comm)
148/2024 (Consistent Infosystems Pvt Ltd) purchase the HDDs after
they are removed from the equipment abroad and imported into India
1 “WD” hereinafter
2 “Seagate” hereinafter
3 “HDDs” hereinafter
4 “OEMs” hereinafter
5 “PCs” hereinafter
6 “Geonix” hereinafter
7 “Daichi” hereinafter
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whereas Hansraj Dugar, the respondent in FAO (OS) (Comm)
104/2025, himself imports the HDDs into India, after they are
removed from the equipment abroad.
3. We will also deal with these matters separately.
FAO (OS) (Comm) 146/2024, FAO (OS) (Comm) 147/2024, FAO
(OS) (Comm) 148/2024, FAO (OS) (Comm) 151/2024 and FAO
(OS) (Comm) 152/2024
B. Facts
4. WD and Seagate, the appellants in these appeals, manufacture
HDDs and sell them to OEMs located in China. The HDDs bear the
appellants’ trade marks, registered under Section 23 of the Trade
Marks Act, 19998. Once the HDDs reach “end of life” stage, the
warranty provided by WD and Seagate comes to an end, the
equipment in which the HDDs were installed is discarded, the HDDs
are extracted therefrom, and imported into India.
5. At the time of import, or of subsequent sale in India, the HDDs
bear the registered trade marks of the original manufacturers, i.e. the
appellants. The respondents examine the HDDs and subject them to
testing. Defective HDDs are returned by the respondents to the
suppliers from whom they were purchased. The appellants’ trade
marks are removed from the remaining, functional HDDs. The
respondents affix their own trade marks/brand names on the HDDs.
8 “the Act” hereinafter
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The software embedded in the HDDs is erased. New software is
loaded on the HDDs by the respondents. New Serial numbers and
Model numbers are affixed on the HDDs. The respondents claim to
refurbish the HDDs and, thereby, enhance their utility. The HDDs are
thereafter sold by the respondents in their own individual packings
under the newly assigned Serial numbers and Model numbers.
6. The respondents claim that this is perfectly legitimate, and
forms the basis of a thriving refurbishing industry. They also claim
that the Government is promoting the industry, though we do not
propose to enter into that arena. The respondents claim that, by their
acts, HDDs, which retain functionality but have been discarded, are
rendered functional and useful, and made available to persons who
may not be able to afford original prime quality HDDs. In a sense of
speaking, they, therefore, claim to breathe life into the HDDs which
had been abandoned as “end of life”. The respondents claim that their
acts are perfectly legitimate, and do not breach any law in force.
7. The appellants, on the other hand allege that, by their acts, the
respondents are simultaneously committing three intellectual property
torts. They are infringing the appellants’ registered trade marks, and
committing the torts of passing off, as well as “reverse passing off”.
8. Predicated on these allegations, the appellants instituted the
suits from which the present appeals emanate, against the respondents,
seeking decrees of permanent injunction restraining them from
altering, impairing, repacking, rebranding or performing any similar
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activity on the HDDs originally manufactured and sold by the
appellants, as would amount to infringement or passing off.
9. The appellants filed, with their suits, applications under Order
XXXIX of the Code of Civil Procedure, 19089 , seeking interlocutory
injunctions, restraining the respondents from performing the afore
noted activities, pending disposal of the suits.
10. A learned Single Judge of this Court, by judgment dated 21
May 2024, disposed of the Order XXXIX applications filed by the
appellants with the following directions:
“The defendants will be permitted to sell the refurbished HDDs,
provided they comply with the following:
(i) Packaging to identify the source of the product:
Packaging in which the refurbished product is sold, will
clearly indicate that the HDD is manufactured by the
plaintiffs concerned (Seagate or WD as the case may be).
This may be displayed in a manner not to deceive the
customer that the sale itself is of the original Seagate or WD
i.e. it should be clear, but not dominating the packaging.
(ii) Reference to the original manufacturer is to be
made through their word mark and not the device mark:
Reference to the plaintiffs should be through their word
marks as in “Seagate” or “WD”, as the case may be.
Defendant shall not use plaintiffs’ logos, in order to not
cause any deception to the consumer.
(iii) Packaging must specify that there is no original
manufacturer’s warranty: A clear statement must be made
to the effect that there is no manufacturers’ warranty or
service by (Seagate or WD, as the case may be) on this
product.
9 “CPC” hereinafter
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(iv) Packaging must specify that the product is “used
and refurbished”: A prominent statement on the front of
packaging to the effect that the product is “used and
refurbished” by the defendants concerned (Consistent or
Geonix or Daichi, as the case may be).
(v) Statement as to extended warranty by the
refurbisher: A clear and prominent message that the
warranty or service of specified years is being provided by
the defendants concerned (Consistent or Geonix or Daichi,
as the case may be), along with customer care details and
contacts.
(vi) Packaging must reflect an accurate description of
the features: An accurate, truthful, precise description of
features and purpose of the refurbished product, without
any misleading, half-truth, deceptive, ambiguous statements
(which could potentially misinform the consumer as to the
features of the product and the purposes for which it could
be used).
(vii) All of the above should also be complied with by
the defendants on promotional literature, website, e-
commerce listings, brochures and manuals.”
(Emphasis as in original)
11. WD and Seagate are in appeal against the said judgments. The
defendants before the learned Single Judge have not chosen to appeal.
C. The Issues
12. The appellants allege, against the respondents, infringement and
“reverse passing off”. The allegation of infringement is predicated on
Sections 29(1) and (2)10, read with Section 29(6)(c)11 and Sections
10 29. Infringement of registered trade marks. –
(1) A registered trade mark is infringed by a person who, not being a registered proprietor or
a person using by way of permitted use, uses in the course of trade, a mark which is identical with,
or deceptively similar to, the trade mark in relation to goods or services in respect of which the
trade mark is registered and in such manner as to render the use of the mark likely to be taken as
being used as a trade mark.
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30(3) and 30(4)12 of the Act, whereas the allegation of “reverse
passing off” is, at least in so far as the law in this country is
concerned, in a sense sui generis.
13. In the context of the refurbishment trade, with which we are
concerned, there does not appear to be any earlier authority on the
point. The learned Single Judge, in the judgment under challenge in
the present appeals, has stated that the territory is virgin, and that he
had, before him, therefore, a “veritable tabula rasa”. We are much in
the same position, the only words written on the tabula being those
contained in the impugned judgments.
14. The only issues to be addressed are, therefore, whether the
respondents have infringed the registered trade marks of the
appellants, or are guilty of passing off, or reverse passing off.
(2) A registered trade mark is infringed by a person who, not being a registered proprietor or
a person using by way of permitted use, uses in the course of trade, a mark which because of–
(a) its identity with the registered trade mark and the similarity of the goods or
services covered by such registered trade mark; or
(b) its similarity to the registered trade mark and the identity or similarity of the
goods or services covered by such registered trade mark; or
(c) its identity with the registered trade mark and the identity of the goods or
services covered by such registered trade mark,
is likely to cause confusion on the part of the public, or which is likely to have an association with
the registered trade mark.
11 (6) For the purposes of this section, a person uses a registered mark, if, in particular, he–
*****
(c) imports or exports goods under the mark;
12 (3) Where the goods bearing a registered trade mark are lawfully acquired by a person, the sale of the
goods in the market or otherwise dealing in those goods by that person or by a person claiming under or
through him is not infringement of a trade by reason only of –
(a) the registered trade mark having been assigned by the registered proprietor to some other
person, after the acquisition of those goods; or
(b) the goods having been put on the market under the registered trade mark by the proprietor
or with his consent.
(4) Sub-section (3) shall not apply where there exists legitimate reasons for the proprietor to oppose
further dealings in the goods in particular, where the condition of the goods, has been changed or impaired
after they have been put on the market.
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15. We are dealing with these aspects in appellate jurisdiction over
a judgment rendered by the learned Single Judge under Order XXXIX
of the CPC. The analysis is, therefore, merely prima facie. Equally,
we would remain guided by the decisions in Wander Ltd v. Antox
(India) Pvt Ltd13 and Pernod Ricard India Pvt Ltd v. Karanveer
Singh Chhabra14, which hold that an appeal against an interlocutory
Order XXXIX order is merely an appeal on principle, and the
appellate Court would not substitute its subjective opinion for the
opinion of the Commercial Court.
16. We have heard Mr. Pravin Anand for WD, Mr. Ranjan Narula
for Seagate, Mr. Dushyant Mahant for Consistent and Ms. Rashi
Bansal for Daichi and Geonix.
D. Sections 29, 30(3) and 30(4) and the decision in Kapil
Wadhwa
17. These appeals necessitate an intricate navigation through
Sections 29, 30(3) and 30(4) of the Act, and we propose to undertake
the exercise at the very outset, so that the legal boundaries, within
which we would be require to limit our excursions, are clearly drawn.
18. As would become apparent during the course of this judgment,
the challenge relating to infringement, as levelled by the appellants
and predicated on Sections 30(3) and 30(4) of the Act, is more
substantial than the plea of “reverse passing off”. In so far as Sections
13 1990 (Supp) SCC 727
14 2025 SCC OnLine SC 1701
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30(3) and 30(4) are concerned, there is no authority, except the
impugned judgment of the learned Single Judge, which deals with
these provisions in the context of refurbishment. The only decision on
the point appears to be the judgment of a Division Bench of this Court
in Kapil Wadhwa v. Samsung Electronics Co.15, which, though it does
not deal with refurbishment, intricately analyses Sections 30(3) and
30(4).
19. We, therefore, proceed to set out our understanding of Sections
30(3) and (4), and the judgment of the Division Bench in Kapil
Wadhwa.
I. Sections 29, 30(3) and (4)
20. Section 30(3) applies where goods bearing a registered trade
mark are lawfully acquired by a person, who thereafter sells or
otherwise deals in the said goods. We will call him Mr. X.
21. The words that follow are crucial. They postulate that the sale
or otherwise dealing, by Mr. X, in the said goods, is not infringement,
by reason only of the existence of one or other of the two
circumstances envisaged in clauses (a) and (b) which follow.
22. Clearly, therefore, Section 30(3) does not create a distinct
specie of infringement. It sets out certain circumstances in which the
act envisaged in the provision would not be infringement.
15 2012 SCC OnLine Del 5172
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23. This implies that, if Section 30(3) were not to apply, the act
would be infringement. Section 30(3), therefore, provides an escape
route, from the taint of infringement, of an act which, but for Section
30(3), would otherwise be infringement.
24. This is clear even from the title of Section 30, which reads
“Limits on effect of registered trade mark”. Thus, the various sub-
sections of Section 30 must be read as incorporating limits, on the
effects of registration. Section 30(3) cannot, therefore, be understood
as providing one more avenue for alleging infringement, consequent
to registration of a trade mark. Rather, it incorporates limits on the
right to assert or allege infringement, where a registered trade mark is
lawfully acquired by the person who sells the goods, bearing the mark,
in the market, in the circumstances envisaged in clauses (a) and (b) of
the sub-Section.
25. The only provision in the Act which envisages what
“infringement” would be, and which is a self-contained code in that
regard, is Section 29. If an act satisfies one or more of the sub-sections
of Section 29, it would amount to infringement. Else, it would not.
There is no other provision, in the Act, which deems any act to
amount to infringement.
26. Section 30(3), therefore, merely clarifies that, even if an act
amounts to infringement under Section 29, it would nonetheless not be
infringement if the circumstances in Section 30(3) apply. If an act
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does not amount to infringement within the meaning of Section 29,
therefore, in the very first instance, no occasion to refer to Section
30(3) would arise at all. This is one of the contentions of Mr.
Dushyant Mahant, and we entirely agree with him.
27. Section 30(4) excepts the applicability of Section 30(3) in
certain circumstances. This does not mean that the act would, then,
ipso facto amount to infringement, as Mr. Pravin Anand would seek to
contend. It merely means that, if the circumstances of Section 30(4)
apply, the escape clause, otherwise available under Section 30(3) to
acts which are infringing within the meaning of Section 29, would no
longer be available. The act would, nonetheless, have to be infringing,
within the meaning of Section 29, in the first instance.
28. If, therefore, an act does not amount to infringement within the
meaning of Section 29, the matter must rest there. No further enquiry,
into whether there is, or is not, infringement, is warranted. If,
however, the act is otherwise infringing within the meaning of Section
29, and the circumstances envisaged in Section 30 apply, i.e., the
infringing goods are lawfully acquired by a person and sold in the
market, then such acquisition and sale would not amount to
infringement if condition (a) or (b) in Section 30(3) applies.
29. That is how, in our view, Sections 29, 30(3) and 30(4) are to be
understood.
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30. Here, we may note that the words “by reason only of”, in
Section 30(3), are confusing. If they are to be assigned their ordinary
grammatical and syntactical meaning, the provision would make no
sense. The plain grammatical connotation of the provision is that, if
the preceding conditions are satisfied, then the sale or dealing of the
goods by Mr. X would not be infringement only because of
circumstance (a) or circumstance (b).
31. But then, circumstance (b) refers to the goods having been put
on the market by the proprietor or with his consent. If the person who
deals in the trade marked goods is the proprietor of the mark, or deals
in the mark with the consent of the proprietor and is, therefore, a
permissive user, the use would, in any case, not be infringement
within the meaning of Section 29, as “infringement”, in each of the
clauses of Section 29, can be committed only by one who is not the
registered proprietor, or the permissive user, of the infringing mark.
32. As such, there would be no sense in specifying that the sale or
dealing of the goods by Mr. X would not be infringement by reason
only of a circumstance which, in any case, would not be infringement
per se.
33. Circumstances (a) and (b) have, therefore, if they are to be
accorded any meaning, to be understood as the circumstances which,
if they apply, would result in the sale or otherwise dealing in the
goods, by Mr. X, not being infringing in character, i.e. not result in
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infringement, assuming the indicia of infringement, as contained in
Section 29, otherwise apply.
34. Circumstance (a) applies where, after Mr. X has acquired the
goods, the proprietor of the trade mark assigns it to someone else.
That circumstance does not apply in the appeals before us.
35. Circumstance (b) applies where the proprietor of the trade mark
has himself put the goods on the market, or consented to their being
put on the market.
36. In other words, if goods bearing a registered trade mark are put
on the market by the registered proprietor of the mark, or with his
consent, then the sale, or dealing, in such goods, by Mr. X, would not
result in infringement.
37. By putting them on the market, or consenting to their being put
on the market, the registered proprietor of the mark has thus exhausted
his right to allege that the sale, or dealing, in the goods, by a person
who lawfully acquires them, results in infringement.
38. If, however, the goods in which Mr. X deals does not bear the
registered trade mark of the original manufacturer (as in the present
appeals), such dealing would not, in any event, amount to
infringement under Section 29, as Section 29, in each of its clauses,
requires the infringer to use the infringed trade mark, or a trade mark
which is deceptively similar thereto, in the course of trade. If the act
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is not infringing under Section 29, there can be no question of
referring to Section 30(3) or 30(4).
39. We may nonetheless examine Section 30(4) as well.
40. Section 30(4) provides that, if there exist legitimate reasons for
the proprietor of the mark to oppose further dealings in the goods, in
particular where the condition of the goods has been changed or
impaired after they have been put on the market, then, even if
circumstance (a), or (b), or both, in Section 30(3) apply, the sale of, or
otherwise dealing in, the goods, by Mr. X, would amount to
infringement.
41. The use of the contrasting expressions “on the market” and “in
the market” in Sections 30(3) and (4), in their respective contexts,
makes it clear that the putting of the goods “on the market” is by the
registered proprietor of the mark, whereas the “sale of the goods in the
market” is by the person who has lawfully acquired them. This
interpretation stands endorsed by Kapil Wadhwa.
42. In a case in which the act of the subsequent acquirer of the
goods would otherwise amount to infringement within the meaning of
Section 29, the subsequent sale of, or otherwise dealing in, the goods,
by the acquirer, would not amount to infringement, if the following
conditions are cumulatively satisfied:
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(i) The goods must have been lawfully acquired by the
acquirer.
(ii) The goods must have been put on the market by the
registered proprietor of the mark, of with his consent.
(iii) The condition of the goods should not have been changed
or impaired after they were put on the market by the registered
proprietor of the mark.
43. The interpretation that would require to be imparted to the word
“changed” in Section 30(4) is also of significance. “Changed”, in its
widest etymological sense, would include any change, positive or
negative, substantial or frugal. As used in Section 30(4), however,
that meaning cannot be attributed to the word “changed”, as the
change, or impairment, must constitute a legitimate reason for the
proprietor of the mark to oppose the sale of the goods. If the change
is resulting in making non-functional goods functional, or useless
goods useful, without any prejudice to the registered proprietor of the
trade mark, it cannot, quite obviously, constitute a legitimate reason to
oppose the dissemination of the goods in the market. Equally, if the
lawful acquirer of the goods, who sells them in the market, affixes his
mark on them, that, too, cannot constitute a legitimate reason for the
registered proprietor of the mark to oppose their sale or dissemination.
The word “change”, therefore, must result in something negative
resulting; in other words, the word “changed” must be read noscitur a
sociis with the word “impaired”. They must partake of a like character.
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44. The noscitur a sociis principle is as old as the hills, and is a
hallowed principle of interpretation of statutes, predicated on the
principle that words, in a statue, take colour from the company they
keep. As far back as in Angus Robertson v. George Day16, the Privy
Council observed that it was “a legitimate rule of construction to
construe words in an Act of Parliament with reference to words found
in immediate connection with them”. A subset of the noscitur a sociis
principle is the ejusdem generis doctrine, which applies where there
are a number of expressions used together, which may be said to
constitute a genus, in which case each of the said expressions is to be
so interpreted as to be part of the genus. The ejusdem generis doctrine
has, however, no application in a case in which there are only two
words keeping company with each other as, just as one swallow
cannot make a summer, one word cannot make a genus. In such a
case, therefore, it is the noscitur a sociis principle which applies.
45. The application of the principle is, of course, subject to the
statute itself not indicating to the contrary. Here, the opening words of
Section 30(4) would eminently support interpreting the word
“changed”, as used later in the provision, noscitur a sociis with the
word “impaired”.
II. The decision in Kapil Wadhwa
16(1879) 5 AC 63, referenced in M.K. Ranganathan v. Govt. of Madras, AIR 1955 SC 604 and
Ahmedabad Primary Private Teachers Assn v. Administrative Officer, (2004) 1 SCC 755
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46. Kapil Wadhwa, it has to be noted at the very outset, is a case in
which the issue which confronts us did not confront the Court, for the
simple reason that Kapil Wadhwa imported, and dealt with the goods
manufactured by Samsung under the Samsung trade mark itself. The
applicability of Section 29, therefore, could not be questioned.
47. Samsung, the respondent before this Court, claimed to be
aggrieved by the fact that the appellants, Kapil Wadhwa and others,
were purchasing Samsung printers from the foreign market, importing
them into India and selling them in India under the trademark
SAMSUNG. This, according to Samsung, infringed its registered
trademarks. The appellants’ activities also resulted in consumers being
misled into believing that the printers being purchased by them were
authorised and sold in India with the permission of Samsung. The
appellants, on the other hand, contended that they were committing no
illegality and that their activities resulted in Samsung’s printers being
available to the consumer public at a cheaper rate. This Court,
therefore, clearly noted, in para 3 of its judgment, that it was dealing
with “parallel imports/grey market goods”. This Court also noted, in
para 8, that it was only examining the dispute from the infringement
angle, as no passing off had been pleaded.
48. Though the dispute in Kapil Wadhwa was qualitatively
somewhat different from that which is before us, the Division Bench
embarked on a detailed analysis of Section 30(3) and 30(4) of the Act.
The learned Single Judge deemed it appropriate to extract paras 42
and 68 to 75 of Kapil Wadhwa, and we do likewise:
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“42. There is a patent fallacy in paragraph 68(c). There is no law
which stipulates that goods sold under a trade mark can be lawfully
acquired only in the country where the trade mark is registered. In
fact, the legal position is to the contrary. Lawful acquisition of
goods would mean the lawful acquisition thereof as per the laws of
that country pertaining to sale and purchase of goods. Trade Mark
Law is not to regulate the sale and purchase of goods. It is to
control the use of registered trade marks. Say for example, there is
food scarcity in a country and the sale of wheat is banned except
through a canalizing agency. Lawful acquisition of wheat in that
country can only be through the canalizing agency. The learned
Single Judge has himself recognized that the law of trade marks
recognizes the principle of international exhaustion of rights to
control further trade of the goods put on the market under the trade
mark. The task of the learned Single Judge thus was to resolve the
impasse in the Indian Law, and thus the presumption/assumption in
paragraph 68(c) could not be the point to resolve the textual
context in which the learned Single Judge has discussed in
paragraph 68(d).
*****
68. With reference to sub-section 4 of Section 30 of the Trade
Marks Act 1999 it would be relevant to note that further dealing in
the goods placed in the market under a trade mark can be opposed
where legitimate reasons exist to oppose further dealing and in
particular where the condition of the goods has been changed or
impaired. With respect to physical condition being changed or
impaired, even in the absence of a statutory provision, the
registered proprietor of a trade mark would have the right to
oppose further dealing in those goods inasmuch as they would be
the same goods improperly so called, or to put it differently, if a
physical condition of goods is changed, it would no longer be the
same goods. But, sub-section 4 of Section 30 is not restricted to
only when the conditions of the goods has been changed or
impaired after they have been put on the market. The section
embraces all legitimate reasons to oppose further dealings in the
goods. Thus, changing condition or impairment is only a specie of
the genus legitimate reasons, which genus embraces other species
as well. What are these species? (i) Difference in services and
warranties as held in the decisions reported as SKF
USA v. International Trade Commission17; Fender Musical
Instruments Corp. v. Unlimited Music Center Inc.18; Osawa &17 423 F.3d 1037 (2005)
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Co. v. B&H Photo19. (ii) Difference in advertising and promotional
efforts as held in the decisions reported as Pepsi Co.
Inc. v. Reyes20; Osawa & Co. v. B&H Photo. (iii) Differences in
packaging as held in the decision reported as Ferrerro
USA v. Ozak Trading21. (iv) Differences in quality control, pricing
and presentation as held in the decision reported as Societe Des
Produits Nestle v. Casa Helvetia22. (v) Differences in language of
the literature provided with the product as held in the decisions
reported as SKF USA v. International Trade Commission23; Pepsi
Co. Inc. v. Reyes24; Original Appalachian Artworks
25
Inc. v. Granada Electronics Inc .
69. Now, as we see it, this can only happen in case where goods
have to be imported from a country of manufacture or a country
where they are put on the market thereof, and then imported into
India. Only then would there be a difference in the language of the
literature provided with the product; difference in services and
warranties in the country from where the goods are imported by the
seller and the country of import i.e. the manufacturer’s warranties
not being available in the country of import; difference in quality
control, pricing and presentation as also differences in advertising
and promotional efforts.
70. This is also an indication of India adopting the Principle of
International Exhaustion of Rights in the field of the Trade Mark
Law.
71. We accordingly conclude that ‘the market’ contemplated
by Section 30(3) of the Trade Marks Act 1999 is the international
market i.e. that the legislation in India adopts the Principle of
International Exhaustion of Rights.
72. That leaves the last submission of the respondents, that in
view of Section 30(4) they are entitled to oppose further dealings
by importers of their printers to India.
73. It is not the case of the respondents that the appellants are
changing the condition of the goods or impairing the goods which
are put in the foreign market by respondent No. 1 or its subsidiary
companies abroad. What is pleaded is that the physical features of
the printers sold abroad are different from the features of the19 589 F. Supp. 1163 (1984)
20 70 F. Supp 2d 1057
21 753 F. Supp. 1240 (1991)
22 982 F.2d 633 (1992)
23 423 F.3d 1037 (2005)
24 70F. Supp 2d 1057
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printers sold in India. But this is irrelevant as long as the goods
placed in the International market are not impaired or condition
changed. It is pleaded that the respondents have no control
pertaining to the sale, distribution and after sales services of its
goods which are imported by the appellants and sold in India. Now,
the Principle of International Exhaustion of Rights itself takes
away the right of the respondents to control the further sale and
further distribution of the goods. With respect to after sales
services, since the respondents do not warranty anything regarding
their goods sold abroad, but imported into India and further sold,
they not being responsible for the warranty of those goods, nothing
turns thereon, as regards said plea. There may be some merit that
the ordinary consumer, who is provided with warranties and after
sales by the appellants, on not receiving satisfactory after sales
service, may form a bad impression of the product of the
respondents and thus to said extent one may recognize a possible
damage to the reputation of the respondents pertaining to
Samsung/SAMSUNG printers and Samsung/SAMSUNG products
sold in India after importation. But, this can be taken care of by
passing suitable directions requiring the appellants to prominently
display in their shop that the Samsung/SAMSUNG printers sold by
them are imported by the appellants and that after sales services
and warranties are not guaranteed nor are they provided under the
authority and control of the respondents and that the appellants do
so at their own end and with their own efforts. This would obviate
any consumer dissatisfaction adversely affecting the reputation of
the respondents, and thus if this is done, the respondents can claim
no legitimate reasons to oppose further dealing in
Samsung/SAMSUNG products in India.
74. As regards the appellants meta-tagging their websites with
those of the respondents, the learned Single Judge has correctly
injuncted the appellants from so doing, which injunction we affirm.
The argument by the appellants that how else would the appellants
know about the working of the particular product hardly impresses
us for the reason the appellants can design their website in a
manner where they are able, on their own strength, without any
meta-tagging, to display the relevant information.
75. The appeal is partially allowed. Impugned judgment and
order dated February 17, 2012 is set aside insofar the appellants
have been restrained from importing printers, ink cartridges/toners
bearing the trade mark Samsung/SAMSUNG and selling the same
in India. The appellants shall continue to remain injuncted from
meta-tagging their website to that of the respondents. But, while
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showrooms that the product sold by them have been imported from
abroad and that the respondents do not give any warranty qua the
goods nor provide any after sales service and that the warranty and
after sales service is provided by the appellants personally. The
appellants would prominently display in their showrooms:
Samsung/SAMSUNG Products sold are imported into India
and SAMSUNG (KOREA) does not warranty the quality
of the goods nor provides any after sales service for the
goods. We warranty the quality of the goods and shall
provide after sales service for the goods.”
(Italics supplied)
49. The Division Bench has, in the above passages, held that (i)
“lawful acquisition”, as employed in Section 30(3), implies lawful
acquisition in the country where the goods are acquired, and not
necessarily lawful acquisition in the country in which the trademark is
registered, (ii) Section 30(4) would cover all circumstances in which
the proprietor of the registered trademark would have a legitimate
reason to oppose further dealing in the goods, and not merely a
situation in which the condition of the goods has been changed or
impaired after they were put on the market by him, (iii) if the physical
condition is changed or impaired, the registered proprietor would have
a right to oppose further dealing in the goods, as they would no longer
be the same goods as had been put on the market by him, (iv) other
“legitimate reasons” which could justify opposition, by the owner of
the trademark, to further dealing in the goods, could be where the
dealer provides different services or warranties, there is difference in
advertising and promotional efforts, difference in packaging,
difference in quality control, pricing and presentation or difference in
the literature provided with the product, (v) these provisions amount
to adoption, by the legislature in India, of the principle of International
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exhaustion of rights, and (vi) the “market” in Section 30(3) is,
therefore, the international market.
50. We have no difficulty in endorsing these observations and
findings of the Division Bench in Kapil Wadhwa, except for the
identification, in para 68 of the report, of diverse circumstances in
which the registered proprietor of the trade mark could have legitimate
reasons to oppose further dealings in the goods. We are of the view
that these “species”, as identified by the Division Bench may not
constitute absolute grounds on which such legitimate reasons could be
said to exist, to oppose further dealing in the goods. To our mind, the
circumstance must be such as would reduce the quality or value of the
goods, or impair the goodwill of the registered proprietor of the trade
mark. For example, the mere fact that the goods may be sold under
different warranties or services may not, by itself, constitute a
legitimate reason to oppose further dealing in the goods. At the end of
the day, the determination of whether the registered proprietor of the
trade mark had, or did not have, a legitimate reason to oppose further
dealing in the goods, within the meaning of Section 30(4) of the Act,
would be largely one of fact.
51. In fact, it appears that the Division Bench, after purporting to
identify indicative circumstances in which the registered proprietor of
the trademark could have a legitimate reason to oppose further
dealings in the goods, did not itself treat these circumstances as
watertight. This is apparent from para 73 of the report in which the
Division Bench held that the fact that the printers sold by Samsung
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abroad were different from those of the printers sold in India was
irrelevant, so long as the goods, which were placed on the
international market by Samsung, were not impaired or their condition
changed.
52. In any event, the provisions of Section 30(3) and (4) are, to our
mind, sufficiently clear, and are by themselves enough for us to deal
with the controversy in issue, without having to navigate as nautical a
course as the Division Bench in Kapil Wadhwa chose to chart.
E. The impugned judgment
I. Facts of the case as noted in the impugned judgment
53. WD and Seagate were the plaintiffs before the learned Single
Judge, and Daiichi, Consistent, Geonix and Cubicor were the
defendants. WD and Seagate manufactured HDDs, which was
supplied to OEMs, located in China and Singapore, for installation as
part of the desktops, laptops, servers and other similar goods sold by
them. These HDDs were unserviceable by the appellants, after the
prescribed lifespan. After that time, they were regarded as “end of
life” products, though they retained their functionality and utility. By
referring to them as “end of life”, what was apparently sought to be
conveyed was that the warranty provided by the original
manufacturers, i.e. the appellants, would no longer apply.
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54. The HDDs which had thus become “end of life” were thereafter
extracted from the equipment in which they were installed/integrated,
and sold. These HDDs were, in the same condition, imported into
India, where they were sold to refurbishers. The refurbishers tested the
HDDs to satisfy themselves regarding their functionality. Defective
HDDs were returned to the suppliers. The HDDs which retained
functionality were refurbished after effacing the original trademark of
the appellants, and sold in the market. Before doing this, the
refurbishers claim to have, by refurbishing the HDDs, enhanced their
utility. None of the indicia of the appellants remained on the HDDs
when they were sold by the respondents after refurbishing. The
respondents affixed their own brand on the HDDs, with a new Serial
number and Model number.
II. Appellants’ contentions before learned Single Judge
55. Before the learned Single Judge, the appellants contended that
the acts of the respondents amounted to infringement within the
meaning of Section 30(4) of the Act and that the respondents were
also indulging in “reverse passing off”. “Reverse passing off”, it was
submitted, took place where the defendant removed the registered
trade mark of the plaintiff so as to pass off the goods as those of the
defendant, but the goods continued to retain features and indicia which
enabled the consumer to identify them as originating from the
plaintiff.
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56. Apropos the aspect of infringement, relatable to Section 30(3)
and (4) of the Act, the appellants contended that the very removal of
their registered trademark from the HDDs amounted to “impairment”
within the meaning of Section 30(4). It was further contended that the
respondents could not seek sanctuary under Section 30(3), as the
HDDs had not been “lawfully acquired”, and were “sold in the market
or otherwise dealt with”. Even if it were to be presumed that the
HDDs had been lawfully acquired, the appellants contended, before
the learned Single Judge, that, as their condition had been changed,
and they had been impaired before they were put on the market,
infringement, within the meaning of Section 30(4), had taken place.
57. On the aspect of infringement, the learned Single Judge has
noted the issue arising before him, in para 7 of the impugned
judgment, as “of refurbished goods being sold after removal of the
original brand, with no reference to the original manufacturers,
thereby severing the umbilical cord with the original registered trade
mark owner; and whether in this situation an action for infringement
or impairment could be considered.”
58. The learned Single Judge queried, of learned Counsel for the
appellants, as to whether there was any proscription on import of
second-hand goods for refurbishing. The appellants relied on para
2.31 of the Foreign Trade Policy26 2023, which permitted import of
second-hand goods for the purpose of
repair/refurbishing/reconditioning or re-engineering free of duty,
26 “the FTP” hereinafter
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“subject to condition that waste generated during the
repair/refurbishing of imported items is treated as per domestic
Laws/Rules/Orders/Regulations/technical specifications/
Environmental/safety and health norms and the imported item is re-
exported back as per the Customs Notification”. It does not appear,
however, from the impugned judgment, that the Customs Notification,
to which para 2.31 refers, was cited by any of the learned Counsel.
Learned Counsel submitted, however, that any item imported for
refurbishment was required to be re-exported thereafter, and that
Sections 30(3) and (4) of the Act had to be read conjointly with the
FTP.
59. It was further contended, by the appellants, that import of goods
bearing a registered trademark amounted to “use” of the registered
trademark within the meaning of Section 29, in view of sub-section
(6)(c) thereof.
60. The appellants further contended that the principle of
international exhaustion, tellingly emphasised in Kapil Wadhwa and
statutorily contained in Section 30(3) of the Act, would not apply, as
purchase of the HDDs which had been removed from discarded
computers and servers could not be treated as “legal acquisition”
thereof. It was specifically contended that removing of the original
labels and trade marks of the registered proprietor, refurbishing,
reformatting and removing of the literature originally provided by the
appellants amounted to impairment as well as material change in the
condition of the goods, resulting in infringement.
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61. The appellants further contended that the respondents were
misrepresenting the discarded and used HDDs as new and unused, and
were selling them under their own brand names. This amounted to
passing off of old and used HDDs as unused.
62. It was also submitted that the respondents were guilty of
“reverse passing off”, as the HDDs had distinct shapes, colours and
other indicia on the basis of which, even after removal of the label
bearing the original registered trademark of the appellants, the
consumer, who would be assumed to be a person who was conscious
of such goods, would be able to identify them as having been
manufactured by the appellants. For example, WD contended that it
used a distinctive silver plate on the HDDs, which was easily
identifiable by the consumer, who would be a technically literate
person. In support of the plea of reverse passing off, the appellants
relied on the judgment of a Division Bench of this Court in Shree
Nath Heritage Liquor Pvt Ltd v. Allied Blenders & Distillers Pvt
Ltd27 and on the decision in Smith v. Montoro28. In any event,
submitted WD before the learned Single Judge, reselling the product
under the respondents’ brand names amounted to a “false trade
description” which was independently actionable under Section 10329
read with Sections 2(i) and 2(1)(za) of the Act.
27 2015 SCC OnLine Del 10164
28 648 F. 2d. 602 (1981)
29 103. Penalty for applying false trade marks, trade descriptions, etc. – Any person who –
(a) falsifies any trade mark; or
(b) falsely applies to goods or services any trade mark; or
(c) makes, disposes of, or has in his possession, any die, block, machine, plate or other
instrument for the purpose of falsifying or of being used for falsifying, a trade mark; or
(d) applies any false trade description to goods or services; or
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III. Respondents’ contentions before learned Single Judge
63. The respondents contended, per contra, that the HDDs had been
lawfully procured by them. They were not the importers of HDDs, but
were refurbishers, who had purchased the imported HDDs from the
importers under legitimate sale invoices on which GST30 was also
paid. The invoices were also placed on record, along with affidavits of
the respondents. The appellants had not been able to produce any
material to indicate that, in their contracts with the OEMs, there was
any restriction on resale of the HDDs. Further, no action was taken by
the appellants against any of the OEMs. No communication, between
the appellants and the OEMs, on the basis of which it could be held
that the sale of the end-of-life HDDs was illegal, was on record.
64. It was further contended, by the respondents, that they did not,
in any manner, impair the condition of the HDDs. Rather, the
appellants had no use for them and had washed their hands of the
HDDs, once they reached “end of life” stage. The warranty provided
by the appellants had expired. The respondents repaired and
refurbished the HDDs and also provided a two-year warranty with call
(e) applies to any goods to which an indication of the country or place in which they were
made or produced or the name and address of the manufacturer or person for whom the goods are
manufactured is required to be applied under Section 139, a false indication of such country, place,
name or address; or
(f) tampers with, alters or effaces an indication of origin which has been applied to any
goods to which it is required to be applied under Section 139; or
(g) causes any of the things above mentioned in this section to be done,
shall, unless he proves that he acted, without intent to defraud, be punishable with imprisonment for a term
which shall not be less than six months but which may extend to three years and with fine which shall not be
less than fifty thousand rupees but which may extend to two lakh rupees:
Provided that the court may, for adequate and special reasons to be mentioned in the judgment, impose a
sentence of imprisonment for a term of less than six months or a fine of less than fifty thousand rupees.
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back facility and after sales service to their consumers. Prior to
refurbishing of the HDDs, the respondents undertook various tests to
satisfy themselves that they were in working condition. If the HDDs
were found to be defective, they were returned to the supplier. If they
were working, the software contained on the HDDs was erased, and
they were reformatted and sold. As a result, consumers, who could not
afford the original HDDs, obtained working HDDs at a cheaper price.
No change, injurious to the HDDs, having taken place, it was
submitted that the respondents could not be regarded as having
“impaired” the HDDs.
65. The HDDs were sold under the respondents’ warranty and,
therefore, the principle of international exhaustion would apply. It was
further contended that removal of the original marks of the appellants
and re-branding of the HDDs with the respondents’ marks did not
attract Section 30(4) or any of the clauses of Section 29 of the Act and
did not, therefore, result in infringement.
66. Refurbishment, it was submitted, is not illegal.
67. The respondents further submitted that the plea of reverse
passing off was completely unjustified. There was no question of the
HDDs, once the registered marks of the appellants had been removed,
being identifiable as those of the appellants. They were embedded
deep inside the equipment in which they were installed. There was no
way in which the consumer would relate the HDDs to the appellants.
The HDDs were sold with a distinct Serial number and Model number,
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and were not sold under the trade mark of the appellants. Even if the
identity of the original manufacturer could be discovered, it would
require a detailed technical analysis, which was a remote possibility.
Besides, as the appellants had themselves stated, the purchaser of such
a product was prudent, and would know that he was purchasing a
refurbished product.
68. Consistent also relied, before the learned Single Judge, on an
agreement between Seagate and Nickle Technologies executed in
2018, under which Nickle Technologies has been allowed to import
end-of-life HDDs manufactured by Seagate, for refurbishing. It was
therefore contended that Seagate could not plead ignorance regarding
the fact that their HDDs, which had reached end-of-life stage, were
removed, imported into India and sold after refurbishment. Seagate,
however, contested the relevance of this submission, stating that the
settlement with Nickle Technologies was applicable only inter partes,
especially as it formed the basis of a decree under Order XXIII Rule 3
of the CPC. Reliance was placed, for this purpose, on the decision in
Pankaj Goel v. Dabur India Ltd31.
IV. Observations and findings in the impugned judgment
69. Having thus set out the rival contentions advanced before him,
the learned Single Judge proceeds to address the various issues which
arose, seriatim, thus.
31 2008 SCC OnLine Del 1744
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IV.1 Re. Importation and sale
70. The learned Single Judge notes that the appellants had not
referred him to any clause in their contracts with their OEMs,
prohibiting discarding or resale of end-of-life HDDs. Clearly, the
appellants had no control over the HDDs once they were embedded as
equipment, which were sold with the embedded HDDs under a
composite and integrated warranty of the OEM. It was not the case of
the appellants that they had held out any warranty to the ultimate
consumer. Ergo, at the stage of equipment integration of the HDDs,
the umbilical cord stood severed.
71. The learned Single Judge further notes that there was no rule,
Regulation or policy prohibiting import of discarded HDD/equipment
into India. Para 2.13 of the FTP, on which Seagate relied, did not
amount to a prohibition, so as to render the import of the HDDs into
India illegal.
72. The learned Single Judge, therefore, holds that there was no
basis to treat the importation of the end-of-life HDDs to be illegal.
IV.2 Sale to refurbisher
73. The learned Single Judge next proceeds to deal with the aspect
of the legality, or otherwise, of the sale of the imported HDDs to the
respondent-refurbishers. Inasmuch as the respondents had produced
invoices, under which they had purchased the HDDs after payment of
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GST, the learned Single Judge holds that the onus shifted to the
appellants to demonstrate that the purchase of HDDs by the
respondents from the importers was illegal. No material, on the basis
of which such a conclusion could be reached, had been produced by
the appellants.
IV.3 Right to repair
74. The learned Single Judge observes that the policy of the Indian
Government recognised and encouraged the repair industry and that
the Ministry of Consumer Affairs had in fact set up a Committee to
come up with a “right to repair” framework. Acceptance of the
appellants’ submissions would result in killing the refurbishment
market.
IV.4 The aspect of infringement under the Act
75. Addressing the aspect of infringement in the context of Sections
30(3) and (4) of the Act, the learned Single Judge first reiterates his
finding that the importation of the HDDs, and their acquisition by the
respondents, was not illegal.
76. However, the learned Single Judge proceeds to hold, accepting
the submissions of learned amicus curiae appointed in the matter, that
the benefit of Section 30(3) would not be available to the respondents,
as they had sold the goods, purchased from the importers, after
removing the registered trade marks of the appellants, which would
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not qualify as putting the goods on the market, within the meaning of
Section 30(3). The learned Single Judge holds, therefore, that, “even
if exhaustion applies, the defendants cannot get benefit of it under this
provision”.
77. The learned Single Judge further observes that the said
interpretation of Section 30(3) resonated, and was aligned, with
Section 30(4), as removal of the original trademark of the registered
proprietor would amount to change or impairment of the condition of
the HDDs and would, therefore, attract Section 30(4) and, ipso facto,
exclude the applicability of Section 30(3). This interpretation was also
in line with the law declared by the Division Bench in Kapil Wadhwa.
78. In line with the said decision, the learned Single Judge
proceeds, in para 93 of the impugned judgment, to observe that, as
there was no illegality in the import of the HDDs, which took place
with the original trademark of the appellants in place, the goods could
be sold along with a full disclosure. This approach, according to the
learned Single Judge, also resonates with the international perspective
on the issue, as reflected in the decisions in Champion Spark Plug
Co. v. Sanders32 and Smith v. Montoro. The learned Single Judge
also places reliance on an article by Dr. Annette Kur, Professor in the
Max Plank Institute for Innovation and Competition, Munich, titled
“Sale of Repaired or Refurbished Goods: Commendable Practice or
Trade Mark Infringement?”
32 331 US 125 (1947)
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IV.5 Reverse passing off
79. The learned Single Judge does not examine, in the impugned
judgment, on merits, the submission of the appellants that the acts of
the respondents resulted in “reverse passing off”, but disposes of the
issue thus, in para 96 of the impugned judgment:
“96. Retaining the manufacturer’s trade marks would also
obviate the argument of the plaintiffs on reverse passing off.
Counsel for the plaintiffs had relied on Smith v. L. Montoro of the
United States Court of Appeal, 9th Circuit, submitting that in
removing references to the manufacturer’s mark on the HDDs and
selling the refurbished product as their own, defendants were
indulging in an act of reverse passing off. The customer would
eventually find out where the product was originally manufactured
by the plaintiffs and would continue to be trace it back to the
plaintiffs. Such a situation would not arise if the refurbisher clearly
states that the goods are manufactured by the plaintiffs and that the
refurbisher is refurbishing them, for the purposes of extended use,
with a warranty exclusively provided by the refurbisher.”
IV.6 Conclusions of learned Single Judge
80. The learned Single Judge has thus concluded the discussion in
the impugned judgment:
“Conclusion
111. Refurbished, second hand, preowned goods exist in most
countries of the world since it caters to a different market, that of a
lesser paying customer. Originally manufactured goods, with their
mint new warranty, are obviously sold at the maximum retail price
and will be bought by people who require them and are ready to
pay for them, which is the market of the manufacturer/authorised
distributor/wholesaler/retailer. Once the sale has happened and the
warranty period attached to the goods is exhausted, none of these
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chain would be liable for any repair or servicing. Of course, if the
retailer for purposes of promoting its sale, decides to give an
additional warranty over and above the manufacturer’s warranty or
the OEM’s warranty, that will only be a sales incentive.
112. Post-exhaustion of warranty, none of these entities i.e.
manufacture/OEM/wholesaler/distributor/retailer have any liability
or responsibility of the state of those goods, unless of course, there
is a mandate under any law, regulation or policy of managing their
disposal. In a situation where such policy or regulation does not
exist, or even if it exists but does not impose conditions on the
manufacturer, the umbilical cord is cut and the goods are in an
untethered space. This is exactly where the principle of exhaustion
comes into play; therefore, under Section 30(3)(b), the registered
owner/manufacturer has no right to object to any dealing.
113. The only caveat is in Section 30(4) where, if the marks are
removed from the original product or it is disfigured or changed in
a manner that possibly amounts to “change” or “impairment”, and
when such goods are sold as goods identified with the
manufacturer, the manufacturer’s right kicks in to prevent the same.
This is obviously to prevent the loss of reputation and goodwill of
the manufacturer, since a consumer may potentially purchase that
product thinking that the changed/impaired product is from the
manufacturer.
114. This is where the necessity of “full disclosure” becomes
critical from the customer’s perspective. If there is “full disclosure”
by the refurbisher that the change has been done by the refurbisher
and does not, therefore, resemble the original product, as doled out
by the manufacturer, inter alia, in terms of warranty, serviceability,
life, manuals and brochures — then consumers are fully warned as
to what they are purchasing. The consumer gets “the whole truth”.
The mandate of the “whole truth” is not only alive in the interstices
of Sections 30(3) and 30(4), but also expressly dealt with in
both Champion Spark Plug Co. and Kapil Wadhwa. Learned
amicus submissions also suggests the “whole truth” principle and,
therefore, informs our conclusion.
115. As noted above in Para 8 above, two kinds of orders were
passed by this Court in these batch of matters: (i) an ad interim
injunction; and (ii) directions permitting sale with a disclaimer on
the defendants’ products of “used and refurbished”. Prima facie,
therefore, the necessity of disclaimer had also appealed to the
court, even at the initial stage of the matter.”
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81. The judgment concludes with the directions, in para 116 and
reproduced in para 10 supra.
F. Rival Contentions before this Court
82. Given the number of Counsel who argued, and the volume of
submissions advanced, we deem it appropriate to itemize the
submissions, even though it may entail some repetition. We are also
including, here, the submissions of Ms. Shwetasree Majumder and Mr.
Sidharth Chopra, learned Counsel who appear for the parties in FAO
(OS) (Comm) 104/2025, as they are primarily concerned with the
same issues.
I. Submissions of Mr. Pravin Anand for WD
(i) Re. passing off
The act of the respondents in selling old and used HDDs of the
appellant, representing them to be new HDDs manufactured by
the respondent, amounts to “passing off”. Analysis of the
HDDs using the Crystal Disk Tool revealed that they had run
for extensive periods of time.
(ii) Re. reverse passing off
(a) The respondents were misrepresenting the
appellant's products as theirs.
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(b) Examination by the appellant's engineers, and third
party technical experts, using the publicly available
Crystal Disk Info tool, revealed the original Serial and
Model Numbers, which were easily traceable to the
appellant. It was not necessary, for the purposes of
passing off, for the appellant’s mark to be visible to the
consumer at the time of sale of the HDD.
(c) If the HDDs malperformed, they would be
examined by technical persons, whereupon the
appellant’s particulars would be readily displayed. This
would lead to a presumption that the appellant authorized
sale of defective goods. (Presumably, the sequitur that is
implied is that the appellant’s goodwill and reputation
would stand tarnished.)
(d) The respondents’ acts have resulted in injury to the
appellant’s goodwill and reputation, and also reduction in
its market stake.
(e) Even in the modified packing, as per the directions
issued in the impugned judgment, the appellants’ identity
is disclosed only in the outer packing, not on the HDD.
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Mr. Anand relies, for the purpose of his plea of “reverse passing
off”, on the judgment of the High Court of Bombay in Sheila
Mahendra Thakkar v. Mahesh Naranji Thakkar33
(iii) Re. infringement
(a) The acts of the respondents in (i) buying used and
old HDDs of the appellant, (ii) effacing the appellant’s
trade marks, (iii) refurbishing the HDDs, (iv) affixing
their own brand with new Serial and Model numbers, (v)
selling them as new, and (vi) thereby altering and
impairing the original condition of the HDDs as sold by
the appellant to OEMs, amounts to infringement in view
of Section 30(4) of the Act.
(b) The impairment to the HDDs is not merely
cosmetic but relates to the functionality and reliability of
the HDDs.
(iv) Other submissions
(a) The HDDs are often used in surveillance
equipment. They have enhanced durability, vibration
resistance and surveillance specific optimizations. These
are critical to safeguard data for security and monitoring
33 2003 (27) PTC 501 (Bom) (DB)
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applications, and stand compromised when used HDDs
are sold.
(b) Selling the appellant’s old and used HDDs as new
without disclosing the date of manufacture, the number of
hours of prior use, etc. amounts to false trade description,
which is actionable under Section 103 read with Section
2(1)(i) of the Act.
(c) The reliance, by the learned Single Judge, on the
“right to repair”, was misguided. The acts of the
respondents do not constitute “repair”. Repair cannot be
of an end-of-life product.
(d) The respondents used unauthorized third party
software tools to rewrite the appellant’s Model number
and Serial number and display their own.
(e) The concluding directions in the impugned
judgment are unworkable and impractical.
II. Submissions of Mr. Ranjan Narula for Seagate
(i) Re. passing off
Misrepresentation of used and old HDDs as new, and sale by
the respondents under their brands, after removing the marks of
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the appellants, amounted to passing off. The respondents were
passing off old and used HDDs as new and unused.
(ii) Re. reverse passing off
(a) The HDDs were clearly identifiable as
manufactured by the appellants by the distinct shapes of
the silver plates and colours on the PCB34, which were
unique to the appellant.
(b) It was a clear case of consumer confusion, as the
respondents were offering the imported products as
refurbished Seagate HDDs.
(iii) Re. infringement
(i) Import of SEAGATE branded HDDs without the
appellant’s authorization itself constituted infringement in
view of Section 29(6) of the Act, which includes import
of goods within the meaning of the term “use”.
(ii) The only escape from this would be if Section
30(3) applied. However, this provision would not come
to the aid of the respondent as the HDDs were not
“lawfully acquired” by the respondents, as they had been
illegally removed from the computers and other
34 Populated Circuit Board
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equipment in which they had been installed by the
OEMs. The HDDs were not meant for resale.
(iii) The mere fact that the HDDs had been purchased
by the respondents from importers under invoices which
included GST did not make their acquisition, by the
respondents, legal.
(iv) Section 30(3) was also not available to the
respondents as they were claiming to be
importing/manufacturing the HDDs, which was a clear
misrepresentation.
(v) As the importation of the HDDs was itself
unlawful, their subsequent purchase by the respondents
could not be lawful.
(vi) Removal of the appellant’s trade marks from the
HDDs amounted to change in their condition/impairment
within the meaning of Section 30(4) of the Act.
(vii) Removal of the appellant’s trade mark stickers,
followed by modification/reformatting of the HDDs,
followed by affixation, on the HDDs, of the respondent’s
marks, clearly justified application of Section 30(4).
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(viii) In their written statement, the respondents had
contended that they were manufacturers and importers of
the HDDs, and were providing a two year warranty to
their suppliers. They were selling end-of-life products as
new without disclosing that they were refurbished. This
by itself constitutes legitimate ground for the appellant to
oppose further dealing in the HDDs by the respondents,
within the meaning of Section 30(4).
(iv) Other submissions
(a) The sale of used end-of-life HDDs as new
constituted misrepresentation to the consumer. The
respondents had produced no material to indicate that
they had subjected the HDDs to any technical
advancement.
(b) The concluding directions in the impugned
judgment, subject to fulfilment with which the
respondents had been permitted to sell the refurbished
HDDs, were beyond the pleadings and were contrary to
the case set up by the respondents themselves.
(c) The respondents were not “refurbishing” the
HDDs, as refurbishment involves extending of the life of
the product by making technical improvements.
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(d) There was no “severance of the umbilical cord”
between the appellants and the OEMs, as the learned
Single Judge has held. In case of any defect during the
warranty period, the consumer approached the OEMs,
who in turn approached the appellants, who would repair
the HDDs if they were under warranty.
(e) Allowing the respondents to continue with their
activities could have serious consequences. The HDDs
were used in surveillance cameras, whose quality would
be diminished if end-of-life HDDs were used. This could
compromise surveillance integrity.
III. Submissions of Ms. Shwetasree Majumder for WD in FAO
(OS) (Comm) 104/2025
(i) Re. infringement
(a) The HDDs were not meant for retail sales. As such,
their purchase by the respondents could not be regarded
as “licit acquisition”.
(b) The invoice on record indicated that the HDDs
were, moreover, not purchased from the OEMs, but from
an unknown third party.
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(c) There was material impairment in the condition of
the HDDs after they were put on the market by the
appellant. This was clear from a Technical Report on the
HDDs imported by the respondent and obtained from the
Customs authorities, by a Staff Engineer at SanDisk India
Device Design Centre Pvt Ltd which revealed that (i) the
HDDs were old and some were inoperable, and could not
be read, (ii) the HDDs were not in their original
Electrostatic Discharge (ESD) packaging and (iii) there
were stickers on the packaging hiding the date of
manufacture.
(d) The written statement of the respondent
acknowledged the fact that he had the intent to sell the
HDDs as new and original products, claiming an
“understanding” that they were unused.
(e) In this case, the respondent was intending to sell
the imported HDDs as it were under the appellant’s trade
mark. The case was not, therefore, one of refurbishing,
and Section 30(3) would not be available.
(ii) Other submissions
(a) There could be no question of allowing release and
sale of changed or impaired goods in the market with
“full disclosure”. The principle of “full disclosure”, as
enunciated in Kapil Wadhwa, applies where the goods as
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such are sold in the market, not where they are changed
or impaired.
(b) The learned Single Judge could not have allowed
third parties to affix the appellant’s trade mark on the
goods. This violated Sections 29(2), (6) and (7)35 of the
Act.
IV. Submissions of Mr. Dushyant Mahant, on behalf of Consistent
(i) Re. passing off
There was no misrepresentation by the respondents at any point,
either in the representations on the product HDDs or on the
packing thereof.
(ii) Re. reverse passing off
(i) The principle of reverse passing off is foreign to
Indian law.
(ii) In any event, for the principle to apply, the
consumer would have to identify the product as the
appellant’s at an initial glance, which was clearly not the
35 (7) A registered trade mark is infringed by a person who applies such registered trade mark to a
material intended to be used for labelling or packaging goods, as a business paper, or for advertising goods or
services, provided such person, when he applied the mark, knew or had reason to believe that the application
of the mark was not duly authorised by the proprietor or a licensee.
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case here. No evidence to this effect was cited by the
appellants either.
(iii) The respondents did not use the appellant’s trade
marks at any point. No consumer would, therefore,
identify the HDDs with the appellants.
(iv) No consumer purchases the HDDs on the basis of
the shape of the silver plate or the colour on the HDDs.
The consumer, who purchases a refurbished HDD, does
so consciously and in full awareness of the fact.
(v) The identity of the appellants as the original
manufacturers of the HDDs could be discovered, if at all,
only on intensive technical analysis.
(vi) Thus, there is no question of reverse passing off.
(vii) The respondents have not, at any point of time,
tried to take advantage of the status or reputation of the
appellants’ registered trademarks.
(iii) Re. infringement
(a) The respondents were not using the appellant’s
trade marks in the course of trade. Section 29 was,
therefore, not applicable to refurbishers who were not
dealing in the goods under the registered trade marks of
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the appellant. Per consequence, Section 30(3) would also
not apply.
(b) There is no material whatsoever, to indicate that
the acquisition of the HDDs by the respondents was
unlawful.
(c) No functional impairment had been caused to the
product. Rather, the respondents had improved and
repaired the HDDs and increased their life span. Section
30(4) was, therefore, not applicable.
(d) Debranding is not objectionable, as per Kerly’s
Law of Trade Marks.
(e) The extension, by the respondents, of their own
warranties and after sales service to their customers,
cannot concern the appellants in any way.
(iv) Other submissions
(a) The complaints raised by the appellants do not
pertain to the realm of intellectual property infringement
or passing off. They relate to import policy, enforcement
of the terms of the FTP, consumer protection, and the
like, which are not subject matter of these proceedings,
and could not have been adjudicated by the learned
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Single Judge as part of the Intellectual Property Division
of this Court. No tort, relatable to Section 27 or 29 of the
Act, was pointed out by the appellants.
(b) The plea that the respondents were resorting to
false trade descriptions pertained to Section 103, not
Section 29 of the Act.
(c) The alternative packing suggested by the learned
Single Judge in the concluding paragraph of the
impugned judgment would allay all the apprehensions
and grievances of the appellants.
In support of his submissions, Mr. Mahant relies on paras
19.6.1, 19.9, 35.6, 36.1, 36.3, 40.1, 40.4, 40.6, 46 and 49 of the
judgment of the Supreme Court in Pernod Ricard.
V. Submissions of Ms. Rashi Bansal for Daichi and Geonix
(i) Re. passing off
(a) The appellants had no connection with the
respondents’ consumers. The appellants had not cited any
instance of any complaint being lodged, with them, by
any of the respondents’ consumers.
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(a) The respondents were not riding on the appellant’s
goodwill or reputation. They were not using the
appellants’ trade marks at any stage.
(ii) Re. reverse passing off
(b) The buyer of such HDDs was prudent and
technically literate. He would know that he was
purchasing refurbished HDDs. There was, therefore, no
likelihood of confusion.
(c) Likelihood of confusion was required to be
established at the point of sale of the goods, and not at a
later stage, for a plea of passing off to succeed.
(d) The plea that the identity of the appellants as the
original manufacturers of the HDDs could be discovered
by using the Crystal Disk Info tool was, therefore,
inconsequential. Besides this tool was not available to, or
accessible by all and sundry.
(e) The appellants’ goodwill and reputation had not
been affected, in any manner, by the respondents’ acts.
The appellants had no business in refurbished goods. No
material indicating any damage to the appellants’
goodwill or reputation had been placed on record by
them.
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(iii) Re. infringement
(a) Once the appellants had sold the HDDs to the
OEMs, the principle of international exhaustion applied.
(b) The respondents checked the condition of the
HDDs, gave them separate Serial and Model numbers
and thereafter sold them. They could not, therefore, be
said to have changed or impaired their condition for the
purposes of Section 30(4).
(iv) Other submissions
(a) As the appellants' business interests, and goodwill,
were not affected by the respondents’ acts, they were not
subjected to any irreparable loss or prejudice as a result
thereof. They could, therefore, easily be compensated in
monetary terms, were they to succeed in the suit. The
balance of convenience was also, therefore, in favour of
denial, rather than grant, of injunction as sought by the
appellants.
VI. Submissions of Mr. Sidharth Chopra on behalf of Hansraj
Dugar
(i) Re. passing off/reverse passing off
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Once there was full disclosure, there could be no question of
misrepresentation; ergo, there could be no passing off either.
(ii) Re. infringement
(a) Section 30(3) did not create a new specie of
infringement. Section 30 was titled “Limits on effect of a
registered trade mark”. Section 30(3), therefore, merely
articulated the principle of international exhaustion.
Infringement was required to be independently
established under Section 29. Sale of the appellant’s
HDDs, in their original condition, could never satisfy the
ingredients of Section 29. Section 29(6) was not an
independent substantive provision.
(b) That apart, even assuming Section 30(3) applied,
once the HDDs had been sold by the appellant to the
OEM, the title in the HDDs passed to the OEM. Further
sale by the OEM could not, therefore, be regarded as
illicit or illegal.
(c) Equally, once the respondent purchased the HDDs
against a valid commercial invoice, title in the HDDs
passed to the respondent. The appellant could not assert
its intellectual property rights to the derogation of the
ownership rights of the respondent.
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(d) There was no material to indicate that the
acquisition of the HDDs, by the respondent, was
unlawful in the country in which they were acquired.
(e) “Change” or “impairment”, under Section 30(4),
implies a positive act, and not natural wear and tear.
G. Analysis
I. Re. the plea of "reverse passing off" and "passing off"
I.1 Plea of “reverse passing off” is foreign to our trade mark
jurisprudence, and does not clothe the appellants with an enforceable
cause of action
83. Mr. Dushyant Mahant sought to contend that the tort of “reverse
passing off” is foreign to trademark jurisprudence in this country.
84. The submission, prima facie, merits acceptance.
85. Trade mark rights, in our country, are cabined and confined
within the Trade Marks Act. The “saving clause” with reference to
passing off is contained in Section 27(2)36, which clarifies that nothing
in the Act would affect the rights of action against “any person for
passing off goods or services as the goods of another person or
services provided by another person, or the remedies in respect
36 (2) Nothing in this Act shall be deemed to affect rights of action against any person for passing off
goods or services as the goods of another person or as services provided by another person, or the remedies in
respect thereof.
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thereof”. It is true that the provision does not read “any person for
passing off his goods or services as the goods of another person or
services provided by another person…” However, we regarded it as
implicit, in Section 27(2), that passing off must be of one’s goods or
services as those of another. In other words, if Mr. X were to represent
the goods of Mr. Y as those of Mr. Z, it would not, to our mind,
constitute “passing off” as envisaged in Section 27(2).
86. This is also clear from various judicial pronouncements of the
Supreme Court which identify the ingredients of “passing off”.
87. In Kaviraj Pt Durga Dutt Sharma v. Navaratna
Pharmaceutical Laboratories37, the Supreme Court observed that “an
action for passing off is a Common Law remedy being in substance an
action for deceit, that is, a passing off by a person of his own goods as
those of another”. Similarly, in Satyam Infoway Ltd v. Siffynet
Solutions (P) Ltd38, the Supreme Court held that “an action for
passing off, as the phrase ‘passing off’ itself suggests, is to restrain the
defendant from passing off its goods or services to the public as that of
the plaintiff’s”. We may reproduce, to advantage, paras 13 to 15 of
Satyam Infoway thus:
“13. The next question is, would the principles of trade mark law
and in particular those relating to passing off apply? An action for
passing off, as the phrase “passing off” itself suggests, is to restrain
the defendant from passing off its goods or services to the public as
that of the plaintiff’s. It is an action not only to preserve the
reputation of the plaintiff but also to safeguard the public. The
defendant must have sold its goods or offered its services in a37 AIR 1965 SC 980
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manner which has deceived or would be likely to deceive the public
into thinking that the defendant’s goods or services are the
plaintiff’s. The action is normally available to the owner of a
distinctive trade mark and the person who, if the word or name is
an invented one, invents and uses it. If two trade rivals claim to
have individually invented the same mark, then the trader who is
able to establish prior user will succeed. The question is, as has
been aptly put, who gets these first? It is not essential for the
plaintiff to prove long user to establish reputation in a passing off
action. It would depend upon the volume of sales and extent of
advertisement.
14. The second element that must be established by a plaintiff
in a passing off action is misrepresentation by the defendant to the
public. The word “misrepresentation” does not mean that the
plaintiff has to prove any mala fide intention on the part of the
defendant. Of course, if the misrepresentation is intentional, it
might lead to an inference that the reputation of the plaintiff is such
that it is worth the defendant’s while to cash in on it. An innocent
misrepresentation would be relevant only on the question of the
ultimate relief which would be granted to the plaintiff [Cadbury-
Schweppes (Pty) Ltd. v. PUB Squash Co. (Pty) Ltd.39; Erven
Warnink Besloten Vennootschap v. J. Townend & Sons (Hull)
Ltd.40]. What has to be established is the likelihood of confusion in
the minds of the public (the word “public” being understood to
mean actual or potential customers or users) that the goods or
services offered by the defendant are the goods or the services of
the plaintiff. In assessing the likelihood of such confusion the
courts must allow for the “imperfect recollection of a person of
ordinary memory” [Aristoc Ltd. v. Rysta Ltd.41].
15. The third element of a passing off action is loss or the
likelihood of it.”
(Emphasis supplied)
These passages stand approvingly cited by the Supreme Court in its
somewhat recent decision in Brihan Karan Sugar Syndicate Pvt Ltd
v. Yashwantrao Moyhite Krushna Sahakari Sakhar Karkhana42.
39 (1981) 1 WLR 193
40 (1979) 3 WLR 68
41 1945 AC 68 (HL)
42 (2024) 2 SCC 577
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88. Inasmuch as Section 27(2) saves the “rights of action against
any person” for passing off, the right of action which is saved is,
clearly, the right of action against a defendant for passing off its goods
as those of the plaintiff.
89. Once Section 27(2) saves only the rights of action against a
person for passing off goods or services as those of another person,
and the Supreme Court has clarified that “passing off” involves
misrepresentation, by one person, of his goods or services, as those of
another, we cannot, by judicial fiat, expand the existing statutory
rights by including a right of action against a person for
misrepresenting goods or services of someone else as his own. That,
clearly, is not “passing off”, and the appellants acknowledge as much
by referring to it as “reverse passing off”. Section 27(2) does not save
the right, if at all, against a person for misrepresenting goods of
someone else as his own.
90. This position is fortified by a reading of Sections 134(1)43 and
135(1)44 of the Act.
43 134. Suit for infringement, etc. to be instituted before District Court.–
(1) No suit--
*****
(c) for passing off arising out of the use by the defendant of any trade mark which
is identical with or deceptively similar to the plaintiff’s trade mark, whether registered or
unregistered,
shall be instituted in any court inferior to a District Court having jurisdiction to try the suit.
44 135. Relief in suits for infringement or for passing off. –
(1) The relief which a court may grant in any suit for infringement or for passing off referred
to in Section 134 includes injunction (subject to such terms, if any, as the court thinks fit) and at the
option of the plaintiff, either damages or an account of profits, together with or without any order
for the delivery-up of the infringing labels and marks for destruction or erasure.
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91. Section 134(c) envisages institution of a suit “for passing off
arising out of the use by the defendant of any trademark which is
identical with or deceptively similar to the plaintiff’s trademark”.
Thus, the suit which may be filed under Section 134 is a suit which is
aggrieved by the use, by the defendant, of the trademark which results
in the tort of passing off. The defendant must, therefore, be the user of
the allegedly injurious trademark. This, too, indicates that the Act does
not envisage a suit by a plaintiff alleging that a defendant has passed
off the goods of the plaintiff or, for that matter, of anyone else, as his
own.
92. Section 135(1) provides for a relief of injunction, apart from
damages, delivery up and rendition of profits, “in any suit for
infringement or for passing off referred to in section 134“. No
injunction can, therefore, be granted in a suit which alleges that the
defendant is misrepresenting the plaintiff’s goods as its own, as that
would neither constitute “passing off” within the meaning of Section
27(2), nor does Section 134 envisage filing of a suit in such a case.
93. We, therefore, agree with Mr. Mahant that no right to sue, or
obtain an injunction, on the ground of “reverse passing off”, is
available in our jurisprudence, at least in trade mark law. We do not
express any view on whether any injunction, against such an act, is
available under any other statute, or law for the time being in force.
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94. All arguments by the appellants, predicated on the allegation of
“reverse passing off” are, therefore, liable to be rejected even on this
ground.
I.2 Ingredients of “passing off” and “reverse passing off” are absent
95. Even if, for the sake of argument, we were to assume that
“reverse passing off” is actionable as a tort in our jurisprudence, the
ingredients of the said tort, as identified by the appellants themselves,
are, to our mind, absent in the present case.
96. “Reverse passing off”, according to learned Counsel for the
appellants, applies where a defendant seeks to misrepresent the goods
of the plaintiff as its own, but sufficient indicia exist to enable the
consumer to identify the goods as of the plaintiff. “Reverse passing
off”, therefore, involves two ingredients; the first being
misrepresentation, by the defendant, of the goods of the plaintiff as its
own, and the second being the ability of a consumer to identify the
goods as those of the plaintiff, despite attempts to the contrary by the
defendant.
97. Apropos the second ingredient, we are in agreement with the
submission of Ms. Bansal that the likelihood of identification, by a
consumer, of the goods as being those of the plaintiff, despite the
misrepresentation to the contrary by the defendant, must take place at
the time when the goods are initially seen by the plaintiff. Ms. Bansal,
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therefore, seeks to incorporate, into the ingredients of “reverse passing
off”, the element of initial interest confusion.
98. The requirement of likelihood of confusion permeates both the
tort of infringement as well as that of passing off. The principle of
“initial interest confusion” requires the aspect of likelihood of
confusion by the consumer to be assessed at the point of “initial
interest”, i.e., when the consumer first sees the goods of the defendant.
This principle applies as much to passing off as to infringement, as
there is no qualitative difference between confusion in one case and
confusion in the other.
99. While “passing off” envisages confusion in the mind of the
consumer, when he sees the goods, or the mark, of the defendant,
“reverse passing off” envisages exactly the opposite, i.e., clarity in the
mind of the consumer, regarding the origin of the goods, despite the
defendant seeking to mask it. The likelihood of confusion, for the
purposes of passing off, must exist at the initial interest stage, and we
see no reason why this principle should not apply to the likelihood of
clarity, in the mind of the consumer, in a case of reverse passing off. In
other words, for a case of reverse passing off to successfully be
pleaded – assuming reverse passing off its actionable as a tort in our
jurisprudence – it must be shown that, though the defendant seeks to
misrepresent the goods as being his, though they are of the plaintiff,
by masking the plaintiff’s trademark or by any other means, the
consumer is able to identify the goods as those of the plaintiff at the
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initial interest stage, i.e., when the consumer first comes across the
goods.
100. No material, to so indicate, has been cited or produced by the
appellants. Though it has been sought to be contended that the shape
and colour of the HDDs were unique to the appellants, and that they
would serve as sufficient indicia to enlighten the consumer that the
HDDs were originally manufactured by the appellants, no
corroborative material, to substantiate these assertions, is on record.
There is nothing to indicate that the shapes of the colours of the HDDs
were unique to the appellants, and were not used by anyone else in the
industry, nor is there enough material for us to come to a prima facie
conclusion that an average consumer would be able to identify the
HDDs as originating from the appellants solely on that basis. The
onus, to make out such a case, was undeniably on the appellants and,
to our mind, the onus has not been satisfactorily discharged.
101. Perhaps conscious of this chink in the appellants’ armour,
learned Counsel for the appellants have originally sought to contend
that, if the HDDs were scanned using the Crystal Disk Info tool, the
original Serial numbers and Model numbers affixed thereon by the
appellants, as well as the identity of the appellants themselves as the
original manufacturers of the HDDs, would be revealed. That,
however, would not amount to clarity in the mind of the consumer at
the initial interest stage and cannot, therefore, suffice to make out a
case of reverse passing off.
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102. Besides, these submissions, again, are a matter of trial, at best.
Ms. Bansal has submitted, and we agree with her, that the Crystal Disk
Info tool may not be available for everyone to either access or source.
In fact, the appellants have led no material with respect to the ease of
accessibility of the Crystal Disk Info tool. The Court cannot, quite
obviously, accept, at face value, the contention of the appellants that
the tool is readily available or that it is frequently used or accessed.
These are all matters of evidence, which cannot constitute the basis for
deciding the Order XXXIX application.
103. A simultaneous, though somewhat fainter, submission was
advanced, by learned Counsel for the appellants, that, by
misrepresenting used and end of life HDDs as new, manufactured and
imported by the respondents, they were indulging in passing off.
Prima facie, we cannot agree. If the respondents were doing this, it
might amount to cheating the consumers and, perhaps, a ground to
proceed under consumer protection law, but it does not constitute
“passing off” as understood in trademark jurisprudence.
104. There is yet another reason why the appellants cannot, prima
facie, seek an injunction against the respondents on the ground of
“passing off” or “reverse passing off”. “Passing off” involves not
merely an aspect of misrepresentation, but also misappropriation of
the goodwill of the plaintiff, resulting in damage to the plaintiff. The
three ingredients of passing off, it is trite, are goodwill,
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misrepresentation and damage45. If these are the ingredients of passing
off, we see no reason why they would also not be the ingredients of
reverse passing off.
105. Quite clearly, the respondents cannot be said to be
misappropriating the goodwill of the appellants in any manner. Nor
have the appellants been able to demonstrate that the goodwill which
resides in their registered trademarks has suffered any damage, or
prejudice as a result of the respondents’ acts. We agree with learned
Counsel for the respondents that, indeed, the existence of any such
damage may be doubtful, as the HDDs in which the respondents deal,
and which form subject matter of the present controversy, are end-of-
life HDDs, which effectively stand abandoned and for which the
appellants do not provide any warranty. Once the HDDs have reached
end-of-life stage, and have effectively been discarded by the OEMs,
we do not see how any goodwill of the appellants, in the marks affixed
on the said HDDs, could be said to continue to subsist.
106. Mr. Anand sought to submit, in this context, that, if the HDD
did not perform properly, and were to be serviced, the technical
persons who would then access the HDD would be able to ascertain
that the HDD was manufactured by the appellants. In such an event,
he submits that the consumer public might form an impression that the
appellant was complicit in allowing used and end of life HDDs to be
circulated in the market.
45 Refer S. Syed Mohideen v. P. Sulochana Bai, (2016) 2 SCC 683, Toyota Jidosha Kabushiki Kaisha v.
Prius Auto Industries Ltd, (2018) 2 SCC 1, Cadila Health Care v. Cadila Pharmaceuticals Ltd, (2001) 5
SCC 73, Brihan Karan Sugar Syndicate
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107. These are all submissions which belong to the realm of
assumption and conjecture. At the very least, they would require
evidence, to be substantiated even prima facie. In view of the fact that
the HDDs are sold, not under the trademarks of the appellants, but
under those of the respondents, we cannot accept Mr. Anand’s
submission that a consumer would form an impression that the
appellant had permitted circulation of the HDDs in the market.
108. There is, therefore, no prima facie evidence of misappropriation
of the appellants goodwill by the respondents or, for that matter, any
damage or prejudice being caused to the goodwill residing in the
appellants’ registered trade marks by the sale of the refurbished HDDs
by the respondents. Absent any such material, we are of the opinion
that no successful case of reverse passing off can be said to have been
made out.
109. We, therefore, are of the opinion that the appellants have not
been able to make out any case of passing off, or of reverse passing
off. The submissions to that effect by the appellants, therefore, deserve
to be rejected.
II. Re. infringement
II.1 Neither Section 30(3) nor Section 30(4) calls for invocation, as
no case of infringement within the meaning of Section 29 is made out
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110. We have already set out, in paras 20 to 44 supra, our
understanding of Sections 30(3) and 30(4), vis-à-vis Section 29.
Viewed from that perspective, it is clear that no case of infringement,
even prima facie, can be said to be made out in the present appeals.
111. Section 30(3), as we have already observed, does not create a
new specie of infringement. It merely states that, if goods bearing a
registered trademark are lawfully acquired by a person, who thereafter
sells or otherwise deals in the said goods, then, if the circumstances
envisaged in clause (a) or clause (b) in the said sub-section apply, the
act of the person in selling or dealing in the goods would not amount
to infringement. By no stretch of imagination, to our mind, can
Section 30(3) be said to be carving out a new specie of infringement
or setting out circumstances in which the act of a person would
amount to infringement.
112. What Section 30(3) says is, therefore, that, if the sale of, or
dealing with, the lawfully acquired goods bearing the registered trade
mark of another otherwise amounts to infringement, then it would not
be infringing if either of the circumstances in clause (a) or (b) applies.
The question of applying Section 30(3), therefore, would arise only if
the sale of, or otherwise dealing in, the lawfully acquired goods
bearing the trademark of another, amounts to infringement within the
meaning of Section 29, as Section 29 constitutes a complete and self-
contained code with respect to infringement.
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113. The respondents are not importers of the HDDs. They purchase
the HDDs from the importers and sell them in the market after
refurbishing. Before selling them in the market, the respondents efface
the registered marks of the appellants and affix their own trade marks.
114. It is nobody’s case that the respondents’ trade marks are either
identical with, or deceptively similar to, the appellants’ registered
trade marks. Sale of goods bearing a registered trademark, after
removing the trademark, cannot constitute “infringement” under any
of the sub-sections of Section 29. Without proceeding sub-section by
sub-section, a bare reading of Section 29 reveals that infringement,
within the meaning of the Section, takes place only where the
infringer uses the allegedly infringed registered trademark, or a
trademark which is deceptively similar thereto, in the course of trade.
“Use of a registered trademark” is defined in Section 29(6). It
includes, in clause (b), offering or exposing the goods, bearing the
registered trade mark, for sale, but does not include purchase of goods
bearing a registered trademark. Before selling the HDDs, the
respondents remove the appellants’ trademarks. They do not,
therefore, use either the appellants’ registered trademarks or any mark
which is deceptively similar thereto, in the course of trade. They do
not, therefore, commit any act of infringement, as defined in Section
29 of the Act.
115. If no act of infringement, within the meaning of Section 29, is
committed by the respondents, no occasion arises to proceed to
Section 30(3) of the Act, at all.
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II.2 Assuming Section 30(3) is at all invocable, its ingredients are
fully satisfied
116. The learned Single Judge has, in the impugned judgment, held
that sale of the HDDs after effacing, therefrom, the originally affixed
trade marks of the appellants, and affixing the trade mark of the
respondents in their place, would not constitute further “sale” of the
HDDs for the purposes of Section 30(3). This observation, to our
mind, is not justified on a plain reading of Section 30(3).
117. The identity of the goods, as the goods per se, in Section 30(3),
is not dependent on, or conditioned by, the trade mark which may be
affixed or present thereon. The sub-Section refers to “goods bearing a
registered trade mark”. In other words, the registered trade mark is
only affixed on the goods, and the goods do not lose, or change, their
identity as the goods even if the trade mark is changed. Significantly,
Section 30(3) does not refer to “sale of the goods as such in the
market”, but only to “sale of the goods in the market”. The
interpretation placed by the learned Single Judge would amount to
reading, into Section 30(3), the words “as such”. This, to our mind, is
not permissible.
118. Even after effacing the originally affixed trademarks of the
appellants and substituting, in their place, the trademarks of the
respondents, the further sale of the goods in the market, with such
substituted trademark would, therefore, to our mind, constitute “sale
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of the goods in the market” for the purposes of Section 30(3) of the
Act.
119. We are, however, in entire agreement with the learned Single
Judge that it cannot be said that the HDDs were not “lawfully
acquired” by the respondents.
120. We agree with Mr. Narula in his submission that if the import of
the HDDs was illegal, the subsequent acquisition of the illegally
imported HDDs by the respondents, even if under valid commercial
invoices, may not constitute “lawful acquisition”. However, there is
nothing to indicate, as the learned Single Judge has correctly
observed, that the import of the HDDs was in any manner illegal.
121. We endorse the findings of the learned Single Judge that the
appellants led no evidence to indicate that there was any proscription
on the OEMs to whom they had sold the HDDs, either contractual or
statutory, from further dealing in the HDDs, especially after they had
reached end-of-life stage and the appellants themselves provided no
further warranty. Though learned Counsel for the appellants
repeatedly asserted that the HDDs were not “meant for resale”, that
submission, besides itself being unsupported by any corroborative
material, begs the issue. The question is not whether the HDDs, as
supplied to the OEMs, were “meant for resale”, but whether there was
any proscription on the OEMs reselling them after they had reached
end-of-life stage. We endorse the finding of the learned Single Judge
that, from the material on record, no such proscription is forthcoming.
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122. The extraction of the HDDs from the equipment into which they
had been installed by the OEMs, and further sale of the HDDs by the
OEMs, to the importers who later imported the HDDs into India
cannot, therefore, be regarded as unlawful.
123. Once the acquisition of the HDDs abroad, by the importers, is
not found to be unlawful, the next question to be addressed is whether
the import of the HDDs into India was illegal. The learned Single
Judge has answered this question in the negative, and we agree with
him.
124. Learned Counsel for the appellants relied, in this context, on
para 2.31 of the FTP. In the first place, the appellants could not be
permitted to rely on para 2.31 without referring to the Customs
Notification dealing with re-export of the refurbished HDDs. This is
for the simple reason that para 2.31 does not, in any way, prohibit
import of HDDs for refurbishing. In fact, it makes it clear that such
import was free. The only condition, contained in the said paragraph
of the FTP, was that the refurbished goods had to be re-exported as per
the applicable Customs Notification. At the highest, therefore, any
infraction of para 2.31 could take place only if the refurbished goods
were not re-exported as envisaged by the said paragraph. Besides the
fact that, if any infraction did take place on that count, it would not
render the import unlawful for the purposes of applicability of the
Trade Marks Act, but may constitute a ground for the Customs
authorities to proceed against the importer, no view in that regard can
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be taken till the Customs Notification, governing re-export of the
refurbished goods, is there before us. None of the learned Counsel for
the appellants has produced the said Notification and, therefore, it is
not even open to us to arrive at the finding as to whether the condition
of re-export, as contained in para 2.31 was, or was not, breached.
125. In the absence of any such material, we agree with the learned
Single Judge that para 2.31 of the FTP does not, in any manner,
indicate that the import of the HDDs was illegal. Rather, para 2.31
makes it clear that the HDDs were freely importable.
126. Thus, as (i) no proscription on resale of the HDDs as sold by the
appellants to the OEMs, is forthcoming, (ii) there is no material to
indicate that the import of the HDDs into India was illegal and (iii) the
appellants had purchased the said HDDs from the importers under
commercial invoices on which GST was also paid, we endorse the
finding, of the learned Single Judge, that the appellants had “lawfully
acquired” the HDDs for the purposes of Section 30(3) of the Act.
127. Assuming that Section 30(3) at all called for invocation,
therefore, all indicia of the said provision stand fulfilled and, when
viewed in the light of Section 30(3) alone, the acts of the respondents
cannot be said to amount to “infringement”.
II.3 Section 30(4) is not applicable
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128. Section 30(3), however, is subject to Section 30(4), in that, if
Section 30(4) applies, the protection of Section 30(3) would not be
available. Even in such a case, to our mind, the act of the respondents
would not ipso facto amount to infringement, if the ingredients of
Section 29 are not fulfilled in the first instance.
129. We cannot agree with Mr. Anand in his submission that, if
Section 30(4) would apply, the respondents’ acts would ipso facto
become infringing. The “exception to an exception” argument of Mr.
Anand, in our view, over-simplifies the issue. We are prepared to go
along with Mr. Anand in this submission, to the extent that Section
30(4) is in the nature of an exception to an exception. If, therefore,
Section 30(4) does apply, the only result is that the benefit of Section
30(3), which would protect the respondents’ acts from the taint of
infringement, would not apply. The acts, themselves, would
nonetheless have to be shown to be infringing, within the meaning of
Section 29, as Section 30(3), we reiterate, does not create a new and
independent specie of infringement.
130. In the facts of the present case, we are, however, of the view
that Section 30(4) would not apply. We have already advanced our
interpretation of Section 30(4) in paras 39 to 44 supra. Applying the
said interpretation, it cannot be said that legitimate reasons existed or
the appellants to oppose further dealings in the refurbished HDDs by
the respondents or, indeed, the refurbishment act itself.
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131. The learned Single Judge has held, in the impugned judgment,
that the umbilical cord binding the appellants to the HDDs was
severed immediately upon the HDDs being installed, by the OEMs, in
computers or other such equipment. Learned Counsel for the
appellants countered this finding and, to justify the challenge, pointed
out that the appellants continued to extend warranty, for the HDDs,
even after they were installed in the equipment. Learned Counsel
submit that, if the OEM received any complaint from the consumer to
whom the computer or other equipment was sold, and the defect was
found to reside in the HDD, the OEM contacted the appellant, who
would effect the requisite repair, if the HDD was within warranty
period.
132. This submission, even by itself, defeats the appellants’ case,
insofar as the aspect of severing of the umbilical cord is concerned, as
it links the “umbilical cord” to the providing of warranty by the
appellants. Applying the extension, by the appellants themselves, of
the metaphor employed by the learned Single Judge, the umbilical
cord might not have been severed at the point when the HDDs were
installed in the equipment by the OEMs, but it unquestionably stood
severed when the HDDs reached end-of-life stage, and the appellants’
warranty, in respect of the HDDs, was no longer available. After that
point, we concur with the learned Single Judge that the appellants did
not have any further concern with the HDDs, or what was done with
them.
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133. There is nothing to indicate that the respondents’ acts impaired
the condition of the HDDs in any manner. Indeed, no such plea of
impairment has even been seriously advanced by the appellants. The
appellants’ contention is that, by erasing the appellants’ registered
marks and affixing, on the HDDs, their own trademarks, removing the
software embedded in the HDDs by the appellants and replacing it
with their software, and changing the Serial numbers and Model
numbers of the HDDs, the respondents “changed” the condition of the
HDDs within the meaning of Section 30(4).
134. We have already opined that the word “changed”, as employed
in Section 30(4), has to be read noscitur a sociis with the word
“impaired”. Read together, applying the said principle, it cannot be
said that the respondents “changed or impaired” the condition of the
HDDs by the acts undertaken by them. Significantly, it has never been
the contention of learned Counsel for the appellants that the appellants
were in any manner concerned with, or were entitled to monitor,
further transactions in respect of the HDDs, once they reached end-of-
life stage and the appellants ceased to provide any warranty in respect
thereof.
135. In that view of the matter, irrespective of the aspect of whether
the respondents changed or impaired the condition of the HDDs, we
are further of the view that there could not be said to exist any
legitimate reason for the appellants to oppose further dealings in the
HDDs.
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136. It might have been another matter if the manner in which the
respondents dealt with the HDDs was in any manner prejudicial to the
appellants, or diminished their goodwill or reputation. No material,
worth its name, is forthcoming to the said effect. Any change in the
HDDs, even if effected by the respondents, could not be said to
prejudice the appellants in any manner, so as to provide, to the
appellants, legitimate reasons to oppose further dealings in the HDDs,
within the meaning of Section 30(4) of the Act.
137. As a result, we are of the opinion that Section 30(4) would not
be available to the appellants.
II.4 The sequitur
138. The sequitur would, therefore, be that no case of infringement,
of the appellants registered marks, can be laid at the door of the
respondents.
III. Other submissions
139. Other submissions advanced by the appellants are, really, of no
substantial significance.
140. The submission that the HDDs are used in surveillance
equipment and that, if their quality is compromised, it could result in
security concerns, is really neither here nor there. No material, to
indicate that the refurbished HDDs could not be used in the
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surveillance equipment, is forthcoming. In any event, this is a
consideration which is alien to the controversy before us, as it does
not impact either infringement or passing off.
141. The plea that the respondents were indulging in “false trade
descriptions” is, again, irrelevant to the issue in controversy. No
remedy, under Section 135 of the Act, is available on this ground. As
learned Counsel for the appellants themselves acknowledge, resorting
to “false trade descriptions” is covered by Section 103 of the Act,
which cannot constitute a ground to seek an injunction.
142. The learned Single Judge has proceeded on the concept of
“right to repair”. Learned Counsel for the appellants submit that the
acts of the respondents do not fall within the purview of the concept of
“repair”. To our mind, this discussion is unnecessary for the purposes
of resolution of the controversy in issue. We do not, therefore, propose
to enter into this aspect.
IV. Re. concluding directions issued by the learned Single Judge
143. Learned Counsel for the appellants sought to contend that the
respondents ought to have been altogether injuncted, and that,
therefore, the concluding directions issued by the learned Single Judge
were not justified. Mr. Anand has also sought to contend that they are
unworkable.
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144. The respondents have not chosen to challenge the said
directions.
145. In view of our finding that there is no prima facie case either of
passing off, or of reverse passing off, or of infringement, the
applications of the appellants, under Order XXXIX Rules 1 and 2 of
the CPC, deserved, in our view, to be dismissed.
146. It may also be disputable whether, having found the respondents
not to be entitled to the benefit of Section 30(3), and that Section
30(4) applied – with both of which conclusions we respectfully beg to
disagree – the learned Single Judge could have proceeded to issue the
directions contained in para 116 of the impugned judgment. We may
note that this Court, in a recent decision in Mohd Talha v. Karim
Hotels (P) Ltd46, issued similar directions, which stand stayed by the
Supreme Court vide order dated 19 January 2026 in SLP (C)
615/202647, recording the submission of learned Senior Counsel for
the appellant that the directions conflicted with the findings regarding
infringement. Till the Supreme Court finally speaks on the issue,
therefore, the existence, or otherwise, of power to issue such
directions, in an application under Order XXXIX Rules 1 and 2 of the
CPC, may be said to be somewhat of a grey area. We may, however,
note, in this context, the clear enunciation of the law, in Midas
Hygiene Industries (P) Ltd v. Sudhir Bhatia48, to the effect that,
where infringement is found to exist, an injunction must follow.
46 2025 SCC OnLine Del 8240
47 Karim Hotels Pvt Ltd v. Mohd Talha
48 (2004) 3 SCC 90
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147. Be that as it may, we do not propose to disturb the directions
issued by the learned Single Judge, invoking the principle that a party
should not be worse off for having appealed.
H. Itemising our findings
148. For the sake of convenience, we may itemise our findings thus:
(i) “Reverse passing off” is not an actionable tort, in our
trade mark jurisprudence. This is, inter alia, apparent from a
reading of Section 27(2) read with Sections 134(1) and 135(1)
of the Act, in conjunction with the judgments of the Supreme
Court identifying the ingredients of passing off, including, inter
alia, Kaviraj Pt Durga Dutt Sharma and Satyam Infoway.
(ii) Assuming, arguendo, that “reverse passing off” was
actionable as a tort in India, its ingredients are, nonetheless,
absent in the present case as:
(a) the “initial interest” test would apply to reverse
passing off as well,
(b) the ability of the consumer to be able to identify
the goods with the original registered trade mark owner
must, therefore, be at the time of initial sale of the goods,
(c) there was nothing to indicate that, at the time of
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consumer would be able to identify them as having been
originally manufactured by the appellants,
(d) the ability to identify the HDDs as having
originated from the appellant using the Crystal Disk Info
tool, could not make out a case of “reverse passing off”,
apart from the fact that the very availability and
accessibility of the said tool would be matters requiring
evidence and trial,
(e) there was no misappropriation, by the respondents,
of any goodwill of the appellants, and
(f) no material evidence of any damage which had
resulted to the appellants, as a result of the acts of the
respondents, was available either.
(iii) For the same reason, no case of passing off could, either,
be said to exist. Even if it were to be assumed that the
respondents were misrepresenting the HDDs as new and,
thereby, misleading consumers, that would not constitute
“passing off” as understood in trademark jurisprudence.
(iv) In so far as infringement was concerned, Section 30(3)
does not create a new specie of infringement but only clarifies
that, if the act of a person who lawfully acquires goods bearing
a registered trade mark of another, sells them in the market, it
would not amount to infringement, if the circumstances
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amounted otherwise to “infringement” within the meaning of
Section 29.
(v) “Infringement”, under Section 29, requires use, by the
defendant, of the registered trademark of the plaintiff or of a
deceptively similar mark. Inasmuch as the respondents efface
the appellants’ marks from the HDDs before refurbishing and
selling them, the respondents’ acts cannot constitute
infringement. As such, Section 30(3) would not call for
application.
(vi) Assuming, arguendo, that Section 30(3) applies, its
ingredients stand satisfied, as
(a) there is no evidence of any proscription on the
OEMs further selling the HDDs, especially after they had
reached end-of-life stage,
(b) import of the HDDs was not prohibited,
(c) the respondents had purchased the HDDs against
commercial invoices on which GST was paid, and
(d) the appellants had themselves placed the HDDs on
the market.
(vii) Section 30(4) would not apply, as there was no change or
impairment of the HDDs by the respondents, the expression
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reason for the appellants to object to further dealings in the
HDDs by the respondents.
(viii) Thus, no case of infringement, either, could be said to
exist.
(ix) The operative portion of the impugned judgment is
maintained, as there is no challenge, thereto, from the
respondents, and the appellants could not be placed worse off
for having preferred an appeal.
I. Conclusion
149. The appeals are, therefore, dismissed.
FAO (OS) (Comm) 104/2025
J. Facts
150. The respondent, in this case, himself imported HDDs, bearing
the appellant’s trade mark, from Hong Kong and Korea. As in the case
of the other appeals decided by this judgment, the HDDs were
originally sold by the appellant to OEMs located abroad, from whom,
after they had reached end-of-life stage, they were removed from the
equipment in which they were installed and sold. Admittedly, at the
time of import, the HDDs bore the appellant’s registered trademark.
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151. The appellant submitted that it had been informed
telephonically, by the Deputy Commissioner of Customs, that a
consignment of HDDs had been imported at the Kolkata Port, which
included HDDs of the appellant. The appellant proceeded to institute,
before this Court, the suit from which the present appeal emanates,
seeking a decree of permanent injunction restraining the respondent
from importing or dealing with any HDDs which had been originally
sold by the appellant and which bore the appellant’s registered trade
marks.
152. The suit was accompanied by IA 14659/2019, under Order
XXXIX Rules 1 and 2, seeking interim injunction. An ex parte ad
interim injunction was granted on 21 October 2019, for the vacation of
which the Respondent filed IA 38495/2024 under Order XXXIX Rule
4 of the CPC. Both these applications were disposed of, by the learned
Single Judge of this Court, by judgment dated 16 May 2025, against
which the present appeal has been filed.
153. The learned Single Judge, while noting that, as the goods had
been seized while in Customs area, it was not possible to ascertain the
further use to which they were intended to be put and, therefore, that it
was not possible to hold that the appellants had made any
misrepresentation to the consumer public, found the case to be
otherwise parallel, on facts, to the dispute which was decided by his
predecessor by the judgment dated 21 May 2024, which forms
subject-matter of challenge in the batch of appeals earlier decided by
this judgment.
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154. The learned Single Judge, therefore, disposed of the
applications before him in the following terms:
“37. In case the defendant wishes to resell the imported goods
without refurbishment, the defendant would be free to import
second-hand goods or “end-of-life” goods bearing the trade marks
of the plaintiffs, while adhering to the disclosure norms in Xerox
Corpn. as set out above. However, in the event the goods are
refurbished and subsequently sold in the market, the disclosure
norms given in para 116 of Daichi International case1 would
apply mutatis mutandis in respect of goods imported by the
defendant and sold after refurbishment.
38. Insofar as the goods already imported by defendant are
concerned, it is an admitted position that they are still lying in a
customs warehouse since the time of their import. This Court,
while passing an ex parte interim order dated 21-10-2019, has
specifically provided that the demurrage or other charges payable
to Custom Authority, shall be paid by the defendant.
39. In light of the discussion above, the goods seized by the
Local Commissioner and now lying with the Custom Authority are
permitted to be released to the defendant, subject to the defendant
filing an undertaking that the said goods shall be sold only as scrap
after removing all marks of the plaintiffs. The defendant shall be
free to pursue his remedies that may be available in law with regard
to demurrage charges payable to the customs.”
155. We have already noted, herein above, the submissions of Ms.
Majumder and Mr. Chopra, learned Counsel appearing for the rival
parties in this appeal.
K. Analysis
156. The only point of difference between this appeal, and the other
appeals which stand decided by this judgment, is that the respondent,
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in this case, was himself the importer of the end-of-life HDDs sold by
the appellant to OEMs abroad and purchased by the respondent.
157. Though Ms. Majumder seeks to contend that the invoice on
record, whereunder the respondent had purchased the HDDs in Hong
Kong, had not been issued by the appellants’ OEM, that factor may
not be of substantial significance at this stage. In so far as the purchase
of the HDDs abroad is concerned, the findings and observations
entered by us hereinabove, with respect to the batch of appeals
challenging the order dated 21 May 2024, would equally apply to the
present case, as, here, too, the appellant has not been able to contend
that there was any restriction on further sale of the HDDs by the
OEMs after they had reached end-of-life stage. The purchase of the
HDDs abroad, by the respondent has, therefore, to be treated, at least
at this stage, to be licit.
158. Unlike the case of the respondents in the batch of appeals
covered by the order dated 21 May 2024, however, the respondent, in
the present case, himself imported the HDDs bearing the registered
trademark of the appellant. Inasmuch as import of goods bearing a
registered trade mark amounts to “use” of the registered trademark
under Section 29(6), and as the respondent was neither the proprietor,
nor the permissive user of the registered trademark of the appellant,
the import of the HDDs by the respondent was infringing in nature,
within the meaning of Section 29.
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159. In this case, therefore, Section 30(3) would come into play, to
examine whether the respondent would be entitled to the benefit of the
said sub-section and, therefore, would escape the taint of
infringement.
160. The answer, to our mind, has necessarily to be in the
affirmative.
161. All conditions of Section 30(3) stand satisfied in this appeal as
well. The purchase of the HDDs by the respondent abroad is prima
facie licit. No restriction or prohibition, against import of the HDDs
into India, is forthcoming, and the findings in that regard, returned in
respect of the earlier batch of appeals, would apply mutatis mutandis
to the present appeal as well. There is no question of the respondent
having changed or impaired the condition of the HDDs, as they were
seized while in Customs area. That said, if the respondent were to deal
with the HDDs in the manner in which the respondents in the above
batch of appeals dealt, there would be no justification to invoke
Section 30(4).
162. Ms. Majumder sought to contend that the HDDs were not meant
for retail sale. For this purpose, however, she relies only on a
Technical Report of a Staff Engineer at SanDisk India Device Design
Centre Pvt Ltd. Such a report cannot form the basis of consideration at
an Order XXXIX stage, till the author of the report is subjected to
cross-examination.
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163. That apart, the report merely states that (i) the HDDs were old
and some were inoperable, and could not be read, (ii) the HDDs were
not in their original Electrostatic Discharge (ESD) packaging and (iii)
there were stickers on the packaging hiding the date of manufacture.
This does not, in any way, indicate that there was any restriction or
proscription on further sale of the HDDs by the OEMs, especially
after they had reached end-of-life stage.
164. Ms. Majumder also sought to contend that the permission,
granted by the learned Single Judge to the respondents, to affix the
respondents’ mark, would violate Sections 29(2) and (7) of the Act.
The submission cannot be accepted, as, in the present case, there was
no effacing of the appellants’ mark. Besides, Section 29(2) would not
apply as there is no likelihood of confusion.
165. But for these differences, there is no substantial distinction, on
facts or in law, in the issue and controversy in the above batch of
appeals and in the present appeal.
L. Conclusion
166. For the reasons already set out earlier in this judgment,
therefore, this appeal must also fail, and is accordingly dismissed.
167. There shall be no orders as to costs.
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168. Needless to say, as these appeals are directed against orders
passed by the learned Single Judge under Order XXXIX of the CPC,
observations and findings contained in this judgment shall not inhibit
the view which the learned Commercial Court may choose to take on
the merits of the disputes between the parties, while adjudicating the
substantive suits.
A closing remark
169. We believe that commendation should be granted where it is
due. We, therefore, record our appreciation for the manner in which
Ms. Rashi Bansal, whom we have had the pleasure of hearing in detail
for the first time, argued her matter, with clinical precision and
without a word out of place. She more than held her own against
seasoned stalwarts like Mr. Anand and Ms. Majumder who appeared
opposite her. We predict a bright future for her, and wish her well.
C. HARI SHANKAR, J.
OM PRAKASH SHUKLA, J.
MARCH 09, 2026/aky/yg
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