A division bench of the Delhi High Court on Tuesday stayed a single-judge order directing Amazon Technologies to pay Lifestyle Equities damages of $39 million (around Rs 340 crore) after finding that Amazon infringed upon its ‘Beverly Hills Polo Club’ trademark.
A Bench of Justices Hari Shankar and Ajay Digpaul passed the interim order after noting that Amazon need not pay any pre-deposit in exchange for the stay.
Amazon has been directed to give an undertaking that they will satisfy the damage award if the court rules against it. The Court furthermore held that the findings in the order will not influence the final decision on the appeal.In 2020, Lifestyle Equities CV filed a trademark infringement suit against Amazon and others for infringement of its "BEVERLY HILLS POLO CLUB" mark.
In 2020, Lifestyle Equities filed a trademark infringement suit against Amazon Technologies and others alleging that they infringed upon its registered "BEVERLY HILLS POLO CLUB" logo/device marks by using a deceptively similar mark on apparel and other products sold on their platforms.
Specifically, it was claimed that Amazon is manufacturing and selling products under the brand "Symbol" with the infringing mark, and that Cloudtail India, operating on the Amazon.in marketplace, is also involved in the sale of these infringing products.The High Court initially granted an interim injunction on October 12, 2020, restraining Amazon and others from using the logo and directing Amazon Seller Services to remove the infringing products from their platform. Subsequently, Amazon Technologies failed to appear in court and was proceeded against ex-parte.
Cloudtail India expressed willingness to accept a decree of injunction and proposed a settlement involving damages, leading to unsuccessful mediation. Cloudtail acknowledged that it used the infringing mark from 2015 to July 2020, with revenue from infringing products amounting to ₹23,92,420 and a profit margin of approximately 20%.
The Court acknowledged Cloudtail's admission of liability but emphasised that Lifestyle could not be denied the opportunity to seek damages from Amazon. Based on the undisputed sales figures provided by Cloudtail, the Court decreed the suit in favour of Lifestyle against Cloudtail, awarding damages of Rs 4,78,484, representing 20% of the revenue from infringing products.
In its final judgment, the Court held Amazon liable for around ₹340 crore in compensatory damages and costs in a trademark infringement case brought by Lifestyle. The ruling stemmed from Amazon’s commercial relationship with Cloudtail, a key seller on its platform, which the Court found closely linked to the alleged infringement.
While acknowledging that e-commerce platforms increase consumer access, the Court observed that they also pose serious challenges to intellectual property enforcement. It criticised the defendants for attempting to present themselves as separate entities in an effort to “diffuse and dissipate the consequences of infringement.”
In evaluating Amazon’s connection to the infringing conduct, the Court examined the Amazon Brand License and Distribution Agreement with Cloudtail. It noted that the agreement granted Cloudtail extensive rights to use Amazon’s trademarks and branding, undermining Amazon’s claim of being merely an intermediary. The Court concluded that these contractual terms made Amazon directly accountable for the acts of Cloudtail.
The Court also directed Amazon to pay litigation costs and court fees, taking the final amount payable to approximately R340 crore. The judgment sets a significant precedent for liability of e-commerce platforms in trademark infringement matters where affiliated sellers are involved.
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