Amazon Seller Services Pvt. Ltd. v. Amway India Enterprises Pvt. Ltd. & Ors.

Relevant Acts and provisions

Information Technology Act, 2000

Section 79

Trade Marks Act, 1999

Section 30(3)Section 30(4)

Provisions considered: Sections 30(3) and 30(4) of the Trade Marks Act, 1999, Section 79 of the Information Technology Act, 2000, and the Direct Selling Guidelines, 2016.

Brief facts

Direct-selling entities governed by the Direct Selling Guidelines, 2016 sued Amazon and other e-commerce platforms for listing and selling their products without consent, alleging that such sales violated the Guidelines' restriction on unauthorised distribution outside the direct-selling network and infringed their trade mark and contractual rights. A Single Judge restrained the platforms from listing the products; the platforms appealed to the Division Bench, arguing that the Guidelines were advisory and that genuine goods, once sold, could be freely resold online.

Issues before the Court

1. Are the Direct Selling Guidelines, 2016 legally binding on e-commerce platforms that are not themselves direct sellers?
2. Does resale of genuine branded goods through an e-commerce platform, without the manufacturer's consent, amount to trade mark infringement?

Court's findings

The Court held that the Direct Selling Guidelines, 2016 were advisory executive instructions issued without statutory backing, and therefore could not be enforced as binding law against e-commerce platforms that were not themselves direct sellers. It observed that in the absence of a specific statute governing direct selling, the Guidelines could not restrict the platforms' right to trade.

The Court held that once goods bearing a registered trade mark are lawfully put on the market by or with the consent of the proprietor, Sections 30(3) and 30(4) of the Trade Marks Act, 1999 permit further dealings in those goods, including resale through online marketplaces, unless the condition of the goods has been impaired or there is another legitimate reason to restrict further sale.

The Court found no evidence that the platforms had misrepresented the goods as being sold by the manufacturers, and accordingly set aside the interim injunctions.

Decision

Appeals allowed; the Single Judge's injunction was set aside and the platforms permitted to list and sell the respondents' genuine products.

Keywords

E-commerce Exhaustion Of Rights Intermediary Liability Online Infringement Trademark Infringement