Delhi High Court issues directions for sale of used Hard Disk Drives

The Delhi High Court recently issued a slew of directions for the sale of used and refurbished hard disk drives (HDDs) [Seagate Technology LLC v Daichi International + connected matters]..Justice Anish Dayal said that packaging in which the refurbished product is sold shall clearly indicate the name of the original manufacturer but in a manner so to not deceive the customer that the sale itself is of the original product.“Reference to the plaintiffs (original manufacturer) 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,” the Court said.It also ordered that a clear statement must be made to the effect that there is no manufacturers’ warranty or service on the product..The other directions issued by the Court are:.Justice Dayal said that these directions should be complied by entities selling refurbished HDDs on their promotional literature, website, e-commerce listings, brochures and manuals..The Court passed the directions while dealing with a batch of suits filed by Seagate Technology LLC and Western Digital Technologies Inc against a bunch of entities selling refurbished HDDs.The defendant companies were Daichi International, Consistent Infosystems Pvt Ltd Geonix International Pvt Ltd. and Cubicor Information Systems Pvt Ltd.Seagate and Western Digital argued that the HDDs manufactured by them become unserviceable after a period of time but still retain functionality and when used equipment is sold and discarded globally, consignments of these end-of-life HDDs are refurbished by various entities and sold to consumers.It was stated that the end-of-life HDDs are imported to India by various importers, and resold to refurbishers who, in turn, remove the marks of ‘Seagate’ or ‘Western Digital’ from the HDDs, refresh and repackage it under their own brand names, and sell it as refurbished products with an extended two-year warranty.It was argued that these HDDs could not be sold as refurbished products since the removal of their brand name from the product amounted to impairment, which was not permitted as per Sections 30(3) and 30(4) of the Trade Marks Act, 1999..The High Court considered the case and held that Seagate and Western Digital failed to show any rule, regulation or policy prohibiting import of discarded HDDs/equipment into India.Justice Dayal said that if there is full disclosure by the refurbisher that they have changed/removed original marks on the HDDs and the product sold does not resemble the original, then consumers are fully warned about what they are purchasing.The Court, therefore, disposed of the interim relief application filed by Seagate and Western Digital..Advocates Ranjan Narula, Shivangi Kohli, and Aishani Singh appeared for Seagate Technology.Advocates Pravin Anand, Saif Khan, Shobhit Aggarwal, Prajjwal Kushwaha, and Meghana Kudligi represented Western Digital Technologies.Advocate Hemant Singh acted as amicus curiae in the matter. He was assisted by advocates Mamta Rani Jha, Manish Kumar Mishra, Anubhav Chhabra, Saloni Kasliwal, and Rahul Choudhary.Advocates Rashi Bansal, Saurabh Lal, Kriti Garg, and Tesu Gupta appeared for Daichi International.Consistent Infosystem was represented through advocates Dushyant K Mahant and Vimlesh Kumar. .[Read Judgment]