The Delhi High Court recently observed that e-commerce platform Flipkart’s feature permitting third-party sellers to ‘latch on’ to a more popular brand’s name is nothing but ‘riding piggy back' and constitutes passing off [Akash Aggarwal v. Flipkart].
It, therefore, directed Flipkart to disable the feature.
Latching on is a process by which third party sellers are allowed to add various products of a certain brand into their own listings along with the photographs of the said brand's products. This is possible through ‘Opportunities’ option under the ‘Listings’ tab on the ‘Flipkart’ website.
Justice Prathiba Singh said that the feature amounts to taking unfair advantage of the goodwill that resides in the more popular brand or business and is a mode of encashing upon their reputation.
“This Court is satisfied that such a feature cannot be allowed to be used or offered, to the detriment of the owner of the brand or the person who has created the original product. Consent and authorisation of the brand owner and the listing owner would be required before such conduct by any seller is permitted,” the order said.
The judge observed that the advent of e-commerce has added new dimensions to Intellectual Property (IP) and that an action for passing off - which was traditionally restricted to products having similar logos, marks, names, and labels in the real world - has now taken on a new dimension in this context.
Though these platforms provide an enormous window, some features like the 'latch on' feature can also cause damage, the Court added.
"The 'latch on' feature on Flipkart allows for latching onto various sellers. Such a feature cannot be used to the detriment of a brand. Flipkart has allowed third parties to latch onto these. Accordingly, Flipkart shall stand restrained from latching onto the plaintiff's products, so as to enable third-party players from encashing upon their goodwill and reputation...The 'Latching On' feature must be disabled by Flipkart," the Court directed.
The present suit was filed by one Akash Aggarwal, who sought a permanent and mandatory injunction restraining trademark and copyright infringement, passing off, delivery up, rendition of accounts, damages and other relief.
Aggarwal was the sole proprietor of an entity operating under the mark/name ‘V Tradition’, which was engaged in the business of sale of clothing for women on various retail e-commerce platforms, such as Amazon, Meesho, Myntra, as well as Flipkart.
He claimed that the brand had spent a substantial amount of money on creating garments and retaining models whose photographs were used for selling the products. The case of the plaintiff was that their mark had been pending for registration since 2021, despite having achieved a total sale of approximately ₹18 crore on Flipkart itself, since December 2020.
It was argued that Flipkart had allowed third parties, including several unconnected sellers, to portray themselves as ‘V Tradition’ and ride on the popularity of the products and designs of the plaintiff by using the mark 'V Tradition', in addition to using the photographs of the plaintiff’s products.
'V Tradition' thus filed a suit seeking a direction to restraining Flipkart from permitting third-party sellers to ‘latch on’ to their name and products.
Counsel for the plaintiff submitted that various people were affected due to the 'latching on' feature and that there was a loss of business to micro, small and medium enterprises (MSMEs) and small businesses.
Flipkart's lawyer said that if an affidavit including the list of all third party owners is sent to the e-commerce giant, it would take them down within 48 hours.
After hearing the arguments, Justice Singh directed Flipkart to disable the 'latching on' feature on its website with respect to the present plaintiff so as to prevent third parties from deriving benefit from the goodwill of the V Tradition trademark.
The Court said that the plaintiff will share the details of all the 34 players that were already 'latched on' with Flipkart's counsel, subsequent to which the e-commerce giant will take them down within 48 hours.
Advocates Anshuman Upadhyay and Naseem Prashant appeared for the plaintiff, while Senior Advocate Rajiv Nayyar, along with Manjra, Sidharth Chopra, Shilpa Gupta, Surabhi Pande and Kuber represented Flipkart.