Supreme Court refuses to lift stay on order directing Amazon to pay ₹340 crore damages to Lifestyle Equities

The Supreme Court on Wednesday dismissed a plea by UK-based fashion brand Lifestyle Equities CV challenging the stay imposed by the Delhi High Court Division Bench on an order directing Amazon Technologies to pay it ₹340 crore in damages for trademark infringement. [Lifestyle Equities v. Amazon Technologies Inc]

A Bench of Justices JB Pardiwala and KV Viswanathan dismissed the plea and stated that the reasons for dismissal would follow in a subsequent order.

The Court, however, clarified that the dismissal of this plea will not come in the way of Delhi High Court's Division Bench hearing the case on merits.

The suit stems from a 2020 complaint filed by Lifestyle Equities alleging infringement of its Beverly Hills Polo Club (BHPC) trademark. The company had claimed that products sold under Amazon’s private label "Symbol" on Amazon.in featured logos deceptively similar to its registered BHPC marks. It also named Cloudtail India, a key seller on the platform, as a defendant.

In October 2020, the Delhi High Court granted an interim injunction restraining the defendants from using the infringing mark. While Cloudtail eventually admitted liability and disclosed sales of approximately ₹24 lakh from such products, Amazon Technologies failed to enter appearance and was proceeded against ex parte.

A single-judge of the High Court subsequently ruled in favour of Lifestyle Equities, holding Amazon liable for trademark infringement. The Court found that Amazon’s brand license and distribution agreement with Cloudtail allowed extensive use of Amazon’s marks and branding, and that the commercial relationship went beyond that of a neutral intermediary. Accordingly, the Court held Amazon accountable for the infringing products listed and sold through its platform.

The judgment awarded $5 million in damages for corrective advertising and brand rehabilitation, and $33.78 million (₹292.7 crore) for lost royalties, in addition to litigation costs. The total amount payable by Amazon was quantified at around ₹340 crore.

However, on July 1 this year, a Division Bench of Justices C Hari Shankar and Ajay Digpaul stayed the single-judge order. The Bench held that Amazon had not been properly served summons before being proceeded against ex parte, thereby raising concerns of due process.

Further, the Division Bench noted that the original suit claimed only ₹2 crore in damages and that no amended pleadings or formal applications had been filed to justify the award of ₹336 crore.

“At no stage of the proceedings did the plaintiffs ever claim the awarded amount of ₹336,02,87,000,” the Bench observed.

It also found that the single-judge had not made any specific finding on Amazon’s direct role in affixing or authorising the use of the infringing mark, but had instead drawn inferences based on Amazon’s market position and agreements with Cloudtail.

This prompted an appeal before the Supreme Court, which has now been dismissed.

Lifestyle was represented by Senior Advocates Mukul Rohatgi and Gaurav Pachnanda with Advocates Mohit Goel, Sidhant Goel, Garima Bajaj, Dipankar Mishra, KD Sharma and Kumar Karan from Sim & San.

Amazon was represented by Senior Advocates Abhishek Manu Singhvi, Neeraj Kishan Kaul and Arvind Nigam with Advocates Saikrishna Rajagopal, Sidharth Chopra, Sneha Jain, Devvrat Joshi and Angad Makkar from Sai Krishna and Associates along with Advocate Aavishkar Singhvi.