Delhi HC Directs Amazon To Pay ₹339.25 Crore To Luxury Brand Beverly Hills Polo Club

In a significant ruling, the Delhi High Court has imposed hefty damages and costs totalling Rs. 339.25 crore on Amazon Technologies Inc for trademark infringement of the luxury lifestyle brand, Beverly Hills Polo Club.

Remarking that Amazon’s actions amounted to ‘deliberate and wilful infringement’, Justice Prathiba M. Singh observed that Amazon engaged “deliberate strategy of obfuscation, pretending to wear different hats—one as an intermediary, one as a retailer, and one as a brand owner – all in an attempt to shift responsibility and evade liability for trademark infringement.”

Lifestyle Equities C.V (plaintiff no. 1) and Lifestyle Licensing B.V (plaintiff no. 2) submitted that they are the rightful owners of the Beverly Hills Polo Club (BHPC) registered trademark. They are engaged in business of manufacturing, distribution and sale of a wide range of products including garments, apparels, accessories, footwear, furniture, textiles, watches and other lifestyle and personal care products under the trademark ‘BHPC’.

The BHPC trademark consists of a logo featuring a charging polo pony with a mounted rider wielding a raised polo stick, symbolizing the sport of polo. The plaintiffs stated the use of the mark and logo serves as a unique identifier of its brand and symbolizes its association with the sport of polo, luxury and premium lifestyle products.

It is stated that the mark is registered in approximately 91 countries including India, USA, UK, UAE, Germany, Nepal, Mexico, etc. It is stated that the products in India under the BHPC trademark were launched in 2007.

The plaintiffs submitted that they have generated substantial revenues from the sale of products bearing the BHPC logo mark in India. It is stated that the sales turnover from products bearing the BHPC mark is more than Rs. 20 crore each year from 2016-2017 onwards.

The plaintiffs alleged that Amazon Technologies Inc. (defendant no. 1) was dealing with apparel products under the label ‘Symbol’ consisting of a horse device mark almost identical to the BHPC logo device, amounting to infringement and unauthorized use. It alleged that Cloudtail India Private Limited (defendant no. 2) acted as a retailer of the infringing apparel products, making them available for sale on the Amazon website managed by Amazon Seller Services Private Limited (defendant no. 3).

On 12 October 2020, the Court had issued ad-interim injunction, restraining Amazon Technologies and Cloudtail India from infringing the impugned mark and had also directed Amazon Seller Services to take down the impugned products from its website.

On 02 March 2023, the Court held that the plaintiff was entitled to a permanent injunction against Amazon Technologies from using BHPC logo in any manner.

Pursuing the averments, the Court stated that the ‘Triple Identity Test’ for trademark infringement has been satisfied. It noted that the horse device logo is almost identical, the goods are identical and the consumers/trade channels are also identical.

It observed that as a case of infringement is made out, Amazon would be liable to pay damages for ‘blatant infringement’. It stated “The use of the impugned logo/mark is not in dispute. Defendant No.2 and Defendant No.3 have already suffered a permanent injunction. This Court has also injuncted Defendant No.1. The question is whether Defendant No.1 would be liable to pay damages for such blatant infringement on the e-commerce platform which can also be termed as e-infringement, as it was the entity which was responsible for the infringing conduct of Defendant No.2 on Defendant No.3’s platform. The answer is clearly in the affirmative.”

On damages, the Court noted that the object of the enquiry on damages would be to compensate the plaintiff for economic loss suffered on account of the unauthorized use of its trademark. It noted that to determine the compensation, the Court should take into account the actual loss suffered by the plaintiff due to the infringement and the means by which the plaintiff can be restored to its original market position, including potential claims for lost royalties.

Noting that Amazon Technologies is one of the most dominant players in the e-commerce space, the Court stated that Amazon possesses ways and means to utilize its dominant presence in the e-commerce space. It stated that Amazon also has the leverage to dilute the BHPC brand/logo by indulging in deep-discounting of its own products which compete with BHPC by using a similar mark/logo. It noted that Amazon is pricing products at 10% of BHPC’s product cost.

The Court stated that Amazon Technologies failed to contest the suit despite having complete knowledge of the proceedings of the suit. Noting that all the defendants belonged to Amazon Group of Companies, it remarked “Defendant No.1 has selectively chosen when to appear and not appear before the Court. At a time when the Court directed vide order dated 20th April, 2022 to explain the exact relationship between the three Defendants, it agreed to suffer a permanent injunction, thereby evading scrutiny. Thus, the clear attempt is to not disclose the exact relationship between the said three Defendants to this Court. Accordingly, in the opinion of this Court, this is not a bona fide conduct of a party before the Court and the conduct of the Defendant clearly demonstrates that there is an intent to withhold crucial information from the Court, rather than engage in bona fide conduct as expected of a party before a judicial forum.”

The Court thus proceeded to impose heavy costs on Amazon. The BHPC claimed damages of USD 155.59 Million (INR1260 crores).

Based on the pleadings and evidence, the Court was of the view that BHPC was entitled to USD 33.78 million of compensatory damages and an additional USD 5 million to compensate for the increase in advertising and promotional expenses. Furthermore, the Court awarded Rs. 3.23 crore to BHPC for the cost of proceedings.

Thus, in total, the Court awarded BHPC Rs. 339.25 crore of damages and costs, to be paid by Amazon to the plaintiffs.

Case title: LIFESTYLE EQUITIES CV & ANR. vs. AMAZON TECHNOLOGIES, INC. & ORS (CS(COMM) 443/2020)

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