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The Delhi High Court has instructed Amazon to pay $39 million in damages for infringing the trademark of ‘Beverly Hills Polo Club’, according to a report by Bar and Bench. The brand’s parent company, Lifestyle Equities, sued Amazon in 2020, alleging the platform sold products with copied logos misrepresented as ‘Beverly Hills Polo Club’ products.
Timeline of events:
2020:
Amazon Seller Service’s lawyers argued that this was not the first time Lifestyle Equities had filed a court case against it for trademark infringement. In a 2018 case between the two parties, the Delhi High Court instructed Amazon to take down URLs of all the products that violated the Beverly Hills Polo Club logo trademark. This included both the infringing products that Lifestyle Equities had flagged in its 2018 lawsuit and any new ones that might crop up over time. Amazon Seller Service said that since the original order still covered it, the new lawsuit was “mala fide”.
Similarly, Cloudtail (which was previously partly owned by Amazon) mentioned that it would further investigate the matter and take down any further listings appearing either on the seller or any other platforms. To this, Lifestyle Equities argued that the company selling these products (Amazon Technologies) on Amazon Seller Services in the 2020 case was not part of the 2018 lawsuit. As such, the court granted Lifestyle Equities an ex-parte ad interim injunction (granted without the presence of the opposing party), temporarily restraining the Amazon group company from selling, or advertising products that infringe on Beverly Hills Polo Club’s trademark.
2022:
In August 2022, the Delhi High Court ordered Amazon Seller Services to disclose all sales that its group company made of products with Beverly Hills Polo Club’s trademark. It mentioned that Amazon “in its claimed position as only an intermediary, can claim no confidentiality on such sale figures.” It also asked Amazon to disclose its relationship with Amazon Technologies, besides the fact that they share a common holding company.
In September, Cloudtail said that it is “willing to suffer a decree of injunction and also for paying reasonable damages” to Lifestyle Equities. The company’s lawyer urged the court to refer the two parties to the Delhi High Court Mediation and Conciliation Centre for exploring the possibility of arriving at an amicable settlement.
2023:
While Cloudtail and Lifestyle Equities went to the mediation and conciliation centre, the efforts ended up unsuccessful. In 2023, Cloudtail’s lawyers argued that it has not used the Beverly Hills Polo Club trademark since 2020. They mentioned that any sales of trademark-infringing products took place between 2015 and July 2020 and that Cloudtail made almost Rs 24 lakh (Rs 23,92,420) from them with a profit margin of 20%.
The company’s lawyers urged the court to award damages based on these figures. They added that the court should hold Cloudtail solely responsible for the damages. This is because Amazon was not involved in its decision to sell trademark-infringing products. The lawyers argued that under the agreement between Amazon and Cloudtail, the latter is liable to indemnify Amazon for any loss arising from any breach on its part. The court acknowledged Cloudtail’s responsibility and granted Lifestyle Equities Rs 4,78,484, which is 20% of the profit from the infringed products based on Cloudtail’s sales figures. However, it also added that Lifestyle Equities could not be denied the opportunity to seek damages from Amazon Technologies.
Amazon Seller Service argued that the court should remove them from the lawsuit since Lifestyle Equities has not demanded any relief from them. The court acknowledged their role as an intermediary and did so.
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Why it matters:
Amazon and Cloudtail have previously been in hot water for the products they sell. In 2021, Reuters investigated Cloudtail and its fellow Amazon retailer Appario account, both of which together contributed nearly 35% of the company’s sales revenue. The investigation revealed that Cloudtail and Appario were preferred merchants receiving discounted fees and exclusive deals with major tech manufacturers such as Apple Inc.
Similarly, yet another Reuters investigation from that year found that Amazon and Cloudtail made knockoffs of top-selling products using data that other sellers do not have, fundamentally giving it an advantage over competitors.
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