Introduction
The case of Lifestyle Equities CV & Anr. v. Amazon Technologies, Inc. & Ors1.
represents a significant milestone in Indian trademark law, particularly concerning
intermediary liability in the digital age. The dispute arose when Lifestyle Equities CV,
owner of the “Beverly Hills Polo Club” (BHPC) mark, alleged that Amazon facilitated the
sale of products bearing a deceptively similar logo under Amazon’s private label
“Symbol”. The plaintiff contended that due to their almost identical logo, Amazon was
able to successfully confuse the public and adversely impact the reputation and brand
equity of other competitors. The core legal issue resolved around whether Amazon’s
behavior amounted to willful infringement and how much damages the court should
grant. This is yet another case, often considered a landmark one, regarding online
systems and marketplaces seeking international brand protection from stakeholder’s
world over for trademark infringements and disputes over property rights.
Background
Lifestyle Equities CV (LECV) and its licensee Lifestyle Licensing BV (LLBV) own and
license the BHPC trademark globally, including in India since 2007. BHPC’s brand
image, associated with luxury and premium products, has substantial goodwill
internationally and domestically.
In 2020, the plaintiffs discovered that products bearing a logo deceptively similar to their
BHPC mark were being sold on Amazon India under the “Symbol” brand. The products
were sold by Cloudtail India Pvt. Ltd. (a major Amazon retailer) and facilitated by
Amazon Seller Services Pvt. Ltd., which operates Amazon.in.
Plaintiffs claimed that Amazon facilitated the selling of counterfeited products which had
the same or closely matched logo of BHPC. This made it possible for consumers to be
duped into buying counterfeit items without their knowledge. This infringement caused a
loss in the company’s finances and reputation which resulted in increased expenditure
on marketing in order to rebuild their credibility with the consumers
Essentially, the Plaintiffs claimed this unauthorized use on Amazon’s platform resulted
in significant financial losses, brand dilution, and increased marketing costs to repair
reputational damage. They argued Amazon’s involvement went beyond that of a
passive intermediary, thereby making it liable for trademark infringement.
On the other hand, Amazon contended that it was simply a marketplace that acted as a
conduit for independent vendors like Cloudtail and, accordingly, was not liable for
infringement of trademark by other vendors. Moreover, Amazon contended that
indemnification clauses shielded it from liability.
But the court had to decide whether Amazon knew about the infringement and whether
Amazon took sufficient steps to mitigate those activities.
Issue and Held
Whether Amazon knew about the infringement and whether Amazon took sufficient
steps to mitigate those activities. In other words, whether Amazon’s behavior amounted
to willful infringement?
Upon reviewing the facts of the case before it, the Delhi High Court thoroughly
examined the evidence and ruled in favor of Lifestyle Equities CV.
Court’s Analysis
The court applied the “Triple Identity Test,” which evaluates (1) the infringing mark’s
similarity with the registered mark (2) whether products offered are of the same class
and (3) whether the distribution channels and clientele are the same.
The court found Amazon’s conduct to be more than that of a passive platform. The court
held that Amazon’s system enabled the sale of products with an infringing logo that was
clear and deceptive and that caused economic loss to Lifestyle Equities CV. The court
also noted that the availability of these fakes at such low prices on Amazon’s site has
severely harmed the sales of BHPC in India, resulting in the brand’s equity erosion. The
decision confirmed that Amazon knew of the infringement but did not undertake any
action to diligently control it, thus incurring liability for damages.
Amazon Technologies Inc., owner of the “Symbol” brand, had licensed it to Cloudtail
under an agreement that included strict control over branding and distribution. This,
combined with Amazon’s failure to act on known infringement, led the court to determine
that Amazon was directly liable. The court emphasized that intermediaries cannot
escape liability by simply acting as a conduit when they actively participate in and
benefit from the infringing activity.
Amazon’s direct involvement in branding, pricing, and sales, coupled with knowledge of
the infringement, negated the safe harbor protection typically granted to intermediaries
under Indian law.
Damages Awarded
The court awarded compensatory damages totaling USD 38.78 million (approx. INR
336.02 crores) to the plaintiffs. This included:
USD 33.78 million (INR 292.70 crores) for lost licensing revenue based on
projected and minimum sales figures as per the Trademark License Agreement.
USD 5 (INR 43.32 crores) million for additional marketing costs incurred due to
reputational damage.
The court rejected the claim for punitive damages, applying the principles in Rookes v.
Barnard 2, noting that such damages require stricter evaluation. Additionally, Amazon
was directed to pay INR 3.23 crores towards the plaintiffs’ legal costs.
This was done in the light of several legal doctrines such as the compensatory principle
which states that damages serve the purpose of putting the plaintiff in the position they
intended to be in before the infringement took place. The court also considered the
principle of burden of proof which serves as the basis of granting some room to the
plaintiff on the estimation of the damages especially bearing in mind the peculiar
character of the case. Reasonable royalties were confirmed based on licensing
agreements and strategic business plans, thereby ensuring that the damages awarded
were valid. Nonetheless, assumption regarding damages on account of an undelivered
IPO was rejected along with many other claims as there was insufficient material to
support them.
Our Analysis
Through this judgement, the court had made it clear that e-commerce sites cannot
escape liability for trademark violations by simply serving as middlemen. This judgment
has broad consequences, validating the significance of intellectual property rights and
establishing a robust precedent for subsequent cases.
The ruling emphasizes the greater burden on e-commerce sites to ensure that they do
not allow the sale of counterfeit goods. Online marketplaces such as Amazon cannot
hide behind indemnification clauses anymore and will need to be proactive in monitoring
and preventing trademark infringement.
The ruling also hints at greater financial risks for infringers, as substantial damages are
likely to be imposed in future cases in this area. In addition to this, the judgment acts as
an encouragement to proprietors of brands to sue for unauthorized use of trademarks,
enhancing intellectual property enforcement across the globe.
The ruling follows international trends in enforcing intellectual property, with other cases
being determined similarly in the UK, US, and EU. The UK Supreme Court’s ruling in
Lifestyle Equities v. Amazon UK Services Ltd3., also established that e-commerce
platforms are responsible for trademark infringement. Similarly, United States courts in
recent cases have put growing scrutiny on online marketplaces in relation to
counterfeiting sales and trademark infringement. The European Union has also made
stricter rules demanding that e-commerce platforms act proactively against intellectual
property infringement. With e-commerce on the rise, companies need to be more
careful in defending their trademarks, while online retailers need to adopt tougher
compliance procedures to ban counterfeit sales.
Conclusion
The Lifestyle Equities CV v. Amazon Technologies case is a watershed moment for IP
enforcement in digital commerce. It sends a clear message: e-commerce platforms
must not enable counterfeiting and infringement, and if they do, they will face
substantial legal and financial consequences. The case encourages brand owners to
enforce their rights rigorously and signals that intermediary liability will be strictly
assessed in future IP disputes. With digital marketplaces expanding globally, this ruling
is likely to influence policy reforms and judicial reasoning worldwide.