Court affirms international exhaustion principle, rejects “reverse passing off” as a tort under Indian law, and allows sale of refurbished HDDs with mandated full disclosure to consumers
In a landmark judgment delivered on March 9, 2026, a Division Bench of the Delhi High Court, comprising Justice C. Hari Shankar and Justice Om Prakash Shukla, has clarified critical aspects of trademark law in the context of refurbished electronic goods. The case arose from appeals filed by Western Digital Technologies Inc. (WD) and Seagate Technology LLC (Seagate) against Geonix International Pvt Ltd, Daichi International, Consistent Infosystems Pvt Ltd, Hansraj Dugar, and others, relating to the import, refurbishment, and resale of end-of-life hard disk drives (HDDs) originally manufactured by the appellants.
The appellants contended that the respondents infringed their registered trademarks by removing original marks from the HDDs, refurbishing them, and selling them under different brands, further alleging passing off and a novel tort termed “reverse passing off.” They sought permanent injunctions restraining such activities.
The Court thoroughly analyzed the Trade Marks Act, 1999, particularly Sections 29, 30(3), and 30(4), and the principle of international exhaustion of trademark rights as expounded in the previous Delhi High Court ruling in Kapil Wadhwa v. Samsung Electronics Co. The judgment confirmed that:
- Trademark infringement under Section 29 requires “use” of the registered mark by the defendant in trade. Since the respondents removed the original trademarks and did not use any mark identical or deceptively similar to the appellants’ marks on the refurbished HDDs, no infringement occurred.
- Section 30(3) provides that lawful purchasers of goods bearing registered trademarks, who resell or otherwise deal with those goods, do not commit infringement if the goods were put on the market by the registered proprietor or with their consent. The Court held that the respondents lawfully acquired the HDDs, imported them into India, and the appellants had no contractual or statutory restriction preventing resale after the warranty period expired.
- Section 30(4) excludes protection under Section 30(3) if the goods’ condition has been changed or impaired after being put on the market. The Court interpreted “changed or impaired” narrowly, requiring a legitimate reason for the trademark proprietor to oppose further dealing, such as reduction in quality or goodwill. Merely removing trademarks and refurbishing to restore functionality does not amount to impairment.
- The Court rejected the appellants’ claim of “reverse passing off” - representing another’s goods as one’s own — as not recognized under Indian trademark law. Passing off requires misrepresentation of one’s own goods as those of another, and the Court found no evidence of misappropriation of goodwill or consumer confusion.
- The Court also emphasized consumer protection, mandating that refurbished HDDs be sold with clear packaging disclosures: the original manufacturer’s trademark may be mentioned only as a word mark (not logo), the product must be labeled “used and refurbished,” warranties by the refurbisher must be clearly stated, and no misleading statements should be made regarding the product’s features or condition.
The judgment dismissed the appellants’ appeals and upheld the directions allowing the respondents to continue refurbishing and selling HDDs under the stated conditions. The Court observed that such rulings support a vibrant refurbishing industry, provide affordable alternatives to consumers, and align with international trademark exhaustion principles.
The Court’s reasoning underscores that once original manufacturers’ warranty expires and goods reach “end-of-life,” the manufacturers’ control and goodwill claims over those goods diminish significantly. The judgment carefully balances intellectual property rights with consumer interest and market realities.
Bottom Line:
Removal of original registered trademarks from end-of-life hard disk drives (HDDs), refurbishing and resale under a different brand does not constitute trademark infringement or passing off under Indian law, provided there is no misrepresentation or impairment of goods; "reverse passing off" is not recognized as a tort in Indian trademark jurisprudence.
Statutory provision(s):
Trade Marks Act, 1999 Sections 27(2), 29, 30(3), 30(4), 103, 134, 135
