Why Did Delhi HC Issue New Guidelines for Sale of Used Hard Disk Drives?

Why Did Delhi HC Issue New Guidelines for Sale of Used Hard Disk Drives?

The Delhi High Court has recently issued several guidelines concerning the sale of pre-owned and rejuvenated hard disk drives (HDDs).

Justice Anish Dayal emphasized that the packaging of refurbished products must prominently display the name of the original manufacturer. However, this should be done in a way that does not mislead customers into believing that they are purchasing the original product itself.

The Court specified that any mention of the plaintiffs (original manufacturers) should be made using their word marks, such as "Seagate" or "WD," as applicable. The defendants are prohibited from using the plaintiffs' logos to prevent any potential deception of consumers.

Additionally, the Court mandated that a clear statement must be included to inform consumers that there is no manufacturer's warranty or service available for the product.

Justice Dayal emphasized that these directives must be adhered to by entities selling refurbished HDDs across all platforms, including promotional literature, websites, e-commerce listings, brochures, and manuals.

The Court issued these directives while addressing a series of lawsuits brought by Seagate Technology LLC and Western Digital Technologies Inc against several entities involved in the sale of refurbished HDDs. The defendant companies named in the suits included Daichi International, Consistent Infosystems Pvt Ltd, Geonix International Pvt Ltd, and Cubicor Information Systems Pvt Ltd.

Seagate and Western Digital argued that their HDDs, while becoming unserviceable over time, still retained functionality. They claimed that consignments of these end-of-life HDDs were refurbished globally by various entities and sold to consumers. The process involved importing the end-of-life HDDs to India, where they were refurbished, rebranded, and sold with an extended warranty.

The plaintiffs contended that the removal of their brand names from the refurbished HDDs constituted impairment, which was not allowed under Sections 30(3) and 30(4) of the Trade Marks Act, 1999.

However, the High Court noted that Seagate and Western Digital failed to demonstrate any rule, regulation, or policy prohibiting the import of discarded HDDs into India. Justice Dayal stressed that as long as refurbishers provided full disclosure about altering or removing original marks from the HDDs and the refurbished product did not resemble the original, consumers were adequately informed about their purchase.

Consequently, the Court dismissed the interim relief application filed by Seagate and Western Digital.

Advocates Ranjan Narula, Shivangi Kohli, and Aishani Singh represented Seagate Technology, while advocates Pravin Anand, Saif Khan, Shobhit Aggarwal, Prajjwal Kushwaha, and Meghana Kudligi appeared for Western Digital Technologies. Advocate Hemant Singh served as amicus curiae, assisted by advocates Mamta Rani Jha, Manish Kumar Mishra, Anubhav Chhabra, Saloni Kasliwal, and Rahul Choudhary.

Daichi International was represented by advocates Rashi Bansal, Saurabh Lal, Kriti Garg, and Tesu Gupta, and Consistent Infosystem was represented by advocates Dushyant K Mahant and Vimlesh Kumar.

Case Title: Seagate Technology LLC v Daichi International + connected matters

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