Amazon Tech gets breather as Delhi High Court stays damages award

The Delhi High Court granted Amazon Technologies Inc. (Amazon Tech) a stay on the operation of the decree awarding ₹336,02,87,000 (approx. USD 390 Million) plus costs for trademark infringement, highlighting serious procedural irregularities, lack of pleadings and evidence against Amazon Tech, and improper enhancement of damages. The judgment primarily deals with an application by Amazon Tech under Order XLI, Rule 5 of the Code of Civil Procedure (CPC), seeking a stay on the operation of the impugned judgment and decree dated February 25, 2025, which awarded damages of ₹336,02,87,000 (approximately USD 390 Million) plus costs against Amazon Tech.

Background and parties involved

Lifestyle Equities CV and Lifestyle Licensing BV (“Lifestyle”) filed the suit alleging infringement of its registered trademark (a horse device mark) associated with the “BEVERLY HILLS POLO CLUB.” Amazon Tech and related entities, Cloudtail India Pvt Ltd (“Cloudtail”), and Amazon Seller Services Pvt Ltd (“ASSPL”).

Amazon Tech owned the trademark SYMBOL and licensed its use to Cloudtail, which sold apparel bearing both the SYMBOL mark and the allegedly infringing device mark on ASSPL’s online marketplace.

Cloudtail was held liable for damages of ₹4,78,484 (approximately USD 5,500) in an earlier order dated March 2, 2023, and ASSPL was deleted from the suit as it was considered an intermediary.

Amazon Tech was proceeded with ex parte on April 20, 2022, due to the non-appearance of the parties, and the trial and evidence recording thereafter occurred in their absence.

Lifestyle contentions in support of the damages

Lifestyle argued that there were sufficient assertions in the plaint regarding the complicity of Amazon Tech in the infringing activities. They pointed out that Amazon Tech, Cloudtail, and ASSPL were closely related and interlinked, suggesting that they operated as a cohesive commercial entity.

The affidavit filed by ASSPL indicated that both Amazon Tech and ASSPL were subsidiaries of Amazon.com, Inc. This assertion was used to argue that the companies were part of the same group and should be held collectively responsible.

Lifestyle contended that the absence of Amazon Tech from the proceedings was deliberate. They argued that Amazon Tech had knowledge of the suit and chose not to defend itself, which should not absolve it of liability.

Lifestyle maintained that Amazon Tech was liable for the infringement of their trademark by using a logo similar to the “BEVERLY HILLS POLO CLUB” logo under the brand SYMBOL. They argued that they had presented evidence and expert testimonies to support their claim for damages.

Lifestyle argued that the damages awarded by the learned Single Judge were justified based on the evidence presented. They contended that the damages were calculated considering the lost royalties, increased advertising expenses, and the impact of the infringement on their brand.

Amazon Tech contentions in appeal

Amazon argued that there was no evidence or finding that Amazon Tech was engaged in any infringing activity. They maintained that, if any infringement had occurred, it was committed by Cloudtail, for which a suit had already been decreed against Cloudtail for ₹4,78,484 (approximately USD 5,500).

Amazon pointed out that Cloudtail had expressed its agreement to suffer a decree of injunction and damages. Cloudtail suggested that damages could be awarded based on the revenue earned by it by selling the allegedly infringing products, and learned Counsel for Lifestyle clearly stated that “for award of damages, aforenoted data is sufficient and no further evidence is required.”

Amazon highlighted a fundamental erroneous assumption in the impugned judgment, where it was recorded that “Defendant No. 1 is claimed to be the owner of the infringing logo/mark which is known by the name ‘SYMBOL’.” Amazon pointed out that this was incorrect, as Lifestyle never sought to contend that the infringing logo was known by the name SYMBOL.

Amazon argued that Lifestyle could not have enhanced the initially claimed damages to ₹3780 crores (approximately USD 439 million) merely by way of written submissions filed after evidence had been led. This constitutes a substantive change to the nature of the claim, which could only be effected by amendment.

Amazon contended that the finding of the learned Single Judge, that Amazon Tech, Cloudtail, and ASSPL “operate as a single commercial entity,” was outside the pleadings, as Lifestyle had set up no such case in its plaint.

Amazon argued that the reliance on the agreement dated December 23, 2015, between Amazon Tech and Cloudtail was entirely misdirected, as the said agreement only licensed Cloudtail the right to use the SYMBOL trademark and did not authorize Cloudtail to infringe any trademark, including the BHPC mark of Lifestyle.

Analysis and court’s observations on stay application

The court acknowledged the general principle that money decrees are not ordinarily stayed on appeal, and deposit of the decretal amount or security is required.

However, it found this case exceptional due to:

• The absence of any pleading or evidence linking Amazon Tech directly to the infringement. The court noted that there was no direct evidence linking Amazon Tech to the affixation of the infringing mark on the apparel sold by Cloudtail.
• The massive enhancement of damages without amendment or notice. The court noted that the damages awarded were significantly higher than those initially pleaded. The claim for enhanced damages was introduced in written submissions after the evidence was closed, which violated principles of natural justice, as Amazon Tech was not given an opportunity to contest this claim.
• The improper ex parte proceedings against Amazon Tech were due to a lack of proper summons service.
• The fact that the decree against Cloudtail for damages was already passed, and no separate liability for Amazon Tech was pleaded or proved. Cloudtail admitted that the decision to use the infringing mark was solely theirs and that Amazon Tech had no liability in the matter. This admission was significant in absolving Amazon Tech of direct involvement.
• The learned Single Judge’s findings on Amazon Tech’s complicity were based on presumptions and a misreading of the license agreement. The court observed that the license agreement between Amazon Tech and Cloudtail was misinterpreted. The agreement only licensed the use of the SYMBOL mark to Cloudtail and did not authorize the use of the infringing mark.

The court concluded that requiring Amazon Tech to deposit any part of the decretal amount would be a “complete travesty of justice” and granted a stay of the operation of the impugned judgment and decree against Amazon Tech, subject to an undertaking to comply with the damages, if the appeal fails.

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