- Download a copy of the court order here.
IPO-bound Flipkart has landed in fresh legal trouble, with unauthorised third-party sellers allegedly exploiting its “latching on” feature to use an original manufacturer’s brand name and images in their own product listings without consent. The Delhi High Court recently observed that such conduct amounts to “passing off.”
What is driving the news? Shapermen, a men’s shapewear and compression garment brand, approached the Delhi High Court, alleging that Flipkart’s latching on feature allows sellers to ride “piggyback” on the goodwill, reputation, and commercial success of legitimate brand owners.
What is Flipkart’s latching on feature? Latching on is a practice in which third-party sellers add products under an existing brand listing and use photographs of that brand’s products in their own listings.
This can be done through the ‘Opportunities’ option under the ‘Listings’ tab on Flipkart’s seller platform.
How is Flipkart’s latching on feature detrimental for brands? Shapermen claimed in its lawsuit that by latching on to a popular brand’s product listing, an unauthorised seller can:
- Appropriate and misuse the brand owner’s trademark, product images, and product descriptions without permission.
- Offer cheap, counterfeit, and inferior-quality products under the guise of the legitimate brand.
- Benefit from the brand owner’s existing customer reviews, ratings, and search engine optimisation.
- Divert sales and customers away from the legitimate brand owner by offering products at heavily discounted and artificially low prices.
What does the suit allege? The complaint alleges that several third-party sellers were marketing their own products under the SHAPERMEN brand without authorisation.
According to the suit:
- The defendants copied and reproduced text and images of Shapermen’s original and copyrighted products in their own listings without permission.
- The sellers piggybacked on Shapermen’s listings to mislead customers into purchasing their own products.
- They appeared to offer purported Shapermen products at heavily discounted prices ranging from Rs 90 to Rs 230, compared to the plaintiff’s MRP of Rs 1,299, suggesting that the products were counterfeit and of inferior quality.
The company conducted test purchases in May and found that the products delivered through the impugned listings carried no SHAPERMEN branding, labels, tags, or inserts. It alleged that the sellers were using its brand name as “bait.”
Flipkart accused of being ‘complicit’ in passing off: The suit alleges that despite multiple complaints by Shapermen alleging third-party sellers were using its brand name and images for their own listings without consent, Flipkart failed and “neglected” to take any action.
According to the complaint, the e-commerce platform failed to fulfil its due diligence obligations as an…
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