Reverse Passing Off Foreign To Indian Trademark Jurisprudence: Delhi High Court Rejects WD & Seagate’s Claims Against Refurbished HDD Sellers

The Court was hearing a batch of appeals filed by Western Digital Technologies Inc. and Seagate Technology LLC, global manufacturers of hard disk drives (HDDs), challenging the refusal of interim injunctions against entities engaged in importing end-of-life HDDs, refurbishing them after removing the original manufacturers’ trademarks, and selling the drives in the market under their own brands.

A Division Bench of Justice C. Hari Shankar and Justice Om Prakash Shukla, while stating that the “plea of 'reverse passing off’ is foreign to our trade mark jurisprudence, and does not clothe the appellants with an enforceable cause of action”, further explained: “Once Section 27(2) saves only the rights of action against a person for passing off goods or services as those of another person, and the Supreme Court has clarified that “passing off” involves misrepresentation, by one person, of his goods or services, as those of another, we cannot, by judicial fiat, expand the existing statutory rights by including a right of action against a person for misrepresenting goods or services of someone else as his own. That, clearly, is not “passing off”, and the appellants acknowledge as much by referring to it as “reverse passing off”. Section 27(2) does not save the right, if at all, against a person for misrepresenting goods of someone else as his own”.

Background

The appellants manufacture hard disk drives (HDDs), which are sold to original equipment manufacturers (OEMs) abroad for integration into computers and servers. These HDDs carry the appellants' registered trademarks and are supplied with a limited warranty period.

After the warranty expires, the equipment containing the HDDs is often discarded. The HDDs are then extracted from the systems abroad and imported into India.

The respondents in the case purchase such HDDs after import. They test the drives, return defective ones to suppliers, and refurbish functional drives. As part of this process, the original trademarks are removed, embedded software is erased, and the drives are reconfigured with new software, serial numbers and model numbers. The refurbished drives are then sold under the respondents’ own brand names.

The appellants instituted suits alleging that these activities amounted to trademark infringement, passing off, and “reverse passing off”, and sought permanent injunctions restraining the respondents from refurbishing and rebranding the HDDs.

A Single Judge refused to grant the injunction, permitting the sale of refurbished drives subject to disclosure requirements, which led to the present appeals.

Court’s Observation

The Division Bench of the Delhi High Court examined the controversy by analysing the statutory framework governing trademark infringement and the doctrine of exhaustion of rights. It noted the factual matrix that the appellants manufactured hard disk drives which were sold to OEMs abroad, integrated into equipment, and later extracted after expiry of warranty. These HDDs were imported into India and purchased by the respondents, who tested them, removed the appellants’ trademarks, reformatted the software, assigned fresh serial and model numbers, and sold the drives as refurbished products under their own brands. The Bench considered whether these activities amounted to infringement, passing off, or “reverse passing off” under Indian trade mark law.

Addressing the plea of “reverse passing off”, the Court held that such a cause of action is not recognised under Indian trade mark jurisprudence. It was observed that Section 27(2) of the Trade Marks Act preserves only the common law remedy against a person who passes off his goods or services as those of another. The provision does not contemplate a situation where a person misrepresents another’s goods as his own. The Bench therefore held that “plea of ‘reverse passing off’ is foreign to our trade mark jurisprudence” and that the Court could not expand the statutory framework by judicial interpretation to create a new cause of action.

The Court further observed that the ingredients of passing off were also not established on the facts of the case. Passing off, the court noted, necessarily involves misrepresentation leading the public to believe that the defendant’s goods originate from the plaintiff. In the present case, the respondents had removed the appellants’ marks and were selling the goods under their own brands. As such, there was no representation that the goods originated from the appellants. The Court also noted that there was no prima facie material demonstrating reputational harm or loss of goodwill to the appellants arising from the respondents’ activities.

Turning to the allegation of trademark infringement, the Bench analysed Sections 29, 30(3) and 30(4) of the Trade Marks Act. It emphasised that Section 29 is the only provision in the Act that defines infringement. Section 30, by contrast, merely limits the effect of registration and provides situations in which acts that might otherwise fall within Section 29 would not amount to infringement. The Court therefore clarified that unless the impugned conduct first satisfies the ingredients of Section 29, there is no occasion to invoke Section 30(3) or Section 30(4).

Applying this framework, the Court held that the respondents were not using the appellants’ trade marks in the course of trade. The HDDs were sold after removal of the appellants’ marks and were marketed under the respondents’ own brands. Since use of the registered mark is a foundational requirement for infringement under Section 29, the absence of such use meant that no prima facie case of infringement was made out. Consequently, the question of applying Sections 30(3) or 30(4) did not arise.

Even assuming Section 30(3) was relevant, the Court held that its requirements were satisfied. The HDDs had been lawfully acquired and placed on the market by the appellants or with their consent when they were sold to OEMs abroad. There was no evidence of any contractual prohibition on the resale of the HDDs after they reached the end-of-life stage, nor any statutory prohibition on their import into India. The Court also endorsed the principle recognised in Kapil Wadhwa v. Samsung Electronics that the expression “market” in Section 30(3) refers to the international market, reflecting the doctrine of international exhaustion of trade mark rights.

The Bench then examined Section 30(4), which allows the proprietor to oppose further dealings in goods where legitimate reasons exist, particularly where the condition of the goods has been changed or impaired. It held that the expression “changed” cannot be interpreted in its widest literal sense. Applying the principle of noscitur a sociis, the Court stated that “changed” must be read in association with “impaired”, meaning a change that negatively affects the condition or value of the goods. If the modification merely restores functionality or enhances utility without harming the proprietor’s goodwill, it cannot constitute a legitimate reason to oppose further dealings.

On the facts before it, the Court found that the respondents’ activities did not amount to such impairment. The respondents tested the HDDs, returned defective units, erased existing software, and refurbished functional drives before selling them under their own brands. These acts did not prejudice the appellants’ trade mark rights. The Court therefore held that Section 30(4) could not be invoked to treat the respondents’ conduct as infringing.

The Court also examined the legality of the importation and resale of the HDDs. It was observed that the appellants had not shown any contractual clause preventing OEMs from selling end-of-life drives or prohibiting their resale. Nor was there any law or policy prohibiting the import of such goods into India. The respondents had purchased the drives through legitimate commercial transactions supported by invoices and payment of GST. In these circumstances, the Court found no basis to treat the acquisition or refurbishment of the HDDs as illegal.

Finally, the Bench considered the operative directions issued by the learned Single Judge permitting the sale of refurbished HDDs subject to clear disclosures regarding the original manufacturer, the refurbished nature of the product, and the absence of the manufacturer’s warranty. The Court noted that these directions adequately addressed concerns of consumer transparency and did not warrant interference in appellate jurisdiction over an interlocutory order.

In conclusion, the Court held that the plea of reverse passing off was not maintainable, that the ingredients of passing off were absent, that no infringement within the meaning of Section 29 was established, and that even otherwise Sections 30(3) and 30(4) did not support the appellants’ case.

Conclusion

The Delhi High Court dismissed the challenge raised by the manufacturers and upheld the view that refurbishment and resale of end-of-life HDDs, subject to appropriate disclosures, do not constitute trademark infringement.

The Court held that the concept of “reverse passing off” is not recognised under Indian trade mark law, and declined to expand the statutory framework through judicial interpretation.

Cause Title: Western Digital Technologies Inc. & Anr. v. Geonix International Private Limited & Ors. and connected matters (Neutral Citation: 2025:DHC:1908-DB)

Appearances

Appellants: Advocates Pravin Anand, Saif Khan, Shobhit Agarwal, Shayal Anand, Prajjwal Kushwaha, Meghana Kudligi; Ranjan Narula, Shakti Priyan Nair, Parth Bajaj; Shwetasree Majumder, Prithvi Singh, Devyani Nath, Vanshika Singh

Respondents: Advocates Rashi Bansal, Saurabh Lal, Deepti Thapa; Dushyant K. Mahant, Vimlesh Kumar; Sidharth Chopra, Kanishk Kumar, Angad Makkar, Priyansh Kohli

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