With the rapid growth of the secondary market for refurbished, repaired and pre-owned products, Indian courts are increasingly being called upon to examine the extent to which trademark rights can control downstream commercial activities involving genuine goods. The rise of refurbishment businesses and the growing global emphasis on the ‘right to repair’ have created important legal questions concerning the balance between intellectual property protection, consumer interests, market competition and sustainability. In this context, trademark law is required to address issues relating to the resale of genuine goods, exhaustion of trademark rights, disclosure obligations, and the extent to which refurbishment or modification of products may affect the rights of trademark owners.
The Delhi High Court’s decision in Western Digital Technologies Inc. & Anr. vs Geonix International Pvt. Ltd. & Ors. [FAO(OS) (COMM) 146/2024, CM APPL. 39898/2024 & CM APPL. 39900/2024], marks an important step in Indian trademark law, especially regarding refurbished goods and the secondary market. The dispute arose when the plaintiffs claimed that the defendants, who were refurbishing and reselling “end-of-life” hard disk drives (HDDs), were infringing their registered trademarks and were also liable for passing off and “reverse passing off”.
The main issue in the case was the interpretation of Sections 29, 30(3), and 30(4) of the Trademarks Act, 1999. The Court treated Section 29 as foundational to the infringement analysis and clarified that Sections 30(3) and 30(4) operate only as limitations or defences to infringement otherwise established under Section 29. The Court stated that Section 29 is the sole provision that defines infringement, clarifying that unless an act falls within its scope, there can be no infringement in the first place. Sections 30(3) and 30(4), therefore, do not create independent grounds of infringement; rather, they operate as limitations or defences to what would otherwise constitute infringement.
The Court closely examined Section 30(3), which covers the doctrine of exhaustion of rights. It held that once goods bearing a registered trademark are lawfully acquired and have been put on the market by the proprietor or with their consent, the proprietor’s right to control subsequent dealings in those goods stands exhausted. This principle, as recognised earlier in Kapil Wadhwa vs Samsung, reflects India’s adoption of the international principle of trademark exhaustion. Consequently, downstream sale or dealing in such goods would not amount to infringement merely by virtue of the trademark subsisting on them.
The Court then turned to Section 30(4), which is an exception to the principle of exhaustion by permitting the trademark owner to oppose further dealings where there exist “legitimate reasons”, particularly where the condition of the goods has been changed or impaired. Importantly, the Court clarified that Section 30(4) does not, on its own, make an act infringing; it simply removes the protective shield of Section 30(3), and even then, the act must independently satisfy the requirements of infringement under Section 29. The Court interpreted the expression “changed or impaired” using the principle of noscitur a sociis, holding that the term “changed” must be read ejusdem generis with “impaired”. In other words, only such changes as negatively affect the condition, quality, or value of the goods, or harm the goodwill of the trademark proprietor, would qualify.
When applying these principles to the case, the Court found that the defendants had removed the plaintiffs’ trademarks from the HDDs and sold the refurbished products under their own brand. Due to this, the key element of ‘use’ of the registered trademark, as required by Section 29, was missing. Since the defendants did not use the plaintiffs’ marks in their business, the Court found there was no infringement from the outset.
The Court also rejected the argument that refurbishment damaged the goods. It noted that the defendants’ testing, repairing, reformatting, and reselling of the HDDs were intended to restore or even improve their usefulness. These actions helped keep the goods working and available. Accordingly, refurbishment was not viewed as a negative change that would trigger Section 30(4).
Another key consideration for the Court was whether the defendants had legally obtained the goods. Based on the evidence, including invoices and the absence of any contractual restriction on resale imposed by the plaintiffs, the Court found that the HDDs were lawfully purchased and imported. The plaintiffs had failed to show any illegality in the sale process. Therefore, the secondary market for refurbished HDDs was considered legal and protected by the exhaustion principle.
Regarding passing off, the Court found no proof of misrepresentation. The defendants sold the refurbished HDDs under their own brand, provided clear information, and made no attempt to suggest that the goods originated from the plaintiffs. In the absence of any likelihood of confusion or deception, the essential elements of passing off were not satisfied.
The Court also considered the plaintiffs’ claim of ‘reverse passing off’, which was based on the removal of the original trademarks and the sale of the goods as the defendants’ own. The Court clearly stated that reverse passing off is not recognised in Indian trademark law and does not constitute an independent cause of action. This observation is likely to have far-reaching implications for future disputes involving rebranded or refurbished goods.
The judgment also situates the case within a broader policy context, highlighting the growing support for the ‘right to repair’ and the role of refurbishment in making products more affordable and sustainable. The Court cautioned that an overbroad interpretation of trademark rights could stifle legitimate secondary markets and undermine consumer interests.
At the same time, the Court supported the need for ‘full disclosure’ to prevent consumer confusion. It upheld the directions issued by the Single Judge mandating that refurbished products must clearly disclose that they are used and refurbished, mention that the original manufacturer’s warranty is not included, and accurately describe their features and origin. Such transparency ensures that consumers are fully informed while preserving the integrity of the trademark system. The Court treated disclosure obligations as the mechanism through which trademark rights, consumer protection and refurbishment activities can be effectively balanced.
In conclusion, the decision balances the rights of trademark proprietors with the realities of modern commerce and secondary markets. The ruling strengthens the importance of trademark exhaustion, limits overbroad infringement claims and recognises the legitimacy of refurbishment activities, while simultaneously emphasising transparency and consumer protection.
Authors – Manisha Singh (Partner) & Kratika Patel (Associate)