[This post is co-authored with Tejas Misra. Tejas is a third-year law student at National Law University, Delhi, and is interested in the evolution of IPR law and its growth in India. His previous posts can be accessed here.]
On 21st August 2024, the Delhi High Court in Louis Vuitton Malletier v. www.haute24.com & Ors. issued a significant order directing for a permanent injunction and INR 5,00,000 as damages to Louis Vuitton for the unauthorized use of the brand’s copyrighted photos and promotional materials on the website http://www.haute24.com. With this Louis Vuitton seems to have struck a jackpot as it managed to restrain Haute24 from selling its products in a copyright dispute over its advertisement material. Haute24 is an online e-commerce platform whose stated aim is to make luxury apparel from the US and Europe affordable for the Indian market (see here). This case is remarkable for acknowledging the artistic merit of photographs used for promotional purposes, recognizing them as “artistic works” under the Indian Copyright Act, but is also extremely brutal in terms of lack of clarity and overreach.
Background
The plaintiff in the present case, Louis Vuitton, filed a suit for copyright infringement seeking an injunction and damages against Haute24 for offering Louis Vuitton’s products for sale, using certain photographs and images the copyright of which were owned by Louis Vuitton.
Louis Vuitton submitted that these were specially commissioned works used for advertising and marketing their products, and were being used without authorization by the defendants. Further, they had doubts as to the genuineness of the products being sold on the website. Haute24 contended that they had been involved in selling the genuine products of Louis Vuitton, as well as certified “pre-owned” products (implying that they were previously owned before being resold). The Court noted that the genuineness of the products was not an issue before it, and the only issue was the utilization of photographs and images that were used by Haute24. Despite this, the Court not only passed a permanent injunction restraining Haute24 from using the photos and promotional material of Louis Vuitton, but it also directed Haute24 to conspicuously display that the goods sold by them were certified and pre-owned goods of the plaintiff. Further, the Court also held that the defendants shall not deal with any “new” products of the plaintiff except with written permission.
Due Protection to Advertisement Material
The Court has rightly acknowledged the artistic merit of commissioned photos for promotional purposes. The advertising industry has long moved from simply promotional material to producing a wide array of diverse media forms, opening new avenues for significant creativity and artistic talent. These include musical compositions, artwork, photographs and designs that all contribute to the making of an advertisement campaign. In Bright Lifecare Pvt. Ltd. vs Vini Cosmetics Pvt. Ltd. & Anr., (2022) the Delhi High Court held that advertisements can be protected under copyright law, provided that they are distinctive enough that their imitation would cause confusion amongst members of the public.
Luxury brands like Louis Vuitton invest heavily in creating high-quality marketing materials that reflect their brand’s prestige and exclusivity. Unauthorized use of these materials not only constitutes a direct violation of copyright law but also dilutes the brand’s image by potentially misleading consumers and reducing the exclusivity that these brands rely on, as well as impacting the brand’s ability to control its own marketing strategy. Platforms like Haute24, which buy products from original brand retailers in bulk and then sell them at discounted prices (see here), are involved in what is referred to as the “grey market”. This is the sale of products that are sold legally, but without the brand’s permission.
The Issue of Remedying Non Issue: Questioning the TM Oriented Remedies of the Court
What stands out as a sore thumb here is the overboard remedy by the Court about the declaration regarding “pre-owned” nature of Haute24’s goods and the requirement to obtain Louis Vuitton’s permission before selling any of its “new” products. This basically means that the Court has passed an injunction against Haute24 from selling Louis Vuitton’s products in a copyright infringement case pertaining to the latter’s promotional material!
While it could be true that Haute24 was selling Louis Vuitton’s products without any authorization, as pointed above, the Court acknowledged that the only issue here was about photographs and images of Louis Vuitton’s product used by Haute24. Despite this express ruling, the Court decided to impose these two conditions on the defendant. Was it because Louis Vuitton was apprehensive about the quality of Haute’s products? Or was it because the Court wanted to eliminate consumer confusion that could ensue from pre-owned or refurbished products? (For eg. the Seagate case discussed by Yogesh here and here). The order does not state any justification behind this.
Another problem with the decision is its lack of clarity on certain important facts. While the decision is just 3 pages long (a rarity among final judgements), it is not clear why it was passed without any trials? (Although on some research, one can see that previously, Haute24 had agreed to suffer an injunction (pdf), but this fact was not mentioned in the final order.)
Taking a step further, if we assume that an issue regarding the genuineness of Haute24’s products was framed by the Court, the requirement to make a declaration regarding “pre owned” nature of Haute24’s goods might go against the doctrine of exhaustion. The “doctrine of exhaustion” states that once a legitimate transfer or valid transaction of sale has taken place, then the owner of the intellectual property in question cannot control or prevent the further sale of the goods bearing the said intellectual property (more on this here). Therefore, the question pops up that once the goods have been lawfully procured, should the Court be imposing such conditions, especially when it’s not clear if these are refurbished or repaired goods as seen in the Seagate case?
This doctrine has been recognized under the TRIPS agreement and different nations have the discretion to make differing laws as to this doctrine. The Indian judiciary has recognized the principle of international exhaustion in Kapil Wadhwa and Ors. Vs. Samsung Electronics Co. Ltd. ( discussed here) and Warner Bros. v. Santosh V.G. (discussed here), where the Delhi High Court held that a party is allowed to import goods into the country and sell them to third-parties without infringing their intellectual property rights in India.
The reputation and goodwill of luxury brands depend on the image of opulence and prosperity that they surround themselves with, which is directly linked to the styles and designs of their products that uniquely associate it with that brand. Accordingly, their promotional pieces and photographs play a key role in dispersing this image to the public. Further, by legally enforcing the exclusive right to use their images, brands can ensure that only authorized sellers who comply with the brand’s pricing and presentation guidelines can use their official photos. Thus, the recognition under copyright allows brands to control their own brand identity. However, in doing right by these luxury brands, the Court seemingly has overstepped and ended up disposing of an issue which was not even disputed in the first place setting up a dangerous precedent in the already murky world of injunctions in the Indian IP regime.