Introduction:
In the significant judgment of Western Digital Technologies Inc. & Anr. v. Hansraj Dugar, cited as 2025 LiveLaw (Del) 571 in CS(COMM) 586/2019, the Delhi High Court reaffirmed the legality of parallel imports in India and laid down the parameters within which such imports can be made, especially when the goods involved are second-hand or end-of-life products. The plaintiffs, Western Digital Technologies Inc. and its associate entity, brought a suit alleging intellectual property infringement against the defendant, Hansraj Dugar, who had imported hard disk drives (HDDs) bearing the trademark of Western Digital. Justice Amit Bansal, presiding over the matter, drew heavily on past jurisprudence, particularly Kapil Wadhwa v. Samsung Electronics Co. Ltd. and Seagate Technology LLC v. Daichi International, to reiterate that importers are entitled to lawfully import and resell genuine goods bearing a registered trademark as long as the original condition is maintained and appropriate disclosures are made.
Arguments of both sides:
The plaintiffs contended that the defendant’s actions amounted to infringement of their trademark rights under Section 29(6) of the Trade Marks Act. They asserted that the HDDs were being imported into India without their authorisation and that the goods bore the plaintiffs’ trademarks, which thereby created a likelihood of confusion among Indian consumers. They claimed that such unauthorised import violated their intellectual property rights and diminished their ability to control the quality and distribution of products bearing their trademark in the Indian market. Additionally, they submitted that the goods lacked proper after-sales support and warranties typically associated with original purchases from authorised dealers.
The defendant, Hansraj Dugar, countered by claiming that the products had been lawfully purchased from the Original Equipment Manufacturer (OEM) abroad. He argued that the goods were genuine and not counterfeit, and that he was merely exercising his right to trade under the principle of international exhaustion of rights. This principle, which is rooted in Section 30(3) and (4) of the Trade Marks Act, recognises that once a product bearing a registered trademark is lawfully sold anywhere in the world, the trademark owner’s rights over the further sale or resale of that product are exhausted. The defendant further relied upon a 2012 CBEC Circular that expressly permits parallel import of genuine goods, and stressed that he had never misrepresented the origin or condition of the products. He also cited the cases of Kapil Wadhwa and Daichi to bolster his claim that such imports were lawful as long as disclosures were made to consumers indicating the goods were second-hand and that warranties from the original manufacturer did not apply.
Judgement:
The High Court acknowledged the validity of the defendant’s arguments, observing that the plaintiffs had not submitted any legal provision or regulation barring the import of second-hand HDDs. Justice Bansal made it clear that as long as the condition of the imported goods was not impaired or altered, and no deception was practised on the consumer, the act of importing and selling such goods did not constitute an infringement. He emphasised that the principle of international exhaustion was well recognised in Indian jurisprudence, particularly through the precedent established in Kapil Wadhwa, which permitted the sale of imported printers as long as clear signage was used to inform consumers about the lack of manufacturer-backed warranties and services.
Justice Bansal further expanded upon this principle by citing the 2024 decision in Seagate Technology LLC v. Daichi International, where the court had permitted the import and resale of refurbished goods. He observed that this decision extended the logic of Kapil Wadhwa to refurbished and end-of-life products and ruled that there was no prohibition under Indian law against the import of discarded or used HDDs. Importantly, he clarified that even the sale of such goods to refurbishers was not prohibited, and what mattered was that adequate disclosure was made to the end consumer.
The Court took note of the fact that the seized goods had never reached the defendant, as they had been intercepted by customs authorities. In light of this, Justice Bansal ordered the release of the goods currently held by the Customs to the defendant. However, the Court was careful to specify the conditions under which such goods could be resold. If sold in the same condition as imported (i.e., without refurbishment), the defendant had the right to do so as long as proper disclosures were made regarding the absence of manufacturer warranties. In cases where the goods were refurbished before resale, the more detailed disclosure norms laid down in Daichi would be applicable. This includes informing consumers not just about the absence of warranty but also the refurbished nature of the product.
The judgment, thus, settled the issue of whether parallel imports and resale of trademarked second-hand goods were permissible under Indian law. By affirming the international exhaustion doctrine, the Court acknowledged the right of Indian traders to participate in the global market, provided transparency and consumer awareness were maintained. It also struck a balance between the rights of trademark owners and the interests of consumers and secondary market participants.
The ruling also tackled the plaintiff’s contention that Section 29(6) of the Trade Marks Act mandates that use of a registered trademark in connection with import constitutes infringement. While the Court acknowledged this reading of Section 29(6), it clarified that this is not an absolute rule and must be read harmoniously with Section 30(3) of the same Act. Section 30(3) provides a statutory defence against claims of infringement where the imported goods are genuine, lawfully acquired, and sold without any misrepresentation. In effect, Section 30(3) acts as a safeguard that permits the sale of trademarked goods that were legally acquired abroad, even if the trademark holder has not authorised the particular import.
This nuanced understanding of the Trade Marks Act enabled the Court to uphold the legality of parallel imports while ensuring that the legitimate concerns of trademark holders were not disregarded. The requirement for full and honest disclosure was reiterated as the central pillar upon which such imports rest. The Court also emphasised the importance of consumer rights, noting that as long as consumers are informed about the nature of the products—whether refurbished or second-hand—and the absence of official warranties, there can be no claim of deception.
In this light, the Delhi High Court’s ruling can be seen as an endorsement of open market principles, allowing genuine products to move across borders without undue restrictions, while still safeguarding brand integrity and consumer interests. The Court’s approach harmonises statutory interpretation with economic realities and provides a clear framework for traders operating in the grey markets or engaging in parallel imports.
The judgment also reiterates the importance of harmonising domestic laws with international trade practices, especially in a digital and globalised era. By relying on the principle of international exhaustion, the Delhi High Court has affirmed India’s commitment to lawful trade practices that do not unreasonably stifle commerce. It also draws attention to the necessity for manufacturers to maintain a flexible strategy when it comes to global distribution of their goods, as they cannot indefinitely control the downstream flow of their products once lawfully sold.
In conclusion, this landmark judgment underscores that intellectual property rights are not absolute and must be interpreted in a manner that balances the proprietary rights of trademark holders with the legitimate rights of traders and the interest of consumers. As long as full disclosure is made and there is no attempt to pass off refurbished or second-hand goods as new, the resale of such products—even when imported without the trademark owner’s permission—will not amount to infringement. This decision provides legal clarity and will have a significant impact on parallel importers, grey market traders, and e-commerce platforms operating in India.