Indian courts rule on trademark use and auction sale validity

The Supreme Court of India and the Delhi High Court have issued significant rulings regarding trademark use in second-life markets and the validity of auction sales in debt recovery proceedings.

In a case involving Western Digital and Seagate hard drives, the Delhi High Court held that refurbishers who remove original marks before resale do not constitute “use” of the registered trademarks under the Trade Marks Act, 1999. The court also applied the principle of international exhaustion to genuine imported drives bearing original marks. The Supreme Court subsequently dismissed Western Digital’s special leave petition regarding this matter.

In a separate ruling, the Supreme Court clarified that the failure to serve a statutory notice does not automatically void an auction sale conducted during debt recovery proceedings. In the case of Sheela Gehlot v. Mohini Hardayal Singh & Ors., the Court ruled that if an affected party has actual knowledge of the proceedings and cannot prove substantial injury, the sale remains valid. This decision addresses the interplay between the Code of Civil Procedure and the Recovery of Debts Due to Banks and Financial Institutions Act.