Western Digital HDD Import Dispute Decided

Introduction

In CS (COMM) 586/2019, the Delhi court on 16 May 2025 adjudicated a pivotal issue involving the importation of second-hand branded goods, trademark rights under the Trade Marks Act, 1999, and the legality of such imports under Indian law. The case revolved around the import of hard disk drives (HDDs) bearing the Western Digital trademark by Hansraj Dugar, trading as Supreme Enterprise, and their alleged infringement.

Facts of the Case

• Plaintiffs: Western Digital Technologies Inc. and its UK subsidiary.
• Defendant: Hansraj Dugar, who imported HDDs marked with Western Digital’s trademarks.
• Dispute: In September 2019, Customs Authorities alerted the plaintiffs about HDDs imported by the defendant under the WD mark.
• Findings: Upon inspection, the drives were found to be second-hand and allegedly misrepresented as “new and unused”.
• Reliefs Sought: Plaintiffs filed for a permanent injunction and seizure of the goods, which were inventoried and retained in Customs’ notional custody.

Key Legal Issues

1. Does the import of second-hand goods bearing a registered trademark constitute infringement under Section 29(6) of the Trade Marks Act?
2. Can a defendant rely on the defence of lawful acquisition and exhaustion under Section 30(3) and (4)?
3. Are full disclosures and proper packaging sufficient to avoid infringement claims for refurbished goods?

Plaintiff’s Arguments

• Goods were OEM-specific and not meant for retail.
• Drives were defective, misleadingly sold as new.
• Defendant could not prove lawful acquisition with required certifications.
• Referred to:
  • Kapil Wadhwa v. Samsung Electronics (2012)
  • Seagate Technology v. Daichi International (2024:DHC:4193)
  • Alleged misuse of trademark under Sections 29(2), 29(6), 30(4).

Defendant’s Contentions

• Goods were genuine and lawfully acquired from overseas OEMs.
• There was no misrepresentation—goods never entered the market as proceedings intervened.
• Relied on the doctrine of international exhaustion under Section 30(3).
• Referred to:
  • Kapil Wadhwa case
  • Daichi judgment, affirming right to import and sell refurbished goods with full disclosure.
  • Xerox Corporation v. Shailesh Patel – Disclosure norms for second-hand imports.

Court’s Analysis

Justice Amit Bansal held:

• The principles in Kapil Wadhwa and Daichi apply: importation and sale of second-hand goods is not barred, if disclosures are made.
• There was no evidence of misrepresentation or tampering.
• Plaintiffs could not produce any regulation prohibiting import of used HDDs.
• Trademark rights exhaust once genuine goods are placed in international market, subject to no impairment.
• Defendant’s goods, never having entered the market, did not infringe.

Orders Passed

• Ex parte injunction vacated.
• Goods to be released from Customs on the condition:
  • If sold as scrap, all Western Digital marks must be removed.
  • If refurbished and sold, follow Daichi disclosure norms.
• Defendant permitted to import similar goods in future, following disclosure requirements from:
  • Xerox case (for second-hand goods)
  • Daichi case (for refurbished goods).

Legal Takeaways

• Importing genuine, second-hand goods does not violate trademark law if disclosures are transparent.
• Trademark exhaustion is a valid defence under Indian law.
• Disclosure and consumer clarity are central to protecting brand reputation while allowing legitimate resale.
• The judgment provides clarity on navigating grey markets for refurbished electronic goods.

FAQs:

1. Can second-hand Western Digital hard drives be imported into India legally?

Yes, provided they are genuine, lawfully acquired, and proper disclosures are made.

2. Is selling refurbished branded products allowed?

Yes, if they are clearly marked as refurbished and not backed by the brand’s warranty, and no misleading branding is used.

3. What disclosures must sellers make for used branded electronics?

Sellers must mention that the products are second-hand or refurbished, and not warranted or serviced by the brand.

4. Does importing used goods automatically infringe trademarks?

No. Trademark infringement requires proof of misrepresentation or impairment. Lawful import and sale with disclosure is allowed.

5. What if the imported product is damaged or altered?

If the product’s condition is changed, the trademark owner may object. Refurbishers must clearly state the nature and condition of goods.

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