Delhi HC Allows Import, Sale of Second-Hand Trademark Goods with Conditions

The Delhi High Court, recently, held that any Indian entity can lawfully import and sell second-hand goods bearing the trademark of another entity, provided certain conditions are met. The court, highlighting the principle of international exhaustion under Sections 30(3) and (4) of the Trade Marks Act, emphasized that there is no legal prohibition on importing discarded or end-of-life goods into India, and such goods may be lawfully imported and resold, provided there is no misrepresentation regarding their warranty, usability, remaining lifespan, or related aspects.

The bench of Justice Amit Bansal, relying on the cases of Kapil Wadhwa v Samsung Electronics [2012:DHC:6136:DB] and Seagate Technology LLC v Daichi International [2024:DHC:4193], held that “Any person in India has the right to legally import goods from abroad bearing the trademarks of an entity and sell the same in India. The principle of international exhaustion is duly recognized under Section 30(3) and 30(4) of the Trade Marks Act. The only caveat which the aforesaid judgments seek to place on such importers is that there should be a complete disclosure as to the facts that the goods are second hand goods and are not covered by the original manufacturer’s warranty”.

Following the plaintiffs' complaint, the court issued an interim injunction restraining the defendant from dealing in the allegedly infringing goods and appointed a Local Commissioner. On 29th October 2019, approximately 7,500 HDDs were seized from a customs warehouse. Despite mediation attempts, the matter proceeded to litigation.

The defendant, represented by Advocate Sidharth Chopra, contended that the HDDs were genuine, lawfully imported, and second-hand goods acquired after paying all duties. Relying on a 2012 circular from the Central Board of Excise and Customs, the defendant asserted that parallel imports of genuine goods were permitted even without the trademark holder’s consent.

The plaintiffs, represented by Advocate Shwetasree Majumder, argued that the goods were not meant for retail but for OEM use and that some drives were non-functional. It was further claimed that unauthorized resale would mislead consumers and harm their reputation, asserting that compliance with domestic laws like the Legal Metrology Act was lacking. It also raised concerns about being unfairly burdened with implied customer support obligations.

The defendant rebutted these claims by citing the Daichi (Supra) judgment, which permitted the resale of refurbished goods under the principle of international exhaustion. It was emphasized that the goods had not been tampered with, were lawfully acquired abroad, and would be sold with full disclosure of their second-hand or refurbished status.

The court examined the case of Kapil Wadhwa (supra) that upheld the legality of parallel imports under Section 30(3) of the Trade Marks Act, provided the goods were unaltered and disclosed as not covered by the manufacturer's warranty.

The court held that even refurbished trademarked goods may be lawfully imported and sold if proper disclosure is made. The court clarified that there was no restriction under Indian law on the import of such second-hand goods, and the plaintiffs had not disputed their genuineness. The court held that the defendant was allowed to import and sale of genuine second-hand goods bearing the plaintiffs’ trademarks, subject to adequate disclosure.

The court further outlined, “In case the defendant wishes to resell the imported goods without refurbishment, the defendant would be free to import second-hand goods or ‘end-of-life’ goods bearing the trademarks of the plaintiffs, while adhering to the disclosure norms in Xerox Corporation v. Shailesh Patel, CS (OS) 2349 of 2006 as set out above. However, in the event the goods are refurbished and subsequently sold in the market, the disclosure norms given in paragraph 116 of Daichi (Supra) would apply mutatis mutandis in respect of goods imported by the defendant and sold after refurbishment”.

For the HDDs already lying in customs since 2019, the court permitted their release, provided the defendant filed an undertaking to sell them only as scrap after removing all branding. The defendant was also allowed to seek remedies related to demurrage charges. The court scheduled the matter for further hearing on September 15, 2025.

For Plaintiff: Advocates Shwetasree Majumder, Prithvi Singh and Devyasni Nath

For Defendant: Advocates Sidharth Chopra, Kanishk Kumar, Angad Makkar and Priyansh Kohli

Case Title: Western Digital Technologies Inc v Hansraj Dugar (2025:DHC:3844)