Delhi HC Rejects Snapdeal’s Plea For Injunction In Trademark Infringement Case

The Delhi High Court on Tuesday refused the IPO-bound Snapdeal’s plea seeking temporary relief against domain name registrars (DNRs) in a trademark infringement case.

The ecommerce startup asked for the suspension of all registrations granted by these DNRs, alleging that these DNRs infringed its trademark, ‘Snapdeal’.

Snapdeal had argued that third parties not associated with it are registering domain names with its trademark, and are engaging in illegal activities such as lucky draws.

However, the court said that it can’t restrict these DNRs from granting the said registrations under the trademark ‘Snapdeal’ since not all the alternatives to the domain name will necessarily be infringing in nature.

It is prudent to note here that a DNR handles the reservation of domain names and also assigns IP addresses for these domains.

The Delhi HC also added that DNRs are responsible for making sure that the alternative domain names they offer do not infringe on any registered trademarks. Also, the high court added that if DNRs provide brokerage for deceptively identical names, they will be charged with trademark infringement.

Therefore, in a sense, the High Court held the DNRs responsible for ensuring that the domain names they offer do not infringe on a company’s trademarks.

A Snapdeal spokesperson, talking with Mint, said that the IPO-bound startup was pleased with the same.

“The court has come to the conclusion that DNRs cannot claim safe harbour protection in such cases,” the Snapdeal spokesperson said.

Snapdeal, in its petition, had sought an injunction against the DNRs from offering any domain names that contained its trademark, that is, the word ‘Snapdeal’.

A single-judge bench of Justice C. Hari Shankar refused the same, stating that the court cannot pass an order to operate in future, as that would be attributing the court a “clairvoyance that it does not possess”.

The court added that Snapdeal would have to necessarily petition the court against each domain name that it perceives as an infringement.

“This may be a long and cumbersome exercise. It cannot be helped. There is no shortcut to justice,” Justice C. Hari Shankar added in his judgement.

Snapdeal joined the list of startups waiting to go public in 2022. It has filed its draft red herring prospectus (DRHP) for a fresh issue of shares worth INR 1,250 Cr and an offer for sale (OFS) of 3.07 Cr shares by existing investors in December 2021.

It includes an offer for sale by existing investors of up to 30,769,600 equity shares.

In FY21, the Delhi-based ecommerce startup reduced its loss by 54% in FY21. Snapdeal witnessed a total loss after tax worth INR 125.4 Cr for the year ended March 31, 2021. In FY20, it posted a loss of INR 273.5 Cr.

Its total income during the fiscal was INR 510.2 Cr, 44.3% down from the INR 916.6 Cr it posted in FY20.

In partnership with Bank of Baroda Financial and NPCI, Snapdeal will launch a co-branded RuPay credit card, joining Flipkart and Amazon in the co-branded credit card scene.