Refurbishment and sale of end-of-life goods under new trademarks does not constitute infringement or passing off.

The Appellants (Western Digital and Seagate) manufacture Hard Disk Drives (HDDs) sold to Original Equipment Manufacturers (OEMs) for integration into computers.

Once these HDDs reach "end-of-life" (warranty expiry), they are extracted from discarded equipment abroad and imported into India.

The Respondents (refurbishers) purchase these HDDs, erase existing software, remove the Appellants' registered trademarks, affix their own brand names, assign new serial/model numbers, and sell them with their own warranties.

The Appellants sued for trademark infringement, passing off, and "reverse passing off".

The Single Judge allowed the sale of refurbished HDDs subject to strict packaging disclosures (identifying the original manufacturer but using only word marks, and stating the product is "used and refurbished").

The Appellants appealed, seeking a total injunction.

Whether the removal of the original manufacturer's trademark and replacement with the refurbisher's mark constitutes "reverse passing off" or is actionable under Indian Law.

Whether the sale of refurbished HDDs constitutes trademark infringement under Section 29, read with the limitations/exceptions in Sections 30(3) and 30(4) of the Trade Marks Act, 1999.

Whether the principle of "International Exhaustion" applies to "end-of-life" goods acquired from global markets.

The court primarily interpreted Section 29 of the Trade Marks Act, 1999, which defines infringement as the unauthorized use of an identical or deceptively similar mark in the course of trade.

It applied Section 30(3), which incorporates the principle of "International Exhaustion," limiting the proprietor's right to oppose further dealings in goods once they are lawfully acquired and put on the market.

It scrutinized the exception in Section 30(4), which allows a proprietor to oppose dealings for "legitimate reasons," particularly where the condition of goods is "changed or impaired".

The court also relied on the principle of noscitur a sociis to interpret "changed" as being of the same character as "impaired."

Key precedents included Kapil Wadhwa v. Samsung Electronics Co. (international exhaustion).

Satyam Infoway Ltd v. Siffynet Solutions (P) Ltd (ingredients of passing off).

Regarding "reverse passing off," the court held it is not a recognized tort in Indian trademark law, as Section 27(2) only saves actions for passing off one's goods as those of another, not representing another's goods as one's own.

Even if applicable, the "initial interest confusion" test failed because there was no proof consumers could identify the HDDs as the Appellants' at the point of sale once de-branded.

On infringement, the court found Section 29 inapplicable because the Respondents do not use the Appellants' marks in trade but rather remove them.

Consequently, Section 30(3) was satisfied because the acquisition from OEMs/importers was licit (no evidenced resale prohibition), and the "umbilical cord" between the manufacturer and the product was severed once the warranty expired.

The court rejected the Section 30(4) "impairment" argument, reasoning that making non-functional goods functional through refurbishment is a positive change, not a negative "impairment" that provides a "legitimate reason" for opposition.

It held that (i) "reverse passing off" is not an actionable tort under the Act.

(ii) refurbishment after effacing the original mark does not constitute infringement under Section 29.

(iii) the "International Exhaustion" principle protects the Respondents as the goods were lawfully acquired.

The court maintained the Single Judge's mandatory disclosure and packaging directions only because the Respondents did not appeal them.

Relief to release seized goods was granted subject to an undertaking to sell them only after removing the Appellants' marks.