Guidelines regarding the sale of refurbished and used hard disk drives (HDDs) have been established by the Delhi High Court. According to HC’s directions, the original manufacturer’s name must be prominently displayed on the packaging, without misleading customers into believing they are purchasing the real product. The court issued the directives while handling a series of lawsuits brought by Seagate Technology LLC and Western Digital Technologies Inc. against several companies selling reconditioned HDDs.
The Delhi High Court has released directions on the resale of refurbished and used hard drives (HDDs). The court mandated that packaging have to clearly state the name of the original manufacturer while preventing deceiving the consumer into believing they are purchasing the original product. The device must clearly say that there is no warranty or service from the manufacturer, according to a mandate from the court.
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When selling refurbished HDDs, companies should adhere to the guidelines on brochures, manuals, websites, e-commerce listings, and advertisements. The directives were issued by the court in the midst of addressing several lawsuits that Western Digital Technologies Inc. and Seagate Technology LLC had filed against various companies that sold refurbished hard drives.
While used equipment is sold and destroyed worldwide, consignments of these end-of-life HDDs are repaired by various entities and sold to customers, according to Seagate and Western Digital. They also claimed that their HDDs remain functioning after a certain amount of time but become unusable.
According to what was said, various importers bring end-of-life HDDs into India, where they are resold to refurbishers who take off any branding such as Seagate or Western Digital. Then they clean and repackage the HDDs under their own brands, and offer them for sale as refurbished goods with an extended two-year warranty. These refurbished HDDs are said to be used for either assembled desktops or surveillance cameras.
“Seagate and WD allege that these end-of-life HDDs could not be sold as refurbished products since the removal of their brand name from the product amounted to impairment, which was not permitted as per Sections 30(3) and 30(4) of the Trade Marks Act, 1999 (“Trade Marks Act”).”
Plaintiffs’ counsel further claimed that the products were unique in that the Printed Circuit Board (“PCB”) colour and the silver plates on the HDDs were shaped differently. As a result, even in the absence of the manufacturer’s label, an industry insider could easily identify the manufacturer of the HDDs.
However, according to the Delhi High Court, Seagate and Western Digital were unable to produce any documentation that would have required them to follow any rules for the importation of used HDDs and equipment into India.
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Note that these suits were filed by Seagate Technology LLC (“Seagate”) and
Western Digital Technologies Inc. (“WD”) against Daichi International (“Daichi”), Consistent Infosystems Pvt. Ltd.(“Consistent”), Geonix International Pvt. Ltd. (“Geonix”) and Cubicor Information Systems Pvt. Ltd. (“Cubicor”).
Directions issued by the Delhi High Court for the sale of used Hard Disk Drives:
(i)Packaging to identify the source of the product: Packaging in
which the refurbished product is sold, will clearly indicate that the
HDD is manufactured by the concerned plaintiffs (Seagate or WD
as the case may be). This may be displayed in a manner not to
deceive the customer that the sale itself is of the original Seagate
or WD i.e. it should be clear, but not dominating the packaging.
(ii) Reference to the original manufacturer is to be made through
their word mark and not the device mark: Reference to the
plaintiffs should be through their word marks as in “Seagate” or
“WD”, as the case may be. Defendant shall not use plaintiffs’
logos, in order to not cause any deception to the consumer.
(iii) Packaging must specify that there is no original manufacturer’s
warranty: A clear statement must be made to the effect that there
is no manufacturers’ warranty or service by (Seagate or WD, as
the case may be) on this product.
(iv) Packaging must specify that the product is “Used and
Refurbished’: A prominent statement on the front of packaging to
the effect that the product is “Used and Refurbished” by the
concerned defendants (Consistent or Geonix or Daichi, as the case
may be)
(v) Statement as to extended warranty by the Refurbisher: A clear
and prominent message that the warranty or service of specified
years is being provided by the concerned defendants (Consistent
or Geonix or Daichi, as the case may be), along with customer
care details and contacts.
(vi) Packaging must reflect an accurate description of the features:
An accurate, truthful, precise description of features and purpose
of the refurbished product, without any misleading, half-truth,
deceptive, ambiguous statements (which could potentially mis-CS(COMM) 67/2024 and other connected matters 64 of 65
inform the consumer as to the features of the product and the
purposes for which it could be used).
(vii) All of the above should also be complied with by the defendants
on promotional literature, website, e-commerce listings,
brochures and manuals.
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