The Court observed that refurbished, second-hand, pre-owned goods exist in most countries of the world since they cater to a different market, that of a lesser paying customer. Once the warranty on these products manufactured by OEMs has expired, they are not liable for any repair or servicing from the manufacturer. This is where the principle of exhaustion comes into play and therefore, under Section 30(3)(b), the registered owner/ manufacturer has no right to object to any dealing.
The Court emphasised that ‘full disclosure’ was necessary to prevent the loss of reputation and goodwill of the manufacturer and also to ensure that the customer is fully aware of the goods that they are purchasing.
To achieve this, the court passed the following directions for sale of refurbished goods:
(i) Packaging to identify the source of the product: The packaging of the refurbished product is to indicate the name of the original manufacturer/ plaintiff. It should be clear, but not dominating the packaging, so that the customer is not deceived.
(ii) Reference to the original manufacturer is to be made through their word mark and not the device mark: The Defendants should use the word mark of the plaintiffs.
(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 on the product.
(iv) Packaging must specify that the product is “Used and Refurbished’: A prominent statement on the front of the packaging to the effect that the product is “Used and Refurbished” by the concerned defendants.
(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 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 misinform 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.
Source: Barandbench
