Delhi HC orders Meta Platforms Inc., Telegram to block mobile numbers, delete groups, created to defraud people under mark ‘SEQUOIA, ‘SEQUOIA CAPITAL’

Delhi High Court: The present suit seeks to permanently restrain unauthorized use of plaintiff’s registered trade marks “SEQUOIA”, “SEQUOIA CAPITAL”, “”, “” etc. by Defendant 1, who was operating a fraudulent cryptocurrency trading and investment online gateway. Sanjeev Narula, J., restrained Defendant 1 or any person acting on their behalf, from using plaintiff’s registered “SEQUOIA” trade marks or its variations, as a part of their domain names, websites, mobile applications, social media handle names/profiles credentials/description, promotional/business activities on digital or print media, bank accounts and/or any business papers etc. in any manner that would amount to infringement of plaintiff’s trade marks.

Background

Plaintiff offered a range of investment services in various sectors, such as artificial intelligence, machine learning, cryptocurrency, healthcare, fintech, e-commerce, edtech, telecom etc., under the brand name “SEQUOIA”. The mark “SEQUOIA” was adopted in 1972 by plaintiff’s founder and any unwarranted use of the mark in relation to capital market would cause customer confusion and result in loss of business and goodwill to plaintiff.

In 2023, officials of Peak XV Partners, formerly Sequoia Capital India, were informed of a WhatsApp group named John Analyst Group-303, managed by persons who identified themselves as Sequoia Capital Investors Advisors and Sequoia Capital BTC Trading Team, purportedly a part of the Sequoia Capital Group. The informant revealed that she had been added to this WhatsApp group without her consent and that the group admins were circulating several trading and investment advice. Defendant 1 asked the investors to register themselves first and then get a referral code from its Assistant. The informant provided plaintiff’s representative with all the WhatsApp conversations on John Analyst Group-303, which contained the details of group admins and another Telegram account.

Plaintiff hired an investigator, who approached the Assistant and was advised to register a Bitcoin trading account on the website, www.leadlec.com, using the invitation code ‘pke9’ and further directed him to create Cryptocurrency wallet on a third-party platform, such as Binance or KuCoin, purchase 50 USDT (US Dollar Tether) and transfer the same to his Leadlec Account created on the website, www.leadlec.com. She further stated that after the Investigator would furnish a screenshot evidencing the transfer of funds, the Investigator would be added to a WhatsApp group, where the Analysts would share investment tips and trading strategies. Therefore, the Investigator could not obtain any further information from the Assistant. According to the website www.scamdetector.com, a leading fraud prevention website providing information and analysis on the legitimacy, safety and authenticity of websites, domain names and e-commerce platforms, the website www.leadlec.com, which was registered on 04-02-2023 was a phishing and scam website.

It was submitted that as operators of www.leadlec.com namely, Defendant 1, were luring consumers using the “SEQUOIA” name/mark and were also circulating images with trading tips purportedly originating from plaintiff. However, the said website became inactive in November 2023 and plaintiff assumed that Defendant 1 had discontinued its illegal activities. The website www.scamdetector.com determined this website as a phishing and spam website.

Analysis, Law, and Decision

The extracts of images and messages being circulated on the John Analyst Group-303, were as follows:

The Court observed that the screenshots depicted that Defendant 1 was attracting unsuspecting consumers using plaintiff’s reputation connected with their registered “SEQUOIA” trade marks. The operators/group admins of the WhatsApp group John Analyst Group-303 were not authorized by plaintiff to offer financial trading and investment related advice and were misrepresenting themselves to the public to that effect. The Court noted that the users were being re-directed to the website www.leadleacoin.com, an alleged bitcoin and cryptocurrency exchange, which again, was not linked with plaintiff. The Court opined that prima facie, it appeared to be an illegitimate website, intended to be used as a ploy to induce the users to invest substantial sums of money. This further affected plaintiff’s standing in the market as the consumers were initially drawn using the “SEQUOIA” trade mark.

The Court considered the public interest involved in the matter and thus opined that plaintiff demonstrated prima facie case in their favour and in case an ex-parte ad-interim injunction was not granted, plaintiff would suffer an irreparable loss and balance of convenience also lies in the favour of plaintiff, and against Defendant 1. Thus, the Court restrained Defendant 1 or any person acting on their behalf, from using plaintiff’s registered “SEQUOIA” trade marks or its variations, as a part of their domain names, websites, mobile applications, social media handle names/profiles credentials/description, promotional/business activities on digital or print media, bank accounts and/or any business papers etc. in any manner that would amount to infringement of plaintiff’s trade marks.

The Court further restrained Defendant 1 or any person acting on their behalf from passing off their business as that of plaintiff or claiming an association with plaintiff and their related entities or employees. The Court further directed:

1. Defendant 2, Meta Platforms Inc., to remove/block WhatsApp accounts of the mobile numbers and they should also delete the WhatsApp group ‘John Analyst Group-303’ or any other groups/community groups created by/administered by the phone numbers of the group admins of the group that were misusing plaintiff’s trade marks in their communications.

2. Defendant 3, Telegram FZ-LLC to remove/block Telegram accounts and they should further delete all other groups/community groups created by/administered by the said phone numbers and/or misusing plaintiff’s trade marks in their communications.

3. Defendant 4, Gname.com Pte. Ltd. to suspend the domain names www.leadlec.com and www.leadleacoin.com.

4. Defendants 5 and 6, Ministry of Electronics and Information Technology and Department of Telecommunications, Ministry of Communications, respectively, to issue necessary notifications/directions to all telecom and internet service providers and Domain Name Registrars in India, to permanently block/delete/remove access to all the telephone numbers, websites, domain names etc., which were subject matter of the present suit.

The matter would next be listed on 31-05-2024.

[Sequoia Capital Operations LLC v. John Doe, CS(COMM) 69 of 2024, Order dated 24-01-2024]

Advocates who appeared in this case :

For the Plaintiff: Shwetasree Majumder, Priya Adlakha, Vardaan Anand, Shiv Mehrotra, Advocates

For the Defendants: Nidhi Raman, CGSC; Zubin Singh, Rahul Kumar Sharma, Anushka Sharda, Madhav Khosla, Advocates