No Excuse for intermediary-E Commerce Platforms and their duty to protect Trade mark/IP Rights

Facts
PUMA filed a lawsuit, claiming that several imitation products with deceptive PUMA markings were showcased by third-party sellers on IndiaMART. These counterfeit items were presented alongside authentic PUMA products when users searched for PUMA items on the IndiaMART platform. Furthermore, these platforms are unable to seek 'safe harbour' status as intermediaries if they are utilized to facilitate counterfeiting activities.

Discussion
An individual becomes registered on the IndiaMART platform as a seller specializing in PUMA shoes by opting for the registration menu in the platform. Subsequently, if a buyer later searches for terms like "PUMA" or "PUMA shoes," the PUMA shoes offered by that seller are presented among the available options for the buyer. This procedure enables potential counterfeiters to register as PUMA shoe sellers without undergoing prior verification by IndiaMART. This flaw ultimately paves the way for trademark infringement, a point emphasized during the legal proceedings violative of intellectual property rights as argued by the plaintiff. Whereas the defendant argued that there is no trademark infringement by the IndiaMART platform as it acts only as tool for viewing PUMA products and after registration there is no direct link between the sellers and the online platform, not attracting trademark infringement provisions and not liable for violation of IPR rights.

Reasoning
Section 29 of the Trademarks Act provides for infringement of registered trademarks. In this case, the usage of fake PUMA trademarks for counterfeiting amounts to trademark infringement and cannot be subjected to exemption by using “Safe harbour clause” Section 79(1) of the Information Technology Act, 2000. If in the later trial and arguments, it was found that there is clear trademark infringement and process of counterfeiting, then the defendant is liable and it is clear violation of IPR rights.

Opinion
To fulfil their duty to protect intellectual property rights, e-commerce platforms should implement robust due diligence measures, including mechanisms for reporting and addressing intellectual property infringements promptly. This may involve implementing effective notice and takedown procedures, employing technological tools for content monitoring, and cooperating with intellectual property right holders. E-commerce platforms may lose the protection of safe harbour clauses if they are found to be actively involved in or aware of infringing activities, such as the sale of counterfeit goods, and fail to take appropriate actions. If a platform is deemed to have knowledge of infringing activities and does not act to address them, it may be held liable for the intellectual property violations. Additionally, changes in legislation or legal precedents may impact the legal landscape for e-commerce platforms and intellectual property protection. It is advisable for e-commerce platforms to stay informed about the legal requirements in the jurisdictions where they operate.

Judgment
The Hon’ble Court observed that even though e-commerce platforms are commercial ventures, they cannot become “haven for infringers” and cannot put in place a protocol by which infringers and counterfeiters are provided an avenue to infringe and counterfeit. The Hon’ble Court ordered IndiaMART to take down all infringing listings containing any of the PUMA’s registered trademarks. The Hon’ble Court passed interim injunction against IndiaMART. The injunction will remain in force till the Court decides PUMA’s trademark infringement suit against IndiaMART.

However, it was made clear that the injunction does not continue to be ad infintium, and IndiaMART has the option to request a modification. This can be pursued if the defendant can convincingly demonstrate to the Court that it has implemented effective regulatory and protective measures, making it impractical for counterfeiters to exploit the IndiaMART platform.


Authored by:
Ms. Anushkaa Arora, Principal Founder ABA Law Office assisted by Aravind Sundar, Research Associate, ABA Law Office