Delhi High Court advises e-commerce platforms to protect IP rights of companies

Delhi High Court advises e-commerce platforms to protect IP rights of companies

Restrains IndiaMART IndiaMESH from providing any registered trademark of Puma

The Delhi High Court has held that e-commerce platforms must diligently protect the intellectual property rights of others and cannot claim ‘safe harbor’ as an intermediary if the platforms are used to abet counterfeiting.

In the Puma SE vs IndiaMART InterMESH Ltd case, Justice C Hari Shankar stated, “E-commerce websites are commercial ventures and are inherently profit-oriented. There is, of course, nothing objectionable in this; but, while ensuring their highest returns, such websites have also to sedulously protect the intellectual property rights of others. They cannot, with a view to further their financial gains, put in place a protocol by which infringers and counterfeiters are provided an avenue to infringe and counterfeit. Any such protocol must meet with firm judicial disapproval.”

In its interim order, the single-judge bench restrained IndiaMART IndiaMESH, which runs the e-commerce platform IndiaMART, from providing any registered trademark of Puma regarding any goods as a search option in its drop-down menu presented to prospective sellers when they register on IndiaMART platform.

The judge ordered IndiaMART to take down all infringing listings containing any of Puma’s registered trademarks.

The injunction would remain in force till the court decides on the matter.

While filing the case, Puma had stated that several counterfeit goods bearing fake Puma marks were put up by third-party sellers on IndiaMART. On searching for Puma products, fake products were displayed. Also, when a seller registered himself on IndiaMART, a drop-down menu was provided by which the seller could represent himself as a dealer of Puma shoes.

Puma apprised the court that if the person chose that option from the drop-down menu, he was registered with the IndiaMART portal as selling Puma shoes. If a purchaser later entered Puma or Puma shoes as the product he wished to purchase, the Puma shoes sold by the seller were among the available choices displayed.

Thus, any counterfeiter could register himself as selling Puma shoes as no prior verification was done by IndiaMART, facilitating the infringement of trademarks.

The bench observed that by allowing the prospective sellers to register themselves without any prior verification, it could prima facie be said that “IndiaMART aided the commission of the unlawful act of counterfeiting, using its platform as a springboard for the purpose.”

While stressing that aiding was a step before abetting and provided an avenue for counterfeiting, Justice Shankar stated, “By this token, the providing of Puma shoes as a drop-down option to the prospective seller prima facie aids the seller in his counterfeiting design as IndiaMART IndiaMESH Limited has. Therefore, prima facie, it aided the commission of the unlawful act of counterfeiting and infringement. It cannot claim the benefit of safe harbor under Section 79(1).”

The judge thus passed the interim order against IndiaMART. However, he clarified that the injunction did not have to continue ad infinitum. IndiaMART could seek modification by demonstrating before the court that it had put in place sufficient regulatory and protective measures to render impossible abuse of its platform by counterfeiters.

Advocates Ranjan Narula and Shivangi Kohli appeared for Puma.

IndiaMART was represented by senior advocate Rajshekhar Rao and advocates Pulkit Gupta, Rhea Dube, and Zeya Junaid.