Counterfeiting: IndiaMART not Entitled to Safe Harbour Protection

In a counterfeiting case involving the infringement of the ‘PUMA‘ trademark, the Delhi High Court held that the defendant, IndiaMART IndiaMESH Ltd., was not entitled to safe harbour protection as it did not comply with the prescribed due diligence requirements.[1]

Upon receipt of complaints from its consumers in August 2021, the plaintiff, Puma SE, conducted a search and realised that counterfeit products bearing its registered trademarks were listed for sale on the defendant’s e-commerce website. It was also found that at the time of registration on the platform, the seller was presented with a drop-down menu with a list of brand names under which the product could be sold, and there was no verification of the seller’s credentials. The present suit was instituted by the plaintiff, alleging that the defendant, by including “Puma shoes” in the said menu, was “aiding, abetting and facilitating” the infringement of its trademarks.

The Court accepted the reliance placed by the plaintiff upon the decision of the Division Bench of Justice Vibhu Bakhru and Justice Amit Mahajan in Google LLC v. DRS Logistics (P) Ltd.[2] The interpretation of “use of a mark” under Sections 2(2)(b) and 2(2)(c)(i) of the Trade Marks Act, 1999, was adopted in the present case; the said expression was not limited to use in visual form but included “use in relation to goods in any form whatsoever” and Section 2(2) did not “control or limit the width of Section 29(6)“. Hence, the use of the plaintiff’s trademark in the drop-down menu amounted to “use” under said Sections. The Court added that the plaintiff’s trademark was visually represented as it appeared to the seller at the time of registration, and the fact that it was a backend feature was held to be immaterial in this context.

Including the plaintiff’s trademark in the drop-down menu was said to increase the likelihood of consumer deception as it enabled counterfeiters to depict their products as genuine. It was held that, with such use, there was a likelihood of unfair advantage being taken of the mark “in a manner which would be detrimental to its distinctive character and repute“.

It was observed that the safe harbour protection under the Information Technology Act, 2000 was not applicable to the defendant since a) its function was not limited to providing access to the communication system, b) it selected the receivers of transmission, and c) it failed to take reasonable steps to ensure that users did not post infringing listings as required under Rule 3(1)(b)(iv) of the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021.

Rejecting the defendant’s contention that it promptly took down the infringing listing once the same was brought to its notice, the Court remarked, “There is obviously no use in closing the stable doors after the horses have bolted. An e-commerce platform cannot become a haven for infringers.”

Holding that a prima facie case of infringement was made out, the Court issued an injunction restraining the defendant from providing the ‘PUMA’ trademark or other registered marks of the plaintiff as options in the drop-down menu for registration on its portal. Further, the defendant was directed to remove the listing of products infringing the plaintiff’s trademarks on being so notified by the plaintiff.

The matter will be heard next on February 7, 2024.

References:

[1] Puma SE v. IndiaMART IndiaMESH Ltd. [IA 15564/2021 in CS(COMM) 607/2021]

[2] FAO(OS)(COMM) 2/2022

Image Credits:

Photo by simpson33 on Canva

It was observed that the safe harbour protection under the Information Technology Act, 2000 was not applicable to the defendant since a) its function was not limited to providing access to the communication system, b) it selected the receivers of transmission, and c) it failed to take reasonable steps to ensure that users did not post infringing listings as required under Rule 3(1)(b)(iv) of the IT Rules, 2021.

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