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We’re pleased to announce that the Centre for Intellectual Property Rights, National University of Advanced Legal Studies (NUALS), Kochi is inviting submissions on the contemporary issues related to intellectual property rights for publication in the inaugural volume of the The Intellectual Property Law Review. For further details, please read the call for papers below:

Centre for Intellectual Property Rights

The Intellectual Property Law Review

Call for Papers Vol. I

The Centre for Intellectual Property under the aegis of the National University of Advanced Legal Studies welcomes submissions for the first volume of the Intellectual Property Law Review. With the objective to make meaningful contributions to the field, we encourage our authors to explore contemporary issues and areas often overlooked relating to intellectual property law and policy. The Intellectual Property Law Review is a student-edited, peer-reviewed, double blind and open access journal. We invite contributions from practitioners in the legal profession, undergraduate and post-graduate students, researchers and academicians in the form of articles, essays, notes, commentaries and reviews.

Nature of Submissions

– Articles: (5000 – 7000 words)
– Essays: (3000 – 5000 words)
– Notes, Comments and Reviews: (1000 – 3000 words)
These word limits are inclusive of footnotes.

Submission Guidelines

1. All submissions are to be made in electronic form and must be sent to theiplawreview@gmail.com on or before 16th January, 2019, 11:59 PM. No other form of submission shall be accepted.
2. All submissions must include an abstract not exceeding 500 words.
3. A separate document providing a brief note including the following information: Name, Address, Postal Address, Name and Address of Institution, Course of Study (if applicable), Academic Year.
4. The manuscript itself should be free of any identification of the author.
5. Co-authorship is limited to two.
6. By submitting the article, the author undertakes that the article is an original work and has not been submitted, accepted or published elsewhere.
7. All submissions will be subject to a plagiarism check at the first stage of evaluation. If a work is found to be not original or plagiarised, it stands rejected at the first instance.
8. Receipt of submission shall be intimated within one week of the authors’ submission.
9. A minimum period of three months from the final date for submission of articles is reserved before the communication of acceptance is made to the author.

Formatting Guidelines

1. All submissions must be made in Word Format (.doc)/(.docx).
2. The body of the manuscript should be in Times New Roman, size 12 with 1.5 spacing. The Bluebook (20th ed.) is to be followed for the citation format. Footnotes should also be in Times New Roman, size 10 and single spacing.

For any queries, contact us at theiplawreview@gmail.com or:
+91 – 8606458450 (Anjanaa Aravindan)
+91 – 8197874621 (Pranav Pillai)

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IP overlaps take place when multiple overlapping IP rights vest in an owner for a single subject matter. These overlaps have given way to numerous debates regarding over-protection, policy implications, statutory interpretation  and many more issues. (To get a better understanding of the same, do refer to Prof. Basheer’s chapter in Overlapping Intellectual Property Rights.) Design-trademark overlaps, in particular, have had an interesting history in Indian litigation. A recent decision of the Delhi HC yet again brings these overlaps to the fore.

In its decision, Greenlight Planet India Pvt. Ltd. vs Gee Lighting Technology, the Delhi HC dismissed an application filed for rejection of plaint. The plaintiffs had instituted a suit for permanent injunction restraining passing off of its goods under the trademark GEE-LITE. Prior to this, they had filed a suit for design infringement. The counsel for the defendants relied on Order II, Rule 2 of the CPC, which provides that where the plaintiff omits to sue or relinquishes a part of their claim, “he shall not afterwards sue in respect of the portion so omitted or relinquished.” Citing this, the defendants argued that the plaintiffs having relinquished their claim with respect to passing off of their goods in the earlier suit, they could not claim the same in the present suit. The counsel for the plaintiffs cited the 2013 Delhi HC judgment in the Micolube case to argue that the cause of action in the two suits were entirely different. The Delhi HC, in its judgment, laid down that Order II, Rule 2 intended to protect people from multiplicity of suits and being sued twice for the same cause of action. The Court opined that “a cause of action for an infringement suit under the Design Act is different/separate/distinct from the cause of action for a passing off suit of a trade mark, trade name and domain name” and went on to conclude, thereby, that Order II, Rule 2 would not apply to the facts of this particular case.

A quick recap of past judicial opinions on design-trademark overlaps is needed here to understand the issue at hand with more clarity. In his analysis of deisgn-trademark overlaps in India, Prof. Basheer cited two important judgments, Tobu Enterprises Pvt. Ltd. v. Megha Enterprises (“Tobu Enterprises“) and Smithkline Beecham v. Hindustan Lever Limited (“Smithkline“). In Tobu Enterprises, the plaintiff claimed relief for both, design infringement and the tort of passing off. The Court observed that although the Trademarks Act, 1958 contained a saving clause for passing off actions, the Design Act did not provide for the same and hence, the plaintiff could not claim relief for passing off. The Court in Smithkline differed from this line of reasoning stating that dual protection could be sought under overlapping IP regimes (particularly in the case of shapes, since these could be protected under both design and trademark laws). Later, in Micolube India Limited v. Rakesh Kumar Trading, a single Judge followed the reasoning in Tobu Enterprises  by focussing on the saving clause for passing off actions under Section 27 (2) of the Trade Marks Act and the lack of a similar provision under the Design Act. The decision was then referred to a larger bench, which delivered its decision in 2013. The Bench studied the legislative intent of both, the Trade Marks Act, 1999 and the Design Act, 2000. With regard to the Trade Marks Act, the Bench concluded that the “registration of the trade marks is the statutory recognition of the rights pre-existing in common law” and hence the Act specifically provided for a savings clause for common law reliefs for passing off. Design rights, on the other hand, originate solely from the statute; the Bench, in this regard, observed that “passing off is a right to sue in common law to prevent misrepresentation is mutually inconsistent and distinct from the purely statutory monopolies which are in the form of privileges like patents and design“. It thus correctly disregarded the reasoning adopted by the Single Judge and Tobu Enterprises.

The Bench did, however, err in its reasoning when it stated that a design once registered could become a functional trademark. The Court entirely based its reasoning on Section 19 in the Design Act which provides grounds for cancellation of designs and concluded that since the use of a registered design as a trademark is not given as one such ground, the product could be protected under both the IP regimes. But on a closer reading of the provision, Section 19(1)(e) provides that    if it is not a design under Section 2(d), the registration of the said design can be cancelled. In his analysis of the 2013 decision, Prof. Basheer pointed out that the definition of design under Section 2(d) includes shape, configuration, pattern etc. but  “does not include any trade mark as defined in clause (v) of sub-section (1) of section 2 of the Trade and Merchandise Marks Act, 1958“. He then concluded that the interpretation of Section 19 would require the cancellation of registration of design once it began functioning as a trademark. The question thus arises:  How can one claim remedy for passing off for a registered design?

Surprisingly, the Delhi HC merely applies Order II, Rule 2 of the CPC and does not analyse the relevant provisions of the Trade Marks Act or the Design Act to settle this unresolved issue. It has to be noted here that it has already been settled quite satisfactorily in previous judicial decisions that the cause of action under a design infringement suit is different from that under a passing off suit and that this issue did not require any further analysis in the present decision. The main issue here which needed to be looked into was whether the design registration still subsisted or not and which the Court seems to have overlooked entirely.

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We’re pleased to announce that Boehmert & Boehmert, Patent & Trademark Attorneys, Germany will be conducting workshops on Patent Strategies in Europe For Pharma & Biotech on January 15, 2019 in Ahmedabad and on January 16, 2019 in Hyderabad. For further details, pl read below:

Patent Strategies in Europe For Pharma & Biotech Workshops by Boehmert & Boehmert Patent & Trademark Attorneys Germany

Boehmert & Boehmert, Patent & Trademark Attorneys, Germany will be holding workshops on Patent Strategies in Europe For Pharma & Biotech. Senior partners from Boehmert & Boehmert (www.boehmert.de) will share latest development at EPO and case laws. As you may be aware, 60% of all patent litigation in Europe takes place in Germany.

The workshops will be held from 10am-2pm, followed by lunch at Hotel Four Seasons by Sheraton, Ahmedabad on 15 January 2019 and at Hotel Taj Banjara, Hyderabad on 16 January 2019. All IP professionals are welcome.

There is no fee for the event. Since the number of delegates is strictly limited, an early response at our contact coordinates given below would be welcome:

Mr. S.Abidi
IPR Associates
iprassociates@gmail.com
9324053831

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Prashant wrote a post about the impact of India’s biodiversity laws’ impact on scientists and businesses. After tracing the history of the biodiversity laws that we see today, he argues that the legislation should be repealed because it opens the door for arbitrary enforcement against businesses and impedes research efforts by scientists.

Pankhuri informed us of the invitation for applications for the CLPR Equality Fellowship with the Centre for Law and Policy Research. The fellows will be expected to engage in litigation and advocacy pertaining to intersectional discrimination in the states of Andhra Pradesh, Karnataka, Kerala and Tamil Nadu The deadline for the applications is December 30, 2018.

Other Developments

India

Judgments

Luxembourg Brands S.A.R.L. and Another v. G.M. Pens International Private Limited – Delhi High Court [November 26, 2018]

The dispute between the Parties arose on the ground that the Defendant had used the mark “RORITO” in infringing and passing off the Plaintiffs’ mark “REYNOLDS” in respect of writing instruments. The Plaintiffs stated that the Defendant was its licensee for a brief period, and after the expiry of the licensing arrangement between them promoted its product in a manner to give the general public a perception that the mark “REYNOLDS” was re-branded as “RORITO”. In considering the Plaintiffs’ argument of passing off, the Court observed that the Defendant did not commit any action of passing off as there was no misrepresentation in its advertisements and that the Defendant merely sought to sell its goods under its bona fide mark “RORITO”. The Court also considered the Plaintiffs’ argument that the Defendant had undertaken a campaign to indicate that “REYNOLDS” was re-branded to “RORITO”, and stated that the evidence filed before it was insufficient to arrive at such a conclusion. Moreover, the Court on a comparison of the rival marks disagreed that their logos were similar. As a related issue, the Plaintiffs claimed that the Defendant’s adoption and use of the mark “TERAMAX” in place of “T-MAX” was infringing of its mark “TRIMAX”. The Court agreed with the Plaintiffs and observed that the Defendant had substituted one similar mark (T-MAX) with another (TERAMAX), which bore a higher similarity to the Plaintiffs’ mark, and accordingly violated the orders passed by the Court on a previous occasion. In view of this particular violation, the Court imposed a penalty of Rupees 5 lakhs on the Defendant, payable to the Plaintiffs within a month.

M/s. Bombay Sewing Machine Company v. M/s. Nipex Light House & Welding – Delhi District Court [November 28, 2018]

The Court granted a permanent injunction restraining the Defendant from using the mark “DURBEY” in infringing and passing off the Plaintiff’s deceptively similar mark “DURBY” in respect of sewing machines. In arriving at this decision, the Court noted that the Plaintiff had been using its mark since 1954 and was also the registered proprietor of the mark. Further, the Court stated that there was no substantial difference between the rival marks as the Defendant’s mark was visually, structurally and phonetically similar to that of the Plaintiff, and the Defendant’s use of the Plaintiff’s mark would lead to loss of Plaintiff’s goodwill and reputation.

M/s. Facton Limited v. Shri Varun and Another – Delhi District Court [November 29, 2018]

The Court granted an ex parte permanent injunction restraining the Defendant from using the mark “G-STAR” in infringing and passing off the Plaintiff’s identical mark in respect of clothing and allied goods. In arriving at this decision, the Court noted that the Plaintiff was the registered proprietor of the well-known mark and that the Defendant could not use it to conduct business. In view of the same, the Court granted punitive and compensatory damages to the tune of Rupees 1 lakh in favour of the Plaintiff.

M/s. Lacoste S.A. v. Devi Dayal and Another – Delhi District Court [November 29, 2018]

The dispute arose between the Parties on the ground that the Defendant was using an identical mark to that of the Plaintiff’s registered mark “LACOSTE”. In the suit filed by the Plaintiff, the Court denied the grant of an injunction in favour of the Plaintiff. The Court examined the evidence filed by the Plaintiff and noted that the Plaintiff had failed to place any documentary evidence on record to prove infringement on of its registered mark by the Defendant.

News

International

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This month saw a highly publicised altercation between pop queen Rihanna and US President Trump.  She called out the President for playing her popular hit song “Don’t Stop the Music” at his rally. In her cease-and-desist letter, Rihanna’s legal team specified that the idol’s consent should have been taken before playing her song at the rally. The issue, however, is more complicated than the simple matter of the artist’s consent to such usage and has been highly debated in the past. This is not the first time a US politician has faced claims of IP infringement for such usage. (In fact, here’s a lengthy list of famous artists who have publicly protested the use of their works by politicians such as Trump, Mitt Romney, Sarah Palin and many more.)

Status Quo in USA: Licensing Guidelines and Legal Claims Available

In USA, copyright of musical works are administered by Performing Rights Organisations (PROs) such as American Society of Composers, Authors and Publishers (ASCAP),  Broadcast Music, Inc. (BMI) etc. PROs acts as representatives for musical woks of various artists, songwriters and composers. Politicians need to obtain “public performance” licenses from the appropriate organisations to play the copyrighted musical works at their campaign. If these campaign events are properly licensed, politicians can use these works without taking the prior consent of the concerned artist and avoid copyright infringement suits. The following defences, however, can be availed by artists in such cases:

  1. Infringement of Right of Publicity: Right of publicity (also known as personality rights in most jurisdictions) is a common law right and is derived from the right to privacy. It protects the right of a famous individual to prevent commercial exploitation of his/her name, image or persona. This right is not provided by any US federal statute and hence differs from state to state. Since most state laws provide for First Amendment exceptions (which include political campaigning) in right of publicity statutes, past claims have mostly been ineffective.
  2. False Endorsement under Section 43(a) of Lanham Act: Playing songs of popular artists in rallies may often create a false impression of artist’s support for the politician and can result in a form of trademark infringement known as false endorsement. It is necessary to prove that the song is used in a “deceptive and misleading” manner so as to result in consumer confusion about the association or endorsement of the artist. Such usage is forbidden under Section 43 which prohibits usage which “is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person“. The provision further prohibits dilution of trademarks (such as an artist’s or band’s name) by such unauthorised usage.
  3. Infringement of Moral Rights of Artist: Moral rights are non-economic, personal rights granted to the creator (who may not necessarily be the owner) of a work. These rights include the right of attribution, the right of integrity and the right to have a work published anonymously or pseudonymously. Although moral rights are only formally extended to works of visual art under the Visual Artists Rights Act in USA, there is a lot of debate about extending the scope of this protection to other works, including musical works. Artists may, hence, claim protection of their moral rights in the future in such cases of political usage.

Status Quo in India: Issue not Addressed Yet

In India, public performance licenses for using musical works at public venues need to be procured from Indian Performing Rights Society (IPRS) or Phonographic Performance Limited (PPL). Though Indian politicians don’t use musical works in their rallies as frequently as their American counterparts, politicians in Meghalaya, Kolkata etc. have been reported to use popular musical works to evoke emotions from the crowd and garner votes. Surprisingly, neither of the bodies have considered the possibility of such legal confrontations arising in the future. Neither IPRS nor PPL address political usage of musical compositions in their public performance licenses.

Suggested Solutions

The legal claims against unauthorised use of musical compositions by politicians in USA have often proven to be ineffective in the past and hence, copyright holders remain dissatisfied with the current legal protection available to them. Usually, PROs in USA issue  “all or nothing”  licenses which grant permission to licensees to use numerous musical compositions under the PRO’s ambit for a fixed fee, thereby allowing politicians to bypass the procedure of gaining the consent of each individual copyright holder. It has been proposed that such licenses should be altered to include clauses which give the power to artists and songwriters to opt out from usage of their compositions at political venues. For example, BMI had introduced a Political Entities license which allows the concerned songwriters or publishers to withdraw any particular musical work from the license. Although such requests can only be made after the song is used, such licenses aid in preventing further usage of the copyrighted work. ASCAP’s guidelines also suggest that before availing a public performance license, politicians must gain the artist’s and/or the songwriter’s consent for using the copyrighted musical work. 

Conclusion: A shift in current licensing norms and a shift in attitude towards artists’ and songwriters’ copyright in their musical compositions would both go a long way in preventing such legal confrontations. Also, a suitable licensing framework addressing such issues needs to be adopted in India to prevent similar controversies from cropping up in the future.

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One of These Days These Boots Are Gonna Walk All Over You (Image From Wikimedia Commons)

In my previous post, I broke down Ms. Justice Prathiba Singh’s recent judgement in Christian Louboutin v Nakul Bajaj, and noted its importance for intermediary liability and e-commerce players in India. In this post, I examine the Court’s approach towards intermediary liability, and attempt to outline what exactly the judgement means for e-commerce platforms. (Update: On November 12, the Court also made a similar ruling on similar facts in L’oreal v Brandworld, relying upon its earlier judgement in Christian Louboutin.)

(Long Post Ahead!)

The Court’s indictment of the defendant was based upon a factual analysis of the role played by the platform vis-à-vis the alleged infringement. The Court’s analysis considered the following questions:

  1. When can an e-commerce platform claim to be an ‘intermediary’ under the IT Act?
  2. When can an intermediary claim immunity from liability under Section 79 of the IT Act?
  3. What is the relationship between infringement under the Trademarks Act and the immunity claimed under Section 79 of the IT Act?

While these are three distinct questions, all of which are relevant to the issue of determining a platform’s liability, the Court’s analysis does not make a clear distinction between the three issues, and consequently, ruling throws up more uncertainty than clarity on the issues. Let’s examine in detail.

  1. When is an ‘e-commerce’ platform an ‘intermediary’?

The definition of ‘intermediary’ is provided under Section 2(w) of the IT Act, which states that an intermediary, for the purposes of any electronic record, means “any person who on behalf of another person receives, stores or transmits that record or provides any service with respect to that record and includes telecom service providers, network service providers, internet service providers, web – hosting service providers, search engines, online payment sites, online – auction sites, online – marketplaces and cyber cafes.”

The definition makes two things apparent –

  1. It is meant to apply only as far as the services of the actor are related to an ‘electronic record’.
  2. The definition is inclusive and broad and covers all manner of services in respect of an electronic record.

With respect to this issue, the Court correctly observes that e-commerce is a broad category that encompasses a range of actors, from those providing an platform for sellers to upload their content without modification (for example, Olx) to those that also select the sellers, offer transportation and packaging, etc. The Court illustrates 21 activities which could determine whether an e-commerce platform is an intermediary or not, which includes everything from ‘giving discounts to customers’, ‘employing delivery personnel’, ‘using trademarks as meta-tags’, or ‘deep-linking’. Further, the Court also takes into account whether a particular platform is taking measures to combat unlawful activities on its platform. As per the Court, when the business of an e-commerce platform includes a ‘large number’ of the factors enumerated by it, it would cross the line from an ‘intermediary’ to an ‘active participant’.

The Court applied these factors to the defendant’s business and its policies to determine that it is ‘much more than an intermediary’. However, there no clear rationale behind the inclusion of the various ‘factors’ in this analysis, apart from that most intermediaries engage in one or the other of such acts (such as creation of listing of a product).

  1. When can an intermediary claim safe harbour under Section 79?

Section 79(1) of the IT Act states that an intermediary shall not be liable for any third-party information made available by it. This broad exemption is qualified by a number of factors. These include that the intermediary must not initiate, select or otherwise modify the communication; that it must observe due diligence while following its duties under the act, and observe government guidelines in this respect. Moreover, the exemption does not apply if the intermediary has “conspired or abetted or aided or induced” the commission of the unlawful act.

The Court’s analysis for Section 79 flows from its analysis of what constitutes an intermediary. The Court states that the factors enumerated would also indicate whether an intermediary is ‘conspiring, abetting, aiding or inducing’ the unlawful conduct, and is not an intermediary and is not entitled to protection under Section 79.

Further, the Court examines the responsibilities of intermediaries under Section 79 and the Intermediary Guidelines Rules, and states that the requirement of ‘due diligence’ is much broader than merely following the guidelines prescribed, and that merely following the guidelines cannot absolve intermediaries of their broader responsibilities. It is unclear from the judgement whether this implies that an assessment of ‘due diligence’ under Section 79 goes beyond observance of the rules and is a case-by-case assessment.

  1. Determining trademark infringement by an e-commerce marketplace

The final part of the Court’s analysis rests on examining the actual provisions under the Trademark Act, for which the defendant could be held liable. The Court examines the defendant’s liability under Sections 101 and 102 of the Trademarks Act, dealing with applying, falsifying and falsely applying trademarks, and Section 2(2)(c) of the Act which defines ‘use’ of a mark. The Court states that services of an e-commerce operator which uses, falsifies or falsely applies a mark in respect of counterfeit goods, may be said to be ‘aiding, abetting, inducing or conspiring’ in the commission of an unlawful act.

The Court provides the following illustration –

“any online market place or e-commerce website, which allows storing of counterfeit goods, would be falsifying the mark. Any service provider, who uses the mark in an invoice thereby giving the impression that the counterfeit product is a genuine product, is also falsifying the mark. Displaying advertisements of the mark on the website so as to promote counterfeit products would constitute falsification. Enclosing a counterfeit product with its own packaging and selling the same or offering for sale would also amount to falsification. All these acts would aid the infringement or falsification and would therefore bring the e-commerce platform or online market place outside the exemption provided under Section 79 of the IT Act.”

Finally, the Court decrees the suit against the defendant observing that, given the sellers were all located on foreign shores, the trademark owner must not be left ‘remediless’ by extending safe harbour of intermediaries to ‘active participants’.

The Court’s final decree does not find the intermediary liable for infringement, but effectively issues an injunction against the defendant, stating that it must obtain the authorization of the rights holder if the sellers are foreigners and must offer a guarantee to the purchasers in case of domestic sellers. Further, the Court ordains a ‘notice and notice’ requirement which states that the intermediary must, upon receiving notice of an infringing product being sold on its platform, notify the sellers, and if it assesses that the seller’s evidence of the authenticity of the product is not sufficient, must take down the listing.

Where does this leave intermediary liability for trademark infringement?

While this is the first final judgement on trial on an issue of intermediary liability for trademark infringement, the judgement does little to actually clarify the scope of intermediary safe harbour and its relationship with the trademarks act.

Not all platforms can claim to be an ‘intermediary’

Firstly, the judgement does make a clear distinction between ‘intermediary’ as those defined under Section 2(w) of the IT Act and those which may claim the safe harbour provisions under Section 79. The intermediaries classified under Section 79 are a subset of all intermediaries contemplated under Section 2(w) of the IT Act, but it cannot be said that by reason of not being entitled to safe harbour under Section 79, that a service provider ceases to be an intermediary, at least with respect to the various other obligations it has under the IT Act.

The judgement is also unclear on the applicability of Section 79 or the IT Act to the facts under consideration, when it illustrates the various factors for determining if an e-commerce player is an ‘intermediary’. The IT Act would only apply to online aspects of the platform’s operation, insofar as it applies to an ‘electronic record’ and ‘on behalf of another person’, while the status of ‘intermediary’ cannot be claimed for its other operations. Therefore, the whole of the Act and any protections offered under Section 79 would only apply to actions which take place online and through the digital platform, and not other acts like providing deliveries or packaging services. Ideally, the analysis should have separated the online elements of e-commerce operations from the other aspects, and assessed the liability for each of these separately. Instead, the Court provides a vague list of ‘factors’ to be assessed to determine if a platform is an ‘intermediary’ under Section 79, although this should only be applicable to the online aspects of the infringement claim. All other aspects should be dealt with under the regular provisions of the Trademarks Act. The factors enumerated by the Court to determine whether a platform is an intermediary would be helpful to the extent they can differentiate between the online and offline aspects of an e-commerce business, but are not helpful in classifying whether the platform is an intermediary or not.

No Clarity on Primary or Secondary Liability of Online Marketplaces

Secondly, the basis on which liability is sought to accrue to the defendant in this case is unclear. It is crucial to note that there was no finding of direct or indirect infringement in the ruling. While the suit was filed claiming that counterfeit goods are being sold on the platform, there was no actual sale that took place on the platform. Therefore, there was no determination whether the goods were in fact genuine or not, and the case merely proceeded on the assumption that the goods were counterfeit, with neither party providing sufficient proof of the goods’ authenticity.

This is problematic, as if the goods are in fact genuine products merely being resold, the issue at hand is of applying the principle of national or international exhaustion of trademark rights to determine the liability of the resale of the product. The Court did not go into this issue at all, even though it would appear to be central to the claims of sale of online goods, given the business model of the defendant.

The Court bypasses this issue and choses to determine the liability for ‘use of the mark’, the requirement for infringement under Section 29. While it finds that a number of the activities of the platform would amount to ‘use’ and even ‘falsifying’ a trademark, the Court also specifically finds that such use would not amount to infringement in case of genuine products. Subsequently, however, the Court appears to liken all these cases of ‘use’ in respect of non-genuine products as ‘aiding’ of an unlawful act, and thereby robbing any intermediary of exemption from liability under Section 79. Yet, the issue of aiding, abetting or conspiring implies a level of knowledge of the infringing act. The Court does not examine the issue of what level of knowledge is required for the intermediary’s actions to constitute ‘aiding’ and makes a analytical leap from determination of ‘use’ under the Trademark Act to that of ‘aiding’ and unlawful act. Therefore, no clear principle on the basis of which the intermediary may be made liable emerges.

What is particularly striking about the judgement is the determination of the defendant’s positive obligation to verify its inventory without a determination of the lawfulness of its use by the sellers themselves.It is unclear whether the judgement imposes a general positive duty to ascertain whether the goods sold by such platforms are genuine or not, although this likely depends upon the nature of the business as per the ‘factors’ enumerated by the court. The Court’s decree imposes such an obligation in order for the defendant to continue its business and also imposes an obligation upon the platform make its own assessment of whether certain notified product is counterfeit or not, after reaching out to the seller. This places the intermediary in the position of facing legal liability for failing to remove notified posts, even without a judicial determination of its lawfulness, which contrary to the principles and the rule laid down in Shreya Singhal v Union of India, that intermediaries may only be required to take down content if notified by a court or government order to do so (although the Court continues to insist that the ratio of that judgement does not apply to IP, without providing sufficient justification for this claim).

The issue of online sale of counterfeit products is pervasive in Indian e-commerce and lacks sufficient consumer protection mechanisms. Even in the facts of this case, had the goods not been genuine, it may have been difficult for the platform to escape secondary liability for infringement. However, in its haste to ensure an effective remedy to rights holders, the Court has left the actual issue of clarifying intermediary liability aside. In the Court’s interpretation, the balance of convenience for the issue of an injunction clearly falls in favour of the rights holder, and not the platform, through what appears to be a ‘know it when you see it’ approach which considers the whole of the business model of the e-commerce platform, including both its online and offline aspects, to determine whether the platform is acting in good faith or not.

While the concern for online infringement and to protect rights holders is legitimate, the route that the Court takes muddles the issue of platform liability for online infringement, and the legal uncertainty is likely to have a negative effect on the online sale and purchase of goods.

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