INTERMEDIARY LIABILITY IN THE CASE OF TRADEMARKS: DELHI HC ON A SPREE TO PREVENT COUNTERFEITING ON ONLINE PLATFORMS.

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After the recent judgment in Christian Louboutin SAS v. Nakul Bajaj (covered and analyzed here), the Delhi HC has held against  www.shopclues.com, holding them guilty for selling counterfeit products on its platform. The court in the cases of L’oreal v. Brandworld and Skull Kandy v. Shri Shyam Telecom has decreed against the claims of the website to merely be an intermediary and governed by “Safe Harbour” provisions. Following its recent landmark judgment in Christian Louboutin, the court has held that there are certain features on the Website which point towards it being more than an intermediary. For example:

  1. The website guarantees that “all products are 100% genuine”;
  2. Repeated sales of counterfeits have been encountered on the website;
  3. Despite several infringement actions against it, the website doesn’t seem to be taking precautions to stop sale of counterfeits;
  4. There is a separate category for replicas on its website. On this window, various lookalike products are advertised and sold. The use of the term replica itself denotes that it is a lookalike or a copy of the original. While the PIP programme appears to be effective, the display of a replica window is definitely not condonable.
  5. This REPLICA window encourages sellers to post lookalike products as the feature of the replica window would constitute aiding and abetment of violation of intellectual property.

The court has rightly ordered the defendants to disclose details of its sellers, remove the replica head altogether as well as the products sold on it within one week, obtain a certificate of genuineness from its sellers, enter into a proper agreement with sellers guaranteeing authenticity and on a claim of a counterfeit good being sold – notify the seller, claim evidence and in case of no evidence of genuineness being available, take down the listing from the website.

Counterfeiting is a persisting serious problem across India in online as well as offline problems. It not only goes against consumer protection, rather also diminishes the goodwill of the original company dealing with that mark in those goods. The recent trail of landmark judgments given by the Delhi HC in this regard is a direction towards curbing the concept of counterfeit trading in India, and has been welcomed by brand owners.  With an increase in the dependency of Indian consumers on E-Commerce websites, provision of such guidelines is imperative to avoid the menace of Counterfeit sale.

The respective judgments can be found here and here

Sources of Judgments: Latest Laws and India Kanoon

Image source – Here