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in India such as (i) display of complete sellerdetails on the platform, (ii) e-commerceentity shall not influence the price ofgoods/services and shall maintain a levelplaying field, (iii) adopts any unfair methodsor unfair or deceptive practice that mayinfluence transactional decisions ofconsumers, (iv) falsely represent themselvesas consumers or post reviews about goodsand services in their name; or misrepresentor exaggerate the quality or the features ofgoods and services. In addition to this, thedraft Rules also lay down certain liabilitieson the sellers who are using e-commerce.Most importantly, these draft Rules providefor consumer grievance redress procedurewhich mandate that every e-commerceentity shall publish on its website the nameof the Grievance Officer and his contactdetails as well as mechanism by which userscan notify their complaints. It is also providedthat the Grievance Office shall redress thecomplaints within one month.

Information Technology Act andthe liability of intermediariesE-commerce platforms have found refuge underthe safe harbor provisions of the InformationTechnology Act 2000.

Intermediaries are defined under Section 2 (1) (w)of the IT Act as: “Intermediary, with respect to any particularelec tronic records, means any person whoon behalf of another person receives, storesor transmits that record or provides anyservice with respect to that record andincludes telecom service providers, networkservice providers, Internet service provid ers,webhosting service providers, searchengines, online payment sites, online-auctionsites, on line-market places and cyber cafes.”

As per section 79 of the IT Act, an intermediaryis not liable for any third party information, data,or communication link made available or hostedif (a) its function is limited to providing access toa communication system over which informationmade available by third parties is transmitted or temporarily stored or hosted; or (b) theintermediary does not— (i) initiate the transmission,(ii) select the receiver of the transmission, and(iii) select or modify the information contained inthe transmission; (c) the intermediary observesdue diligence while discharging its duties underthis Act and also observes such other guidelinesas the Central Government may prescribe in thisbehalf.

The Act further provides that the above safeharbor provisions shall not apply if –

(a) the intermediary has conspired orabetted or aided or induced, whether by threats or promise or otherwise in the commission of the unlawful act;

(b) upon receiving actual upon receivingactual knowledge, or on being notified by the appropriate Government or itsagency that any information, data orcommunication link residing in orconnected to a computer resource,controlled by the intermediary is beingused to commit the unlawful act, theintermediary fails to expeditiouslyremove or disable access to thatmaterial on that resource withoutvitiating the evidence in any manner.

Judicial scrutiny of Section 79 of the IT ActThe courts have scrutinised the said provision todetermine the responsibility of intermediaries inIP matters. In Myspace Inc. v. Super CassettesIndustries Ltd. (2016), the Delhi High Court notedthat while Section 79 grants a measured privilegeto the intermediaries, liability can be imposed onthe intermediary if it has actual knowledge of theinfringement and not just general awareness/knowledge.

Thereafter, in Christian Louboutin SAS v. NakulBajaj & Ors (2018), the Delhi High court observedthat e-commerce platforms which activelyconspire, abet or aide, or induce commission of unlawful acts on their website cannot go scotfree. The protection afforded to intermediaries isnot absolute and if they also initiate thetransmission, select the receiver or select or modify the information contained in the

RésumésManisha Singh Manisha is a founder and the Managing Partner of LexOrbis. She is knownand respected for her deep expertise on prosecution and enforcement ofall forms of IP rights, and for strategizing and managing global patents,trademarks and designs portfolios of large global and domestic companies.

Aprajita NigamAprajita is enrolled with the Bar Council of Delhi since 2013, and holdsan LL.M. degree in IPR Law from NALSAR University of Law. AtLexOrbis, her work includes trademark, copyright, and design matters,domain name complaints, agreement drafting, attending hearings etc.She has received much appreciation for her publications.

Smrita Sinha Smrita is an advocate enrolled with the Bar Council of Delhi since 2019and has graduated from Amity Law School Delhi. At LexOrbis she hasbeen involved in various IP matters related to copyright, trademark andindustrial design. Smrita has also contributed to publications on thesubject of arbitration, trademarks etc.

Manisha Singh

Aprajita Nigam

Smrita Sinha

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The advent of e-commerce platforms hassignificantly transformed the Indian businessand retail sector by focusing on consumers’

need for convenience to shop for the necessitiesas well as luxuries by a mere click of a button.Rapid expansion of internet services acrossIndia and the tremendous rise in the sale ofsmartphones has accelerated the growth of e-commerce business. Interestingly, these e-commerce platforms have not only managedto garner the attention of the urban populace,but of those living in the semi-urban and ruralareas of India.

The growing popularity of e-commerceplatforms has, at the same time, broughtchallenges in the form of counterfeiting whichaffects both brand owners and consumers, and

as such, these platforms are constantly underthe scanner for their role in the menace createdby counterfeit products.

Government initiatives The Government of India has come up with thefollowing draft policy and rules for regulating e-commerce platforms operating in India:• Draft National E-commerce Policy: The

measures enlisted under this policy inter aliaare – (i) the mandate for providing sellerdetails, (ii) publicly available undertaking bythe seller to e-commerce platform regardinggenuineness of the products, (iii) option ofregistration for trademark owner with the e-commerce platform to get a notification bythe platform in case a trade-marked product is uploaded for sale, (iv) if the trademark owner desires, the e-commerce platform shall not list any trade-marked good withoutprior approval, (v) in case of luxury goods,cosmetics and other goods having impact onpublic health, prior authorization fromtrademark owner will be mandatory, (vi)financial disincentives for seller if found to beselling counterfeit products, and (vii) takedownof counterfeit products on a complaint madeby consumer and affirmed by trademarkowner, if the seller fails to produce evidence of genuineness of the product.

• Draft Consumer Protection (E-Commerce)Rules, 2019: These Rules have been madeunder the Consumer Protection Act toprotect the interests of the consumers andprovide for general conditions that arerequired to carry out e-commerce business

38 THE TRADEMARK LAWYER CTC Legal Media

Liability of e-commercewebsites in India

Manisha Singh, Managing Partner, Aprajita Nigam, Senior Associate, andSmrita Sinha, Associate, of LexOrbis, outline how the Indian legal system isdealing with the IP challenges created by the rapid growth of e-commercein the country.

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40 THE TRADEMARK LAWYER CTC Legal Media

transmission, then they may lose the exemptiongiven under safe harbour provision.

A recent judicial development has come inthe form of a dispute between Direct SellingEntities (Plaintiffs) and e-commerce websites(Defendants), wherein a Single Judge of theDelhi High Court ruled in favour of the plaintiffs,and awarded interim injunctions restraining thedefendants from displaying, advertising, selling,and facilitating repackaging of the plaintiffs’products, except of those sellers who producewritten permission/consent of the plaintiffs forlisting their products.

In an appeal preferred by Amazon, Snapdealand Cloudtail (Appellants) against the aforesaidinterim injunctions, a Division Bench of the DelhiHigh Court noted that the appellants provideservices in addition to access and thus, theyhave to show compliance with Section 79(2) ofthe IT Act and establish that they do not - initiatethe transmission, select the receiver of thetransmission and do not select or modify theinformation contained in the transmission. Theappellants contended that the consumersinitiate the transmission and they neither selectthe receiver, nor modify any information.

Among other observations, the court notedthat Section 79 of the IT Act ensures that the

liability for non-compliance and/or violation oflaw by a third party, i.e. the seller, is not imposedon the e-commerce websites. The courtdisagreed with the Single Judge’s view that thee-commerce websites will have to meet the duediligence requirement, failing which the benefitof safe harbour provision would not be availableto them, and observed that there is a prima faciemerit in the appellants’ contention that as onlinemarketplaces they provide value-addedservices; however, it does not dilute the safeharbour granted to them.

The jurisprudence relating to intermediaryliability is constantly evolving in India and finalityon the same is much awaited.

E-commerceplatformshave foundrefuge underthe safeharborprovisions of the IT Act 2000.

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ContactLexOrbis709-710 Tolstoy House, 15-17 Tolstoy Marg, New Delhi -110001Tel: +91 11 2371 6565www.lexorbis.commanisha@lexorbis.comaprajita@lexorbis.com smrita@lexorbis.com

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