Author - Utkarsh Singh and Prayank Khandelwal

WhenUncle Ben told Spiderman that “With great power comes great responsibility” werealized that this quote was not just applicable to the fiction world it couldvery well be applied to the Non-Fiction world we currently live in. After RelianceJio introduced affordable high-speed internet to India, the country was takenby a storm and a new era of internet awareness came into play, with easyaccessibility of the internet, people started to place their trust over onlineservice providers thereby bestowing upon them certain powers. The E-commerce industryobserved a sudden boom in the purchases made online and people started using thesewebsites to acquire original goods. But there have been numerous cases whereinthe goods ordered are not the actual goods delivered. Moreover, the E-commerceindustry on numerous one occasion has violated the Intellectual Property Right(IPR) of well-known and established brands.

Forexample, X ordered a pair of shoes of the brand Nike from abc.com, with thebelief that he will be getting the original brand shoes after all he paid theprice for original Nike’s, but when the shoes arrived they turned out to below-quality fakes bearing the trademark of Nike. Now X may or may not realizethat the product sent to him is a fake and may end up blaming Nike for the lowquality of the product. If this charade carries on for a while then thehard-earned reputation and brand image of Nike will be soiled without them evenrealizing. Thus, one of the main purposes of having an IPR will be defeated.Now, the website abc.com is in clear violation of Sections 2(2)(c), 101 and 102 of the Trademark Act (whichbasically states meanings of using, applying and falsifying a mark). Now,when a legal recourse for trademark infringement is taken by Nike, then abc.comclaimed protection by addressing themselves as merely an intermediary. Now tounderstand whether abc.com will be liable for the infringement or not we needto understand how the concept of intermediary liability works and how cansomeone even after technically breaching the IPRs of a third party still escapeliability by claiming protection under it.

Section79 of the Information Technology Act, 2000 states that an intermediary is notliable for third party information, data, links hosted on its platforms, butthe intermediary has to absolve itself from any kind of active participationthroughout the transaction. Intermediary Guidelines were also issued in theyear 2011 to give a clearer picture as to the Due Diligence that is to befollowed by such websites that portray themselves as an intermediary. These E-commercewebsites generally enter into a contract with a seller to display the seller’sgoods on their website. Once the goods are displayed, the end consumer candirectly place an order from the website. Now when selecting such sellers, theE-commerce website has to perform certain due diligence to ensure that theproduct being displayed by the seller is authentic and the seller has acquiredpermission from the manufacturer to deal with such goods. You may read the duediligence requirements as given under the IT(Intermediary Guidelines), Rules 2011. But the mereobservance of the guidelines won’t absolve the E-retailer of TrademarkInfringement liability. This view was brought unto view by the decision ofDelhi High court in the case of ChristianLouboutin SAS v Nakul Bajaj and Ors wherein an E-Commercewebsite was held liable for the infringing trademark of the company by the nameof Christian Louboutin by selling their products without acquiring duepermission.

Flipkartand Amazon these two E-Commerce giants are currently the leaders in the Indianmarket and we rarely see them getting caught up in such situations. So thequestion that pops up to one’s mind is what are they doing differently? Whencomparing with other websites such as Darveys or Shopclues, 3 major differencescan be observed.

• DueDiligence- They exercise proper due-diligence and ensure thatany product being sold on their website is not counterfeit; they take thereports by their customers seriously and act upon it. They ensure that they donot make any frivolous claims themselves about the quality of a product but merelyserve as a platform for selling goods.
• SellerVerification- These E-Commerce websites ensure thatthe sellers have the requisite authority to deal with the goods they areplanning on displaying on the website, before allowing such goods to be sold ontheir platform.
• Take-DownProvision- They have a very strict takedown policy whereinPeople/Companies whose IPR has been infringed can directly report suchviolation to the E-commerce platform and the platform, in turn, takes strictaction to protect their right and if found in violation the infringer is bannedfrom trading on the website.

Inconclusion what can be said is that all E-commerce websites need to realizethat the sellers are different from the manufacturers and it's only after dueverification by the manufacturer should they allow the sellers to sell suchgoods on their website. When such an act is committed aside from the damage tothe intellectual property, brand name the faith of customers over such atrading platform is also lost. People spend their hard-earned money andtherefore have the right to receive what they pay for and not fake goods.Therefore it’s high time now that the E-commerce websites start taking UncleBen seriously or they might end up with an imprisonment for a minimum of 6 monthswhich can be extended up to 3 years or fine up to two lacs or both, and forsubsequent offenses the term keeps on increasing by 1 to 3 years and so doesthe heavy fine. So, it’s better that the E-commerce platforms start gearing upand take the due precaution as there is no Spiderman in the real world whowould help them escape such an adverse situation.