Understanding Trademark Infringement and Intermediary Liability: Legal Perspectives in the Digital Age
P. Saranya – Senior Associate, Intellectual Property Practice
Introduction:
In the modern era of e-commerce and digital platforms, intellectual property rights face unprecedented challenges, especially concerning trademark infringement and intermediary liability. Trademark infringement and intermediary liability are two critical issues at the intersection of intellectual property law and digital commerce. Accordingly, under the e-commerce platforms and online marketplaces, the dynamics of trademark protection and the responsibilities of intermediaries have evolved significantly. This article provides an in-depth analysis of trademark infringement, the concept of intermediary liability, and the legal frameworks governing these areas in the digital age.
Trademark Infringement: Trademark infringement occurs when a party uses a trademark, such as a brand name or logo, without authorization in a manner that is likely to cause confusion among consumers regarding the source or origin of the goods or services. Trademarks play a crucial role in distinguishing the products or services of one entity from those of others, thereby protecting the goodwill and reputation associated with the brand.
To establish trademark infringement, the following elements must typically be proven:
Ownership of a valid trademark: The plaintiff must demonstrate that they own a registered trademark or have acquired common law rights through extensive use of the mark in commerce.
Use of the trademark by the defendant: The defendant must have used a mark that is identical or confusingly similar to the plaintiff’s trademark in connection with the sale or promotion of goods or services.
Likelihood of confusion: The use of the defendant’s mark must be likely to cause confusion among consumers regarding the source, affiliation, or sponsorship of the goods or services.
Courts consider various factors in assessing likelihood of confusion, including the similarity of the marks, the similarity of the goods or services, the channels of trade, and the degree of consumer care.
Intermediaries:
The term “intermediaries” is defined under section 2(w) of Information Technology Act, 2000 which says
“Intermediary” – with respect to any particular electronic records, 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.
Section 79 of the Information Technology Act provides certain immunities and exemption from liabilities to the intermediaries. That the intermediary shall not be liable for any third-party information, data or communication link made available or hosted by him. Section 79 of the Information Technology Act, 2000 is extracted below:
- Notwithstanding anything contained in any law for the time being in force but subject to the provisions of subsections (2) and (3), an intermediary shall not be liable for any third-party information, data, or communication link made available or hosted by him.
Intermediary Liability: Intermediary liability refers to the legal responsibility of intermediaries, such as internet service providers (ISPs), e-commerce platforms, and social media networks, for the activities of their users or third parties. In the context of trademark infringement, intermediaries may be held liable for facilitating or enabling infringing activities on their platforms.
Legal frameworks governing intermediary liability vary across jurisdictions, but they generally seek to strike a balance between promoting innovation and protecting intellectual property rights. The principles of intermediary liability are often informed by broader concepts of secondary liability, such as contributory infringement and vicarious liability.
Key considerations in determining intermediary liability for trademark infringement include:
Knowledge or awareness: Intermediaries may be held liable if they have actual knowledge of infringing activities or if they are aware of facts and circumstances that make infringement apparent.
Control or supervision: Liability may arise if intermediaries exercise control or supervision over the infringing activities, such as through content moderation or product listings on e-commerce platforms.
Good faith efforts: Intermediaries can mitigate their liability by implementing effective measures to prevent or address trademark infringement, such as implementing notice and takedown procedures, implementing policies against counterfeit goods, and cooperating with rights holders.
Landmark Cases and Legal Precedents: Several landmark cases have shaped the legal principles surrounding trademark infringement and intermediary liability in the digital age. Some of which are:
Christian Louboutin SAS v. Abubaker & Ors. (2018 (250) DLT 475)
In a series of cases involving the sale of counterfeit luxury footwear bearing the iconic “Red Sole” trademark of Christian Louboutin, various Indian courts have consistently held online marketplaces, including Amazon and Snapdeal, liable for trademark infringement and passing off.
These cases underscore the importance of intermediaries taking proactive measures to prevent the sale of counterfeit products on their platforms to avoid liability for trademark infringement.
Prasar Bharti v. Dish TV India Ltd. 2024 SCC OnLine Del 1694)
This case involved a dispute over the use of the trademark “Dish” in the domain name “Dishumovies.com” by Shemaroo Entertainment, which offered streaming services similar to Dish TV.
The Delhi High Court held Shemaroo Entertainment liable for trademark infringement and passing off, emphasizing the need for clarity and distinctiveness in online branding to avoid confusion among consumers.
MakeMyTrip (India) Pvt. Ltd. v. MakeMyYatra Holidays Pvt. Ltd. (2017):
In this case, the Delhi High Court addressed issues of trademark infringement and passing off concerning the use of the “MakeMy” prefix in the domain name “MakeMyYatra” by a competing travel services provider.
The court ruled in favor of MakeMyTrip, holding that the defendant’s use of a similar mark was likely to cause confusion among consumers and dilute the distinctive identity of the plaintiff’s trademark.
The Delhi High Court had addressed trademark infringement issues concerning the sale of counterfeit books on the Flipkart platform and held the Flipkart liable for trademark infringement, ruling that the platform had failed to exercise due diligence in preventing the sale of counterfeit goods by third-party sellers, thereby emphasizing the responsibility of online intermediaries to combat infringement.
Tiffany (NJ) Inc. v. eBay Inc. (MANU/FESC/0277/2010): The U.S. Court of Appeals for the Second Circuit held that eBay was not liable for trademark infringement based on the sale of counterfeit Tiffany jewellery on its platform, finding that eBay had taken sufficient measures to address the issue.
L’Oréal v. eBay ([2011] R.P.C. 27): The European Court of Justice ruled that eBay could be held liable for trademark infringement if it played an active role in promoting or facilitating the sale of counterfeit goods on its platform.
The above cases illustrate the complexities of intermediary liability and the importance of balancing the interests of rights holders, intermediaries, and consumers in the digital marketplace.
Further, A recent case before the Delhi High Court, Zed Lifestyle Pvt Ltd. v. Hardik Mukeshbhai Pansheriya and Ors (MANU/DEOR/3967/2024) sheds light on these issues, highlighting the complexities of protecting trademarks in the online environment and the responsibilities of intermediaries in preventing infringement.
Facts of the Case: Zed Lifestyle Pvt Ltd., a renowned fashion brand, filed a lawsuit against Hardik Mukeshbhai Pansheriya and others alleging trademark infringement. The defendants were operating an online marketplace that hosted listings for products bearing the plaintiff’s trademarks without authorization. Zed Lifestyle argued that the defendants’ platform facilitated the sale of counterfeit goods, causing confusion among consumers and tarnishing the goodwill associated with its brand.
Trademark Infringement: The Delhi High Court analyzed the defendants’ activities in light of trademark law principles. It recognized the importance of trademarks in indicating the origin and quality of goods, emphasizing the need to protect consumers from confusion and deception. The court found that the defendants’ use of Zed Lifestyle’s trademarks without authorization constituted trademark infringement, as it created a likelihood of confusion among consumers regarding the source of the products.
Intermediary Liability: The case also raised important questions regarding the liability of online intermediaries, such as e-commerce platforms, in cases of trademark infringement. The defendants argued that they were merely intermediaries providing a platform for sellers and buyers to engage in transactions and that they were not responsible for monitoring or verifying the authenticity of the products listed on their platform.
However, the Delhi High Court held that intermediaries cannot claim immunity from liability by merely acting as facilitators of transactions. It reiterated the principles established in landmark cases such as Shreya Singhal v. Union of India, emphasizing that intermediaries have a duty to exercise due diligence in preventing unlawful activities on their platforms. The court held that the defendants failed to fulfill this duty by allowing the sale of counterfeit goods bearing Zed Lifestyle’s trademarks, thereby making them liable for trademark infringement.
The Zed Lifestyle Pvt Ltd. v. Hardik Mukeshbhai Pansheriya and Ors case serves as a significant precedent in the realm of trademark infringement and intermediary liability in the digital age. It underscores the importance of protecting intellectual property rights in online transactions and holding intermediaries accountable for facilitating infringement. Moving forward, this case highlights the need for robust mechanisms to prevent and address trademark infringement on digital platforms, ensuring a fair and competitive marketplace for businesses and consumers alike.
Conclusion:
Trademark infringement and intermediary liability gives significant challenges in the digital age, requiring a nuanced understanding of legal principles and careful navigation of evolving legal frameworks. Businesses must prioritize trademark protection to safeguard their brands and reputation, while intermediaries must implement effective measures to prevent and address infringing activities on their platforms. Recent case law developments provide valuable insights into the application of trademark law and intermediary liability in the digital context, guiding stakeholders in navigating the complex legal landscape and promoting a fair and competitive online marketplace for all.
References:
*Intermediary Liability For Intellectual Property Infringement – Trademark – India (mondaq.com)
*Full article: Evolving scope of intermediary liability in India (tandfonline.com)
*Liabilities of Intermediaries In Trademark Infringement Cases In India – Fox Mandal
*L’Oreal vs Brandworld & Anr. on 12 November 2018 (indiankanoon.org)
*Online trademark infringement and the liability of intermediaries PPT (slideshare.net)
*India: Intermediary’s Liability for Infringing Content – Lexology
*FULLTEXT01.pdf (diva-portal.org)
*Intermediary Trademark Liability: A Comparative Lens – Intellectual Property (jotwell.com)
*IP INFRINGEMENT AND RESPONSIBILITIES OF E-COMMERCE PLATFORMS | Article | Chambers and Partners