E-Commerce Platforms: Obligated to Offer Complete Seller Data to Combat Intellectual Property Right Infringement in India

In India, the rise of e-commerce has transformed the approach of consumer’s shopping and business operations. In addition to it, there is an expansion of online marketplaces like Amazon, Flipkart, and Myntra, which provides an easier accessibility to a wide range of products. However, this transformation has significant challenges, such as counterfeiting, trademark infringement, and unauthorized use of copyright contents, faced by the rights holder and the creator, particularly in the domain of intellectual property rights (IPR). Hence, there is a need to protect the intellectual property rights, as it is becoming an increased urgency.

This article examines the legal basis for disclosing the complete seller data, discusses relevant precedents, and explores the challenges associated with implementing such measures in India.

Obligation of e-commerce platforms to offer complete seller’s information: Legal Basis

There are legislations governing the IPR protection in e-commerce platform which create an obligation to the intermediaries to address the issue regarding seller data disclosure and IPR protection in the digital marketplace:

1. Trade Marks Act, 1991: As per S. 29, 101, and 104 of the Act, the law protects the trademark and service marks from any unauthorized use by addressing the violation issues and providing mechanisms to the owner of the trademark, in order to seek remedies against counterfeit goods.
2. The Copyright Act, 1957: Under the said act, S. 65A and S. 65B protect the digital copyrights from any unauthorized distribution or reproduction of the copyrighted works. S. 63 deals with the prevention of counterfeited goods and must have a fair use of the copyrighted works as per S. 51 and 52, along with S. 55 that deals with the remedies. Similarly, the same is covered under S. 48 and 104 of the Patent Act, 1970 with regards to unauthorized use of goods.
3. The Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 under the Information Technology Act, 2000: Under Rule 3(2)(d), it sets specific duties for intermediaries in the e-commerce sector to have a track record of information given by the users and sellers, ensuring to follow legal standards in order to prevent any intellectual property rights infringement.

Precedents and Rationale: Court Rulings on E-Commerce Platform Responsibilities

The Indian courts have addressed the responsibilities of e-commerce platforms concerning IPR enforcement and seller data in several notable cases:

1. Tata Sons Ltd. v. Amazon Seller Services Pvt. Ltd. (Bombay High Court, 2021):

The Bombay High Court stated that any e-commerce platform is held liable when there is a failure to take necessary measures in preventing the sale of infringed products on registered trademark while addressing the matter of trademark infringement in e-commerce platforms.

2. Flipkart India Pvt. Ltd. v. Philips Electronics India Ltd. (Delhi High Court, 2020):

The court held in favour of Philips by holding Flipkart responsible for the sale of counterfeit Philips products by reinforcing that it is mandatory for the e-commerce platforms to take proactive measures to confirm the seller’s information and avoid any sale of infringed products.

3. Amazon Seller Services Pvt. Ltd. v. Amway India Enterprises (Delhi High Court, 2019):

The Delhi High Court held in favour of Amway by making Amazon liable for the action of counterfeiting the sale of “Amway Products.” The case highlights the need for the e-commerce sector to maintain detailed seller’s data and ensure the genuineness of sale of goods through their platform with reasonable steps to address IPR issues effectively.

The judiciary’s role in managing intellectual property rights (IPR) is pivotal in ensuring transparency and accountability. By maintaining detailed seller data and adhering to IPR norms, platforms can effectively prevent misuse of IPR. This transparency not only holds sellers accountable for their actions but also fosters a fair and competitive market environment by protecting the consumer. The judiciary’s approach, therefore, safeguards the rights of creators while promoting a culture of compliance and ethical practices in the marketplace.

Strengthening the Legal Framework for IP Enforcement:

1. There is an increase in the sale of counterfeit goods on e-commerce platforms, which creates a barrier for the seller to sell their authentic products in the market against the false goods, which are disguised and sold as the seller’s product. Such an issue impacts the brand’s integrity and consumers’ trust. Hence, in order to eliminate such action, there must be international cooperation to tackle the cross-border counterfeit problems; recommendations for enhanced penalties to create a strong deterrent; and the development and reform of consumer reporting mechanisms for easier initiation and enforcement of complaints by the consumers.
2. The unauthorized use of copyrighted images, descriptions, or other content without permission, leads to copyright infringements. This complicates the enforcement and increases the burden on the creators and rights holders. The approach towards such an issue must be resolved through granting injunctions to stop the ongoing unauthorized use of copyrighted content, encouraging a clear licensing agreement and contract; and using legal tools to gather enhanced evidence.
3. As there are numerous transactions listed on e-commerce platforms, the sellers and rights holders, especially in the small and medium-sized enterprises (SMEs), struggle with monitoring, track keeping, and enforcing the IPR due to limited resources. The response to the issue would be solved by addressing the unified national framework for IP enforcement that helps in the structured enforcement process; by developing a Public Private Partnership that helps in monitoring and analysing the data’s by leveraging the resources; and by providing legal aid programs specifically for SMEs to help them operate and enforce the IP rights.
4. It is difficult to address the infringement issues or seek remedies due to the lack of collection of the seller’s detailed information. The solutions to such difficulty are by proposing reformation in the e-commerce platforms to implement comprehensive seller identification and reporting mechanisms; by developing and maintaining a centralised IPR database to have a track record of the information; and by taking legal action against those who fail to comply with the legislation or provide necessary seller information.

In conclusion, the e-commerce platform must prioritize collecting the seller’s information within legal and ethical standards. Additionally, a comprehensive measure must be followed to protect the IP rights of the creator or rights holder and actively prevent any IPR infringements by maintaining a fair and legal platform.

Authored by Sarren Muhil, an assessment Intern at Intepat IP.