E-commerce websites are not bound to keep a check on products for IP infringement before advertising on their website

Delhi High Court: In a case regarding Intellectual Property Rights, the plaintiffs-manufacturer of water purifiers sought protection by obtaining design registrations under the Designs Act, 2000 in respect of the aesthetic appearance of its water purifier systems stated that products covered by the plaintiffs registered designs are being marketed and sold by the defendant through e-commerce platform-Ebay constituting piracy under the Designs Act, 2000 and alleged that Ebay’s action of permitting the defendant to advertise, offer for sale and sell its products too amounts to infringement of the plaintiffs rights under Section 19 of the Designs Act.

The plaintiffs sought relief against Ebay to take down, remove, delist all products infringing the registered designs of the plaintiffs and issue of prohibitory injunction to from allowing products infringing the registered designs of the plaintiffs being offered for sale and sold from their portal. Plaintiffs contended that Ebay being an intermediary had a duty to do due diligence in order to ensure that before posting any information on its computer resources, it is important to satisfy itself that the same does not infringe the intellectual property rights of any person.

Ebay averred referring to Section 79 of the IT Act, 2000 which states that an intermediary shall not be liable for any third party information, data, or communication link made available or hosted by him. The Court accepted this contention observing that asking the intermediary e-commerce websites to screen the products they advertise for infringement of IPR would amount to an unreasonable interference with the rights of the intermediary to carry on its business.

The Court held that the intention of the Legislature has been to require the intermediaries to be vigilant and to only declare to all its users its policy and advise them not to host any infringing information on the website of the intermediary and to on receipt of complaint remove the same within 36 hours whereas no requirement of keeping a check upon the nature of products being advertised has been posed by the Legislature and did not pass any such directions to ebay as sought by the plaintiffs. [Kent RO Sytems v. Amit Kotak, 2017 SCC OnLine Del 7201, decided on 18.01.2017]

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