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Delhi HC Holds that IndiaMART Cannot Claim Safe Harbour while Hosting Listings for Counterfeit Puma Goods

IndiaMART allows third-party sellers to choose “Puma” from a drop down menu as a descriptor for their goods. However, due to few verification processes, peddlers of counterfeit goods get to also select the option, leading to the proliferation of unauthorized goods.

The Delhi High Court recently held that e-commerce platform IndiaMART couldn't claim safe harbour while hosting multiple listings for knock-off Puma goods. In his January 3rd judgment, Justice C. Hari Shankar directed the platform to take down all infringing listings bearing Puma's registered trade marks. Safe harbour, held under Section 79 of the Information and Technology Act, 2000, protects intermediaries from being held liable for the third-party content they host, provided they comply with applicable laws.  IndiaMART allows third-party sellers signing up to the platform to choose "Puma" from a drop down menu as a descriptor for the goods they're selling. However, there are few verification processes while doing so, leading to peddlers of counterfeit goods selecting the option as well, and a proliferation of unauthorised Puma knockoffs on the platform. Finding that providing the drop down option constitutes trade mark infringement by IndiaMART, Justice Hari Shankar subsequently restrained IndiaMART from providing any of Puma's registered trade marks as options in the menu. "E-commerce websites are commercial ventures, and are inherently profit oriented," Justice Hari Shankar reasoned. "There is, of course, nothing objectionable in this; but, while ensuring their highest returns, such websites have also to sedulously protect intellectual property rights of others. They cannot, with a view to further their financial gains, put in place a protocol by which infringers and counterfeiters are provided an avenue to infringe and counterfeit. Any such protocol has to meet with firm judicial disapproval...There is nothing inherently illegal in IIL providing a drop…

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