Curbs on intermediaries in e-market

Intermediaries in e-commerce marketplace must operate with caution and they cannot claim immunity provided in the Information Technology Act if they violate trade mark law, the Delhi High Court emphasised in its judgment, Christian Louboutin SAS vs Nakul Bajaj. “So long as they are mere conduits or passive transmitters of records or information, they continue to be intermediaries, but merely calling themselves as intermediaries does not qualify all ecommerce platforms or online marketplaces as one,” the judgment stated while interpreting Section 79 of the Act dealing with intermediaries. In this case, the foreign firm dealing in luxury goods sought to stop Indian website Darveys.com from selling its products, alleging that they were counterfeits. The website countered that it did not sell those products but only directed potential customers to sellers who are spread over many countries. They are intermediaries protected by the Act, they argued. However, the high court stated that when an e-commerce company claims immunity, it ought to ensure that it does not have active participation in the selling process. The presence of any element which shows active participation could deprive intermediaries of the exemption. The court passed eight directions against Darveys like: If the sellers are abroad, before uploading a Louboutin product bearing its marks, it shall obtain concurrence before offering them on its platform; if the sellers are in India, it shall enter into an agreement ensuring the genuineness of the products.