What Responsibility Do E-Commerce Platforms Have for Counterfeit Enforcement?

Introduction

E-commerce has transformed the Indian shopping. Be it fashion, or electronics, or any other good, the sites such as Amazon, Flipkart, and others, have become a great convenience, a great variety, and a great price to the consumers. However, this development has brought about the development of high sales of counterfeit goods online. The knockoffs not only deceive the consumers, but also ruin the image and revenues of genuine firms.

In this direction, the law is even more holding e-commerce sites responsible to ensure that the marketplaces offer safety and reliability to the market. Though the sellers have a direct role to play in infringement, the platforms are expected to be aggressive in policing, deterring and destroying counterfeit items. Indian courts and regulators are now starting to demystify these roles, between on the one hand safeguarding consumers and on the other hand guaranteeing freedom of business.

Legal framework in India

1) Mobile Commerce (E-Commerce) Rules, 2020- Websites that engage in e-commerce must ensure that they display details regarding sellers, money back guarantees and grievance redress policy. Ask the demand sites to stop selling counterfeit products.

2) Information Technology Act, 2000- Provides safe harbour to intermediaries but only in instances where they act upon reports of illegal content, or duplicated goods as soon as they are reported.

3) Intellectual Property Laws- Section 1 of Copyright Act, 1957 and Trademark Act, 1999 gives the right holders a right to take an action against counterfeit goods. Websites must also be used to remove the violative listings to avoid liability.

The way courts understand the responsibility of platforms-

1. Safe Harbour vs. Active Role- Courts distinguish between the platforms that are idly hosting the third-party listings and those that are actively engaged in pricing, packing or even promotion. They should not go further and become intermediaries or they will lose safe harbour and take a liability.

Case Study: Christian Louboutin. V. Nakul Bajaj (2018) -The Delhi high court ruled that in the circumstances when platforms are actively involved in sales they cannot fall back on the intermediary protection.

2. Notice And Takedown Mechanism- Platforms should be responsive on notifying about fake products. The inability to omit listings may have an impact on a litigation on facilitating infringement.

Shirtwaist Seller: Amazon Seller Services v. Amway India (2020) - The court emphasized that it is the work of the platforms to collaborate with brand owners to remove fake products.

3. Consumer Protection Approach- The second area the courts look at e-commerce relies on the rights of consumers. There should also be platforms that ensure transparency, redressal, and should not mislead the customers by allowing counterfeits to thrive.

FACTORS COURTS CONSIDER

In this determination on responsibility, courts will be concerned with the status of the platform, be it, simply, a marketplace or actively, controlling the sale. They also examine the pace at which the takedown activities are completed upon being presented with a complaint regarding counterfeits and the due diligence that the platform has performed prior to awarding the seller the right to list their products. Another reason is the interest of the consumer because a fake product can be harmful or deceptive. Finally, the courts weigh the trade-off between the innovation and accountability in such a way that platforms do not turn into a burdensome zone but rather accountable custodians of trust in the digital trade.

The importance of the enforcement of counterfeit to E-commerce platforms- The platform should make sure that counterfeit enforcement is done well to ensure that the consumers remain loyal to the platform and that their business grows long-term. It provides the brands with confidence to sell online as they are assured of the protection of their intellectual property. Active enforcement reduces as well the legal risks because the platforms that fail to act can be sued or fined by the authorities. It will also aid in building a trusted market, which will encourage additional buyers to purchase online. The websites also secure their reputation by not risking selling counterfeits since buyers will always blame the site and never the vendor.

CONCLUSION

Indian e-bays cannot afford to be spectators of the sale of fake products through their platforms. They should be exercising due diligence and have their notice-and-takedown systems in place and actively collaborate with brand owners as well as consumers, as courts and regulators would expect them to do so. Even though the sellers themselves are directly liable, the platforms bear an immediate responsibility to contribute a considerable role in the fair, transparent, and safe online trading. Lastly, the counterfeit protection is not only a legal requirement but also a business necessity to ensure trust in the trade online.