Delhi High Court restrains Indian Mart website from displaying counterfeit PUMA products

delhi high court

Delhi High Court: A suit was filed by PUMA SE (plaintiff) against the website owned by IndiaMART IndiaMESH Ltd. for displaying various counterfeit goods, bearing fake “Puma” marks, put up by third-party sellers for purchase. C Hari Shankar, J., restrained the defendant from providing any of the registered trade marks of the plaintiff, including PUMA, in respect of any goods whatsoever, as search options in the drop down menu presented to prospective sellers at the time of their registration on the Indiamart platform.

The Puma SE is one of the world’s leading manufacturers of sportswear and accessories. It uses the distinctive and logos, which are its source identifiers. “PUMA” as a word mark is registered in the name of the plaintiff. The defendant IndiaMART IndiaMESH Ltd (“IIL”) operates the website Merchandise of various manufacturers are purchasable from the said website. The website allows a consumer to enter a search option in the space provided for the purpose. The plaintiff’s grievance is that if one enters, in the said space, the search word “PUMA”, various counterfeit goods, bearing fake “Puma” marks, put up by third-party sellers, are displayed for purchase. These goods also bear the plaintiff’s registered trademarks.

Counsel for the plaintiff submitted that most of the goods that are put up by various sellers as genuine PUMA sportswear or allied products are in fact counterfeits. IIL’s IndiaMart e-commerce website is, therefore, being used to peddle counterfeit goods of the plaintiff. The use of the plaintiff’s registered trademarks on such counterfeit goods amounts to infringement within the meaning of Section 29 of the Trade Marks Act, 1999. It was alleged that by using the said marks, the goods on which they are used, and which are sold on the IndiaMart e-commerce platform are also, therefore, being passed off as genuine goods of the plaintiff.

The plaintiff’s grievance against IIL, which is the sole defendant in the suit, is that IIL is aiding, abetting and facilitating such infringement and passing off. IIL does no prior verification before accepting a seller, registered on its website, as peddling the goods of a particular reputed brand. The result is that IIL’s IndiaMart platform is used as a means to peddle counterfeit goods, in the bargain defrauding customers, infringing the plaintiff’s registered trademarks and passing off the counterfeit goods as the goods of the plaintiff. By not conducting any verification of the seller’s credentials, and by providing “Puma shoes” as a drop-down option that the seller can choose while registering himself as a dealer in a particular product or product range, it is alleged that IIL is facilitating infringement and passing off by sale of counterfeit products. This, he alleges, amounts to aiding and abetting infringement and passing off.

The issues under consideration are

(i) Is IIL infringing the plaintiff’s registered trade marks, or passing off goods or services, other than those of the plaintiff, as the plaintiff’s? If not, the matter ends there.

(ii) If IIL is doing so, is it entitled to safe harbour under Section 79 of the IT Act and thereby insulated from the consequences of infringement/passing off?

The Court noted that it is a settled principle of law that the expression “in advertising” is not synonymous with “in an advertisement”. For a registered trade mark to be regarded as having been used “in advertising”, therefore, it is not necessary that the registered trademark must feature in an advertisement. Thus, the use of a trademark as a keyword to trigger the display of an advertisement of the goods or services would amount to the use of the trademark in advertising. Therefore, in the present case, the use of the plaintiff’s registered trademark as one of the drop-down choices available to the seller at the time of registration with the IndiaMart platform would also amount to “use” of the trade mark within the meaning of Section 2(2)(b) and 2(2)(c)(i). Section 2(2)(b) clarifies that any reference, in the Trade Marks Act, to use of a mark, shall be construed as a reference to the use of printed or other visual representation of the mark.

The Court remarked that though the “Puma shoes” option provided in the drop down menu is visible only to the seller at the time of registering himself with the IndiaMart platform, and is not visible to the consumer who visits the website with intent to purchase goods, and though it is provided only at the “backend” of the registration process, the providing of the option itself constitutes “use of a mark” of the plaintiff, within the meaning of the Trade Marks Act. IIL does not include, in its drop down menu, all brands, but only select brands of reputed manufacturers. There is a conscious participation by IIL in the exercise of determination of the drop down choices. Thus, a prima facie case of infringement within the meaning of Section 29(1), (2) and (4) of the Trade Marks Act, exists.

On the aspect of safe harbour, the Court observed that Rule 3(1)(b)(iv) of the IT Rules requires every intermediary to make reasonable efforts to cause users of its computer resource not to host, display or upload any information that infringes any patent, copyright or other proprietary rights. This requirement having been cautiously inserted, has to be given a strict interpretation. Strict adherence and compliance with the requirement are mandatory. Rule 3(1)(b)(iv) of the IT Rules has to be read alongside Section 79 of the IT Act. While sub-section (1) of Section 79 insulates an intermediary from third-party information, data or communication links made available or hosted by it, subsection (2) sets out the circumstances in which this protection would be available and sub-section (3) sets out the circumstances in which this protection would not be available. Both these provisions prima facie against IIL in the present case.

The Court further observed that Section 79(2) stipulates the three circumstances in clauses (a), (b) and (c) thereof, in which Section 79(1) would apply. Of these, clauses (a) and (b) are separated by the conjunction “or”, whereas there is no conjunction between (b) and (c). One presumes, however, that clauses (b) and (c) are also to be deemed as having been separated by the conjunction “or”. This indicates that it is not necessary that all the three clauses (a) to (c) must simultaneously apply for Section 79(1) to apply and that Section 79(1) would apply if any one of the three clauses (a) to (c) of Section 79(2) is applicable. In the present case, however, none of the three clauses (a) to (c) of Section 79(2) applies. Thus, As IIL has, therefore, prima facie aided the commission of the unlawful act of counterfeiting and infringement, it cannot claim the benefit of safe harbour under Section 79(1).

Thus, the Court held that the plaintiff has been able to make out a prima facie case of infringement by IIL of the plaintiff’s Puma trade mark as would justify it to an injunction as sought.

[PUMA SE v Indiamart Intermesh Limited, 2024 SCC OnLine Del 17, decided on 03-01-2023]

Advocates who appeared in this case :

Mr. Ranjan Narula and Ms. Shivangi Kohli, Advocates for plaintiff

Mr. Rajshekhar Rao, Sr. Adv. with Mr. Pulkit Gupta and Ms. Rhea Dube, Ms. Zeya Junaid, Advocates for defendants

Buy Trade Marks Act, 1999   HERE

trade marks act, 1999

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