Christian Louboutin SAS Vs. Nakul Bajaj and Ors.

30th April, 2019 - 10:23 am Categories: Legal Issues 0 Comments

Facts of the case:

The plaintiff in the case, one Christian Louboutin is a luxury brand which is specialized in shoes and other related goods, Christian Louboutin has many products which enjoy exclusivity through Intellectual Property Rights. The defendant is Darveys.com, Darveys is a members-only luxury online shopping portal. It was noted in the investigation that the company required members to pay ₹2000 to use the website. It was stated that the product sold by the Darveys.com especially the product line of the plaintiff were stated to be unauthorized sales. The plaintiff further claimed that the products of their brand were sold only under authorized sellers in India. The defendant claimed protection through section 79 of the Information Technology Act, 2000 as an intermediary.

Issues

• Whether the “safe harbour” protection through section 79 should apply here?

• Whether the use of Mega Tags comprising the Plaintiff’s Registered Trademark amounts to infringement of IP rights?

• Whether there should be relief awarded to the plaintiff against the defendant?

Analysis

The website of the defendant comes under the definition of the intermediary under section 2(w). Section 79 of the Information Technology Act provide safe harbour protection to intermediaries alone on certain conditions over content uploaded or sold through third parties, like in the sense of Amazon. Flipkart.

The Defendant gave out certain points in their written statement: That the praise for Mr. Christian Louboutin is not within the knowledge of the Defendants. The Defendants have not had any direct dealings with the Plaintiff. They further claimed that the sale was legally carried out.

The Plaintiff in their contentions stated the following:

The use of the brand’s trademarks on the website is a clear indication of an infringement. The usage of Mega tags comprising the brand names was also infringing. The use of an article on the website by Christian Louboutin clearly differs from the plaintiff’s contention of not having knowledge about the brand. It also points at the various mentioning of the brand and its founder through writeups and photographs.

The court looked at the Google France SARL, Google Inc. v. Louis Vuitton Malletier SA & Ors.[1] (hereinafter, ‘Google France’),

“the European Court, after reviewing the provisions of the EC Directive 89/104, Directive 2000/31 and Regulation 40/94 which stipulates the rights conferred by a trademark, considered the position of intermediaries. if the service provider, who merely provides the internet reference through a keyword or a sign identical to the trademark, does not violate Article 51 of Director 89/104, or 9(1)(a) and (b) of Regulation 40/94.”

“it is necessary to examine whether the role played by that CS (COMM) 344/2018 Page 17 of 59 service provider is neutral, in the sense that its conduct is merely technical, automatic and passive, pointing to a lack of knowledge or control of the data which it stores.”

The court examined various judgements and concluded that the knowledge of the infringement by the intermediaries makes the liability shift. This was also stated in an Indian Judgement MySpace Inc. v. Super Cassettes Industries Ltd.[2] There too the concept of constructive knowledge and the active knowledge was discussed. In the MySpace judgement, it was declared that even if the intermediary has a knowledge of the illegality happening in their website then the intermediary does not need a court order to stop the counterfeited product or infringing product from using their intermediary service. The activities that happen even after a minimum knowledge of the infringement can be claimed to be of a sort of abiding by the infringement done by the third party and it would amount to the intermediary becoming liable.

In the issue of meta-tags, the decision of Delhi High Court itself in the Kapil Wadhwa v. Samsung Electronics[3] was relied upon, where it was stated that the use of meta-tags which comprises of brand names of others would amount to infringement.

“Meta tags are links which are provided using keywords. If a trade
name is used as a keyword and a link is provided, the website comes up whenever a customer searches for the said trade mark. The trade mark used in the code as a keyword is invisible to the end-user or customer. Such use, though invisible to the customer, has been held to be illegal.”

The court gave out the decision that the darveys.com in support of transporting the infringed goods to the customer would definitely be held liable even as an intermediary. The court also referred to the IT (intermediaries guidelines) rules 2011. The court also insisted that the aforesaid of the intermediary guidelines is advisable but not a sole criterion for providing the protection that the intermediaries needs.

Conclusion

The role of intermediary in the e-commerce sites usually tends to be of a sort of a complete package other than just being an intermediary.

This judgement being the first of its kind on these types of cases, tends to create a clear definition of the work that the intermediary has to do and it relies on the provisions of the safe harbour, overriding effect and intermediary guidelines of 2011. This tries to explain the due diligence that an intermediary needs to do before hosting a sale.

Author: Rohit Magesh <rohitmagesh98@gmail.com> LLB. (Hons.)
VITSOL Chennai , Intern at Khurana & Khurana, Advocates and IP Attorneys. In case of any  queries please contact/write back to us at rishabh@khuranaandkhurana.com

References:

[1] C-236/08 Court of Justice of the European Union (Grand Chamber)

[2] 236 (2017) DLT 478

[3] 2013 (53) PTC 112 (Del.)