Flipkart Gets ‘cover’ under Safe Harbour Clause- India

April 17, 2023
Granting an interlocutory injunction

By Priya Adlakha and Tanvi Bhatnagar

The Hon’ble Delhi High Court in a recent order in Samridhi Enterprises v. Flipkart Internet Pvt. Ltd. & Ors.[1], while granting an interlocutory injunction to the Plaintiff against the sellers on Flipkart, held that under Rule 3 of the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 (“Intermediary Rules”), an intermediary is not under any obligation to take action merely on a complaint of the victim/user regarding infringement of IPR. Therefore, no prima facie case was held to be made out against Flipkart.

Brief facts of the case:

Plaintiff claimed to be a manufacturer and seller of car covers under its registered marks ‘UK Blue’ UK Blue Brown and ‘Autofact’Autofact brown orange logo since 2018 on various e-commerce platforms including Flipkart. The Plaintiff grievance was that the Defendant Nos. 2 to 9 (sellers on Flipkart), have not only copied the look and feel of Plaintiff’s car covers designs, but also marketing the car covers in an identical fashion, on Flipkart, so as to create confusion in the minds of the consumers. The two exemplary listings compared by the Hon’ble Court are:

Plaintiff’s Listings Defendant’s Listings
Car Body Cover Swift Product Listing Seller Flipkart
Auto Fact Car Body Swift Car Body Cover old Swift

Hence, Plaintiff claimed copyright in the original artistic works under Section 2(c) of the Copyright Act, 1957 in its promotional listing and its infringement by the Defendants in their impugned listings on Flipkart.

The Hon’ble Court hold that clearly the Defendant Nos. 2 to 9 have adopted marketing methods and a portrayal of their products on the platform of Flipkart, which is consciously intended to lure buyer into believing their products belongs to the Plaintiff, and restrained them from copying, reproducing, adapting, distributing, communicating, transmitting, disseminating, or displaying the product images of the Plaintiff and trade marks as well as product listing details of the Plaintiff in which the Plaintiff owns the exclusive, valid and subsisting copyright(s) & Trademarks on to ecommerce platform “Flipkart” or on to any other online or offline platform.

It was argued on behalf of Flipkart that the platform had taken down the infringing listings as alleged by the plaintiff, and therefore it was not a necessary party in the case. The said request was apparently contested by Plaintiff. Though, the injunction order does not mention the interim reliefs sought by the Plaintiff against Flipkart, however some of the paragraphs of the plaint, wherein Plaintiff has alleged a lack of due diligence on the part of Flipkart, have been reproduced in the order. The allegations in brief included that:

(a) Flipkart encourages infringing product listings and sellers on its portal for its personal benefit, hence there is a lack of basic due diligence.
(b) By refusing to take down the infringing content on Plaintiff’s request, Flipkart acted in contravention of Rules 3(2) and 3(1)(b)(iv) of the Intermediary Rules, 2021.
(c) Flipkart’s infringement policy permits an aggrieved person to register a complaint for infringement of IPR, and also provides for the removal of such content on being brought to its notice.

Observations of the Court:

Hon’ble Mr.Justice C. Hari Shankar, IPD, Delhi High Court, making reference to The Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, which superseded The Information Technology (Intermediaries Guidelines) Rules, 2011, made the following observations:

  • That Rule 3(2)(a) of the Intermediary Rules, 2021 only envisages complaints regarding violation of the provision of Rule 3 (1), which provides inter alia, for the publishing of details of a Grievance Officer as well as the complaint mechanism on the platform’s website/app, and also requires the officer to acknowledge complaints and dispose them off within a time frame.
  • There is no provision in Rule 3 of the Intermediary Rules, 2021, which requires an intermediary to receipt of a complaint regarding infringing activities on its portal, to take any action against the alleged infringers.
  • Rule 3(1)(b)(iv) of the Intermediary Rules, 2021, does not assist the case of the Plaintiff, as under Rule 3(1)(b), Intermediary’s due diligence is limited to framing a policy to include IPR violation and under Rule 3(1)(a) is to publish the said policy/rules on its website/mobile app, in a prominent manner.
  • There is a conscious departure from the 2011 Rules, wherein such a provision i.e., clause 3(4) actually existed:

“3. Due diligence to be observed by an intermediary — The intermediary shall observe following due diligence while discharging his duties, namely:

(4) The intermediary, on whose computer system the information is stored or hosted or published, upon obtaining knowledge by itself or been brought to actual knowledge by an affected person in writing or through email signed with electronic signature about any such information as mentioned in sub-rule (2) above, shall act within thirty six hours and where applicable, work with user or owner of such information to disable such information that is in contravention of sub-rule (2). Further the intermediary shall preserve such information and associated records for at least ninety days for investigation purposes.”

  • With regard to Flipkart’s infringement policy, the learned Judge held that when the statutory provision does not envisage action being taken by intermediary on being informed by the right holder against an IPR violation, the Court cannot, by placing reliance on an internal policy of a particular intermediary, read into Clause 3 any such requirement, which doesn’t exist in the 2021 Rules.

Therefore, the learned Judge held that allegation of infringement is not made out against Flipkart. On Plaintiff’s request, the Hon’ble Court directed Flipkart to provide details of the sellers i.e., Defendant Nos. 2-9 within 3 days from order, subsequent to which the Plaintiff was ordered to implead the parties in their individual capacities.

[1] [CS.(COMM) 63 Of 2023]


Intermediary Liability: SC says Intermediaries not Protected under Section 79 of IT Act


For more information please contact us at : info@ssrana.com