The Bombay high court recently laid down that marketplace cannot take refuge under section 79 of the IT Act when dealing with products being sold on their site.
“Section 79 of the Information Technology Act 2000 states that intermediaries will not be responsible for any third-party information or data or communication links.”
The intermediaries here are organisation or entities that provide content to the end-user online and as per the Information technology
They only act as facilitator and protection from any liability that may arise from user-generated content on them.
Bombay High court snatched away the safe heaven enjoyed by the retail website.
Making it necessary for them to check trademark registration of the retailers selling a product on their site.
Hence,
It is necessary for the online retailers to make sure that the products being sold on their website are not a counterfeit product or are not using a trademark that is deceptively similar to the marks that are registered with other brands.
As was seen in the case of Metro shoes which is a well-Known brand in Mumbai that filed a case against Reliance retail, Just dial and India Mart for the products which were being sold on their website that were highly similar to the Trademark ‘Metro’ under which they are selling footwear.
The court also made it clear with a judgement that sites such as these can no longer hide behind the tag of “intermediaries” they will have to see that they don’t sell knock offs or counterfeit products on their site.
The loss of immunity under section 79 of the Information Technology act makes it necessary for the online retail website to check upon the trademark registration of the retailers and products.
Amazon and Flipkart are among the few retail websites that have made registration of a vendor on the site acceptable only when they have a trademark registration for the brand or product they are selling. This step by the sites is necessary to check the authenticity of the website.
The website has to necessarily conduct intellectual property due diligence on the vendors as they will be liable for penalty and fine from the court as they will be considered the party to the trademark infringement.