Court restrains third-party sellers from exploiting Flipkart’s 'Latching On' feature to misuse 'Shapermen' brand, orders immediate delisting of infringing products.
In a significant ruling, the Delhi High Court has granted an interim injunction in favor of Piyush Sapra and another plaintiff, restraining unauthorized third-party sellers from exploiting the 'Latching On' feature of Flipkart's e-commerce platform to misappropriate trademarks and copyrighted content of the legitimate brand owner. The case, presided over by Mr. Justice Tejas Karia, highlights the complexities of intellectual property rights in the digital marketplace.
The plaintiffs, who own the trademark 'SHAPERMEN,' filed a suit against Flipkart Internet Private Limited and multiple third-party sellers, alleging unauthorized use of their brand name and copyrighted materials. The court found a prima facie case of passing off and copyright infringement against the defendants.
The plaintiffs demonstrated that Flipkart’s 'Latching On' feature allowed unscrupulous sellers to attach themselves to existing popular product listings. This feature, while intended to enhance consumer choice, was misused by unauthorized sellers to present counterfeit and inferior quality products under the guise of the legitimate brand, thereby misleading consumers and diverting sales.
Justice Karia emphasized the intermediary's responsibility under the Information Technology Act, 2000, noting that Flipkart failed to take action against the infringing sellers despite multiple complaints from the brand owner. This failure jeopardizes Flipkart's safe harbor protection under Section 79 of the Act, potentially making it complicit in the infringement.
The court's order included an injunction against the use of 'SHAPERMEN' trademarks and copyrighted materials by the third-party sellers. Flipkart was also directed to immediately delist and disable access to the infringing listings. Additionally, the court mandated Flipkart to provide detailed information about the infringing sellers upon notification of any further unauthorized listings.
This ruling underscores the stringent due diligence obligations of e-commerce platforms in protecting intellectual property rights and preventing the exploitation of their systems by unauthorized sellers.
Bottom line:-
Intellectual Property Rights - E-commerce intermediary's liability for unauthorized use of trademarks and copyrighted content by third-party sellers under its platform - Passing off action by the legitimate brand owner against unauthorized use of its trademarks and listings by unscrupulous sellers exploiting the platform's 'Latching On' feature.
Statutory provision(s):
Commercial Courts Act, 2015 Section 12A, Civil Procedure Code, 1908 Order XXXIX Rules 1 and 2, Information Technology Act, 2000 Section 79, Bharatiya Sakshya Adhiniyam, 2023 Section 63(4)(c).
Piyush Sapra v. Flipkart Internet Private Limited, (Delhi) : Law Finder Doc id # 2927523
