The role of intermediaries in the ecommerce industry has been evolving and shaping up since inception of the Information Technology Act, 2000. Intermediaries not only provide a platform for conducting commerce and trade on the internet but also mediate between sellers and buyers from all across the world.
In the usual course of their business, intermediaries are required to observe due diligence in their activities. This includes being watchful of intellectual property rights violation on their platform. For example, an intermediary needs to take requisite steps upon finding one of its seller’s product(s) infringing someone’s IP rights, so that further infringement of such rights can be barred. Such requisite steps included removal of the content upon complaint. But the law doesn’t explicitly clarify whether it includes scrutinizing a content by the intermediary before being allowed on to the online platform. In an interesting case of Kent R.O. vs. Amit Kotak & Ors., the Single Judge of Delhi High Court spelled out the position of law on this aspect, delineating intermediaries’ obligations in case of infringement of IP rights on their website.
Kent alleged against the First Defendant, Amit Kotak that his products resembled in shape, look and appearance with that of Kent’s water purifiers. On the other hand, the Second Defendant, eBay got caught up in the crossfire as an intermediary, alleged to have violated Kent’s IP rights for hosting the infringing products on its website. The Information Technology Act, 2000 and Information Technology (Intermediaries Guidelines) Rules, 2011 require an intermediary to take down any IP infringing content upon notice. The dispute arose because Kent had found out similar products on eBay, besides the ones it brought to notice, that were infringing Kent’s design rights. Kent alleged that eBay was under an obligation to observe due diligence of removing infringing products on its own, with respect to products not brought to notice by Kent but continued to infringe Kent’s rights. As per eBay, it had removed all infringing contents that were notified by Kent. However, eBay contended that it was not obligated to remove content not complained of, or in other words, go through each and every content before posting online. Without clear provision in law to determine the position on this aspect, Kent approached the court praying for a direction to take down, remove and delist all such products as well as issue a prohibitory injunction against eBay from allowing similar infringement in future.
The question was neither about eBay’s obligation with respect to removal of infringing content upon complaint nor making its users aware of computer resources that had information infringing any IP rights. The question was whether law allows the relief asked by Kent, i.e., enabling a mechanism where an intermediary could scrutinize information of a seller’s products before hosting them for sale online. Such a mechanism would aid in identifying potential IP infringing products and forbid them from being uploaded on the portal.
What the law explicitly provides is a safe harbor from legal liability for intermediaries in case they observe due diligence while performing their duties. However, this safe harbor is subject to intermediaries’ role in abetting, aiding, conspiring and inducing an unlawful act, which was contended by Kent against eBay.
The court held that screening contents pre-publication online would be to interfere unreasonably in the rights of an intermediary. If it is allowed to conduct such scrutiny, then the intermediary assumes the role of a self-determining authority for deciding infringement in alleged cases. However, pre-publication scrutinisation and self-determining role are not authorized by law to an intermediary.
A careful reading of provisions of the Rules indicates that the intermediary is only obligated to the removal of any infringing content on receipt of a complaint and not otherwise on its own self-determination. The removal has to be made within 36 hours of receipt of any complaint on this behalf. Other obligations of the intermediary include making its users aware of its policies on this aspect and advising them not to host or entertain any IP infringing information while enjoying the benefits of the intermediaries’ website.
The obligations on intermediaries are well settled. The duty of investigating the content and determining infringement before publication is not vested with an intermediary. It should not be mistaken with the doctrine of “auto-block” which enables search engines to automatically block a list of proposed contents online, prepared by a nodal agency of the government. The doctrine applies only in relation to The Pre-conception and Pre-natal Diagnostic Techniques (Prohibition of Sex Selection) Act, 1994 (PNDT Act) and not otherwise.
In the meanwhile Kent preferred an appeal against eBay, where the Division Bench remanded back the matter to Single Judge and directed the Plaintiff’s to establish the liability of eBay on basis of knowledge threshold as mandated by Section 79 (3) (b) of the Information Technology Act, 2000.