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THE SIGNIFICANCE OF THE CHRISTIAN LOUBOUTIN JUDGMENT IN LIGHT OF  LIABILITIES OF ONLINE MARKETPLACES

INTRODUCTION

Christian Louboutin is a French fashion designer, recognized globally for his red-soled stilettos. His brand Christian Louboutin sells luxury heels and shoes across the world through authorized offline stores as well as online platforms. In Christian Louboutin Sas v. Nakul Bajaj[1], the first time the Indian Court has pronounced any judgment in light of trademark infringement by online platforms which are involved in selling products. In the said case, the Plaintiff Company – Christian Louboutin, and the Defendants run a website called www.darveys.com[2] which was involved in a dispute regarding the genuineness of the goods sold.

FACTS

The plaintiff, Christian Louboutin, is a luxury brand that specializes in making shoes and other goods, they have many products which are protected through Intellectual Property Rights. The defendant, Darveys.com, Darveys, is a luxury shopping portal exclusive only to members who had to pay a sum of Rs.2000, for its membership and would only then be able to access the website. The plaintiff claimed that the products which were being sold on the defendant’s website were in no way authorized by them and that they sold their products only through authorized sellers in India. The defendant under section 79 of the Information Technology Act[3], 2000 claims protection as an intermediary.

E-COMMERCE WEBSITES AND IT LEGALITY

According to Section 2 (w) of the IT ACT, 2000[4], an “intermediary” refers to any person who receives, stores, or transmits an electronic record on behalf of another person or provides any service related to that record. This includes telecom service providers, network service providers, internet service providers, and others. The policies in the agreement of Darvey Com, show that they exercise complete control over its items and are identifying the sellers which enable the seller to promote them and sell products in India hence actively, the role is much more than that of an intermediary. There is an obligation to observe due diligence by publishing rules and regulations which require information that if hosted does not violate IP rights and which highlights e-commerce platforms actively conspiring abetting, aiding, or inducing the commission of unlawful acts cannot be left without intervention. That due diligence provision is broad and not restricted to the guidelines themselves.  The provision is to promote trustworthy businesses which are active intermediaries and not to harass them in any way. Under section 79 of the IT Act[5], the intermediary is not liable for third-party information, or data links posted on the platforms however such protection is not absolute and if the circumstances contained in section 79 (2)(b)[6]  are carried out, the intermediary may lose its protection. The court cited the Google Inc. v. Louis Vuitton Malletier SA & Ors[7] case in which the European Court considered the rights of trademarks and the position of intermediaries in accordance with EC Directive 89/104, Directive 2000/31, and Regulation 40/94. The court concluded that providing internet references through keywords by a service provider does not violate Article 5(1) of Directive 89/104[8] or 9(1)(a) and (b) of Regulation 40/94[9].

VIOLATION OF IP RIGHTS

The court referred to another judgment of MySpace Inc. v Super Cassettes Industries Ltd.,[10] where constructive and active knowledge was discussed at length and held that even if the intermediary knows the happening of something not legal in the website then it does not need a court order to stop the infringement. Minimum knowledge is sufficient to claim infringement done by third-party and the intermediary’s liability. Therefore, we see that the court says that darveys.com even if had minimum knowledge of the similarity between the products of Christian Louboutin and the photographs and descriptions/meta tags on its website it was infringing the trademark rights of Christian Louboutin. The court referred to the case of Kapil Wadhwa v Samsung Electronics Co. Ltd. 194 (2012) DLT 23[11] which referred to meta-tagging,  the court in the instant case said that meta tagging which was typing keywords on the website search engine which would need to show the actual product or on any other search engine which would lead to the defendant’s website was indeed causing harm to the luxury brand Christian Louboutin as it misled or misdirected the customers towards a website which was not of its own.

JUDGEMENT

The court held that the defendant was not an intermediary under section 79 of the IT ACT, 2000.[12] Darveys was to display all the details of the sellers, addresses, and contact details on their website. They are to show the authenticity of the goods with a certificate from the sellers. Sellers who are based out of India have to give notification to the plaintiff and get consent before the sale of the products on the website. Sellers who are based in India shall have a contractual relationship with the platform to certify the genuineness and authenticity of the codes and should contain conditions for breach. The plaintive should notify the seller of any product which is not genuine and if no basis is found for it, the listing should be taken down as per the Intermediary Guidelines 2011[13]. The seller must honor the warranty and guarantee of the product given by the Plaintiff any product which does not contain the warranty will not be sold on the platform. The meta tags which indicate the plaintive brand should be removed from the platform. It is found that the defendant indeed never sold the product of the plaintiff but only displayed pictures and meta tags on its platform hence, damages were not directed at the defendant.

SIGNIFICANCE

The judgment highlighted the infringement of a trademark via an e-commerce platform. One of the most exciting and significant legal judgments of the past few years, it is particularly important because it deals with the liability of e-commerce platforms for infringement of intellectual property rights. The Christian Louboutin judgment emphasizes the importance of intermediaries in IPR enforcement. E-commerce platforms need to implement effective measures to prevent IPR infringement, such as regularly monitoring their platform for infringement, having a system for a rapid takedown of infringing content, and implementing technological solutions to prevent counterfeit sales.

This case serves as a precedent for the liability of e-commerce platforms in India and sets an example for other countries to follow. The judgment emphasizes the need for intermediaries to be responsible and take active measures to prevent IPR infringement on their platforms. By doing so, e-commerce platforms can ensure that they do not face legal consequences and provide a safe and authentic environment for their consumers. This judgment echoes the provisions of Indian law that put intermediaries on notice of potential IPR infringement. As per the Information Technology Act, of 2000[14] intermediaries are required to take measures to remove infringing content once they are notified of it. The intermediary will be held liable if they fail to take these measures after being notified. The responsibility of e-commerce intermediaries to prevent trademark infringement has increased due to a case that raised the threshold for safe harbor protection.

CONCLUSION

In conclusion, the Christian Louboutin Sas v Nakul Bajaj[15] judgment has significant implications for online marketplaces in India and serves as an example for other countries to follow. The court emphasized the need for intermediaries to take active measures to prevent intellectual property rights infringement on their platforms to avoid legal consequences. E-commerce platforms must implement effective measures such as regular monitoring for infringement, a system for a rapid takedown of infringing content, and technological solutions to prevent counterfeit sales. The judgment raises the bar for safe harbor protection and echoes the provisions of Indian law that put intermediaries on notice of potential infringement. By following the guidelines outlined in this case, e-commerce platforms can provide a safe and authentic environment for their consumers while avoiding infringement liability. Overall, this judgment highlights the importance of intermediaries in IPR enforcement and serves as a precedent for future cases involving online marketplaces.

Author(s) Name: Shuvangi Gupta (St. Xavier’s University, Kolkata)

References:

[1] Christian Louboutin Sas v Nakul Bajaj (2018) SCC OnLine Del 12215

[2] Darveys <https://www.darveys.com/> accessed 07 May 2023

[3] Information Technology Act 2000, s 79

[4] Information Technology Act  2000, s 2(w)

[5] Information Technology Act 2000, s 79

[6] Information Technology Act 2000, s 79(2)(b)

[7] Google France SARL and Google Inc. v Louis Vuitton Malletier SA (C-236/08)

[8] 89/104/EEC Directive 1988, Article 5(1) 

[9] Council Regulation (EC) No 40/94 1993, art 9(1)(a) and (b)

[10] MySpace Inc. v  Super Cassettes India Ltd (2011) FAO(OS) 540/2011

[11] Kapil Wadhwa v Samsung Electronics Co. Ltd 194 (2012) DLT 23

[12] Information Technology Act 2000, s 79

[13] Intermediary Guidelines 2011<https://www.meity.gov.in/writereaddata/files/GSR314E_10511%281%29_0.pdf> accessed 07 May 2023

[14] Information Technology Act 2000

[15] Christian Louboutin Sas (n 1)