Meesho, a popular fashion e-commerce platform became embroiled in a legal dispute with regards to copyright infringement and passing off. Abhi Traders, the plaintiff in the present case filed a suit against Fashnear Technologies Private Limited, the entity behind e-commerce platform “Meesho” as well as 9 other identified-known and unknown parties.
AHI TRADERS SUES MEESHO FOR PROMOTING COUNTERFEIT PRORDUCTS
The plaintiff, Abhi Traders is engaged in the retail clothing business for men and women, and is also registered with the e-commerce platform Meesho to market and sell its products. The company designs and manufactures its products in-house which are thereby sold under the brand name “IBRANA”.
Defendant 1 in this case is Fashnear Technologies Private Limited which owns and manages Meesho.com. While, Defendant 2-9 were unauthorised retailers on Meesho engaged in the sale of counterfeit and passing off of “IBRANA” products.
ABHI TRADERS’ RIGHTS INFRINGED BY UNAUTHORISED SELLERS
Abhi Traders initiated a legal action for copyright infringement and passing off against Fashnear Technologies Private Limited, asserting that the latter unlawfully sold, promoted, and advertised counterfeit products under the brand name “IBRANA.”
The dispute arose when Abhi Traders, came across unauthorised retailers blatantly misusing its catalogue photographs on the Meesho website, to sell their own inferior quality items. Consequently, the brand initiated its process to resolve the matter with Fashnear and also demanded due damages. The plaintiff also sought ex-parte ad interim injunction from the Hon’ble Court against the unauthorised retailers and the e-commerce platform. The case was presented before the Bench of Justice Sanjeev Narula at the Hon’ble Delhi Court.
The plaintiff asserted that Defendants 2-9 misrepresented themselves under the brand name “IBRANA” and sold inferior quality products at competitive prices. The plaintiff alleged that this misrepresentation would tarnish the reputation of their brand “IBRANA.” In support of their claim, the plaintiff submitted an application that included the alleged images used by the defendants for the purpose of passing off and misrepresentation. Defendant 2-9 were also engaged in outright copyright infringement by making unauthorised use of the catalogue images of the brand IBRANA to advertise their own products. The plaintiff claimed that the actions of the Defendants misled the consumers into believing that the products/goods of the defendants were in fact authentic and genuine and originated from the plaintiff’s business.
The allegation against Fashnear in this regard was its inaction with respect to conducting due diligence of such unauthorised retailers and for engaging in the promotion of and providing support to the Defendant 2-9 to sell their products in an illegal and unauthorised manner. Moreover, it was alleged that Meesho’s practice of not mentioning the address of the real/bona fide seller was against the regulations under Rule 5(3)(a) of Consumer Protection (E-Commerce) Rules, 2020 (‘2020 Rules’).
The plaintiff also added that they sought to avoid protracted legal proceedings and intended to settle the matter amicably through constructive communication, however their efforts were not reciprocated. Abhi Traders contested that it had sent an email communication to Fashnear addressing its grievances on 23rd February 2024 requesting disclosure of Defendant 2-9 but the latter failed to comply with its request. Accordingly, it was contended that Fashnear was barred from claiming any benefit under Section 79(1) of IT Act, 2000 .
ARGUMENTS FROM FASHNEAR TECHNOLOGIES PRIVATE LIMITED
The defendants approached the dispute in a rather passive manner, displaying a submissive demeanour. This passive stance could stem from their implicit acceptance of flagrant legal exploitation within their trade practices. Fashnear Technologies contended that it complied with court orders by removing the URLs of the images and products, asserting its responsibility extended solely to actions executed in accordance with due process.
The defence counsel asserted that Fashnear Technologies is completely devoted to adhering to court directives to remove the infringing material/content from its e-commerce platform throughout the entirety of the proceedings. Moreover, they highlighted the platform’s dedication to complying with the laws governing e-commerce platforms such as disclosing details about the seller, their name, address, customer care number etc. under Consumer Protection Rules, 2020.
CONSUMER PROTECTION IN ONLINE SHOPPING
Consumer Protection (E-Commerce) Rules, 2020 envisaged with the aim to enhance transparency between consumers and e-commerce platforms provides under Section 5(2) that such marketplace e-commerce platforms shall require sellers to provide an undertaking, “to ensure that descriptions, images, and other content pertaining to goods or services on their platform is accurate and corresponds directly with the appearance, nature, quality, purpose and other general features of such good or service.”
Further, under section 5(3), Every marketplace e-commerce entity shall provide the following information in a clear and accessible manner, displayed prominently to its users at the appropriate place on its platform: (a) details about the sellers offering goods and services, including the name of their business, whether registered or not, their geographic address, customer care number, any rating or other aggregated feedback about such seller, and any other information necessary for enabling consumers to make informed decisions at the repurchase stage.
Abhi Traders also emphasized that the Fashnear Technologies cannot claim exemption from liability under sub-section (1) of Section 79 of the Information Technology Act, 2000. This provision states that an intermediary shall not be held liable for any third-party information, data, or communication link made available or hosted by them. However, the petitioner argued that under the Consumer Protection Rules, 2020, e-commerce platforms must comply with Section 5(2) to qualify for such exemption and defense, which was allegedly not fulfilled in the present case.
Passing off is a widely used term when one party misrepresents itself to be another party to sell its own products and meanwhile infringes upon the trade mark rights of such party.
COURT ORDERS INJUNCTION AGAINST MEESHO SELLERS
The court found a “prime facie case” of copyright infringement on the part of Defendant 2-9 as they were blatantly misusing the brand name under Plaintiff 1 to promote, advertise, and sell their products. This was an outright case of misrepresentation as it also misled the consumers into believing that the product was original, given the absence of contact details of sellers on the e-commerce platform. Further, the court observed that the inferior quality of the product sold with lower pricing amounted to unlawful trade practice by Defendant 2-9 under the misrepresented brand name.
The court underscored the significance of Section 5 of the Consumer Protection (E-Commerce) Rules, 2020, which mandates e-commerce platforms to furnish comprehensive details of the seller, including their geographic address, customer care number, ratings, and other feedback about the seller and the entity listing the product. This provision is designed to ensure transparency in transactions between the seller and the buyer facilitated by the intermediary e-commerce platform. The court observed that such transparency is imperative, as these platforms function as critical channels of accountability in instances of defective, damaged, or unwanted products. Moreover, the court acknowledged that unauthorised use of “such look-alike products undermines the integrity of fair trade and competition”. The court, in its deliberations, recognized the prevailing principle of balancing convenience, attributing greater weight to the plaintiff’s stance due to the adverse impact on their brand integrity. Consequently, an injunction was granted to restrain Defendant 2-9 and any other entities implicated in such illicit trade practices from reproducing, imitating, or disseminating any of the plaintiff’s products.
Furthermore, this injunction also extended to restrict any kind of publication of pictures that were look-alike of Plaintiff’s product. Defendant 1 was mandated to disclose details of sellers as provided under the Consumer Protection (E-Commerce) Rules, 2020 in compliance with the stipulations under Consumer Protection (E-Commerce) Rules of 2020 and promptly remove all URLs infringing upon the plaintiff’s intellectual property within a 72-hour timeframe subsequent to receiving the list of the same from the plaintiff. The case is listed for hearing on 1st August 2024 for further proceedings.
IMPORTANCE OF DUE DILIGENCE FOR E-COMMERCE PLATFORMS
It is important to understand that the platform Meesho acting as an intermediary between the seller and the buyer provides its customers with the option to return products or to file complaints with its customer service departments, however the same is limited only to the platform itself and there is no actual/genuine interaction between the seller and the buyer. This poses as a great threat to the good name and the brand value of a home-grown brand like “IBRANA” by Abhi Traders which rely on recommendations and referrals by their satisfied consumers to rise to popularity. Thereby anyone using the brand name “IBRANA” added with the catalogue images of the genuine owner, is likely to give the impression, that the same is originating from Abhi Traders itself and essentially fits the category of counterfeiting. It becomes imperative for the e-commerce platforms to thereby conduct due diligence on their end and to provide as much relevant information about the seller to the consumers to avoid confusion, which Fashnear failed to do.
In an exemplary display of meticulous legal scrutiny, the court, presiding over the case involving Abhi Traders and Fashnear Technologies Pvt. Ltd, demonstrated discerning jurisprudential acumen. The court’s acknowledgment of the blatant copyright infringement underscores its profound commitment to safeguarding the rights of both the original proprietor and consumers. Although certain issues, such as damages, remain pending court resolution, the injunction order provides much-needed relief for both the plaintiff and bona fide purchasers seeking products under the brand name of the Petitioner. The court’s handling of the matter reflects a pro-consumer stance, elucidating the principle of Caveat Venditor.
Justice Narula’s meticulous approach to the case, attests to the court’s dedication to upholding justice. The decision to issue an injunction restraining sellers from using images resembling the product is particularly significant given the rapid growth of online shopping in India. This court order not only safeguards the plaintiff’s rights but also upholds the integrity of bona fide consumers. It underscores the court’s unwavering commitment to maintaining equitable trade practices and preventing instances of copyright infringement by sellers on e-commerce platforms. The court’s scrupulous assessment of evidence and steadfast adherence to legal principles in this matter merit commendation, reaffirming its pivotal role in defending the sanctity of intellectual property rights.
