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Home / NewTech / A problematic review of broker rules for trademark and copyright liability – Technology News, Firstpost

A problematic review of broker rules for trademark and copyright liability – Technology News, Firstpost



The Department for the Promotion of Industry and Internal Trade released a new draft National E-Commerce Policy for stakeholder comments on 23 February 2019. While In the past, with e-commerce guidelines mainly concerned with the FDI rules the new policy covers a much wider range of activities, including infrastructure development and new import rules, which suggests online customs clearance, Consumer protection provisions requiring the establishment of companies in India, etc.

In addition to such rules, which are more specifically aimed at the commercial operation of an e-commerce site, the policy also proposes rules that limit the liability of intermediaries such websites, their handling of counterfeit goods, piracy and prohibited goods.

The proposed rules are problematic because, firstly, they establish rules that serve the pre-commerce websites as mediators by obliging all these websites to play a more active role.

Second, they challenge the Supreme Court and other judgments, including the Shreya Singhal judgment, by asking intermediaries to use their own judgment to identify content that infringes another's copyright or trademark, and even remove the affected salesperson blacklisted for a period of time. The rules completely disregard the fact that such findings require the judgment of the courts and not the intermediaries.

  Representative image. Reuters

Representative image. Reuters

How Copyright and Trademark Intermediaries Work

The liability of intermediaries and the need to re-examine them has long been the subject of controversy highlighting the changing nature of the Internet and technology. The version of the Intermediary Guidelines published last December reflects this change, and the new regulations proposed in the context of e-commerce policy take the next step, albeit in a problematic way.

Existing Laws on Liability of Intermediaries It is well known that Section 79 of the Information Technology Act of 2000 protects intermediaries such as social media companies, e-commerce websites, etc. from liability for the content they host. Intermediaries must diligently review uploaded content and remove illegal content within 36 hours of receipt of a judicial or regulatory order (as set forth in Shreya Singhal ). These rules form the basis of liability for injury intellectual property rights (eg trademarks and copyrights), but the rules are more differentiated and will be subject to judgments under the Indian Copyright Act of 1957 and various rules, as discussed below.

Infringement of trademarks following the draft e-commerce directive

First, the new rules on anti-counterfeiting measures or trademarks infringing trademarks under the new e-commerce directive.

In order to enable trademark owners to exercise their rights, the Directive includes the following requirements:

  • Trademark owners' permission to register with a platform and any branded product uploaded there must be communicated to the trademark owner by the platform.
  • allows trademark owners to require their approval prior to the listing of their products by sellers, while mandating such approval for high-end (luxury) goods, cosmetics and others; 19659017] require that trademark owners be informed of complaints about counterfeit products, and if the seller is unable to prove authenticity, they must be revoked; and
  • require platforms to stop hosting products that have been found to be counterfeit, to subject vendors to financial penalties, and even blacklist them.

Regarding sellers, the new rules also require:

  • platforms make salesperson names and contact information available; and
  • platforms conclude agreements with sellers to ensure the authenticity and validity of brand guarantees for their products without which they can not be listed.

It also includes new rules for reviews and customer support. It contains similar rules for prohibited products that require deletion of the list of affected sellers, as well as notification from authorities.

Problematic adaptation of a court in Delhi, HC

These rules correspond to the instructions of the High Court of Delhi in 2018 in Christian Louboutin Sas v Nakul Bajaj . However, the proposed rules omit some important factors of the ruling.

First, the ruling distinguishes between e-commerce sites that are mere intermediaries and thus protected by Intermediary Law and those that are more active subscribers and therefore not. The judgment lists a number of factors which may contribute to this finding, e.g. Vendor identification platforms, provision of transportation facilities, guarantee of quality and guarantee of authenticity, provision or upload of ratings, provision of products and discounts, provision of customer support, booking of search engine space using metatags Linking to the owner's website, etc.

On this basis, OLX and eBay may serve as examples of mere intermediaries and Amazon and Myntra as examples of more active participants (based on the general perception of these websites).

Despite this list, facts and circumstances must be considered in the assessment, including the terms and conditions of the site.

Assessing the nature of e-commerce sites

However, the new directive completely eliminates the need to make this provision. In addition, the rules that the policy inherits, as previously stated, are derived from the instructions in this case. However, the instructions in this case were specific to the e-commerce site (Darveys.com) and were not general rules for all intermediaries. Adopting the same guidelines as the rules for all e-commerce sites under the new policy, ignoring the facts and circumstances, will require all e-commerce sites to perform various operations, including identifying sellers and monitoring them warranties, etc. that cause them to lose their mere intermediary status and thus their protection by law.

Furthermore, the judgment does not mention a blacklisting of sellers, which in turn should be an assessment of the facts and circumstances by a court instead of the e-commerce site. However, the rules completely exclude the requirement of a court order.

The actual facts and circumstances can make a big difference, for example, determining whether the seller has sincerely sought before blacklisting to determine if the goods were genuine to him. Similarly, the sale of used goods is a factor because they can be genuine branded products, but no valid original warranty exists under the new terms. Such a resale would be inadmissible under the new rules.

  Representative image: Reuters

Representative image: Reuters

Violation of copyright under the new directive

On copyright infringement and anti-piracy measures under the New Directives and e-commerce Web sites Take measures to deal with the online distribution of counterfeit content and to identify "trusted entities" whose grievances are primarily resolved. The ecommerce platform must immediately notify access to the content by a copyright owner about the distribution of content.

This requirement to remove content upon notification complies with the copyright rules of intermediaries pursuant to § 52 (1) (c) UrhG. This provision provides that potentially inhumane content must be temporarily suspended for 21 days upon receipt of such notification, pending a court order to permanently disable it. The need for specific knowledge through a notice of copyright infringement was confirmed in Myspace Inc. v. Super Cassettes Industries Ltd (Delhi High Court, 2016).

Monitoring the content of IPR violations

If the requirement for anti-piracy measures refers to an obligation to monitor, this contradicts a Supreme Court ruling of 2017, Kent RO Systems v. Amit Kotak ] where Ebay was eBay, a broker need not be in a place to judge whether or not content violates intellectual property rights. The law requires that intermediaries only have to notify the content of the notification, and it is unlikely that an intermediary will monitor all content for violations.

A surveillance requirement is justified if the website is not a mere mediator. For example, in Unacademy's case, in which the High Court of Madras stated in 2018 that Unacademy was not protected as an intermediary from uploading copyrighted content. The Unacademy proved to be more than a mere intermediary in testing its terms of service, claiming to approve the uploaded content, pay paid users for the content provided, and claim exclusivity for the content that it is not merely a mediator.

Website blocking

Another rule is blocking sites. It is not clear why such a rule is included in an ecommerce policy. According to the policy, a group of industry stakeholders is to list "unfair websites" that are mostly pirated. Sites that are placed on this list of sites that violate websites must remove or disable access to Internet services providers within periods, and payment gateways must not allow payments for such sites. Search engines must take steps to remove such sites from search lists, and advertisers can not host advertisements on such sites.

The inclusion of this rule, which would normally be reserved for the Ministry of Electronics and Information Technology, seems to be the result of the broad network that has taken the directive into commerce with e-commerce. It seems that it has included every activity on the internet that involves payments in any form, even content delivery. While the overlap of traditional regulatory courts overlaps with the Internet, this can lead to contradictory regulations for the industry.

Misinterpretation of Judgments

The draft e-commerce policy was also recently included in the draft Intermediary Guidelines, in which Tehseen Poonawalla's requirements for fake news and in Prajwala Letter on automated surveillance and content delinquency in relation to child pornography, rape and gang rape were misinterpreted to contain a general requirement, exchange information, censor content and automatically monitor all content for legality (a more complete) Discussion is here ).

Admittedly, the granting of an intermediary's absolute immunity to the content it hosts is no longer justified, and intermediary liability must take more responsibility. Adaptation of rules without a proper understanding of the underlying decision is problematic.

The current set of rules is problematic in many ways, as it does not require the actual character of the For the commerce site, an intermediary is required to give judgment on the content he or she is hosting and does not grant the parties concerned any legal remedy or appeal. The nuances of the underlying case law, be it the laws or judgments, the constitutional rights and the principles of natural justice (such as the right to be heard) must not be overlooked.

In any case, the invitation from stakeholders to the The proposed policy is to be welcomed, so that problems of this kind can be addressed. Perhaps in the age of technology, the role of regulators needs to be redefined, and possibly regulations jointly issued by the departments involved may lead to a holistic view of the image.

The author is a lawyer specializing in technology, privacy and cyber laws

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