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Synergy Between Ipr And E-Commerce Platforms

Introduction

Intellectual property rights (IPR) in e-commerce are a vital component of e-commerce. Despite its importance, it is frequently overlooked since most people do not comprehend it and its linkages to e-commerce are not evident. Regardless, intellectual property and e-commerce are inseparably linked. Musical Arts, designs, pictures, software, material, and many other sorts of Intellectual Property can be transferred using an e-commerce platform in the digital age. IPR is extremely important in all of these cases because the value of these items must be preserved. Intellectual property regulations and technology security methods are used to provide protection. If IP theft is widespread, it has the potential to destroy an e-commerce business and also randomly disclosing of intellectual property prior even applying for its safeguarding is a common error made by most IP holders. As they are unable to take legal steps against others who are unlawfully using it for business objectives, this might turn out to be very devastating, which is why IPR in e-commerce is critical. IP assets make up the vast majority of the corporate resources. However, it is challenging for legal systems to adjust to the needs of the contemporary information era. The traditional means of protecting IP rights are hardly sufficient in the effortless, technologically advanced world of today. This study intends to examine the connection between intellectual property and e-commerce, the several problems in this field, and solutions to protect intellectual property in the context of e-commerce using various legislative frameworks and precedents.

1.1.Interplay Between Intellectual Property and E-commerce

With 48.7% of the population of India having ingress to the world wide web and ever growing e-commerce market which is forecasted to reach about twenty billion euros by 2030, it becomes pertinent to analyse the interconnect between these two.[1] Presently, multiple e-commerce platforms have emerged in the market which was predominantly ruled by Amazon and Flipkart. The issue arises here itself since infringement virtually is hard to detect and harder to ascertain liability[2]. There are few e-commerce companies which explicitly make copies of brands such as Firstcopyclub, ShoesKartel etc.

1.2 Challenges in IPR Regulation in e-commerce

As per a survey, around 38% online buyers experienced counterfeit products and 1/3rd people have gotten copied products. The scam can be at various levels and multi-facet forms including mimicking websites, selling cheaper copies of brands or even stealing ideas of originators[4]. Identification of these is an issue making it all the more problematic. The threefold victims of this include:

  1. Buyers who get cheater for fake products
  2. Sellers whose ideas and services get stolen and mimicked
  3. E-commerce websites who encounter burden of tackling the issue of infringement and losses incurred therein, also known as intermediary liability, along with dealing with concerns over authenticity of their sites among customers.

There’s also differences of jurisdiction, ever-evolving nature of such platforms, user-generated information system, lack of uniformity across platforms. [5]There are the major issues which looks hopelessly futile and endangers to shake the entire foundation of IP protection.

1.3.Safeguarding Strategies

The safeguards have to be both legislative as well as policy based. The policy based considerations include the internal policies of e-commerce sites as well as registrations of companies for their IP.[6] The identification techniques include image recognition, maintaining stringent databases, interception systems working real time and collaborative efforts. Both the e-platforms and sellers have to take initiatives wherein the sellers need to register their products for trademark, copyrights and patents while the platforms have to exercise strict no-tolerance policy in case of infringements. The e-platforms themselves might need to copyright their interface and service if the same is endangered[7]. For example, Amazon holds patent over auto-authentications of transactions in India. Signing confidentiality agreements also are one of the ways of protection.[8]

Prominent e-commerce websites have varied countering mechanisms for counterfeit. Alibaba, a Chinese company partnered with big brands like LV and worked vigorously against counterfeiting on its e-commerce site.[9] Snapdeal introduced ‘Brand shield’ platform for reporting IPR infringements while Amazon has adopted a definite procedure of three invoices being submitted before any product could be sold and has stringent policy of ‘Brand Gating’.[10]

1.4.Legislative Frameworks

The degree of legislative structure can range from civil suits to criminal actions. On the global front, TRIPS agreement has been signed by 164 nations, India being one of them[11]. In compliance of the same, criminal complaints can be initiated against the  accused[12]. As per the Consumer Protection Rules, 2020 which provides safeguards against misrepresentation and other fraudulent gimmicks used by sites to scam people.[13] It has specifically mentioned provisions about the mandate of exercising due diligence and caution while detecting such shams. The authenticity and reliability of products showcased in their website.

[Image Sources: Shutterstock]

Intellectual Property lawAdditionally, the IT Act of 2000 also has provisions for intermediaries and ascertains liability on them. Section 79[14] of the Act specifies that if the intermediary merely transmits information of a third party without modifying or initiating the same then no liability can be attached[15]. The exception here is that due diligence must be exercised by them. Additionally, the liability cannot be evaded if the intermediary had any role in conspiracy, abetment or aiding of such and act or even if no cognizance or speedy had been taken once they were informed of such an infringement. Furthermore, Rule 3 of IT[16] Act  similarly specifies for due diligence. Grievance officer’s details also needs to be published along with the due process of grievance redressal. Once complaint has been filed, its acknowledgement needs to be done within 24 hours post which 15 days are given to resolve the issue[17]. Government has also been directed to form Grievance Redressal Appellate committee which has to take cognizance and resolve matter within thirty days. Injunction petition can also be filed or C&D notice can be sent to remove fake products. In the case of Tiffany v. eBay[18] it was held that where e-commerce sites fail to prevent the sale of counterfeit products, the onus comes on them for compensation.[19]

1.5.Comparative Analysis

UK, just like India[20] delves in observing due diligence by the e-commerce websites. IPRED[21] in UK looks after such cases and highlights the importance of verifying authenticity of products manually[22]. One of the major governing legislations is Electronic Commerce (EC Directive) Regulations 2002 which talks about rights of parties involved. EU, on the other hand, CPCREP[23] was the commission which worked upon focussing on issue of counterfeit. Although there is no legislative action regarding trademark infringement over web but it has taken cognizance of role of intermediaries in safeguarding IPR.[24] Different directives and legislations such as E-commerce directive or GDPR govern the same. In US, Lanham Act deals with trademarks although the contributory liability of intermediaries is not mentioned. But through judicial precedents, it has been laid down that the traditional contributory liability shall also be applied to e-commerce platforms.[25]

CONCLUSION

This study sheds light on numerous issues and potential solutions in this field while highlighting the crucial connection between intellectual property (IP) and e-commerce. The preservation of IP rights in the modern era is crucial given the e-commerce market’s explosive growth, particularly in nations like India. According to the survey, intellectual property (IP) infringement is a widespread problem in e-commerce that affects not only consumers who acquire fake goods but also authentic vendors and the e-commerce platforms themselves. The complexity of these infringements, which include concept theft, imitation websites, and inexpensive brand reproductions, makes it difficult to detect and respond to IP crimes.

There are suggested legislative and policy-based solutions to lessen these difficulties. Sellers on e-commerce platforms are urged to register their goods for patent, trademark, and copyright protection. For recognising and preventing IP infringements, strict policies and preventative measures are advised, such as picture recognition and real-time interception systems. The adoption of countermeasures by well-known e-commerce platforms is illustrated by a number of examples, including collaborations, reporting platforms, and stringent policies. The blog also identifies domestic and international legal frameworks, including the TRIPS agreement and national laws, that can be used to bring criminal charges against IP violators. With specific regulatory requirements demanding due investigation and attention to complaints, the need of intermediaries in protecting IP rights is further stressed. E-commerce websites that fail to stop the selling of counterfeit goods may be held financially responsible. Countries like the UK and the EU have passed laws to protect intellectual property rights in the e-commerce industry and emphasise the value of manually confirming product authenticity.

The study’s findings highlight the significance of adjusting IP protection systems to the changing digital landscape and the necessity of joint efforts by governments, e-commerce platforms, and sellers to successfully combat IP infringement.

Author: Shreshtha Singh, A Student at Institute- Symbiosis Law School, Hyderabad, in case of any queries please contact/write back to us via email to [email protected] or at IIPRD. 

RFERENCES

i.            Online Sources

  • Scconline, https://www.scconline.com/, (last visited Oct. 26,2023).
  • Alexander S. Gillis, What is Phishing and How Does it Work? | Definition from TechTarget, https://www.techtarget.com/searchsecurity/definition/phishing (last visited Oct27, 2023).
  • Murlidhar Rao, How Smart, Connected Products Are Transforming Competition, https://hbr.org/2014/11/how-smart-connected-products-are-transforming-competition (last visited Oct27, 2023).
  • Upendra Baxi, COPYRIGHT LAW AND JUSTICE IN INDIA Author(s): Upendra Baxi Source : Journal of the Indian Law Institute , October-December 1986 , Vol .28,No.4Published by : Indian Law Institute Stable URL : https://www.jstor.org/stable/43951048, 28 497 (1986).
  • WTO|intellectual property- overview of TRIPS Agreement, https://www.wto.org/english/tratop_e/trips_e/intel2_e.htm (last visited Oct27, 2023).
  • Malvika Kapila, Intermediary Liability under the IT Act: Time for an Amendment?, https://www.barandbench.com/columns/intermediary-liability-under-the-information-technology-act-time-for-an-amendment (last visited Oct27, 2023).
  • Bindu Shah, ‘Retail Industry of India’ (IIPTA 1st December 2019) https://www.iipta.com/indian-retail accessed on 16th August, 2020.
  • Commission’s Public Consultation on the Regulatory Environment for Platforms, EUROPEAN COMMISSION, (Oct. 28, 2024, 8:29 am), https://enterprise.gov.ie/en/consultations/public-consultation-on-the-regulatory-environment-for-platforms-online-intermediaries-data-and-cloud-computing-and-the-collaborative-economy.html.
  • International Comparison of Approaches to Online Copyright Infringement: Final Report, Intellectual Property Office of United Kingdoms 2015, (Oct. 26, 2023, 11:00 AM), https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/549462/International_Comparison_of_Approaches_to_Online_Copyright_Infringement.pdf .
  • Graham Widfeild, “Global Scenario of Retail Law” (2015) (2) (45) JOURNAL OF IP RIGHTS http://nopr.niscair.res.in/handle/123456789/45 accessed on 24thOctober, 2023

ii.            Books

  • M.K. BHANDARI, LAW RELATING TO INTELLECTUAL PROPERTY RIGHTS (Central Law Publication 2021).
  • K. AHUJA, LAW RELATING TO IPR (LexisNexis Publication 2017).

iii.            Journal Articles

  • Lipi Parashar, The Protection and Enforcement of Intellectual Property Rights in the E-Commerce Industry, 3 INTL JL MGMT & H, 119 (2020).
  • Reema Dominic, A Study on  Intellectual Property Rights and  its  significance for E-Commerce, INTERNATIONAL JOURNAL OF CREATIVE RESEARCH THOUGHTS, (11th ed. 2023).
  • Kiren Willy, India: e-commerce market size 2030 | Statista, https://www.statista.com/statistics/792047/india-e-commerce-market-size/ (last visited Sep 7, 2023).
  • Arturo Ancona, INTELLECTUAL PROPERTY AND E-COMMERCE WIPO-WASME SPECIAL PROGRAM ON PRACTICAL IP ISSUES Geneva , October 6 to 9 , (2003).
  • Kirsty Phillips et al., Conceptualizing Cybercrime: Definitions, Typologies and Taxonomies, 2 Forensic Sci. 379 (2022).
  • Zainab Abbas, Himanshu Kushwaha & Ashwani Kumar, Safeguarding E-Commerce Functioning in A Digitized Environment, 7 Rjsitm 6 (2018).
  • Ashish Kumar Srivastav, Reach of Intellectual Property Rights in Digital Commerce: An Indian Perspective, SSRN Electron. J. (2022).
  • Aram Sinnreich, Intellectual Property in Global Arena (6th ANU Press 2018).
  • JL Singhal, Lecturs on Intellectual Property (7th Singhal Publications 2018).
  • Aram Sinnreich, Intellectual Property in Global Arena (6th ANU Press 2018).

iv.            Statutes

  • Information Technology Act, No.21, Acts of Parliament, 2000 (India).
  • Intellectual Property Rights Enforcement Directive, 2004/48/EC

[1]Kiren Willy, India: e-commerce market size 2030 | Statista, https://www.statista.com/statistics/792047/india-e-commerce-market-size/ (last visited Sep 7, 2023).

[2]Arturo Ancona, INTELLECTUAL PROPERTY AND E-COMMERCE WIPO-WASME SPECIAL PROGRAM ON PRACTICAL IP ISSUES Geneva , October 6 to 9 , 2003 (2003).

[3]Banyan Tree Holding Ltd. A. Murali Krishna Reddy &Anr, OS No.894/008; Carlsberg Breweries v. Som Distilleries and reweries Ltd., 2019 (77) PTC 1 (Del).

[4]Alexander S. Gillis, What is Phishing and How Does it Work? | Definition from TechTarget, https://www.techtarget.com/searchsecurity/definition/phishing (last visited Sep 7, 2023).

[5]Kirsty Phillips et al., Conceptualizing Cybercrime: Definitions, Typologies and Taxonomies, 2 Forensic Sci. 379 (2022).

[6]Zainab Abbas, Himanshu Kushwaha & Ashwani Kumar, Safeguarding E-Commerce Functioning in A Digitized Environment, 7 Rjsitm 6 (2018).

[7]Murlidhar Rao, How Smart, Connected Products Are Transforming Competition, https://hbr.org/2014/11/how-smart-connected-products-are-transforming-competition (last visited Sep 7, 2023).

[8]Ashish Kumar Srivastav, Reach of Intellectual Property Rights in Digital Commerce: An Indian Perspective, SSRN Electron. J. (2022).

[9]Upendra Baxi, COPYRIGHT LAW AND JUSTICE IN INDIA Author ( s ): Upendra Baxi Source : Journal of the Indian Law Institute , October-December 1986 , Vol . 28 , No . 4 Published by : Indian Law Institute Stable URL : https://www.jstor.org/stable/43951048, 28 497 (1986).

[10]Aram Sinnreich, Intellectual Property in Global Arena (6thedn. ANU Press 2018)

[11]WTO|intellectual property- overview of TRIPS Agreement, https://www.wto.org/english/tratop_e/trips_e/intel2_e.htm (last visited Sep 7, 2023).

[12]Kent RO Systems Ltd. v. Amit Kotak 2017 SCC OnLine Del 7201

[13]JL Singhal, Lecturs on Intellectual Property (7thedn. Singhal Publications 2018).

[14]§79, Information Technology Act, No.21, Acts of Parliament, 2000 (India).

[15]Malvika Kapila, Intermediary Liability under the IT Act: Time for an Amendment?, https://www.barandbench.com/columns/intermediary-liability-under-the-information-technology-act-time-for-an-amendment (last visited Sep 7, 2023).

[16]Rule 3, Information Technology Act, No.21, Acts of Parliament, 2000 (India).

[17]Imagine Marketing Pvt. Ltd. vs Exotic Mile (CS (COMM) 519/2019); Kanishka Gupta v Liberty Footware ORA/104/2006/TM/DEL.

[18]Tiffany (NJ) Inc. v. eBay Inc 2010 SCC OnLine US CA 2C 1.

[19]Perfect 10, Inc. v. Amazon.com, Inc., 508 F.3d 1146.

[20]Bindu Shah, ‘Retail Industry of India’ (IIPTA 1st December 2019) https://www.iipta.com/indian-retail accessed on 16th August, 2020.

[21]Intellectual Property Rights Enforcement Directive, 2004/48/EC.

[22]Aram Sinnreich, Intellectual Property in Global Arena (6th ed. ANU Press 2018).

[23]Commission’s Public Consultation on the Regulatory Environment for Platforms, EUROPEAN COMMISSION, (oCT. 8, 2024, 8:29 am), https://enterprise.gov.ie/en/consultations/public-consultation-on-the-regulatory-environment-for-platforms-online-intermediaries-data-and-cloud-computing-and-the-collaborative-economy.html.

[24]International Comparison of Approaches to Online Copyright Infringement: Final Report, Intellectual Property Office of United Kingdoms 2015, (Sept. 6, 2023, 11:00 AM), https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/549462/International_Comparison_of_Approaches_to_Online_Copyright_Infringement.pdf .

[25]Graham Widfeild, “Global Scenario of Retail Law” (2015) (2) (45) JOURNAL OF IP RIGHTS http://nopr.niscair.res.in/handle/123456789/45 accessed on 2nd November, 2020

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