Trademark Infringement in Online Markets: Comparative Analysis and Legal Frameworks – Part I

Abstract

Online trademark infringement and counterfeiting is a growing problem for luxury brands. In recent years, trademark owners have taken aim at the operators of online marketplaces and auction websites, asserting that these defendants are liable for contributory infringement due to sales of counterfeit goods on their sites. In addressing the scope of secondary liability for trademark infringement, the courts of the United States and European nations, including France, Germany, and the United Kingdom, along with the courts in India have applied differing standards and reached inconsistent results. This article considers the legal framework of trademark laws along with the question of secondary liability for trademark infringement from a comparative perspective and contrasts the rationales offered by the various courts in their decisions to confer the liability on infringers as well as on online marketplaces for the trademark infringement of their genuine products on their platforms.

Objectives Of The Research

The objectives of the research are as follows:

  • To understand the position of trademark laws with respect to trademark infringement in online marketplace and e-commerce arena.
  • To understand the underlying challenges in identifying the infringer and holding them accountable.
  • To understand the liability and responsibility of online marketplaces selling counterfeit products in these trademark infringements.
  • To compare the laws related to trademark infringement in online marketplaces of different nations.
  • To provide appropriate remedies to be absorbed by the laws in India to tackle the infringement of trademarks online.

Significance Of The Research

The Trademark laws aim to protect the businesses from fraud and deception through the use of a distinctive mark. Consumers identify these trademarks as an indicator of product’s quality and authenticity. However, with the increase in sale of counterfeit goods online, which infringes the trademarks of other businesses, consumers are directly impacted, as neither they can differentiate between the original and counterfeit product, nor they can judge the quality of the product they are purchasing online. It also heavily impacts the trademark holders and their business, as the counterfeit products deteriorates the value of their brand name.

[Image Sources: Shutterstock]

TM infringement online Part 1

Thus, though there is a plethora of research is present everywhere across the internet, this paper analyses the effect of online trademark infringement with respect to Indian laws and regulations and the challenges that Hon’ble Courts are likely to face while protecting the infringement of such trademarks. Moreover, the paper also endeavours to shed some light on what new changes required so as to protect the rights of the trademark holders under the Indian Intellectual Property regime.

Research Questions

The following are the research questions:

  1. How the Trademark infringement takes place in online marketplaces?
  2. What are the various existing frameworks aimed at regulating Trademark infringement by online marketplaces?
  3. Does the existing law, i.e. Trademark Act, 1999 cover the infringement done on e-commerce sites due to sale of counterfeit products?
  4. What are the liabilities of e-commerce platforms for the infringement of trademarks of the registered businesses?
  5. What changes the existing laws require to prevent such trademark infringements?

Research Questions Hypothesis

The present intellectual property laws in India i.e., Trademark laws, lack mechanism to protect the rights of the legitimate business owners of infringement of their trademarks in online marketplaces due to the increased sale of counterfeit products on their platform. As a result, this study is an endeavour to unearth the changes required in the existing laws so as to cater to the rights of aforementioned persons with respect to their trademarks.

RESEARCH METHODOLOGY

The research methodology used in this paper is analytical in nature. More specifically the author uses qualitative research to reach their conclusions. The researcher has used a secondary source of data in the present research and has derived the data and information from the online sources including case judgments, articles and research papers.

SCOPE OF THE STUDY

The study will primarily focus on trademark laws with respect to trademark infringement in online marketplace, where the sale of counterfeit products on e-commerce platforms lead to infringement of trademark of legitimate businesses. It will also focus on the challenges faced by the trademark owners in holding the infringers accountable for such infringement.

LIMITATIONS OF THE STUDY

The limitation of the study is that with the stark rise of e-commerce in India in recent years, the cases of trademark infringement in online platforms has grown multifold. Therefore, the cases and legislations governing it is futile, and has not developed much in India, as it is in other nations. Thus, the research on the topic concerning our nation becomes quite difficult as well as interesting.

REVIEW OF LITERATURE

Kari Kammel, et al. (2021) state in their research about the trademark infringement in online marketplace by selling the counterfeit products, with the special focus on their status in United States and United Kingdom. Furthermore, the research focuses on how to fix liabilities on the seller of counterfeit goods along with attributing secondary liability on the e-commerce platforms, and how to protect the interests of consumers in such scenarios.

Philip Lindell (2020) in her research focused on the extent to which the online intermediaries are liable for the use of their services for the trademark infringement in the countries like US and in EU. Further, the paper also describes about the nuances and difficulties in the cross-border enforcement of trademark laws, and how the liability of such infringement can be imposed on these intermediaries, and the ways available for them to escape their liabilities.

Conclusion

India has experienced a meteoric rise in recent years in both online marketplaces and e-commerce. E-commerce platforms have produced new kinds of purchasing experiences for customers by combining the forces of technology, competitive price offerings, exciting deals, and quick delivery. As a result, the number of online marketplaces created domestically or internationally has significantly increased in India. But as e-commerce platforms have grown, the threat of counterfeiting has grown significantly. The issue of counterfeiting not only compromises a brand’s reputation or brand value, but also puts consumer safety at risk by allowing the sale and uninformed purchase of sub-standard goods. These E-commerce platforms make it simple to access consumer goods from a computer or smart phone, but they also, by their very nature, make it simple for counterfeiters to market their counterfeit goods.

Businesses may find it challenging to enforce trademark rights in online marketplaces because it can be challenging to locate infringers and hold them accountable. In addition, well-known online stores like Amazon are frequently used as a platform for the sale of counterfeit goods, which has prompted concerns about their accountability and liability in trademark infringement cases. Effective trademark enforcement is essential in this situation for protecting the goodwill and financial interests of legitimate businesses. This research paper will explore the challenges involved in trademark enforcement in online marketplaces and examine the various legal and practical approaches that can be employed to combat trademark infringement in the digital age.

Author: Ipsita Sinha, in case of any queries please contact/write back to us via email chhavi@khuranaandkhurana.com or at Khurana & Khurana, Advocates and IP Attorney.

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