Online Marketplace Ip Enforcement Programs.
I. Online Marketplace IP Enforcement Programs (Overview)
1. What are IP Enforcement Programs?
Online marketplaces (Amazon, eBay, Flipkart, Alibaba, etc.) host third-party sellers. Because counterfeit and infringing goods frequently appear on such platforms, marketplaces have developed IP Enforcement Programs to:
Allow IP owners to report infringement
Remove counterfeit or infringing listings
Suspend repeat infringers
Maintain “safe harbor” protection under intermediary laws
Examples (conceptually):
Notice-and-Takedown systems
Brand Registry Programs
Verified Rights Owner (VeRO-type) programs
2. Legal Tension
The core legal question is:
When does an online marketplace move from being a passive intermediary to an active participant in infringement?
Courts worldwide have addressed this by balancing:
IP rights protection
E-commerce growth
Intermediary liability shields
II. Landmark Case Laws (Detailed)
1. Tiffany (NJ) Inc. v. eBay Inc. (United States)
Facts
Tiffany alleged that large volumes of counterfeit “Tiffany” jewelry were sold on eBay.
eBay knew counterfeits existed but relied on its notice-and-takedown system.
Tiffany argued eBay should proactively monitor listings.
Legal Issues
Whether general knowledge of infringement creates liability
Whether marketplaces must proactively police listings
Judgment
Court held eBay not liable
General knowledge of infringement ≠ specific knowledge
Duty arises only when the platform has specific notice of infringing listings
Key Legal Principles
Marketplaces are not required to pre-screen all listings
Notice-and-takedown systems are sufficient
Protects innovation and scalability of e-commerce
Significance
This case became the global benchmark for intermediary liability.
2. L’Oréal SA v. eBay International AG (European Union)
Facts
L’Oréal sued eBay for allowing sale of counterfeit cosmetics and perfumes.
eBay provided listing optimization, promoted sales, and assisted sellers.
Legal Issues
Whether eBay’s role was neutral or active
Whether providing seller assistance removes safe harbor protection
Judgment
Court held that safe harbor applies only to neutral intermediaries
If the platform plays an active role, it loses protection
Courts can order platforms to:
Prevent future infringements
Identify infringing sellers
Key Legal Principles
“Active role” test introduced
Platforms cannot hide behind neutrality if they optimize infringing sales
Significance
This case tightened obligations on marketplaces in the EU.
3. Christian Louboutin SAS v. Nakul Bajaj & Darveys (India)
Facts
Darveys sold luxury goods, including Louboutin shoes, without authorization.
Claimed it was only an intermediary.
Used branding language suggesting authenticity.
Legal Issues
Whether Darveys was an intermediary or an active seller
Applicability of “safe harbor” under Indian IT law
Judgment
Delhi High Court held Darveys liable
It was not a passive intermediary
Displaying luxury branding + controlling product presentation = active role
Key Legal Principles
Court laid down factors to determine intermediary liability, including:
Control over inventory
Ability to modify listings
Direct customer interaction
Pricing and promotion control
Significance
First major Indian case clarifying marketplace liability.
4. MySpace Inc. v. Super Cassettes Industries Ltd. (India)
Facts
Copyrighted music was uploaded by users on MySpace.
Super Cassettes claimed MySpace was liable for infringement.
Legal Issues
Whether intermediaries must proactively monitor content
Scope of “actual knowledge”
Judgment
MySpace not liable until it receives specific notice
No obligation for proactive monitoring
Key Legal Principles
Intermediary liability begins only after actual knowledge
General awareness is insufficient
Significance
Reinforced notice-and-takedown framework in India.
5. Amway India Enterprises v. Amazon & Flipkart (India)
Facts
Amway products were sold on Amazon and Flipkart without authorization.
Products required quality control and consumer guidance.
Legal Issues
Whether marketplaces were intermediaries or sellers
Violation of direct-selling guidelines
Judgment
Court restrained marketplaces from selling Amway products
Held platforms liable due to:
Storage
Packaging
Logistics
Discounting control
Key Legal Principles
Deep involvement in supply chain removes intermediary protection
Consumer safety and brand integrity matter
Significance
Marked a shift toward stricter scrutiny of Indian marketplaces.
6. Louis Vuitton Malletier v. eBay (France)
Facts
Counterfeit luxury goods sold extensively on eBay.
eBay profited from transaction commissions.
Judgment
eBay held liable
Ordered to pay heavy damages
Key Legal Principles
Profit-driven facilitation of infringement attracts liability
Strong protection for luxury brands
Significance
Contrasted sharply with U.S. approach.
7. Alibaba Counterfeit Litigation (China – Multiple Actions)
Facts
Alibaba accused of allowing counterfeit goods.
Implemented IP Protection Platform after lawsuits.
Judicial Approach
Chinese courts required:
Seller identity verification
Fast takedown systems
Repeat infringer penalties
Significance
Led to development of robust IP Enforcement Programs in Asia.
III. Comparative Legal Principles
| Issue | US | EU | India |
|---|---|---|---|
| Proactive monitoring | Not required | Sometimes required | Not required |
| Active role test | Limited | Strong | Strong |
| Notice-and-takedown | Central | Central | Central |
| Seller verification | Limited | Encouraged | Increasingly required |
IV. Conclusion
Online Marketplace IP Enforcement Programs exist to:
Balance innovation and IP protection
Preserve safe harbor protections
Prevent abuse of platforms
Courts globally agree on one principle:
The more control a marketplace exercises, the greater its legal responsibility.
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