The judgment establishes the importance of due diligence for platforms to qualify as intermediaries under the IT Act and emphasizes that platforms actively participating in the sale of counterfeit products cannot claim immunity as intermediaries.

Prathiba M. Singh, J.

1. The Plaintiff is a company engaged in the business of manufacturing and marketing a wide range of goods related to eyewear including lenses, sunglasses, optical frames and related goods. A company by name of M/s. Oakley Inc. was formed in the year 1975 which had created and coined the mark ‘OAKLEY’. The said word was used as part of the trade mark and as a trade name in relation to various goods, such as sports gear equipment, used in bikes and motorcycles, helmets, pads, motorcycle grips, number plates, elbow guards, chin guards, goggles etc. Oakley Inc. also started using the letter ‘O’ on its goggles which became quite well-known.

2. The Plaintiff company, which is an eyewear company, purchased the rights in the ‘OAKLEY’ brand, by acquiring ownership of Oakley Inc. The Plaintiff’s mark ‘OAKLEY’ is registered in India in various classes, including class 9, 16, 25 and 35.

3. The products of the Plaintiff under its various brands thus, include Ray-Ban, Oakley, Vogue Eyewear, Persol, Oliver Peoples, Alain Mikli and Arnette. Licensed brands include Giorgio Armani, Bulgari, Burberry, Chanel, Coach, Dolce & Gabbana, Donna Karan, Michael Kors, Paul Smith, Polo Ralph Lauren, Prada, Stella McCartney and Versace.

4. The Plaintiff also has a strong presence in India, and its products are sold through an Indian subsidiary M/s. Luxottica India Eyewear Pvt. Ltd.

5. That the Plaintiff acquired knowledge of Defendant No.1-M/s. Mify Solution Private Limited running a website under the name “www.kaunsa.com”. The Defendant No.2-Mr. Ashish Paliwal is the Director of Defendant No.1. Defendant No.3-SLS Systems is operating the website “www.kaunsa.com”. In February, 2014, the Plaintiff acquired knowledge of sale of various OAKLEY branded products on the Defendant’s website. It immediately ordered an “OAKLEY Radar Range US Team Sunglasses Blue Frame” in the first week of March vide order No. KA/265072/B8UIRW40 and paid a sum of Rs.999/- for the purchase. The product in respect of the transaction was delivered and it was noticed that the product was not as per the standards of the Plaintiff and was in fact counterfeit. The suit thereafter, came to be filed.

6. On 25th August, 2014, this Court granted an ad interim ex-parte injunction in the following terms:

“10. By way of this ex-parte ad interim injunction, the Defendants are restrained by themselves or through their representatives/agents from manufacturing, marketing, supplying, exporting, displaying or advertising or in any manner dealing with the trade mark OAKLEY of the Plaintiffs or any deceptively or confusingly similar trade mark to that of the Plaintiffs including on the website www.kaunsa.com.”

7. The Defendants put in appearance and two separate written statements were filed. A joint written statement came to be filed by Defendant No.1 and 2, and one by Defendant No.3. The case of Defendant No.1 and 2 was that the website “www.kaunsa.com” is an intermediary and an online shopping portal. It does not indulge in any selling of products directly. It merely provides a platform for sale. The Defendants sought protection under Section 79 of the Information Technology Act, 2000 (hereinafter, ‘IT Act’). Paragraph 3 to 6 of the same are relevant and is set out herein below: -

“3. That the Defendant No.1 merely provides an online shopping portal, www.kaunsa.com, for its users to interact, buy and sell goods online. It is pertinent to mention here that while operating its website Defendant No.1 acts only as a service provider/intermediary and does not indulge in any manner in selling of the products directly. It is humbly submitted that it is the sellers who upload their goods on Defendant No.1’s portal and in doing so are deemed to have accepted the rules/policy, terms and conditions of the website which strictly prohibits the infringement of trademarks/copyrights. Thus, the Defendant No.1 being a service provider/intermediary cannot be said to have infringed, if any, Pla