The main legal point established in the judgment is that online marketplaces must go beyond mere compliance with guidelines and actively prevent trademark infringement to qualify for the exemption under Section 79 of the IT Act.

Prathiba M. Singh, J.

1. The Plaintiff has filed the present suit seeking an injunction against use of the trademark ‘L’OREAL’ by the Defendants and sale of ‘‘L’OREAL’ products on the Defendant’s website www.ShopClues.com.

2. The Plaintiff is engaged in the business of manufacture, distribution, and sale of a wide range of hair care, skin care, eye care, cosmetics and beauty products including but not limited to perfumery preparation, cosmetics, preparations for colouring and bleaching the hair, hair dyes and tints, non-medicated preparations for the care and beauty of the skin and non-medicated preparations for eye care cosmetics and other allied/related products.

3. The mark ‘L’OREAL’ is stated to have been coined in the year 1910- 1915. The said mark is also registered in India in class 3. The Plaintiff claims enormous goodwill and reputation internationally. It is also claimed that ‘L’OREAL’ products are available in India and are also extensively advertised in India. The Plaintiff came to know that Defendant No.1 is the seller/merchant on the Defendant No.2 website www.shopclues.com. Defendant No.2 M/s. Clues Network Pvt. Ltd. is the owner of the website www.shopclues.com, which is interactive in nature and is an online market place. The Plaintiff found that various ‘L’OREAL’ products were available on the Defendant No.2’s website, without license from the Plaintiff. Thus, to verify the authenticity of the goods being sold, the Plaintiff affected a test purchase of one of its products from the website www.shopclues.com.

4. Paragraph 22 of the plaint categorically asserts that an examination of the products revealed that the same were not of the Plaintiff’s origin, were of inferior quality, and thus counterfeit. They were also being offered at massive discounts. The suit was filed accordingly, against all the Defendants. This Court on 14th October, 2014, had granted an ex-parte injunction in the following manner: -

“I have heard counsel for the plaintiff and perused the plaint, application and the supporting documents. I am satisfied that this is a fit case for grant of ex-parte ad interim injunction and in case an ex-parte ad interim injunction is not granted, the plaintiff will suffer irreparable loss. The balance of convenience is also in favour of the plaintiff. Accordingly, till the next date of hearing, defendants, their directors, principal officers, partners, agents, representatives, distributors, assigns, stockists are restrained from using, manufacturing, marketing, purveying, supplying, selling, soliciting, exporting, displaying, advertising on the online market place through the website www.ShopClues.com, or any other mode with respect to the impugned mark ‘L’OREAL and L’OREAL formative trade mark’.

Provisions of Order 39 Rule 3 CPC be complied with, within four days.”

5. Consequently, an application under Order XXXIX Rule 4 came to be filed by Defendant No.2, which was dismissed by the Court with the following observations:

“In the opinion of this Court, it cannot be a matter of chance that so many counterfeit products are being sold on the applicant/defendants website. Consequently, this Court is of the view that no grant for vacation of stay has been made out.”

6. Thereafter, an application for passing of summary judgment under Order XIII-A came to be filed by Defendant No.2, which were withdrawn with liberty to file fresh applications, as noted in order dated 23rd February, 2017. However, vide order dated 11th May, 2017, the court noted that the Defendant No.2 decided not to file a fresh application under Order XIII-A. Admission/denial of documents has been completed and the matter was listed for case management on 24th July, 2018, on which date none appeared for Defendant No.1.

7. Submissions have been addressed on behalf of the Plaintiff, and Defendant No.2 and both counsels have no objection if the suit is disposed of finally. The first and foremost submission of learned counsel for Defendant No.2 is tha