This article has been written by Indulekha T M, 5th year student of SDM Law College, Mangalore.
ABSTRACT
The Internet is vital for the development of contemporary economies because they are fluid and ever-changing. The Relevance of Intellectual Property Rights in the e-commerce process and its impact across the virtual and physical worlds must thus be emphasised. To ensure that the intrinsic worth of Intellectual Property is not overlooked or underestimated, it is critical to keep an eye on both e-commerce and the technology infrastructure.
INTRODUCTION
The Indian retail sector has witnessed substantial expansion due to reasons such as evolving consumer tastes and rising internet penetration. Yet it also raises challenges surrounding trademarks.
Since a growing number of sellers utilise online platforms it becomes of greater significance than ever to safeguard brands against infringement and counterfeiting. The widespread unlawful usage of trademarks is an imminent danger to consumer trust and brand identification. It would require solid legal frameworks and vigilant brand management to address these issues and establish a secure and prosperous e-commerce ecosystem in India.
What is E-Commerce?
Electronic commerce or e-commerce is the exchange of money or data via an electronic network, typically the Internet, for the purchase and sale of goods and services. These commercial transactions can be business-to-business (B2B), Business-to-consumer (B2C), or consumer-to-business.
E-business and e-commerce are frequently used synonymously. Online retail shopping involves transactional processes, which are sometimes referred to as “e-tail.”
What is a Trademark?
A trademark can be any combination of letters, numbers, symbols or
designs that distinctively identify your products or services. Customers utilise it to identify you in the marketplace and set you apart from your rivals.
Trademarks and service marks are both grouped under the umbrella term “trademark”. Products are identified by a trademark, and services are identified by a service mark.
A trademark :
- Identifies the source of your goods and services
- Provides legal protection for your brand
- Helps you guard against counterfeiting and fraud.
INTELLECTUAL PROPERTY AND IT’S ROLE IN E-COMMERCE
E-commerce is an excellent instrument for facilitating business. However, the owner solely is in charge of defending his intellectual property rights. Inadvertently allowing others to unfairly use intellectual property is altar happens when an entity neglects to safeguard it before disclosing it to the public.
It is crucial to make sure that before beginning to sell both online and in physical stores the necessary measures have been taken to obtain the appropriate intellectual property rights. Due to their territorial nature Intellectual Property rights must be properly protected in India. Therefore to receive legal protection when selling a product on an Indian e-commerce platform, the necessary IPR registrations must be finished
Thus before publishing its intellectual property in the public domain, any business, especially one that depends on e-commerce, must take the lead in protecting it through patents, copyrights, trademark registrations and other legal measures.
Sales of counterfeit and phone goods by numerous e-commerce companies like Shoeskartel, Firstcopyclub and others, regularly violate copyright and trademark laws. The jurisprudence of intermediary liability has been advanced by Indian courts, which have held platforms liable for actively hosting and participating in IP rights violations, rather than only focusing on the direct infringement of rights by sellers of counterfeit goods.
CHALLENGES FACED BY E-COMMERCE
Counterfeiters have adjusted their methods in response to the expansion of the internet.
Online marketplaces have grown in popularity, which has also made it simpler for counterfeiters to use these platforms as sales channels for their fake goods. Many external parties offer information about goods or services in an online marketplace, even though the marketplace operator manages transactions. After the marketplace operator has processed customer transactions, the participating retailers or wholesalers are responsible for delivery and completion.
The reason why Indians are drawn to online marketplaces so much is that, by aggregating products from multiple vendors, these e-marketplaces often provide more choice, accessibility and affordability than vendor-specific online retail sites. 38% of 6,923 respondents to a survey claimed to have purchased a counterfeit item from an online retailer in the previous year. According to a different survey, in the last six months, three out of every four online shoppers have experienced the delivery of phoney goods.
Grey market goods are another relevant issue with e-commerce platforms that impacts manufacturers in addition to counterfeit goods.
According to the International Trademark Association, goods on the grey market are made by the owner of the brand and sold through unofficial channels, in contrast to counterfeit goods. In this context, independent, unaffiliated third-party sellers who offer unlicensed original products for sale on e-commerce platforms are referred to as grey-market channels.
Even websites imitating the style and feel of legitimate business websites are made by scammers. Fraudsters may deceive customers into paying for goods they will never receive by creating phoney websites.
Furthermore, these con artists may steal the credit card and bank details of gullible clients. These fraudulent websites may have a convincing appearance, making it challenging to distinguish them from real ones.
How would one tell the difference between genuine products and a fake or counterfeit one, from the perspective of the customer? To begin with, the products would be made available at a substantial reduction from their standard retail cost. It must be verified whether the vendor has several listings and apartments available, as well as whether they are a part of the authorised or official channel of distribution. Lastly, there is a good chance the vendor is selling a phoney item if the price of each listing differs significantly or if the same item has been listed more than once.
These checks are useful not only for customers but also for legitimate businesses whose products are being counterfeited or directly impacted by such dishonest vendors. They can create genuine doubts in the minds of these businesses. It is the e-commerce platform’s great responsibility to remove these annoyances from their page so that they do not interfere with legitimate businesses.
TRADEMARK FOR E-COMMERCE SELLERS
The world can now purchase any brand, its products and its varieties online due to the rising use of the internet. Therefore having a distinctive trademark for their products is important for an online retailer or business. A brand for logo makes it easier for customers and the general public to identify the goods offered by an online retailer or business.
When customers remember a product’s trademark, look it up and make repeat purchases, it will draw and keep them as e-commerce sellers and companies. It will contribute to the company’s or sellers products becoming more well-known and favoured. Speciality brands and the goods they are linked with will be well-known across the globe.
CHALLENGES FACES BY TRADEMARKS IN THE E-COMMERCE INDUSTRY
THE GLOBAL REACH OF ONLINE PLATFORMS
The Internet’s global reach has created a plethora of opportunities for businesses to connect with customers around the world. Nevertheless, because of their widespread use, trademarks may be violated abroad, making it difficult to enforce trademark rights. To protect their rights in several jurisdictions, businesses need to be aware of the territorial nature of trademark protection and look into international trademark registration options.
CONFLICTS OVER DOMAIN NAMES AND CYBERSQUATTING
In the digital age, registering domain names that are exact replicas or confusingly similar to well-known trademarks to make money off of confusion is known as “cybersquatting”. Businesses must implement proactive measures like monitoring domain registrations, delivering cease-and-desist letters, and using domain name dispute resolution processes like the Uniform Domain-Name Dispute-Resolution Policy(UDRP) due to the time-consuming and expensive nature of domain name disputes.
SOCIAL MEDIA UTILISATION AND BRAND SPOOFING
Social media networks provide businesses with a wealth of marketing opportunities, but they also put them at risk of impersonation. Unauthorised entities can fabricate profiles, pages, or accounts to trick customers, harming their reputation and possibly costing them money. To keep their brand credible, businesses should report phoney accounts, interact with users, and keep a close eye on social media channels.
TRADEMARK INFRINGEMENT AND KEYWORD ADVERTISING
Trademark keywords used in pay-per-click(PPC) advertising may confuse consumers and reduce the value of trademarks. To keep control over brand messaging and guard against competition interference, businesses must closely monitor PPC campaigns, enforce their trademark rights, and think about bidding on their trademarked keywords.
COUNTERFEIT GOODS IN E-COMMERCE
The retail industry has been revolutionised by e-commerce platforms, they are also havens for the production of fake goods. Online marketplaces offer anonymity to counterfeiters, who use it to sell counterfeit goods and damage the reputation of genuine brands. To stop the sale of counterfeit goods, businesses need to closely collaborate with e-commerce platforms and be watchful in identifying and reporting counterfeit goods.
USER-GENERATING CONTENT VIOLATING INTELLECTUAL PROPERTY RIGHTS
A district challenge to trademark protection arises from the widespread presence of User Generated Content(UGC) on social media and other online platforms. Companies have to find a way to protect their trademarks while still permitting user interaction. To preserve brand integrity, it is essential to create explicit policies for user-generated content and to put in place a strong takedown process for content that violates rights.
MEASURES ADOPTED BY LEADING E-COMMERCE AGAINST THE CHALLENGES
The safeguarding of intellectual property rights is a crucial aspect that policymakers and businesses across the globe take into account in the current innovation-focused and knowledge-intensive global economy. Because of this, the majority of markets have enacted legislation defining what happens to e-commerce sites and other online intermediaries when their users violate intellectual property rights. Because of this numerous online retailers have started creating user-friendly internal governance systems that support intellectual property protection and have made an effort to present themselves as socially conscious businesses to combat the threat of counterfeit goods.
Big e-commerce sites like Amazon, eBay and Alibaba have created sophisticated IP protection systems by relying on technology. Several platforms have developed proactive monitoring and IP infringement notification systems with the aid of big data and sophisticated computing technologies. The online market is now safer thanks to cutting-edge technologies like real-time interception systems, image recognition algorithms, semantic recognition models, product information databases and data collaboration platforms.
THE ACTS AND PROVISIONS RELATED TO LEGAL ISSUES FACED BY E-COMMERCE BUSINESSES
INFORMATION TECHNOLOGY ACT, 2000
It is the main piece of legislation that controls Indian e-commerce. This act recognises electronic signatures, as legitimate and grants electronic records the same legal standing as paper records
CONSUMER PROTECTION ACT, 2019
The Consumer Protection Act of 2019 lays forth the consumer protection regulations that e-commerce companies operating in India must abide by. In addition to protecting customers from unfair business practices and subpar goods, the act aims to increase market competition.
COPYRIGHTS AND TRADEMARKS ACT, 1957
E-commerce companies may run into legal problems if their trademarks and copyrights are violated. Intellectual property owners are granted protection and the ability to pursue legal action against infringers through the Copyrights and Trademarks Act of 1957.
- GOODS AND SERVICES TAX (GST) ACT, 2017
- RESERVE BANK OF INDIA GUIDELINES
- DATA PRIVACY LAWS
- CYBERCRIME LAWS
LANDMARK CASE LAWS :
Shreya Singhal V Union of India 2015
This case concerns the validity of Section 66A of the Information Technology Act, which was declared unconstitutional by the court and criminalised speech expressed online.
Amazon Seller Services Pvt.Ltd Vs. Amway India Enterprises Pvt.Ltd 2015
The subject matter of this case was e-commerce platforms’ trademark infringement.
Relevancy of the case: Enforceability of Direct Selling Guidelines against online sellers.
Statues and provisions: Information Technology Act, 2000 ( s.2(w),79), The Constitution of India, 1950 (Article 13,19(1)(g),73,77)
CONCLUSION
IP protection in e-commerce is a challenging issue, especially when it comes to dealing with the online sale of counterfeit goods. IP rights holders, e-commerce platforms, and pertinent government agencies must work together more closely, exercise joint governance, and share data and technology.
EU SMEs that are trying to break into the Indian e-commerce market need to know about the obstacles it presents as well as the applicable legal protections available to them.
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