Kent RO System Ltd. v. Amit Kotak

Introduction

Where the internet gives us a lot of boons it carries some curses also. Anything done without due care and caution is not acceptable. Before coming to the brief of the case let’s first understand two terms that are involved in the case. The first term is ‘Intermediary’, The Information technology act,2000 defines the term ‘intermediary’ as means any person who on behalf of another person receives, stores or transmits that record or provides any service Concerning that record and including telecom service providers, network service providers, internet service providers, web-hosting service providers, search engines, online payment sites, online-auction sites, online-market places, and cyber cafes.

The second term involved in this e-commerce. E-commerce (electronic commerce) means buying and selling goods and services, or the transmitting of funds or data, over an electronic network, primarily the internet.

The issue involved in the Kent RO System Ltd. v. Amit Kotak

Responsibility of intermediaries regarding infringing content on their platform.

Laws or Provisions involved in the Case

1. The Information Technology Act,2000 (sections 79, 79 (1), 79(3))
2. The Designs Act, 2000 (Section19)
3. The International Technology (Intermediaries Guidelines) Rules,2011 (RULE 3, Section 22(1)(c))

Brief facts of Kent RO System Ltd. v. Amit Kotak

1. Kent RO System Ltd. (plaintiff) is the manufacturer of water purifiers, has taken all the necessary protection concerning the design, shape, and aesthetic appearance of its water purifiers system by registering it under the Design Act, 2000 so that the plaintiff’s registered design can’t be used by any other manufacturer or trader.
2. Kent RO System Ltd. Company sells its water purifiers in both physical and virtual (online) markets through e-commerce websites including e-Bay (defendant NO.2).
3. e-Bay (defendant NO.2) is an e-commerce platform portal through which seller of various products showcase, sells their products, and carry on their business.
4. e-Bay acts as an intermediary facilitating the transaction between seller and buyer of various goods.
5. Amit Shanhulal Kotak (defendant NO.1) was also a manufacturer and /or trader of water purifier systems. the shape, design, and aesthetic appearance of his water purifier system are similar to Kent RO.
6. Amit Kotak infringes the plaintiff’s right under section 19 of The Design Act,2000 by regularly uploading his infringed products on the e-Bay website (defendant NO.2).
7. Before instituting the suit plaintiff draws the attention of Amit Kotak and e-Bay to the infringement caused by Mr. Amit Kotak (defendant NO.1) and demanded to remove such infringed content from their website.
8. On receiving the complaint, e-Bay removed all the content which are mentioned in the complaint itself but the plaintiff contended that there are several other infringing products on their website which should also be removed without specific demand but e-Bay has not taken the steps to remove the other infringing product and stated that without specific demand they can’t identify the infringed product but on receipt of any complaint in future also from the plaintiffs shall, per law, remove the offending products from its websites.
9. Kent RO System Ltd. Brings suit against Amit Kotak for selling products that have the same design as the plaintiff’s product (which is registered under The Design Act,2000) by donning this defendant NO.1 done the tort of piracy under the provision of the design act and against e-Bay (defendant NO.2) for not observing due diligence in the identification of the infringed product and by this it helped defendant NO.1 to showcase their infringed product.

NOTE:  Defendant No.1 admitted his fault and did not contest the case.

Plaintiff’s Arguments

1. Relying on Rule 3 of Information Technology (Intermediaries guidelines) Rules,2011, being an intermediary defendant NO.2 is required to observed due diligence while discharging his duties namely:

• The intermediary shall publish the rules and regulations, privacy policy, and user agreement for access or usage of the intermediary’s computer resource by any person.
• Such rules and regulations, terms and conditions, or user agreements shall inform the users of computer resources not to host, display, upload, modify, publish, transmit, update or share any information that infringes any patent, trademark, copyright, or other proprietary rights;
• The intermediary shall not intentionally upload or publish any information or shall not initiate the transmission, select the receiver of the transmission, and select or modify the information contained in the transmission as specified in sub-rule (2).
• The Intermediary should give a notice to its users that in case of failure to comply with rules and regulations, user agreement, and privacy policy for access or usage of the intermediary website, the Intermediary has the right to remove the content or products of such users from its platform and can ban it for future.

1. The counsel for the plaintiff has also drawn attention to the Section 22(1)(c) of The Designs Act that a person is guilty of piracy of protected design under the design act if the person with one’s eye open knows that the designs, shape, appearance of any product is infringing any other person rights under design act and that person knowingly(not under mistaken belief) without the permission of registered proprietor upload, showcase that infringed product on their website for sale.
2. The counsel for the plaintiff has also contended that the exemption under Section 79(3) of Information Technology (Intermediaries guidelines) should not be made available to the intermediary if he colludes, encourages, supports, or endorse the commission of an unlawful act for wrongful gain with the seller.

Defendant’s Arguments

1. The counsel of defendant NO.2 stated that defendant NO.2 is innocent, it has no knowledge about the infringed product and has complied with all the regulations of The IT Act and as soon as it received the complaint from the plaintiff it removed all the infringed product mentioned and also promises to remove the infringed content further from their website in future on receiving complain by the plaintiff.
2. Defendant no.2 (e-Bay) has cited section 79 of the IT Act providing that an intermediary is not responsible to a third party( to whom the original content belongs) if some person uses its platform to upload infringing information, content, or products because the task of the intermediary is restricted to give access to its users to showcase their content on its website provided that intermediary follows all the guidelines of government regarding their duties.

Analysis of bench

1. The IT Act rule does not want special care or protection from the side of the intermediary, only a notice of privacy policy and instruction for not uploading infringed content should be given to its users.
2. It is laid down in the IT Act that on receiving any objection from any person that any of the content on their platform is infringing the lawful right of such, then within 36-hour intermediary should take action.
3. Court further analyzed that legislation does not give any piece of work to intermediary of scrutinizing or scanning of the information, content, and product uploaded on their website.

Judgment

Court held that neither the argument of the plaintiff is strong enough nor the plaintiff has any evidence against defendant no.2 (e-Bay). Court gives its decision in favor of defendant no.2.  The reasoning of the court decision is as follows:

• Everything which is specified in the act as deemed necessary and required from the side of the intermediary like giving a warning to its user not to give or upload any content on which they have no right or which is against someone else rights.
• After getting a complaint from the plaintiff, the defendant removed the entire infringed product from its platform. So, there is no negligence or breach of duty from the side of defendant no.2 (e-Bay).
• Plaintiff requested to not give an exception of section 79 of IT Act to defendant no.2 but there is no evidence that can show that defendant no.2 (e-Bay) has any mutual interest with defendant no.1 (Amit Kotak).

Conclusion

 On a daily basis, 1000 people upload their products on e-commerce platforms. It is not feasible and viable for an intermediary to check every product before permitting it to upload on its website. If they start donning this process of checking content on their platform then the whole of their precious time would go waste which should actually be used by them in expanding their business.

Endnotes

1. Judgment in Kent RO Systems Ltd. & Another vs. Amit Kotak & Others.  https://indiankanoon.org/doc/163813330/
2. Information technology (intermediaries guidelines) rules 2011
3. The Design Act 2000:  https://indiankanoon.org/doc/931654/
4. Information Technology Act 2000:https://indiankanoon.org/doc/1965344/
5. Judgment in Kent RO System Ltd. & Another vs. Amit Kotak & Others.https://cyberblogindia.in/kent-ro-systems-ltd-anr-v-amit-kotak-ors/
6. E-commerce definition: https://www.techtarget.com/searchcio/definition/e-commerce
7. https://police.py.gov.in/Information%20Technology%20Act%202000%20-%202008%20(amendment).pdf/

This post has been submitted by Simran Dhandia, a student of Jai Narain Vyas University, Jodhpur.