The IT sector is growing at an unprecedented rate with e-commerce emerging as an indispensable tool for business/commerce. With the plethora of online portals, aggregators, online/mobile businesses, content distributors providing services ranging from ticketing and travelling to matrimony, it is safe to call the internet a one-stop solution to all needs.
Today, with the growing awareness of intellectual property, e-commerce involves selling products and services that are based on IP and its licensing. Pictures, music, software, etc, can be the traded with IP playing a pivotal role in the business transaction. While the advent of e-commerce has facilitated ease of businesses, certain significant issues have arisen that need attention.
Trademarks and domain names
Brand names play a crucial role in businesses, especially e-commerce, so domain names have acquired the same status as that of trademarks. The nature of cyberspace has given rise to challenges such as cybersquatting, deep hyperlinking, meta-tagging and other such violations.
In the landmark judgment of Yahoo v Akash Arora & Anr (1999), the Delhi High Court held that trademark law applies with equal force in the virtual and physical worlds. In this case, the court rejected the attempt to register ‘Yahoo India’ as a domain name due to its close resemblance to the registered domain name ‘Yahoo’. The Indian courts have repeatedly followed this approach in several subsequent cases such as Rediff Communication v Cyberbooth & Anr (1999), where the Bombay High Court upheld a similar principle and asserted the value and importance of a domain name as a corporate asset.
Domain name squatting often leads to confusion among consumers and damage to the goodwill of the rightful owner. Moreover, such offences result in diversion of traffic to competing businesses and counterfeits, and hence lead to loss. Therefore, technical measures to curb such illegalities are imperative. For domain name disputes, proceedings can be initiated when country-code top-level domain names are registered. In India, INRegistry adjudicates such domain name disputes.
Digitisation of data has led to a rapid rise in unauthorised copying, downloading and reproduction. Linking and peer-to-peer file-sharing have led to rampant digital piracy. In the day and age of streaming unlicensed content online, copies are made available in minutes, leading to loss of revenues for the copyright owners.
"For domain name disputes, proceedings can be initiated where country-code top-level domain names are registered. In India, INRegistry adjudicates such domain name disputes."
In India, the Copyright Act, 1957 does not address the liabilities of online intermediaries in cases of copyright infringement. The Information Technology (Amendment) Act, 2008, despite not directly addressing any IP issues, has a provision that can have an impact on IP in e-commerce and the digital environment. It also tends to clarify the scope of immunity available to intermediaries.
The nature of e-commerce—it relies on computer technologies, both hardware and software—emphasises the significance of patents. They are an important aspect of business because of the amount of licensing, contracting, outsourcing, and strategic relationships that are involved in business.
Patents can record new ideas, block rival patents for related innovations, increase valuation, enhance the reputation of a company and become a source of royalties in licensing transactions. For instance, Amazon developed a business software patent—‘1-Click’—which allowed customers to buy products with one click instead of filling out a registration each time they made a purchase. In 1999, Amazon sued Barnes & Noble for infringing the patent and was awarded a preliminary injunction by the US District Court for the Western District of Washington. This showed the importance of patenting a technology or innovation in the e-commerce sphere.
In India, the relief for IP infringement includes remedies laid down in section 103 of the Trade Marks Act, 1999 and section 63 of the Copyright Act, 1957 stipulating imprisonment of up to three years for non-adherence; injunctions, both temporary and permanent; and damages and monetary compensation. Also, ‘John Doe’ orders, which are ex parte injunctions, may be issued against unknown or anonymous people or entities.
The complexities of e-commerce have required businesses to tread with caution. It is absolutely mandatory that relevant notices and disclaimers are used to restrict IP infringement.
Manisha Singh is founder of and partner at Lex Orbis. She can be contacted at: email@example.com
Shristi Bansal is an associate at Lex Orbis. She can be contacted at: firstname.lastname@example.org
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