Intermediary Not Required To Take Action Against Alleged Infringers On User’s Complaint Under Rule 3 Of IT Rules 2021: Delhi High Court

The Delhi High Court has observed that an intermediary is not required to take action against alleged infringers on receiving a complaint of the user regarding the infringing acts on the portal under Rule 3 of Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021.

“Rule 3(2)(a) only envisages complaints regarding violation of the provision of Rule 3. There is no provision in Rule 3 which requires an intermediary, on receipt of a complaint regarding infringing activities on its port, to take any action against the alleged infringers,” Justice C Hari Shankar said.

Rule 3 provides for due diligence to be followed by an intermediary on receipt of a user’s complaint and a grievance redressal mechanism for dealing with such complaints.

“The court cannot, by judicial fiat, read, into the IT Rules, something which the rule does not contain either expressly or by necessary implication,” the court said.

Justice Shankar was hearing a suit filed by a manufacturer and seller of car covers against Flipkart and eight entities who were allegedly selling similar products by copying the design, look and feel of the car covers sold by it on the e-commerce platform.

It was the case of the plaintiff, Samridhi Enterprises, that it has been manufacturing and selling car covers under the marks “UK Blue” and “Autofact” since 2018 on Flipkart.

The plaint alleged that by failing to remove the allegedly infringing lists from its website despite an intimation by the plaintiff, Flipkart infringed the statutory provisions under IT Rules, 2021.

On court’s query, the counsel appearing for plaintiff submitted that Flipkart violated Rule 3(2) of the IT Rules, 2021, by failing to act on its complaints.

It was also submitted that the Grievance Officer of Flipkart failed to act in accordance with Rule 3(2)(a) which states that such an officer shall acknowledge the user’s complaint within 24 hours and dispose it off within 15 days.

Rejecting the contention, the court noted that Rule 3(1) requires an intermediary to publish its rules, regulations, privacy policy and user agreement for access of usage of its computer resource by any person.

It also noted that Rule 3(1)(b) requires that the user be informed not to host, display, upload, modify, publish, transmit, store, update or share any information which infringes any patent, trademark, copyright or other proprietary rights.

“All that is required of intermediary in this clause is, therefore, to inform the user not to display or host infringing content. The provision does not proceed further to require the intermediary to, on a complaint of infringement being made to it, take any action in that regard, much less any action against the intermediary,” the court said.

Furthermore, Justice Shankar also compared Rule 3 of the 2021 Rules with Rule 3(4) of the 2011 Rules which required an intermediary to act on a user’s complaint within 36 hours and work with the user to “disable such information” which contravenes the provisions.

The 2011 Rules also required the intermediary to “preserve the information and associated records” for at least 90 days for “investigation purposes.”

Noting that such a stipulation is not mentioned in the 2021 Rules, the court said:

“The omission of any such provision in the 2021 Rule is, clearly, a conscious departure from the pre-existing 2011 Information Technology (Intermediaries Guidelines) Rules. Where the rule makers deemed it appropriate not to incorporate a provision in the 2021 Rules parallel to Rule 3(4) of the 2011 Rules, it would be inappropriate for this Court, by judicial order, to incorporate such a provision or requirement in the 2021 Rules.”

The counsel for the plaintiff also referred to Flipkart’s infringement policy which permits a person, who alleges that its intellectual property rights are violated by uploaded content, to register a complaint and envisages the removal on the infringement being brought to its notice.

The court observed that the provision is “couched in directory” rather than mandatory terms as it uses the word “may”.

“Where the applicable statutory rules do not envisage action being taken by a intermediary merely on a complaint being made by an aggrieved victim or user regarding infringement of intellectual property rights, by content posted on the platform of the intermediary, the court cannot, by placing reliance on an internal policy of a particular intermediary, read into Clause 3 any such requirement, especially where such a provision existed in Information Technology (Intermediaries Guidelines) Rules 2011 and has consciously been omitted in the 2021 Rules,” the court said.

It thus, prima facie, observed that the allegation that Flipkart acted contrary to the rules by not taking action on the basis of its complaint “does not appear to be sustainable.”

However, it added that the allegation of copyright violation was prima facie made out.

Issuing summons in the suit, the court said that it is not deleting Flipkart from the array of parties as its presence may be useful in dealing with remaining prayers.

The matter will now be heard on May 02.

Title: SAMRIDHI ENTERPRISES v. FLIPKART INTERNET PRIVATE LIMITED & ORS.

Citation: 2023 LiveLaw (Del) 255

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