Intellectual Property Rights

Christian Louboutin SAS v. Nakul Bajaj & Ors.

2018 SCC OnLine Del 12215

Facts

Christian Louboutin manufactured and sold luxury footwear and fashion products.
Its protected identifiers included:
the name CHRISTIAN LOUBOUTIN;
its logos;
the well-known red-sole mark;
the founder’s name, likeness and photographs.
The defendants operated the e-commerce platform darveys.com.
The website offered luxury products bearing Louboutin’s marks.
It displayed Louboutin’s catalogue and represented products as “100% authentic.”
The platform also used “Christian” and “Louboutin” as meta-tags to attract internet traffic.
Louboutin alleged that:
some goods were counterfeit or unauthorised;
Darveys falsely suggested sponsorship or affiliation;
the platform actively participated in the selling process.
Darveys claimed protection as an “intermediary” under Section 79 of the Information Technology Act, 2000.

Whether Darveys was a passive intermediary entitled to safe-harbour protection.
Whether its use of Louboutin’s marks, photographs and meta-tags amounted to infringement and passing off.
When an e-commerce platform becomes an active participant in trademark violations.

Section 79 protects intermediaries from liability for third-party information only where the statutory conditions are satisfied.
Safe harbour is not blanket immunity.
Protection may be lost where the platform:
initiates or materially participates in transactions;
selects or modifies information;
aids, abets, induces or contributes to unlawful acts;
knowingly facilitates counterfeit sales.
Trademark use includes:
offering goods for sale under the mark;
advertising through the mark;
using the mark to attract customers;
creating a false impression of affiliation.
Genuine, unauthorised resale may sometimes be protected under exhaustion principles.
That protection does not extend to counterfeit goods or misleading claims of official authorisation.

The Court examined Darveys’ real business model rather than merely accepting its description as a marketplace.
Darveys did more than provide a neutral electronic noticeboard.
It allegedly:
approved or controlled sellers;
required customers to become members;
collected payments;
arranged product delivery;
packaged goods;
guaranteed authenticity;
displayed full branded catalogues.
These functions gave it an active role in the transaction and in the representations made to consumers.
The promise that goods were “100% authentic” was especially important.
A platform making such a guarantee could not simultaneously deny responsibility for whether the products were genuine.
Use of Louboutin’s marks and founder’s photographs created an appearance that the platform was:
authorised;
connected;
approved by the brand.
The meta-tags deliberately diverted persons searching for Louboutin products to Darveys.
The Court held that active participation could take the platform outside Section 79.
It was not enough for Darveys to state that foreign sellers supplied the products.
Where those sellers were difficult to identify or pursue, granting complete immunity to the platform would leave the trademark owner without an effective remedy.
The Court emphasised that every e-commerce model must be examined factually.
Ordinary technical assistance does not automatically create liability.
Here, the combination of authentication claims, transaction control and trademark-based promotion went beyond passive hosting.

The Delhi High Court held that Darveys was not entitled to safe-harbour protection on the facts.
It restrained the defendants from selling infringing goods and from using Louboutin’s marks, name and images without authority.
The decision treated active e-commerce participation as capable of constituting infringement and aiding counterfeit sales.
Use this case for: an online marketplace may lose intermediary protection where it controls the transaction, guarantees authenticity and actively uses the trademark to promote unauthorised goods.