Amazon Seller Services Pvt. Ltd. v. Indusviva Health Sciences Pvt. Ltd.
AIR 2020 Kar 5 : (2019) 4 AIR Kant R 766 : (2020) 1 ICC 725
In the High Court of Karnataka
Misc. First Appeal 8411/2018
Before Justice Sreenivas Harish Kumar
Decided on August 28, 2019

Relevancy of the Case: Requirement of consent before selling products of a direct selling entity through e-commerce platforms

Statutes and Provisions Involved

• The Information Technology Act, 2000 (Section 79)
• The Code of Civil Procedure, 1908 (Order XXXIX Rules 1, 2)
• The Information Technology (Intermediaries Guidelines) Rules, 2011 (Rule 3)
• The Direct Selling Guidelines, 2016 (Clause 7(6))

Relevant Facts of the Case

• In a previous order, the trial court passed an order of temporary injunction against the defendant/appellant to stop the sale of the plaintiff/respondent’s products on its platform.
• The appellant was endorsing the respondent’s products without the respondent’s consent. The respondent company is a direct selling entity for these products.
• The respondent sent various communications through emails and lodged complaints to stop the sale of its products. However, the appellant did not comply with these requests. After that, the respondent sent a legal notice to stop the sale of its products.
• Even after receiving the legal notice, the appellant took no action.

Prominent Arguments by the Advocates

• The appellant’s counsel argued that knowledge of an illegal or infringing incident can only be brought by a court order, and only in that case is the appellant obliged to act. Therefore, the appellant was not obligated to act on the respondent’s request. The counsel also argued that guidelines referred by the trial court have no legal obligation for them to be followed. It claimed protection under the safe harbour clause.
• The respondent’s counsel submitted that the appellant did not get consent from the respondent before hosting the products on its platform. It also submitted that the communication sent to the appellant did not prevent it from disclosing the seller of the product. Also, the counsel pleaded that the trial court exercised its jurisdiction correctly. Hence, the court should dismiss the appeal.

Opinion of the Bench

• Knowledge of only unlawful incidents should be brought via a court order. It does not include violation of commercial rights or infringing incidents.
• Due diligence is necessary to claim protection under safe harbour. If the host has specific knowledge that the hosted content is infringing or illegal, it cannot claim protection under the safe harbour.
• When faced with several possible interpretations, the trial court’s selection of a particular viewpoint does not undermine the validity of its decision. This comes under the use of the trial court’s discretionary powers.

Final Decision

• The court dismissed the appeal.