Kent RO Systems Ltd. and Ors. v. Amit Kotak and Ors.

Kent RO Systems Ltd. and Ors. v. Amit Kotak and Ors.

2017 (69) PTC 551 (Del)

In this case, Plaintiff wanted the Hon’ble Court to hold that once the Plaintiff has lodged a Complaint before the Defendant No. 2 (Intermediary under the IT Act, 2000) with respect to the offending prouduct of the sellers, the Defendant No. 2 on its own, before hosting a product of any other sellers should verify, whether the same also infringes the registered design of the Plaintiff.

The Hon’ble Single Judge of Hon’ble High Court of Delhi rejected the said prayer by holding as follows:

• This would lead to converting an intermediary into a body to determine whether there is any infringement of Intellectual Property Rights.
• All persons claiming any Intellectual Property Rights will then, intimate the intermediaries of their claims and the intermediaries then, before hosting any material on their computer resources would be required to test the material vis-à-vis all such claims lodged with them, else would be liable for infringement.
• IT Rules oblige the intermediary to remove/disable the information hosted on the portal only on receipt of complaint. The IT Rules, do not oblige the intermediary to, of its own, screen all information being hosted on its portal for infringement of rights.
• Hosting of information on the portal of the Defendant No. 2 (eBay) is automatic, without any human intervention.
• Such a direction would bring the business of intermediaries to a halt.
• The provision in the Rules (Intermediary Rules) requiring the intermediary to on receipt of complaints take action is different from requiring an intermediary to of its own take a call as to what is infringing and what is not.
• Had the intention of the Legislature been to require the intermediaries to be vigilant as the plaintiff reads the IT Act and the Rules to require it to be, the Legislature would have merely observed that the intermediary will not permit to be hosted on its website any information infringing intellectual property rights of any other person if such person had informed the intermediary of the same. However the Legislature has not done so and has required the intermediaries to only declare to all its users its policy in this regard and advise them not to host any infringing information on the website of the intermediary and to on receipt of complaint remove the same within 36 hours.
• To require an intermediary to do such screening would be an unreasonable interference with the rights of the intermediary to carry on its business

Other Important Observation:

For a case to be made out under Section 79(3) of the Information Techonology Act, 2000 making the provision of Section 79(1) exempting an intermediary from liability to be inapplicable, the Plaintiffs have to plead and prove conspiracy or abetment or aiding or inducing within the meaning of Section 79(3) of the IT Act. The words ‘conspired’, ‘abetted’, ‘aiding’ and ‘inducing’ are legal terms meaning whereof has been settled for long. They require pleading and proof of common intention. That is not the case pleaded by the Plaintiffs.