INDIAMART INTERMESH LTD. [Appellant]  Vs.  PUMA SE [Respondent]

FAO(OS) (COMM) 6/2024, CM APPL. 2216 & 2219 of 2024

(CORAM: HON’BLE MR. JUSTICE VIBHU BAKHRU and HON’BLE MS. JUSTICE TARA VITASTA GANJU)

The case involves an appeal by IndiaMART Intermesh Limited (IIL) against a judgment by a Single Judge, which ruled in favor of PUMA SE (PSE) in a trademark infringement suit. PSE had filed a lawsuit seeking an injunction against IIL for allowing third-party sellers on its platform (Indiamart.com) to use the ‘PUMA’ trademark as a search term, keyword, or product listing, thereby facilitating the sale of counterfeit goods.

The Single Judge held that IIL’s use of ‘PUMA’ in its drop-down menu for sellers constituted trademark infringement under Sections 29(1), (2), and (4) of the Trade Marks Act, 1999, as it enabled counterfeit sales. The court also rejected IIL’s claim of ‘safe harbor’ protection under Section 79 of the IT Act, stating that IIL failed to take reasonable steps to prevent infringement, as required under Rule 3(1)(b)(iv) of the IT Rules, 2021.

IIL argued that it is merely an intermediary, providing a B2B platform connecting buyers and sellers without actively participating in transactions. It contended that the drop-down menu was only for descriptive purposes and did not amount to trademark use. However, the court found that IIL’s active facilitation of brand-name listings, without verification, contributed to consumer deception and counterfeit sales.

The key legal issues were whether IIL’s use of ‘PUMA’ in its drop-down menu constituted trademark infringement and whether it qualified for intermediary immunity. The court ruled against IIL, emphasizing the need for due diligence in preventing trademark misuse on e-commerce platforms. The judgment reinforces that intermediaries must actively prevent infringement to claim legal protection.

The dispute revolves around IndiaMART Intermesh Limited (IIL) and its use of PUMA SE’s (PSE) trademark ‘PUMA’ in a drop-down menu for sellers registering on its B2B platform, Indiamart.com. PSE alleged that this facilitated the sale of counterfeit PUMA products, constituting trademark infringement under Sections 29(1), (2), and (4) of the Trade Marks Act, 1999. The Single Judge ruled in favor of PSE, restraining IIL from using ‘PUMA’ in its drop-down menu and directing it to remove infringing listings. However, the Division Bench overturned this decision, holding that: IIL is an intermediary under Section 79 of the IT Act and merely provides a listing service, akin to a Yellow Pages Directory, without actively participating in transactions.

The drop-down menu is a facilitative tool for sellers to describe their products accurately, not an endorsement of counterfeit goods. No intent to aid infringement was established, as IIL does not control or verify sellers’ products beyond basic checks. Section 30(1) of the TM Act permits honest descriptive use of trademarks, provided it does not unfairly exploit the mark’s reputation. While IIL must remove infringing listings upon notice, it cannot be compelled to eliminate brand-name options entirely.

The court upheld the take-down obligation for counterfeit listings but rejected the broader injunction, emphasizing that intermediaries like IIL are not liable for third-party infringements unless complicit. The ruling balances trademark protection with the practical realities of digital marketplaces, ensuring intermediaries are not overburdened with preemptive verification duties.