2025 | Vol 1(1) | November

The struggle between trademark and transparency on e-commerce platforms: Examining consumer protection in India

Stuthi Sebastian, Student of Gujarat National Law University, Silvassa, India

Contact at: stuthi23sbal056@gnlus.ac.in

Abstract

A Trademark acts as a symbol of reputation, identity and quality of a brand’s products and services. This paper is a doctrinal examination of the tension between trade mark protection and consumer transparency on e-commerce platforms. It is observed since the cases of sale of counterfeit products are on the rise along with the blatant disregard to transparency when it comes to online listings, traditional laws of trade mark and consumer protection which were originally enacted for physical markets are insufficient in the digital realm. Certain sets of legislations and case laws of India and abroad have been analysed to highlight the matter of concern. Various challenges like intermediary liability and lack of verification are evaluated to show consumer vulnerability along with suggestions to address the said challenges.

Keywords: Trademark, e-commerce, transparency, consumer protection, infringement

1 Introduction

Tangible matters that are worth protecting are protected physically, either lawfully or unlawfully. However, when it comes to intangible matters, things get tricky because there is nothing to hold on to by which it can be protected. Luckily, where might cannot intervene, the law can. Intangible assets of a person have been protected since the time of the Romans and have continued till today. Among others, India mainly protects Intellectual Property under respective legislations for Patent[1], Copyright[2], Designs[3]and Trade Marks[4]. However, India is not at a point where it can govern the encounter of tangible substance (product) with the intangible asset (trade mark) on a platform that solely operates from the faith that the people at large have on them. With the rapid progression and development of the internet around the world, it is all the more easier to carry out trade, cross border transactions and other commercial activities.

Online platforms such as ‘Amazon’, ‘Flipkart’, ‘Blink it’ and ‘Meesho’ have integrated themselves so deeply into a person’s everyday routine that if at any time one needs anything, it is literally at the tip of their finger at that instant (intangibly) and in their house in a few hours or days. This highlights the heavy reliance on online marketplaces which often leads to disappointment because when the goods are delivered, it may not be up to the expectation which was caused due to lack of transparency on the e-commerce platforms leading to more confusion. People often put their trust on a commodity kept on a platform solely because of the reputation created by a commodity’s brand out of its own goodwill. Platforms often desire an unending list of categorical commodities to keep every kind of option available, but what they often overlook is the insertion of matching products at low prices in the list of items which causes the confusion between the original and duplicate product.

Because of near to no transparency on the online platforms regarding the products placed, reason being ignorance of verification processes there is an increase in counterfeit goods which makes customers more vulnerable in digital marketplaces. This article attempts to overcome the question of whether the Indian consumer protection laws are adequate to govern the operation of online platforms when it intersects with the Indian trade mark laws.

2 Legal grounds

“Trademarks act as crucial assets for companies, symbolizing the reputation, identity, and quality linked to their products and services.”[5] In order to protect a brand’s reputation and goodwill, India enacted the Trade Marks Act in 1999 (TM Act 1999), which laid down the essentials relating to trade marks along with provision for registration, protection and prevention of the use of fraudulent marks. It also safeguards the rights of the holder of trade mark, penalises for infringement. Section 2 (1) (zb) of the TM Act 1999 defines trade mark as follows, “a mark capable of being represented graphically and which is capable of distinguishing the goods or services of one person from those of others and may include shape of goods, their packaging and combination of colours”.[6]

Few other essential provisions provided below discuss the extent of well-known marks, exclusive rights, infringement and remedies, which are important for any trade mark holder.

Section 2 (1)(zg) of the TM Act 1999 explains ‘well known trade mark’ as, with respect to any products or services, a mark that has gained recognition among the public that utilizes those products or receives those services, signifying that the use of that mark for other products or services may be interpreted as a link in the trade process or service provision between those products or services and the mark for the initially mentioned products or services.[7]

For a trade mark to be secured, it must be duly registered, after which, as per section 28[8], the holder gains exclusive right over the use of the trade mark with respect to the goods and services for which it has been registered. However, the said exclusive right is subject to any conditions and limitations to which the registration is subject.

Similarly, when the holder gains the right to use the registered trade mark, they also have the right to restrain other persons from using the registered trade mark. Section 29[9] elaborates on when a registered trade mark is infringed by a person who is not the registered proprietor by using a mark which is identical or deceptively similar for trade, in such a manner as to render the use of the mark likely to be taken as being used as trade mark.

Therefore, such legislations are put in place to ensure that the registered trade mark is used only till the extent available to the registered proprietor. However, these laws are sufficient only when they operate at a tangible level, meaning when people are able to identify and differentiate between the fake and the original at conventional markets, but it becomes inadequate when there is a barrier between the people and the seller. This barrier is the e-commerce platform where people are incapable of differentiating the fake from the original because of lack of transparency between the seller and the consumer.

The TM Act 1999 is not adequately equipped to deal with the vulnerability that a trade mark faces when put on online platforms. There are no specific laws that regulate the action of misrepresented keyword advertising or domain names which often misled people to believing the false.

On the other hand, legislation for the Consumer Protection[10] (CP Act 2019) was enacted to protect the interests of consumers by establishing authorities for timely and effective administration along with settlement of consumer’ disputes. A consumer is any person that buys any goods or avails any services for a consideration paid. A consumer has multiple rights, including that of being protected, informed, assured, heard and to seek redressal. However, like that of the TM Act 1999, the law was sufficient as long as the purchase of goods or service was physical, but when the whole aspect of purchase took another form of being on online platforms, the law was held back. To rectify the error of ignoring the capabilities of e-commerce purchases, the Consumer Protection (E-Commerce) Rules was released in 2020 which brought forth the regulations upon the sellers operating on e-commerce platforms to abide by the enacted rules to continue their trade and to protect the consumers purchasing through online modes.

E-commerce platforms are usually run by intermediaries which often provide with a platform to the seller to sell their goods or services and platform to consumers to purchase the said goods or services from the seller. Section 79 of the Information Technology Act, 2000[11] (IT Act 2000) exempts intermediaries from liability for things like third party information, data, or communication links made available or hosted by such intermediaries, but only in certain cases. It acts as a ‘safe harbour’ for the intermediaries from being tried under any law for the time being in force. However, they may still be instructed to carry out due diligence and send notice or take down any e-commerce platform which may be in violation of rules put upon it.

3 The intersection

Since the e-commerce platform functions as an intermediary between the seller and consumer, the whole paradigm of trade and business translates that into a virtual activity. The concern that remains persistent with the virtual affair is that of authenticity. Due to lack of robust security and verification measures in the virtual realm to combat trademark infringement, it is easier for others to produce lookalike brand names, counterfeit products or fake domain names which mass consumer confusion and serious harm to the brand’s reputation that was built on its goodwill. It has become very common for the businesses to list products that are in violation with trade mark infringement on their online platforms with the sole purpose of showing more options to the consumer at cheaper prices to increase their productivity and spreading their monopoly. Due to these never-ending listing of products, consumers are often misled by way of photoshopped visuals (product looks from original brand), manipulated keywords at search engines and other deceptive methods are used to divert consumers from original products to that of unauthorised fake, low quality products to increase its sale. One such example is the offence of ‘Cybersquatting’[12] which involves registering of domain names that are identical or deceptively like that of the original domain name with the ill intent to gain profit by imitating themselves as the legitimate owner. These counterfeit goods problems negatively impact the consumers who are involved in the virtual transactions in terms of safety, trust and quality of delivery which causes further doubts and hesitancy for future transactions.

Lack of seller transparency on such intangible platforms becomes advantageous for the seller’s business as it easier for them to create fake accounts or websites that look the same or deceptively similar to that of originally registered trade mark due to which it becomes more easier for them to gain wrongful benefit by misrepresenting the general people into thinking that the symbol or mark shown by them is that of the original and authentic product. These fraudulent sellers are quick with setting up fake brand affiliation through which they attract the consumers and create confusion with inconsistent authorisation disclosures due to which the innocent people generally give them the benefit of the doubt, which is then exploited by these sellers. Another deceptive way is by setting up short-term seller accounts where they take full advantage of the consumer's innocence and after which they vanish without a trace which in turn evades them from their liability.

Oftentimes, it is the algorithm that pulls the strings of the online platforms. It is commonly observed how because of algorithm products of the same category are listed hierarchically based on their price, which is from higher to lower due to the original product gets jumbled among the fakes. This shows that the algorithm is set in such a way that price is preferred over the quality of the product, even if they are the fake versions of the trade marked product. Another filter, other than that of algorithm, is that of sponsored listings. These sponsored products often overshadow the original product with their extravagant photoshop skills and price range.

4 Case analysis

In the case of Yahoo Inc. Vs Akash Arora[13], the general public was familiar with the global internet portal, Yahoo. Furthermore, Yahoo had full ownership over its trademark and domain name. The point of contention arose when the defendant introduced a similar internet portal named ‘yahooindia.com’. The plaintiff prayed for an injunction arguing that the defendant was allegedly passing off and was misusing the plaintiff’s existing goodwill. The Court was in favour of the plaintiff when it observed that domain names operate as source identifiers, therefore deserve the same level of protection as that of trademark.

Similarly, in the case of Satyam Infoway Ltd. Vs Siffynet Solutions Pvt. Ltd.[14], the plaintiff, Satyam Infoway (Sify) controlled ownership over domain names and the trademark ‘Sify’. The defendant, Siffynet, introduced a similar domain name called ‘siffynet.net’. The Court reiterated that domain name operates as commercial identifiers, therefore it also deserves protection. As ‘Sify’ was established before ‘siffynet’ and had created its reputation in the market, the Court granted protection in the plaintiff’s favour, observing that the defendant was likely to confuse the users and mislead them. It further emphasized that the domain name should be protected like a trade mark as it also operates at a global level.

In the case of Lifestyle Equities CV Vs Amazon Technologies Inc.[15], the plaintiff accuses the defendant (amazon) of selling clothing items that carry similar marks as that of registered trade mark of ‘Beverly Hills Polo Club’ but at a cheaper rate which was causing confusion and brand dilution. The Court passed an ex-parte order due to the consistent absence of the defendant where it granted permanent injunction in favour of the plaintiff and held that the defendant is liable for intentional trademark infringement. The court emphasized that the online platforms cannot evade themselves out of ‘e-infringement’ and urged them to perform their due diligence to prevent the sale of counterfeit and similar looking goods while critiquing the defendant’s opaque corporate structure.

In the case of IndiaMART Intermesh Ltd. Vs PUMA SE[16], Puma accuses IndiaMART of selling counterfeit Puma products under the category of ‘Puma shoes’ in its seller registration menu. A single judge bench observed that IndiaMART was not a passive intermediary, therefore is not protected under section 79 of IT Act 2000 which provides with safe harbour for the intermediaries and held IndiaMART liable for trade mark infringement. However, after appeal to a division bench, the decision of the single judge was reversed while observing that the IndiaMART is a neutral listing platform and is entitled to safe harbour. It was instructed to remove infringing listings upon notice. Thus, finding a middle ground between protecting brand owner and intermediary liability.

In the case of Tata Sia Airlines Ltd. Vs Shenzhen Coloursplendour Gift Co. Ltd.[17], Tata is the registered trade mark owner of ‘VISTARA’ along with its colour scheme of aubergine and gold. Shenzhen was found selling luggage tags and keychains that were deceptively of the same colours and marks on AliExpress. The court exercised its jurisdiction as the international sellers were targeting Indians users too. It observed that the imitation of the products was intentional and Vistara’s goodwill was being exploited which could confuse users into thinking that it is related to the airline. The Court granted the remedies noting that such well-known marks are to be protected on e-commerce platforms.

When it comes to international cases, the US and EU do have more comprehensive and robust laws when it comes to trademark infringement, but it can be observed that India has a stricter approach as compared to the US or EU. In the case of Tiffany (NJ) Inc. Vs eBay Inc.[18], Tiffany brought a suit against eBay for selling counterfeit jewellery that are identical to Tiffanny’s. The US court denied primary trademark liability, observing that eBay using the mark was protected under ‘nominative fair use’[19]. However, the court instilled secondary liability and applied the ‘Inwood standard’[20] saying that eBay can be held to be contributorily liable if it has the knowledge of infringement and still continues to supply it.

Similarly, in the case of L'Oréal SA Vs eBay International AG[21], eBay was accused of facilitating the selling of counterfeit cosmetics of L'Oréal. To the contrary to the prior case, here the court held that eBay was not secondarily liable for trade mark infringement as it was committed by individual sellers. It further observed that by hosting listings or providing platforms does not violate contributory infringement and liability arises only when such platform in active knowledge of the activity yet encourages or benefits out of such wrongful conduct. This marked a clear distinction between passive facilitation and intentional participation and extending liability only where ill-faith participation is found.

5 Challenges

The contemporary legal system faces various challenges regarding protecting trade marks along with ensuring that the online users are also safeguarded. Major concerns revolve around the fact that there is lack of direct contact between original trade mark holders and the online sellers listing counterfeit products to dupe the users. Similarly, there is no direct and tangible point of access between the online users and the seller. In both situations, one of the major barriers is the online platform itself as it acts as intermediary due to which, from both sides it is the intermediary which is the point of contact.

However, the said intermediary is protected by the blanket of ‘safe harbour’ under section 79 of the IT Act 2000 which protects them from any liability in certain cases. This highlights the issue of inadequate platform accountability because if any one brings a case against the intermediary, they may likely be protected by the aforementioned provision due to which the trademark holder or the user may not attain the justice it deserves.

Another challenge that arises is the weak redressal mechanisms because since it is difficult to identify the real seller on the online platform, the users are left without any option to seek any relief. It is highly unlikely that only one seller will be selling counterfeit products of the original brand online, numerous fake products are sold by various sellers and any case brought against them for damages does not resolve the concern of future trade mark infringement.

Similarly, when a case is brought against the seller for listing identical products to that of the original product and a decision is passed, the enforcement capacity of the decision is very poor when it comes to execution against cross-border sellers. Since, the decision generally only binds the party to the suit, it lacks the capacity to prevent other sellers from selling counterfeit products in the future.

By law the most important challenge is the lack of trademark law not being updated with contemporary digital realities. There are neither any specific guidelines as to regulate the algorithms operating on the online platforms nor any duty imposed by the statute for authenticity verification. All of these challenges culminate to the gaps in the contemporary digital realm of India.

6 Recommendations

To curb the gaps the legislation makers must be practical and forward looking to be able predict the future and accommodate the existing and upcoming changes. It is a recommendation to introduce guidelines regarding digital trademark infringement under the TM Act 1999 to make it legally enforceable upon the citizens of India as a whole.

First and foremost, the intermediaries (online platforms) must be imposed with the duty to compel each online seller to go through the process of identity verification for authenticity and originality and only after such verification, they be allowed to list their products on their platforms.

The newly enacted E-commerce rules can also improve itself by strengthening the authenticity compliance standards which includes imposition of penalties in case of non-compliance.

All the online platforms must be required to maintain a separate space for ‘infringer registry’ where if any user or original seller notices or receives any listing of an unauthorised product, they may directly register their complaint after which it is the duty of the intermediary to take down listing.

Online platforms must ensure that their algorithm functions in a way that ranks the product based on its quality and authenticity to confirm its originality, so that it is transparent and confusion free to both seller and users.

It must be the duty of the intermediary to resolve an infringement complaint as soon as possible and take all the necessary actions to restrain the sellers from listing fake products either by way of its safeguarding policies or through court orders to ensure faster takedown down mechanisms.

7 Conclusion

The vast complexity of operation of e-commerce has led to confusion and misrepresentation of products in the digital realm which has left the users displeased. Due to the increased sale of counterfeit goods on online platforms, tension is observed while finding the balance between protecting trade marks and maintaining consumer transparency. The existing legal provisions are insufficient to tackle the infringements occurring in the digital realm due to which there is a need for harmonization of the existing laws like the TM Act 1999, IT Act 2000 and CP Act 2019. By amending and strengthening each law, and compelling strict compliance to them, the online platform can be regulated in a much more efficient and transparent way. As of now the whole digital marketplace revolves around the intermediaries and to translate it into a consumer-centric digital marketplace, the online platforms must act not only as an intermediary but also as responsible commercial actors.

References

[1] The Patents Act 1970 (Act No. 39 of 1970).

[2] The Copyright Act 1957 (Act No. 14 of 1957).

[3] The Designs Act 2000 (Act No. 16 of 2000).

[4] The Trade Marks Act 1999 (Act No. 47 of 1999).

[5]Patil M, ‘Trademark Infringement in E-Commerce’ (Lexology, 2 May 2025) https://www.lexology.com/library/detail.aspx?g=49411e35-d68a-4183-991a-8218f583731a#:~:text=assets%20for%20companies%2C%20symbolizing%20the,unauthorized%20use%20of%20advertising%20keywords accessed 5 December 2025.

[6]The Trade Marks Act 1999 (Act No. 47 of 1999), s 2(1)(zb).

[7] The Trade Marks Act 1999 (Act No. 47 of 1999), s 2(1)(zg).

[8] The Trade Marks Act 1999 (Act No. 47 of 1999), s 28.

[9] The Trade Marks Act 1999 (Act No. 47 of 1999), s 29.

[10] The Consumer Protection Act 2019 (Act No. 35 of 2019).

[11] The Information Technology Act 2000 (Act No. 21 of 2000), s 79.

[12] ‘Fortinet’ https://www.fortinet.com/resources/cyberglossary/cybersquatting accessed 15 December 2025.

[13] Yahoo Inc. Vs Akash Arora, [1999] IIAD Delhi 229

[14] Satyam Infoway Ltd. Vs Siffynet Solutions Pvt. Ltd., [2004] 6 SCC 145

[15] Lifestyle Equities CV vs Amazon Technologies Inc., [2025] INSC 1190

[16]IndiaMART Intermesh Ltd Vs PUMA SE, FAO(OS)(COMM) 6/2024 (Del. HC 2 June 2025)

[17]Tata Sia Airlines Ltd. Vs Shenzhen Coloursplendour Gift Co. Ltd., [2022] 08 DEL CK 0176

[18]Tiffany (NJ) Inc. Vs eBay Inc. F 3d 93 (2d Cir 2010)

[19]Tewari A, ‘To Use or Not to Use: Understanding the Concept of Nominative Fair Use’ (candcip, 13 November 2020) https://www.candcip.com/single-post/2020/08/19/to-use-or-not-to-use-understanding-the-concept-of-nominative-fair-use accessed 6 December 2025

[20] Inwood Laboratories, Inc v Ives Laboratories, Inc 456 US 844 [1982]

[21]L'Oréal SA Vs eBay International AG [2011] ECR I-6011 (CJEU)