In the midst of releasing a capsule collection of $250 red-soles shoes for tots, Christian Louboutin has been keeping its global trademark fight alive. In the latest development in an more than four-year long case, the High Court of Delhi held late last week that an Indian e-commerce site may continue to sell Louboutin products on its platform, despite claims from Louboutin that it was offering up counterfeit or otherwise infringing products. As long as the site can ensure that the pricey footwear is, in fact, authentic, it can keep Louboutin on its roster of brands.
Louboutin initially filed suit against Darveys.com, alleging that the platform is offering its complete catalog of footwear available for sale without its authorization. The famous footwear brand also alleged that Darveys was using the names “Christian” and “Louboutin” as meta-tags in order to drive consumer search results and traffic to its site.
The court’s recent decision, penned by Justice Pratibha M Singh, overturns the 2014 ruling of a lower court, which had barred Darveys from selling Louboutin products on its site altogether. The High Court held on Friday that Darveys may resume sales of Louboutin products as long as it ensures that each product is, in fact, authentic, a marked win for the site, which has been busy putting forth defenses in the case since the lower court issued the interim injunction four years ago.
Of interest in the case is the model that Darveys embodies. Much like FarFetch, the London-based e-commerce giant, Darveys does not hold any inventory for the brand new products it offers for sale on its site, which include those from Balenciaga, Celine, Dior, Prada, Saint Laurent, and Valentino, among many others. Instead of holding inventory, Darveys – thanks to its partnerships with 300 boutique and retailers – aggregates products, connects consumers to third-party stockists, and ultimately, takes a cut of the sale, which is completed on the third-party retailer’s site.
Counsel for Darveys pointed to the company’s model, which differs from that of the vast majority of e-commerce retailers, and argued that it should be protected from trademark liability under Section 79 of India’s Information Technology Act, which provides a safe harbor for intermediaries. (Such a claim – which mirrors Section 230 of the Communications Decency Act in the U.S. – is commonly made by publishers in connection with content published by third-parties in websites’ comments sections).
They argued that, among other things, Darveys is “not selling the goods but merely enabling the booking of orders through its online platform.”
The High Court was not persuaded by Darveys safe harbor argument, hold that the court found that Darveys’ “policies show that [it] exercises complete control over the products” it offers for sale. In particular, the court held that “Darveys.com is identifying the sellers, enabling the sellers actively, promoting them and selling the products in India.” As a result, “the role of Darveys.com is much more than that of an intermediary,” and thus, not protected by the Section 79 safe harbor.
With that in mind, the court held that in order for Darveys to be able to legally offer Louboutin’s (and other brands’) products available for sale by way of its site going forward, it must disclose the names and contact information for all third-party retailers, obtain a certificate from sellers that the goods they sell are genuine, remove any/all listings upon notification of a counterfeit product, and get a guarantee from the sellers that warranties are applicable and shall be honored by the seller.
Still yet, the court held that Darveys must remove the Christian Louboutin meta tags, citing previous case law in India that makes it “illegal” to use others’ trademark-protected names as keywords, even if they are invisible to the consumer.
While Darveys has not been ordered to pay any monetary damages to Louboutin, the case – which comes as the validity of Louboutin’s red sole trademark is currently subject to separate proceedings in India – serves as a notable one for brands and retailers, alike, both in terms of brands’ ability to dictate the distribution of its products (which has proven a hotly litigated topic in recent years) and also in terms of e-commerce sites’ ability to disclaim liability in accordance with intellectual property infringement safe harbors.
*The case is Christian Louboutin SAS v. Nukal Bajaj & Ors., CS (COMM) 344/2018.