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III. Kent R.O. Systems Ltd. Anr v Amit Kotak and Ors
Case Brief

Case Name: - Kent R.O. Systems Ltd. Anr v Amit Kotak and Ors.
Court: - High Court of Delhi, India
Judge Bench: Hon’ble Mr. Justice Rajiv Sahai
Case Type: - Civil Appeal
Subject: - Civil, Appeal.
Final decision: - Appeal Dismissed

The honorable court resolved the case involving defendant No. 2 by obligating them to adhere to
their commitment to promptly remove any objectionable content upon becoming aware of its
presence.

The Further observations of the Delhi High Court have been listed below:-

- In paragraph number 29, the court held that the plaintiffs' request for defendant No.2, eBay, to
pre-screen all water purifier listings on its platform for potential design infringement, even before
any complaints are made, would effectively require the intermediary to act as an intellectual
property rights judge, a responsibility far beyond its scope.

- In paragraph number 30, the court held that imposing such pre-screening obligations on
intermediaries would transform them into arbiters of intellectual property disputes, an
impractical and legally problematic expectation.

- In paragraph number 31, the court held that the IT Rules only mandate intermediaries to remove
or disable content upon receiving a complaint; they do not require intermediaries to proactively
monitor and filter content for potential infringements.

- In paragraph number 32, the court held that obliging intermediaries to screen all information for
potential infringements would be detrimental to their operations and could lead to excessive
delays, especially considering the automatic nature of information hosting on the intermediary's
platform.

- In paragraph number 33, the court held that intermediaries cannot be expected to engage in
continuous vigilance and policing without specific complaints, despite the acknowledgment that
infringing goods may reappear on the platform after removal.

- In paragraph number 34, the court held that to hold intermediaries liable under Section 79(3) of
the IT Act, the plaintiffs would need to prove conspiracy, abetment, or aiding, which requires
evidence of common intention, which is not the case here.

- In paragraph number 35, the court held that just as plaintiffs cannot be vigilant at all times,
intermediaries cannot reasonably be expected to exercise constant vigilance. Determining
whether intellectual property rights are infringed is often a technical matter best addressed by
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courts. The IT Act and Rules do not empower intermediaries to autonomously detect and reject
infringing content.

- In paragraph number 41, the court held that an analogy drawn between intermediaries and
owners of physical property or publishers of physical newspapers highlights that no legal
provisions require them to maintain continuous vigilance for intellectual property infringements.

- In paragraph number 42, the court held that requiring intermediaries to conduct such screening
would unreasonably interfere with their business operations.

- In paragraph number 43, the court held that it is not deemed expedient to issue any such
direction to defendant No.2 regarding proactive screening.

- In paragraph number 44, the court held that the lawsuit against defendant No.2 is disposed of,
with defendant No.2 bound by its previous statements and the court's directions. Each party is
responsible for their own costs.

Details:-
S.No. Particular Details
1.
Case Name Kent R.O. Systems Ltd. Anr ...Appellant
Versus
Amit Kotak and Ors …Respondents

2.
Relevant 
Citations
3.
Statue Referred  The Information Technology Act, 2000
(Sections 79, 79(1), 79(3))
 The Designs Act, 2000 (Sections 19, 22)
 The International Technology (Intermediaries
Guidelines) Rules, 2011 (Rule 3)

4.
Relevant Facts A brief narration of the facts
and Issues 1. Kent RO Systems Ltd, a manufacturer of Water Purifiers, holds
copyrights for the aesthetic designs of their products under the
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Designs Act 2000. They market their products both directly and
through various e-commerce platforms, including eBay, a well-
known online marketplace with numerous sellers.
2. Mr. Amit Shabhulal Kotak, another water purifier manufacturer,
produced products with designs strikingly similar to Kent RO
Systems' copyrighted designs. Manufacturing and selling products
featuring copyrighted designs constitutes piracy under the
Designs Act 2000. Mr. Amit Kotak consistently listed these
infringing products on eBay's e-commerce platform.
3. Before filing the lawsuit, Kent RO Systems notified both Mr. Amit
and eBay of the copyright infringement issue, requesting the
removal of the infringing content from eBay's website. Upon
receiving this demand, eBay promptly removed the specific items
mentioned in the notice.
4. The plaintiff, however, contended that there were approximately
100 more infringing items on eBay's e-commerce platform, and
they insisted that eBay should remove all such infringing contents
without the need for individual demands.
5. eBay opposed this demand, asserting that it was challenging to
identify such items without clear notifications and that they were
only responsible for removing items when informed about their
infringement.
6. Subsequently, Kent RO Systems initiated a lawsuit against Mr.
Amit Shabhulal Kotak and eBay, seeking a permanent injunction
and damages.
7. The primary allegation in this case was that Mr. Shabhulal, the
first defendant, had been utilizing the same designs as the
plaintiff's copyrighted products, which amounted to piracy under
the Designs Act 2020.
8. The plaintiff also claimed that the second defendant (eBay) had
not exercised due diligence in recognizing copyright infringements
within the product designs uploaded to its platform, thereby
facilitating the first defendant's showcasing of infringing products
on eBay's website.
9. As an intermediary, the second defendant was expected to
exercise reasonable care when allowing its customers to display
their products. However, eBay failed to inform its customers that
they should not upload, showcase, modify, publish, update,
transmit, or share information that infringes the intellectual
property rights of any party.
10. Additionally, eBay neglected to take steps to prevent the sale of
infringing articles through its platform, which constitutes a
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violation of the Information Technology (Intermediaries

Guidelines) Rules, 2011.

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HIGH COURT’S DECISION

1. The court held that E-commerce operators must exercise caution

when creating and disclosing privacy policies and user terms.
2. These documents play a crucial role in warning users against
uploading content that infringes copyrights or violates public
order.
3. Intermediary companies must exercise great care when drafting
their privacy policies and terms of use to ensure compliance with
the IT Act and intermediary regulations.
4. Pursuing legal action for damages against intermediaries who
diligently adhere to IT rules, including the prompt removal of
infringing content from their platforms, is unjust and may
burden the judicial system.

Main issues:
Whether Rule 3 of the IT Rules mandates intermediaries to adhere to
specific due diligence requirements in the course of their
responsibilities:
1. Intermediaries are required to make publicly available the
regulations, privacy policy, and user agreement governing access
or usage of their computer resources by any individual.
Held - According to the IT rules, an intermediary is obligated to
promptly remove all infringing content and restrict access to the
website within 36 hours of becoming aware of such infringement.
The legislation also specifies that intermediaries must inform their
users about their privacy policy, terms of use, and user
agreement. This user agreement should explicitly convey to users
that they are prohibited from hosting, displaying, or publishing
any content that infringes upon the copyrights of others.
2. The intermediary is prohibited from knowingly hosting, publishing,
initiating transmissions, selecting transmission recipients, or
altering transmitted information in a manner that contravenes the
specifications outlined in sub-rule (2).
Held - After thoroughly reviewing the case documents, the court
found that the second defendant had adhered to all the
regulations outlined in the Act. Additionally, the plaintiff failed to
provide evidence of the alleged conspiracy between the
intermediary and its customer. Consequently, the second
defendant qualified for the liability exemption under Section 79 of
the IT Act.

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5.
Held in the case This decision of the High Court clarifies crucial points of law.

- In paragraph number 29, the court held that the plaintiffs'

request for defendant No.2, eBay, to pre-screen all water
purifier listings on its platform for potential design
infringement, even before any complaints are made, would
effectively require the intermediary to act as an intellectual
property rights judge, a responsibility far beyond its scope.

- In paragraph number 30, the court held that imposing such

pre-screening obligations on intermediaries would transform
them into arbiters of intellectual property disputes, an
impractical and legally problematic expectation.

- In paragraph number 31, the court held that the IT Rules only
mandate intermediaries to remove or disable content upon
receiving a complaint; they do not require intermediaries to
proactively monitor and filter content for potential
infringements.

- In paragraph number 32, the court held that obliging

intermediaries to screen all information for potential
infringements would be detrimental to their operations and
could lead to excessive delays, especially considering the
automatic nature of information hosting on the intermediary's
platform.

- In paragraph number 33, the court held that intermediaries

cannot be expected to engage in continuous vigilance and
policing without specific complaints, despite the
acknowledgment that infringing goods may reappear on the
platform after removal.

- In paragraph number 34, the court held that to hold

intermediaries liable under Section 79(3) of the IT Act, the
plaintiffs would need to prove conspiracy, abetment, or aiding,
which requires evidence of common intention, which is not the
case here.

- In paragraph number 35, the court held that just as plaintiffs

cannot be vigilant at all times, intermediaries cannot
reasonably be expected to exercise constant vigilance.
Determining whether intellectual property rights are infringed
is often a technical matter best addressed by courts. The IT Act
and Rules do not empower intermediaries to autonomously
detect and reject infringing content.
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- In paragraph number 41, the court held that an analogy drawn

between intermediaries and owners of physical property or
publishers of physical newspapers highlights that no legal
provisions require them to maintain continuous vigilance for
intellectual property infringements.

- In paragraph number 42, the court held that requiring

intermediaries to conduct such screening would unreasonably
interfere with their business operations.

- In paragraph number 43, the court held that it is not deemed

expedient to issue any such direction to defendant No.2
regarding proactive screening.

- In paragraph number 44, the court held that the lawsuit

against defendant No.2 is disposed of, with defendant No.2
bound by its previous statements and the court's directions.
Each party is responsible for their own costs.

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Other cases Cases which were looked into by the Judge’s
which were
1) United States Court of Appeals, Second Circuit in Tiffany (NJ)
Inc.
2) Tiffany and Company Vs. eBay Inc. 600 F. 3d 93 (2nd Cir.
2010), particularly to paras 5,7 & 8 thereof.
3) Myspace Inc. Vs. Super Cassettes Industries Ltd. 2016 SCC
Online 6382.
4) Sanchayani Savings Investment (I) Ltd. Vs. State of West
Bengal CA No.5168/2000
5) Eicher Motors Limited Vs. www.Ebay.in CS(OS) 2998/2015

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impacted by this
judgement Flipkart Internet Private Ltd. vs State Of Nct Of Delhi & Anr.

- The Delhi High Court in the case of Flipkart Internet Private

Limited v. State of NCT of Delhi & Anr., it has been established
that intermediaries can seek the protection of the 'safe harbor'
provision under Section 79 of the Information Technology Act,
2000 ("IT Act"), even in situations involving criminal
prosecution.

Amway India Enterprises Pvt. Ltd. vs 1Mg Technologies Pvt.

Ltd. & Anr

- Amway, a major direct selling company, sought injunctions

against unfair competition. They sell products through direct
sellers and sent cease and desist letters to e-commerce
platforms regarding trademark misuse, but platforms claimed
safe harbor protection. Modicare, another direct seller, found
its products on Amazon without consent. Amazon, citing
Section 79 protection, failed to provide seller details as ordered
by the court. Oriflame, a cosmetics seller, alleged unauthorized
sales on Amazon, but Amazon denied the claims, citing Section
79 protection. All three cases involve e-commerce platforms
claiming safe harbor under Section 79 of the IT Act, despite
complaints of trademark misuse and unauthorized sales. The
court determined that the Direct Selling Guidelines, 2016, carry
legal weight and are obligatory. Through an interim injunction
order, the court prohibited the defendants from promoting,
showcasing, or selling the plaintiffs' products on e-commerce
platforms.