Ip and e commerce

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ByArvind M Velu

IP and E-Commerce: The Jurisdictional Issue



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Evolution of E-Commerce

• E-Commerce is defined as the use of computers and information technology to transact business by and between entities and individuals.

• It has grown from just a small sector of business to redefine our economy.

• E-Commerce is of four types: 1. B2B - Business to Business 2. B2C - Business to Consumer 3. C2B - Consumer to Business 4. C2C - Consumer to Consumer



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Rationale behind E-Commerce Growth

1. Rising Incomes, leading to a better standard of

living.2. Greater variety of goods and services openly

available online.3. Convenience of buying and delivery options. 4. Advancements in the fields of mobile operating

systems and other related technologies. 5. Rise in internet penetration and usage base. 6. Domestic and foreign capital being pumped in.



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E-commerce: India and the World



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E-Commerce in India



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E-Commerce in India

• It is evident that E-Commerce in India is at a nascent stage, but by estimated projections, it is set to become the largest e-commerce market in the future.

• Sites such as Flipkart, Snapdeal, Myntra and Jabong, are Indian startups that have proved that e-commerce as a business model is here to stay.

• Retailers who adapt to this mode of business will eventually benefit. Those who do not adapt will eventually be left behind.



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IP and E-Commerce: A Correlation

• IP is just as valuable or in most situations more valuable than physical or real property.

• IP has become a central element in economic and cultural policy in the world today.

• E-Commerce is directly linked to IP in many ways. Firstly, the subjects traded on these e-commerce sites such music, pictures, entertainment, software, designs etc are all protected by IP laws.

• Secondly, domain names and content of sites are also protected by IP laws.



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• Intellectual property is often infringed upon online. In the field of e-commerce, the areas of copyrights and trademarks are most infringed.

( WIPO has often termed the internet as the ‘worlds biggest copy machine’)

• An ancillary issue that arises from the legal issues in the confluence of IP and E-Commerce is that of Jurisdiction.

• The internet does not posses a jurisdiction of its own and hence the problem of localizing an issue and applicability of relevant laws will arise.

The Legal Issue of IP and E-Commerce:



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• For example, ‘A’, situated in India, decides to download an article from a website, and pays for it via electronic-payment. Subsequently, he is not able to perform the download. He wants to initiate a legal suit against the owner of the site. However, the owner of the site is situated in Thailand. The site itself is based out of a server in Brazil. Now the question arises as to whether the aggrieved party should approach the courts of Brazil, Thailand or India for his grievances to be redressed.



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• As no uniform jurisdictional code exists, legal practitioners resort to the ‘conflict of laws’ or Private International Law (PIL).

• Private International Law is essentially a branch of municipal or domestic laws. It regulates the relationship between individuals on an international level.

• In the internet era, a protected work can be accessed through a website anywhere in the world. Hence the need for PIL arises.

Private International Law



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Theories in Jurisdiction…



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In Personam Jurisdiction

The words ‘in personam’ mean ‘directed towards a particular person’. It refers to a right, action, judgement or entitlement that is attached to a specific person.

An ‘in personam’ suit is one in which relief is sought against, or punishment is sought to be inflicted upon a ‘specific person’.

These suits are always against an individual person and only compensatory benefits are awarded.



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Motion Pictures USA v. iCrave TV, 2000.

This case involved the sale of copyrighted material online in the US. The defendant was involved in the sale of copyrighted television and entertainment programs through their site. The petitioner sought the intervention of the courts to restrain the activities of the defendant, a Canadian website alleging Copyright infringement, Trademark Infringement and unfair competition amongst other things. It was held that by infringing trademarks and copyrights within the US and advertising to American viewers, the US courts had personal jurisdiction over the case.



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This theory states that minimum contact can be deduced from the fact of selling goods, providing services, maintaining office or store or entering into contract with someone or committing a tortuous act within the state.

It is equivalent to a territorial presence in the state.

It justifies the state’s exercise of sovereignty over the non-resident.

Minimum Contact Theory



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Zippo Manufacturing v. Zippo Dot Com., 1997

The Federal District Court of Pennsylvania in this case held that the defendant satisfied the minimum contacts rule criteria as they had entered into agreements with various internet access providers within the state of Pennsylvania, through which they had established minimum contact and also had satisfied the test under the long arm statue of the State of Pennsylvania. Hence they could successfully be brought under the jurisdiction of the state of Pennsylvania.



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International Scenario

• France : VEJF and LICRA v. Yahoo! Inc., 2000: In the year 2000, French court prevented Yahoo!

Inc. from selling WWII and Nazi related memorabilia online. The court held that as internet users in France were able to access this site, it was a felony according to their national laws. The court also ordered Yahoo ! Inc’s US site to have filters in order to prevent it being accessed from France.



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• European Court of Justice: Shevill and Others v. Presse-Alliance SA., 1992. :

The ECJ held that where the Brussels convention of

1988 applies, a defamation action may be brought both where the publication occurred and where the claimant suffered damage to his reputation. The latter place is most likely to be interpreted as where the defamatory statement was read, i.e., the location of the viewer.



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• Australia: Dow Jones & Co. Inc. v. Joseph Gutnick., 2002. :

The Australian court is this case held that the place of publication is to be the point of downloading. The court considered that the focus of defamation is upon the damage which it causes to reputation. And also that a defamation can only cause such harm when ‘comprehended by the reader, the listener, or the observer’, thus publication of a defamation is a bilateral process which can only be complete once the publisher has made the article in question available and it is available for perusal by a third party.



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Indian Scenario

• World Wrestling Entertainment, Inc. v. M/s/ Reshma Collections., 2013.

This case, involved a plaintiff company incorporated under the laws of the State of Delaware, USA engaged in the business of licensing and sale of branded consumer products. The defendant was a company incorporated in Mumbai, which sold duplicated products of the plaintiff.



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Indian Scenario

The Delhi High Court laid down that jurisdiction in e-commerce cases involving trademark and copyright disputes would be determined by the buyer’s place of residence.

The Court also opined that plaintiff could be said to carry on his business to an extent in Delhi and therefore, fulfilled the condition “carrying on business” as laid down in Dhodha case. The Court was of the view that “due to advancements in technology and the rapid growth of new models of conducting business over the internet, it is possible for an entity to have a virtual presence in a place which is located at a distance from the place where it has a physical presence.



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• E-commerce is an important avenue of the world economy today. Hence jurisdiction in cyberspace requires a clear international approach.

• The Indian E-Commerce scene is developing at an unprecedented pace.

• Hence, the Indian scenario is bound to witness more litigation in this specific field in the near future and it is of great importance that the judiciary explores and interprets the unexplored grey areas in this field.

Conclusion



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Conclusion

• It will be help the Indian Judicial system to refer to legal theories of other common law nations where high protection for intellectual properties exist.

• Laws of different nations need to be forged to create an international substantive law, which will make judicial proceedings easier on a global stage.

• This approach could shift the emphasis to the determination of law rather than the territorial uncertainty.



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Thank you