The Delhi High Court Wednesday ruled that Flipkart Internet Private Limited has intermediary status under Section 79 of the Information Technology Act and is therefore entitled to safe harbour immunity from criminal prosecution. The proceedings arose out of a criminal complaint registered with the Delhi Police under Section 63 of the Copyright Act and Sections 103 and 104 of the Trademarks Act. The complaint alleged that Flipkart was complicit in hosting and selling infringing counterfeit cosmetic products in its online marketplace.

Flipkart filed a petition before the Delhi High Court under Articles 226 and 227 of the constitution and Section 482 of the Code of Criminal Procedure, contending that it has immunity from liabilities arising out of products sold by third-party sellers through its marketplace. Flipkart further argued that it had complied with due diligence requirements under Rule 3(2) of the Information Technology Guidelines of 2011 by indicating in its user agreement that third party sellers were not permitted to display any counterfeit product or product which infringed any patent, trademark, copyright or proprietary rights of others.

The Court, in agreeing with Flipkart, held, “unless an active role is disclosed in the commission of the offences complained of, the intermediary, such as the present petitioner, would be entitled to claim protection under Section 79 of the IT Act.” The Court did not, however, bar further investigations for ascertaining the identity of infringing and unauthorised sellers on Flipkart’s platform.