As regulation races to keep up with the digital evolution, the rapid pace of change can create its own weaknesses in the chain of protection and enforcement. Gautam Kagalwala reports on how India’s draft e-commerce policy adds anti-counterfeiting protection for companies, but at the cost of slowing online trade

The draft National E-Commerce Policy released by the Department for Promotion of Industry and Internal Trade (DPIIT) in February envisages bringing in measures to give companies more power to tackle counterfeit products sold on e-commerce sites. Tracking down counterfeiters in cyberspace is far more challenging for companies than in the physical world.

Neighbourhoods associated with the sale of counterfeit products, such as Lamington Road in Mumbai, Karol Bagh in Delhi and Chandni Chowk in Kolkata, are on the map for brand owners. But the internet offers anonymity, allowing counterfeiters to spring back into action immediately, even if their websites are taken down.

The Global Brand Counterfeiting Report, 2018, estimated that losses suffered due to online counterfeiting globally amounted to US$323 billion in 2017, while the Organization for Economic Co-operation and Development (OECD) identified India as a major point of origin for counterfeit products worldwide.

“Instances of availability of counterfeits on e-commerce websites tend to be more complicated to tackle, compared to bricks-and-mortar stores,” says Gaurav Mukerjee, a partner in the commercial litigation practice at Remfry & Sagar. “The latter are easier in terms of undertaking investigations, conducting surveillance, and search and seizure operations.”

The draft policy requires registered trademark owners to receive notifications when their goods are put up for sale. E-commerce websites are required to list the name, legal entity name and contact details of sellers, increasing transparency and allowing companies to track down infringers quicker. Sellers will have to provide an undertaking of the genuineness of their products and face penalties from e-commerce sites for counterfeit goods sold.

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