Service providers’ liability for copyright infringement

By Daksh Kumar, LexOrbis
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The internet has been the most omnipresent form of media for two decades and along with all its benefits and popularity the legal ramifications have increased manifold. These include copyright infringement, which has been rampant for many years.

Daksh Kumar
Daksh Kumar

Intellectual property rights holders sue intermediaries because intermediaries serve as the informational and access gateways for infringing activities and it is more cost effective to seek redress from them than from individual users such as uploaders, downloaders, seeders and linkers. Also, intermediaries are targeted by rights holders for not preventing or helping stem the deluge of infringing activities facilitated through the intermediaries’ platforms, technology and services.

In response to these claims, policies are being reformed and laws undergoing constant amendments. Courts are formulating new rules to find intermediaries indirectly liable for the infringing conduct of their users. Judicial solutions in civil and common law jurisdictions include recognizing claims in vicarious and contributory liability, authorizing and inducing infringement, joint liability under tort law, aiding, abetting and negligence.

India’s Copyright Act, 1957 (CA), was enacted before the internet was conceptualized. Amendments to the CA in 2012 first introduced what can be considered as safe harbour provisions, which apply to internet service providers (ISPs). Section 52 of the CA (as amended) unconditionally exempts an intermediary from liability as it clearly states that transient or incidental storage of work (like caching) does not amount to copyright infringement.

The CA also provides for procedural guidelines and a time frame for facilitating access by the intermediary until receipt of orders from a competent court. Before the amendments, some provisions in the CA coupled with specific ISP liability provisions in the Information Technology Act, 2000 (IT Act), acted as the basis for safe harbour provisions for ISPs until the Information Technology (Intermediaries Guidelines) Rules, 2011, were enacted.

The definition of “intermediary” under section 2(w) of the IT Act clearly includes “internet service providers, web hosting service providers, search engines and cyber cafes”. Section 79 of the IT Act exempts an intermediary from liability in certain cases, especially if the intermediary does not initiate transmission, select the receiver of a transmission, select or modify the information contained in the transmission or the intermediary observes “due diligence”. Section 81 of the IT Act is to have overriding effect provided no rights conferred under the CA or the Patents Act, 1970, are impinged.

Rule 3(3) of the Information Technology (Intermediaries Guidelines) Rules requires the intermediary to observe due diligence while conducting: (a) temporary storage of information for onward transmission to another computer resource; (b) removal of access to any information, data or communication link pursuant to any order or direction. Thus, safe harbour protection available to intermediaries under section 79 of the IT Act (amended in 2008) is conditional upon the intermediary observing due diligence as per the 2011 rules.

The evolution of intermediary liability took different paths in different countries. In Australia it evolved as “infringement by authorizing” through the landmark Moorhouse, Cooper, Kazaa and iiNet cases. In Canada it developed as “authorizing infringement” through pioneering cases like the Canadian Association of Internet Providers case. In China, it evolved as “fault-based, joint or accessory liability” through leading cases such as Chinamp3.com.

The UK, based on leading and path-breaking judgments such as the CBS case and the Amstrad case, applied the “sanction, approve and countenance test”, which took statutory form in the Digital Economy Act. In the US, leading cases such as Napster, Grokster and Sony helped in the evolution of “contributory infringement”, which was embodied in the Digital Millennium Copyright Act (DMCA).

In India, the earliest decisions on intermediary liability were Avnish Bajaj v State and the Super Cassettes Industries’ cases against Yahoo and My Space, in which it was held that section 81 would have overriding effect over section 79 of the IT Act. More recently, in Shreya Singhal v Union of India the Supreme Court dealt with intermediary liability and the unconstitutionality of section 66A of the IT Act vis-à-vis freedom of speech and expression.

In India, intermediary liability evolved theoretically as “authorizing infringement” or “indirect infringement” and the recent amendments to the statutory framework have embodied the safe harbour provisions of the DMCA. Further, to resolve some conflicting issues between provisions of the CA and the IT Act as well as ambiguity regarding the responsibilities and the roles of the intermediaries pertaining to the take-down process, the courts seem inclined towards harmonious construction of statutes to deal with intermediary liability issues.

Despite interpretational problems and other teething troubles the safe harbours have become the global standard against which the liability of intermediaries may be limited. However, the underlying concern remains that safe harbour provisions provide corrective measures and not a preventive mechanism to deal with the menace of online copyright infringement.

Daksh Kumar is a senior associate at LexOrbis.

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