The slip between cup and lip

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Shwetasree Majumder of Fidus Law Chambers discusses intermediary liability and finding collaborative solutions

Section 66A of the Information Technology Act, 2000, (the IT Act) has been widely dubbed an anti-free speech provision as it has been used to arrest creators/disseminators of online content on the basis of grounds ranging from “information that is grossly offensive or has menacing character”, to content which the disseminator “knows to be false, but for the purpose of causing annoyance, inconvenience, danger, obstruction, insult, injury, criminal intimidation, enmity, hatred or ill will …”.

Shwetasree Majumder
Shwetasree Majumder

Last year, in a historic judgment in Shreya Singhal v Union of India, the Supreme Court struck down section 66A, concluding that it curbs the public’s right to know, as it makes no distinction between mere discussion or advocacy of a particular point of view, which may be annoying or inconvenient or grossly offensive to some, and incitement by which such words lead to an imminent causal connection with public disorder, security of state, etc.

Predictably, the striking down of the provision was primarily on account of the apparent vagueness and subjectivity of its content. Relying on various judgments of the US courts and the Indian Supreme Court and using standards laid down there, the court concluded that the expressions used in section 66A were completely open ended and undefined.

Implications for trademark owners and intermediaries: The linking of the striking down of the problematic section 66A with the issue of intermediary liability, though not apparent at first glance, is inevitable. The safe harbour available to intermediaries under section 79 of the IT Act necessitated that they take down all content that falls under section 66A, within 36 hours of receiving a complaint. The Supreme Court upheld section 79, but limited the liability of intermediaries to only remove content that is against national interest, public order, morality and sovereignty (under article 19(2) of the constitution of India) and with the caveat that the removal must be pursuant to a direction of the designated officer responsible for enforcing the provisions of the act, or an order of a court.

The concern that arises from this is that by striking down section 66A, the Supreme Court has effectively directed that intermediaries need no longer concern themselves with taking down content other than that which falls under article 19(2) (and which a designated authority or court finds to be so).

Intermediary liability in India now stands significantly watered down since infringing content (which was also outlawed under section 66A) can now only be blocked by a court order pursuant to a trademark or copyright owner exercising their rights under the trademark or copyright statutes or common law.

Thus, a takedown notice no longer has any legal authority and if an intermediary chooses to take down content that is infringing on the basis of a takedown notice, it can do so, but it will be an entirely voluntary act. As such, it can equally choose not to do so.

The scale of the problem: According to a new study by the Organization for Economic Cooperation and Development, China unsurprisingly holds the top spot in the trade of fake goods, followed by Turkey, Singapore, Thailand and India. According to the United Nations, from 2008 to 2010 almost 70% of all counterfeit goods seized worldwide were from China.

The rapid growth of e-commerce in China (online sales grew 40% in 2015 to US$441.84 billion) illustrates the sheer scale of the problem. The obvious question is, is India on its way to becoming another China?

Online counterfeiters are clearly far more savvy than their street vendor counterparts. In addition the internet provides a distribution channel for crime syndicates that are now increasingly reaching out for a share of the counterfeiting pie. Hence, the need to find an effective and lasting collaborative solution is extremely urgent.

Striking a balance: Curiously, in recent months, several e-commerce portals in India have adopted advertising tag lines that say their wares are 100% genuine products, and that there is 100% purchase protection, etc. There is neither the means to audit these claims nor enforce them. However, they demonstrate attention and a voluntary desire on the part of the portals to deal with the issue of counterfeits, as also a willingness to partner with brand owners to find voluntary solutions.

Late last year India’s Central Board of Excise and Customs decided to lead the way to create a pioneering platform for all stakeholders to come together and find a solution to the problem of online counterfeiting. In February, it brought together web portals, logistics providers, payment providers, brand owners and policy gurus to form a working group that has been tasked with the drafting of an India-specific voluntary code of best practices for e-commerce. Interesting solutions such as uniform and robust KYC (know your customer) standards across intermediaries and technical solutions that can be used to identify and red flag repeat offenders are being debated so as to evolve a result that is groundbreaking and easily implementable.

Shwetasree Majumder is the principal at Fidus Law Chambers, a boutique IP and IT practice offering strategic solutions in the contentious and non-contentious domains.

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Email: shwetasree@fiduslawchambers.com