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Cast Adrift without Safe Harbor: The Risks of Ignoring IT Act Protections (PART 5)

Liability under the IT Act

Beyond Section 79 of the IT Act, Section 81 is a non-obstante clause, providing for an overriding effect of the IT Act over all other laws in times of conflict. But, this clause carves out an exception for copyright and patent holders.[1]

The Intermediaries Guidelines also require intermediaries to notify their users for not uploading content that - “infringes any patent, trademark, copyright or other proprietary rights”[2] and to not host/ publish such content on their platforms.

Limited and Conditional Protection under the Copyright Act, 1957 (“the Copyright Act”)

Section 52(b) and (c) of the Copyright Act provides protection to intermediaries for transient or incidental storage of copyrighted works, if:

1. It is purely in the technical process of electronic transmission or communication of such content;

2. It is for the purpose of providing links or access/ integration to content, when not expressly barred by the copyright owner and when the intermediary does not have reasonable grounds for believing that such storage is of an infringing copy (actual knowledge requirement).

Section 52(c) also provides for a notice and take-down mechanism, wherein copyright owners could request intermediaries to remove protect-ed content from their platforms for a minimum period of 21 days (or for a longer period in case of a court order mandating such requirement). As per this provision, intermediaries on being satisfied are required to remove content within 36 hours of being intimated.[3][SD1]

Thus, reading the IT Act and the Copyright Act in conjunction, in cases of content protected by copyright, intermediaries must prescribe to a higher standard of care in ensuring that their platforms are not used to make infringing con-tent available to the general public. It is also worthwhile to note that the Copyright Act does not define what is ‘transient or incidental storage’ and without such clarity, ambiguity remains on which intermediaries are protected/ unprotected under this clause.

As discussed at the starting of this section, according to Section 79, safe-harbour protection is available to intermediaries in India if they, upon receiving ‘actual knowledge’, remove unlawful content from their platforms. This ‘actual knowledge’ was interpreted to mean intimation by appropriate government agency or an order of a court by the Supreme Court in Shreya Singhal, but subsequently in matters concerning the infringement of IP rights, courts have distinguished the ‘actual knowledge’ requirement as enunciated in Shreya Singhal and replaced it with a ‘specific knowledge’ requirement i.e. if intermediaries are given specific knowledge of infringing works by IP owners, they are liable to take it down to keep their safe-harbour protection under the IT Act.

In its landmark judgment in Myspace v. Super Cassettes Industries[1] the Delhi High Court while distinguishing copyright matters from those contained under Article 19(2) of the Constitution of India[2] stated that -

“50. … In the case of copyright laws it is sufficient that MySpace receives specific knowledge of the infringing works in the format provided for in its website from the content owner with-out the necessity of a court order.”

Reiterating the actual knowledge requirement in cases of content protected by copyright, the court stated that -

“57. … If copyright owners, such as SCIL inform MySpace specifically about infringing works and despite such notice it does not takedown the content, then alone is safe harbor denied. However, it is for SCIL to show that despite giving specific information the appellant did not comply with its notice.”

Apart from distinguishing the actual knowledge requirement in cases of copyright, the Myspace judgment is also important since it clarified that unspecified material, including takedowns of all future infringing content is not what intermediaries are required to do un-der law as this will lead to private censorship and will have a chilling effect on free speech.

The court held that -

“62. … The remedy here is not to target intermediaries but to ensure that infringing material is removed in an orderly and reasonable manner. A further balancing act is required which is that of freedom of speech and privatized censorship. If an intermediary is tasked with the responsibility of identifying infringing content from non-in-fringing one, it could have a chilling effect on free speech; an unspecified or incomplete list may do that. … Such kind of unwarranted private censor-ship would go beyond the ethos of established free speech regimes.”

In another matter before the Delhi High Court,[3] this time for the infringement of a design under the Designs Act, 2000, the rights owner wanted the intermediary (eBay) not only to remove existing infringing products but to screen similar listings in future and remove infringing products without the intimation of the owner. The court rejecting such a claim held that intermediaries cannot be expected to exercise such vigilance over their platforms and are liable to only re-move infringing content which is specifically asked for. The court held that -

35. … Moreover the question, whether an IP right has been infringed or not is more often than not a technical question with which the courts steeped in law also struggle and nothing in the IT Act and the IT Rules requires an intermediary, after having been once notified of the IP Rights, not allow anyone else to host on its portal infringing goods/matter. The intermediaries are not possessed of the prowess in this respect. As aforesaid, it is a different matter, when attention of the intermediary is invited to infringing product and complaint made with respect thereto. Merely because intermediary has been obliged under the IT Rules to remove the infringing content on receipt of complaint can-not be read as vesting in the intermediary suo motu powers to detect and refuse hosting of in-fringing contents.”

More recently, the same court in Christian Louboutin v. Nakul Bajaj[4], a matter relating to trademark infringement held an e-commerce company not be an intermediary as per Section 79 of the IT Act[5] and held that for e-commerce portals to claim exemption under the safe-harbour provision, they need to ensure a passive and not an active participation in the selling pro-cess. The court held that -

“78. … When an e-commerce company claims ex-emption under Section 79 of the IT Act, it ought to ensure that it does not have an active participation in the selling process. The presence of any elements which shows active participation could deprive intermediaries of the exemption.”

With respect to IP rights, taking into consideration the law and the above-mentioned judicial pronouncements, the following inferences can be made:

1. Despite the ruling of the Supreme Court of India in Shreya Singhal, courts have distinguished the ‘actual knowledge’ requirement for matters of free speech[6] from claims of IP infringement. In cases of IP, courts have operationalised the notice and takedown mechanism, wherein rights owners can request for infringing content to be taken off by intermediaries on intimating them of the infringement (the notice and takedown mechanism); and

2. Such requests need to be specific and not broad, rights owners may not request intermediaries to be vigilant about all future violations, as this will require constant monitoring/ screening, which is outside the role played by intermediaries (the specific knowledge requirement);

None of the cases discussed above, eventually lead to revocation of intermediary safe-harbour to either place primary or contributory liability for infringement on the Internet platforms. In Christian Louboutin, though the Delhi High Court held that due to the active role played by the e-commerce portal in selling activities it did not fall into the definition of an intermediary, the court didn’t hold the portal liable for trademark infringement.

Due to the lack of clarity on intermediary liability, for content protected by IP rights, uploaded to platforms by third parties, intermediaries will end up over complying with takedown requests to ring fence their safe harbour protection. This may have a negative effect on content which falls under ‘fair use/ fair dealing’ categories of law,[7] severely impacting the free-speech rights of citizens. This, coupled with the fact that tech giants like - Facebook, Google and Twitter already use automated filters which often lead to taking down legal content, could prove to be problematic for the digital rights of Indian people.

Though courts have recognized that intermediaries cannot and should not play the role of judges in determining what is illegal or legal content,[8] by empowering rights owners to send notices for specific content removal, courts have also made it difficult for intermediaries to defend instances of fair use/ fair dealing.

In a recent draft policy document issued by the Department for Promotion of Industry and In-ternal Trade,[9] the government has raised issues around the liability of e-commerce platforms for counterfeit and pirated products. The draft pol-icy has recommended that if trade mark owners require, e-commerce platforms shall not list their products without prior consent. On the copyright front, the draft policy has recommended that, “Intermediaries shall put in place measures to pre-vent online dissemination of pirated content.” The draft policy reiterates the ‘specific knowledge’ requirement and the ‘notice and takedown’ mechanism established by courts (as discussed above)

“Upon being notified by the owner of copyright protected content/ work that a website or e-commerce platform is making available, selling or dis-tributing the copyrighted content/ work without the prior permission/ authorization of the owner, such website or platform should expeditiously re-move or disable access to the alleged content.”

The draft e-commerce policy has used both terms - e-commerce platforms and intermediaries, creating further confusion. The way e-commerce platforms function in India, any demands for ensuring non-listing of products may lead to pre-screening which will dilute the safe-harbour protection granted to such platforms under law. Pre-screening and active monitoring of content has also been held to be not required by law and may have a chilling effect on free speech (as observed in the Myspace judgment). In terms of copyright violation, though the draft policy is in line with the current jurisprudence, this does create disproportionate pressure on intermediaries to takedown content, which may not be illegal and also makes intermediaries the judges of what is legal/ illegal.

The growing trend of making intermediaries more liable for the content on their platforms is apparent from the draft policy’s demand on such services to show a higher level of ‘social responsibility’. The draft policy states that intermediaries need to ensure ‘authenticity’ and ‘genuineness’ of content flowing through their pipelines - “… With a growing importance of these entities, their social responsibilities also increases. Due to the fact that traders, merchants, individual users, organizations, associations are all dependent on them, the authenticity of content posted on their websites cannot be compromised. In this regard, it is important to emphasize on responsibility and liability of these platforms and social media to ensure genuineness of any information posted on their websites.

From a policy standpoint this is problematic for various reasons, firstly, this recommendation uses very broad and vague phrases like social responsibility, authenticity and genuineness; secondly, this makes intermediaries the judges of deciding what is legitimate and what is not, which will have the unintended consequence of private censorship (this is also held to be illegal by various courts); thirdly, it is very difficult to ascertain the authenticity and genuineness of content, whether protected by IP rights or not, as it may depend on various factors which a ma-chine or even a human reviewer may find it hard to determine. As iterated at various points in this report, any suggestions/ recommendations for increasing the accountability of intermediaries must not abrogate free speech and privacy rights of netizens.

By Siddharth Dalmia

The Startup Sherpa


[1] Myspace v. Super Cassettes Industries Ltd., 236 (2017) DLT 478, also accessible at Appendix[.] [2] In Shreya Singhal, the Supreme Court restricted takedown requests to matters contained under Article 19(2) of the Constitution of India [3] Kent RO Systems Ltd. v. Amit Kotak, [240 (2017) DLT3], also accessible at Appendix[.] [4] Christian Louboutin SAS v. Nakul Bajaj, [253(2018)DLT728], also accessible at Appendix[.] [5] Though the definition of intermediary as per the IT Act specifically includes - online auctions sites and online marketplaces. Kindly refer to Section 2(1)(w) of the IT Act. [6] As guaranteed by the Indian Constitution under Article 19(1)(a) [7] Divij Joshi, SaReGaMa Pardon Me, You Have the Wrong Address: On the Perils and Pitfalls of Notice and Takedown, SPICY IP, also accessible at Appendix[.] [8] Kent RO Systems Ltd. v. Amit Kotak, [240 (2017) DLT3] [9] Draft National e-Commerce Policy, India’s Data for India’s Development, Department of Industrial Policy and Promo-tion (Feb 25, 2019, 4:15PM), also accessible at Appendix [.]

[1] Section 81 of the IT Act: Act to have overriding effect. – The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force. [Provided that nothing contained in this Act shall restrict any person from exercising any right conferred under the Copy-right Act, 1957 (14 of 1957) or the Patents Act, 1970 (39 of 1970).] [2] Rule 3(2)(d) and Rule 3(3) of the Intermediaries Guidelines [3] Section 52(c) of the Copyright Act and Rule 75 of the Copyright Rules, 2013. The Act can be found in the annexure [.] and the rules can be accessed at Appendix [.] or

[SD1]Map with copyright act.

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