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Cast Adrift without Safe Harbor: The Risks of Ignoring IT Act Protections (PART 6)

Indian courts on intermediary liability

Having gone over the applicable laws with regard to intermediary liability in India, this section of the report will examine some of the notable cases around intermediary liability in India. Only cases from various High Courts (at the state level) and the Supreme Court of India have been considered for this section, and the list is non-exhaustive. The cases discussed herein are relevant to provide an overview of the jurisprudence which has evolved in India on issues surrounding intermediary liability.


Avnish Bajaj v. State[1] (2008)


As discussed previously, this case was an inflection point for the debate on intermediary liability in India.


This case holds importance in the intermediary liability landscape in India as for the first time the managing director of a company (in this situation eBay) was charged with criminal pro-visions both, under the penal law of India and under the IT Act, for content circulated by a third party on an e-commerce platform. In this matter, Avnish Bajaj escaped liability on technical grounds as the company Baazee.com was not arraigned as an accused in both matters - before the High Court and subsequently the Supreme Court of India. Another important aspect of this case (the Delhi High Court judgment) was that the court recognized the use of content filters for blocking pornographic content and stated that companies bear the risk of acquiring knowledge if such content escapes the filters.[2]


Google v. Visakha Industries (2009)[3]

In 2009, Visakha Industries, a construction company involved in the manufacturing of asbestos cement sheets, filed a criminal defamation case against Ban Asbestos Network India (BANI), its coordinator and Google India. It alleged that the coordinator of BANI had written blog posts on a website owned by BANI, that contained scathing criticism of the company and therefore harmed its reputation in the market. Google India was also arraigned as a party in the litigation because the blogpost was hosted on the blog publishing service of Google.


Google India moved the High Court of Andhra Pradesh for dismissal of the criminal charges against it on the grounds that it enjoyed safe-harbour protection under Section 79 of the IT Act. It was contended that Google is not the publisher or endorser of the information, and only provides a platform for dissemination of information. It, therefore cannot be held liable. The High Court refused to accept Google’s contention and dis-missed the petition on the grounds that Google failed to take appropriate action to remove the defamatory material, in spite of receiving a take-down notice from the company.


Aggrieved by the judgment of the High court, Google filed an appeal in the Supreme Court in 2011, where the matter is currently pending.


Shreya Singhal v. Union of India[4](2015)

As discussed previously, the Shreya Singhal judgment was a watershed moment for the the debate on intermediary liability in India.


Myspace Inc. vs. Super Cassettes Indus-tries Ltd.[5] (2017)

This case is important from a copyright perspective as the division bench of the Delhi High Court in this matter reversed a single judge decision holding Myspace liable for copyright infringement. The division bench held that if intermediaries are tasked with the responsibility of identifying illegal content, it could have a chilling effect on free speech.

In this matter, the court also distinguished the ‘actual knowledge’ requirement from Shreya Singhal to mean ‘specific knowledge’ in matters of copyright infringement i.e. if intermediaries are pointed to specific infringing material by rights holders then they must remove such con-tent, without the necessity of a court order.


Kent RO Ltd & Anr. Vs. Amit Kotak & Ors[6] (2017)

In January, 2017, a single judge bench of the Delhi High Court, refused to compel intermediaries to screen content that infringes intellectual property laws on an ex-ante basis.[7]


The petitioner Kent RO Systems, a company that manufactures water purifiers filed for permanent injunction against one Amit Kotak (respondent) for infringing its intellectual property rights by copying its designs and eBay India Pvt Ltd. for aiding the infringement by allowing the respondent to sell its product on their website.


eBay India Private Limited sought the protection of Section 79 of the IT Act, under which it is saved from any liability arising out of third party generated information, data or communication link established by it, as long as its function is confined to providing access to a communication system.

The single judge bench of Justice Rajiv Sahai Endlaw held that compelling an intermediary to screen content would be “an unreasonable interference with the rights of the intermediary to carry on its business.”[8]


The court also asserted that requiring an intermediary to screen any kind of content would change the role of an intermediary from a facilitator to an adjudicator. Under Section 79 and the IT Rules, 2011, an intermediary is only obliged to remove content on receipt of a court order or Government notification.


In Kent RO, the court reiterated the specific knowledge requirement as expounded in Myspace, stating that when the attention of the intermediary is brought to infringing products, then they are liable to remove such listings from their websites.


The Registrar (Judicial), Madurai bench of Madras High Court v. The Secretary to Government, Union Ministry of Communications, Government of India, New Delhi and Ors.[9](2018)


This case arose from the unfortunate circum-stance of the death of a 19-year old student, allegedly after playing the online game “The Blue Whale Challenge”. This game required players to undertake 50 extreme tasks which eventually lead to them committing suicide. The Madras High Court took suo motu cognizance of the matter as there was public interest at play.


The court had asked the government to request online services like Google, Facebook, Microsoft, Yahoo and Instagram to remove ‘links’ of the blue whale game from their portals. To this, Google replied by stating that its Indian subsidiary can-not remove content as their app store was run by the parent company, which was governed by US laws. Google clarified, that their team in the US was aware of the game and will continue to take action against providers who violate their app store policies.


The court, while highlighting Google’s response and noting how difficult it is for law enforcement to get access to crucial information, reprimanded online services stating that they cannot abdicate their duties and responsibilities under law -


“The service providers cannot abdicate their responsibilities. They cannot also plead that they have no control over the content. A mere look at the net neutrality debate that is presently going on would show that the service providers are in a position to have control over the content that passes through their information highway. If the service providers can attempt to control the con-tent for commercial considerations, they can certainly be called upon to exercise their power of control in public interest also. Rather they must be mandated to do so.”

The court thus directed the Central Government to take appropriate steps to bring “Over The Top” services into a legal framework obliging them to comply with the laws of India and to provide the required information to the law enforcing agencies - “Methods must to be devised to ensure that those OTTs which could not be brought within such framework are not accessible in India.” The court also requested the government to amend laws and regulations so that Indian laws are applicable to these foreign services and law enforcement can get access to relevant information at crucial points.

This case highlights an important pain point in the current intermediary liability debate, not just in India, but around the world i.e. access to information by law enforcement. The government, while introducing changes like the Draft Rules, of-ten point to this problem highlighting the fact that foreign entities take refuge behind source country laws at the time of providing assistance to Indian law enforcement agencies. It will remain to be seen how tech-companies and governments solve the problem of access to information by law enforcement, but any new changes will have to be in consonance with free speech and privacy rights.[10]


Christian Louboutin SAS v. Nakul Bajaj and Ors[11] (2018)

In November 2018, the Delhi High Court laid down certain guiding principles in respect of li-ability of e-commerce platforms for trademark infringement.


The plaintiff, Christian Louboutin, a company that manufactures high end luxury shoes, was the owner of registered trademarks in India and sold its products only through authorized dealerships. The defendant, Darveys.com was an e-commerce platform that markets itself as a “luxury brands marketplace.” The plaintiff alleged that the defendant sells counterfeit products bearing the plaintiff’s name on its website. Apart from offering for sale and selling the Plaintiff’s products, on the website of the defendant, it also alleged that the defendant used the names “Christian” and “Louboutin” as meta tags to attract traffic towards its website, and this resulted in infringement of the trademark rights of the Plaintiff, and violation of personality rights of Mr. Christian Louboutin, the founder of the brand.



The defendant argued that the goods sold were genuine, and that there was no infringement on its part because it was a mere intermediary, and entitled to protection under Section 79 of the IT Act.


The High Court examined in detail what constitutes an ‘intermediary’ under Section 2(w) of the IT Act, and whether online marketplaces as intermediaries qualify for safe harbour protection under Section 79.


In determining the role of an online marketplace and ambit of ‘service’ as has been used in the definition of ‘intermediaries’ under the IT Act, the court laid down twenty six tasks that an intermediary may undertake, ranging from identification of the seller, advertising products on the platform, transporting the product to the purchaser, using trademarks through meta tags, among other things.


The judgment also stated that it has to be seen whether the platform is taking adequate mea-sures to ensure that no unlawful acts are commit-ted by the sellers. Measures include the manner in which the terms of the agreements entered into between the sellers and the platform are en-forced, consequences of violation of the terms, among others.


The Court noted that the elements summarised above would be key to determining whether an online marketplace or an e-commerce website is ‘conspiring, abetting, aiding or inducing’ and is thereby contributing to the sale of counterfeit products on its platform. “When an e-commerce website is involved in or conducts its business in such a manner, which would see the presence of a large number of elements enumerated above, it could be said to cross the line from being an intermediary to an active participant”, the judgment stated.


After considering all the above mentioned factors, the Court concluded that Darveys.com can-not be termed as an intermediary that is entitled to protection under Section 79 of the IT Act.


This case is particularly important because it was the first time that the Court decided on the is-sue of trademark infringement by online e-commerce platforms that have maintained that they are immune from liability by virtue of Section 79 of the IT Act. It is also pertinent to mention that the court despite ruling that Darveys.com was not an intermediary, it did not hold it liable for trademark infringement.



By Siddharth Dalmia

The Startup Sherpa

+91-9971799250

dalmiasiddharth1994@gmail.com

[1] Avnish Bajaj v. State, 150 (2008) DLT 769 [2] Post this judgment, the intermediary law of India was amended. [3] Google v. Visakha Industries, [Criminal Petition No. 7207 of 2009] [4] Shreya Singhal v. Union of India, (2015) 5 SCC 1 [5] Myspace Inc. vs. Super Cassettes Industries Ltd. [236 (2017) DLT 478], also accessible at Appendix [.] [6] 2017 (69) PTC 551 (Del), also accessible at Appendix [.] [7] R. Bajaj, In a Welcome Development, Delhi High Court Refuses to Compel Intermediaries to Screen Content Violative of Intellectual Property Laws on an Ex-ante Basis, SpicyIP https://spicyip.com/2017/03/ in-a -welcome-development- delhi-high-court-refuses-to-compel-intermediaries- to-screen- content-violative-of-intellectu-al-property-laws-on-an-ex-ante-basis.html or also accessible at Appendix [.] [8] 2017 (69) PTC 551 (Del), also accessible at Appendix [.] [9] 2018 (1) CTC 506, also accessible at Appendix [.] [10] The IT Act gives the government powers to request for information, intercept, decrypt and also takedown content as per Section 69 and 69A [11] Christian Louboutin SAS v. Nakul Bajaj & Ors, Civil Suit No. 344/2018, also accessible at Appendix [.]

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