Copyright Infringement And Intermediary Liability

The plight of online music sites, file sharing sites, and social networking sites that provide options for upload of audio and video files (categorized as “Intermediaries” under Indian laws) may hardly be considered enviable, given the growth in the number of cases filed against them in various courts. A few of these cases relate to alleged copyright violations due to the upload of music and video files, and injunctions through an Ashok Kumar (or John Doe) order. An Ashok Kumar order is an ex parte injunction issued against unknown individuals restraining them from uploading, distributing, or in general making available copyrighted materials online.

The Information Technology Act, 2000 (“the IT Act”) and the provisions of the Copyright Act, 1957 (“the Copyright Act”) are relevant with respect to this issue. Both these laws are sole legislations on their respective subjects. The IT Act deals with data and communication of data in electronic form. The IT Act also includes provisions for the liability of Intermediaries. The Copyright Act deals with the protection of copyright in India. Music and films have been considered as musical works and cinematograph works respectively and are therefore protected under the provisions of the Copyright Act. With the advent of the internet as a mode of communication, it is easy to transfer music and film through the internet. These transfers are mostly through the abovementioned sites. In most instances, users may be uploading the music and film files. However, under the provisions of the IT Act, online music sites, file sharing sites, and social networking sites may still be considered as liable.

This article discusses the issue of violation of copyright vested in music or films on the internet and the liability of intermediaries. The article further discusses the implications of obtaining an Ashok Kumar or John Doe order for Intermediaries.

Who are Intermediaries?

Section 2 (w) of the IT Act defines an “Intermediary” as follows:

“Intermediary” with respect to any particular electronic records, means any person who on behalf of another person receives, stores or transmits that record or provides any service with respect to that record and includes telecom service providers, network service providers, internet service providers, web hosting service providers, search engines, online payment sites, online-auction sites, online market places and cyber cafes.

An Intermediary stores, receives, transmits and provides other services with respect to electronic records on behalf of other persons. Intermediaries do not provide content. They are mere conduits over which information is made available. In the context of music and films, sites that host music and video files, social networking sites providing facility for the upload of audio and video files, file sharing sites and online market places that provide for the sale of audio and video files are the sites which may be covered within the definition of Intermediaries. The term Intermediary may further include internet services providers that provide internet connectivity to the sites allowing upload or download of audio and video files. Though internet service providers may not be impacted by the issue of copyright infringement due to the upload of music and films, they may nonetheless be subject to Ashok Kumar orders.

As stated above, Intermediaries are not content providers and, therefore, they presumably do not upload materials infringing copyright. However, once user-generated content is uploaded, aggrieved music and film producers can [approach] a court of law against the unfortunate Intermediary.

Film and music producers contend that they have made substantial investments in their films or music. If the music or films are available online then there is a loss of revenue as the user may not buy the movie or music from an authorized, revenue-generating source. Intermediaries on the other hand may contend that any restraint on the Intermediaries may lead to reduction in the number of website hits. Most Intermediaries do not charge the users for the upload or download of files and rely on advertisements hosted on the websites. In the event the number of hits is reduced, advertisers may not be keen to provide the advertisements to such websites. Consequently, there is a loss of revenue for the Intermediaries. Further, if the website is blocked the Intermediary may not be able to generate revenue at all whether through the user or advertisements. Therefore, while the entertainment industry does have an argument of loss of revenue, removal or blocking of content does not augur well for the Intermediary’s balance sheet.

View of the IT Act

The IT Act is the only legislation that deals with the liability of Intermediaries. Such liability may include the liability arising out of the violation of copyright. The IT Act also includes provision pertaining to the applicability of the Copyright Act in the event of violation of copyright through the electronic medium. Therefore review of the IT Act is important to analyse the liability of Intermediaries on the issue of copyright violations in cyberspace.

Section 79 is the relevant provision that deals with the liability of Intermediaries. Section 79 (1) of the IT Act stipulates that an Intermediary is not liable for any third party information, data, or communication link made  hosted by it. Section 79 (2) specifies the instances when Intermediary]may not be liable. Sections 79 (2) (a) stipulate the Intermediary may not be liable if it is acting as a mere conduit and not a content provider. Section 79 (2) (b) stipulates that provisions of Section 79 (1) may not apply if the Intermediary does not:

  1. Initiate the transmission;
  2. Select the receiver of transmission; and
  • Select the information contained in the transmission; or
  1. Modify the information contained in the transmission.

In order to be absolved of its liability the Intermediary is required to prove that:

  1. it has complied with Section 79 (1); and
  2. either of Sections 79 (2) and 79 (3).

Section 79 (3) obligates the Intermediary to observe due diligence while discharging its duties.

Intermediary may be liable under the IT Act if:

  1. the Intermediary has conspired, abetted, aided or induced the commission of the unlawful act; or
  2. has failed to remove or disable access to the content after having received the actual knowledge of the presence of such data or link.

Copyright violations on the Internet may be placed on different footing due to Section 81 of the IT Act. Proviso to Section 81 stipulates that provisions of the IT Act may not restrict any person from exercising his rights under the Copyright Act or the Patents Act, 1970. Therefore, in the cases of copyright infringement the aggrieved party may take recourse to the provisions of the Copyright Act.

The IT Act specifies that an Intermediary may not be liable if it has not itself uploaded the objectionable content or such content is uploaded without its knowledge. However, Section 81 reduces the scope of exemption from liability for the Intermediary and stipulates that the provisions of the Copyright Act may be applicable in case of copyright violations. Therefore, Section 81 clearly overrides Section 79 of the IT Act. The music and film producers may contend that once an audio or video file is on the internet it may go viral leading to the violation of their copyright. However, acceptance of this contention may also lead to higher degree of obligations for Intermediaries, which the Intermediaries may not be able to accept. Therefore, the interplay of Section 79 and 81 with regard to violation of copyright is of relevance. This interplay was discussed in detail in the matter of Super Cassette Industries v. MySpace Inc, 2011(48)PTC49(Del) (“MySpace Judgment”)

In the Matter of Super Cassette Industries v. MySpace Inc.

In the MySpace Judgment, the Delhi High Court discussed the provisions of the IT Act and the Copyright Act to determine the liability of MySpace an Intermediary, on the issue of copyright infringement. The MySpace Judgment lays down that Intermediaries:

  1. are required to screen the content at the time when it is uploaded. Further, pursuant to such screening the copyrighted content should not be allowed to be uploaded; and
  2. should not facilitate access to the copyrighted content by making the uploaded materials attractive;

This judgment is controversial because under the IT Act, an Intermediary is not liable merely because an objectionable (e.g. copyrighted content) is uploaded. The Intermediary is liable when it fails to remove the content once it is aware of its presence. However, with respect to copyrighted content, the Delhi High Court has given more stress on the screening of content and not allowing the copyrighted material to be uploaded. The MySpace Judgment therefore stipulated a greater degree of compliance if a copyrighted material is uploaded on the website. The MySpace judgment is perhaps the first judgment on this issue and therefore it is important to review the facts and ratio of this case.

The MySpace case was brought by Super Cassette Industries, a well-known company engaged in the business of film production and music distribution, which sought removal of infringing material from MySpace, a social networking site. MySpace allows users to share files (including audio and video files), and listen or view the music or video so shared. Super Cassette Industries informed MySpace that certain titles owned by it were uploaded on MySpace. The parties entered into an agreement in this regard. However, the Super Cassettes Industries alleged that the infringing materials were never removed from the MySpace website.

Delhi High Court based its judgment on Section 51 (a) (ii) of the Copyright Act. Section 51 (a)(ii) stipulates that Copyright in a work may be deemed to be infringed when any person, without a license granted by the owner of the Copyright or the Registrar of Copyrights under this Act or in contravention of the conditions of a license “permits for profit any place to be used for the Performance of the work in public where such performance constitutes an infringement of the copyright in the work unless he was not aware and had no reasonable ground for believing that such performance would be an infringement of copyright.” The Delhi High Court held that the internet is included within the meaning of “any place” in Section 51 (a) (ii) of the Copyright Act.

The Delhi High Court further discussed the proviso of Section 81. Section 81 of the IT Act stipulates that in the event of conflict with the provisions of any other law in force and the IT Act, provisions of the IT Act will override such law. However, a proviso to Section 81 limits this overriding effect of Section 81. It stipulates that the provisions of the IT Act will not restrict any person from exercising his right under the Copyright Act, 1957 and the Patents Act, 1970. Therefore, the portion of the proviso to Section 81 that deals with the Copyright Act, 1970 may limit or restrict the defenses available to an Intermediary under Section 79 of the Act in the event of copyright violations. Rule 3 of the Information Technology (Intermediary Guidelines) Rules, 2011 require Intermediaries to remove content within 36 hours of them becoming aware of the infringing material on their server. Since, Section 79 of the IT Act may not be available to the Intermediaries in case of copyright infringement; post infringement removal may not absolve the Intermediary from its liability under the Copyright Act.

Further, the court has delved on the subject of due diligence. It held that the Intermediary is required to deploy ample measures to ensure that the infringing materials are not hosted on its website. Industry has reacted strongly to this part of the judgment since high traffic makes compliance by Intermediaries a challenge. Though the websites deploy filters, it may be difficult to block all materials infringing copyright at the time of upload. However, until the time this judgment is revised, the Intermediaries are required to abide by this stipulation.

The MySpace judgment also indicates that there is a higher probability of the Intermediary being made liable if it amends or modifies user content, or places advertisement to make the uploaded content more accessible. Since, the websites earn from the advertisements and number of the hits an Intermediary may not be absolved of its liability if it amends or modifies the infringing material placed on its website. Advertisements, if any, on the website may not be aimed to promote number of hits on links to the infringing materials.

An Ashok Kumar Order

In recent times, film producers of movies like Singham, Bodyguard, Speedy Singhs, “3,” and Gangs of Wasseypur have successfully obtained an Ashok Kumar order to protect their copyright in their films. As discussed above, an Ashok Kumar order is an ex parte injunction issued against unknown persons restraining them from doing certain act/s. Producers file such cases a few days prior to the release of their films, naming unknown individuals (named as Ashok Kumar) and internet service providers (“ISPs”) as parties. Despite the fact that ISPs do not host content, and their role is limited only to providing access to the internet, issuance of an Ashok Kumar order requires these ISPs to block video and file sharing websites.

In most of instances, the file or video sharing website is completely blocked, resulting in the infringing as well as non – infringing materials not being available to “netizens.”

The Madras High Court has recently clarified that only specific links may be blocked pursuant to an Ashok Kumar or John Doe order. While an Ashok Kumar or John Doe order is a welcome development to film producers, the ambit of such orders may be limited to specific link or content and not to websites. ISPs however continue to block websites, since it may be a challenge to track material made available by users. Although it is an easy way to block infringing material finding its way through the ISP, the ISPs may be acting too cautiously while abiding an Ashok Kumar or John Doe order. Should the ISP exercise a little more effort it would be able to track and block infringing material from passing through its service, while allowing “netizens” otherwise free access to the Internet and websites hosted thereon, thus not diminishing the value proposition of the Internet.

Summing Up

The Delhi High Court judgment in Super Cassette Industries v. MySpace Inc. has demonstrated that vulnerability of Intermediaries has increased substantially, with respect to copyright violations over Internet. Further, the recent trend of Ashok Kumar or John Doe orders may also have a negative impact on intermediaries’ operations. Intermediaries are treading on a difficult path once they have to deal with content that may be subject to copyright.

Prashant is an Associate in the Bangalore office of J. Sagar Associates. Apart from general corporate commercial advice and transactions, he also advises clients Information Technology Laws. He may be reached at prashant@jsalaw.com.

 

 

By Prashant Kumar

 

 

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