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The Death of Safe Harbours for Internet Intermediaries in India

In a landmark decision for internet companies and copyright law in India, the Delhi High Court passed an order holding MySpace liable for copyright infringement. This was a keenly awaited decision, as it sought to clear up the ambiguities in the interpretation of the IT Act and the immunity granted to ‘intermediaries’ for publishing and hosting unlawful content on the Internet.

A Brief Overview 

The context for the Myspace dispute is the interpretive difficulty in Section 79 and 81 of the IT Act. On one hand, Section 79 grants legal immunity to internet companies for storing unlawful content  (so long as it was not aware of the violation and has satisfied other conditions), while Section 81 renders it inapplicable to copyright and patent cases (it states that the provisions of Section 79 shall not restrict anyone from exercising rights granted under the India Copyright and Patents Act).

The contradiction can be explained by means of a hypothetical. Say you wanted to upload a short clip from a television show to a website like YouTube. While you may or may not have committed an unlawful act for failing to secure permission from the copyright owner, it is important to know whether the intermediary, that is YouTube, can he held liable for your actions. In the United States, the Digital Millennium Copyright Act (DMCA) grants a safe harbour to internet companies for all third party content, including copyright protected content (provided the intermediary fulfills certain conditions). In India however, the complexity arises out of the discord between Section 79 and Section 81, and the MySpace case is the first real attempt at reconciliation.

HARBOUR

MySpace v. Super Cassettes: A Land mark Mine for Copyright Law

The decision in MySpace is long and winding, but it analyses the issue of intermediary liability for copyright infringement in-depth. Super Cassettes India Limited (‘Super Cassettes’) is a record company and owns the copyright over a large collection of songs and films. MySpace is a social networking website that allows users to share music, images and video clips. The dispute pertained to several videos owned by Super Cassettes that made their way onto Myspace.com.

Super Cassette’s Arguments

Super Cassettes argued that MySpace was guilty of primary infringement under S.51(a)(i) of the Copyright Act for communicating copyrighted works to the public without a license. Since MySpace permitted its website to be used for the dissemination of unlawful content, it had permitted its platform to be illegally used for profit. The fact that advertisements were placed alongside the allegedly infringing content was used establish the commercial motive of Myspace. Further, it was argued that MySpace should not benefit from the exception under Section 51(a)(ii) of the Copyright Act since it had knowledge of the infringing content. This was illustrated by making a reference to the Terms of Use on its website reminding users not to upload unlawful content. Super Cassettes would also point out the three tools MySpace had designed and implemented to detect copyright infringement.

A separate argument was made that S.14 and S.51 of the Copyright Act, when read together, granted copyright owners the exclusive right to authorise the doing of certain acts, which MySpace had illegally permitted its users to do themselves. With respect to the content removal mechanism under Indian law, Super Cassettes argued that it was insufficient to protect the rights of copyright owners and there was no remedy available to owners after the infringement had taken place. Significantly, it asserted that the safe harbour provisions under the DMCA are inapplicable to India, and should be discounted from the analysis.

The Myspace Defence

MySpace, on its part, began with a defence common to internet companies operating in India – the Delhi High Court lacked jurisdiction to hear the dispute since MySpace carries on its business in the United States. It neither targets, nor does it enter into any commercial transactions with Indian users. The other defence was that, being an ‘intermediary’ under Section 2(w) of the IT Act, it qualified for the legal immunity provided under Section 79 to internet companies. On the contradiction between S.79 and Section 81, MySpace argued for a harmonious interpretation, by drawing from the practice in the United States under the DMCA. It disputed knowledge of infringing activity unless it was specifically brought to their notice by copyright owners. Moreover, with thousands of uploads taking place each day, it was impossible for MySpace to monitor every upload and prevent all infringement. There was also no unlawful commercial gain since the ads were displayed alongside licensed content only, while others were automatic based on keyword searches, in the form of AdWords provided by search engines. MySpace also referenced its Terms of Use to show that it had taken the precaution to obtain a limited license from its users to facilitate the publication and hosting of the content.

Lastly, it explained the tools it had developed to detect infringing content so show that it did not encourage or aid infringing activity: The ‘Hash Block Filter’ prevented the re-posting of infringing content based on the ‘hash’ of the file being uploaded;  ‘Take Down stay Down’ which also prevented unlawful uploads; and a ‘Rights Management tool’ available to all copyright owners for free on its website. The tool prevented all content that was flagged by a registered copyright owner from being uploaded, if there was an identical match for more than 30 seconds in the file. Besides these tools, it also complied with the notice and takedown procedure under Indian laws.

Analysing the Decision

My criticism of this decision is directed at several erroneous assumptions made by the court. In most instances, it casts onerous obligations on internet intermediaries like MySpace to detect and remedy cases of piracy. But the impracticality of certain technical operations, such as the monitoring of all unlawful content and determination of what is ‘fair use’ was not adequately considered by the court.

Did MySpace have knowledge of piracy?

The knowledge element is important in view of the exception provided for in S.51(a)(ii) of the Copyright Act, which states that MySpace would not be liable if it ‘was not aware and had no reasonable ground for believing’ that the clips on its website were infringing. The court dismissed all arguments advanced by MySpace, based on some questionable logic:

  • The fact that MySpace had developed and installed certain technical tools to detect copyright infringement was used against it. The court reasoned that it showed MySpace at least some apprehension of infringement. It also dismissed the argument that this measure was adopted by MySpace to comply with the DMCA. Instead, the advice of Super Cassettes appeared to have held sway since the court held the DMCA provisions to be irrelevant to the Indian context. This is problematic for one important reason: Section 79(3)(b) of the IT Act appears to provide for a post-notification remedial mechanism similar to the DMCA. It places an obligation on internet intermediaries to ‘remove or disable’ access to the content upon receiving ‘actual knowledge or being notified’ of any unlawful content on its website.  
  • The court found that MySpace had specific knowledge of the songs and videos owned by Super Cassettes since it was provided a list of titles owned by it. It is unclear whether officials from MySpace actually had access to the document and read it.
  • The fact that MySpace obtained a limited license from users to insert ads into the video meant an opportunity to know the content of files being uploaded, and therefore whether it was lawful. It appears the court did not consider the possibility of an automated system to insert ads in the video. More importantly, it is unreasonable to expect a system, whether automated or human, to determine the legality of content given the complexities involved in a fair use analysis (i.e. whether protected content can be used with a license from the owner).
  • Lastly, the fact that MySpace’s operations were India-centric showed its knowledge of the activities of its Indian users and the fact of infringement. It is extremely hard to appreciate the reasoning employed here.

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Unfortunately, this decision does not lay down any discernible knowledge standard for the purpose of a copyright infringement claim, which was expected given the recent ‘red flag’ test evolved in Viacom v. Youtube (previously discussed here). This is particularly worrisome since the guidelines under the IT Act on the due diligence requirements for internet companies does not provide any guidance in this regard either. It also fails to elaborate on a notice and take down mechanism, and in dismissing post-infringement remedies entirely, it fails to appreciate the very basis for dealing with online copyright infringement claims. Despite the assertions from big record companies, it provides a balanced system for dealing with infringement claims, especially given the numerous instances of frivolous  notices being issued by such companies.

Was the MySpace platform being illegally used for profit? 

To answer this, the court made reference to S.51(a)(ii) and tried to define the scope of “any place” as used in the Indian Copyright Act. It juxtaposed this phrase with “place of public entertainment” as used in the UK Copyright Act, 1956 and inferred that the legislative intent in India was to widen the scope and include places besides places of public entertainment. The UK Copyright Act of 1988 separately provides for “infringement caused by use of an apparatus” and “place of public entertainment”. This suggested knowledge of two distinct types. Therefore the court reasoned that the phrase ‘any place’, as used in India, was of wider amplitude and included platforms on the internet.

Did MySpace Allows its Users to Freely Pirate? 

The court defined copyright infringement to mean the doing of any unauthorised act which violate the exclusive rights of the copyright owner. This was apparent from a combined reading of Section 14 and S.51(a)(i) of the Copyright Act. With respect to MySpace and its users, the court remarked that ‘the act of authorizing is something more than merely providing means with knowledge’. It requires active participation of the person. In this case, the question of authorisation required further proof of participation, which could only be determined at the trial stage and hence, and dd not deliberate upon S.51(a)(i). This appears to be a reasonable inference since there is a clear difference between websites actively promoting piracy and platforms that may be used for it incidentally.

Reconciling Section 79 and 81

Given the non-obstante clause in Section 81, it clearly overrode other  provisions in the IT Act, thereby rendering the safe harbour provisions contained in Section 79 meaningless.  Therefore, as the law currently stands, even if an internet company satisfies the requirements under Section 79, it can be sued by an individual or company using provisions of the Copyright Act or Patents Act.

Irrespective of this overriding effect, the court found that the act of inserting ads disqualified MySpace from invoking the safe harbour provisions. Notably, it found that MySpace had failed in its due diligence and should have ‘done a preliminary check in all the cinematograph works relating Indian titles before communicating the works to the public rather, than falling back on post infringement measures’.

In conclusion, the most significant implication is the court’s confirmation that the IT Act does not protect intermediaries from copyright infringement claims. The court observed that “Section 79 is, thus, meant for all other internet wrongs wherein intermediaries may be involved including auctioning, networking servicing, news dissemination, uploading of pornographic content but not certainly relating to the copyright infringement or patent infringement which has been specifically excluded by way of proviso to Section 81.” At the same time, the court did recognise that right of intermediaries or any other person to avail of the exceptions under the Copyright Act, if it is applicable. It is hard to find fault with this conclusion given the definitive language used in Section 81, leaving the judges with little interpretive freedom.  The court found MySpace guilty of primary copyright infringement under S.51(a)(ii) and passed an order restraining the defendants from dealing with any work belonging to Super Cassettes works, including modifying them, adding advertisements, or making profits. In the future, MySpace would also have to delete any infringing clips, when notified.

Although the title suggests the “death” of safe harbours for internet companies in India, one wonders if there was any life to begin with. The contradictory language, in fact,  reduced it to a still-born. At this stage, a legislative amendment is the only go.

(Images from Cannedcat and the public domain)

A modified version of this post was first published on SpicyIP

About Amlan Mohanty

Amlan is a lawyer based in India. He has been writing about technology and intellectual property for the last five years.