Está en la página 1de 19





Electronic copy available at:

Table of Contents
INTRODUCTION ...................................................................................................................... 2 DEFINING E-COMMERCE ....................................................................................................... 2 Business-to-Business (B2B) Business-to-consumer (B2C) Consumer-to-business (C2B) Consumer-to-consumer (C2C)..................................................................................................... 3 LEGAL RECOGNITION TO E-COMMERCE PRACTISE ........................................................ 5 ISSUES OF E-COMMERCE ...................................................................................................... 6 PROTECTION TO E-COMMERCE ........................................................................................... 7 The Berne Convention The TRIPS Agreement World Intellectual Property Organization :( WIPO) WIPO Copyright Treaty, 1996 The Digital Millennium Copyright Act (DMCA) PROTECTION OF E-COMMERCE IN INDIA..10 COPYRIGHT ON DATABASES...14 JUDICIAL PRONOUNCEMENTS IN RELATION TO INFRINGEMENT OF COPYRIGHT IN INTERNET...15 CONCLUSION.18 BIBLIOGRAPHY.19

2|P a ge

Electronic copy available at:


"Determine that things can and shall be done and then we shall find the way" - Abraham Lincoln ABSTRACT The emergence of new digital information technologies, such as the Internet, is having a significant impact on copyright and related rights, and the copyright industries such as music, film and software throughout the world. The most exciting form of e-commerce is the sale of bits sold in packets representing works protected by copyright: e-books, e-journals, music, films, photographs etc. Logically, since most literary and artistic works can be digitized or are created digitally, the Internet should be the best way to access such works and within a few years, most purchases of copyrighted material, in particular in the business-to-business environment, could be done easier and better online. This will also give creators worldwide the ability to access and reuse material available on global digital networks. India has been a key beneficiary of electronic commerce. This has brought in a wave of digitization of offices and workplaces with the concomitant effects of decrease of bundles of papers and increase of bits and bytes of databases. The paper aims to the features of the amended IT act 2008 & henceforth the necessary steps that are needed for broadening the extent of copyright protection to internet on which the electronic commerce are carried out. This paper will also discuss the cases in which the Indian courts have adopted a new method of defining rights in this digital era and the provisions that are presently available for providing protection to the works which fall under the copyright regime.

KEYWORDS: Copyright, e-commerce, databases, ownership.

E-Commerce is a new way of conducting, managing and executing business transactions using modern information technology. The Internet provides access 24 hrs a day, seven days a week, any time anywhere. Theoretically, the internet is the main technology whereby all elements of a commercial transaction (advertising, production, purchase, payment and the delivery of the service) can be conducted on an interactive basis with more than one person, unconstrained by time and space, in a multimedia (sound, image and text) environment at a relatively low cost. This facilitates improvement in operations leading to substantial cost savings as well as increasing competiveness and efficiency through the redesign of traditional business. ECommerce is thus a business practice that involves use of computers, computer systems or computer networks. The Information Technology Act, 2000, (IT Act), was enacted with a view to give legal recognition and hence, provide extra fillip to the concept of e- transactions, ecommerce and e- transactions, to prevent cyber crimes and ensure security practices. There is
3|P a ge

however, issues relating to Intellectual property rights in respect of internet. This paper aims to show that the work related to internet can be protected under copyright law and what are the various legal provisions that are provided for the protection of works falling under copyright regime.

Defining E-Commerce
E-Commerce is a commerce based on bytes. E-Commerce, defined simply, is the commercial transaction of services in an electronic format. In general terms, e-commerce is a business methodology that addresses the needs of organizations, traders and consumers to reduce costs while improving the quality of goods and services and increasing the speed of service delivery. It may also be referred to as the paperless exchange of business information using Electronic Data Interchange, Electronic Fund Transfer etc. E-Commerce is not only about simple transactions of data but also general commercial acts such as publicity, advertisements, negotiations, contracts and fund settlements1. The World Trade Organization2 (WTO) Ministerial Declaration on ECommerce defines e-commerce as, the production, distribution, marketing, sales or delivery og goods and services by electronic means. The six main instruments of E-Commerce that have been recognized by WTO are telephone, fax, TV electronic payment and money transfer systems, EDI (electronic data interchange) and the internet. According to European Commission3, E-Commerce encompasses more than the purchase of goods online. It includes a disparate set of loosely defined behaviors, such as shopping, browsing the internet for goods and services, gathering information about items to purchase and completing the transactions. It also involves the fulfillment and delivery of those goods and services and enquiries about the status of orders. Like any other sustained business activity it also means conducting consumer satisfaction surveys, capturing information about consumers and maintaining consumer data bases for marketing promotions and other related activities. The development of E-Commerce is like a roller-coaster ride. It is growing but it is facing bumps as well. One may say it is part of the growing up phase. The first phase of E-Commerce threw up a new business nomenclature using various permutations and combinations of Business and Consumers, like Business-toBusiness(B2B), Business-to-Consumer(B2C), Consumer-to-business(C2B) and Consumerto-Consumer(C2C).

Business-to-Business (B2B)
As the name suggests, it is a business platform involving two independent or even dependent business entities. It acts a business facilitator, negotiator and dealmaker between or among mutually contributing business units. For example, Maruti the automobile manufacture has more

1 2

Sharma, Vakul, Legal dimensions of cyberspace (Indian Law Institute, New Delhi, 2004) Page no. 51. 3

4|P a ge

than two hundred ancillary suppliers supporting its car manufacturing activities. It seeks their cooperation (mainly in procurement) in maintaining all its pre and post production activities4.

Business-to-consumer (B2C)
It refers to a business platform, involving a business entity and consumers. It is a retail version of E-Commerce-selling goods or services through Web based shops. It is based on the concept of shopping at convenience. A consumer can shop at his convenience from the place and time of his choice. It is about a new shopping experience, through an electronic version of catalogue (mail order) shopping.

Consumer-to-business (C2B)
It is a kind of retail marketing platform, where a business entity seeks or rather chases customers actively. It is a pro-active version of e-commerce in the sense that it is a customer chaser, offering customers deals, packages or bundle of products at competitive prices. Moreover, it negotiates or bids by offering best possible deals to the customers. These days it is a common business model adopted by airlines and tour operators.

Consumer-to-consumer (C2C)
It represents a consumer business platform, where one consumer acts resource person selling goods in an online medium to other customers at a price. This may also be called as consumer2consumer auctions. This is an improvement over traditional selling or auction processes, where the relationship is in the form of business2consumer.

Legal recognition to e-commerce practices

Legal recognition to e-commerce practices has come a long way from the initial adoption of UNCITRALs Model Law on Electronic commerce by the general assembly of the United Nations. The purpose of the UNCITRAL model law on electronic commerce is to encourage the use of electronic commerce & to provide nations with model legislation governing the use of alternatives to paper based methods of communication and storage of information 5. It is based on functional equivalent approach and extends notions such as writing, signature and original of the traditional paper based requirements to a paperless world. It gives legal acceptance to electronic records and digital signatures.

Supra note 1, pg. 53.

The legal frameworks & challenges, 5|P a ge

India became the twelfth country in the world to adapt the UNCITRALs model law on electronic commerce on October 17, 20006. The information technology Act, 2000 is based on the model law on electronic commerce.

Issues of e-commerce
A very basic formulation of the way that the copyright laws of most nations relate to electronic communications is that there will be a copyright infringement when individual copies a work held in electronic format without the authority of the copyright holder. 7the key problem with this formulation, as far as ISPs and intermediaries are concerned, is that both the TCP/IP protocol underlying the Internet, and the technologies which overlay it, rely extensively, if not entirely, on the ability to make copies of information. GENERAL ISSUES Contractual Issues (a) Validity of online contracts: The Indian Contract Act allows for certain contracts to be made in forms other than in writing. Hence online contracts may be valid as they may be considered to be in these other forms, but there are problems concerning the validity of contracts that need to be in writing. (b) Normal and Online contracts: There is a need to understand the difference between normal contracts and online contracts, especially with respect to the question of where and when the contract is concluded. In this connection, the paper discusses dispatch and receipt of data messages with reference to the UNCITRAL Model Law and the Information Technology Bill, 1998 and compares it with offer and acceptance under Indian law. (c) Evidence: The Indian Evidence Act requires documents to be proved by primary evidence, and the validity of data messages as primary evidence is uncertain. There is an allied discussion on how to adduce information stored in computers. Content: Globally, content in cyberspace has generated considerable debate, specifically with respect to what would constitute an offence. E-money (a) Private Issue of E-money: The idea of e-money is still new to India though foreign governments have already had to contend with it. The public policy implications of private issue of e-money should be analysed. (b) Regulation: Before allowing the private issue of e-money several regulatory issues focusing on controlling and regulating private issuers require clarification.

UNCITRAL Model Law on Electronic Commerce, 7 Berne Convention, art 9(1): Authors of literary and artistic works.shall have the exclusive right of authorizing reproduction of these works, in any manner or form.

6|P a ge

(c) Money Laundering: The paper discusses how e-commerce and e-money impact money laundering and how governments the world over have been trying to grapple with the problem. There is also a related discussion on the various kinds of risks associated with private issue of e-money. Labor: The Net has altered the place of business. As a result, we are faced with the question: Will a web site constitute an undertaking? these are some of the important issues that are to be addressed. Intellectual Property Rights: E-commerce has opened up entirely different dimensions affecting copyright and related issues of intellectual property rights. (a) Fixation: Is fixation a must under Indian law? : Under US law, copyright protection subsists only in original works of authorship fixed in any tangible medium of expression, perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device.8Fixation along with originality and creativity is an important criterion for obtaining copyright in the US. Spoken words or live broadcast would not be entitled to copyright protection unless they have been reduced to some tangible form, such as a videotape. Apart from the definitions of Cinematograph film, sound recording and dramatic work which have some mention of the need for recording or writing on some medium, the Copyright Act is silent on the requirement of fixation. Section 17 (cc) of the Copyright Act mentions that where a person has delivered any address or speech in public that person would be the first owner of copyright. There is no mention that the speech should be reduced to writing for obtaining such protection. However, commentaries on the Copyright Act have indicated that copyright in a lecture will exist only if it has been reduced to writing.9 In the realm of online communication, many works are transient as they are stored temporarily on the Video RAM (VRAM) of the display monitor. For example, output of a video game is generated only when the game is played and stored temporally in RAM or VRAM. The point here is whether such temporary storage satisfies the criteria of fixation. The US courts have held that even a transient storage of digital information in the random access memory ("RAM") is sufficient to satisfy the fixation requirement. It is unclear whether such temporary storage would amount to fixation and consequently whether copyright protection would extend to such work under Indian law. (b) Publication: What is publication? When can a work be deemed to be published in India? : "Publication" means making a work available to the public through issue of copies or by communicating the work to the public. The date of publication is important as the term of copyright begins from such date. In case the work is put on the web, would it amount to a publication as per the Indian law? Perhaps the answer is yes as the web site can be seen accessed by the public anywhere in
8 9

U.S.C. 102(a).Digital Millennium copyright act. Narayanan P., Copyright and Industrial Designs, Eastern Law House, 2010; pp 20 and 30

7|P a ge

the world. However, a question would arise on the place of publication. This question is important because the period of copyright will depend on this. If any work is published in India and some other country simultaneously, the work is deemed to be published in India, unless the other country affords copyright protection of a shorter period than that granted under Indian law. In such event, the work is deemed to be published in that other country. When a web site is set up, it is simultaneously accessible throughout the world. If any country offers a period of copyright protection which is less than under the Indian law, then all work published via Net may be deemed published in such other country. If this country does not grant any protection to Indian copyright, the India may not recognize such copyright. Parallel Imports: Under the Copyright Act, parallel import is not permitted unless it is for domestic use. The terms import and importer have not been defined in the Copyright Act but Courts have held import to mean bringing into India from outside India 10. Take an example: a book has been published and different publishers are given rights in different countries. One enterprising publisher puts the entire book online and sells it to people. Selling it to the public other than in the country where he has rights could be an infringement. The Copyright Act may allow every person in India to download one copy for domestic use. This can cause loss to the publisher in India. Separately, the publisher who put the book online could be hauled up for publishing outside the territory in which he has the rights to publish even if the server is located in the same country. Rights Management Information (RMI): RMI is information that identifies the work, the author of the work, the owner of any right in the work, and any numbers or codes that represent such information. RMI would allow the copyright owner to trace the copy and know if the copy is an infringing copy or not. The WIPO Treaty makes it obligatory for signatories to provide protection against removal and alteration of any electronic RMI without authority. India has made it mandatory to display particulars of the work and the copyright owner on the container while publishing any sound recording and cinematograph film11. It is however, silent on electronic rights. Fair dealing and implied license: While surfing the net, the content of the web site is stored on the VRAM of the computer. It may amount to reproduction and such unauthorized reproduction may be considered as an infringement. The Copyright Act 12 allows the lawful possessor of computer programs to make copies or adapt the program in order to use it for the intended purpose. It also allows the possessor to create backup copies purely as a temporary protection against loss, destruction or damage. Thus, keeping a temporary copy of the program in RAM or VRAM would be permissible under the Copyright Act. However, web sites may contain content (other than computer programs) that is protected by copyright. When storing such content, it
10 11

Gramophone Company of India Ltd. v Birendra Bhadhur Pandey, AIR 1984 SC 667. Section 52(A) of the Act. 12 Section 52 (aa)

8|P a ge

must fall into the fair dealing exception or should have an implied license. Section 52 of the Copyright Act which deals with acts not amounting to infringement of copyright, lays down that any fair dealing with respect to literary, dramatic, musical or artistic work for the purposes of private use including research or criticism or review would not constitute infringement. Thus, reproduction of the copy in RAM or VRAM may be claimed for personal use and may be deemed as fair dealing. An alternate way to deal with this is to deem that any person who puts up a web site gives implied license to everyone to browse and do allied acts like clicking on the hyperlink and printing the contents. Courts have held that licenses can be implied 13 from the circumstances or by course of conduct. However, whether downloading of the content into the computer's permanent memory for future use would be covered as fair dealing or under implied license is still an open question. Domain Names: Recently, many companies have faced problems as cyber squatters hijacked their trademarks as domain name. In a recent case, the trademark tanishq was registered by a Tata group company, Titan Industries. A cyber squatter hijacked the domain name Indian courts have clearly said that domain names are similar to trademarks. 14 However, if the cyber squatter is a non-resident, the company may be able to obtain protection if such trademark is registered in that country, and if the trademark is not registered, then under the common law remedy relating to passing off15. Another option that is commonly used is the dispute resolution policy of NSI. The NSI (Network Solutions Inc.) is a US based registry issuing domain names under contract from the National Science Foundation. At present, the National Center of Software Technology (NCST) assigns '.com' domain names under license the authority of NCST to grant such license. The government can pass a legislation that will help institutions like NCST to be eligible to assign such names. Also, penalties should be levied for knowingly registering a domain name that is some one's trademark with intention to misguide the web surfer. Meta tags: A very popular method to find information on the Internet is by using search engines. A search engine uses key words to find information. For example, if a user wants to find the site of 'MTV' and does not know the URL, he uses a search engine and types in the key words 'MTV'. The search engine would return hits of the sites, which contain the words 'MTV'. The hits would be hyperlinked to the actual sites. Some search engines use 'Meta-tags' to find and index web pages. Meta-tags are the key words that are encoded into the HTML, but do not appear on the web page. When any user searches for MTV all the sites with 'MTV' in the Metatag would turn up as hits. Also, usage of 'MTV' in a Meta-tag does not mean that the web site has to do anything with 'MTV'. Someone can deliberately put it in a meta-tag to get a hit when someone searches for 'MTV'. It is also possible that if the key word has been used enough times in the meta-tags, the site could appear before the actual site.

13 14

Cooper v Stephens (1895) 1 Ch 567. Yahoo v Akash Arora judgement dated Feb 19, 1999 High Court of Delhi 15 Ibid.

9|P a ge

Protection to e-commerce
As the Internet has became more prevalent, the need for copyright protection there has also become a necessity. Over the past two centuries, copyright regime has again & again been challenged by ever growing technology and as a legal respond to such challenges the law of copyright itself has developed. Today, copyright law has been adapted to protect Internet items, just as it has been adapted through the years to protect various other new mediums. It protects original work or work that is fixed in a tangible medium, meaning it is written, typed, or recorded16. Technologies such as linking, in lining and framing, which are commonly used on the world wide web pose a great risk towards the copyright protection of a right holder. How the world wide exchange of copyright works over various peer-to-peer (P2P) networks has already been discussed in detail in this paper.

International Frameworks
Until recently, international copyright law rested on the Berne Convention for the Protection of Literary and Artistic Works and the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) of 1995. Since 1974, the international copyright instruments have been managed by a special United Nations agency the World Intellectual Property Organization (WIPO). WIPOs objective, as described in the treaty establishing it, is to promote the protection of intellectual property throughout the world through cooperation among States and, where appropriate, in collaboration with other international organizations. Currently, WIPO consists of 180 member states & administers six copyright treaties and aims at homogenizing national intellectual property protections with an ultimate eye towards the creation of a unified, cohesive body of worldwide international law.17 The Berne Convention As mentioned above, the first attempt to harmonize copyright law at a global level dates back to adoption of the Berne Convention in 1886. The Convention established a minimal level of copyright protection for the member nations to follow and adopted the national treatment policy (under which a member state must give the same protection to material copyrighted in other member states as it gives to material copyrighted under its own law). The treaty also established that the International Court of Justice in the Hague (Hague Court) would exercise jurisdiction over disputes between member nations, but the Treaty left nations free to declare their immunity from the jurisdiction, and many states have done so.



Supra,note 1 at pg.114. Study on Intellectual Property Rights, the Internet and Copyright, 10 | P a g e

The TRIPS Agreement The General Agreement on Tariffs and Trade (GATT) has also addressed copyright issues, in parallel to WIPO. As copyright was becoming increasingly important in shaping international trade with the advent of the information society, the 1994 Uruguay Round of GATT produced TRIPS the Agreement on Trade-Related Aspects of Intellectual Property Rights. The same Round also instituted the World Trade Organization (WTO). The TRIPS Agreement adopts portions of the Bern, Rome and Paris Conventions in enunciating norms for intellectual property laws. Article 9.1 of TRIPS Agreement provides that, Members shall comply with Articles 1 through 21 of the Bern Convention (1971) and the Appendix thereto. However, Members shall not have rights or obligations under this Agreement in respect of the rights conferred under Article 6bis of that Convention or of the rights derived there from. So it is clear that the approach taken in the copyright provisions of the TRIPS Agreement is to adopt the regime of copyright protection provided in the Bern Convention. Article 10.1 provides that, Computer programs, whether in source or object code, shall be protected as literary works under the Bern Convention. Article 10.2 further provides that, Compilation of data or other material, whether in machine readable or other form, which by reason of the selection or arrangement of their contents constitute intellectual creations shall be protected as such. World Intellectual Property Organization :( WIPO) WIPO is an organization of the United Nations (UN). Before its establishment, there were many organization established under certain individual organs like the Assembly of Paris Union, the Executive Committee and the international Bureau of Bern which were later united in an organization called 'Bureau Internationaux Reunis Pour La Protection de La Propriete Intellectuelle' known as 'BIRPI'18. WIPOs activities are of four kinds: registration, promotion of inters- governmental cooperation in the administration of intellectual property rights, specialized program activities and latterly, dispute resolution facilities. In 1996, member countries found it necessary to form a treaty to deal with the protection of copyright evolvement of new technology19. WIPO Copyright Treaty, 1996 It was adopted by the Diplomatic Conference at Geneva on December 20, 1996. This treaty is a special agreement within Article 2 of the Bern Convention. It is related to digital technology and the Internet. The WIPO copyright treaty is a special agreement amongst the member countries to grants authors more extensive rights than those granted by the Bern Convention. Article 4 of the treaty provides that, "Computer programs are protected as literary works within the meaning of Article 2 of the Bern Convention. Such protection applies to computer programs, whatever may

18 19

Jain,Pankaj & Rai.Pandey Sangeet, Copyright & Trademark Laws relating to Computers. (2005)pg.85 Supra, note 10.

11 | P a g e

be the mode or form of their expression." 20 Article 5 further states that "compilations of data or other material, in any form, which by reason by the selection or arrangement of their contents constitute intellectual creations, are protected as such. This protection does not extend to the data or material itself and is without prejudice to any copyright subsisting in the data or material contained in the compilation." WIPO Copyright treaty generally covers all kinds of computer programs and not just the object code or source code of computer programs as it was in TRIPS Agreement21. So it can be said that ignoring the minor changes adopted by WIPO Copyright Treaty, it is not inconsistent with the TRIPS Agreement 22. The Digital Millennium Copyright Act (DMCA) The Digital Millennium Copyright Act (DMCA) was adopted in October 1998 to implement the United States treaty obligations under the WCT and the WPPT and to move the nations copyright law into the digital age. 23 The DMCA: 1. makes it a crime to circumvent anti-piracy measures built into copyrighted material, while permitting the cracking of copyright protection devices to conduct encryption research, assess product interoperability, and test computer security systems, and providing exemptions from anti-circumvention provisions for nonprofit libraries, archives, and educational institutions under certain circumstances; 2. Outlaws the manufacture, sale, or distribution of code cracking devices used to illegally copy software; 3. protects Internet service providers from copyright infringement liability for simply transmitting information, and limits the liability of nonprofit institutions of higher education -when they serve as online service providers and under certain circumstances for copyright infringement by faculty members or graduate students, while requiring service providers to remove material from their systems that appears to constitute copyright infringement; and 4. Requires that web casters pay licensing fees to record companies. 24

E-commerce protection in India

The Internet system is spreading fast in India. There are many issues related to internet. But one of the biggest issues concerning Internet is protection of intellectual property- works of the mind. As per Section13 and 63 of Indian Copyright Act, 1957 literary works, pictures, sound recordings and other creative works are protected from being copied without the permission of
20 21

Ibid,at pg 86. Ibid. 22 Id. 23 Copyright and the Internet - Global Internet Policy Initiative, 24 The Digital Millennium Copyright Act - Overview , 12 | P a g e

the copyright holder. It is yet unclear how copyright law governs or will govern these materials as they appear on the Internet25. The Copyright Act, 1957 does not deal with the liability of ISPs at all. Till now, position in India was indefinite with respect to liability for copyright infringing third party content. With the advent of IT (Amendment) Act, 2008 there is a significant clarification regarding the scope of immunities available to intermediaries. Unlike the immunities under the old IT Act, these immunities are not only available with respect to offences under the IT Act, 2000 but even for the liabilities arising under any law. Section 79 of the IT Act exempts ISPs from liability for third party information or data made available by him if the ISP had no knowledge of the offence committed or if the ISP had exercised all due diligence to prevent any infringement. Amended Section 79 states that subject to the exceptions, an intermediary shall not be liable for any third party information, data, or communication link made available or hasted by him. The liability of ISPs finds mention in Section 79 of the Information Technology Act, 2008 as follows: (1) Notwithstanding anything contained in any law for the time being in force but subject to the provisions of sub-sections (2) and (3), an intermediary shall not be liable for any third party information, data, or communication link made available or hasted by him. (2) The provisions of sub-section (1) shall apply if (a) the function of the intermediary is limited to providing access to a communication system over which information made available by third parties is transmitted or temporarily stored or hasted; or (b) the intermediary does not (i) initiate the transmission, (ii) select the receiver of the transmission, and (iii) select or modify the information contained in the transmission; (c) the intermediary observes due diligence while discharging his duties under this Act and also observes such other guidelines as the Central Government may prescribe in this behalf. The exception to the above are: 1. The intermediary has conspired or abetted in the commission of the unlawful act; or


Copyright software & internet, 13 | P a g e

2. Upon receiving actual knowledge, or on being notified by the appropriate Government or its agency that any information, data or communication link residing in or connected to a computer resource controlled by the intermediary is being used to commit the unlawful act, the intermediary fails to expeditiously remove or disable access to that material on that resource without vitiating the evidence in any manner. Means in the above two situation, the ISPs will be made liable. The amendments to Section 79 of the IT Act contains non obstanate clause i.e. Notwithstanding anything contained in any law for the time being in force and accordingly it gives a protective shield to ISP against liability arising due to some other legislation. At the same time the amended section 81 has a proviso- Provided that nothing contained in this Act shall restrict any person from exercising any right conferred under the Copyright Act, 1957 or the Patents Act, 1970. The interpretation of this section is that it is to keep the primacy of the Patent Act and the Copyright Act over the Information Technology Act. We can correlate the section 79 and 81 by inferring that other legislation is Copyright Act. Both the section counter each other but a careful and finer study will justify that the section 79 has been amended to give more relaxation to ISPs26. Basically, section 79 of the amended act has been framed in accordance with EU Directives on E- Commerce to determine the extent of responsibility of intermediaries for third party data or content. The objective of the directive is to promote free flow of information between the member states. The EU Directive provides for the liability of the intermediaries in a very detailed manner, which includes not only intellectual property rights and associated liabilities but also general content liability. The motivation behind the EU Directive on electronic commerce is to develop information society services (ISS), ensure legal certainty and consumer confidence through the coordination of national laws, and clarify legal concepts for the proper functioning of the internal market, in order to create a legal framework to ensure the free movement of ISS between Member States. Under the E-Commerce Directive, an ISP is exempt from liability when it serves as a "mere conduit" (Article 12) or provides "temporary caching" (Article 13) for the sole purpose of making the transmission of content more efficient, is of a mere technical, automatic and passive nature, and where the ISP has neither knowledge nor control over the content being transmitted or stored. The conditions under which a hosting provider is exempted from liability, as stated at Article 14(1)(b) form the basis for the development of "notice and take down" procedures by copyright owners to ISPs to remedy instances of infringement27.

Copyright on Databases
In India databases are protected as literary works. In US if author is creative in selecting and arranging the data and does not merely display the data as facts will be registered. In UK a

Fair Use in the Digital Era, 14 | P a g e


database which lacks creative input and requires only modest skill and labour acquire the right of unfair extraction for a period of 15 years only. While data created by full creativity copyright protection is given i.e. life of author plus 70 years. Compilation of data are themselves not protectable can be the subject of protection when there is the necessary selection coordination and arrangement and combined it with the abstraction, filtration and comparison test 28. Through internet the work of authors can be displayed in different jurisdictions and which is very difficult to detect. So the display rights can be easily violated over Internet. Specifically Section 43 of the Indian Information Technology Act, 2000 imposes liability to pay damages by way of compensation not exceeding one crore rupees to the person so affected if any person without permission downloads, copies, or extracts any data, computer database or information from such computer, computer system or computer network.The section defines database as the representation of information, knowledge, facts, concepts, or instructions prepared in a formalized manner. Computer database means a representation of information, knowledge, facts, concepts or instructions in text, image, audio, video that are being prepared or have been prepared in a formalized manner and have been produced by a computer, computer system or computer network.29 Though this section can be applied for electronic databases, its effectiveness is still to be tested for granting protection to databases or data on the Internet. In India, a member of the Berne Convention and TRIPS Agreement, the requirement of originality in selection or arrangement of the contents of the database is required to attract copyright protection. Furthermore, the Copyright Act provides that copyright shall subsist in original works of authorship. Under Section 2(o) of the Copyright Act, computer database is included in the definition of literary work30.


The Indian Copyright Act is unable to protect the unauthorized distribution and use of work over internet. Infringement over internet and piracy posing a threat to creative works worldwide and thus the growth of the internet, the e-commerce and the digital economy.[5] Copyright owners exclusive right of distribution applies to e-mail attached or forwarded.


Copyright Infringement In Cyberspace And Network Security: A Threat To E-commerce, -&-NetworkSecurity.html
29 30

See Explanation (ii) of Section 43 of the Information Technology Act, 2000. Databases & its implications,

15 | P a g e

In Play Boy Enter Inc v/s Frena 31, Defendants subscribers downloaded unauthorized photographs of playboy enterprises to a bulletin board system. US Court held that the plaintiffs exclusive right of distribution was infringed by customers of defendant. This creates an obligation on the bulletin board operators to ensure that its system is not being used to display and download copyrighted materials by its customers. In Feist publication v/s Rural Telephone Service Co. Inc.32 It was held that there must be at least some minimal degree of creativity and what should be protected by copyright were the fruits of intellectual labour and not just sweat of the brow. In Michael v/s Internet - Group Inc., Court held that it is violation of copyright owners exclusive statutory right of display by making available videotape over the internet without authorization and posting unauthorized copies of electronic clipart on web pages. In Religious Technology v/a Netcom33, US District court held that temporary copying involved in browsing is the functional equivalent of reading and does not implicate the copy right laws. So as regards browsing one must come to the conclusion that it does not amount to violation and can deceived to be a fair dealing. In Kelly v. Arriba Soft 34, involved a search engine designed to identify and gather images posted on WebPages. The defendant did not seek the permission of the copyright owners of the images that appeared on defendants index. Plaintiffs claims alleged both copyright infringement, and violation of the DMCA 1202 prohibition on the removal of copyright management information. Although the thumbnail images on the index of the defendants search engine displayed plaintiffs photographs in full, their size were greatly reduced, and, the thumbnails could not be enlarged. The court found that displaying a full-sized version of the image without returning the viewer to plaintiffs web site was more problematic. Finally, the court held that defendants index did not compromise the potential market for or value of plaintiffs works35.

The Google & T-Series Case The Indian IPR regime has not witnessed any case with regards to the present issue but recently in the year 2007, T-Series brought a case against You-Tube and its parent company Google Inc. for earning profits at the expense of its rightful copyright owner by allowing its subscribers to upload T-Series copyrighted materials without obtaining any license or permission from T31 32

839 F. Supp. 1552 (M D Fla 1993) 737 F.Supp. 610, 622 ( Kan. 1990). 33 907 F. Supp. 1361 (N.D. Cal. 1995). 34 (280 F.3d 934 (CA9 2002)

Copyright Use and Excuse on the Internet

, 16 | P a g e

Series. T-Series with its rapid expansion had a forward looking approach to the copyright law & was the plaintiff in this case. The facts giving rise to the actions brought by T-Series is that the users of you-tube posted certain materials on , which were under copyright of T-Series. In the ordinary course of events, T-Series should have proceeded against the user who posted such materials. Under sec. 51 of the Indian copyright act, this could be taken as infringing the copyright by the user. However, sec. 63 of the act also includes within its scope abetment of infringement. Thus, as is the usual trend in such cases, instead of suing the user, which would prove to be fruitless in terms of the ability to pay compensation, T-Series under its parent company Super cassesates Industries Limited (SCIL) brought an action against YouTube & its parent company Google Inc. at the Delhi High Court. The Delhi high court passed an interim order of injunction restraining YouTube from reproducing, adapting, distributing & displaying on their websites or otherwise infringing in any manner any audio visual works in which SCIL owns exclusive, valid and subsisting copyright. The injunction was passed on the grounds that YouTube and Google incurred pecuniary benefits by making the copyrighted songs of T-Series available for free of cost on their website, which contained advertisements, without obtaining any license or permission from SCIL who earned profits from selling these copyrighted songs in market in the form of DVDs & CDs. Himalaya Drug Company v. Sumit36 The plaintiff in this action was an Indian company carrying on business in the field of manufacturing and marketing herbal medicinal products. In connection with its business, the plaintiff had compiled a herbal database which was posted on its web site. An Italian infringer illegally copied the herbal database and posted the same on its own web site hosted by a US server. The Indian company sued the Italian infringer through its us server/ ISP, claiming: That the herbal database compiled by it was an original literary work under the Indian Copyright Act; That the Italian infringer had unauthoringly copied the original database and thereby violated the Plaintiffs rights of distribution and communication to the public; That the infringing copies of the defendants web site were accessible to Internet users in Delhi; and That the High Court of Delhi had the jurisdiction to entertain and try the suit in exercise of its personal jurisdiction over the overseas defendant. Pursuant to the action, the High Court of Delhi granted an ex parte injunction against the defendant restraining it from reproducing the Plaintiffs copyright in its herbal database. Thereafter, the plaintiff served a copy of the order on the US based ISP and requested it to deny

[2006 PTC 112 (Del)],

17 | P a g e

access to or disable the infringing web site in accordance with the Digital Millennium Copyright Act which contains notice and take down provisions on fulfillment of certain conditions. Upon receiving the notice, the US ISP/ server removed the impugned web site.

With India emerging as an IT major at international levels, the development and growth of online means of transmission of copyrighted works over the Internet has thrown up a superfluity of issues of immediate relevance to the Indian business interests and, therefore, there is a compelling need for India to conform to the international framework for resolution of the issues. The borderless nature of Internet, calls for a more encouraging relationship in other jurisdiction and close cooperation with the international organizations. Undoubtedly, the current Copyright laws do provide protection to Copyright owners but it has some drawbacks. There are issues of relevance for which the current legal frame work does not provide any statutory remedies such as the punishment for the activities of intermediaries for copyright infringement, the rights management information, the protection of anti-circumvention devices etc. The society must be educated on the necessity of Copyright protection to prevent any unauthorized use. Hence, barring a few important aspects, the copyright Act 1957 & the Information Technology Act meets the challenges posed by the internet.

18 | P a g e


1) Jane C. Ginsburg , Copyright Use and Excuse on the Internet, from accessed on 7th march, 2010. 2) Jaime, Isabell, Negociations of copyright in e-commerce, from as accessed on 16th march, 2010. 3) Vikas Asawat, Information Technology (Amendment) Act, 2008: A new vision through a new change, from as accessed on 12th
march, 2010.

4) ALOK KUMAR YADAV, Copyright in Digital Era, from as accessed on 9th march, 2010.

as accessed on 12th march, 2010

6) Priyambada mishra & Angsuman Dutta, Striking a balance between liability of ISP and protection of copyright over the internet: A need of the hour, from as accessed on 13th march, 2010.

7) Jaime Delgado & Isabel Gallego, Negotiation of copyright in e-commerce of multimedia publishing material, from as accessed on 12th
march, 2010.

1) Nimmer on Copyright, Lexis Nexis, Melville B. Winner & David Winner, Indian Print 2010. 2) Copinger and Sknoe James on Copyright, Volume 1 - By Kevin Garnett and Gillian Davis and Gwilym Harbottle South Asian Edition 2008, 15th edition. 3) Legal Dimensions of Cyberspace, S.K. Verma & Raman Mittal, Indian Law Institute, 2004. 4) Dr. Wadehra B.L., Law Relating to Intellectual Property, Universal Law Publishing Co., 4th Edition

19 | P a g e