Liability of intermediaries under Copyright

Infringement

Submitted to Ms. Kuhu Tiwari

(Faculty of IPR- Copyright law)

Submitted by Anant ekka

Section A
Roll No: 26
Semester IX
B.A.LL.B(Hons.)
Submitted on: 05/10/2017

HIDAYATULLAH NATIONAL LAW UNIVERSITY, RAIPUR (C.G.)

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 Acknowledgement
The successful completion of any task would be, but incomplete, without the mention of
people who made it possible and whose constant guidance and encouragement crowned my
effort with success.

I would like to thank my course teacher Ms. Kuhu Tiwari for providing me the topic of my
interest.

Secondly, I would like to thank our Vice Chancellor for providing the best possible facilities
of I.T and library in the university.

I would also like to extend my warm and sincere thanks to all my colleagues, who
contributed in numerable ways in the accomplishment of this project.

Thanking you,

Anant Ekka
Semester IX

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 Contents
Acknowledgments... 2

Research Methodology.....4

Objectives....................................................................................................................4

Introduction..................................................................................................................5

Liability for internet mediaries under IT Act................................................................7

Intermediary liability and copyright infringement.......................................9

Viacom International Inc. v. YouTube Inc..............................................................11

Conclusion...18

Webliography..............................................................................................................19

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 Research Methodology
This research project is Non-Doctrinal in nature since it is largely based on secondary &
electronic sources of data and also since there is no field work involved while producing this
research and it involves study of cases and comparison from different books, journal and
other online sources. It is not empirical in nature.

Objective

What and who are intermediaries?

Liability of intermediaries under copyright infringement.

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 Introduction

Copyright is a bundle of rights which is meant to encourage creativity. In ancient days

creative persons worked for fame and recognition rather than to earn a living, thus, the
question of copyright never arose. In the last four decades modern and advanced means of
communication like broadcasting, litho-photography. Television, websites contents etc have
made the Copyright Act an important act to deal with possible problems of ownership and
infringement on such rights

Copyright rights prohibit others from using the copyrighted works. The traditional concept of
the copyright has undergone a drastic change due to advent of the new technologies; its scope
has extended manifolds. Now, the modern law of copyright encompasses musical works,
cinematograph works, computer programs, performers rights, broadcasting rights.

The Copyright Act today has also to deal with business models which are growing over the
internet wherein the users are participating actively and thereon the companies are earning
solely on the basis of the internet services by facilitating users to share their contents which
are attractive (which includes pictures, motion pictures, films, songs, graphics, trailers,
private communications amongst the eminent personalities, scam disclosures etc) so as to
make it common to all and enabling them to view it easily by sitting at home.

Thus it has becomes necessary that the Copyright Act also deals with problems of online
copyright infringement and other related aspects. Though no specific reference has been
made with this aspect, but the amended provisions of the Copyright Act tries to deal with
some practical problems and including the inclusion of fair use policy and other aspect of
transient and incidental storage of work or performance or for providing links for such links.

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 What is an Intermediary?

Intermediary has been defined under Section 2(w) of the IT Act,2000 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 services with respect to that
record and includes telecom service providers, network service providers, internet services
providers, web-hosting service providers, search engines, online payment sites, online-
auction sites, online-market places and cybercafs.

Internet intermediaries bring together or facilitate transactions between third parties on the
Internet. They give access to, host, transmit and index content, products and services
originated by third parties on the Internet or provide Internet-based services to third parties.

Who are intermediaries?

Internet access and service providers (ISPs)
Data processing and web hosting providers, including domain name registrars.
Internet search engines and portals.
E-commerce intermediaries, where these platforms do not take title to the goods being
sold.
Internet payment systems.
Participative networking platforms, which include Internet publishing and
broadcasting platforms that do not themselves create or own the content being
published or broadcast.

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 The Information Technology Act, 2000

The IT Act has defined the term intermediary under Section 2(1)(w) of the Act.
Intermediary with respect to any particular electronic message means any person who on
behalf of another person receives, stores or transmits that message or provides any service
with respect to that message.

Liability for internet mediaries, section 79, IT Act

Section 79: Exemption from liability of intermediary in certain cases

(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 hosted 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;
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.

(3) The provisions of sub-section (1) SHALL NOT apply if-

a) The intermediary has conspired or abetted or aided or induced whether by
threats or promise or otherwise in the commission of the unlawful act
b) Upon receiving actual knowledge, or on being notified by the appropriate
Government or its agency that any information, data or communication link

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 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.

The Act clearly provided that to seek protection under section 79 it was mandatory for the
intermediaries to observe due diligence as provided by the Information Technology
(Intermediaries guidelines) Rules, 2011. Thus it is mandatory for the Intermediaries to follow
such due diligence to seek protection/ exemption under the IT ACT, 2000.The exemption
provided under Section 79 read with the Information Technology (Intermediaries guidelines)
Rules, 2011 clearly is similar to the provision of DMCAs (Digital Millennium Copyright
Act) safe harbours for online service provider.

However the Amendment and the understanding of the said Section received a set back by
the Judgement of Honble Delhi High Court in the matter of Super Cassettes Industries Ltd
Vs My Space Inc 1 , which had led to the confusion over the protection given to the
Intermediaries under the IT ACT, 2000. That the Honble Court while giving a Prima Facie
view on the Injunction had come to the conclusion that that the provisions of Section 79 of
The Information Technology Act, 2000 will have no bearing on the liability of infringement
of Copyright because of the proviso provided under Section 81 of the Act. The protection
given to the Intermediaries with respect to copyright and patent infringement cases has been
taken away by considering the provisions of Section 79 of the Act read with Section 81 of the
Act.

Thus intermediary can be sued for online infringement of copyright content despite given an
exemption under Section 79 of The Information Technology Act, 2000. The interpretation of
Section 79 read with Section 81 of the Act has lead to take away the exemption provided
under the Act.

However the proviso provided under Section 52 (c) is again an Act to bring the Indian
Copyright Act in accordance with the International Practise. A proviso has been added to this
clause to provide a similar provision as safe harbour as per international norms to internet

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2011(48)PTC49(Del)
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service providers, as they are merely carriers of information provided by others. This is
generally referred to as notice and take down procedure. If the person responsible for the
storage of the copy has received a written complaint from the owner of copyright in the work,
that the transient or incidental storage is an infringement, such persons responsible for the
storage shall refrain from facilitating such access for a period of twenty-one days or till he
receives an order from the competent court refraining from facilitating access. In case no
such order is received before the expiry of such period of twenty-one days, he may continue
to provide the facility of such access.2

Intermediary Liability and Copyright Infringement

The Copyright Act, 1957

Section 51: Copyright in a work shall be deemed to be infringed

(a) When any person, without a licence granted by the owner of the copyright or the
Registrar of Copyrights under this Act or in contravention of the conditions of a
licence so granted or of any condition imposed by a competent authority under this
Act:
i. Does anything, the exclusive right to do which is by this Act conferred upon the
owner of the copyright, or
ii. permits for profit any place to be used for the communication of the work to the
public where such communication constitutes an infringement of the copyright in
the work, unless he was not aware and had no reasonable ground for believing that
such communication to the public would be an infringement of copyright.

Section 52: Certain Acts not to be infringement of Copyright

(b) The transient or incidental storage of a work or performance purely in the

technical process of electronic transmission or communication to the public;

2
https://iiprd.wordpress.com/2016/01/04/online-copyright-infringement-and-its-liability-upon-intermediary/
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(c) Transient or incidental storage of a work or performance for the purpose of
providing electronic links, access or integration, where such links, access or
integration has not been expressly prohibited by the right holder, unless the person
responsible is aware or has reasonable grounds for believing that such storage is
of an infringing copy.

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 Viacom International Inc. v. YouTube, Inc.
Viacom International, Inc. v. YouTube, Inc., is a U.S. District Court for the Southern
District of New York case in which Viacom sued YouTube, a video-sharing site owned
by Google, alleging that YouTube had engaged in "brazen" and "massive" copyright
infringement by allowing users to upload and view hundreds of thousands of videos owned
by Viacom without permission. A motion for summary judgment seeking dismissal was filed
by Google and was granted in 2010 on the grounds that the Digital Millennium Copyright
Act's "safe harbor" provisions shielded Google from Viacoms copyright infringement
claims. In 2012, on appeal to the United States Court of Appeals for the Second Circuit, it
was overturned in part. On April 18, 2013, District Judge Stanton again granted summary
judgment in favor of defendant YouTube. An appeal was begun, but the parties settled in
March 2014.

Background:

On March 13, 2007, Viacom filed a US $1

billion lawsuit againstlawsuit against Google and YouTube alleging that the site had engaged
in "brazen" copyright infringement by allowing users to upload and view copyrighted
material owned by Viacom. The complaint stated that over 150,000 unauthorized clips of
Viacom's programming, such as SpongeBob SquarePants and The Daily Show, had been
made available on YouTube, and that these clips had collectively been viewed more than 1.5
billion times.

Viacom claimed that YouTube had infringed on its copyrights by performing, displaying, and
reproducing Viacom's copyrighted works. Furthermore, the complaint contended that the
defendants "engage in, promote and induce" the infringement, and that they had deliberately
built up a library of infringing works in order to increase the site's traffic (and advertising
revenue). In total, Viacom claimed three counts of direct infringement, and three counts
of indirect infringement, specifically inducement, contributory infringement and vicarious
infringement.

Viacom did not seek damages for any actions after Google put its Content ID filtering system
in place in early 2008. The lawsuit was later merged with similar complaints being pursued
by the English Premier League and other copyright holders.
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Ruling:
The District Court held that Youtube qualified for safe harbour provisions under the
DMCA. The Court laid down the Red Flag test consisting of a subjective and objective
component, to determine whether Youtube had actual knowledge of infringing content. It
held that actual knowledge involved knowledge of specific and identifiable infringement of
particular items and not a general awareness or knowledge of prevalence of such activity in
general. It also observed that Youtube had complied with the notice-and-takedown procedure
under the DMCA and hence could avail of the immunity.

Primary liability for direct infringement:

One must keep in mind that it is possible to hold an intermediary liable even when there is no
knowledge attributable to it. An intermediary may also be held liable for direct infringement
where they engage in infringing activity themselves. Primary liability flows from the
principle of strict liability, for example where an infringement of the exclusive reproduction
right of the copyright owner, gives rise to liability irrespective of whether the alleged
infringer had knowledge of the breach or not. This is particularly relevant for an intermediary
since transient copying, which is generally an automated process may fall within the net of
reproduction, and the defense of lack of knowledge would fall through completely. The
other possibility is that caching activities such as duplicating certain images, videos, links
or entire web pages on its servers, in order to provide quicker access to such information may
also fall within the ambit of cases where there has been no communication to the public, but
the reproduction right of the owner has been encroached upon.

Secondary liability:
Secondary liability is generally found in S.51(a)(ii) and S.63 of the Copyright Act. S.51(a)(ii)
uses the expression reasonable ground for believing and being aware. S.63 of the Act
uses the phrase knowingly infringes or abets the infringement of. At the same time, it is
important to look at the phraseology in S.79(3) of the IT Act, which uses the expression
actual knowledge. S.79(3) carves out exceptions to S.79(1), essentially outlining situations
in which the safe harbour provided for in S.79 will not be available to the intermediary.

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It is interesting to see whether it is possible to equate actual knowledge under S.79(3) with
being aware and having reasonable ground for believing. In that case, establishing liability
under the Copyright Act by showing that the intermediary had reasonable grounds for
believing or was aware would have the effect of making out the exception to S.79(1). In
that case, since the S.79(3) exception is demonstrated, it is irrelevant whether S. 81 can
prevail over S.79, that is to say, whether rights conferred under the Copyright Act would be
rendered inapplicable with regard to an intermediary, since the safe harbour exemption would
not be available to the intermediary in any case, in view of S.79(3).

Defence under Copyright Act and proposed amendment:

By reading S.81 of the IT Act to override S.79, we must also recognise that this provides an
intermediary the right to take any defence available to it under the Copyright Act (The
section states: 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
which is equally applicable to an intermediary). This is of significance since the proposed
amendments to the Copyright Act include an addition to S.52(1) acts not to be
infringement of copyright with the following wording:

(i) the transient and incidental storage of a work or performance purely in the technical
process of electronic transmission or communication to the public.

(ii) such transient and incidental storage for the purpose of providing electronic links, access
or integration, where such links, access or integration has not been expressly prohibited by
the right holder, unless the person responsible is aware or has reasonable grounds for
believing that such storage is of an infringing copy; Provided that if the person responsible
has prevented the storage of a copy on a complaint from any person, he may require such
person to produce an order from the competent court for the continued prevention of such
storage.
The DMCA provides four well-defined safe harbours, two of which are similar in form to the
above provision. S.512(b) for temporary storage or system caching and S.512(c) for
permanent storage under the control of users. It is clear then that an intermediary taking a

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defence of lack of knowledge will succeed subject to the qualifications provided for in the
Act.

Applicability in India:
In this section, the principles laid down in Viacom v. YouTube will be examined in light of
provisions in the IT Act and Copyright Act, to understand how the jurisprudence around
intermediary liability in India could develop in the future.3

Due Diligence Requirements-

These are conditions that must be satisfied by an intermediary in order to qualify for safe
harbour protections. The due diligence requirements for intermediaries in India are contained
in Section 79(2) of the IT Act, read with the Intermediary (Due Diligence) Guidelines,
2011. It is important to note the conjunctive or that separates Section 79(2)(a) and (b).
Accordingly, an intermediary will have to demonstrate that it has complied with the due
diligence requirements and therefore qualifies for the immunity. Interestingly, in the case
of Avnish Bajaj v. State of Delhi it was held that Baazee had failed to exercise due diligence
since its filters were faulty and allowed pornographic content to pass through, and was
therefore held prima facie liable.

Use of Filters-
The need to install efficient filters, as observed in Avnish Bajaj is troubling for a few reasons.
The court stated that:
owners or operators of websites that offer space for listings might have to employ content
filters if they want to prove that they did not knowingly permit the use of their website for sale
of pornographic material

Perhaps the Delhi High court intended to impose this condition specifically in relation to
obscene or pornographic content, but there is nothing to suggest that the same standard will
not be applied to copyright claims as well. Besides, with little else by way of judicial
guidance on the standard of diligence required to be exercised, it is reasonable to assume that
intermediaries may be required to install filters to monitor copyright violations. This is

3
http://techlawtopia.com/how-viacom-v-youtube-can-be-applied-to-indias-intermediary-liability-regime/
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particularly worrisome because even the DMCA does not mandate the use of
filters. Moreover, even if the use of filters is made mandatory, the bigger issue is that of its
effectiveness, with many experts opining that word-based filters are pointless since simply
rephrasing the words could circumvent such filters.

Content Removal System-

Under Section 512(c)(3) the DMCA, the burden of preparing a content removal request (or
takedown notice) is placed on the copyright owner. At present, the IT Act is silent on the
procedure to send content removal requests and the takedown system, so it is unclear what
details must be provided by a copyright owner to an Indian intermediary. On the other hand,
the DMCA places extensive obligations on the copyright owner, at the time of requesting
removal of content, including the need to identify the allegedly infringing content. In the case
of a search engine the owner must specifically identify the links to the alleged infringing
materials.

Another important issue in this regard is the deadline for removal of content. Both the DMCA
and the IT Act use the word expeditiously to characterise the period within which an
intermediary must remove content. In Viacom, it was observed that YouTube removed
virtually all allegedly unlawful content by the next business day, despite the fact that Viacom
had over a period of months accumulated some 100,000 videos and then sent one mass take-
down notice. The District Court in Viacom found YouTubes efforts to be satisfactory. But
in India, courts appear to be more demanding. In Avnish Bajaj, the court held that removal by
the next business day was unsatisfactory (the unlawful video was uploaded on a Saturday and
it was taken down on Monday).

Admittedly, sexually explicit content requires expeditious treatment compared to that which
infringes copyright, but the point remains that the standard cannot be different based on the
nature of the complaint. It must also account for the practicalities involved in the removal of
content. While a multinational corporation like Google can afford to deploy resources
towards such mundane tasks, a smaller company may not be able to afford such luxuries,
thereby exposing it to lawsuits.

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Red Flag Test-

At the crux of this decision however, is the standard for knowledge of infringement that
would disqualify an intermediary from claiming safe harbour protections. In this regard,
another observation of the Delhi High Court in Avnish Bajaj is relevant:

By not having appropriate filters that could have detected the words in the listing, or the
pornographic content [that] was being offered for sale, the website ran a risk of having
imputed to it the knowledge that such an object was in fact obscene.

The court in Avnish Bajaj appears to impute knowledge to Bazee.com for simply deciding
not employing filters to actively monitor content on the website. As explained above, the use
of filters is not mandatory under any statute, especially since the burden of alleging
infringement is placed on the copyright owner and not the intermediary. Therefore, it seems
illogical to declare that an intermediary had knowledge of infringement merely because it did
not utilise filters on its website. On the other hand, if it were to be argued that filters are
essential to keep website free of obscene content, then perhaps the law should make this
explicit.

What is more useful however is the District Courts formulation of the Red Flag Test
in Viacom. The test consists of a subjective and objective component i.e. determining

whether the online service provider in question was aware that infringement would occur on
its website/platform; and an objective assessment of whether the infringing
activity should have been apparent to a service provider operating under similar
circumstances. The court posited that for an intermediary to be liable, it must have knowledge
of specific and identifiable infringements of particular individual items and that mere
knowledge of prevalence of such activity in general is not enough. Further, the proclivity of
users to post infringing materials on the website is not sufficient to deprive the intermediary
of immunity under the DMCA. The decision in Viacom appears to be consistent with the
language in used in Section 79(3) of the IT Act, specifically the use of the phrase actual
knowledge as opposed to general knowledge. To that extent, the observations
in Viacom should certainly benefit courts in evolving suitable doctrines on the law
concerning intermediary liability for copyright infringement in India.
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Recently, on of the largest record companies in India, Super Cassettes Industries Limited
(or T-Series) took MySpace to court under very similar circumstances. Given this lawsuit,
the interpretive difficulties in the IT Act and the other issues raised here will certainly be
addressed in court, and one hopes that it will result in suitable precedent on the liability of
internet companies for hosting and publishing infringing content online.

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 Conclusion
It is entirely possible that the Indian legislators did not intend to replicate the DMCA safe
harbour provisions. Based on this interpretation of the IT Act, it does appear that way.
Support for such an assertion can also be found in the Standing Committee Report on the IT
Amendment Act, which indicates that S.79 was intended to grant intermediaries immunity
from criminal actions only, and as such does not function in a like manner to the DMCA,
which extends immunity to all claims of copyright infringement as well.

The basic point remains that irrespective of whether a defence exists under the Copyright Act
or not, an intermediary should be allowed to demand immunity from claims of copyright
infringement. Interpreting the Act in such a manner negates the very purpose of a safe
harbour provision, which S.79 ostensibly aspires to be.

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 Webliography

https://iiprd.wordpress.com

https://spicyip.com

https://indialawnews.org

https://www.casebriefs.com

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