INTELLECTUAL

PROPERTY RIGHTS

Topic;- CONCEPT OF INTERMEDIARY

LIABILITY IN INTELLECTUAL
PROPERTY INFRINGEMENT; INDIA

SIDHARTH A.J
18BLA1093
CONCEPT OF INTERMEDIARY LIABILITY IN
INTELLECTUAL PROPERTY INFRINGEMENT; INDIA
By sidharth A.J
ABSTRACT
Internet intermediary liability refers to the legal responsibility of intermediaries for unlawful
activities carried out by the users through their services . The present article examines internet
intermediary liability with special reference to the infringement of intellectual property rights in
the context of the Indian law. the paper is divided into three parts. The first part analyses the
intermediary liability in U.S the second part deal with the intermediary liability framework in
India with landmark judgment and legislations. Finally, the paper ends with a comparative
analysis

INTRODUCTION
Today, the Internet has become what may be called a “platform economy”1.Intermediaries today,
are an essential element of the Internet economy. Intermediary liability is arguably the single
largest legal structure that may affect how our markets react to these technological changes.
Internet intermediary liability refers to the legal responsibility of intermediaries for unlawful
activities carried out by the users through their services2.intermediaries here refers to network
operators, network infrastructure providers, internet access providers, internet service providers,
social networks, search engines and aggregators, internet cafes etc, The e-commerce sites
provide the users an online platform for buying/selling of products/services. In the initial days,
the social networks and other internet platforms were believed to promote free speech as the
users were to voice their opinions and comments on various social and political issues without an
editorial process. These online platforms were supposed to be regulating themselves to prevent
unlawful content appearing in them. Therefore, the intermediaries were given 'safe-harbour'
against third party content

The Intermediary Guidelines govern intermediaries, such as internet service providers, search
engines, and hosts, which play an indispensable role in ensuring free flow of communication and
information on the internet. A comprehensive study of intermediary liability requires one to
delve into a multitude of issues., three essential components that need to be analysed in order to
evaluate the effectiveness of safe harbours are – (i) scope in terms of kinds of activities and
intermediaries covered; (ii) fault or culpability standard, and (iii) notice and takedown
mechanism. This paper analyses each of these components separately. By delving into these
three components, we will be able to inquire if the Indian copyright safe harbor framework
provides adequate protection, when compared with the American safe harbour provision.

1
Yochai Benkler, THE WEALTH OF NETWORKS, 127 (2006).
2
https://techcrunch.com/2018/10/03/mit-google-cisco-and-uspto-create-prior-art-archive-for-better-patents/
retrieved on 20/4/21
Further, the paper also conducts a comparative analysis between copyright safe harbour and
general safe harbour contained in Section 79 of the Indian Information Technology Act, 2000

CONCEPT
The IT Act defines "intermediary" under Section 2 (w)as any person "who on behalf of another
person receive or transmits that record or provides any service with respect to that record and
includes telecom service provider, as network service providers, internet service providers, web
hosting service providers, search engines, online payment, online-auction sites, online
marketplaces, and cyber cafes3.

Thus, intermediary liability, is similar to the principle of vicarious liability were the
master/employer will be held accountable for the actions of employee, in the case of
intermediary liability this means that the service providers will be held accountable for any
illegal act of the user on their platform.

INTERMEDIATERY LIABILITY IN US
Much before the copyright safe harbor provision was legislated in the United States, the courts
were confronted with the question of secondary liability. The U.S. copyright statute did not
envisage secondary liability. However, the Supreme Court of the U.S. in Sony Corp.4 held that
even if the statute does not provide for secondary liability, the concept of secondary liability is
well-established in common law. As such, it should apply to copyright infringement as well,
especially since the statute does not specifically exclude it. This justification for secondary
infringement was vindicated in Grokster.The court in Grokster further expanded the concept of
secondary liability, holding that the concept of secondary liability encapsulates three common
law doctrines namely - liability for contributory infringement, vicarious liability, and liability for
induced infringement. Theseparate inducement doctrine was adopted by the Court as a result of
shortcomings of the other two doctrines of secondary infringement.

Another important doctrine of secondary liability is vicarious liability. It “allows imposition of

liability when the defendant profits directly from the infringement and has a right and ability to
supervise the direct infringer, even if the defendant initially lacks knowledge of the
infringement”5 (emphasis added). While vicarious liability relies on ‘profit’ and ‘ability to
control’, contributory liability relies on material contribution. 6‘Material contribution’ envisages
greater involvement of the intermediary than ‘ability to control’. Due to greater involvement
envisaged by contributory liability, it requires a higher knowledge requirement i.e. actual
knowledge, as opposed to constructive knowledge, which vicarious liability is based on.

3
IT Act 2000, as amended by the Information Technology (Amendment) Act 2008, Section 2(w).
4
Sony Corp. v. Universal City Studios, 464 U.S. 417 (1984)
5
Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913, 925 (2005).
6
Stefano Barazza, Secondary Liability for IP Infringement: Converging Patterns and Approaches In Case Law,
JOURNAL OF INTELLECTUAL PROPERTY LAW & PRACTICE, 882 (2012).
The inducement rule does not find its basis on mere knowledge of either potential or actual
infringement. It is premised on purposeful, culpable expression and conduct, and strikes a proper
balance between legitimate commerce and innovation having a lawful promise. 20 The
understanding of whether the expression is purposefully culpable is derived from several factors
including the message communicated to the consumers .These U.S. doctrines of secondary
liability not only anchored the common law safe harbours before statutory safe harbours were
legislated, but also had profound impact on the subsequent evolution of safe harbours.

INTERMEDIARY LIABILITY FRAMEWORK IN INDIA

The Indian Copyright Act of 1957 was amended in the year 2012 whereby the section 52
described a number of instances where exemption could be granted for copyright infringement.
As per the section 52(1) (c), the acts of intermediaries are exempted from copyright infringement
unless they are aware or have reasonable grounds for believing that such storage is of an
infringing copy10 . The intermediaries are exempted from liability under the section 79 of the
Indian Information Technology Act if the offence or contravention was committed without his
knowledge or that he had exercised all due diligence to prevent the commission of such offence.
Therefore, the intermediary is protected from copyright infringement if they were not aware that
the hosted content was copied materials

Section 79 of the IT Act, as amended in 2008, provides safe harbour to online

intermediaries,7for all kinds of liabilities. The academic debate on whether there should be a
common safe harbour provision for all kinds of wrongs, is in full swing with compelling
arguments on both sides. In its enterprise of making a standard safe harbour, some commentators
also accused the amended provision of being a one-size-fits-all approach that, unfortunately,
neither fits all kinds of intermediaries, nor fits all kinds of wrongs.8Section 81 of the IT Act,
which conferred an overriding status to the IT Act over other laws, further supported the
standardization

The concerns of these critics were ameliorated, at least in small part, when the single judge
bench of the Delhi High Court in its decision in the Myspace (hereinafter “Myspace I”) case held
that Section 79 of the IT Act does not apply to copyright infringement.27 Section 81 consists of a
non-obstante clause, giving the IT Act an overriding effect over other laws. However, its proviso
excludes the Copyright Act and the Patent Act from the ambit of such an overriding effect. It is

7
Though the IT Act consisted of safe harbour even prior to amendment introduced in 2008, the safe harbour was
much weaker. It applied only to ‘network service providers’ as opposed to the existing provision which applies to all
intermediaries.
8
See Pritika Rai Advani, Intermediary Liability in India, XLVIII (50) ECONOMIC AND POLITICAL WEEKLY 120,
122 (2013).
unfortunate, however, that there is no uniformity in the decisions of the High Courts about the
exclusion of Section 79 from copyright cases.

Further the Information Technology (intermediaries guidelines) Rules, 2011, specified a set of
conditions to be fulfilled by the intermediaries in order to obtain safe-harbour protection. These
include (1) publishing of privacy policies and user agreements (2) specification of prohibited
content including the infringing intellectual property rights (3) a stringent notice and takedown
process (4) support to law enforcement agencies (5) reporting of cyber security incidents to the
authorities and (6) appointment and notification of a grievance officer

MY SPACE INC. VS SUPER CASSETTES INDUSTRIES LTD.

This issue was recently raised in Super Cassettes industries £td vs Myspace Inc' (“Myspace
case”) where T-Series held a copyright infringement suit against Myspace.com in relation to a
large repertoire of sound recordings. The Delhi High Court held Myspace liable under Section
si(a)(ii) of the Copyright Act, which deems infringement when any person “permits for profit
any pierce to be used for the communication of the work to the public where such
communication constitutes an infringement of the copyright in the work...” The court ruled that
since “any place” includes websites and the internet, and is not restricted to physical locations,
and since the revenue derived by Myspace from advertisements on the website constitutes profit
Myspace was liable under Section s (il)(ii). The most significant aspect of the judgment was that
it found adjudicatory function by judging the content they would be hosting, and the availability
of content on the internet will be adversely affected in absence of appropriate measures to safe-
guard intermediaries.

The judgment passed on December 23, 2016, by a division bench of the Court reversed an earlier
2012 of a single bench of the Court that had held MySpace was liable for the infringement
despite it having no specific knowledge of the infringement. In the 2016 judgment, the Court
held that in case of internet intermediaries, Section 51(a)(ii) of the Copyright Act, 1957 stipulates
actual knowledge of the infringement and not general awareness. Thus, this judgment
strengthened the safe harbour immunity provided to intermediaries in India under Section 79 of
the Information Technology Act, 2000 and relieved Myspace from pre-screening user-generated
content.

EXTENT OF INTERMEDIARY LIABILITY

There are different viewpoints worldwide on the extent to which an intermediary should be held
responsible for the content generated by the user. In general, these could be summarized in the
form of three models namely - strict liability model, safe harbour model and broad immunity
model.

 In the strict liability model, the intermediaries are held unconditionally liable for
usergenerated content and hence they should monitor the content and ensure its
compliance with the law.
 In the safe-harbour model, the intermediaries are granted conditional immunity provided
they fulfill some requirements as specified by the law. This model includes "notice-
andtakedown" processes, which are procedures regarding the receipt and processing of
content takedown requests to be followed by the intermediaries. The intermediaries may
be instructed to have content filters in place so as to avoid hosting or transmission of
unlawful content. The safe-harbour model of intermediary regulation is followed by the
EU e-commerce directive, US Digital Millennium Copyright Act and the Indian
Information Technology Act .
 In the broad immunity model, the intermediaries are given broad, sometimes conditional,
immunity from liability for user-generated content. In this model, the intermediaries are
not required to monitor the user generated data for unlawful content.

However, irrespective of the liability model followed, the intermediaries are obliged to take
down unlawful content when they are instructed to do so through legal procedures9 .

CONCLUSION
The Indian position on intermediary liability lacks the necessary nuance. Despite a marked
improvement in the IT Act expanding the safe harbour protection enjoyed by intermediaries, the
onerous obligations imposed on intermediaries by delegated legislation and judicial decisions
severely threaten the enjoyment of the right to freedom of speech and expression on the internet.
There is a need to clarify certain principles without which the immunity afforded to
intermediaries stands on slippery ground. An attempt should also be made to borrow useful legal
principles from other jurisdictions, such as the counter-notification procedure, and to develop a
more comprehensive and constitutionally consistent law governing intermediary liability. The
rules issued under the IT Act have negated the progressive steps taken by the legislation. It is
imperative to ensure that they do not confer arbitrary power on the state as well as the
intermediary itself.

Judicial decisions must also guard against increasing the burden on intermediaries, as obligations
to monitor content are not only infeasible, but may further lead to intermediaries resorting to
overbroad filtering which will severely chill speech. Thus, the present law in India must be

9
. https://neilpatel.com/blog/google-index/ retrieved on 21/4/21
carefully developed by both the legislature and judiciary to create a clear, comprehensive and
fair framework with regard to intermediary liability.