Protection of

Consumer
Interest in
E-Commerce
Remoteness of Damages in Contract

• The plaintiff was a miller. His mill had stopped because of a breakage of
the mill’s crankshaft. The plaintiff had contracted with the defendant, a
common carrier, to take his broken crankshaft to a manufacturer to be
used as a template to cast a new crankshaft. The defendant had
delayed in shipping the crankshaft. As a result the plaintiff had lost
profits caused by the delay in having his mill made operational. The
defendant argued that the plaintiff’s losses were too remote in that at the
time of entering the contract the lost profits could not have been
contemplated by the parties.
Hadley v. Baxendale (1854)

• A defendant will be liable for damages that may reasonably be

supposed to have been in the contemplation of the parties arising in the
normal course of events.
• Where special circumstances are communicated, a defendant will be
liable for damages that may have been reasonably contemplated by the
parties acquainted with that special knowledge.
• X a user of an online service ONS clicked on “I agree” twice before
running the application on his system. Eventually, he is charged a hefty
amount from his credit card without getting any prior information on it. X
sues ONS for fraud. Is the claim legally sustainable?
Rudder vs. Microsoft (1999)

• Rudder was the user of Microsoft internet services

• Clicked on “I Agree” before running the application
• The legality of click-wrap agreement
• The validity of forum non conveniens
* Caspi vs. MSN (1999)
- Fine prints in contracts
*Tata Chemicals vs. Skypack Couriers (2001)
 • Transparency- proactive stakeholders; consumer
vulnerability
• Fair practices- business, advertising and marketing
• Accurate, clear and accessible online disclosures-
OECD limitations such as language, technological barriers
must be accounted for
Recommendations
• Sufficient information about a business that is
on Consumer online
Protection in - Location
E-Commerce
- Identification
- Prompt and easy communication with consumer
- Dispute resolution
• Sufficient information about the nature of goods or services being provided by the business
- Contractual requirements
- Key limitations
- Health, safety and security concerns
- Age related restrictions, etc.
• Transparency of information pertaining to transactions and associated costs
- Payment methods
- Privacy policy
- Rights of clients
- Dispute resolution, etc.
• Easy to use payment methods:
- Effective security measures
- Minimum levels of consumer protection vis-à-vis e-payments
- Minimum liability of consumer on case of default of payment
- SS. 5 and 7 of Payment Settlement System Act 2007- RBI guidelines;
applicable to e-transactions
 • Advertising Code Committee of the
Netherlands
• FTC of the USA
Bad Practices • Consumer Protection Act 2019
in Advertising • Advertising Standards Council of India (ASCI)
Examples of laws/regulations on protection of a
consumer from misleading advertisements
• Stakeholders must make effort to educate and aware the consumers
- Rights and duties
- Digital competence
• Global communication- joint ventures, co-operation between the
governments and the stakeholders
 • Data of e-bay users used by ReverseAuction to send
them unsolicited emails with the subject line- ADV.
[e-bay User ID] will EXPIRE soon which was not true
• Violation of e-bay’s user agreement and privacy policy
which prohibited anyone from using the user data for
unsolicited emails
FTC vs.
We know how important your eBay(R) user ID is to you! You
ReverseAuction.com have spent a lot of time and effort developing a reputation in
the on-line auction trading community. That is why
ReverseAuction.com has placed your eBay user ID
"[recipient's eBay user ID]" on reserve in our system for you
and only you for a short period of time. As long as you visit us
now and claim your ID, no one else can get it! Then, when
you decide to trade on our site, you will be able to use your
carefully built reputation by trading as "[recipient's eBay user
ID].
• Section 5(a) of the FTC Act prohibits unfair or deceptive acts or practices in or affecting commerce.
• Violation of consumer privacy
• The Court ordered ReverseAuction:
- To delete the personal information of consumers who received the spam but declined to register with
ReverseAuction;
- To give those who did register, as a result of the spam, notice of the FTC charges and an opportunity to
cancel their registration and have their personal information deleted from ReverseAuction's database;
- To inform the consumers that their data was collected from e-bay database and it was not consented to
by e-bay
 • Online advertising company which collects its user data
to analyse user patters and increase its consumer base
through “cookies”
• Plaintiffs, in a class action, alleged that these “cookies”
had unauthorized access to more private information of
the DoubleClick affiliated website users
• Three counts were alleged: 1. Violation of S. 2701 of the
Stored Communication Act; 2. Wiretrap Act S. 2510; 3.
In Re Double Computer Fraud and Abuse Act S. 1030
- Prohibits intentional unauthorized access of electronic
Click Privacy communication while it is in electronic storage
- Exception: consent of a website and its user, to intercept
Litigation their communication for better delivery of advertisements
- Restrains the intentional interception of any electronic
communication or the procurement of any other person to
do so.
- Proscribes the intentional and unauthorized causing of
damage to a protected computer resulting from knowingly
causing the transmission of a program, information, code,
or command. (respectively)
• Settlement
- Better explained privacy policy
- User awareness campaign
- Imparting options which give a user the choice to install or decline the
installation of invasive computer programs
 • LIC policy meant only for government and
semi-government employees, reputed
commercial firms
LIC vs. • Violation of constitutional rights and objectives
Consumer • LIC- agent of state- must realise the objective of
Education social welfare- subject to judicial review
• Reasonable classification based on
and Research employment?
Centre • Conformity to the COI, FR, DPSP and the
Preamble
 Consumer Protection
and E-commerce, India

Laws, rules and directives.

 • Section 2(16) defines e-commerce
• Section 2(7) explanation (b)- consumer includes
Consumer anyone who engages in online transactions
through electronic means or
Protection telemarketing…goods and services…online
Act 2019 market place…auction sites
• Section 94 provides the central government to
take measures to prevent UTP in e-commerce
Consumer
Protection and 1. All models of e-commerce
E-commerce 2. All goods and services bought or sold online

Rules 2020 3. All e-commerce retailers

4. All UTP across all the models of e-commerce

Applicability:
Rule 2
 • Every e-commerce entity must be incorporated under the Companies
Act, 1956 or the Companies Act, 2013 or a foreign company
covered under clause (42) of section 2 of the Companies Act, 2013
or an office, branch or agency outside India owned or controlled by
a person resident in India as provided in sub-clause (iii) of clause (v)
Duties of of section 2 of the Foreign Exchange Management Act, 1999 and the
entities are required to appoint a nodal person of contact or an
alternate senior designated functionary who is resident in India, to
e-commerce ensure compliance with the provisions of the act or the rules made
there under. e-commerce entity shall not engage itself in any unfair
trade or malicious practice, whether in the course of business on its
entities: platform or otherwise.
• They must establish adequate grievance redressal mechanisms and a
Rule 4 grievance officer shall be appointed who shall ensure
acknowledgment of the consumer complaint within 48 hours and the
company shall redress the complaint within one month from the date
of receipt of the complaint.
• It shall provide the following information in a clear manner on its
platform, which can be easily visible by the consumers: legal name
of the e-commerce entity; principal geographic address of its
headquarters and all branches; name and details of its website; and
contact details like e-mail address, fax, landline and mobile numbers
of customer care as well as of grievance officer.
• It cannot ask for cancellation charges on consumers cancelling after confirming purchase unless similar charges
are also borne by the e- commerce entity and it has also been prohibited from manipulating the price on its
platform and from discriminating the consumers of the same class.
• If any e-commerce entity offers imported goods or services for sale, it has to mention the name and details of any
importer from whom it has purchased such goods or services, or who may be a seller on its platform.
• Every e-commerce entity must endeavour to become a partner in the convergence process of the National
Consumer Helpline of the Central Government.
• Every e-commerce entity has to make their payment process effective towards accepting refund requests of the
consumers as prescribed by the Reserve Bank of India or any other competent authority under any law for the
time being in force, within a reasonable period of time, or as prescribed under applicable laws.
• All e-commerce entities have to record the consent of a consumer for the purchase of any good or service offered
on its platform where such consent is expressed through an explicit and affirmative action, and not otherwise.
 • Sellers have the duty to maintain fair trade practice and not to get
involved in any kind of unfair trade practice which includes
misrepresenting himself as a consumer and posting fake reviews
about a product.
• They cannot deny their duty to take goods back while offering
goods through market place entity and cannot withdraw or
Duties of discontinue services purchased or agreed to be purchased.
• The duty to reimburse the consideration paid by the consumers is
sellers in also cast upon the seller, if the goods or services are deficient or
defective or of different quality as compared to what was shown in
images or are delivered late from the scheduled time. However, the
marketplace: seller is not responsible if the late delivery is due to unavoidable
causes.
Rule 6 • Seller should make a written contract with the concerned
marketplace e-commerce entity to undertake or solicit such sale or
offer.
• It is mandatory for a seller to appoint a grievance officer for
consumer grievance redressal and to make sure that the said officer
acknowledges the receipt of any consumer complaint within
forty-eight hours and redresses the complaint within one month
from the date of receipt of the complaint
• Seller is required to ensure that the advertisement about characteristics, access and usage conditions of the goods and
services are correct and consistent with the actual product..
• Seller is also under an obligation to maintain transparency with the respective e-commerce entity by providing it its
legal name, principal geographic address of its headquarters and all branches, the name and details of its website, its
e-mail address, customer care contact details such as fax, landline, and mobile numbers and where applicable along
with its GSTIN and PAN details.
• Seller is prohibited for manipulating prices as he is now liable to provide the e-commerce entity on its platform or
website: (a) all contractual information required to be disclosed by law; (b) total price in a single figure of any good or
service, along with the breakup price for the good or service, showing all the compulsory and voluntary charges such as
delivery charges, postage and handling charges, conveyance charges and the applicable tax, as applicable.
• Seller is required to disclose all the relevant information which is required by the consumer to decide on purchasing a
product like the country of origin, the name and contact numbers, and designation of the grievance officer for consumer
grievance redressal or for reporting any other matter, name and details of importer, and guarantees related to the
authenticity or genuineness of the imported products.
 • Every marketplace e-commerce entity is liable to make sure that
sellers are selling accurate products on their platforms. They must
ensure that appearance and feature, quality, colour of product
shown are consistent with the original product.
Liability of • Every marketplace e-commerce entity has a duty to provide
relevant information on its platform where a consumer can easily
e-commerce see it. Information includes details about the sellers offering goods
and services, including the name of their business, whether
entities: registered or not, their geographic address, customer care number,
any rating or other aggregated feedback about such seller. Also, the

Rule 5 entity is responsible to provide the consumer with any information

that can be useful for him to contact the seller, in case any written
request comes from the consumer.
• A ticket number has to be allotted to each complainant so that
he/she can track the status of the complaint.
• Any relevant information relating to return, refund, exchange, warranty and guarantee, delivery
and shipment, modes of payment, and grievance redressal mechanism, and any other similar
information which will be useful for consumers to make a final decision to purchase a product
shall be given to him.
• Payment options must be made clear to the consumers and all the charges and fees, including the
procedure of cancelling payment must be transparent to the consumer. The terms and conditions
mentioned on the website must include information to determine the relationship of the entity with
the seller.
• If any e-commerce entity vouches for the authenticity of any particular product or service of seller
either explicitly or implicitly, then it shall be liable with respect to that particular product.
Exemption
from liability
 E-Commerce and
Intellectual Property Rights
IPR and Internet

• Reasons facilitating infringement

Anonymity

Quick and easy transfer of data

Borderless
IPR

COPYRIGHT TRADE-MARK PATENTS INDUSTRIAL

DESIGNS

TRADE
SECRETS
 Trade Secrets

• According to Article 39.2 of the Trade-related Aspects of Intellectual

Property Rights (TRIPS) there are three criteria that have to be taken into
consideration;
(a) The information is not, as a body or in the precise configuration and
assembly of its components, generally known among or readily
accessible to persons that normally deal with the kind of information in
question;
(b) The information has actual or potential commercial value because it is
secret;
(c) The person lawfully in control of the information has taken reasonable
steps under the circumstances to keep it a secret.
Connection with national Security- Economic
Espionage Act, 1996

• US vs Liew- Trade secret of the whitening of the cream

inside Oreo
• US vs Hanjuan Jin- Trade Secrets of Motorola

Exemptions- independent invention, accidental

disclosure, reverse engineering (Uniform Trade
Secrets Act 1979)
Copyright

Works covered:
• Literary
• Artistic
• Cinematographic work
• Computer programs- literary
• Web sites- unique design then artistic, literary, trade
dress
• Musical work
• Motion pictures
• Sound Recordings
Rights of the author

• Legal Rights
- Prevent a party from reproducing, modifying or distributing without
consent of the author
• Moral Rights
- Attribution of authorship- citation
- Restrain and claim damages if modification of the work affects the
authors reputation
 Enforcement of Legal protection

• Copyright (Amendment) Act 2012

i. Grant of Compulsory Licenses
ii. Grant of Statutory Licenses
iii. Administration of Copyright Societies
iv. Fair Use Provisions
v. Access to copyrighted works by the Disabled
vi. Relinquishment of copyright

• K C Bokadia vs Dinesh Chandra (1999) MP

Registration not mandatory for protection under copyright Act

• Dhiraj Dharamdas v M/S Sonal Infosystems Pvt. Ltd. 2012 (Bom)

Registration under Sec 44 mandatory for remedy for infringement under Sec 51 of Copyright Act,
1957
 Need for Uniform International Law

• Regulations important- to encourage creativity

• IPR are territorial- different countries have different approaches for registration
and protection of IPR
• Bern Convention is widely accepted but interpreted inconsistently.
- Principles involved:
i. National treatment
ii. Automatic protection
iii. Independent protection
- Issues with respect to lesser developed economies- A. 9(2)- Three-step test
i. limited to special cases
ii. do not conflict with normal exploitation of the work
iii. do not unreasonably prejudice the legitimate interests of the author.
 Issues in digital copyright

Three main categories

I. Works- Computer Programs, database, multimedia

II. Reproduction, distribution and communication to the public

III. Management and Administration of Copyrights

Copyright protection to computer software

• Protection to computer programs-

- Copyright Act, 1957 grants protection to original expression and computer
software is granted protection as a copyright unless it leads to a technical
effect and is not a computer program per se;
- The computer software which has a technical effect is patentable under
India Patent Act, 1970.
• Tata Consultancy Services v. State of Andhra Pradesh
A computer software is intellectual property, whether it is conveyed in
diskettes, floppy, magnetic tapes or CD ROMs, whether canned
(Shrink-wrapped) or uncanned (customized), whether it comes as part of
computer or independently , whether it is branded or unbranded, tangible or
intangible; is a commodity capable of being transmitted, transferred,
delivered, stored , processed , etc. and therefore as a 'good' liable to sale tax.
The court stated that, 'it would become goods provided it has the attributes
thereof having regards to (a) its ability; (b) capable of being bought and sold;
and (c) capable of being transmitted, transferred, delivered, stored and
possessed. If a software whether customized or non-customized satisfies
these attributes, the same would be goods.
 • Sec 2 (ffc)- computer program " means

i. a set of instructions
ii. expressed in words, codes, schemes or
iii. In any other form, including a machine readable medium,
iv. capable of causing a computer
v. to perform a particular task or achieve a particular result

• 2 (ffb)
i. "computer" includes any electronic or similar device having information
processing capabilities
• Section 51 defines infringement of copyright and states that a person infringes
copyright of another if he unauthorizedly commits any act which only the
copyright folder has exclusive rights to do;
• Civil remedies to copyright infringement s are provided in chapter XII
of Copyright Act, 1957 granting injunction and damages for copyright
infringement;
• Criminal liability provisions are provided in chapter XII of Copyright
Act, 1957 wherein abetment of infringement is also unlawful and
punishable with imprisonment of up to three years and a fine up to Rs.
2 Lacs
Copyright of Computer Program

• Sec 14 (b) in the case of a computer program,-

• to do any of the acts specified in clause 14 (a) (exclusive right over a
category of work)
• to sell or give on commercial rental or offer for sale or for
commercial rental any copy of the computer program:
- Provided that such commercial rental does not apply in respect of
computer programs where the program itself is not the essential
object of the rental.
 Exemptions

• Reverse engineering for building another product

Sega Enterprises v Accolade Inc. (1992) 9th Circuit
(1) the purpose and character of the use;
(2) the nature of the copyrighted work;
(3) the amount and substantiality of the portion used in relation to the
copyrighted work as a whole; and
(4) the effect of the use upon the market for the copyrighted work.
• Indian law
- Sections 52(1)(aa) to (ad) of the act lay down the mandated
exceptions with respect to computer programmes or software
- Article 6 of the EU directive on the legal protection of computer
programs (1991), which deals with “decompilation” and limits the
exception only to the “parts of the original program” which are
necessary in order to achieve inter-operability; not applicable in India
Database
• WIPO Copyright Treaty 1996
- A. 5: Collection of independent works, data or other
materials, arranged in a systematic or methodical way and
capable of being individually accessed by electronic or other
means
• Copyrights Act, 1957
- Sec 2(o): database is literary work
- Sec 17 (c): who is the author of database- employer unless
otherwise agreed
• Information Technology Act, 2000
- Sec 2 (1) (k): "computer resource" means computer,
computer system, computer network, data, computer data
base or software
- Sec 2 (1) (o): data―data means a representation of
information, knowledge, facts, concepts or instructions
which are being prepared or have been prepared in a
formalised manner, and is intended to be processed, is
being processed or has been processed in a computer
system or computer network, and may be in any form
(including computer printouts magnetic or optical storage
media, punched cards, punched tapes) or stored internally
in the memory of the computer
 Westlaw, Seller
Jstor, kindle details

Importance
of Database
Registered
Goodwill of
user-
the website
information
Originality in Database

V Govindan vs E M Gopalakrishna ( AIR 1955 Mad 319):

“common source” places the onus on the defendant to
prove that they actually went to the common source
from where they borrowed, employing their own skill,
labour and brains and that they did not merely copy.

Burlington Homeshopping vs Rajnish Chibber (1995) DEL:

Compilation is also literary work as considerable amount
of time, money and effort is spent on putting together a
compilation
Eastern Book Company vs
D. B. Modak 2004

• Held:
1. Unless the work has been prepared by own labour,
skill and there is originality and creativity in its
generation it will not have copyright

2. Compilation may not have anything original in it but

it is the whole work that should be original

3. Final work must be distinguishable from previous

works
 • Section 51 of the Copyright Act 1957-
Infringement
• Section 52- Exceptions

- Direct Infringement- Infringement

consists of the unauthorized exercise
of one of the exclusive rights of the
copyright holder ;
Copyright
Infringemen - Contributory Infringement-
participating in an activity that
t constitutes a copyright breach with
the knowledge of such breach

- Vicarious infringement- knowledge;

control; financial benefits
Linking
Intellectual Reserve, Inc. v. Utah Lighthouse Ministry, Inc, 75 F. Supp. 2d 1290
(D. Utah 1999)
• A website posted infringing copies of a church's copyrighted handbook at its
site. The website was ordered to remove the handbook but subsequently
provided links to other sites that contained infringing copies of the
handbook. These links were different from traditional hyperlinks, because
the website knew and encouraged the use of the links to obtain
unauthorized copies. The linking activity constituted contributory copyright
infringement
• It is not a violation of copyright law to create a hyperlink, but it is a violation
of the law to create a link that contributes to unauthorized copying of a
copyrighted work if the linking party knew or had reason to know of the
unauthorized copying and encouraged it.
 Washington Post Co. vs. Total News, Inc.
(1997)
• The Washington Post, CNN, and several
other news companies sued a website,
Total News, which framed their news
content. Under the terms of a settlement
agreement, Total News agreed to stop
framing and agreed to use text-only links.
• "Framing" is the process of allowing a user
Framing to view the contents of one website while it
is framed by information from another site,
similar to the "picture-in-picture" feature.
Framing may trigger a dispute under
copyright and trademark law theories,
because a framed site arguably alters the
appearance of the content and creates the
impression that its owner endorses or
voluntarily chooses to associate with the
framer.
 Perfect 10, Inc. vs. Amazon.com, Inc. (2007)
• In-lined links to full sized reproductions are
not automatically excused as a fair use. The
federal appeals court, in this case,
permitted the use in-lined links for

In-lining thumbnail reproductions.

• "In-lining" is the process of displaying a
graphic file on one website that originates
at another. For example, in-lining occurs if a
user at site A can, without leaving site A,
view a "cartoon of the day" featured on site
B.
Fair Use

• Users of copyrighted materials have affirmative access to protected

materials and their fair use rights are duly protected and enforced.
• Broadened the scope of statutory and compulsory licensing provisions
provided in the 1957 Act
• Empowered broadcasting organisations to broadcast any prior published
literary, musical work and sound recording by just giving a prior notice to the
copyright owner and paying royalty at the rates prescribed by the Copyright
Board as laid down in Section 31D of the Amendment Act.
• Neither any positive confirmation from the copyright owner is required nor
do they have any say in determining royalty rates, making it almost an
unqualified right for the broadcasters.
Authors Guild v Google (2015)- snippets of
copyrighted books

Plaintiffs, who are authors of published books under copyright, sued Google, Inc. (Google), the
defendant, for copyright infringement in the United States District Court for the Southern District of
New York. Through its Library Project and its Google Books project, acting without permission of
rights holders, Google has made digital copies of tens of millions of books, including Plaintiffs' that
were submitted to it for that purpose by major libraries. Google has scanned the digital copies and
established a publicly available search function – this was alleged to constitute infringement of
Plaintiffs' copyrights. Plaintiffs sought injunctive and declaratory relief as well as damages. Google
defended on the ground that its actions constitute "fair use," which, under 17 U.S.C. § 107, is "not
an infringement." The district court agreed; thus, the plaintiffs appealed.

The first fair use factor's inquiry is whether and to what extent the new work supersedes and is
transformative. While recognizing that a transformative use is not absolutely necessary for a finding
of fair use, the goal of copyright, to promote science and the arts, is generally furthered by the
creation of transformative works and that such works thus lie at the heart of the fair use doctrine's
guarantee. A transformative use is one that communicates something new and different from the
original or expands its utility, thus serving copyright's overall objective of contributing to public
knowledge.
• Clause 52(1)(w) provides that the making of a three dimensional object
from a two dimensional work, such as a technical drawing for industrial
application of any purely functional part of a useful device shall not
constitute infringement. This provision should help reverse engineering
of mechanical devices.
• Clause 52(zc) has been introduced to provide that importation of literary
or artistic works such as labels, company logos or promotional or
explanatory material that is incidental to products or goods being
imported shall not constitute infringement.
• Clause 52 (zb) protects the reproduction of protected work in a format
that is accessible by persons with disability
Fair use and digital environment (explicit)

• Clause 52 (1)(a) Explanation- The storing of any work in any electronic

medium for the purposes mentioned in this clause, including the incidental
storage of any computer programme which is not itself an infringing copy for
the said purposes, shall not constitute infringement of copyright.
• Clause 52 (b)- the transient or incidental storage of a work or performance
purely in the technical process of electronic transmission or communication
to the public.
• Clause 52 (c)- transient and incidental storage of a work or performance for
the purposes of providing electronic links, access or integration, where the
right holder has not expressly prohibited such links, access or integration,
shall not constitute infringement.
• Clause 52 (n)- storage of a digital copy of a work if the library possesses a
non-digital version of it.
 1. Online marketplaces – Intermediaries
2. Sec 2 (w) of IT Act, 2000- Definition of
Intermediaries
Liability of 3. Sec.79- Safe harbour for Intermediaries
Intermediaries 4. IT (Intermediaries Guidelines ) Rules
2011
Case Laws

• Mouthshut.com vs UOI 2013 SC-

• Google vs Vishaka Industries 2016 AP HC

• Avenish Bajaj vs State (2005) – MMS Clippings

• Blueberry books vs Google India and others 2016 Del

• Super Cassettes vs Myspace 2012 Del

 Management and
Administration of Copyrights
The Digital Millennium Copyright Act (DMCA), 1998
- Introduced a new category of copyright violations that prohibit the
"circumvention" of technical locks and controls on the use of digital
content and products.
- These anti-circumvention provisions put the force of law behind any
technological systems used by copyright owners to control access to
and copying of their digital works.
DMCA – Major Provisions

The DMCA contains five main

provisions:
• No circumventing digital protections
• No distribution of devices circumventing digital
protection
• No selling of anti-security tools- enables copying
• No removing of copyright information-
copyrights management
• Safe harbor for internet service providers
DMCA - copyrights

• Through the use of "digital locks," technological systems behind which these
copyrighted materials are protected, producers and manufacturers are able
to automate fine grained control over who can access, use, and/or copy
their works and under what conditions.
• Producers insist these "digital locks" are necessary to protect their
materials from being pirated or misappropriated.
• But, these new technological systems, and the DMCA provisions making
it a crime to bypass them, undermine individuals ability to make "fair
use" of digital information, and essentially replace the negotiation of the
terms of use for those products with unilateral terms dictated by
copyright owners
Anti- Circumvention Measures

• 65A. Protection of Technological Measures

• (1) Any person who circumvents an effective technological measure

applied for the purpose of protecting any of the rights conferred by
this Act, with the intention of infringing such rights, shall be
punishable with imprisonment which may extend to two years and
shall also be liable to fine.
 Exceptions to Sec 65 A

I. Alter the technology for purposes not prohibited by the Act

II. Conducting encryption research through legally obtained

encrypted copy

III. Testing security of the computer system with the authorization of

the owner

IV. During the course of identification of surveillance of users

V. National Security
Sec 65 B

• Protection of Rights Management Information Any person, who

knowingly
•(i) removes or alters any rights management information
without authority, or
•(ii) distributes, imports for distribution, broadcasts or
communicates to the public, without authority, copies of
any work, or performance knowing that electronic rights
management information has been removed or altered
without authority, shall be punishable with imprisonment
which may extend to two years and shall also be liable to
fine
E-Commer
ce and
Trade-Mar
ks
 Identification - Identifies the
goods of one trader and
distinguishes them from another

Source - Identifies the source of

the goods

Functions
Quality - Goods of the same
trade-mark, of a similar quality

Advertising - Helps in advertising

and the sale of the goods
 TM owner has the right to use the mark
or assign others to use the mark

Unauthorized use of the TM amounts to

infringement

Use of deceptively/identically similar

Infringement mark is an infringement

of TM Registered TM -the registered user may

take an action against infringement

Unregistered TM - the common law

remedy of passing off is maintainable

Sec 103, 104 and 135- TM Act, 1999

Sec 29 of Trademarks Act, 1999
A registered trade-mark is infringed by a person who, not being a registered
proprietor or a person using by way of permitted use, uses in the course of trade,
• a mark which is identical with, or deceptively similar to,
• the trade-mark in relation to goods or services in respect of which the
trade-mark is registered
• and in such manner as to render the use of the mark likely to be taken as being
used as a trade-mark.
Domain Names

• A name that identifies a computer or

computers on the internet. These names
appear as a component of a Web site's
URL; Eg. www.christuniversity.in.
• This type of domain name is also called a
hostname.
• Name used to identify an IP Address
Elements of a Domain Name

• Top level domain name- TLD name- .com, .in,

• Second level domain name- SLD name- .co, .ac,
• Third level domain name- the name of the
company/department/categories/classifications
amrisha.tripathi@law.christuniversity.in Cc-TLD

3DN SLDN
 • Prior to December 1999 Network
Solutions Inc. ("NSI") was
responsible for the registration of
second level domain names
• First come-first served policy and
put on hold if complaint made
Management • Internet Corporation for Assigned
Names and Numbers (ICANN), a
of DN non-profit corporation is now
responsible for coordinating the
assignment of protocol, and
management of the Domain Name
system
• India- National Centre for Software
Technology runs the Indian Domain
Registration Service
 • Under ICANN
• The UDRP permits complainants
to file a case with a resolution
Uniform DN service provider (WIPO)
specifying, mainly,
Dispute the domain name in question,

Resolution the respondent or holder of the

domain name,

Policy the registrar with whom the

domain name was registered
and
the grounds for complaint
 • Such grounds include, as their
central criteria,-
i. the way in which the domain
name is identical or similar to a
trademark to which the
complainant has rights;

Grounds for ii. why the respondent should be

considered as having no rights
or legitimate interests in
complaints respect of the domain name
that is the subject of the
complaint; and
iii. why the domain name should
be considered as having been
registered and used in bad
faith.
ICANN

• Paragraph 3 of the UDRP permits ICANN to cancel, transfer or

otherwise make changes to domain name registrations in case
they receive an order from a court or arbitral tribunal having
competent jurisdiction requiring such action.

• Therefore, one may even opt for a traditional litigation, get an

order for transfer of domain name and then approach ICANN
under Paragraph 3 of UDRP for transfer of domain name.
Pattern of dispute resolution

• Majority of the cases have favored the complainant

• Complainant can choose the arbitrator
• To generate revenues arbitrator tends to favor the complainant
• Trademark-based domain-name disputes are resolved by
agreement, court action, or arbitration before a registrar to
cancel, suspend, or transfer a domain name.
https://www.icann.org/resources/pages/policy-2012-02-25-en
Cyber squatting

• The registering, or using a domain name, mala fide, intent to make profit,
belonging to someone else.
• The cyber squatter then offers to sell the domain to the person or company
who owns a trademark contained within the name at an inflated price.
• Cyber squatters ask for prices far more than that at which they purchased it.

• Typo-squatting- URL hijacking,- radif.com, amazin.com

• Pagejacking- contents of a well-known TM posted on another page- usually
for phishing activities
 • Two organizations held business
names with "Pitman" in them
and wanted to use the domain
Pitman vs name pitman.co.uk
• The court held that, given that
Nominet both parties had a prima facie
right to use "Pitman" in their
(1997) business name, the first to
register had the better interest
EWHC in the domain name.
• On its own this case was an
open invitation to domain name
squatters.
 • One in a Million were dealers in
Internet domain names,
specializing in registering names
Marks and identical or similar to the names
of well-known companies
without their consent.
Spencer • Domain names including Marks
PLC v. One & Spencer, Sainsbury’s, Virgin,
British Telecommunications and
Ladbroke Group were registered
in a Million, by the appellants who wrote to
the various companies whose
1998 name or mark featured in
particular domain names,
offering them for sale.
 • Anybody seeing or hearing the name
connects it with the business of
Marks & Spencer. So, if a person taps
on his keyboard the domain name
marksandspencer.co.uk, and sees
the name One in a Million Ltd, it
could clearly create a false
representation constituting the
common law tort passing of off.
• When a domain name is registered
by another person which is
deceptively like a famous TM,
Observation likelihood of confusion and unfair
competition may be assumed
• Mala fide intention of defendants in
s by the selling the DN at a higher price to the
TM owners amounts to bad faith
registration
Court • The domain names were registered
to take advantage of the distinctive
character and reputation of the
marks. That is unfair and detrimental
to the business
• The mere sale of a domain name,
which is confusingly like a registered
trademark, represents an
infringement.
Indian Scenario

• Remedies under the Law

- If the mark is unregistered – passing off
- If a registered Mark - passing off and fine/imprisonment/
confiscation/ destruction /all as per Sec 103-105 of Trademarks Act,
1999
 First case in SC for Domain name
protection
Are internet domain names
subject to the legal norms
applicable to other intellectual
Satyam Infoway properties such as trade-marks?

Ltd. vs Siffynet Held:

Solutions Pvt. • Domain name is not just for
communication.
Ltd (2004) • Domain Name has all the
features of a TM
• No law for IPR in domain names
so court applied the common law
principle of Passing off to hold
infringement of TM
 • Arun Jaitley wanted to book the
Arun Jaitley domain www.arunjaitley.com
vs. Network • The domain name was pre-booked;
was pending deletion; limitation
Solutions period of 35 days had expired- the
domain was open to be taken
Private (2011, • The defendant made an offer to the
plaintiff to buy it for $11K-12K; later
DHC) sold the domain name to a domain
auction site
• Violation of Uniform Domain-Name
Dispute Resolution Policy (UDRP) of
ICANN
Observations by the Court

1. Dual functions
• the domain name does not merely remain as an address but rather
performs the function of a trade-mark as the prospective customers or
other known persons visit the webpage and are able to immediately
connect with the source and identify the same with the particular
company or the individual.
2. Domain names are protected under the law of passing off with a personal
name being no exception.
• That the entitlement to use one’s own name stands on a higher footing
than the entitlement to use the trade mark.
• right to use ones own name is a personal right as against the right to use a
trade mark which is merely a commercial right.
• Held : Trademark violation by passing off
Source-
https://spicyip.com/2011/07/arunjaitleycom-case-of-cybersquatting.html
Indian Cases under • Respondent- marutionline.com- regd.
With Network Solutions, Inc. (NSI)
UDRP- • Complainant- regd. Maruti under
multiple, business-specific domains
Maruti Udyog Ltd v
Maruti Software • The domain name was registered in
bad faith as there was no evidence to
Private Ltd (2000) suggest that the respondent intended
to use the domain name for legitimate
purposes.
• Mere registration of a company under
the Companies Act does not afford
any right and/or entitle the holder of
the certificate of incorporation to
succeed in an action for passing off.
 • Tata’s Tanishq jewellery vs. Tan-ishq,
a beauty product line
https://www.wipo.int/amc/en/domain
Titan s/decisions/html/2000/d2000-1793.ht
ml
Industries Ltd • To obtain relief under the ICANN
vs. Tanishq Uniform Domain Name Dispute
Resolution Policy, Paragraph 4(a) of
Corporations the Policy requires the complainant
to prove each of the following:
(2000) ✔ that the domain name registered by
the respondent is identical or
confusingly similar to a trademark or
service mark in which the
complainant has rights; and
✔ that the respondent has no rights or
legitimate interest in the domain
name; and
✔ that the domain name has been
registered and used in bad faith.
 • before any notice of this dispute,
Legitimate respondent used, or demonstrably
prepared to use, the domain name or a
interests in name corresponding to the domain
name in connection with a bona fide
a domain offering of goods or services;
• respondent has been commonly known
name by the domain name, even if no
trademark or service mark rights have
been acquired; or
• respondent is making a legitimate non
commercial or fair use of the domain
name, without intent for commercial
gain to misleadingly divert customers
or to tarnish the trademark at issue
 • Respondent registered and intends to
Bad Faith use the name in good faith for a body
care business, without any intent to
trade on Complainant's good will
• There is no indication that Respondent
registered the Domain Name with the
intent of selling it for profit.
• There is no evidence to contradict the
Respondents assertion that it
registered the Domain Name for the
purpose of engaging in a body care
business.
 • Anti- Cybersquatting: Consumer
ACPA Protection Act

• Prohibits the act of registering ,

trafficking in or using a domain name
that is identical or confusingly similar
to a mark or dilutive of a famous mark
with bad faith intent to profit.
 • Electronic Boutique- retailer in video
Electronics games & computer software
Boutique vs. • Registered websites –
electronicsboutique.com &
John ebworld.com

Zuccarini • Zuccarini- electronicboutique,

(2000) electronicbotique.com, ebwold.com &
ebworl.com

• Held, Zuccarini liable under ACPA

 • Text coding hidden from normal
view
• Located in a specially designated
portion of the HTML code which
Meta- generates the Web page
• Web page designers use this
Tagging hidden HTML code to designate
keywords which are
communicated to search engine
software
• Uses of trademarks in ways which cause search engines to
improperly associate Web pages with those trademarks have created
allegations of intellectual property violations
• Deliberate use of another's trademark in the source code to throw up
a web page in a search conducted by a user for that company’s goods
or services
 • Playboy Inc. filed a suit before Dist.
Court for preliminary injunction –
Registered Trademarks, PLAYMATE and
PLAYBOY.
Playboy • That Calvin used the said words as part
of their Domain Names and embedded
Enterprises, in meta-tags of their websites-
www.playboyxxx.com and

Inc. v Calvin www.playmatelive.com

• nominative use (a type of fair use for
Designer discussing the product itself) is
permitted.

Label and • Only so much of the mark may be used

as is reasonably necessary for
identification (e.g. the words may be
others, 1997, reasonably used but not the
specific font or logo)
US Dist. Court • Plaintiff pleaded- initial interest
confusion
 (1) the terms “Playboy” and “Playmate”
in the metatags of the website;
(2) the phrase “Playmate of the Year
1981” on the masthead of the website;
(3) the phrases “Playboy Playmate of
Issues the Year 1981” and “Playmate of the
Year 1981” on various banner ads,
which may be transferred to other
websites; and
(4) the repeated use of the abbreviation
“PMOY ʹ81” as the watermark on the
pages of the website
 •Linking
•Framing
Other Acts Washington Post v. Total
of TM News
infringemen •Unfair competition
•Dilution of trademark
t Held: just case of passing
off.
E-Commerce and Patents
Categories of works

• Business Method Patents- A business method may be defined as "a

method of operating any aspect of an economic enterprise”
- According to Indian patent act section 3, which deals with inventions which are
considered not patentable, any "mathematical method or business method or a
computer program or algorithms are not patentable". However, they are
patentable if a new method solves a "technical" problem and an
apparatus/system is developed from it.

• Software patents- patents on software

Rise of Software Patents

• Gottschalk V Benson ( 1972) – held computer programs do not

constitute a patentable process; abstract; vague; unpredictable
• Diamond V Diehr (1981) – if the invention as a whole meets the
requirements of patentability—that is, it involves "transforming or
reducing an article to a different state or thing"—it is
patent-eligible, even if it includes a software component.

4/24/2021 SDM-IMD 3
State Street Bank and Trust Co vs Signature
Financial group Services (1998)

• First case where business methods were considered patentable

subject matter
• Financial Services Software is Patentable
• It must produce a “useful, concrete and tangible result.”
• Signature Financial had obtained a patent on a "Hub and Spoke"
method of running mutual funds
• In this method, several mutual funds (or "spokes") pool their
investment assets into a single investment portfolio (the "hub").
• Software then determines the value of each fund based upon a
percentage ownership of each of the assets in the hub portfolio.
• This information is tracked on a daily basis and is used to track fund
share pricing and tax accountability.
• State Street Bank asked the court to declare this invention to be
un-patentable as a mere mathematical algorithm or as a business
method
• Held, anything that is “concrete, useful , produces values (tangible
result)” in real world is patentable
 State Street Bank

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Individual u al F
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4/24/2021 SDM-IMD 6
Granted Patents in US

• Amazon’s one click shopping-

• Amazon.com v Barnesandnoble.com (1999)

• Priceline's reverse auctions- pre booking

EU

• According to European Patent Convention

• Article 52 deals about patentable invention,
• any "schemes, rules and methods for performing mental acts,
playing games or doing business, and programs for computers;" are
not Patentable.
Japan

• In Japan Business Method are well known and comes under the
patentable subject matter. However, patents are not issued solely for
business methods and the business method must invariably contain a
technical aspect that is both tangible and real for patents to be
awarded.

• Business methods are available if a process by software is concretely

realized by using hardware resources. Not "a human", but "a
computer" needs to be a subject for the operation in each step of the
business method.
India

• According to Indian Patent Act Sec 3, which deals with inventions

which are considered not patentable, any "mathematical method or
business method or a computer program or algorithms are not
patentable".
• However, they are patentable if a new method solves a "technical"
problem and an apparatus/system is developed from it.
Business Method patent in India

1. Google Ads in e-mail newsletters

• Ads based on contents published in newsletters

2. Method for determining ad spot value

• Ads based on the requirement of the business. Eg. Nike, winzip,

bookclub
Software Patents in India
• Indian patents Act- Sec 3

• Software per se cannot be patented in India

• Ericcson vs Intex 2015 (Del)

• Anything that brings a level of technical application to the software
and therefore means that the software is not merely software, i.e.
not merely restricted to being an abstract list of commands for the
computer, but gives it a visible technical consequence, counts as a
‘technical contribution/effect’.
Eastern Book Company and Ors. vs D.B. Modak and
Ors.
By Anushka Bharwani - October 8, 2020

x
In the Supreme Court of India
(2008) 1 SCC 1
Petitioner
Eastern Book Company & ors.
Respondent
D.B. Modak & ors.
Date of Judgement
12 December, 2007
Bench
The Hon’ble Mr Justice B.N. Agrawal; Hon’ble Mr Justice P.P. Naolekar

Introduction
The judgment made an analysis of the concept of originality and creativity with respect to the work to
be copyrighted under the Copyright Act,1957. As mentioned in the judgment “Copyright protection
finds its justification in fair play. Copyright is a right to stop others from exploiting the work without
the consent or assent of the owner of the copyright. A copyright law presents a balance between the
interests and rights of the author and that of the public in protecting the public domain or to claim the
copyright and protect it under the copyright statute. One of the key requirements is that of originality
which contributes, and has a direct nexus, in maintaining the interests of the author as well as that of
the public in protecting the matters in the public domain.”

Facts of the case


The petitioner, (appellant 1) Eastern Book Company, a partnership firm and EBC Publishing Pvt. Ltd. x
(appellant 2) are together engaged in printing and publishing various books in the field of law. One
such publication of the appellant is the law report called ‘Supreme Court Cases” ( also called as the
SCC), which has been continued since 1969, consists of all the reportable and non-reportable
judgments, short judgments, orders, record of proceedings and directions of the Supreme Court. For
the same, they procure Raw data (copies) of judgments from the office of registrar of the Supreme
Court. The Law report used to publish copy edited versions of the judgments which include
formatting, numbering, cross-referring and various other inputs to make it user friendly. It also
includes inserting Headnotes, Long Notes, and footnotes which are done by Surendra Malik (appellant
3).

In 2004, the defendant Spectrum Business Support Ltd(Respondent 1) and Regent Datatech Pvt
Ltd(Respondent 2) came out with a software called ‘Grand Jurix’ and ‘the Laws’ respectively
publishing the same CD ROMs. They have been alleged to take the Appellant’s copy-edited version of
the supreme court judgments as it is, thereby constituting infringement of appellants’ exclusive right
towards it.

Background of the case

The petitioner first filed a Copyright infringement case before a single judge in the Delhi High Court to
obtain a temporary injunction against the publishing of the appellants’ version of the judgments by
the defendants. The Court after granting certain temporary injunctions ruled in favor of respondents
after they applied for the vacation of the stay order saying that mere copying of supreme court
judgments with some changes does not amount to originality and hence the work cannot be
copyrighted. Respondents, however, conceded to agreeing on appellants copyright over the headnotes
and they have excluded those from being published.

Unsatisfied by the judgment, the petitioners appealed to the division bench of the High Court and it
was again ruled in favor of respondents because of the same reason that the ‘character of the
judgment remains the same’ even after making corrections to it and ‘does not make it materially
different’ from the original judgments. The bench held that copyrighting the edited version of
supreme court judgments would unwantedly stretch the right of a person(here appellants) and would
defeat the primary purpose of making the judgments public in the first place. The bench however
added to the previous judgment that the headnotes, footnotes and editorial notes were appellant’s
own creation and hence cannot be used by the defendants.

Discontented by the division bench’s decision, they resorted to appealing by way of a special leave
petition before the supreme court of India against both the respondents which were heard together in
the case discussed.

Statutory Provisions Involved

Section 13 of the Copyright Act,1957.

Section 14 of the Copyright Act,1957.

Section 52(1)(q)(iv) of the Copyright Act,1957.

Issues before the Court


 What should be the standard of originality with respect to the derivative works (here the copy- x
edited version of supreme court judgments) to make the work eligible to be called the author’s
original work and hence get protection under Copyright Act of 1957?

Whether the whole copy-edited version of the judgment subject to copyright as claimed by the
appellant as the whole of it being their original literary work or just the part added to the raw text?

Contentions put forward by the parties

By the Petitioner

They claimed that copyright subsists in the law report ‘Supreme Court Cases’, the SCC, as a whole.
The way the judgments are presented in the reports; includes footnoting, editorial notes, cross-
referencing, selection, sequencing, and arrangement of the judgments, making it the original work
of art in itself; entirely different from the actual raw data collected from the register of the
supreme court.

The work takes substantial labor, skill, capital, and infrastructure on the appellant’s part, making it
eligible to be copyrighted under Section 13 of the Copyright Act and subsequently published on e-
platforms under Section 14 of the Copyright Act,1957.

The learned senior counsel submitted that Section 2(k) read with section 17 says that the
government is the first owner of the judgments of the courts and Section 52(1)(q)(iv) provides
that any person wanting to reproduce or publish it would not be liable for copyright infringement.
But it also doesn’t suggest that in the event a person has modified the decisions of the court and
published his rendition, some other individual is allowed to duplicate that person’s form of the
decisions, significantly or in its completion.

They also claimed that work done by the author is neither of trivial nature nor negligible
irrespective of the amount of creativity put in by the author, Therefore the author has full right to
claim copyright over his derivative work.

By the defendant

The learned Counsel, Mr. PN Lekhi, of one of the respondents, submitted that because the
reproduction of the cases of the supreme court does not lead to copyright infringement under
Section 52(1)(q)(iv) of the Copyright Act. Therefore publication of judgments by the respondents
does not lead to any copyright infringement. As far as the subsistence of copyright of the
Appellants law report is concerned, the extensions did lack even minimal level of creativity or
application of intellectual labor which is required to get copyright as per Copyright Act 1957.

The learned counsel, Ms. Pratibha M. Singh, of the other respondent, pointed out the difference
between law report and law journal. The law journal, it was stated lists the judgments verbatim
with some inputs while a law report is the Author record of the judgment in his own words
mentioning, the arguments put forward and the judgment given in the case. Therefore, the
appellant’s work was claimed to be Law Journal and not Law Report. It was also stated that some
minimal level of creativity is a prerequisite for copyright which the appellant’s content lack and
hence cannot be copyrighted.

Judgment
The judgment was ruled in favor of the appellants giving them exclusive right over their content
prohibiting anyone to utilize it. The court ordered the respondents to sell their CD-ROMs with their
own Headnotes, footnotes and editorial and in no way, they should be a copy of the appellant’s work.
It further asked the respondents to not use the paragraphs made by the appellants in their copy-

edited version for internal references and their editor’s judgment regarding the opinions expressed by
the Judges by using phrases like `concurring, ‘dissenting’ `partly dissenting, etc. on the basis of x
reported judgments in SCC.

Ratio Decidendi :

It held that the derivative work should be more than just a copy of the original work and involve
individual skill, labor,capital and a minimal level of creativity. In the said case the work is done by the
author i.e. segregating the facts into separate paragraphs; adding paragraph numbering and
indicating the concurring and differing opinion of the judges in a particular case requires a great
measure of legal skill and judgment on the part of the author. It is an exercise of brain work to edit it
in the given manner without breaking the chain of thought of the judgment, which can not in any
possibility be a mechanical process. According to the court, this exercise and creation have a minimal
level of creativity required for work to be eligible to be copyrighted under the Copyright Act of 1957.

Conclusion
The case set a new standard for the concept of Originality by making a balanced decision between the
concept of ‘sweat of the brow’ and the level of creativity required to make your work subsist for
copyright. The concept of Sweat of the brow as given by the Canadian judgment (CCH Canadian Ltd.
v. Law Society of Upper Canada, 2004 (1) SCR 339 (Canada) that set an extremely low standard for
copyright eligibility and on the other hand concept of absolute novelty, as is required for a patent. The
case laid down that a derivative work should not be a copy of the source but at the same has minimal
creativity more than just labor and capital irrespective of the literary merit it has. The crux being for
an author to apply for copyright for his work must be an ‘exercise of skill and judgment’ and not
creativity, more than just an application of labor and capital.

“The views of the authors are personal“

Anushka Bharwani
I am a student of NMIMS,School of Law persuing BA LLB (Hons.).Since , childhood I've been very interested in reading
books and while growing I always admired the power of law as a binding societal institution and its potential to bring
about a change in society. Environmental law and Criminal law are areas that interest me the most but I am also open
to discovering others fields during my time at law school. Music and meditation play a very important part in my life as
it serves as source of constant positivity in life.


 Post Views: 10063

Fair Use Law in India under Copyright Act

By Uzair Ahmad Khan - February 15, 2020

Image Source: https://bit.ly/39N1Ahd

This article is written by Rajshree Mukherjee, pursuing a Certificate Course in Media and Entertainment
Law: Contracts, Licensing and Regulations, and Karishma Karnik, pursuing a Diploma in Intellectual
Property, Media and Entertainment Laws from Lawsikho.com.

Introduction
This assignment will specifically deal with the concept of Fair Use Law and how this concept derived its
significance in Indian cases. It will also focus on the legislation that deals with this law and to what
extent this law can be applicable based on the analysis of certain landmarks judgments of U.K., U.S as
well as Indian cases.

Doctrine of Fair Dealing

Doctrine of Fair Dealing is an exception to the law that would usually protect any material that would be
considered to be copyrighted as under the Indian Copyright Act, 1957 (hereinafter known as the “Act”).
It is a legal doctrine which permits a person to use any work which is protected under the Act with
limited usage of such work so as to maintain the sanctity and originality of such work as well as the
registered proprietor of the work.

The meaning of “Fair Dealing” depends on different facts and circumstances. In India, the Court applies
basic common sense so that they can determine as to what can be constituted as Fair Dealing on the
case- to- case basis. Fair dealing is a significant limitation on the exclusive right of the copyright owner.
It has been interpreted by the courts on a number of occasions by judging the economic impact it has
on the copyright owner. Where the economic impact is not significant, the use may constitute fair
dealing. The fair nature of the dealing depends on the following four factors:

1. the purpose of use;

2. the nature of the work;
3. the amount of the work used, and
4. the effect of use of the work on the original.

In consonance with the UK Copyright laws, India has adopted the concept of Fair Dealing for the past
years. On the other hand, the same concept is known as “Fair Use” under U.S. Copyright laws. Cases
such as Gyles vs Wilcox which had established the concept of “Fair Abridgment” and Folsom vs
Marsh have established the concept of what Fair Dealing is. These cases acted as precedents to the
Indian cases which will be discussed in brief later in this assignment.

In the recent amendment that has been made in the Act known as the Copyright (Amendment) Act,
2012, the concept of Fair Dealing has also included works in the line of musical or cinematographic in
nature. The reason for this is that since both personal and private works have been amended in the
recent Act except work done in the line of computer programming, the scope has become much wider to
consider what can be considered to be Fair Dealing under the Indian Regime. Also, Fair Dealing has been
considered to benefit disabled persons who can now access works including sharing with any person with
a disability for private or personal use, research or for any other educational purposes.

To know more about Fair use please visit

What do you mean by Fair Use under the Indian Copyright Act?
Under Indian regime legal framework being the Copyright Act, 1957, section 52 lays down certain acts
or works that cannot be considered as an infringement of copyright namely fair dealing with a literary,
dramatic, musical or artistic work not being a computer program for the purposes of-
 fair dealing with any work, not being a computer programme, for the purposes of—
(i) “private or personal use, including research;
(ii) criticism or review, whether of that work or of any other work;
(iii) the reporting of current events and current affairs, including the reporting of a lecture delivered
in public.
the transient or incidental storage of a work or performance purely in the technical process of
electronic transmission or communication to the public;
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:
the reproduction of any work for the purpose of a judicial proceeding or for the purpose of a report of
a judicial proceeding;

The Court along with the above mentioned provision, also relies upon classic cases which has been dealt
in brief in the next chapter as to what and up to how much extent any work which is abridged as under
the Act can be considered to be “Fair Use” of the copyrighted work which in fact, is an extremely
technical based issue that is seen by the Court mainly looking into the fact of the case.

Click Above

International Cases
 Hubbard vs Vosper- In the line of dealing with the concept of Fair Dealing, Lord Dennings has
stated that “It is impossible to define what is “Fair Dealing”. It must be a question of
degree. You must first consider the number and extent of the quotations and extracts….
then you must consider the use made of them…Next, you must consider the proportions…
other considerations may come into mind also. But, after all, is said and done, it is a matter
of impression”.

Gyles vs Wilcox– This case had initially established the doctrine of “Fair Abridgment” which
eventually came to be known as “Fair Dealing” which was the first case based on the concept of Fair
Use law as was adjudicated by the Court of Chancery of England. In this case, the Court adjudicated
the issue of whether work which comes within the purview of copyright can be abridged or such
abridged are to be considered as new work, separate to that of abridged work. In that regard, Lord
Hartwicke established two categories under which such abridged work would be classified into firstly,
“True Abridgments” which in itself explains that the work was created at its truest form without
violating the copyright. While the other being “Coloured Shortenings” which is the colouring or
certain adjustments made to the original copyrighted work.

Folsom vs Marsh– This case was the first-ever case of “Fair Use” in U.S. wherein, Justice Story has
set forth the following four factors to determine a work to be of Fair Use, which later went to be
codified under the Copyright Act, 1976:

1. “The nature and objects of the selections made;

2. The nature of the original work;
3. The amount is taken; and
4. The degree in which the use may prejudice the sale, or diminish the profits, or supersede the objects,
of the original work.”

Indian Cases
 India TV Independent News Services Pvt. Ltd. vs Yashraj Films Pvt. Ltd- The facts of this case
state that the defendants that is, India TV broadcasted a show on its channel documenting the life of
the singers wherein the singers were shown to perform their own songs however, while such
performance was being filmed clips of a movie scene were shown to play in the background. The
plaintiff, that is, Yashraj Films Private Limited claimed that such a scene of the movie in the
background amounts to infringement of its Copyright. The defendants took the defence of fair dealing
under Section 52. The Delhi Court dismissed the defence of fair dealing and restrained the defendants
from the production, distribution and broadcasting or in any way exploiting any cinematograph film,
sound recording or part thereof which is owned by the Plaintiff. This litigation battle went on for
years, where different angles and viewpoints were considered, in an appeal from the above order, the
Hon’ble bench of Delhi High Court also felt the need to overlook the conventional approach of dealing
with Section 52 of the Copyright Act, the bench set aside the order passed by the single Judge and
uplifted the restrictions so imposed. However, the Appellants were still prohibited from broadcasting
any cinematograph film without the appropriate permission. It was through the Copyright
(Amendment) Act, 2012 that fair dealing as a concept brought within its scope musical recordings and
cinematograph films.
Through this case the Indian legal system made advancement in the field of fair dealing under
Copyright by overlooking the rigid and conventional approach and implementing the necessary
changes.

Civic Chandran vs Ammini Amma- In this case, the Court considered that a parody did not
constitute an infringement of copyright as long as it has not been misused or misappropriated. In
consonance with this case, the Court established the following three tests which is to be taken into
consideration to determine work to be an infringement of copyright:

1. “the quantum and value of the matter taken in relation to the comments or criticism;
2. the purpose for which it is taken; and
3. the likelihood of competition between the two works.”

How can fair use be incorporated as a defence in

Copyright Infringement Litigation?
When a person is faced with Copyright infringement litigation, he/she can adopt either of the two
strategies as a defence;

1. They can challenge the Copyrightability of the work

2. Argue that the work was well within the ambit of fair dealing under Section 52 of the Copyright Act,
1957.
The United States Copyright Law specifies several factors in order to determine whether the acts fall
within the ambit of fair use, the Indian courts have accepted these factors too in order to determine
whether an act constitutes a fair dealing as provided under Section 52 of the Copyright Act, 1957 or else
it amounts to infringement of a Copyright.

The factors are as follows:

The purpose and character of the use of such work, it has to be determined whether the work is of
commercial nature or for a non profit/educational purpose.
Nature of the Copyrighted work.
The portion used as a part of the Copyrighted work as whole.
The effect of the use of such work on the market or value of the copyrighted work.
Not a substitute for the original work.
Also, is transformative in nature that is, adds new meaning and message to the original.

If these factors are present in a work it can be dealt under the scope of fair dealing and in a Copyright
litigation the defence would have to prove how his/her work has incorporated all the above mentioned
factors so as to not result in infringement of a Copyrighted work.

The factors are thoroughly considered by the courts before determining as to whether the work can be
considered within the scope of fair dealing.

In the United Kingdom an exception to Copyright Infringement is prevalent in the form of fair dealing.
However, the fair use is limited in scope as it only extends to research, private study, criticism, review
and news reporting and it is irrelevant whether fair use is for general use or for a purpose not specified
in the Copyright, Designs and Patents Act, 1998.

The European Commission released a communication about the new European Copyright framework at
the end of 2015. The main highlight of this framework is to increase the levels of harmonization, make
relevant exceptions mandatory for member states to implement and ensure that it functions
across the borders within the EU. The Canadian courts have also found more flexibility in the country’s
fair dealing statute moving it substantially closer to a fair use model without abandoning the fair dealing
framework.

How is fair dealing disadvantageous to the owner of a

Copyright?
There has always been a thin line of difference between Infringement and Fair Dealing. Section 52 of
the Copyright Act 1957 does not permit the reproduction of the whole work. Such substantial copying
and reproduction of the whole of the work would amount to infringement however; one of the major
loopholes present in the Indian Copyright Act is that it does not define what substantial or insubstantial
portion of the Copyright work is. As per the legal interpretation of the provision it is clear to one and all
that only the insubstantial portion of the original copyright work comes within the ambit of fair dealing.
The question of whether a work is fair dealing or not is a qualitative one that differs from case to case.

In the case of “The Chancellor, Masters and Scholars of the University of Oxford v Rameshwari
Photocopy Services (CS (OS) 2439/2012, I.As. No. 14632/2012)” in this case it was held that
“making course packs for suggested reading for students by photocopying portions of various prescribed
reference books does not violate the copyright of the publishers.”The facts of the case state that the
plaintiffs were Oxford University Press, Cambridge University Press and its Indian affiliate, Taylor &
Francis and its Indian affiliate. They filed a suit for permanent injunction restraining Rameshwari
Photocopy Services and via Delhi School of Economics, Delhi University from infringing copyright owned
by them in various publications which have been photocopied and distributed to students in course
packs. The course packs reproduced selected portions of copyright protected materials ranging between
5% to 33.25% of the original books. The Delhi School of Economics’ portion never required the entire
packs to be reproduced; only selected portions were contained in the pack. The issues raised within the
case were as follows:

1. Whether unauthorised distribution and reproduction were infringing acts?

2. Would the provision of course packs cause Delhi University to directly compete with the plaintiffs in
the market for textbooks in the field of education?
3. Did the production and redistribution of such copyright content violate the licensing scheme
administered by the Indian Reprographic Rights Organisation?
4. Was the interpretation of the Indian Copyright Act in accordance with the international copyright
treaties and comparative legislations provided for in other countries?

However, the Judgement is silent on the question as to whether, in the Court’s opinion, is the
reproduction of the whole book allowed or only reproduction of excerpts from several books would be
allowed? The verbatim lifting of content from various books would amount to copyright infringement as
per the provision of the Copyright Act, 1957 and therefore the Judge needs to thoroughly consider
various aspects before giving its opinion on whether a work constitutes fair dealing or not.

Conclusion
It can be safely concluded that the test to determine a copyrighted work as a Fair Use of such work
indeed differs from case to case since such facts are to be given high priority more than the law itself.
Though the legislature has attempted to make law on this concept more flexible but precise, in the
Indian scenario, section 52 of the Copyright Act, 1957 makes a legitimate stand for the public to rely
 upon this provision for now. As mentioned under Article 13 of the TRIPS (Trade-Related Aspects of
Intellectual Property Rights) which reads as follows:

“Members shall confine limitations or exceptions to exclusive rights to certain special cases
which do not conflict with a normal exploitation of the work and do not unreasonably
prejudice the legitimate interests of the rights holder”.

India has been able to establish a proper ground as for now since the whole idea having an exception as
against the protection of copyright is to give rise to creativity and growth which can be transformed and
expressed in many other new ways so as to encourage people to attain such degree of creativity with
careful consideration to the original copyrighted work.

Endnotes
1. Lexology, Exceptions to copyright infringement – fair dealing,
2. (1740) 26 ER 489
3. 9. F.Cas. 342 (C.C.D. Mass. 1841)
4. Supra note 1
5. Supra note 1
6. 1972) 1 All ER 1023 p. 1027
7. Supra note 3
8. FAO(OS) 583/2011
9. 1996 PTR 142
10. Mondaq, India: “Fair Dealing” In Copyrights: Is The Indian Law Competent Enough To Meet The
Current Challenges?

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 Post Views: 9083

How Intellectual Property relates to E-Commerce

By Varun Varma - September 25, 2017

In this article, Varun Varma discusses How Intellectual Property relates to E-Commerce.

Introduction
Intellectual Property (IP) is a legal term that has been associated with industrial property with
copyrights and other rights in the similar field. It is a process where someone creates anything from
their mind like inventions, literary, artistic works, designs, symbols, names and images which are used
in commerce.[1]. The essence of IP in India is well established at all levels i.e Statutory, Administrative
and Judicial. India in its meeting with World Trade Organization had ratified an agreement which is in
relation to Trade Aspects of Intellectual Property Rights (TRIPS) which was enforced on 1st January
1995. As per the agreement, there shall be minimum standards for the protection and enforcement of
intellectual property rights in member countries which are required to promote the effective and
adequate protection of intellectual property rights with a view to reducing distortions and impediments
to international trade.[2] The main pillars of Intellectual Property law are copyrights, patents and
trademarks and these three pillars are governed and described fully under the respective statutes which
are Indian Copyrights Act 1957, The Patents Act 1970 and The Trademarks Act 1999.
According to Merriam Webster, E-Commerce refers to that activity that are related to buying and selling
of goods and services over the internet.[3] Intellectual Property in E-Commerce is perhaps the most
neglected, yet the most essential and value bearing component of E-Commerce.[4]

According to Michael Dertouzos foreword in Tim Berners- Lee’s book, Weaving the Web, “Technology is an inseparable
child of humanity and that for true progress to occur, the two must walk hand in hand, with neither one acting as
servant to the other”

Importance of Intellectual Property in E-Commerce

Intellectual property law protects against disclosure of trade secrets which further signifies protection
against unfair competition. This makes the intellectual property an asset which is more valuable than
owning a tangible asset. This is most clearly visible in the field of technology and the digital economy.[5]
If there was no intellectual property practices and statutes governing the functioning of IP laws, there
would have been no new creation of works and hard work of someone could be stolen and it would have
spread around the world without paying any cost to its creator for his labor on the invention.[6]

THE TWO PRIMARY AREAS WHICH ARE IN RELATION WITH INTELLECTUAL

PROPERTY WHICH MUST BE TAKEN CARE OF ARE

1. Safeguarding your own intellectual property

One of the common mistake committed by the owner of the intellectual property owner is to reveal the
intellectual property prior to filing for protection of that property. Similarly, in many countries making
trade secrets public automatically dissolves any protection[7].

2. Violating someone else’s intellectual property

As E-commerce websites who are in the business of buying and selling of products often infringes the
intellectual property laws by portraying the description of products and showing their images. There are
several essentials which must be followed for not infringing the IP laws are as follows:

It must be your own creation

Permission granted by the creator to use.
It must be under the ambit of public domain
It is covered under fair use.[8]
Kinds of E-Commerce
E-Commerce or Electronic commerce refers to the business done online. So a company’s website can be
a great tool the business online and for the purpose of generating sales[9]. E-Commerce is classified
into four main categories:

1. B2B(Business to Business)
Companies doing business with each other like manufacturer selling to distributors and wholesalers
selling to retailers. Pricing of these products are negotiable on a number of products ordered.[10]

2. B2C (Business to Consumer)

Business to consumer (B2C) is a business transaction between a company and a consumer or consumers
who are the end users of its product or services. B2C is different from B2B model as B2B refers to the
business between 2 business entities. All the business companies who directly sell to the consumers can
be put in the category of B2C companies. This term became immensely popular during the dotcom boom
of the late 1990s, when it was mainly used to refer to online retailers[11].

3. C2C (Consumer to consumer)

A consumer to consumer is that kind of a business model which is connected between two consumers
and the mode of doing business is online. There are two modes of implementation of C2C markets i.e
actions and classifieds. C2C marketing has gained a major boost over the internet through the
companies like Ebay and Craigslist[12].

4. Consumer to Business (C2B)

Consumer to business is an exceptionally authentic and plan of action where a shopper creates an item
or administration that an association uses to finish a business procedure or with the end goal of picking
up an upper hand. This technique transposes the conventional business to buyer (B2C) model.[13]

Elements granted protection in Intellectual Property

There are several parts of websites which are vested with the protection of different kinds of Intellectual
Property.
 E-Commerce systems, search engines or other technical Internet tools is granted protection
under Patents or utility models.
Software includes the text-based HTML code which are used in websites and it is vested with a shield
under Copyrights Act or patents law, depending upon national law.
Website design is protected under copyright.
All the website content in the form of written material, photographs, graphics, music and videos
are protected under Copyrights.
Databases can be protected by copyright or by sui generis database laws.
Business Names, Logos, Product names, domain names and other signs posted on the
website are covered under Trademarks.
Computer generated Graphic Symbols, displays, graphic user interfaces (GUIs) & even
webpages are protected under Industrial Design Law.
Hidden Aspect of a website like (confidential graphics, source code, object code, algorithms,
algorithms, programs or other technical descriptions, data flow charts, logic flow charts, user
manuals, data structures and database contents) are protected under Trade Law Secrets.[14]

Ways to protect a website under Intellectual Property Rights

There are essential measures which are mentioned in IP Laws which protect a website from abusive use.
These are as follows:

1. Protecting Intellectual Property Rights

2. To let people know that the content is protected under IP Laws.

3. To make sure people know what all content can be used by them.

4. Controlling access and use of your website content.[15]

Conclusion
As E-Commerce is an industry which is growing at a rapid rate. And there can be various instances
where creation and invention of someone can be accessible without even giving the person enough
credit, labor and money is not given to the inventor. So for this purpose Intellectual Property plays a
very vital role. It gives protection to almost all the content which is available over the internet. There are
several E-Commerce businesses which are performed between the businessman or company and
consumers whereas for the purpose of making these transactions more safer, intellectual property plays
vital role.

References

[1] Wipo, What is intellectual property?, WIPO, available at www.wipo.int/about-ip/en/.

[2]India in Business Ministry of External Affairs Govt. of India Economic Diplomacy Division, Investment:
Intellectual Property Rights, available at indiainbusiness.nic.in/newdesign/index.php?
param=investment_landing/267/3.

[3] Merriam Webster, Definition of E-Commerce For English Language Learners, available at
www.merriam-webster.com/dictionary/e-commerce.

[4] Ajeet Khurana, Intellectual Property in Ecommrce: Your Greatest Asset, THE BALANCE (28.02.2017),
www.balance.com/intellectual-property-in-ecommerce-your-greatest-asset-1141708

[5] Ibid.

[6] Ibid.

[7] Ibid.

[8] Ibid.

[9] Wipo, Intellectual Property and E-Commerce: How to Take Care of your Business Website,
www.wipo.int/export/sites/www/sme/en/documents/pdf/business_website.pdf

[10] DigitSmith, Ecommerce definition and types of ecommerce, www.digitsmith.com/ecommerce-

definition.html.

[11] Investopedia, Business to Consumer-B TO C: What is ‘Business to Consumer- B TO C’,

www.investopedia.com/terms/b/btoc.asp.
convenient and effective to impose strict liability on intermediaries, which host, transmit and locate such
information. Therefore, it is imperative that they monitor the content and ensure its compliance with the
law.

Broad immunity model: While it is acceptable to argue that the architecture of the internet
necessitates intermediary liability for control of unlawful activity, legislations have to accommodate the
fact that they also play an indispensable function in ensuring free flow of ideas in information on the
internet, and thus, requires some protection from liability. In the broad immunity model, they are given
comprehensive, sometimes conditional, immunity from liability w.r.t user-generated content. In this
model, they are not required by the law to monitor the user-generated data for unlawful content.

Safe harbour model: In the safe-harbour model, the intermediaries are granted conditional immunity
provided they ffulfillulfil some requirements as specified by the law. This model includes “notice-and-
takedown” processes, which are procedures regarding the 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.

However, irrespective of the liability model followed, they are obliged to take down any unlawful content
when instructed, via legal procedures.

Intermediary Liability jurisprudence in India : Safe

Harbour Model
Safe Harbour provisions protect the intermediaries from being held liable for the acts of third party users
who use the infrastructure provided for illicit acts. E.g. Internet Service Providers (ISPs) will not be liable
if their subscribers use the Internet for an unlawful purpose, e-commerce platforms are not legally
responsible if people sell counterfeit goods, & social media platforms are not liable when people publish
defamatory content. In India, the regulation of intermediaries is incorporated in different laws and sub-
legislations.

The statutory regime governing intermediary liability for third-party content in India is to be found
primarily, but not exclusively, in
1. Indian Copyright Act, 1957
2. Information Technology Act, 2000
3. Information Technology (Intermediaries Guidelines) Rules, 2011
4. Copyright Rules, 2013
5. Moreover, there have been a multitude of cases in India, and the judiciary has been proactive in
adjudicating on these issues.

Indian Copyright Act (1957)

The Indian Copyright Act of 1957 was amended in 2012 whereby Section 52 described several instances
where exemption could be granted for copyright infringement. As per Section 52(1)(c), the acts of
intermediaries are exempted from copyright infringement saving they are conscious or have a
reasonable basis for believing that work/content is an infringing copy.

Information Technology Act (2000)

Safe Harbour provisions for intermediaries in India are observed under the IT Act and the intermediary
rules that correspond to it. The Safe Harbour provisions have evolved significantly since the Act got
enacted first, partially through amendments of the Act and Rules, and partly through judicial
interpretations of these provisions. Initially under the IT Act, only network service providers were
protected “for any third party information or data made available by him if he proves that the offence or
contravention was committed without his knowledge or that he had exercised all due diligence to
prevent the commission of such offence or contravention.” Thus, the original IT Act gave little to no
immunity to intermediaries.

After the Amendment Act, 2008, the definition of an ‘intermediary’ has been broadened as mentioned
above. Telecom service providers, web-hosting services, network service providers, internet service
providers, search engines, online payment sites, e-commerce sites, cyber cafes and social media
websites such as Facebook, Twitter, and Pinterest are now all considered intermediaries as per this
definition.

Safe Harbour provisions are provided under Section 79 of the IT Act. Section 79(2) exempts network
service providers or intermediaries from liability if it is proven that the offence was committed without
his knowledge or that he had practiced all the required due diligence to avoid such contravention. The
explanation to this Section provides that the network service provider is an intermediary. Therefore,
when we look at all these provisions, it is clear that the intermediary has received protection from
copyright infringement under the statute.

The Information Technology (Intermediaries Guidelines) Rules, 2011

After the Amendment Act in 2008, the Government of India introduced the Intermediary Guidelines,
which were obligatory for all intermediaries to follow in order to claim safe harbour protection. These are
to be read in accordance with the IT Act. The due diligence requirements that must be observed by
intermediaries, provided under Rule 3, are:

1. Intermediaries to publish rules and regulations, privacy policy and user agreement
2. Rules and regulations, terms and conditions or user agreement shall specify all prohibited acts and
the intermediary should inform users that violation of same shall lead to termination of access
3. Intermediaries to disable such information within 36 hours and storage of same for 90 days for
investigation purposes,
4. Intermediaries to assist authorised government agencies,
5. Intermediaries to exercise reasonable measures to secure its computer resource,
6. Intermediaries to report cybersecurity incidents to the Indian Computer Emergency Response Team
and

Yet, the IT Act and the Intermediary Guidelines were engulfed by various issues such as vagueness in
specifying the prohibited content and other factors. Additionally, any person could ask the intermediaries
to pull down the unlawful content. However, most of these issues were mostly addressed in the Shreya
Singhal judgment.

Shreya Singhal v. Union of India (2015)

In 2015, in the landmark Shreya Singhal v UOI judgement, the Supreme Court for the first time
recognised the Indian citizen’s Right to Freedom of Speech over the Internet & cyberspace. It struck
down the stringent Section 66A of the IT Act, that provided for punishment for sending offensive
messages through any means of a computer.

Regarding intermediary liability, the Court held that “Section 79 is valid subject to Section 79(3)(b)
being read down to mean that an intermediary upon receiving actual knowledge from a court order or on
being notified by the appropriate government or its agency that unlawful acts relatable to Article 19(2)
are going to be committed then fails to expeditiously remove or disable access to such material….
Similarly, the Information Technology “Intermediary Guidelines” Rules, 2011 are valid subject to Rule 3
sub-rule (4) being read down in the same manner as indicated in the judgment.”

The Court also observed that it would be nearly impossible for intermediaries and sites like Google,
Facebook etc. to go through millions of requests that are made and determine which requests are
legitimate and which are not.

My Space Inc. v. Super Cassettes Industries Ltd. (2017)

In this case, the Delhi High Court categorised Copyright matters and observed that if intermediaries
were handed the responsibility of identifying unlawful content, it could have dangerous effect on free
speech. It might lead to private & invisible censorship that would be unconstitutional. This case dealt
with uploading of music on myspace.com against which a copyright infringement suit was filed by Super
Cassettes India Ltd.

The High Court also introduced the concept of ‘actual or specific knowledge’. The bench held that
intermediaries could be held liable if they have either actual or specific knowledge of the existence of
infringing/unlawful content on their website from content owners. And if they do not take down the
content, despite such notice. There is no need for a court order in such cases.

Amway India Enterprises Pvt Ltd v. 1Mg Technologies Pvt Ltd & Anr. (2019)

The main issue, in this case, was the dispute between Direct Selling Business and e-commerce platforms
about whether the intermediary has assumed the role of the seller by determining its retail prices,
discounts, return/refunds policies etc. Therefore, the issue was whether the intermediary had violated
the Direct Selling Guidelines issued by the Government, which were binding on the Plaintiff. The Division
Bench held that these guidelines are advisory and are not law and thus, not enforceable.

Further, the Court also gave reasoning as to why major eCommerce companies are actively involved and
thus, do not qualify as intermediaries entitled to protection under the safe harbour provided in Section
79 of the IT Act. It was held that any non-compliance of the due diligence requirements as per the
Intermediary Guidelines and failure to adhere to their policies would make the e-commerce platforms
liable. The Division Bench also observed that the value-added services provided by the defendant as
online market places, do not dilute the safe harbour granted to them under Section 79 of the IT Act.

Takedown notices and its incomplete provision in India

In a digital era, when Copyright protected material can easily be duplicated and disseminated around the
globe, there is a need to protect the already protected material against any infringement. One of the
remedies available to copyright holders is to issue Take Down Notices to an Internet Service Provider
stating that the concerned website hosts any content which infringes the Right of the copyright holder.
Further, necessary information regarding the infringing content must be duly provided, and the host
website is sent a notice to take down such content. As a signatory to the TRIPS Agreement and being a
WTO member country, India has introduced Internet Service Providers liability provisions under the
Copyright Act, 1957, Information Technology Act, 2000 and rules framed thereunder.

Subsection (3) of section 79 creates an exception wherein an intermediary is not entitled to claim
immunity when it has conspired or aided or abetted or induce the unlawful act or when it has failed to
“expeditiously” take down information upon being notified by the government or upon receiving “actual
knowledge” that the information is being used to commit an unlawful act.

Essentials of a Take Down Notice for infringement of

Copyright protected work
Rule 75 of the Copyright Rules, 2013 lists essentials of takedown notices and the process of delivering it
to the intermediary. The notice must necessarily specify these:

1. Description of the work with sufficient information to identify the content

2. Details establishing that the complainant is the exclusive owner of copyright in the content
3. Undertaking that the complainant will file an infringement suit in an appropriate court against the
person responsible for uploading the infringing work; produce the orders of the competent court
having jurisdiction, within twenty-one days from the date of receipt of the notice.
4. Details showing that the copy of the work is an infringing copy of the work owned by the complainant
and that the allegedly infringing act is not covered under Section 52 or any other act that is permitted
under the Act.
5. Details of the location where transient or incidental storage of the work is taking place.
6. Details of the person, if known, who is responsible for uploading the work infringing the copyright of
the complainant.

American counterpart: This notice and takedown procedure in the IT Act is similar to section 512 of
Digital Millennium Copyright Act (“DMCA”) which is the safe harbour provisions for intermediaries with
respect to copyright issues in the United States of America. The DMCA provision requires service
providers, upon receiving notice of infringing material, to remove or disable access to the material as
soon as possible. However, the DMCA also provides account to notification procedure to ensure that
there is no wrongful removal of content which does not constitute an infringement. If a subscriber files a
counter-notice contesting the infringement, the service provider is required to restore the material
unless the original claimant alleging infringement filed a lawsuit within 14 days.

In contrast to the DMCA, the takedown procedure under the IT act does not specify a time frame within
which Section 79(3) obligation application must be exercised. However, the intermediary guidelines
prescribe 36 hours for removal of unlawful content. Neither intermediaries nor users have been provided
with an opportunity to respond to takedown notices under Section 79(3). They will therefore have few
options but to remove content regardless of whether it is actually infringing or not in order to comply
with the notice.

Despite extensive amendment in 2008, S. 79 of the IT Act lacks clarity. It could have an unforeseen
impact on the intermediaries as well as the Right to free speech of the users unless the Safe Harbour
provision is articulated and amended to have some more clarity, transparency and redressal. Therefore,
a counter-notification procedure as provided in S.512 of DMCA should be included in S.79 of the IT Act
to prevent misuse of this provision.

Additionally, every category of online content, and more importantly, every category of intermediary are
varied, and any content takedown requirement must acknowledge these differences. A smaller
intermediary may find it more challenging to comply with a stricter, shorter timeframe. A piece of
‘terrorist’ content may be expected to be treated with more urgency than something that merely is
defamatory. These complexities are critical. They must be accordingly and thoughtfully incorporated in
any law on content takedown notice. Regulation of illegal content online also cannot follow the one-size-
fits-all principle. Accordingly, a good law on content takedown notices must account for the differences
existing in the way intermediaries operate and the diversity of speech online.

Conclusion
The definite relationship between the different intermediary liability provisions & rules is very
ambiguous. Section 79 provides the intermediaries with an umbrella provision of immunity (‘safe
harbour’) from civil and criminal liability. However, the licenses are contractual most of the time, and any
breach would entail the termination of the ISP’s license by the Department of Telecommunications. Also,
the relationship between liability for copyright infringement and the liability under the IT Act is not very
definite. The Delhi High Court, in Myspace vs Super Cassettes, held that the safe harbour provisions
apply to intermediaries concerning copyright infringement.

From the statutory provisions and judicial pronouncements above, it is observed that the rights,
protections and liabilities of intermediaries in India are ever-evolving and dynamic technology and the
law develops. However, it is apparent from the trend that India is approaching an era of more stringent
intermediary liability. Currently, Section 79 of the IT Act, the Intermediary Guidelines & Shreya Singhal
Judgment, is the authoritative law of India on intermediary liability. Hence, intermediaries cannot be
held liable unless they had the correct information, and unless the requisite authority gives proper court
order.

The Indian position on intermediary liability lacks the necessary new ones. Despite a marked
improvement in the IT act expanding the safe harbour protection enjoyed by intermediaries, the
obligations imposed on intermediaries by various legislations and judicial decisions severely threatens
the enjoyment of the Right to freedom of speech & expression on the internet. There is a need to clarify
certain principles without which the immunity provided to these intermediaries stands on slippery
ground.
It is imperative to ensure that no arbitrary power of the state is imposed on the intermediaries. The
evolving jurisprudence on intermediary liability significantly impacts all technology & e-commerce
players and necessitates the government to tread more cautiously to avoid dangerous economic
repercussions. Judicial decisions must also guard against increasing the burden on them, as obligations
and pressure to monitor content or not only infeasible but may lead to them resorting to broad filtering
which will severely paralyse speech and expression. Thus, the present law in India must be carefully
developed by both legislature and judiciary to create a clear, comprehensive and fair framework
concerning intermediary liability in the intellectual property sphere.

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 UNIT 9 LINKING, INLINING AND FRAMING
Structure
9.1 Introduction
9.2 Objectives
9.3 Linking
9.3.1 What is Linking?
9.3.1 Liability for Linking

9.4 Inlining
9.4.1 What is Inlining?
9.4.2 Inlining and Indian Law

9.5 Framing
9.5.1 What is Framing?
9.5.2 Legality of Framing under Indian Law

9.6 Summary
9.7 Terminal Questions
9.8 Answers and Hints

9.1 INTRODUCTION
The Web sites are soaked in information, much of it with varying degrees of copyright
protection. In fact, the reality is that almost everything on the Net is protected by
copyright law. Web sites are a composition of materials, often consisting of words,
graphics, audio, and video, that are expressed to the consumer as information content.
The subject matter expressed in the site is an electronic publication of this content.
Since, designing, producing, and maintaining a sophisticated Web site is very
expensive, protecting content ownership is extremely important. As Web sites
become more and more interactive with consumers, their creation, design, and
maintenance place enormous demands on innovative marketing techniques that
should be legally protected.
Never before has it been so easy to violate a copyright owner’s exclusive right to
copy the material. Everyone with a computer and an Internet connection creates his
own Web pages and thus become a publisher. Hence the rules that once applied to
only a few companies bind million of people now.
This unit highlights the scenario when contents of your Web site are exploited by
others without your permission or knowledge. The discussion is centred on copyright
issues involved in the practices of Linking, In lining and Framing technologies which
are normally being used on the Internet.

9.2 OBJECTIVES
After reading this unit, you should be able to:
z explain the concept of linking;
16
z make distinction between surface linking and deep linking; Linking, Inlining and
Framing
z describe the liability for linking;
z explain the Indian law references to linking; and
z describe the legality of framing under Indian law.

9.3 LINKING
9.3.1 What is Linking?
The interactive feature of the Internet’s most popular information access tool, the
World Wide Web, to hyperlink defines its very culture distinguishing it from any
other communications medium. On the Internet, a link is a selectable connection
from one word, picture, or information object to another. Links usually appear as
highlighted, underlined, otherwise prominent text or picture that can be selected by
the user, resulting in the immediate delivery and view of another file. The highlighted
object is referred to as an anchor. The anchor reference and the object referred to
constitute a link. A link may lead either to another file in the same Web site, or to a
file on a different computer located elsewhere on the Internet. Internet browsers
automatically decipher the instructions given by links and retrieve the specified file. A
single Web page may contain many links to other Web pages.
Linking is the sine qua non for the World Wide Web and in fact links are what make
the World Wide Web a web. Links allow quick access to information that otherwise
could take much time and effort to find. Linking is of two types:
Surface linking: When the home page of a site is linked it is the case of surface
linking.
Deep linking: When a link bypasses the home page and goes straight to an
internal page within the linked site it is the case of deep linking.

9.3.2 Liability for Linking

The Web was built for the purpose of enabling hypertext capabilities, allowing one
site to link to and access another. In most cases, the owner of a Web page will
desire the page to be the destination of as many links as possible because more links
would mean more hits, and more hits would in turn mean wider dissemination of
whatever information the page is designed to get across. To date, Web site owners
have made money primarily from the sale of advertising at their sites. The advertising
rate is set keeping in mind the number of people who visit the site.
The problem arises only with regard to the practice of deep linking. The home page
of a Web site is used as the entry point to information contained within the Web site
and welcomes users, explains the nature of the site and offers links that allow the
user to navigate through the site. Deep links defeat a Web site’s intended method of
navigation. Further deep links may “steal” traffic from the linked site’s homepage
thereby decreasing the revenue that could be generated from advertising that is
dependant on the traffic onto the site. A link is just a URL, the Internet address of a
Web site and therefore like a street address is not copyrightable. But this technology
of hyperlinking may aid in the distribution of creative material that belongs to someone
else. 17
Intellectual Property In the Ticketmaster Corp. v. Microsoft Corp.[United States District Court for the
Protection in
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Central District of California, Civil Action Number 97-3055DPP] case, the plaintiff,
Ticketmaster Corporation sued Microsoft for Microsoft’s practice of linking, without
permission, deep within its site rather than to the home page, and claimed, among
other things, that Microsoft effectively diverted advertising revenue that otherwise
would have gone to the plaintiff. Ticketmaster Corporation had also entered into
contracts with other firms whereby those firms had agreed to pay to link to the
Ticketmaster site. Free linking by Microsoft to the plaintiff’s site could have devalued
those contractual relationships. Allowing such a free link undercut Ticketmaster’s
flexibility both in designing its site and in its marketing efforts and arrangements with
other sites. During the pendency of the court proceedings the parties entered into a
settlement agreement whereby Microsoft agreed not to link to pages deep within the
Ticketmaster site and agreed that the links will point visitors interested in purchasing
tickets to the ticketing service’s home page.
In a Scottish case, Shetland Times, Ltd. v. Dr. Jonathan Wills and Another [1997
FSR 604.], the plaintiff, the Shetland Times operated a Web site through which it
made available many of the items in the printed version of its newspaper. The
defendants also owned and operated a Web site on which they published a news
reporting service. Defendants reproduced verbatim a number of headlines appearing
in the Shetland Times. These headlines were hyperlinked to the plaintiff’s site. Clicking
on the headline took the reader to the internal pages in the plaintiff’s site on which
the related story was found. In the process, the front page of the Shetland Times’
site (on which paid advertisements appeared) was bypassed, significantly diminishing
the value of the site to potential advertisers. The court issued an interim interdict
barring defendants, without the plaintiff’s consent, from copying headlines from the
plaintiff’s newspaper onto their Web site, and creating hyperlinks from those headlines
to the location on the plaintiff’s site on which the article described in the headline
appears.
What liability is there for the content on a linked site? A hyperlink used by a Web site
does not directly cause copying of any substantive content by anyone, but instead
merely provides a pointer to another site. A surface link to a home page does not
generally require permission. This position is based on the theory that going online
creates an implied license for anyone with a computer to view the Web site. Simply
placing a surface link is no more an infringement than the library catalogue telling you
it stocks a book, is an invitation to you to photocopy it in its entirety. The very fact
that a person or an entity has put up a Web site is in itself an invitation to all to visit
the site. So, the owner of a Web site should only be happy that someone has provided
a link to his Web site.
But what exactly can be the liability for a deep link under the Copyright Act of India.
By virtue of section 14 and 51 of the Indian Copyright Act, reproducing any
copyrighted work, issuing copies of the work to the public or communicating
the work to the public could amount to copyright violation. But in case of deep
linking the linking site is not reproducing any work. The reproduction, if at all any,
takes place at the end of the user who visits the linked page via the link. Can the
linking site said to be issuing copies of the work or communicating it to the public?
Technically, the linking site is only informing people about the presence of the work
and giving the address of the site where the work is present. It is the user’s discretion
to access the work by clicking the link. But nevertheless the linking site is definitely
18
aiding in the distribution of the work.
Looking from another angle, section 2(ff) of the Copyright Act says: Linking, Inlining and
Framing
Making any work available for being seen or heard or otherwise enjoyed by the
public directly or by any means of display or diffusion other than by issuing copies
of such work regardless of whether any member actually sees, hears or otherwise
enjoys the work so made available.
This definition of communication to the public could be stretched to cover the
communication of contents of a Web site on the Internet as the expression by any
means of display has been used to define communication.
But in case of deep linking problems could arise. Without deep linking, the Internet
as we know it would collapse. You couldn’t have a search engine, for example. But
some grey areas do need to be addressed. It is quite different for a search engine to
deep link than a competitor of an e-business Web site to do the same. Deep linking
to commercial Internet databases without the permission of the content owner could
raise many problems. It would be difficult for any business to see its content being
used by a competitor for free just because the new technology allows it. Many
publishers are moving to curtail or block permanent deep links, as more free content
moves behind registration screens or is shepherded after a few days into paid-for
archives. But many Web sites would welcome deep links as well.
So, should the law be amended to stop deep linking without permission of the owner
of the content? Or should the law provide complete immunity to links of all kinds.
Internationally, no law till date has put a ban on deep linking. There are indeed
problems in doing so. On the one hand one has to consider the rights of the owner
of content and on the other hand the interests of the society for which growth of the
Internet is all important. The international treaties and laws do emphasize the
importance of control in the hands of the content owner, but specifically they have
not dealt with the problem of deep linking. It would not be proper for the Indian
legislation to include a provision banishing deep links altogether because the current
provisions are sufficient to check the unauthorized use of someone’s content through
deep linking and using these provisions courts can fill the vacuum by deciding from
case to case basis; if a deep link has been created with bad intent and in order to
derive unjust enrichment out of somebody’s content then it could be injected.
Before linking deep within a Web site the prudent course for businesses and individuals
would be to seek permission. And for the creators of a Web site who want that it is
not linked to a pornographic or shabby site could place a prohibition in its ‘terms of
use’ similar to, “Do not link to this site without our express consent”. If you link
to a site that includes illegal material, could you be liable? It may be best to post a
disclaimer on your site indicating that the links are for information only, and do not
constitute an endorsement or approval of the material on the linked sites.
Please answer the following Self Assessment Question.
Self Assessment Question 1 Spend 3 Min.
What are the different kinds of linking?
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Intellectual Property ...................................................................................................................
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9.4 INLINING
9.4.1 What is Inlining?
Inlining or ‘In-line linking’ enables a Web page to summon different elements from
diverse pages or servers to create a new Web page. Instead of copying the elements
to the composite page, the elements are linked in by “pulling in” graphic or image
files from another site and displaying on the composite Web page. Thus, the composite
page would consist of a series of links to other sites and servers. While browsing the
composite page, the page directs the browser to get the pictures, graphics etc. from
the original sources.
An example would be a Web page on art that contains images stored around the
world. The Web page could contain the text: “See my favourite paintings”. Using an
IMG link, the Web page could then direct the visiting browser to retrieve the images
of famous paintings from the Web page of various museums and place it immediately
below the text. To the end-user, the integration of the two pieces of content (text and
pictures) is seamless, despite the fact that they were taken from two very different
sources. The viewer cannot distinguish that the image has originated at and been
imported from a separate site and may never come to know that it was not created
or stored at the site being visited by him. In this respect, inlining is different from
deep linking where the user is usually aware that he has “changed pages”, either
from the different appearance of the newly accessed page, or from the change in the
URL address display in the Web browser.
In the USA the Dilbert dispute, though did not involve the filing of a complaint or any
judicial determinations, is one of the few inline controversies and thus serves as a
point of discussion for these links. Dan Wallach created “The Dilbert Hack Page”, a
site that presented the Dilbert comic strip via inlining to the United Media Web site,
where the comic strips were located. The images appeared on Wallach’s Web site
via inlining. United Media, speaking for United Feature Syndicate, Inc., owner of
the copyright in the comic strip, requested by letter to Wallach to discontinue the
link. United Media contended that “the names or likenesses of the Dilbert comic
strips and all other United Media intellectual property cannot be used – on the World
Wide Web or elsewhere – without the express, written consent of UFS”. United
Media asserted that Wallach’s inline links to copyrighted material constituted an
unauthorized display of a copyrighted work, a violation of the Copyright Act. To
avoid litigation, Wallach removed the page.
In, Leslie A. Kelly v. Arriba Soft Corporation [Case No. 00-55521, US Court of
Appeals for the Ninth Circuit], a visual search engine (ditto.com, formerly known as
Arriba) crawled the web to produce thumbnail images of photographs and used
them to link to the original pictures. Leslie Kelly, a professional photographer was
upset that the search engine reproduced thumbnails of the images on his site which,
when clicked, produced the full-size image in a window on Arriba’s site. The page
used so-called in-line linking to display the original full-sized image, surrounded by
20 text describing the size of the image, a link to the original web site, the Arriba banner,
and Arriba advertising. Kelly filed suit on April 6, 1999, alleging copyright Linking, Inlining and
Framing
infringement. A California District Court ruled that both the creating of the
thumbnails and the inline-linking is justified under the fair use doctrine. On appeal by
Kelly, the Ninth Circuit Court of Appeals affirmed and reversed in part the
district court decision. The display of the tiny images was deemed to be legal fair
use, but not the inline-linking. On February 6, 2002, the US Court of Appeals for
the Ninth Circuit held that that unauthorized inline linking to images residing on the
copyright owner’s Web site violates the copyright owner’s right of public display.
The court rejected defendant’s fair use defence and stated that inline linking
diminishes the opportunities of the copyright owner to sell or licence the images on
his own Web site. The Electronic Frontier Foundation (EFF) filed a brief, thereafter,
urging the court to reconsider the part of its ruling on inlining to copyrighted
images. The EFF argued that the ruling against “inline linking” threatened to transform
everyday Web site activities into copyright infringements. In July 2003 the court
withdrew that portion of its opinion which was relating to inlining, leaving it to the
lower court to take a fresh look at the issue. It is now open for the court to reconsider
whether inlining is violative of copyright or not.
Please answer the following Self Assessment Question.
Self Assessment Question 2 Spend 3 Min.
Content on the Internet is protected by copyright law. Do you agree?
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9.4.2 Inlining and Indian Law

As in linking one has to turn to section 51 read with section 14 of the Copyright Act,
1957 to test the legality of inlining. By virtue of section 14 and 51, reproducing any
copyrighted work, issuing copies of the work to the public or communicating
the work to the public could amount to copyright violation. The person who employs
an inline link on his site is not causing any reproduction of the copyrighted content.
This is because the link’s creator never copies the pirated content; instead merely
provides a visiting browser with instructions to retrieve the image, which is then
incorporated into the overall page on the user’s site. Thus the only person who
copies the protected image is the final user who never comes to know that his browser
is fetching different elements from different sites. So, the reproduction, if at all any,
takes place at the end of the user who visits the linked page via the link. Also, the
creator of the inline link is not issuing copies of the work nor communicating or
distributing the work to the public. But he can be said to be aiding in such
communication and distribution.
Looking from the angle of section 2(ff) of the Copyright Act the definition of
communication to the public could be stretched to cover the communication of 21
Intellectual Property contents of a Web site on the Internet as the expression by any means of display
Protection in
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has been used to define communication.
Section 14(a)(vi) grants the right of adaptation only to the owner of copyrighted
work. By inlining the linking site could take some elements from the linked site’s
multimedia settings and create it’s own, thereby affecting the right of making a
derivative work of the linked site because taking some elements from the multimedia
setting and combining them with some other could well fit into the definition of
adaptation. So, adaptation rights do come in picture vis-à-vis inlining.
Inlining brings in the question of moral rights as well. Section 57 of the Copyright
Act, 1957 says:
1. Independently of the author’s copyright, and even after the assignment either
wholly or partially of the said copyright, the author of a work shall have the
right —
a. to claim the authorship of the work; and
b. to restrain or claim damages in respect of any distortion, mutilation,
modification or other act in relation to the said work which is done before
the expiration of the term of copyright if such distortion, mutilation,
modification or other act would be prejudicial to his honour or reputation.
2. The right conferred upon an author of a work by sub-section (1), other than the
right to claim authorship of the work, may be exercised by the legal
representatives of the author.
First, this section allows the copyright author to claim authorship of the work. In
case of inlining the user is confused about the original source and hence may never
come to know about the author. The user may never know from where different
elements of the site have emanated.
Second, it talks about the right of integrity. The author of the copyrighted work has
a right to see that his work is not being distorted, mutilated or modified. Copyrighted
graphic image could be pulled into a site with its image appearing on a single page
combined with other images, thus creating another work virtually new and different
from the original thereby strongly implicating the right to integrity of the work. The
combination of various elements could be termed as modification or even mutilation
in certain circumstances.
Even if a Web page allows others to link to it, it cannot be presumed that it has also
granted permission to link to individual elements of the page. If someone were to
create a composite Web page by summoning various elements from a different Web
site without necessary permission, it is clear that such a use would not be protected
as fair use. By stripping an element of its context, you also strip many of the copyright
privileges that may have been attached.
Should the law be amended to outlaw inlining or to allow this practice? The Copyright
Act talks about various rights of owners and authors of works and describes situations
where these rights can be infringed. So, there is no need for the law to be changed
as such in this regard. A complete ban could restrict the growth of the Internet. At
the same time owner’s content should not be subject to exploitation by one and all.
22 In this situation, it is for the courts to decide upon the legality/illegality of inlining from
case to case. The measure would always be the Copyright Act, the philosophy of Linking, Inlining and
Framing
which is amply clear. In case an inline link amounts to aiding in distribution or
communication with dishonest intentions, the courts will come forward and declare
such inlining illegal.
It is considered a breach of net etiquette to link to anyone else image through an
IMG link without permission. Consequently, one should obtain permission from the
copyright owner of the image prior to creating an inlining link.
Please answer the following Self Assessment Question.
Self Assessment Question 3 Spend 3 Min.
What is copyright violation? Explain
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9.5 FRAMING
9.5.1 What is Framing?
Web browsers allow Web authors to divide pages into “frames”. A frame is an
independently controllable window on a Web site through which pages from another
Web site can be viewed. Since it is possible for a site to call a frame’s contents from
a different location, a programmer might “frame” another’s Web content beneath his
own navigation or banners. This allows him to use creative content owned by another
entity to sell banner advertising on its on site. A typical use of frames is to have one
frame containing a selection menu in one frame and another frame that contains the
space where the selected (linked to) files appear.
In Washington Post Co. v. Total News, Inc. [97 Civ.1190 (S.D.N.Y.)] The
Washington Post filed a complaint against an online news site, Total News, the
publisher of the Web site www.totalnews.com. TotalNews, an aggregator of web
news sources, employed frame technology to display news sites from around the
Web. Total News had created pages with frames that contained hyperlinks to other
news Web sites, such as The Washington Post, CNN, USA Today, Time and Sports
Illustrated, etc. Web users, therefore, could use www.totalnews.com to access
articles from various sources. The TotalNews Web site generated its revenue from
advertising, which it placed in a static border frame. Clicking on a hyperlink to ‘The
Washington Post’ within the Total News Web page displayed the content of The
Washington Post page within a frame that was surrounded by TotalNews’s URL,
logo, banner, advertisements and information. Six content providers – CNN, Time-
Warner, Reuters, The Washington Post, The Wall Street Journal and the LA Times,
sued TotalNews, claiming that such framing was the Internet equivalent of pirating
copyrighted material. They also alleged misappropriation, trademark infringement
and trademark dilution. The plaintiffs complained that TotalNews has designed a 23
Intellectual Property parasitic Web site that republishes the news and editorial content of other Web sites
Protection in
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in order to attract both advertisers and users. Total News settled the case by agreeing
to link to, rather than frame, the Post’s Web pages of various plaintiffs and the court
did not have an opportunity to decide any of the legal issues that were raised by the
plaintiffs.
In, Futuredontics Inc. v. Applied Anagramic Inc. [1997 46 USPQ 2d 2005 (C.D.
Calif. 1997)] Applied Anagramic, Inc., a dental services Web site, framed the content
of a competing site. The frames included information about Applied Anagramic as
well as its trademark and links to all of its Web pages. A district court ruled that the
addition of the frame somewhat modified the appearance of the linked site and such
modifications could, without authorization, amount to infringement.
Please answer the following Self Assessment Question.
Self Assessment Question 4 Spend 3 Min.
What do you mean by frame in context of cyberspace?
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9.5.2 Legality of Framing under Indian Law

As in linking and inlining one has to turn to section 51 read with section 14 of the
Copyright Act, 1957 to test the legality of framing. The person who frames some
other site’s content on his site is not causing any direct reproduction of the copyrighted
content. This is because the framer never copies the pirated content; instead merely
provides a visiting browser with instructions to retrieve the content, which is then
incorporated into the overall page on the user’s site. Thus the only person who
copies the content is the final user who never comes to know that his browser is
fetching different elements from different sites. Also, the framer is not directly issuing
copies of the work nor communicating or distributing the work to the public as the
user’s browses is actually fetching the content directly from the owner’s site. But he
can be said to be aiding in such communication and distribution.
Section 14(a)(vi) grants the right of adaptation only to the owner of copyrighted
work. The framing site could take some elements from the framed site’s multimedia
settings and create it’s own, thereby affecting the right of making a derivative work
of the framed site because taking some elements from the multimedia setting and
combining them with some other could well fit into the definition of adaptation. So,
derivation and adaptation rights do come in picture vis-à-vis framing.
Framing brings in the question of moral rights as well. Section 57(1) of the Copyright
Act, allows the copyright author to claim authorship of the work. In case of framing
the user is confused about the original source and hence may never come to know
24 about the author. The user may never know from where different elements of the
site have emanated. The creator of a frame does not literally “copy” the contents of Linking, Inlining and
Framing
the framed page but only directs the user’s browser to summon content from another
Web site and show the same along with the content of the framing site. Since the
URL of the framed Web page does not appear on the screen, the user accessing a
framed site may not perceive the site as being framed and may attribute the
appropriated material to the home site owner. This could implicate the right of the
author to be identified as such, since the user never comes to know that he is viewing
content from a different site.
The author of the copyrighted work has a right to see that his work is not being
distorted, mutilated or modified. Content from various sites could be pulled into
a single window, thus creating another work virtually new and different from the
original thereby strongly implicating the right to integrity of the work. The combination
of various elements could be termed as modification or even mutilation in certain
circumstances.
Should the law be amended to outlaw framing or to allow this practice? The Copyright
Act talks about various rights of owners and authors of works and describes situations
where these rights can be infringed. Imagine a situation akin to the Washington
Post case. The world renowned news portals make huge investments in terms of
time, effort and cost to bring a news report. What if someone just frames the same
by a simple technique? It would be wholly unfair to do so or to allow so. In this
situation, it is for the courts to decide upon the legality/illegality of framing from case
to case. The measure would always be the Copyright Act, the philosophy of which
is amply clear. In case a frame amounts to aiding in distribution or communication
with dishonest intentions, the courts will come forward and declare such inlining
illegal.
Despite the paucity of judicial guidance in this area it could be stated that framing
could amount to copyright infringement. Therefore, the use of frames to contain
linked content should only be carried out with the express permission of the owner
of the framed materials.
Let us now summarize the points covered in this unit.

9.6 SUMMARY
z Almost everything on the Net is protected by copyright law.
z Linking is of two types; surface and deep linking.
z Inlining or ‘In-line linking’ enables a Web page to summon different elements
from diverse pages or servers to create a new Web page.
z Inlining is different from deep linking where the user is usually aware that he has
“changed pages”, either from the different appearance of the newly accessed
page, or from the change in the URL address display in the Web browser.
z A frame is an independently controllable window on a Web site through which
pages from another Web site can be viewed.
z The technologies of linking, inlining and framing could be abused to violate
someone’s copyright.
25
Intellectual Property z Moral rights which are included within the overall doctrine of copyright could
Protection in
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also be jeopardized by these technologies.

9.7 TERMINAL QUESTIONS

1. How in lining could lead to copyright violations?
2. What is meant by the term ‘framing’? How framing could lead to copyright
violations?
3. Write a note on linking technologies and its copyright implications.

9.8 ANSWERS AND HINTS

Self Assessment Questions
1. Surface linking and deep linking.
2. Yes.
3. Frame is an independently controllable window on a website through which
page from another website can be viewed.
4. Reproducing any copyrighted work, issuing copies of the work to the public of
communicating the work to the public amounts to copyright violation.
Terminal Questions
1. Refer to sub section 9.3.1 of the unit.
2. Refer to section 9.4 of the unit.
3. Refer to section 9.2 of the unit.

26
TRADE SECRET
• Hidden Aspect of a website like (confidential graphics, source code, object code,
algorithms, algorithms, programs or other technical descriptions, data flow charts, logic
flow charts, user manuals, data structures and database contents) are protected under
Trade Law Secrets
• US vs Liew
conviction of walter liew arose from theft of trade secrets from Dupont (information and doc
pertaining to the production of white pigment - Titanium dioxide
✓ Intent to injure Dupont
✓ Intent to benefit

• US v Hanjuan Jin
Began working as a software engineer in motorola, took a year medical leave, where she joined
Sun Kaisens - telecommunication company in china
Later returned to work, downloaded technical documents - alleged to be trade secrets and
attempted to board a flight to china
✓ Intent to obtain economic benefit
✓ knowingly that it would cause injury to owner
✓ knowing that offense will benefit foreign government
COPYRIGHT
• Computer software – No technical effect- Protection under copyright act, 1957
Need not register for protection. Must register for remedy on infringement under sec 44
• Computer program – technical effect – protection under Patent Act, 1971
•
Taxation and
E-Commerce
Kinds of Taxes

Direct Tax- Income Tax

Basis of payment is the income

Indirect Tax- GST, customs

Basis of payment is the use of resources to provide the goods and services
 •Tax Deducted at Sources- Tax
deducted by the payer before making
Methods payment to the payee. Eg Salary,
Rent, Professional fee

of •Tax Collected at Source- Tax

Taxation collected by seller while selling the
product to the buyer. Eg, Goods and
Services.
 • Substantial amount of State revenue
which is generated through direct and
Taxation indirect taxes is lost when Internet
transaction remain untaxed because:

Issues in 1.Permanent Establishment- compromise

E-Commer between the source state and the resident

state to prevent double taxation of a
business being carried out by a
ce non-resident.
2.Nature of products bought and sold- e
goods/ intangible goods.
 •Brick –n- mortar- no online
activity. Eg. Offline stores
Models of
E-Commer •Click-n-brick- some online activity
Eg. ola cabs, food delivery
ce and •All- click model- entire business is
Taxation online. Eg Softwares and digital
goods
Models of Taxation
⚫All
SubstantialBrick
nexus n All
Brick click click
Sale of tangible Delivery offline, Softwares, music,
goods in shops order online videos, games, app

Substantial
Tax by retailer in nexus,consumption Enforcement is
the bill based/ origin based difficult
tax
 • Company registered in State Y actively
selling its goods in State X .Factors to
consider:

Consideratio • Business Connection

n for • Purposeful availment

Taxation • Fixed assets

• Targeting criteria
 • According to OECD Model Treaty 1992

• A fixed place of business through which a

business of an enterprise is wholly/partly
carried out (Art. 5.1)
Business
• Office of dependent agents contracting on
Connection- behalf of business entity is PE

Permanent • Factory /office- PE only if it carries out

Establishment business, ancillary work offices not covered

• Office of independent agents not PE

Virtual Permanent
Establishment and Taxation
• Galileo International and Amadeus Global Travel v Deputy
CIT (2008) Del

• Held: Non- resident companies providing computerized

reservation system are liable to be taxed in India as they
receive booking fees from Indian residents, thereby having
a virtual PE (fixed place of business)
 • ITO vs Rights Florists Ltd. (ITT ) 2013

• Held that payments to websites like Google

No and Yahoo! for online advertisements were
not liable to be taxed in India
Permanent
• The tribunal held that the websites could not be
Establishmen construed as permanent establishments or as
taxable presence of foreign enterprises owned
t without and maintained in India.

servers • The web servers are located outside of India, no

permanent-establishment risk to India exists
UN Model Double Taxation Conventions
⚫ Art. 5- (Permanent Establishment)
- Stocking of goods for delivery- PE 5(5) (b)
- Independent agents; dependent agents 5(7)

⚫ Art. 9- (Associated Enterprises)

- More taxation right to source State or Capital importing state
- Commercial and financial relations between two enterprises will
result into a taxation of profits even if they have been accrued by just
one enterprise; by virtue of association
 • Sec 44DA Income Tax Act- Royalties Income in
case of non-residents (April 1, 2011 onwards)
- Paradigm Geophysical Ltd. Vs. CIT (DHC)
- Revenue from supply or software;
maintenance of software- taxable?
- Supply= royalty ergo taxable
Permanent -
•
Maintenance= subject to determination of PE
163 of Income Tax Act, 1961
Establishmen - Appointment of an agent by a foreign company
in India may fulfill business connection and can
t in India be a PE
• Business Connection- Sec 9 (1) of Income Tax
Act- income is deemed to accrue or arise in
India when it arises directly/indirectly through
any business connection in India
Arms Length Principle and Transfer Pricing

⚫ Arms Length Principle- Parties to a transaction are

independent and must be on an equal footing-

⚫ Transfer Price- amount of money paid to the particular part

of the organization for manufacturing goods/delivering
services and the cost on the part of organization which
purchases those products or services
Transfer Pricing Principle

⚫ Developed to check tax evasion

⚫ Entities transfer income to low tax jurisdictions and expenditure

to high tax jurisdictions

⚫ Principle followed- entities should bear cost/expenses of

outsourcing the work to its other units as if they outsourced it to
an independent vendor
Arms Length Principle and Transfer Pricing

Arms length principle is applicable to assess the profit of the foreign

non-resident that are made from business activity through its PE in India

⚫ Cargo Community Network Pvt. Ltd. Case(2006) –

- Use of the commercial equipment was carried out in India and accordingly, the
'payments' also arise in India.
PE and Royalty
⚫ DCIT v Metapath Software International Ltd (2006)

Income from selling hardware and software to telecom companies

Held; No PE to carryout sales in India

Sale was not of license to use the software for commercial purposes

Income from such sales was not taxable in India

Taxation of E-Goods
⚫ Only Tangible goods subject to tax

⚫ TCS vs State of AP (2005)

Branded software which comprise of IPR become tangible when stored
in physical media

⚫ CIT vs Oracle Softwares Ltd (2010)

Manufacturing is a process that makes articles fit for use and
duplicating activity which makes a CD fit for use is a manufacturing
activity
E-Goods- Goods or Services
⚫ Definition of Goods in India

⚫ Art. 366 (13) – Constitution of India

⚫ Sale of Goods Act, 1930- movable property except actionable claims, money

⚫ Central excise and salt Tax Act, 1944- anything which can be bought and sold

⚫ E-goods- goods which are bought and sold online. It is delivered onlines eg.
Softwares, e-books etc.
Taxation of E-Goods
⚫ Twentieth Century Finance Corporation Limited v State of
Maharashtra (2000)

⚫ Where place of sale has not been agreed or determined through

legal rules of a statute, the place of sale will be the place where
property in the goods passes to the buyer

⚫ Destination based rule- places of consumption- is not applied

UNIT 8

Prescribe – Power of the state to apply its law to the persons (territorial, nationality (status of
person or interest within the territory), effect and protective principles)

Adjudicate – Power to decide the dispute; Deciding factors: reasonableness, presence of defendant
and effect of his activities

Enforce – Mandate Compliance/ Punish the offender

Theories for jurisdiction to prescribe:

(1) Subjective territoriality: act or conduct is committed within the boundaries/territory of the
regulating/forum State then such State shall be entitled to lay down law/ apply its law in order to
govern such an act or conduct.

UEJF and LICRA v Yahoo! Inc and Yahoo France:

(2) EFFECTS JURISDICTION / Objective territoriality: act or conduct by the non-resident

person within a Forum State. act takes place in another territory but, the effect of the activity,
direct or indirect is substantially felt within the Forum State.

United States v Thomas (def – California, published pornographic content, charged a fee,
downloaded in Tennessee, so the district court had the jurisdiction)

Playboy Enterprise, Inc. v Chuckleberry Publishing, Inc

cross border jurisdictional dispute on the internet. The defendant operated a website in Italy that
displayed and distributed obscene photographs to internet users including customers based in the
USA as a paid service. The court took the view that distributing such obscene material in the
USA violated an order prohibiting the use of Trade Mark, ‘Playmen’ in magazines distributed
in USA. The order curtailed access to the website in USA.

(3) Nationality: alleged offender is a National of the State, the laws of which have been violated
by his acts. The Forum State assumes jurisdiction based on the Nationality principle. Indian
National is liable to prosecution in India for an offence committed in a foreign country which is
punishable under Indian law.

Sec 3 of IPC- liable under Indian law, shall be tried as if the act was committed in India
Sec 4 of IPC - offence committed by any citizen of India in any place without and beyond India

179 of CRPC -offence can be tried either where the offence was committed or where the
consequence of the violation was suffered by the affected party

(4) Protective Principles: a country takes necessary action in a foreign State to secure its national
integrity or interest. offences of serious nature that threaten the integrity and security of a State
including acts of cyber warfare, terrorism, espionage, money laundering, etc.

United States v Rodriguez, wherein certain false statements were made in immigration documents
when they were outside the United States, held that protective principle can be invoked and
jurisdiction can be assumed when offensive act is committed by another government or another
State.

(5) Passive Nationality: based on the complainant’s nationality (def should also fall within the
jurisdiction)

(6) Universality: jurisdiction is assumed by any State to prosecute an offender for acts which
are known universally by International Law to be a heinous crime, viz. hijacking, genocide,
child pornography. The multilateral treaties and conventions such as the Cyber Crime
Convention, 2001 is an example of acceptability of universal jurisdiction principles

TESTS to determine jurisdiction over internet:

Minimum Contact Test

General Jurisdiction: Personal Jurisdiction invoked as the nonresident defendant has substantial
contact with the forum state. Cause of action need not arise from defendants’ activities with the
forum state

Specific Jurisdiction: Cause of action should arise from defendants’ activities within the forum
state + purposefully availed’ himself of the privilege of transacting business within the Forum
State + exercise of jurisdiction should be fair and reasonable

Burger King Corp v Rudzewicz: Def – Michigan (being the franchise failed to provide royalty to
burger king acc with the contract signed in Florida- Plaintiff) Florida law would govern their
relationship, Jurisdiction existed with the Florida Court
Washington v International Shoe Company: agents of the International shoe company were
contacting the other commercial entities in Washington to advertise the shoe and even got
business for the show company. Def argued that they did not have any presence in Washington
because only agents were sent, and through those interactions they were getting business. The
Washington court did have a jurisdiction.

Hanson v Denckla: the court held that a non-resident defendant should REASONABLY
EXPECT that he may be subjected to a legal proceeding in a foreign court if he ‘purposefully
avails’ the benefits of conducting business in the foreign State and enjoys the legal protections
granted by that State for conducting its business.

Mere Transfer of Product in to Forum State without advertising or soliciting business – DOES
NOT SATISFY purposeful Availment test: Asahi Metal Industry Company Limited v Superior
Court of California, Court rejected ‘foreseeability’ approach and laid down the requirement of
‘additional action’ that indicated ‘purposefully Availment’ (merely on the basis of foreseeability
the personal jurisdiction cannot be established)

California-based resident who was injured in a motor-cycle accident had sued the manufacturer of
motor-cycle tiers, a Taiwan-based Corporation. The Supreme Court of California took the view
that it had jurisdiction on the basis of foreseeability that the product could be sold all over the
world including California. The United States Supreme Court rejected the view of California Court
and said that dispute had to be resolved in Taiwan only.

CompuServe, Inc. v. Patterson: Ohio – Texas resident (shareware sold through internet service
provider, received payments, agreement)

Effect Test

Calder v Jones: Corporation based in Florida published an allegedly defamatory article on

Shirley Jones, a resident of California. A complaint alleging libel was filed by the complainant
against the National Enquirer, its distributors and the newspaper’s editor and the journalist who
wrote the article in the State Court of California. The court held that although the article was
written, and printed in Florida, the journalist and the editor of the newspaper of the National
Enquirer had expressly aimed at the California based Jones and knew that publishing such an
article may harm the reputation of Jones in California. In short, the effects of the conduct
committed in Florida were felt in California where they were directed. Particularly so when the
National Enquirer had 10 per cent of its total sales in California and the journalist had written the
story in Florida by contacting sources in California through telephonic interviews

Panavision International v Toeppen: California State was held to have personal jurisdiction over
an Illinois resident. Toeppen engaged in a cybersquatting activity by registering Panavision’s
trade mark and demanded a hefty amount to transfer the registration to Panavision. The court
held that California had specific jurisdiction over the non-resident Toeppen. The court took the
view that Toeppen knew that Panavision would feel the effect of his illegal action in California
as its principal office of Panavision was located in California

Sliding Scale Test/ Zippo Test

Zippo Manufacturer v Zippo.Com

Zippo manufacturing, the plaintiff company was manufacturing cigarette lighters in

Pennsylvania and the defendant had an internet news service company registered in California.
Zippo was a well-known trademark of the plaintiff company. However, the defendants also used
the word ‘zippo’ to render its online news service in Pennsylvania. The question here was
whether there was trademark infringement. Whether the jurisdiction would lie in the courts of
where the Zippo Manufacturing’s head office is situated or in the courts of where Zippo.com is
registered. The courts also looked into whether the website was interactive or not (Sliding test).
The plaintiff, Zippo Manufacturer contended that the defendant by transacting business in
Pennsylvania had caused infringement of its trade mark ‘zippo’. When a case was filed in the
United States District Court of Pennsylvania, the court held that it had specific jurisdiction over
the defendant.

According to the Sliding Scale Test, on one extreme end are ‘passive websites’ that disseminate
mainly information to internet users and would not attract exercise of personal jurisdiction.
In the middle of the spectrum are the ‘interactive websites’ where internet users may input some
information on the website. In this case exercise of personal jurisdiction depends on ‘the level
of interactivity and commercial nature of exchange of information’ by means of the website.
On the extreme other end of the spectrum are the ‘active websites’ wherein the defendant
undertakes activities over the internet and constantly interacts with the website. In the Zippo
case the court took the view that the defendant would fall in the category of ‘active websites’ and
held the exercise of personal jurisdiction over the defendant was fair and justified.,

UEJF and LICRA v Yahoo! Inc and Yahoo France

First the French court assumed jurisdiction and said that the Yahoo website has to block access
of its site (for displaying Nazi souvenirs) to its France website users (provided a platform to the
third parties for auction sales) After it was done, the French court asked them to block access of
its website to French residents even in USA. Yahoo appealed to US District court... And the court
held the case in favor of Yahoo saying that the decision of French court is inconsistent with first
amendment of freedom of speech and expression and that it did not personal jurisdiction on the
Yahoo Website for USA but only on Yahoo France website. And when the other party (LICRA)
appealed to US Court of appeal they held in favor of LICRA saying that district court of USA
does not have personal jurisdiction over LICRA.

Targeting Approach test / Purposeful Availment Test

People v World Interactive Gambling

jurisdiction over out-of-state defendant as he had specifically targeted New York residents as
customers for conducting illegal business of gambling using the internet.
Knowhow briefs
The Brussels regulation at a glance
Executive Summary:
 A practical guide which addresses how and why the Brussels Regulation
has been ratified and approved; which jurisdictional issues parties should
consider when filing an international lawsuit; the practical steps that need
to be taken prior to recognition and enforcement of judgments; and what
types of documents need to be prepared by a party for the enforcement
procedure.
 This guide also provides a short introduction of the new reform of the
Brussels Regulation and points out the significant changes which will apply
from 10 January 2015.

What is the Brussels Regulation?

1. Council Regulation (EC) No 44/2001 on jurisdiction and the recognition
and enforcement of judgments in civil and commercial matters (“Brussels
Regulation”), dated 22 December 2000.
2. The Brussels Regulation is mainly based on the Brussels Convention on
jurisdiction and the enforcement of judgments in civil and commercial
matters, dated 27 September 1968. In contrast to the Convention, the
Brussels Regulation is mandatory for all members of the EU and need not
be ratified.
3. If a person wins a lawsuit and is granted a judgment, they may want to
enforce this judgment in order to receive whatever the court has granted.
To be enforced, in which, the judgment has to be declared enforceable in
the member state enforcement is sought. In general, each Member State
has its own laws on enforcement. The Brussels Regulation regulates the
enforcement a judgment handed down in another Member State, so that
there is a uniform set of provisions which apply across the EU.
4. The Brussels Regulation applies to disputes between individuals from
different Member States of the European Union (EU).
5. Questions of interpretation of the Brussels Regulation are subject to the
jurisdiction of the European Court of Justice.
6. The Brussels Regulation applies exclusively to civil and commercial
matters. In particular, it does not extend to:
 matters of personal status, including matrimonial matters, wills and
succession;
 bankruptcy;
 social security; and arbitration.
When does the Brussels Regulation apply?
1. General rules of jurisdiction
The Brussels Regulation provides general rules with respect to jurisdiction. The basic principle is
that the courts of the EU Member State in which the defendant is domiciled will have jurisdiction to
hear the dispute, regardless of the defendant's nationality. Domicile is determined in accordance
with the domestic laws of the Member State in which the matter is brought. If a party is not
domiciled in the EU Member State whose courts are seised of the matter, then, in order to
determine whether the party is domiciled in another Member State, the court shall apply the law of
that Member State. Where legal entities or companies are involved in a lawsuit, domicile is
determined in accordance with the laws of the country in which the legal entity or company has its
statutory seat, central administration or principal place of business. In the case of trusts, domicile is
determined by the court considering the case by applying its own rules of private international law.
2. Possibility of suing a defendant in another Member State
While the principle of domicile acts as the general rule for determining jurisdiction, a defendant
may, under certain circumstances, be sued in the courts of a Member State other than the Member
State in which he is domiciled. The Brussels Regulation lists the following areas of jurisdiction:
special and exclusive jurisdiction; jurisdiction on matters relating to insurance; consumer contracts;
and individual contracts of employment.
Under the Brussels Regulation, 'special jurisdiction' will include the following:
 matters relating to a contract: As a general rule, the courts of the Member State which is
the place of performance of the obligation in question will have special jurisdiction;
 matters relating to maintenance/financial support: Questions can be brought before
the courts of the Member State in which the maintenance creditor is a resident;
 matters relating to tort, delict or quasi-delict: The courts of the Member State in which
the harmful event either occurred or may occur will have jurisdiction;
 matters relating to insurance: An insurer may be sued before the courts of the Member
State in which he is domiciled. Alternatively, where the action is instigated by the insured or
a beneficiary of the insured, the insurer may be sued in the courts of the Member State in
which the plaintiff is domiciled. In respect of liability insurance or insurance of immovable
property, the insurer may, in addition, be sued before the courts of the Member State in
which the harmful event occurred.
 matters relating to contracts concluded by consumers: “Consumers” are defined as
persons who conclude a contract with a professional for a purpose which is outside their
own trade or profession. All contracts concluded with a person who pursues commercial or
professional activities in the EU are covered. A consumer will be protected if a contract
concluded for the sale of goods is financed on instalment credit terms, by a loan repayable in
instalments, or by any other form of credit. Additionally, a consumer will be protected if a
contract has been concluded with a person who pursues commercial or professional
activities in the Member State of the consumer's domicile, or directs such activities to that
Member State. A consumer may commence proceedings either before the courts of the
Member State in which the defendant is domiciled, or before the courts of the Member State
in which the consumer is domiciled. Proceedings may be brought against a consumer by the
other party to the contract only before the courts of a Member State in which the consumer
is domiciled.
 matters relating to individual contracts of employment: employees may either sue
their employer before the courts of the Member State of the employer's domicile or before
the courts of a Member State in which the employee habitually works. An employee who
does not habitually work in any Member State may sue his employer before the courts of the
Member State in which the business that hired the employee has its seat. An employer who
 is not domiciled in any Member State, but does have a branch, agency or other
establishment in a Member State, is deemed to be domiciled in that State.
However, an employer can only bring proceedings against an employee in the courts of the
Member State in which the employee is domiciled. Therefore this jurisdiction is exclusive.
3. The following courts will have exclusive jurisdiction irrespective of domicile:
 where the subject of proceedings is rights in rem to immovable property or tenancies of
immovable property: the courts of the Member State in which the property is situated;
 where the subject of proceedings is the validity of the constitution, the nullity or dissolution
of companies or other legal entities, or the validity of the decisions of their organs: the
courts of the Member State in which the legal entity has its seat;
 where the subject of proceedings is the validity of entries in public registers: the courts of the
Member State in which the register is kept;
 where the subject of proceedings is the registration or validity of patents, trademarks,
designs or other similar rights: the courts of the Member State in which the deposit or
registration has been applied for, has taken place, or is under the terms of a Community
instrument or an international convention deemed to have taken place;
 where the subject of proceedings is to enforce a judgment: the courts of the Member State in
which the judgment has been, or is to be enforced.
If the parties, of whom one or more should be domiciled in the EU, have included a choice of
jurisdiction clause in an agreement attributing jurisdiction to a Member State court, that court will
have jurisdiction. According to the Brussels Regulation, a number of formalities must be observed
for a valid jurisdiction agreement. The agreement must be in writing, or in a form that follows
practices which parties have established between themselves, or, in international trade or
commerce, the agreement must be in a form that complies with general trade practices of which the
parties are, or ought to be aware.

When can the Brussels Regulation help for recognition and

enforcement of your judgment?
A judgment in one Member State must be recognised in other Member States without having to
resort to any special procedure. "Judgment" means any decision issued by a court or tribunal of a
Member State, no matter what the decision may be called, including decrees, orders or a writ of
execution. Under no circumstances may a foreign judgment be reviewed with respect to its
substance.
First, a judgment must be recognised before it can be enforced in another Member State.
1. Despite the general rule, a judgment will not be recognised if:
 recognition is manifestly contrary to public policy in the Member State in which recognition
is sought;
 it was given in default of appearance and the defendant was not served with the document
that instituted the proceedings in sufficient time and in such a way as to enable the
defendant to arrange for his/her defence;
 it is irreconcilable with a judgment given in a dispute between the same parties in the
Member State in which recognition is sought;
 it is irreconcilable with an earlier judgment given in another Member State or non-EU
country involving the same cause of action and between the same parties.
2. A court of a Member State in which recognition is sought of a judgment given in another
Member State may stay the proceedings if an ordinary appeal against the judgment has been
filed.
3. A judgment can be enforced in another EU Member State when, on application by any
interested party, it has been declared enforceable there. Either party may appeal against a
decision by applying for a declaration of enforceability.
 The courts or relevant authorities to which the application may be submitted are listed in
Annex II of the Brussels Regulation.
 The enforcement procedure itself is governed by the national law of the Member State in
which enforcement is sought.
 The judgment shall be declared enforceable immediately on completion of the formalities,
without review.
 A declaration of enforceability may only be refused on one of the grounds specified in the
Brussels Regulation (Articles 34 and 35).
A decision on the application for a declaration of enforceability may be appealed against by either
party.

What are the significant innovations and key changes of the

revised Brussels Regulation?
 In December 2012 the European Economic and Monetary Affairs Council approved
amendments to the Brussels Regulation, which will come into force on 10 January 2015.
 The key changes are designed to (a) streamline the process for enforcement of judgments across
Member States, and to reduce time and costs for judgment creditors; (b) strengthen choice of
court agreements by ending cross border “torpedo” litigation tactics; (c) extend the remit of the
Brussels Regulation’s jurisdiction rules to non-EU Defendants in certain cases; and (d) protect
arbitration clauses against abusive litigation.
1. Streaming the enforcement of judgments across EU Member States
In order to enforce a civil or commercial judgment handed down in one Member State in another
Member State, a judgment creditor is currently required to obtain a declaration of enforceability
from the enforcing Member State court. Depending on the particular enforcing state, this process
can add several months to the timeline for a claimant looking to enforce a judgment in another
Member State, whilst giving the defendant the opportunity to raise meritless defences in order to
delay enforcement.
The revised Brussels Regulation aims to abolish this procedural hurdle. It ensures that a Member
State court judgment will be immediately enforceable in another Member State court without any
further declaration of enforceability being required. Certain safeguards have been introduced to the
revised Regulation. However, it is only in exceptional cases that recognition and enforcement will
be refused, e.g. where it would be contrary to public policy.
2. Ending cross-border “torpedo” actions

The revised Brussels Regulation seeks to end the increasingly common tactic of “torpedo”
proceedings. These occur when a party commences proceedings in a Member State other than the
one chosen by the parties, with the aim of causing delays. This is made possible by the current
wording of the Brussels Regulation, which provides that the Member State court in which
proceedings are first commenced (the court first seised) determine whether it has jurisdiction. No
other Member State can claim jurisdiction until the courts of the Member State first seised have
done so. This rule applies even if, for purely tactical reasons a party brings proceedings before a
court other than the one specified in the jurisdiction clause.
The revised Brussels Regulation seeks to end this practice. It provides that, where parties have
(conferred) exclusive jurisdiction on a Member State court, any other Member State court shall stay
the proceedings brought before it until the court provided for in the jurisdiction agreement has
ruled whether or not it has jurisdiction to determine the matter.
3. Extending the remit – application of the Brussels Regulation to non-EU parties
The Brussels Regulation does not currently apply to defendants domiciled outside the EU. In such
cases Member State courts apply their own rules to decide whether they have jurisdiction. The
revised Brussels Regulation will extend to and protect jurisdiction agreements by non-EU parties
with a view to provide claimants with equal access to justice in the following circumstances:
 A consumer from a non-EU country will be able to bring proceedings either in the courts of
that non-EU country or in the courts of the domicile or place of establishment of the trader;
 A lawsuit against a non-EU domiciled employer can be brought before the courts of the
Member State in which the employer is established;
 None of the parties have to be domiciled in the EU if they have agreed that any disputes will
be subject to the exclusive jurisdiction of the courts in one of the Member States.
4. Protecting arbitration clauses against abusive litigation
The revised Brussels Regulation is intended to address the concerns that arise if parties to an
arbitration agreement choose the arbitral law of a Member State and its courts' supervisory
jurisdiction for their arbitration, but the courts of another Member State are seised first. In such
circumstances the court of the Member State agreed upon by the parties under the arbitration
clause would have to stay any proceedings in favour of the Member State court that was seised first.
 The revised Brussels Regulation confirms that Member State courts retain the right to rule
on the validity and scope of arbitration agreements in accordance with their national law,
and that their decision should not be subjected to the rules of recognition and enforcement
laid down in the Brussels Regulation.
 The New York Convention has precedence over the Brussels Regulation and therefore courts
of Member States are permitted to recognise and enforce an arbitral award even if it is
inconsistent with another Member State’s judgment.
Contact:
4B

Vonnick le Guillou Steven Baker

Co-Head of International Co-Head of International
Dispute Resolution Dispute Resolution
Paris London

Direct: +33 1 42 68 6035 Direct: +44 (0) 20 7415 6766

vonnick.le.guillou@twobirds.com stephen.baker@twobirds.com

Florence Brauch Djazia Tiourtite

Associate Mid-level Associate
Düsseldorf Paris

Direct: +49 211 2005 6233 Direct: +33 (0) 1 42 68 6358

florence.brauch@twobirds.com djazia.tiourtite@twobirds.com
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advised to seek specific legal advice in relation to any particular problem they may have. © Bird & Bird LLP 2013.

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