Intermediary Liability for Copyright Infringement in India: Few Thoughts in the Wake of Viacom v. Youtube [Part II]

Continuing from my previous post, about the liability of intermediaries in India, after my reading of Viacom v. Youtube and the raging debates on this blog and elsewhere about the correct interpretation of Section 79 and Section 81 of the Information Technology Act, I put forth the following analysis with the assumption that there will be some clarity on the interpretation of S.81 soon, and if as expected, it mirrors the purpose, character and substance of the DMCA, the following interpretation may prevail.

2) INTERPRETATION 2 – Section 79 overrides Section 81

Definition of service provider
First and foremost, it is essential to determine whether an intermediary such as Youtube would fit within the definition of ‘service provider’ under existing Indian law. The recently amended Section 2(w) of the IT Act is expansive in scope and defines intermediaries fairly broadly and includes telecom service providers, internet service providers, web-hosting service providers, search engines, online payment sites, online auction sites, online market places and cyber cafés. Simultaneously, it is also important to test the nature of the service provider on the touchstone of S.79(2). While sub-clause (a) deals with access-only intermediaries, it also includes ‘transmission’. As mentioned earlier, the court in Viacom held that transmission or re-transmission, whether to the original third-party user who uploads the information or to any another user, is a necessary complement to ‘storing’ that information. Borrowing the principle, Youtube seemingly satisfies the condition under S.79(2)(a). At the same time, it also appears to satisfy the three conditions under sub-clause (b) requiring that the intermediary:

i) does not initiate the transmission
ii) select the receiver of the transmission; and
iii) select or modify the information contained in the transmission.

(For a more detailed analysis of how an online video hosting service that survives on user-generated content qualifies as a ‘service provider’, I recommend a reading of the brilliantly written judgement in UMG Recordings, Inc. v. Veoh Networks, Inc.(C.D. Cal. Sept. 11, 2009)

Due Diligence
The concept of due diligence features in sub-clause (c) of S.79(2) of the IT Act. It is important to note that while the conjunctive ‘or’ separates clauses (a) and (b), clause (c) constitutes a separate requirement altogether. Thus, for an intermediary to qualify for immunity, it must satisfy either clause (a), or clause (b) and must necessarily satisfy clause (c) as well. That is to say (a) + (c) or (b) + (c) or (a) + (b) + (c). It is absolutely essential then that the standard for ‘due diligence’ is clarified immediately and comprehensively.

I find the aspect of ‘due diligence’ to be the most crucial determinant in a case like this since it is a subjective element that is capable of varying interpretive standards. I am most concerned however, by the judicial guidance in this regard that has emerged quite recently in the context of intermediary liability. In the case of Avnish Bajaj v. State of Delhi the Court held that Baazee.com (the intermediary) had failed to exercise due diligence since its filters were faulty and allowed content that was pornographic in nature to pass through, despite the listing itself having obscene content, and the intermediary did not account for any changes in its policy to tackle the possibility of such content being listed on the website in the future.

Going by the direction provided in Avnish Bajaj, I am slightly distressed to note that the installation of efficient filters is judged to be a condition for an intermediary to satisfy the due diligence requirement under the Act, for the reasons mentioned below.

(a) Use of Filters
This is important because in the absence of any statutory requirement, any case law suggesting that efficient filters are mandatory, might compel an intermediary to alter its policy with regard to installing filters. While the Court in Avnish Bajaj observed that “owners or operators of websites that offer space for listings might have to employ content filters if they want to prove that they did not knowingly permit the use of their website for sale of pornographic material”, whether the same standards of due diligence would apply in copyright infringement claims is open to doubt.

Perhaps because the case dealt with intermediary liability in relation to obscenity law, the standard was raised considerably and stricter conditions were laid down, but there is nothing to suggest that the same standard will not be expected of an intermediary in defending a claim for copyright infringement. And besides, with due diligence being an essential condition under the statute, and no other guidance in this regard for service providers, an intermediary would be hard-pressed to find any other reference to a standard for ‘due diligence’.

I find this particularly worrisome because the DMCA does not in any way require filters. In fact, this was in issue that also emerged in the aftermath of the Viacom ruling, with some observers claiming that Viacom’s real intent was not to curb infringement of its works on Youtube, but rather to make a case for the DMCA to be re-written, with a mandatory requirement of proactive monitoring and use of filters. It cannot be overemphasised how untrue such claims of Viacom are, since there is absolutely no burden on the intermediary to monitor its networks for infringing content, a point I reflect on below.

The other issue is that even if filters are mandated (for example by way of a Government notification under S.79(2)(c) of the IT Act) is it really of any use? I have heard from several experts that word-based filters are highly ineffective since a mere rephrasing of generally accepted terms can be used to circumvent such filters (eg. “warez” – often seen on bit torrent and other pirate sites). I again refer to the facts of Viacom wherein it was proved that Viacom had gone out of its way to secretly upload its content on to the Youtube site, because it recognized how valuable the YouTube audience was. Of course, Viacom in its suit did not expect such content to be taken down because it did not consider it to be infringing. Even a layman, based on such facts can realise how difficult it might have been for Youtube to police its content, and determine what a legitimate upload was, even with the use of filters.

This is analogous to an argument I had earlier made in relation to DRM’s and fair use – when statutes and judicial pronouncements itself do not lay down any strict guidelines to determine what is and what is not fair use, how can we expect technological devices such as DRM’s to make that fine distinction – and the same goes for filters, further evidenced by Viacom’s conduct and the subsequent difficulties Youtube faced.

(b) Burden on whom
It is amply clear that the DMCA places the burden on copyright owners to prepare S.512(c)(3) notices and service providers have no burden to filter or take other steps that copyright owners may demand but aren’t in the statute. Briefly examining S.79(3) of the IT Act, it appears that it also lifts the burden away from the intermediary. However, the use of the expression ‘appropriate Government or its agency’ is interesting to note since it lends support to the view that the legislative intent was to exclude copyright infringement claims and focus on criminal actions. However, this is pure conjecture since ‘actual knowledge’ that forms part of the same clause could easily include knowledge of copyright infringement.

However, since the statute is silent on the procedure to prepare and send take-down notices to an intermediary, it is unclear what details are expected to by provided to the intermediary by the copyright owner. The DMCA of course, has fairly exhaustive requirements including identification of the copyrighted work, or if the service provider is an “information location tool” such as a search engine, to specifically identify the links to the alleged infringing materials. [S.512(c)(3)(iii)], S.512(d)(3)]. The provisions also require the copyright owners to identify the copyrighted work, or a representative list of the copyrighted works, that is claimed to be infringed. [512(c)(3)(A)(ii)]. In the absence of such requirements, an intermediary in India may be forced to work tirelessly to identify the material and take it down. The absence of counter-notification procedures, however, is the most disturbing, with ample opportunities for abuse and a possible chilling effect on speech and expression.

(b) Notice and Takedown (Time taken)
The Court in Viacom observed that ‘when Viacom over a period of months accumulated some 100,000 videos and then sent one mass take-down notice on February 2, 2007, by the next business day, Youtube had removed virtually all of them‘.

I’ve extracted this statement of the District Court since both statutes, the Information Technology Act, as well as the DMCA use the word ‘expeditiously’ to characterise the time-limit for an intermediary to take down the unlawful content. Thus, it is case-law and government guidelines, if any, which will determine the standard in this respect. While the District Court in America found Youtube’s efforts to take the material down by the next business day to be satisfactory, closer home, our Indian courts appear to be a little more impatient. I draw this conclusion from the Avnish Bajaj ruling wherein the Court held that deactivating the unlawful content by the next business day was unsatisfactory. The video was uploaded on Saturday 27th November, 2004 at 8:30 pm. and taken down on Monday 29th November, 2004 at 10:00 am. (See para 3.4 of the judgement). Going by ordinary working hours of any regular business establishment, it seems to me that the intermediary took down the content as early as it possibly could, with perhaps no employees available on Saturday evening and all through Sunday, and the content being taken down early Monday morning. It seems unfair to expect the intermediary to work any more ‘expeditiously’.

I fully appreciate the difference in nature of a copyright infringement claim and an obscenity case, with the latter admittedly requiring expeditious treatment as compared to the former, but my point simply is that a a clear and workable standard must be developed if S.79 is to apply to copyright infringement claims as well, with a distinction being made between standards for obscenity, defamation and copyright infringement claims, if required.

Imputation of knowledge and standard test for knowledge
The knowledge requirement combined with the standard for due diligence are perhaps the two most crucial factors in such cases. Firstly, flowing from the point about filters, I was again a little concerned to see the following observation in the Avnish Bajaj case:

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

There appears to be an immediate imputation of knowledge by the courts by mere reason of the intermediary lacking filters to dribble out unwanted content. As I have tried to illustrate above, filters are not required by statute and with the burden being on the copyright owner to prove infringement, it appears illogical to state that an intermediary knew of infringing content merely because it did not utilise filters on its website. Again, I must use the appropriate disclaimer that this case deals with intermediary liability in relation to obscenity law and it is perhaps unfair to use the same standards for copyright infringement claims, but I will leave it to the readers to form their own opinions. What is more helpful perhaps, is the guidance provided by the Court in Viacom, by clarifying the standard test to be used in such cases – the “Red Flag test”.

The red flag test has a subjective and objective component – subjectively determining whether the service provider was aware of the facts in question and then objectively determining if the infringing activity would have been apparent to a reasonable person operating under similar circumstances. The Court observed that the intermediary must have “knowledge of specific and identifiable infringements of particular individual items” and that “mere knowledge of prevalence of such activity in general is not enough.” I particularly value the observation that “proclivity of users to post infringing materials” on the website is not sufficient to deprive the intermediary of immunity since such a holding could be beneficial to sites like Youtube where there is unarguably a large number of infringing works, and the management at Youtube is ‘aware’ that some users may be naturally inclined to upload copyrighted works, but at the same time, it serves as a medium of expression for several users who may be protected by fair use or even upload their own home videos and the like.

The holding appears to be consistent with the qualifying term used in S.79(3) – “actual knowledge” as opposed to general knowledge and the observations in this case will certainly aid the Indian courts in laying down a test of its own or even adopting the Red Flag test if it so desires.

On-going litigation
Regardless of all the comments that have been made on this blog and elsewhere, a definite picture on the interpretation of S.79 when read with S.81 of the IT Act, will emerge only when such cases reach the courts. It is for this reason that I would like to call attention to at least two cases that I am aware of that deal with the subject matter at hand.

We had blogged earlier about T-Series taking MySpace to court in Delhi under circumstances very similar to those in Viacom v. Youtube. Most interestingly, reports suggest that while MySpace has taken a defence under Section 79 of the amended IT Act, T-Series seems to have relied on the first interpretation, which is that the proviso to Section 81 nullifies any immunity that MySpace may claim under S.79 of the Act. Secondly, reports from a couple of months ago suggest that Guruji, a search engine that indexes songs from various sites is also immersed in trouble and is being taken to court by T-Series. This case is again interesting since the IT Act clearly recognises search engines as intermediaries capable of utilising the safe harbour provisions. Whether they extend to claims of copyright infringement or not is the crux of the matter and I for one, cannot wait to see the rulings in these cases, which will certainly serve as judicial precedents on this issue and will hopefully lay down adequate standards and guidelines for both copyright owners and intermediaries alike. We can promise you that SpicyIP will be following these cases closely and bring out an analysis as soon as they are available.

I apologise for the two long posts and for any issues that might have slipped my mind. As always, readers’ comments are welcome!