Continuing from my previous post, in this post, I will cover the decision of the court in the case of MySpace v. Super Cassettes and its reasoning for the same. I will devote a section specifically to the issue of the interpretation of S.79 and S.81 of the IT Act which has a significant bearing on the immunity available to intermediaries for hosting content that infringes copyright.
DECISION OF THE COURT
I. Authorising infringement of works
The court by making a reference to S. 14 and S.51(a)(i) of the Copyright Act, noted that infringement is the doing of any act, which the owner of the work is permitted to do, by any person not authorised to do so by the owner. The court noted that ‘the act of authorizing is something more than merely providing means with knowledge and require further active participation of the person than that of the permitting the place for infringement.’ The court made an important distinction between the authorisation which would fall within S.51(a)(i) and (ii), the latter requiring actual knowledge and reasonable belief, and the former involving the participation of the defendant and exercise of control, besides knowledge. After going through several English precedents on this point, the court found that the question of authorisation required further proof of participation, which could only be determined at the trial stage and hence, refused to deliberate further on the issue of violation of S.51(a)(i).
II. Permitting for profit, a place for communication of infringing works to the public
The court made reference to S.51(a)(ii) and tried to define the scope of “any place” as required under the Indian Copyright Act. It juxtaposed this phrase with “place of public entertainment” as used in the UK Copyright Act, 1956. The court inferred that this indicated that the India legislature intended to broaden the scope to not only include places of public entertainment, but any other place as well. It also referenced the later UK Copyright Act, 1988 which repealed the 1956 Act, which provides for two kinds of infringements separately, namely “place of public entertainment” and “infringement caused by use of an apparatus”. This shows knowledge of two distinct types, and although the Indian legislature has not included the latter, the court reasoned that this meant ‘any place’ was of wider amplitude and hence included places on the internet such as MySpace, and not just places of entertainment.
III. Issue of Knowledge on the part of MySpace
The knowledge requirement is important in view of the exception provided for under S.51(a)(ii) of the Indian Copyright Act which states that there will be no liability where the defendant ‘was not aware and had no reasonable ground for believing’ that the works were infringing. The court however, completely dismissed the arguments advanced by MySpace on several grounds:
First, it stated that the very fact that MySpace had developed and installed remedial tools to deal with infringement showed that they at least had an apprehension of infringement. It also dismissed the claim that this was done, keeping in mind the requirements under the DMCA, by observing that the post-infringement curative measures provided for under the DMCA are sufficient in the American context, but not in the Indian legal sense. Now, I find this to be an incorrect reading of the Indian law since S.79(3)(b) of the IT Act makes it very clear that an intermediary shall not be held liable if it ‘upon receiving actual knowledge, or on being notified’ of the unlawful material, it ’remove[s] or disable[s] access to that material on that resource without vitiating the evidence in any manner’. I don’t see anyone reasonably arguing that this is not in the form of a post-infringement remedial measure, much like the DMCA. Second, the court goes into the question of ‘actual knowledge’ stating that the defendants had specific knowledge of the plaintiff’s works since they were provided a list of their titles and updated works from time to time. Third, the fact that it obtained a license from users to modify content to insert ads and such indicated that they had knowledge of the content of the works. Fourth, the court found that its India-centric operations are also a clear indication of the knowledge of infringement.
Again, there appear to be some infirmities. For one, I don’t see how merely having an Indian presence or focus shows knowledge of infringing activities. On the point about attributing knowledge to them since they insert ads, isn’t is possible that this is an automated system, where the ads are placed at the beginning of the video and there is no one actually going through the content to flag it as infringing? Neither does the court lay down any real standard in respect of the knowledge requirements, which is something I really hoped to emerge from this case. No reference was made to the ‘red flag’ test [Viacom v. Youtube] which is particularly worrisome since the Intermediary Guidelines under the IT Act provide no guidance in this regard either. More importantly, the court failed to lay out any standards in respect of the notice and take down requirements. In dismissing the post-infringement remedies, it failed to respect the very basis of dealing with copyright infringement claims in the age of the Internet. I find no merit in the contention that a post-infringement remedy does not make up for the harm caused to the rights holder, since we are well aware of frivolous takedown notices issued by such companies, and hence a notice and takedown system serves the purpose of maintaining the balance of rights holder and user interests.
IV. Interpretation of S.79 and S.81 of the IT Act
The court agreed with the view that S.81 acted as a proviso to S.79 and the non-obstante clause contained therein has an overriding effect. This implies that although one may satisfy the requirements under S.79 of the IT Act that grants immunity to intermediaries, an individual can still proceed against the intermediary using provisions of the Copyright Act or Patents Act.
As an arguendo, irrespective of this overriding effect, the court found that the act of modification of the works, by inserting ads etc. excluded the defendants from the purview of S.79(2)(b) of the Act and hence it failed to satisfy the requirements. It also remarked that MySpace failed to exercise due diligence and that it should have done a ‘preliminary check in all the cinematograph works relating Indian titles before communicating the works to the public rather than falling back on post infringement measures’.
The most significant implication of such a ruling however is that it recognises that the IT Act does not protect intermediaries against copyright infringement claims. The court observed that “Section 79 is, thus, meant for all other internet wrongs wherein intermediaries may be involved including auctioning, networking servicing, news dissemination, uploading of pornographic content but not certainly relating to the copyright infringement or patent infringement which has been specifically excluded by way of proviso to Section 81.” Of course, one cannot really blame the court in this respect since the language used in S.81 appears to be clear and a non-obstante clause to boot, leaves little by way of interpretive freedom to the judges. If they had ruled any differently, I fear they would be charged with judicial activism and accused of encroaching on the legislative domain.
The court also noted that the Copyright Act itself grants certain exceptions and an intermediary could avail of the same to escape liability. While this is certainly true, this is also true of the American system wherein valid defences may be made against an infringement claim, and yet, the DMCA grants specific immunity to intermediaries for copyright infringement cases. The court found not only the DMCA, but the WCT and WPPT to be inapplicable to this case, even in terms of persuasive value, which, while understandable to some extent, eliminates even the slightest possibility of ensuring that immunities granted to intermediaries are uniform across the world.
The court also relied on the argument that reading S.79 to include copyright infringement claims would create a ‘conflict between the acts of infringement by way of permitting the place for profit provided under Section 51 (a) (ii) and Section 79 which saves the intermediary from liability’. However, I would argue that S.51(a)(ii) covers more than just internet intermediaries and merely because they are granted additional protection, does not in itself render S.51(a)(ii) ineffective or create disharmony.
The court, in this case, found MySpace guilty of primary copyright infringement under S.51(a)(ii) and passed an order restraining the defendants from dealing with the plaintiff’s works, including modifying them, adding advertisements, or making profits from the same, without enquiring about the ownership of the works. As regards future works, it directed MySpace to delete the works of the plaintiff as and when they are notified by them.
I began this post with the title ‘Death of safe harbour for intermediaries for copyright infringement’, but now I wonder if there was any life to begin with. Perhaps ‘still-born’ would be more appropriate. For those of us who believe in the rights of the intermediaries and were hoping against hope for a favourable interpretation of the IT Act, this decisino comes as a crushing blow, and I fear at this stage, an amendment is the only remaining option.