Indian Intermediary Liability Law Requires a Thorough Makeover

Two recent developments, on two different sides of the world, have reopened my eyes to the flawed intermediary liability legal regime that currently exists in India. The first was the recent ruling of the second circuit appellate court in the United States in the much publicised Youtube-Viacom copyright infringement suit. The second one is closer home – the recent calls for the annulment of the Information Technology (Intermediary Guidelines) 2011 from a Rajya Sabha MP and a writ petition filed in the Kerala High Court challenging the same guidelines. 
Taking these development together, I was left with a feeling of deep concern and impending alarm – while U.S. law on safe harbours for intermediaries continues to develop (despite its own shortcomings), the Indian law on this point is replete with ambiguities and is in dire need of an immediate standard-setting exercise. However, the second development I mentioned (questioning the legality of the Intermediary Guidelines itself) does leave open the possibility of completely discarding the current guidelines. This would give us a new drawing board, a fresh set of paper and the most important ingredient of all – the benefit of experience and extra-territorial interpretations, to help us draft a reasonable clear and comprehensive document to guide online service providers, who are in a desperate need of some clarification on this issue. 
In this post, I will try to highlight the flaws in the Indian legal framework. while drawing from the Second Circuit ruling in the Youtube-Viacom case, which was delivered only a few days ago. 
The biggest worry I think, for most online service providers operating in India currently, is that they’re not even sure if one can claim immunity as an intermediary for copyright infringement claims. Do we even have a safe harbour provision for internet intermediaries in India for copyright infringement committed by users of its service (eg. users of Youtube posting infringing clips of Bollywood movies)? I explored this question in my post on the MySpace case. Mind you, these could be perfectly legitimate services (like YouTube) but they still face immense potential legal liability under the current system. I concluded that the MySpace decision did not mark the ‘end’ of the safe harbours for internet intermediaries for copyright infringement cases in India – they did not even have one to begin with! 
Thus, even in 2012, the Indian law is unclear on whether it should grant immunity to intermediaries for copyright infringement claims. This is in complete contradistinction to the position in the United States. The Second Circuit (which is an appellate court) left no ambiguities when it made clear that the DMCA safe harbour provisions would be available to Youtube for both direct infringement (also known as ‘primary infringement’) as well as secondary infringement. American law seems to be taking a more progressive approach, whilst trying to define the exact contours of such immunity. Why is this important? Because the Indian MySpace decision holds the intermediary liable for primary copyright infringement under S.51(a)(ii) of the Indian Copyright Act. This is something that needs to be made explicit in the next version of the Intermediary guidelines to clarify the Indian law or in its absence, the sitting judges should appreciate this point in their next ruling on this issue.
(Where are the safe harbour provisions for internet intermediaries in India for copyright infringement cases? Where did they go? Did they ever exist? Image from here)
In my previous post on the MySpace decision, I had criticised the judgement for failing to throw any light on  the knowledge standard that would disqualify the intermediary from claiming immunity under S.79 of the IT Act. I fully understand the court’s reasoning in holding that MySpace had ‘actual knowledge’ of infringing titles that were brought to the attention of the company. But there was no guidance on what constitutes actual knowledge as opposed to general knowledge. 
Compare that to the Second Circuit ruling that made detailed observations about the types of knowledge that may disqualify an intermediary from claiming safe harbour protection. As explain by Eric Goldman, there are three main types of knowledge an intermediary might possess: 
1) Actual knowledge of specific acts of infringement – This is a subjective standard and is case-specific and intermediary-specific. For example, in the MySpace case, the fact that they were notified of the infringing titles (irrespective of whether they were given URL’s of these files) according to the court, meant that they had ‘actual knowledge’. 
2) Red-flag knowledge – The court calls this an objective standard, which essentially means a reasonable person test is used to determine whether the intermediary had sufficient knowledge which would disqualify it from obtaining safe harbour immunity. That is to say – even though it did not have actual knowledge, could it have known that the posted content was infringing. 
3) Wilful Blindness towards acts of infringement – This is where there is no actual or red flag knowledge, but could still disqualify an intermediary. In the Youtube case, the question was whether internal mails between employees discussing infringing clips and whether to remove it immediately or wait, is sufficient proof of wilful blindness. This is relevant even in the current Megaupload dispute where leaked e-mails were sought to be used as evidence against the company.
The Indian courts have completely ignored the ‘red flag test’ aspect. Even the MySpace case glides over this point. If we want certainty in the law, it is necessary for the courts to explain exactly what would constitute ‘constructive knowledge’ (or red-flag knowledge) as it is often called. This needn’t necessarily come from an executive action in the form of the Intermediary Guidelines. But it is important that judges take up this issue in subsequent cases. I am hoping the on going case in the Delhi High Court on ‘objectionable’ material posted on social networking websites, will provide some guidance. 
The issue of wilful blindness is an even more important one. There are several websites that could get trapped in this net if the court issued directions in this regard. Instead of going after piracy in roundabout ways, an improved intermediary law would arm the record labels with sufficient ammunition to go after such websites. 
Add to this the ridiculous and appalling rulings on some of the other points – indication of knowledge because they had tools to detect infringement, insertion of ads in the users’ works indicating knowledge of infringement and the fact of MySpace’s India-centric operations being proof of infringing activity in/from India, and it is clear that the Indian law is falling far behind and needs a complete makeover.
The need for a new intermediary liability law becomes even more important when we acknowledge the increasing trend in courts issuing John Doe orders to producers of films to ‘prevent piracy’ (see Prashan’t recent post on a March, 2012 order of the Madras High Court). Not only do they bypass the procedures mandated under the Intermediary Guidelines, but also use pressure tactics to ensure compliance from the intermediaries. This all seems like wasted time and effort to me. If everyone just focussed their attention on drafting a clear and unambiguous law, there would be no need for such extra-statutory remedial measures. If courts clarified that being ‘wilfully blind’ to infringing works would disqualify one from utilising the safe harbour provisions in the IT Act, there would be no need for music labels to approach the court to block 104 websites, which is a frightening development in itself, as I explained in a previous post
With a clearer law, they could rest assured that the IT Act and contemporary jurisprudence would appreciate the difference between legitimate services like YouTube and clearly illegal websites like profiteering from infringing activity. 
a) Clarity on the scope of the safe harbour provisions – do they extend to acts of primary and secondary infringement? 
b) Can the provisions of the Indian Copyright Act and Patents Act override the safe harbour provisions contained in S.79 of the IT Act? If so, then why are there no immunity provisions for copyright cases when they exist for defamation, obscene content etc. What is the basis of classification of copyright as a distinct category, undeserving of safe harbour protection? 
c) What are the different knowledge standards and what is the standard of proof? Are there any specific acts of the intermediary that would disqualify an intermediary from utilising the safe harbour provisions in copyright infringement cases? 
d) Is the period of 36 hours within which the intermediary must take down infringing content, a reasonable period? How was this figure arrived at? 
Hopefully policy makers will keep this in mind when they go back to the drawing board. More importantly however, we must realise that the actual technicalities will be decided by the courts. No single executive action can attempt to define knowledge standards or exact parameters. So, more than anything, it is the duty of the judges to keep these issues in mind when the deliver the next judgement on intermediary liability for copyright infringement cases. 
I am a fourth year law student with a keen interest in the issue, and even I don’t understand the current law. This severely hampers my ability to set up a business venture that might involve publication of potentially infringing content on the internet (not that I have any such plans at the moment!). But if not for any other reason, let’s at least clarify the law for the promising Indian start ups that want to create such products and services.
Update: I am currently working on drafting a report on the same – compiling a list of issues that require clarification in the proposed Intermediary Guidelines and factors to be considered in developing the intermediary liability law in India. I would love to hear from our readers on suggestions/additions. Please do write to me at [email protected] if you have any suggestions!
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