Copyright Others Overlaps in IP

Shreya Singal v. Union of India: Part II – Copyright Infringement and Intermediary Liability


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While the Supreme Court in Shreya Singhal struck down Section 66A for unconstitutionality (See earlier post: Shreya Singhal v. Union of India: Part I – Overbreadth, chilling effect and permissible restrictions on speech), it upheld Section 79 on intermediary liability, albeit, after reading it down to drastically narrow its applicability. Interestingly, despite its wide repercussions for free speech, the only party to have filed a separate writ challenging this Section’s constitutionality was the Internet and Mobile Association of India (IAMAI), represented by Sai Krishna and Associates – a big kudos to them!

In the wake of the court’s holding, several controversies remain. [See Amlan’s posts here and here for a background to this debate].

Warning: Long post ahead.

I. Scheme under the IT Act and Rules

Section 79, as the court describes, is an exemption clause that saves intermediaries from liability for unlawful acts performed via their platforms. This is subject to the intermediary demonstrating that it was:

1.  acting as a ‘mere conduit’, i.e., its function was limited to providing access whereby third party information was transmitted or temporarily stored or that it did not

(i) initiate the transmission,

(ii) select the receiver of the transmission, and

(iii) select or modify the information contained in the transmission

2.  it exercised due diligence and observed guidelines provided by the Central government

3.  that upon receiving actual knowledge that any information is being used to commit the unlawful act, the intermediary expeditiously removed or disabled access to that material.

The Information Technology (Intermediary Guidelines) Rules, 2011, notified in pursuance of powers conferred under Section 87(2)(zg) [conferring rule making powers on the executive] read with Section 79(2), details the nature of the due diligence to be followed by intermediaries to claim exemption under Section 79. However, curiously, the Rules also describe the substantive content that is ‘unlawful’ for the purposes of Section 79.

Rule 3(1) requires that intermediaries publish terms of service. Rule 3(2) outlines the content that is to be proscribed by these terms of service. This includes a wider range of words than is used in Section 66A, including, ‘harassing’, ‘blasphemous’, ‘disparaging’, ‘invasive of another’s privacy’ and ‘racially objectionable’ [Rule 3(2)(b)]; ‘harms minors in any way’ [Rule 3(2)(c)]; infringes any patent, trademark, copyright or other proprietary rights [Rule 3(2)(d)].

Rule 3(3) states that the intermediary shall not ‘knowingly’ host or publish or initiate, select the receiver of or modify the transmission of any content that violates the standards contained in Rule 3(2). This would seem to create an independent offence of secondary liability in relation to a range of speech with no clear exposition of the exact nature of this offence. While Section 66A criminalised certain kinds of speech, Rule 3(2) extends beyond the phraseology used in that section.

Only relating to Article 19(2): What does it mean?

The Supreme Court read down Section 79 to mean that an intermediary will only be liable if when “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.

The court further found that “the Court order and/or the notification by the appropriate Government or
its agency must strictly conform to the subject matters laid down in Article 19(2). Unlawful acts beyond what is laid down in Article 19(2) obviously cannot form any part of Section 79.”

However, ambiguity remains in relation to which parts of Rule 3(2) continue to be applicable. I would like to submit that the creation of a substantive offence by way of the Intermediary Guidelines should fail for substantive ultra vires since Section 79(2) contains no such power. The court, in the operative part of the judgment, only read down Rule 3(4), which requires intermediaries to take down content on receiving ‘actual knowledge’ that it is in violation of the user agreement. The question remains: Are intermediaries still required to include words such ‘disparaging’, ‘blasphemous’ etc. in their user agreements? What potential impact could this have in terms of user’s rights against intermediaries for arbitrary removal of their content? Does the court need to specify which terms in Rule 3(2) exceed the ambit of Article 19(2)?

In light of this continuing ambiguity, the specific inclusion of content that infringes copyright under Rule 3(2)(d) brings us to the next controversy on Section 81 of the IT Act, 2000.

Section 81 v. Section 79

Section 81 and Section 79 of the IT Act both contain ‘non obstante’ clauses that would give each overriding effect over other provisions of the Act. Section 81 clearly states that ‘nothing contained in this Act shall restrict any person from exercising any right conferred under the Copyright Act, 1957’. Section 79, which exempts intermediaries from liability for reproducing (through actions like caching) or disseminating copyrighted materials, would seem to restrict the remedies to a copyright holder under the Copyright Act. However, this analysis is complicated for many reasons:

  • The Copyright Act as amended in 2012 has its own safe harbour provisions relating to intermediary liability. This is not unusual. The US similarly has Section 512 of the DMCA which is separate and distinct from the general safe harbour provided by Section 230 of the Communications Decency Act. This would add weight to the argument that Section 79 does not apply to the realm of copyright infringement, which has its own independent mechanism under the Copyright Act and the Copyright Rules.
  • Rule 3(2)(d), however, defeats that argument since it indicates a clear intention to exempt intermediaries for liability under the Section 79 of the IT Act, 2000.
  • Inversely, Rule 3(2)(d) is ultra vires for being in express violation of its parent statute.
  • This tussle between the Copyright Act and IT Act gains relevance, since both statutes refer to differing standards of liability for intermediaries.

This leads to the big question. Does Section 79 of the IT Act apply to the context of copyright at all?

Some commentators have attempted to answer this question by pointing out that even if intermediaries cannot be held liable under Section 79, they continue to owe a duty to assist the court by complying with blocking and take down orders. In response it has been argued that since Section 79 is not an enforcement provision, it cannot be used to source any such duty. However, Section 79(2) also includes a general due diligence obligation which read with Rule 3(4) and Rule (3)(2)(d) of the Intermediary Rules, clearly casts an obligation on an intermediary to disable any content in pursuance of a takedown notice on the ground of copyright infringement. See Ananth Padmanabhan’s insightful article on this controversy here.

The Delhi High Court attempted to resolve all of these questions in the Super Cassettes Industries v. Myspace case by holding that Section 81 has an overriding effect over Section 79. This brings us to the safe harbour provisions under the Copyright Act, 1957.

II. Scheme under the Copyright Act and Rules

The Copyright Act, in provides that:

  1. Section 52(1)(a): The transient or incidental storage of work in the purely technical process of electronic transmission or communication to the public (for example, caching) is not copyright infringement. Note that this is an unqualified provision, such that, in all such cases, intermediaries cannot be held liable for infringement.
  2. Section 52(1)(b):Transient or incidental storage of work for the purpose of providing links, access or integration shall not be copyright infringement provided such storage has not been expressly prohibited by the rights holder or the intermediary is not aware or does not have reasonable grounds for believing that such storage is of an infringing copy.
  3. On the reception of a written complaint as to the infringing nature of the stored work, the intermediary must refrain from facilitating access to the work for a period of 21 days from the receipt of the complaint. If no court order is received pursuant to the complaint, the intermediary may continue to provide the facility for such access.

Some crucial question arise:

  • While Section 52(1)(a) and (b) speak of transient or incidental storage, that is, primary liability, the proviso to Section 52(1)(b) speaks of facilitating access to infringing content, which seems to refers to secondary liability. Absent the proviso, it might have been possible to argue that the Copyright Act simply exempts intermediaries for primary liability from their act of ‘copying’ for the purpose of hosting certain content and the IT Act exempts intermediaries from secondary liability for ‘publishing’ such content and making it available to the public. However, the proviso would indicate an intention to consider both primary and secondary liability jointly under the phrase ‘storage.’
  • While the IT Act speaks of ‘actual knowledge’, the Copyright Act has ‘aware’ or ‘reasonable grounds for belief’ as the standard for holding the intermediary liable for continuing to host content. This would seem to indicate a DMCA ‘red flag’ styled obligation on intermediaries. However, in the Super Cassettes Industries v. Myspace case, the Delhi High Court interpreted ‘reasonable ground for belief’ very broadly. It found the installation of filters and insertion of advertisements among other things as indicative of the intermediary’s awareness that infringing activities were being conducted on its platform. The decision in this case would seem to indicate that the intermediary must, suo motto, take down content that it has ‘reason to believe’ is infringing. This imposes a dual duty on the intermediary to police content that it hosts as well to disable access to content when it receives a takedown notice.
  • Further, the intermediary has complete discretion to restore content after the expiry of the 21 day period from the take down request.

This regime unduly burdens intermediaries with the responsibility to police content for copyright infringement. However, since the intermediary (the agent) does not share in all the benefits of the content creator (the principal) there is an inherent principal-agent problem of mismatched incentives. Intermediaries have different incentives and risk sensitivities than users, motivating them to act cautiously rather than expose themselves to liability. There also exists an inherent information asymmetry between intermediary and user. The intermediary cannot be expected to bear expertise as to what data is infringing and what isn’t. As the DU photocopying case demonstrates, the determination of whether certain content is infringing or constitutes fair use under the Act is not necessarily a straightforward question. Copyright based takedown was infamously the basis for the removal of multiple campaign videos a few weeks prior to the Obama/McCain polls in the 2008 US Presidential elections. The creates an immense chilling effect on free speech, particularly on user generated content based platforms. The finding in Shreya Singhal that Section 66A is unconstitutional as it is liable to be used in such a way as to have a chilling effect on free speech by reason of its overbreadth raises interesting questions for the potential interpretation of the ‘reasonable ground for belief’ standard in Section 52(1)(b).

Finally, neither the Act nor the Rules imposes an obligation on the intermediary to communicate the fact of such takedown to the content creator or to restore such content on the failure to obtain a court order. The onus placed by the Supreme Court in Shreya Singhal on communication of take down notices (for the purpose of challenge under Article 226) could raise implications for transparency in the Copyright Rules pertaining to takedown practices. Stephen Mathias has considered this issue in this excellent post, and argues for an alternate take down policy that requires communication of take down requests to content creators.

In conclusion, the ruling of court in Shreya Singhal certainly not only brings clarity to free speech jurisprudence, but by invoking principles such as chilling effect and overbreadth as part of our constitutional jurisprudence, could become a basis for arguing for a similar relook at the liability regime for intermediaries under Copyright law

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