Intermediary liability is something that is close to our hearts here at SpicyIP, which is why we have covered it on multiple occasions, stressing its importance repeatedly. Our previous posts on this topic are available here, here, here, here and here. This post focuses on a new case that has come up in this context – that of copyright infringement liabilities for e-commerce platforms. Specifically, I’m going to be dealing with Tata Group’s Westland’s case against Flipkart for selling Amish Tripathi’s Scion of Ikshvaku on its platform. [Long post ahead]
The facts of this issue, to be frank, are a bit confusing. As per the Economic Times report, Westland has argued that it has signed a two-month exclusive deal with Amazon for the sale of the book in question, and that Flipkart has violated the Copyright Act and the IT Act by selling the same on its platform.
The ‘ridiculousness’ of this case arises from the fact that, as per the limited facts given in the report, it would seem that this is a breach of an exclusive distribution contract on part of Westland, and not even a copyright violation! (If our readers have more information on this, please do let us know!) Secondly, even if sellers were selling the book on Flipkart, that’s the point – sellers were selling the book, and not Flipkart. They are therefore not directly liable by any count. The question, therefore, becomes one of secondary liability, i.e., intermediary liability.
The Legal Position
Ever since April, no discussions on intermediary liability laws in India can be had without discussing the Shreya Singhal judgment. The judgment drastically changed the face of intermediary liability in India, switching us from and notice-and-takedown procedure to a government-order procedure. But crucially, as Rupali notes in the post linked above, the Supreme Court left S. 81 of the Information Technology Act untouched. Which makes sense – the Court was dealing with Free Speech, and S. 81 deals with copyright, and the two aren’t related at all… no, wait. That’s not quite right, is it?
But before we come back to that in just a few seconds, let’s see what the law here actually is. S. 81 starts with a non-obstante clause, and states that nothing under the IT Act shall restrict ‘any rights conferred’ under the Copyright Act which has been held to have precedence over S. 79,. Now, S. 52 of the Copyright Act itself provides certain immunities for intermediaries – but, crucially, these immunities seem to be limited to digital content, which can be ‘stored’ or ‘cached’. Thus, they arguably do not extend to the ‘sale’ of products through intermediaries. Here, S. 51 of the Copyright Act read with S. 63 of the same makes it an offence to ‘knowingly’ abet the infringement of a copyrighted a work, ‘infringement’ here including ‘sale’. Thus, arguably, Flipkart is not protected by the intermediary liability rules insofar as the infringement of the Westland’s copyright is concerned, under the Copyright and IT Acts, both – because they don’t exist.
The central requirement of S. 63 of the Act for infringement or the abetment of the same, though, is that the actions must be made ‘knowingly’; i.e., with the knowledge of the infringement. It is here, in the requirement of ‘knowledge’, that we find a bare, nascent seed of the immunities necessary for intermediaries in the modern age to be extended even to e-commerce platforms that deal in sales of physical products. A seed we can only hope will be nurtured and not uprooted.
The Problem, and the arguments
But of course, this brings us to the ‘why’ of it. The reasons for this are myriad, but let’s focus on the most relevant. As I’d touched upon earlier, there is a quite definite and quite powerful link between freedom of speech and intermediary liability, something we at SpicyIP have spoken about at length. Intermediary liability creates a chilling effect on the intermediary, making it less and less likely that they’ll host content that is legal grey areas, thereby hampering a) the speech or the speaker, here possibly the author of a book, and even the seller’s right to trade and commerce and b) the amount of choice the listener gets in deciding what to listen to, or in this case the amount of choice he has in his purchases. Thus, it is only the first of a line of dominos, the fall of which affects our fundamental rights and our daily lives.
The most crucial legal argument, here, lies perhaps in one of the oldest cases on provisions for intermediary liability and the Internet, the US Supreme Court’s Cubby v. CompuServe Inc. The SCOTUS’s conclusions are herein admittedly mostly in a free speech context, but are incredibly relevant as the Court tested CompuServe on the whether it had ‘knowledge’ of the illegal activity only, similar to the S. 63 of the Indian Copyright Act, as the US lacked proper intermediary guidelines back then. And in this context, the SCOTUS found that it would be impractical to expect CompuServe to police all the content on its website, and that it should not be held liable for the offending content since it did not have knowledge of it. There are, of course, cases from multiple jurisdictions that have found the intermediary guilty, but they would seem to be, on the basis of available facts, inapplicable under the Copyright Act.
The question, then, turns on ‘knowledge’. Like CompuServe and any other intermediary, Flipkart here, cannot police each and every product that is put on its site for sale for copyright infringement – and it doesn’t make economic or practical sense for it to do so. Flipkart can also quite definitely, in my opinion, not keep an eye out for every exclusive licensing contract in India – contracts it isn’t even a party to – and ensure that the users of its platforms don’t violate that! This would harm not only the e-commerce platforms, but the consumers as well, in the long run.
Of course, all the facts about the Flipkart case are not clear yet, and the actual events may reveal some complicity on part of Flipkart. But switch ‘Flipkart’ for Amazon or any other online marketplaces that deals with sales of physical products, and the argument still holds true. The Shreya Singhal judgment brought to us in India a sort of clarity and freedom in online speech that we desperately needed. I would argue that we need stronger intermediary Safe Harbour principles for e-commerce platforms under Copyright laws, with or without sale of physical content, just as badly.