In a Welcome Development, Delhi High Court Refuses to Compel Intermediaries to Screen Content Violative of Intellectual Property Laws on an Ex-ante Basis

One issue that has received sustained attention on this Blog has been the determination of the width and amplitude of the responsibility of intermediaries for the removal of content that is violative of intellectual property laws.

In this respect, we have covered such diverse issues as the implications of the Viacom versus YouTube decision on intermediary liability see [here and here]; the implications of the Shreya Singal judgment [see here]; the need for the extant legal framework to be overhauled [see here and here]; and the obligations on online marketplaces to remove content that infringes a party’s copyright [see here].

Against this backdrop, it would be instructive to analyze one recent Delhi High Court judgment which sheds considerable light on the obligation of intermediaries to screen content alleged to be violative of intellectual property laws before publishing the same.

Facts and arguments:

Plaintiff no. 1, Kent Ro Systems, contended that it has obtained design registration for the water purifiers developed by it. Defendant no. 1, Amit Kotak, the plaintiffs argued, sells water purifiers that contain the same design as the one used by the plaintiffs which amounts to piracy. Since Defendant No. 1 sells these water purifiers on Ebay, the plaintiffs argued, Ebay is obligated to remove the same.

In light of the fact that EBay did not remove many of the listings that were violative of the plaintiffs’ rights, the plaintiffs requested the Court to issue an order for delisting the infringing material as well as a prohibitory injunction to prevent such listings from being published in future.

While EBay had no difficulty accepting the plaintiff’s prayer that all infringing content be removed as soon as it is brought to its notice, the dispute between the parties centred on the issue of whether EBay can be obligated to remove the content alleged to be infringing on an ex-ante, in contradistinction to an ex-post, basis.

On this issue, the plaintiffs argued that, EBay, being an intermediary, is obligated to institutionalize a system to ascertain whether or not the content that it is publishing is of an infringing character and to refrain from publishing the content if the answer to this question is in the affirmative. The plaintiffs sought to draw sustenance from Rule 3 of the Intermediary Guidelines, which imposes an obligation on intermediaries to maintain due diligence, and Section 79(3) of the IT Act, which makes the safe harbor that intermediaries enjoy inapplicable in circumstances when they aid, abet, conspire or induce the commission of an offence, in support of this prayer.

In response, EBay relied on Section 79 of the IT Act in support of its argument that its actions would be covered within the four squares of the aforesaid provision, which shields from the gauntlet of legal liability the conduct of an intermediary which merely serves as a conduit for the receipt of information and does not interfere with the information in any way.

Analysis and Conclusion of Court:

The Court commenced its analysis by noting that, in order to prevail, the plaintiffs would have to explain how the Intermediary Guidelines spell out an obligation upon intermediaries to screen content to ascertain if it is of an infringing character. This onus would be imposed upon the plaintiffs, the Court reasoned, in light of the fact that a bare perusal of the Rules reveals that intermediaries are only bound to apprise users of their privacy policy/ rules and regulations and to disable infringing content, on being informed of its existence, within 36 hours.

Since the plaintiffs were apparently unable to answer this question in a satisfactory fashion, the Court arrived at the conclusion that no such directions could be issued. It gave 3 reasons in support of this conclusion.

First, To accept the plaintiffs’ prayer, it reasoned, would result in converting the intermediary “into a body to determine whether there is any infringement of intellectual property rights or not” – a role which intermediaries are ill-equipped to perform. More specifically, in light of the fact that casting such an obligation upon intermediaries would result in them being compelled to test all the material sent to them for publication vis-à-vis claims of IP infringement in order to avoid liability, the Court refused to accept this argument.

Second, if the intention of the legislature was to cast such an obligation upon intermediaries, the Court reasoned, the intermediary guidelines would have imposed an absolute embargo on hosting infringing content. However, in light of the fact that the Guidelines merely cast an obligation to disable content on being informed that it is of an infringing character, the Court held that the legislature did not intend to impose any such obligation.

Finally, in light of the fact that no obligation to screen infringing content is imposed on the publishers of newspapers or the owners of immovable property, the Court reasoned, it would be inapposite to impose such an obligation on intermediaries who are similarly situated as the aforementioned categories of service providers.

Analysis of Decision:

On a closer scrutiny of the judgment, 3 main conclusions can be drawn.

First, the Court’s reading of the Intermediary Guidelines, I would respectfully submit, is completely accurate and legally defensible. More specifically, in light of the fact that the legislature has intentionally set the threshold that must be met by intermediaries to be compliant with the due diligence standard intentionally low, and the same was lowered further by the Supreme Court in the Shreya Singal judgment, it was not open to the Court to read into the Guidelines an obligation on intermediaries to censor content on a suo moto basis.

Second, at a time when intermediaries find themselves caught in a judicial quagmire owing to a labyrinth of complicated legal norms and judicial pronouncements as regards their obligations, this verdict is a welcome development. By making clear the legal position as to the ex-ante liability of intermediaries as regards infringing content, this judgment has put the safe harbor provisions on a more secure legal footing.

Finally, notwithstanding the aforementioned advantages, the verdict also has the effect of creating two distinct and separate legal obligations on intermediaries depending upon the nature of content involved. More specifically, in light of the auto-block doctrine created by the Supreme Court as regards advertising for prenatal sex-identification diagnostics which I adverted to in this post and Prashant dealt with in this post, and the fact that the Court is contemplating the imposition of a similar obligation as regards rape videos, intermediaries will be obligated to screen this type of content before publication while not being mandated to screen content that infringes someone’s intellectual property rights. While the desirability of this classification is a matter that I shall not delve into in this post, its immediate implication is that it adds an additional layer of confusion to an already complicated branch of jurisprudence.

Rahul Bajaj

Rahul Bajaj is a fourth year law student at the University of Nagpur. His interest in intellectual property law began taking a concrete shape when he pursued Professor William Fisher's online course on copyright law in the second year of law school. Since then, Rahul has worked on a diverse array of IP matters during his internships. He is particularly interested in studying the role of intellectual property law in facilitating access to education.

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