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Liability of Online Intermediaries viz-a-viz Copyright Infringement

What is Copyright?

World Intellectual Property defines copyright as, “copyright (or author’s right) is a legal term used to describe the rights that creators have over their literary and artistic works. Works covered under copyright range from books, music, paintings, sculptures and films, to computer programs, databases, advertisements, maps, and technical drawing”.

Copyright provides the creator of an original work a legal right, which grants exclusive rights to make copies, grant license and otherwise exploit his or her work. Thus, it is a form of legal monopoly that protects original works which maybe both published and unpublished from unauthorized duplication without credit and due compensation. With the advent of internet in the 21st Century, diverse creative works being taken into its digital sphere, copyright and allied intellectual property rights remain no alien to online publication and usage.

The internet has become an essential part of our daily lives, in fact it is hard to fathom a world without the internet connecting us and providing us any information we seek in a click of second. The internet comes with certain disadvantages, the one which we will divulge into is regarding the infringement of intellectual property rights.

Online Intermediaries and Their Liabilities

The internet as mentioned provides information. This information comes in varying forms such as texts, pictures, videos, etc. To make this information accessible to the public, users upload this information on the internet via intermediaries.

Section 2(1) (w) of Information Technology Act, 2000 states “Intermediary with respect to any particular electronic records, means any person who on behalf of another person receives, stores or transmits that record or provides any service with respect to that record and includes telecom service providers, network service providers, internet service providers, web-hosting service providers, search engines, online payment sites, online auction sites, online-market places and cyber cafes.”

However this easy access to information is not without drawbacks which come in the form of infringement of intellectual property rights in the virtual world. Despite there being a plethora of laws to protect copyright, but mostly these laws are limited by territorial boundaries or are more concerned with the protection of traditional IPR and do not cover the scope of the virtual or digital medium. The question thus comes into mind, who is liable? The person who uploads such copy of works? Intermediaries for hosting it? Or both? There seems to be a bit of confusion in this regard.

There are various pros and cons of extending liability of copyright infringement to intermediaries.  An important point to consider is that there is a difference between online services which provide the transmission of data and services providing the content. In the latter, intermediaries are held liable because they actively participate. The main arguments for holding intermediaries liable are attributed to the factors that they have a responsibility to scrutinize the content before publishing it and due to the fact they have deeper pockets. Opposite arguments are that intermediaries are simply messengers and they act like courier agent, just delivering a parcel without scrutinizing the content. Moreover, with the vastness of the internet and millions of content being uploaded every day, it is not possible to scrutinize each one.

Thus it is generally accepted that when intermediaries are aware of an infringement and yet fail to act, then it would be held liable and by this view most countries around the world have limited or no liabilities for intermediaries.

Legal Position of Online Intermediaries Globally

In the US, in its various judgements and legislations such as Digital Millennium Copyright Act, 1998 has stated the position that an intermediary is not liable for the acts of others in copyright infringement if it did not have prior knowledge.

Viacom Int’l Inc. v. YouTube Inc [07 Civ. 2103 (S.D.N.Y. April 18, 2013)] is a landmark decision, the facts of the case are, the complainant based the issue on copyright infringement of a content to which Viacom claimed to be the owner, the same was uploaded by a third-party user on YouTube’s server and was available for public to view. The court held that in order to hold intermediaries liable for copyright infringement, the copyright owner has to prove that such intermediaries had specific knowledge of infringement. In addition, the court also suggested that the intermediary may be held liable if it had exerted “substantial influence” on the infringing activities of users. Viacom was unable to prove YouTube had actual knowledge or awareness of specific infringing activity on its website and the courts held that YouTube could not be held liable for copyright infringement. This lead to the formation of the “red-flag” test which stated that one had to have “actual knowledge” to be held liable and not “general awareness”.

Legal Position of Online Intermediaries in India

In India, copyright is protected by the Copyright Act, 1957 but this Act does not deal with copyright infringement in the virtual domain. The liability of intermediaries can be found in Section 79 of the Information Technology Act, 2000. Section 79 of the IT Act exempts intermediaries from liability for the third party infringement if the intermediary exercised all due diligence and had no knowledge of the incident. If the two exceptions are not met, the intermediaries can be held liable. Section 81 of the Act is a proviso to Section 79 and the non-obstante clause contained there has an overriding effect. This has an important significance because it provides a loophole, that even if one may satisfy the requirements of Section 79 of the Act, which provides immunity to intermediaries, an individual still has the right to approach the court against the intermediaries by using the Copyright Act.  It can be interpreted by reading section 81 which overrides Section 79 and provides the intermediaries with the right to take up any defence which is available to it in the Copyright Act.

In the 2012 Amendment of the Copyright Act, Section 52(1) (b) was inserted which provided that, “incidental and transient” copies shall not amount to copyright infringement and would fall under the purview of fair use. Here, the term “incidental” refers to technical copies or unintentional copies and “transient” is temporary or cache copies. Thus any document which is present in the server of an intermediary for a temporary basis or is stored unintentionally, unless so expressly prohibited by the copyright owner, will not amount to infringement.

Super Cassettes Industries Ltd. v. Myspace Inc. and Anr [2011 (48)PTC49(Del)] is considered a landmark decision wherein Myspace permitted its users to upload work of the complainant on its website. The Court held Myspace liable for copyright infringement with respect to the music to which SCIL had ownership. Myspace claimed that they were an intermediary within the scope of section 79 of the IT Act, 2000 and thus exempted. The court held the view that Section 81 overrides Section 79 of the IT Act, 2000. Myspace claimed that it had various remedial tools to provide post-infringement curative measures (as required by DMCA), the court observed that infringement measures might be sufficient in the American framework, but not in the Indian context.  The court further stated that Myspace was aware of the infringing works as it had obtained a license from the user to insert ads by modifying the content and thus showed that they had knowledge.


The recent legislations aim to provide a balanced position for online intermediaries and the respective right holders. However the laws are still emerging, holding intermediaries liable for third-party generated content could lead to a system where intermediaries would be forced to restrict the availability of content to the public in order to avoid any liability. Such form of censorship could adversely impact one’s freedom of speech and expression.

United IPR

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