India: Internet Service Provider´s Liability For Copyright Infringement

Last Updated: 22 May 2003

By Jidesh Kumar.M.D , Associate, Intellectual Property Department


Nobody ever knew that Charles Babbage's love for Lady Ada Lovelace would become the phenomenon of the future. With advancements in the field of Computers and its related technologies, it has acquired the much-needed status as the most efficient and effective communication medium. The amazing capability of the Internet to promote the exchange of knowledge, information, and ideas on a universal scale has surely revamped the way people interact. The greatest advantage of this medium is its ability to enable people around the planet to obtain great quantities of information within seconds, thereby propelling intellectual thought and facilitating the spread of information. In the past one decade, the estimated number of Internet users grew from around 1 million to approximately 1.5 billion. The Internet enables a simple user to connect to a local Internet access provider and hop around the globe from one site to another at the cost of a local telephone call.

It is precisely here that the Internet Service Providers ("ISP") play a significant role. With the growth of the Internet, Intellectual Property Right ("IPR") abuses have grown many times. The intellectual property owners complain that they are losing billions of dollars because of the online copying that the Internet facilitates. Furthermore, they fear that the growth of the Internet will aggravate this existing problem. Thus, in almost all IPR violation cases, the accessed ISP will be added as a respondent. This has created a sense of uncertainty among ISPs who feel they are being made scapegoats through no fault of their own and are left clueless as regards their rights.


Internet Service Providers are companies or corporations that enable clients to connect to the Internet. Just as in any other business, ISPs may range from conglomerates to small companies having only a handful of clients. Quite often, the ISPs provide their clients with facilities to create client literature or other articles and make them available over the Internet to the general public - a function ISPs proudly term as a "value-added service." Typically, an ISP provides its clients with more than just an email account and access to the web; it offers facilitation to upload files (including web pages) to the ISP's publicly accessible servers, enabling users to access these files.


From the early nineties, the Internet has grown at an exorbitant pace. Initially, cyberspace consisted of fewer than 50 World Wide Web sites; computer scientists and physicists used the majority of these sites. Today, the Internet is no longer reserved for researchers, and it is anticipated that within five years international commerce on the Internet could reach $3.2 trillion. In the past 96 months the number of Internet users has risen from hundreds to millions of users. Some experts expect this figure to reach two billion by the year 2008.

While the Internet has helped artists, educators, researchers, and publishers explore and conquer their markets, the very same technology also makes it possible for copyright pirates to copy and distribute anything present on the Internet, while remaining both anonymous and undetectable. Copying is the easiest thing one can do on the Internet, and so has become a valid concern for IPR holders who urge that something be done quickly to address this menace.

Identifying the individual who posts allegedly infringing material is not an easy task, whereas spotting the ISP is quite simple. Even if the offending individual is caught, there is no guarantee that he will have the resources to pay legal damages. ISPs, on the other hand, are in a position to pay with the profits the ISPs make from the pirates' use of the Internet. Therefore, copyright holders target ISPs out of sheer pragmatism. Additionally, in comparison to an independent publisher or author, an ISP is in a much better position to supervise how its subscribers make use of the Internet. Both of these factors make the ISPs especially culpable in the eyes of the law.

In response, ISPs claim they are passive carriers, just like telecommunications companies, and therefore should be given some degree of immunity from copyright infringement liability. Furthermore, they contend that making ISPs liable for pirates' IPR infringements could have a crippling effect on the growth of the Internet. One thing is pretty obvious here, smaller ISPs that lack deep pockets will not be able to fight time-consuming and costly courtroom battles, and ultimately they will be forced to wind up their operations.


The liability of ISPs in copyright infringements is a topic that has generated a lot a fiery debate throughout the globe. But here they will be disappointed, because the Indian courts and legislators haven't much to offer on the topic. In fact, it is the case law and legislation of the U.S. that provides the only adequate direction. To be sure, Americans have adopted many laws addressing the threats from cyberspace; the Digital Millennium Copyright Act 1998 and the Anti-Cybersquatting Consumer Protection Act 1999 are good examples. Apart from the U.S. legislation, the latest Australian legislation, the Copyright Amendment (Digital Agenda) Act 2000, took effect in March 2001. While India too has realized the need of the hour and has enacted the Information Technology Act 2000. Still the Indian position on ISP liability remains vague. A survey of various information technology laws around the globe will help to correct some of the latent deficiencies of the Indian Information Technology Act 2000.


Currently, in India, ISPs have not been drawn into any major IPR violations. The new Internet policy announced by the Central Government in July 2000 has brought service providers, in addition to existing ISPs such as Satyam, Dishnet, and Wipro Netcracker. Therefore, in the future, the probability of these ISPs being dragged into unnecessary courtroom battles is high. The law addressing the ISP liability issue is ambiguous. The Information Technology Act exempts ISPs from liability if they can prove that they had no knowledge of the occurrence of the alleged act, and that they had taken sufficient steps to prevent a violation.

However, it is not surprising to find that the legislation in this field lacks clarity. The Digital Millennium Copyright Act of the United States, has defined the standard of knowledge an ISP is required to possess for it to be held liable for illegal third party activities. Additionally, the US legislation allows ISPs to terminate the accounts of individuals who infringe copyrights on a regular basis. Furthermore, in the United States, ISPs have to register an agent with the appropriate office so they can receive information of copyright infringements. This eliminates the possibility of an ISP being caught unaware of third party infringements.

The Indian position in the "cyberspace" legislation must be made more explicit. It must clearly require an ISP to have actual knowledge of any infringing act to be held liable. To make it convenient for ISPs, they could be asked to designate an agent with the requisite authority to receive complaints regarding offenses committed on the Internet. This will ensure that the ISP has sufficient knowledge of the abuses on the Internet. The Australian Act gives due importance to the financial gain made by ISPs along with the nature of the relationship between an ISP and a third party infringer. Similarly, the Indian Act must include sections that address the financial aspect of the transaction, and the relationship between an ISP and a third party, because this is vital to determining the identity of the violator. The American concept of contributory infringement can also be incorporated into the Indian Act so that if any person "with knowledge of the infringing activity, induces, causes, or materially contributes to the infringing conduct of another," the person can be made liable. And as in the Australian Act, an ISP must not be held liable unless it determines the content of the material.

In order to be exempt from liability, the Indian Act requires the service provider to exercise "due diligence" to prevent the commission of copyright infringement. The Act does not provide the meaning of the term "due diligence." If "due diligence" means policing each and every aspect of the Internet, it can lead to loss of privacy and can ultimately have a disastrous effect. There is a need for a consensus on the meaning of the term due diligence because the primary function of ISPs is to build the Internet, not to play the role of a policeman. Consequently, "due diligence" should be interpreted narrowly. If the behavior of an ISP is reasonable, then that ISP should not be held liable for each and every activity on the Internet. The laws should be pragmatic because an ISP cannot be expected to monitor all the activities on the Internet.

Although the Information Technology Act 2000 has been enacted with much fanfare, it has failed to clarify some basic issues. This Act requires considerable fine-tuning and issues concerning ISPs should be taken seriously, because any hesitation over implementing policies or regulation of ISPs can prove detrimental to the institution of the Internet as a whole.

The content of this article does not constitute legal advice and should not be relied on in that way. Specific advice should be sought about your specific circumstances.

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