India: Safe Harbour For Intermediaires

Last Updated: 6 April 2017
Article by N. Mahabir
  1. "There is only one boss. The customer. And he can fire everybody in the company from the chairman on down. Simply by spending his money somewhere else" – Sam Walton.
  2. World has moved from Brick and Mortar to online in all forms of assimilation right from mom and pop stores to electronics and medicines. From selling limited wares in a shop, an online store can sell unlimited wares. The business is scalable without limits. Online platforms or intermediaries like Flipkart, eBay, Amazon have given access to many vendors through their platforms. However, it may not be feasible to keep an electronic watchman to filter everything the vendor intends to sell on the site. The power of intermediary can be deciphered from the fact that on 29 March 2017, Amazon founder Jeff Bezos became the second richest person on earth, few billions short of Bill Gates.
  3. India has sought to regulate electronic transactions through Information Technology Act, 2000. Section 2(w) of the Information Technology Act, 2000 defines intermediary as "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"
  4. Section 79 of the Information Technology Act, 2000, is a non-obstinate clause which provides immunity from liability under all laws provided the intermediary has not conspired or abetted or aided or induced in commission of the unlawful act or upon receiving actual knowledge through any notification about a computer resource in the control of intermediary being used for unlawful act fails to expeditiously remove or disable access to that material. Section 79 reads as below:

    79. INTERMEDIARIES NOT TO BE LIABLE IN CERTAIN CASES

    1. Notwithstanding anything contained in any law for the time being in force but subject to the provisions of sub-sections (2) and (3), an intermediary shall not be liable for any third party information, data, or communication link made available or hasted by him.
    2. The provisions of sub-section (1) shall apply if—

      1. the function of the intermediary is limited to providing access to a communication system over which information made available by third parties is transmitted or temporarily stored or hasted; or
      2. the intermediary does not—

        1. initiate the transmission,
        2. select the receiver of the transmission, and
        3. select or modify the information contained in the transmission;
      3. the intermediary observes due diligence while discharging his duties under this Act and also observes such other guidelines as the Central Government may prescribe in this behalf.
    3. The provisions of sub-section (1) shall not apply if—

      1. the intermediary has conspired or abetted or aided or induced, whether by threats or promise or othorise in the commission of the unlawful act;
      2. upon receiving actual knowledge, or on being notified by the appropriate Government or its agency that any information, data or communication link residing in or connected to a computer resource controlled by the intermediary is being used to commit the unlawful act, the intermediary fails to expeditiously remove or disable access to that material on that resource without vitiating the evidence in any manner.
    Explanation.—For the purposes of this section, the expression "third party information" means any information dealt with by an intermediary in his capacity as an intermediary.
  5. Section 81 again reiterates that the provisions of IT override all other acts except the rights under Copyright Act, 1957 and Patent Act, 1970. Could it be analogous to the Safe Harbour provision under the US Digital Millennium Act. Section 81 reads as below:

    81. Act to have Overriding effect: The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force.

    Provided that nothing contained in this Act shall restrict any person from exercising any right conferred under the Copyright Act 1957 or the Patents Act 1970 (Inserted Vide ITAA 2008)
  6. However, intermediaries have been made parties to large number of law suits considering that many of the infringing products are easily sold in large numbers through these portals. There has been a push to enrol as many vendors as possible to provide diverse product and price options to the buyers.
  7. In a case titled Super Cassettes Industries Ltd. vs. MySpace Inc. & Anr., the Single Judge of the Delhi High Court had restrained Myspace from permitting any person to use its space for infringement of Plaintiffs copyright. In that case, the Plaintiff was the developer and producer of various musical and cinematographic work. Myspace was a subscriber based free social networking site enabling content sharing. Myspace added advertisements to the uploaded content. The Single Judge held that in view of Section 81 of the Information Technology Act, the liability of intermediary is not saved when there is violation of Copyright Act. The after the fact inquiry by the Defendant was not enough to overcome the rights granted to copyright owner under the Copyright Act.
  8. In a recent case Kent RO Systems Ltd. vs. Amit Kotak & eBay India Pvt. Ltd, the Delhi High Court reiterated the position that the intermediary is not required to make a self-determination of infringing products sold on its website but is required to take down the same only after recipt of complaint. The Court felt that an intermediary will not be possessed with prowess to detect each case of infringement unless their attention is drawn to a particular instance.
  9. In the case of Sabu Mathew George Vs. Union of India, before the Supreme Court of India three intermediaries viz. Google, Yahoo and Microsoft agreed to auto block advertisement with specific words which are in violation of The Preconception and Pre-natal Diagnostic Techniques (Prohibition of Sex Selection) Act, 1994 (PNDT Act) which prohibited detection of the gender of the child during the conception stage. This interpretation could arise on account of the great social problems for which this Act had been framed to address. The Court also directed the Government to form a nodal agency which will alert the intermediaries about any site so that the same could be blocked by the intermediary and not be accessible. Repelling the contention of Intermediaries that blocking of content which are not advertisement on pre-natal diagnosis would violate their freedom of speech, the Court reiterated that freedom of speech cannot be in violation of law.
  10. In the landmark decision of Shreya Singhal vs. Union of India, the Supreme Court of India while dealing with the case in the context of Article 19 (2) of the Constitution of India viz. situation in which the right to Freedom of Speech could be regulated, held that under Section 79 of the Information Technology Act, intermediaries are exempt from liability if they fulfil conditions of the section. The Court refrained from striking down Section 79 by reading down Section 79 (3) (b) and Rule 3 of the Information Technology (Intermediary Guidelines) Rules, 2011 to hold that the knowledge referred to in this section must be only through the medium of a court order or through an agency established by the Government. The Court observed that it would be otherwise very difficult for intermediaries to go through all the requests they receive and judge which requests are legitimate and which are not.
  11. In the appeal filed before the Division Bench of the Delhi High Court in Myspace Inc.vs. Super Cassettes Industries Ltd., the Court held that:

    1. It cannot be said that Myspace had knowledge of the infringement as it is technically not feasible to identify streaming content which infringes.
    2. When insertion of advertisements and modifications to any content is carried out by Myspace through automated systems, it cannot be said that Myspace had knowledge of infringement. It is not enough that there is suspicion of knowledge of infringement but should be actual knowledge.
    3. The take down notice by Plaintiff gave its entire repertoire without actually identifying the infringing works available on Myspace portal, which was not good enough notice.
    4. The argument of constructive knowledge and secondary infringement by Myspcace was rejected.
    5. The safe harbour provisions of the Indian Information Technology Act is similar to that under the European Copyright Directives.
    6. Section 79 of The Information Technology Act read along with the Information Technology (Intermediary Guidelines) Rules, 2011, provided an affirmative defense to the intermediary if the associated conditions of due diligence under Section 79 are followed.
    7. Section 79, Section 81 of Information Technology Act has to be read harmoniously with Section 51 (a) (ii) of Copyright Act, 1957.
    8. Plaintiff was directed to provide the URL of the infringing works to Myspace and Myspace was directed to remove it within 36 hours.

Conclusion:

The decision of the Division Bench in Myspace case is a welcome step. It recognizes that intermediary should be allowed to conduct business without any fetters but should act with diligence. The Court had done the delicate act of a harmonious construction between Section 79 and Section 81 of the Information Technology Act. However, an intermediary should block or remove access to an infringing material once it has been issued with the take down notice. This is a fine balance between growth of technology and protection of Intellectual property rights.

The intermediary should also place a gatekeeper before its enables any person to use its platform to disseminate information so that the person on its platform can be traced and be held accountable for its acts. This would reinforce the trust users place on intermediaries and their online platforms.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.