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Liability Of Internet Service Providers For Copyright Infringement On The Internet

Posted on Sep 17, 2005

Posted By Subhrarag Mukherjee


The advent of Internet has raised many unprecedented issues that do not find express solution in the existing Indian legal regime. One of the most contentious issues associated with the Internets facilitation of information distribution is the liability of service providers for transmitting content created by others. The most important right under challenge is the right of reproduction. In the digital context the copyright works are stored in digital format and multiplied every time it is used or sent to another person. The question which arises is whether all forms of reproduction whether temporary or permanent form a part of reproduction right in the digital context? Can the service providers be held responsible for violations that take place in the net of which they may or may not have information? Are their activities like providing access by linking by deep linking, system catching, framing etc. violations of the rights of reproduction of the copyright holders? Explaining the role of Internet Service Providers (ISPs) in making copyright work available to end users over the net, the paper describes the basis of liability, response of the US legal regime to the issue, treatment of liability issue in WIPO Internet treaties and finally studies the Indian law on that regard. It points out the need for a clear and well-defined liability standard for service providers as an imperative to the healthy promotion of intellectual property in the digital environment in the country.

The Basis Of Liability

The liability for copyright infringement rests on three theories- direct, vicarious and contributory infringement. Direct infringement occurs when a person violates any exclusive right of the copyright owner. Vicarious liability arises when a person fails to prevent infringement when he can and has a right to do so and is directly benefited by such infringement. These two theories are based on the strict liability principle and a person will be liable without any regard to his mental state or intention. Contributory liability arises when a person participates in the act of direct infringement and has knowledge of the infringing activity. The question arises as to which standard should be applied in order to fix the responsibility of service providers.

Existing International Norm

This issue for the first time caught the attention of the international community in the WIPO Copyright Treaty, 1996 [WCT]. The right of making available to the public the work in such a way that the members of the public may access the work from a place and a time individually chosen by them was incorporated into the WCT to cover internet communication of the works. The treaties updated the Berne Convention by incorporating the existing TRIPS provisions in its folds and granted additional rights to the authors in the context of Internet. A new right referred to as the right of communication to the public was incorporated and right of distribution was specifically spelt out. It also provided for legal remedies against circumvention of technological measures used by the authors to protect their work. Legal protection was also granted to rights management information systems used by the authors while transmitting works in digital environment. It was further made clear that mere provision of physical facilities for enabling or making a communication does not itself amount to communication with the meaning of this provision. Since there was no agreement to treat both temporary and permanent reproduction as a part of reproduction rights in digital format, no specific provision was included in the WCT in this regard. It was the failure of the  international community due to the pressure from interest groups to reach to a definitive conclusion on the nature of the liability of service providers and users, that left the international law unsettled and it was left to the respective Nation States to introduce appropriate provisions in the domestic law to protect the interests of the owners.

Implementation- Us Leads The Way

One of the first countries to legislate on the Treaty provisions was the US through its Digital Millennium Copyright Act (DMCA) that came into force in 1998. Before referring to the DMCA it is necessary to refer to some of the judicial pronouncements of US Courts on the issue.In Playboy Enterprises v. Frena , the Court was called upon to determine the liability of electronic Bulletin Board System operator (BBS) for the acts of users who had uploaded and downloaded the plaintiffs copyrighted photographs. The Court found Frena liable for violating the plaintiffs right to publicly distribute and display copies of its work. 

The defendant contended that he had in fact removed the photographs from the BBS when he received the complaint and had since monitored the BBS to prevent additional photographs of Playboy from being uploaded. The Court ruled in favour of the plaintiff on the ground that intention or knowledge is not an element of infringement. This ruling has been criticized on the ground that imposition of strict liability would compel them to monitor private transmission of their users in an effort 
to detect potential violations thereby making their functioning precarious and also open them to the challenge of violation of right to privacy.In Sega Enterprises v. Maphia , the Courts did not approve Ferna Courts findings but tried to find service providers liable under vicarious and contributory liability theories. Following this, in Religious Tech. CTr. v. Netcom Online Commun. Servs , the Court laid down that the notice of infringing activity to the service provider will implicate him for contributory negligence because failure to stop an infringing copy from being distributed worldwide would constitute substantial participation. Substantial participation is where the defendant has knowledge of the primary infringers infringing activities and it induces, causes or materially contributes to the infringing conduct of the primary infringer. It rejected the argument of the defendant that it was in essence a common carrier entitled to exemption to strict liability codified in Section III of the Copyright Act and held that service carriers are not bound to carry all the traffic that passes through them. It however, did
not go far to impose direct infringement liability on the service provider as it would, in the opinion of the Court, result in liability 
for every single server transmitting information to every other computer. The lead taken by the Netcom Court was maintained by the Courts that followed it. At the same time the Courts havent been reluctant in imposing direct infringement liability on the service provider when he himself was selling the infringing material. In Playboy Enterprises, Inc. v. Hardenbaugh , where the defendant himself was screening copyrighted photos in the upload file and then shifting them to the master file for users, the Court held the defendant liable for direct infringement because of his direct participation in the infringing activity.After Hardenburgh, the U.S. Congress enacted the Online Copyright Infringement Liability Limitation Act as part of the Digital Millennium Copyright Act of 1998. The Digital Millennium Copyright Act (DMCA) effectively gives legislative backing to the principle laid down in RTC v. Netcom by codifying its ruling that passive automatic acts shall not become grounds for a finding of online copyright infringement. Second, the law clearly spells out the criteria to establish a case of contributory or vicarious copyright infringement against an ISP. Thus, we see that the U.S. Courts have not granted any general immunity to the service provider but impose liability on the service providers depending upon the degree of control and knowledge of the infringing activity.

The Indian Position

The liability of service providers for copyright infringement is not expressly covered by the Indian Copyright Act. The Information Technology Act, 2000 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, the existing provision does not clearly prescribe liability limits of service providers. For example, if a person makes a representation to a service provider claiming copyright on the material available on the network, will the service provider be liable if he fails to take steps within a reasonable time to remove the infringing material from the network? If the service provider fails to prevent infringement of copyright in the above circumstances, is the plea of not having knowledge of infringement still available to him? If the service
provider removes the material from the network in pursuance to the representation made by a person which later on proves false, will the service provider be liable to the person whose material has been removed?

The Indian position in liability of service providers for copyright infringement must be made more explicit. The I.T. 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. 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. If the behavior of an ISP is reasonable, then that ISP should not be held liable for each and every activity on the Internet as has been held by the US Courts.

There is a dying need for express provisions either in the Copyright Act or the Information Technology Act, 2000 prescribing liability of service providers for copyright infringement in the light of the issues raised in the paper. Issues concerning ISPs should be taken seriously, because any hesitation over implementing policies or regulation of ISPs can prove detrimental to the development of the institution of Internet as a whole. 

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