Copyright infringement

By Raman Mittal

Liability of Internet service providers for copyright infringement

Raman Mittal

The issue of on-line copyright infringement liability for ISPs has been around since the use of the Internet started to expand rapidly in the early 1990’s and has been the subject of extensive debates worldwide. Should ISPs be held responsible for illegal activities committed by their users? To what extent are online intermediaries responsible for third party material put on the Internet by users of their facilities?

Because of the inherent difficulties of enforcing copyrights against individual Internet users worldwide, the copyright owners have found the answer to this problem is placing legal liability for copyright infringement on those who allow and enable Internet copyright pirates to exist, namely the Internet service providers (ISPs). For the content community, it is practical to sue the ISPs as they are in a position of policing the Internet. On the other side of the argument, ISPs are passive carriers similar to telecommunications companies and, therefore, should be granted some limitation from liability with regard to copyright infringement. In addition, to make ISPs liable could stifle the growth of the Internet.

The liability of ISPs may arise in a variety of legal fields, such as criminal law, tort law, trade secret law, copyright law, trademark law, unfair competition law, etc. Worldwide many nations have tried to define the liability of ISPs in disseminating third party content. Many of these national laws relate to criminal law, information technology law or copyright law. These statutes have tried to solve the problem by adopting either of the two approaches; horizontal approach and non-horizontal approach. The horizontal approach covers not only copyright infringement but also all other potential areas of law where liability of ISPs might arise. There are laws now in force in Germany, Sweden, Japan, etc. which approach the issue from a horizontal perspective. It fixes the liability regardless of the grounds for illegality of the transmitted material. Whereas, under non-horizontal approach the potential liability of ISPs is determined under each law where it might arise. Non horizontal approach has been adopted by some countries such as Hungary, Ireland, Singapore and the United States of America. In this case various statutes would determine ISP liability; for example, adopting non-horizontal approach the copyright statute would address ISP liability that might arise only in relation to copyright violations.

ISP liability under the Copyright Act, 1957

The Copyright Act, 1957 was obviously drafted in complete oblivion of the phenomenon called the Internet. Even after its amendments in 1994 and 1999 it does not contain any express provision for determining or limiting ISP liability. However, some provisions in the Act could be interpreted to have some bearing on the liability of ISPs. As per section 51 (a)(ii) of the Copyright Act:

Copyright in a work shall be deemed to be infringed, when any person, without a licence granted by the owner of the Copyright or the Registrar of Copyrights under this Act or in contravention of the conditions of a licence so granted or of any condition imposed by a competent authority under this Act … permits for profit any place to be used for the communication of the work to the public where such communication constitutes an infringement of the copyright in the work, unless he was not aware and had no reasonable ground for believing that such communication to the public would be an infringement of copyright. (emphasis added.)

ISPs allow their servers and other telecommunication facilities for storing user’s material and for transmitting that material. The computer servers and other telecommunication facilities are actually located at their business premises and hence they would verily come under the expression “any place” and could be held liable for the infringing activities of third parties whose material they store or transmit if other requirements are fulfilled. Further, the expression “permits for profit” means that to be held liable the activities of ISP should be for profit meaning thereby that he should be financially benefiting out of the infringing activities. ISPs normally charge for their services and even if they offer some services for free, they could indirectly be making profit out of it, e.g., from advertisements that they bundle together with the transmitted material. So, the above two requirements are fulfilled by ISPs for most of their activities in case they transmit or store infringing material. The expression ‘unless he was not aware and had no reasonable ground for believing that such communication to the public would be an infringement of copyright’ is significant in the sense that ISPs are liable only if they have knowledge of the infringing material stored or passing through their servers.

Further, “any person who knowingly infringes or abets the infringement of copyright …” is made criminally liable under S. 63 of Copyright Act, 1957. ‘Can an ISP be said to have abetted the infringement of copyright’ is a question to be decided by the courts in the light of actual facts.

ISP liability under the Information Technology Act, 2000

In India the provisions relating to the ISPs are specifically legislated in the IT Act, 2000 where an Internet Service Provider is referred to as Network service provider and Explanation (a) to s. 79 defines it as:

“Network service provider” means an intermediary.

Intermediary again has been defined under section 2(w) as:

“intermediary” with respect to any particular electronic message means any person who on behalf of another person receives, stores or transmits that message or provides any service with respect to that message.

Further the Act contains in section 79 a clause which limits the liability of ISPs under certain circumstances:

Network service providers not to be liable in certain cases.
For the removal of doubts, it is hereby declared that no person providing any service as a network service provider shall be liable under this Act, rules or regulations made thereunder for any third party information or data made available by him if he proves that the offence or contravention was committed without his knowledge or that he had exercised all due diligence to prevent the commission of such offence or contravention.

Classification of ISPs under the IT Act, 2000

Under IT Act, 2000 no classification of ISP has been attempted. The expression ‘Network service providers’ used in section 79 subsumes within it all kinds of Internet service providers irrespective of what function they perform in the long chain of intermediaries that transport Internet content to the desired destinations. The ISPs perform different functions in the task of transporting content and their liability cannot be uniform. It has to be based precisely on what function they perform.

In the opinion of the author it is necessary to categorize the ISPs into functional categories otherwise different ISPs could be held liable under the IT Act, 2000 for something which they have played no role in or for the contents over which they have little control. To give a meaningful disposition to the limitation on liability of ISPs, for which section 79 has been drafted, it becomes essential to categorize the ISPs.

Filtering ISP liability through the IT Act

The title of section 79 of the IT Act “Network service providers not to be liable in certain cases” makes apparent the object behind the section, which is to limit the liability of ISPs. The liability of ISPs could arise in a number of ways under different statutes. The liability could be criminal or civil in nature depending on various factors. It is impractical to define the liability of ISPs which could arise in various forms at one place. Equally impractical could be to amend all our laws, which could hold ISPs liable, in order to limit their liability. The latter has not been attempted in any of the Indian legislations including the Copyright Act, 1957 till now. The IT Act, 2000 does not attempt the former but just seeks to create a filtering mechanism for determining the liability of ISPs. The idea is that the liability of an ISP for his action or omission be first determined in accordance with the statute under which it arises and then if at all the ISP is held liable, his liability again be filtered through section 79 of the IT Act. For example, if an ISP is accused of illegally distributing pirated copies of music, then his liability be first determined under section 51(a)(ii) and section 63 of the Copyright Act, 1957. If the ISP is found liable then his liability again be tested on the touchstone of section 79 of the IT Act, 2000.

In this context, the expression “under this Act” which has been used in section 79 has created some confusion. Apparently, this limitation of liability would be applicable only when the liability has arisen under the IT Act alone. This could not be the motive behind drafting section 79 especially when the Act does not attempt to define the liability of ISPs in any of its provisions; it only talks about limiting their liability. For the removal of doubts it is desirable that the expression “under this Act” be removed from section 79.

How can an ISP qualify for exemption from liability for copyright infringement?

To qualify for exemption, ISPs may neither initiate the transmission, select the receiver nor have any editorial control by selecting or modifying the material. Section 79 of the IT Act also provides two circumstances under which an ISP can qualify for exemption from liability:

” Lack of knowledge
” Exercise of due diligence

Lack of Knowledge

Knowledge of the illegal contents on part of the ISP is a prerequisite for holding him liable under section 79 of the IT Act, 2000. The ISP can escape liability if it could be proved that he was unaware of all that was stored and passing through his servers. But if he is put under a notice that some infringing material is either stored or passing through his servers, he has to take proper action for removing or disabling that material otherwise he could be said to have knowledge of the infringing material and held liable.

Due diligence

For an ISP to escape liability, section 79 prescribes “due diligence” to be exercised by him. The provision requires actual knowledge or breach of the duty of care. What should be the extent of the “due diligence” requirement? Should the ISPs be required to monitor and judge legality of millions of files that are present or passing through their servers? Considering the gigabyte that are stored or passing through their servers this seems to be an impossible task. But, if we say that the ISPs should not be under an obligation for “due diligence”, it might encourage them to consciously ‘look away’ and evade all liability. It can be safely concluded that ISPs are not liable for the (infringing) gigabytes that are stored and passing through their servers unless they are put on notice. If an ISP encounters particularly suspicious circumstances, he may be subject to “due diligence” i.e. a duty of care to investigate further whether material he hosts or refers to is unlawful and, where found to be so, to block access.

Why are ISPs impleaded in cases of copyright infringement on the Internet?

Most of the time in every set of action that a copyright owner takes against infringements on the Internet, by and large the action is simultaneously taken against the ISP as well, apart from the person who actually commits the infringement. There are reasons behind ISPs being sued so often when it comes to Internet infringements.

It is very easy to trace an ISP. For example a software product is found loaded on a Web site which anyone is free to download. Let’s presume the Web site actually operates some kind of bulletin board, i.e. a site where people just upload and download files and where anyone can contribute as well as can take. In such situations, often you can trace out the Web site owner but you can’t trace out the actual contributor. But you definitely can find out the ISP who’s facilities have been used to upload the software. In digital environment products are priced high and much damage can occur in less time. So, apart from suing the actual offender people would always like to sue the ISP as well.

Normally an ISP, as a business entity, has deeper pockets and is also more capable of paying the damages than is an individual private user. Another reason is that it deters infringement by other subscribers. If on a Web site there are 15 subscribers, all of whom can upload and download content to and from that Web site, if you sue one of them, the next day someone else might upload the same content. But if you sue the ISP directly it would have to shut off and make it very clear to his subscribers that the infringing content will not be uploaded on this Web site ever again. So with the intent of deterring infringement again, suing an ISP is quite practical. It is far easier to try and stop the copyright infringement by suing the ISP directly because he controls that network.

Raman Mittal,
Reader, Faculty of Law, University of Delhi India.

Cyber Law – Internet India – Copyright