Analysis of the Delhi High Court’s Myspace Judgement

MySpace Inc. v. Super Cassettes (C.S(OS) 2682/2008) is an ongoing litigation in the High Court of Delhi concerning allegations of copyright infringement. Such infringement has been claimed by Super Cassettes (SCIL) against MySpace. MySpace is an online platform that enables users to upload content with a technical functionality that eases the upload and sharing of audio content.

On an appeal by Myspace, against an interim judgment of a single judge, a Division Bench of the High Court of Delhi has on 23.12.2016 (FAO(OS) 540/2011) given a significant judgment. The judgment concerns the extent of safe harbors for online intermediaries in instances of allegations of copyright infringement.

Procedural History

• Notice for infringement: On being approached by MySpace to enroll in a rights owner’s management program SCIL alleged that it noticed large scale infringement of its works. This caused SCIL to issue a notice to MySpace to remove content, in which it claimed copyright. Sample lists of song titles were submitted by SCIL and damages were claimed for their unauthorized use. MySpace issued a reply stating that infringing content had been removed and was subsequently added to a technical filter (to prevent future uploads). SCLI, however, stated that the content had not been removed and further went on to file a civil suit for damages, injunction and declaration against MySpace. It further claimed infringement by MySpace against its larger catalogue of works.
• Interim injunction in favour of SCIL: SCIL argued that MySpace was infringing Section 51(a)(i) as well as Section 51(a)(ii) of the Copyright Act, 1957 by publishing copyrighted works on its website and by making profit by providing, “space”. It also claimed wider reliefs on apprehension uploads against it’s wider catalogue. This basis of this assertion was MySpace’s use of “tools” in which copyright owners were requested to enroll through a rights management program. Based on such submissions an ad-interim injunction came to be passed on 19.12.2008 by a Single Judge of the High Court of Delhi. The interim injunction was finally determined by a speaking order on 29.07.2011.
• Reasoning of interim injunction: The Order dated 29.07.2011 was premised on the phrase, “any place” as mentioned in Section 51(a)(ii). It was reasoned by the Court to include both a physical as well as a virtual place. The Court held that MySpace had created a, “space” that allowed upload of content by users without the permission of the rights owners. Such content was subsequently saved in its database and for which it collected a limited license to add, modify and delete content. Such functions were supported by contextual advertisements and constituted profit within the purview of the second prong of Section 51(a)(ii) that stated the unauthorized use should be, “for profit”.
• Rejection of safe harbor protections: Arguments in defense of such use premised on the safe harbor for intermediaries under Section 79 of the Information Technology Act, 2000 were rejected by the Court. It was reasoned by the Court that Section 81 that contained a proviso for remedies under the patent and copyright act had an overriding effect on Section 79. Hence, it rendered Section 79 nugatory in claims of copyright infringement. This decision was appealed by MySpace which has lead to the judgment by the Division Bench on 23.12.2016.

Analysis of the Judgment dated 23.12.2016

The division bench on appeal reduced the legal controversy to three issues.

The first issue related to the knowledge of infringement as a necessary constituent of Section 51(a)(ii) of the Copyright Act. It held that such knowledge was not available with online intermediaries for the following reasons:

Actual knowledge necessary: The Court held that the “knowledge” test applied by the Single Judge was inapplicable to online websites. The Court stated that the “general awareness” standard that was enough to impose liability in cases of infringement in physical spaces, overlooked that unlike the real world (brick and mortar), in the virtual world (on the internet), there were millions of videos are uploaded daily and it was impossible under available technology standards to proactively identify the streaming content which actually infringed copyrights without a specific claim by the owner.

General filters result in disproportionate takedowns: The Court in this case also acknowledged that SCIL’s demand to run a general filter and “take down” as per it’s product catalogue (search strings based on the title of songs) would result in a disproportionate take down. It would result in “snuffing out creativity” and violation of the right of “fair use” along with resulting in multifarious disputes. For instance, license holders who may hold rights to create versions of the works or remixes for such songs. There is also the possibility of incidental takedowns of songs with the same title

Duty to police on rights owner: The Court reasoned that the onus was upon the Plaintiff to give detailed description of its specific works to enable the web host to identify them. It was also clarified that if the modification/addition is entirely through an automatic process without any human intervention, then knowledge could not be attributed to MySpace and that “knowledge” could not be assumed on the basis of mere suspicion or apprehension.

The court then considered the issues of the existence of intermediary liability exemption under Section 79 of the Information Technology Act, 2000. It held that MySpace qualified for the protection for the following reasons:

MySpace is an intermediary: The court held that MySpace, prima facia fell within the definition of “intermediaries” under Section 2 (1) (w) of the IT Act, 2000 and qualified as an intermediary/ Internet service provider because it acted as a “conduit”/ portal for information where users could upload and view content.

Knowledge standard under Section 79 for copyright infringement: Section 79(3) of the IT Act specified that when a person had actual knowledge or upon notification by the appropriate government or its authority fails to expeditiously remove or disable access to an unlawful content then the immunity granted under Section 79(1) is revoked. In the Shreya Singhal case, Section 79(3) with Rule 3(4) of the Rules were read down to mean receipt of actual knowledge from a court order or on being notified by the appropriate government.

However, this was in respect of restrictions under Article 19(2) of the Constitution of India. In that case, the Supreme Court was conscious of the fact that if millions of requests for take down were made, it would become difficult for intermediaries (such as Google) to identify legitimate requests. In the case of copyright laws it was held sufficient that MySpace received specific knowledge of the infringing works in the format provided for in its website from the content owner without the necessity of a court order.

MySpace was a passive intermediary: The court observed that under Section 79(2)(a) an intermediary could seek safe harbor protection if its role is limited to “providing access to a communication system over which information made available by third parties is transmitted or temporarily stored or hosted.” Furthermore, under Section 79(2)(b) an intermediary could not initiate the transmission, select the receiver of the transmission and select or modify the information.

The court stated that it was reasonably clear that MySpace complied with the first and second sub-clauses. For, (a) It has a “free for all” platform, which by itself did not initiate the sharing feature and that while it had created the “share” option that per se does not mean that it “initiates” an action. (b) MySpace did not choose its audience/ receiver. Anyone with Internet access could open its website and be a receiver/ viewer of the data being transmitted. © On the third sub-clause of whether MySpace selects or modifies information, the court at a prima facia stage found that the modification is to the format and not to the content and secondly even the process of modifying the format is an automatic process without either MySpace’s tacit or expressed control or knowledge. In the circumstances the Court concluded that MySpace prima facie complied with the requirements of Section 79(2).

MySpace exercised proper due diligence: As with regards to “due diligence” under Section 79(2)©. the Court stated that MySpace’s website for purposes of viewing did not require the user subscription to its terms and conditions. However, for the purpose of uploading, sharing, commenting etc. subscription with MySpace is needed and for this purpose an agreement is entered into between the parties. To comply with the due diligence procedure specified in the Rules, MySpace had to publish its rules, regulations, privacy policy and user agreement for access of usage. MySpace annexed its user agreements and privacy policies which suggested due diligence. The court held Section 79(3) read with Rule 3(4) of the Intermediary Rules made an intermediary liable on receiving “actual knowledge” or upon obtaining knowledge from the affected person in writing or through email to act within 36 hours of receiving such information disable access to such information and it was for the plaintiff to show such knowledge had been given.

Exemptions under Copyright Act for transient storage inapplicable: MySpace also tried to defend its activities by claiming the shield of the fair dealing section of the Indian Copyright Act. However, the Court refused, stating that the fair dealing defense was inapplicable to the case as the provisions protected transient and incidental storage only. Whereas, in the instant circumstances, the content in question was stored/hosted permanently.

Implications of the Myspace judgment

• The court held that the proviso to Section 81 did not completely oust the applicability of Section 79 of the Information Technology Act, 2000 in cases of copyright infringement. Hence, exemptions from liability for online intermediaries is available even in cases of copyright infringement.
• It further held that the applicability of Section 51(a)(ii) of the Copyright Act, in the case of internet intermediaries contemplated actual knowledge and not general awareness. The standard for availing it has not been relaxed and such storage needs to be transient or temporary.
• In case of online intermediaries, interim relief has to be specific and directed to the actual content and the same was to be removed within 36 hours of receiving said notice. This is a departure from the standard in Shreya Singhal which requires a court/executive order for, “actual knowledge” to be constituted.

Further commentary by Anubha Sinha, Gautam Bhatia, Nandita Saikia.