Super Cassettes v. MySpace

The judgment[*]is extremely worrying since it holds MySpace liable for copyright infringement, despite it having shown that it did not know, and could not have known, about each instance of infringement; that it removed each instance of alleged infringement upon mere complaint; that it asked Super Cassettes to submit their songs to their song identification database and Super Cassettes didn't.

This, in essence, means, that all 'social media services' in which there is even a potential for copyright infringement (such as YouTube, Facebook, Twitter, etc.) are now faced with a choice of either braving lawsuits for activities of their users that they have no control over — they can at best respond to takedown requests after the infringing material has already been put up — or to wind down their operations in India.

The Facts

Aside from social networking, MySpace facilitates the sharing of content between its users. This case concerns content (whose copyright vested in T-Series) was uploaded by users to MySpace’s website. It appears that tensions between MySpace and T-Series arose in 2007, when T-Series entered into talks with MySpace to grant it licenses in its copyrighted content, while MySpace asked instead that T-Series register with its rights management programme. Neither the license nor the registration came about, and the infringing material continued to be available on the MySpace website.

Specifically, T-Series alleged that cases for primary infringement under section 51(a)(i) of the Copyright Act as well as secondary infringement under section 51 (a) (ii) could be made out. Alleging that MySpace had infringed its copyrights and so affected its earnings in royalties, T-Series approached the Delhi High Court and filed a suit seeking injunctive relief and damages. In proceedings for interim relief while the suit was pending, the court granted an injunction, but, in an appeal by MySpace, added the qualification that the content would have to be taken down only on receipt of a specific catalogue of infringing works available on MySpace, rather than a general list of works in which T-Series held a copyright.

The Defence

While other arguments such as one around the jurisdiction of the court were also raised, the central issues are listed below:

1. Non-Specificity of Prayer
   T-Series’ claim in the suit is for a blanket injunction on copyrighted content on the MySpace website. This imposes a clearly untenable, even impossible, burden for intermediaries to comply with.
2. Knowledge
   MySpace argued that no liability could accrue to it on two counts. The first was that it had no actual or direct knowledge or role in the selection of the content, while the second was that no control was exercised, or was exercisable over the uploading of the content. Additionally, there was no possible means by which it could have identified the offending content and segregated it from lawful content, or monitored all of the content that it serves as a platform for.
3. Intermediary status and Safe Harbour Protection
   In relation to its status as an intermediary, MySpace raised several arguments. First, it argued that it had immunity under section 79 of the IT Act and under the US Digital Millennium Copyright Act (US DMCA). Another argument restated what is arguably the most basic tenet of intermediary liability that merely providing the platform by which infringement could occur cannot amount to infringement. In other words, the mere act of facilitating expression over internet does not amount to infringement. It then made reference to its terms of use and its institution of safeguards (in the form of a hash filter, a rights management tool and a system of take-down–stay-down), which it argued clearly reflect an intention to discourage or else address cases of infringement as they arise. MySpace also emphasized that a US DMCA compliant procedure was in place, although T-Series countered that the notice and take down system would not mitigate the infringement.
4. Relationship between MySpace and its Users
   Taking from previous arguments about a lack of control and its status as an intermediary, MySpace argued that it was simply a licensee of users who uploaded content. The license is limited, in that MySpace is only allowed to alter user-generated content so as to make it viewable.

Outcomes

1. Infringement by Facilitation
   The court concluded that infringement in terms of section 51 (a) (ii) had occurred in this case, since web space is a “place” in the terms required by the section and there were monetary gains in the form of ad revenue. The argument as to a lack of knowledge of infringement was also rejected on the ground that MySpace’s provision for safeguards against infringement clearly established a reason to believe that infringement will occur. Also referenced as evidence of knowledge, or at least a reason to believe infringement would occur, is the fact that MySpace modifies the format of the content before making it available on its website. It also tested for infringement by authorization in terms of section 14 read with section 51 (a) (i), but concluded that this did not arise here.
2. Reading away section 79?
   The court accepted the argument made by T-Series to the effect that sections 79 and 81 of the IT Act must be read together. Since section 79 would be overridden by section 81’s non-obstante, the effect would be that rights holders’ interests under the Copyright Act will erode intermediaries’ immunity under section 79.
3. Due Diligence
   The court rejected the argument that the provision of due diligence or curative measures post-infringement would be sufficient. Specifically, the contention that the quantum of content being uploaded precludes close scrutiny, given the amount of labour that would be involved, was rejected. Content should not immediately be made available but must be subject to enquiries as to its title or to authentication of its proprietor before it is made available. In fact, it holds that, “there is no reason to axiomatically make each and every work available to the public solely because user has supplied them unless the defendants are so sure that it is not infringement.” (Paragraph 88).

There is also an attempt to distinguish the Indian framework from the DMCA. While that law calls for post-infringement measures, it is argued that in India, on reading section 51 with section 55, the focus is on preventing infringement at the threshold. In response to the case that it would be impossible to do so, the court held that since the process here requires MySpace to modify the format of content uploaded to it to make it viewable, it will have a reasonable opportunity to test for infringement.

Analysis

Accounting for the Medium of Communication

The court’s analysis of the issues begins with a predictable emphasis on how the law of copyright would operate in the context of what is termed “internet computing”, peppered with trite statements about “the virtual world of internet” creating “complexit[ies]” for copyright law. The court appears to have entered into this discussion to establish that the notion of place in section 51 (a) (ii) should extend to “web space” but the statements made here only serve to contrast starkly against its subsequent failure to account for the peculiarities of form and function of intermediaries online. Had this line of argument been taken to its logical conclusion, after the character of the medium had been appreciated, the court’s final conclusion, that MySpace is liable for copyright infringement, would have been an impossible one to arrive at.

And What of Free Speech?

As it had argued before the court, intermediaries such as MySpace have no means by which to determine whether content is illegal (whether by reason of amounting to a violation of copyright, or otherwise) until content is uploaded. In other words, there is no existing mechanism by which this determination can be made at the threshold, before posting.

The court does not engage with the larger consequences for such a scheme of penalizing intermediaries. Censoring patent illegalities at the threshold, even if that were possible is one thing. The precedent that the court creates here is quite another. Given the general difficulty in conclusively establishing whether there is an infringement at all due to the complexities in applying the exceptions contained under section 52, it should not be for ordinary private or commercial interests such as intermediaries to sit in judgment over whether content is or is not published at all. In order to minimize its own liability, the likelihood of legitimate content being censored by the intermediary prior to posting is high.

The consequences for civil liberties, and free speech and expression online in particular, appear to have been completely ignored in favour of rights holders’ commercial interests.

Consequences for Intermediary Liability and Safe Harbour Protection

Even if every instance in question did amount to an infringement of copyright and a mechanism did exist allowing for removal of content, the effect of this judgment is to create a strict liability regime for intermediaries.

In other words, the court’s ruling will have the effect that courts’ determination of intermediaries’ liability will become detached from whether or not any fault can be attributed to them. MySpace did make this argument, even going as far as to suggest that doing so would impose strict liability on intermediaries. This would lead to an unprecedented and entirely unjustifiable result. In spite the fact that a given intermediary did apply all available means to prevent the publication of potentially infringing content, it would remain potentially liable for any illegality in the content, even though the illegality could not have been detected or addressed.

What is perhaps even more worrying is that MySpace’s attempt at proactively and in good faith preventing copyright infringement through its terms of use and in addressing them through its post-infringement measures was explicitly cited as evidence of  knowledge of and control over the uploading of copyrighted material, at the threshold rather than ex post. This creates perverse incentives for the intermediary to ignore infringement, to the detriment of rights holders, rather than act proactively to minimize its incidence.

A final observation is that the court’s use, while pronouncing on relief, of the fact that MySpace makes a “copy” of the uploaded content by converting it into a format that could subsequently be hosted on the site and made accessible to show evidence of infringement and impose liability upon MySpace in itself is a glaring instance of the disingenuous reasoning the court employs throughout the case. There is another problem with the amended section 79, which waives immunity where the intermediary “modifies” material. That term is vague and overreaches, as it does here: altering formats to make content compatible with a given platform is not comparable to choices as to the content of speech or expression, but the reading is tenable under section 79 as it stands.

The result of all of this is to dislodge the section 79 immunity that accrues to intermediaries and replace that with a presumption that they are liable, rather than not, for any illegality in the content that they passively host.

Effect of the Copyright (Amendment) Act, 2012

Since the judgment in the MySpace case, the Copyright Act has been amended to include some provisions that would bear on online service providers and on intermediaries’ liability for hosting infringing content, in particular. Section 52 (1) (b) of the amended Act provides that “transient or incidental storage of a work or performance purely in the technical process of electronic transmission or communication to the public” would not infringe copyright. The other material provision is section 52 (1) (c) which provides that “transient or incidental storage of a work or performance for the purpose of providing electronic links, access or integration, where such links, access or integration has not been expressly prohibited by the right holder, unless the person responsible is aware or has reasonable grounds for believing that such storage is of an infringing copy” will not constitute an infringement of copyright. The latter provision appears to institute a rather rudimentary, and very arguably incomplete, system of notice and takedown by way of a proviso. This requires intermediaries to takedown content on written complaint from copyright owners for a period of 21 days or until a competent rules on the matter whichever is sooner, and restore access to the content once that time period lapses, if there is no court order to sustain it beyond that period.

This post does not account for the effect that these provisions could have had on the case, but it is already clear, from the sloppy drafting of section 52 (1) (c) and its proviso that they are not entirely salutary even at the outset. At any rate, there appears to be nothing that *determinatively* affects intermediaries’ secondary liability, i.e., their liability for users’ infringing acts.

Disclosure: CIS is now a party to these proceedings at the Delhi High Court. This is a purely academic critique, and should not be seen to have any prejudice to the arguments we will make there.

[*]. Super Cassettes Industries Ltd. v. MySpace Inc. and Another, on 29 July, 2011, Indian Kanoon - Search engine for Indian Law. See http://bit.ly/quj6JW, last accessed on October 31, 2012.