Centre for Internet & Society

In a three-part study, Ananth Padmanabhan examines the "John Doe" orders that courts have passed against ISPs, which entertainment companies have used to block dozens, if not hundreds, of websites. In this, the second part, he looks at the law laid down by the U.S. Supreme Court and the Delhi High Court on secondary and contributory copyright infringement, and finds that those wouldn't allow Indian courts to grant "John Doe" orders against ISPs.

In the second part of his study, Ananth Padmanabhan proceeds to examine applying a general theory of secondary or contributory copyright infringement against ISPs. He traces the basis for holding a third party liable as a contributory by closely examining the decisions of the U.S. Supreme Court in Sony Corp. v Universal City Studios[1] and MGM Studios, Inc. v Grokster, Ltd.[2] and concludes that this basis does not hold good in the case of a mere conduit intermediary such as an ISP.

[1]. 464 U.S. 417 (1984). Hereinafter referred to as Betamax.

[2]. 545 U.S. 913 (2005). Hereinafter referred to as Grokster.

Primary and Secondary Infringement

Liability for copyright infringement can either be primary or secondary in character. In the case of ISPs, liability as primary infringers does not arise at all, and it is in their capacity as conduit pipes facilitating the transmission of information that they could be held secondarily liable. Even in such cases, the contention of copyright owners is that once the ISP is notified of infringing content, it has the primary responsibility of preventing access to such content. This contention is essentially rooted in a theory of secondary infringement based on knowledge and awareness, and the means to prevent further infringement.

The controversy around a suitable model of secondary infringement is reflected in two judicial pronouncements – separated by a gap of more than two decades – delivered by the U.S. Supreme Court. In Sony Corp. v Universal City Studios,[3] the US Supreme Court held that the manufacturers of home video recording devices known in the market as Betamax would not be liable to copyright owners for secondary infringement since the technology was capable of substantially non-infringing and legitimate purposes. The U.S. Supreme Court even observed that these time-shifting devices would actually enhance television viewership and hence find favour with majority of the copyright holders too. The majority did concede that in an appropriate situation, liability for secondary infringement of copyright could well arise. In the words of the Court, “vicarious liability is imposed in virtually all areas of the law, and the concept of contributory infringement is merely a species of the broader problem of identifying the circumstances in which it is just to hold one individual accountable for the actions of another”. However, if vicarious liability had to be imposed on the manufactures of the time-shifting devices, it had to rest on the fact that they sold equipment with constructive knowledge of the fact that their customers may use that equipment to make unauthorized copies of copyrighted material. In the view of the Court, there was no precedent in the law of copyright for the imposition of vicarious liability merely on the showing of such fact.

Notes of dissent were struck by Justice Blackmun, who wrote an opinion on behalf of himself and three other judges. The learned Judge noted that there was no private use exemption in favour of making of copies of a copyrighted work and hence, unauthorised time-shifting would amount to copyright infringement. He also concluded that there was no fair use in such activity that would exempt it from the purview of infringement. The dissent held the manufacturer liable as a contributory infringer and reasoned that the test for contributory infringement would only be whether the contributory infringer had reason to know or believe that infringement would take place and not whether he actually knew of the same. Off-the-air recording was not only a foreseeable use for the Betamax, but also its intended use, for which Sony would be liable for copyright infringement.

This dissent has considerably influenced the seemingly contrarian position taken by the majority in the subsequent decision, MGM Studios, Inc. v Grokster, Ltd.[4] This case called into question the liability of websites that facilitated peer-to-peer (P2P) file-sharing. Re-formulating the test for copyright infringement, the US Supreme Court held that ‘one who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties’. In re-drawing the boundaries of contributory infringement, the Court observed that contributory infringement is committed by any person who intentionally induces or encourages direct infringement, and vicarious infringement is committed by those who profit from direct infringement while declining to exercise their right to limit or stop it. When an article of commerce was good for nothing else but infringement, there was no legitimate public interest in its unlicensed availability and there would be no injustice in presuming or imputing intent to infringe in such cases. This doctrine would at the same time absolve the equivocal conduct of selling an item with substantial lawful as well as unlawful uses and would limit the liability to instances of more acute fault than the mere understanding that some of the products shall be misused, thus ensuring that innovation and commerce are not unreasonably hindered.

The Court distinguished the case at hand from Betamax, and noted that there was evidence here of active steps taken by the respondents to encourage direct copyright infringement, such as advertising an infringing use or instructing how to engage in an infringing use. This evidence revealed an affirmative intent that the product be used to infringe, and an active encouragement of infringement. Without reversing the decision in Betamax, but holding that it was misinterpreted by the lower court, the Court observed that Betamax was not an authority for the proposition that whenever a product was capable of substantial lawful use, the producer could never be held liable as a contributory for the use of such product for infringing activity by third parties. In the view of the Court, Betamax did not displace other theories of secondary liability. This other theory of secondary liability applicable to the case at hand was held to be the inducement rule, as per which any person who distributed a device with the object of promoting its use to infringe copyright, as evidenced by clear expression or other affirmative steps taken to foster infringement, would be liable for the resulting acts of infringement by third parties. However, the Court clarified that mere knowledge of infringing potential or of actual infringing uses would not be enough under this rule to subject a distributor to liability. Similarly, ordinary acts incident to product distribution, such as offering customers technical support or product updates, support liability etc. would not by themselves attract the operation of this rule. The inducement rule, instead, premised liability on purposeful, culpable expression and conduct, and thus did nothing to compromise legitimate commerce or discourage innovation having a lawful promise.

These seemingly divergent views on secondary infringement expressed by the U.S. Supreme Court are of significant relevance for India, due to the peculiar language used in the Indian Copyright Act, 1957.[4]

Section 51 of the Act, which defines infringement, bifurcates the two types of infringement – ie. primary and secondary infringement – without indicating so in as many words. While Section 51(a)(i) speaks to primary infringers, 51(a)(ii) and 51(b) renders certain conduct to be secondary infringement. Even here, there is an important distinction between 51(a)(ii) and 51(b). The former exempts the alleged infringer from liability if he could establish that he was not aware and had no reasonable ground for believing that the communication to the public, facilitated through the use of his “place”, would amount to copyright infringement. The latter on the other hand permits no such exception. Thus, any person, who makes for sale or hire, or by way of trade displays or offers for sale or hire, or distributes for the purpose of trade, or publicly exhibits by way of trade, or imports into India, any infringing copies of a work, shall be liable for infringement, without any specific mens rea required to attract such liability. It is in the context of the former provision, ie. 51(a)(ii) that the liability of certain file-sharing websites for copyright infringement has arisen.[5]

Mere Conduit ISPs – Secondary Infringement Absent

In MySpace, the Delhi High Court examined the liability for secondary infringement on the part of a website that provides a platform for file-sharing. While holding the website liable, the Single Judge considered material certain facts such as the revenue model of the defendant, which depended largely on advertisements displayed on the webpages, and automatically generated advertisements that would come up for a few seconds before the infringing video clips started playing. Shockingly, the Court even considered relevant the fact that the defendant did provide for safeguards such as hash block filters, take down stay down functionality, and rights management tools operational through fingerprinting technology, to prevent or curb infringing activities being carried on in their website. This, in the view of the Court, made it evident that the defendant had a reasonable apprehension or belief that the acts which were being carried on in the website could infringe someone else’s copyright including that of the plaintiff. The logic employed by the Court to attribute liability for secondary infringement on file-sharing websites is befuddling and reveals complete disregard for the degree of regulatory authority available on the internet even where the space, i.e., the website, is supposedly “under the control” of a person. However, a critical examination of this decision is not relevant in understanding the liability of mere conduit ISPs. This is for the reason that none of the factual considerations relied on by the Single Judge to justify imposition of liability on a file-sharing website under Section 51(a)(ii) arise when the defendant is an ISP that only provides the path for content-neutral transmission of data.

This was completely ignored by the Madras High Court in R.K.Productions v. B.S.N.L.,[6] where the producers of the Tamil film “3”, which enjoyed considerable pre-release buzz due to its song “Kolaveri Di”, sought an omnibus order of injunction against all websites that host torrents or links facilitating access to, or download of, this film. Though this was worded as a John Doe plaint by branding the infringers as unknown administrators of different torrent sites and so on, the real idea was to look to the resources and wherewithal of the known defendants, ie. the ISPs, to block access to the content hosted by the unknown defendants.

This prompted the ISPs to file applications under Or. VII, Rule 11 of the Civil Procedure Code, seeking rejection of the plaint on the ground that the suit against them was barred by law. The Single Judge of the Madras High Court dismissed these applications for rejection of the plaint, after accepting the contention that the ISPs are necessary parties to the suit as the act of piracy occurs through the channel or network provided by them. The High Court heavily, and incorrectly, relied on MySpace without appreciating the distinction between a mere conduit ISP and a file-sharing website such as MySpace or YouTube, as regards their respective roles and responsibilities, the differing degrees of regulatory control over content enjoyed by them, and most importantly, the recognition and formalisation of these distinctions in the Copyright Act, 1957, vide the Copyright (Amendment) Act, 2012.

[3]. 464 U.S. 417 (1984). Hereinafter referred to as Betamax.

[4]. 545 U.S. 913 (2005). Hereinafter referred to as Grokster.

[5]. Hereinafter the Act.

[6]. Super Cassette Industries Ltd. v MySpace Inc., MIPR 2011 (2) 303 (hereinafter referred to as MySpace). This decision of the Delhi High Court has been rightly criticised. See http://cis-india.org/a2k/blog/super-cassettes-v-my-space (last accessed on 24.03.2013).

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