Module 6

MODULE 6: INTERMEDIARY LIABILITY

Intermediary liability got its legal attention when the amplified internet created a borderless
domain for all the illegal activities. The concept of Copyright got importance when the
printing machine was invented and lost its importance when internet became popular. This
is the current scenario and as usual law is trying to catch up with the technological
advancements. To take one of the hot debated topics, intermediary liability, in hand my
view is that Indian Courts and legislature in India has failed to address even the bare logical
requirement. The original idea of intermediary liability dates back. Traces of it can be found
in criminal and civil jurisprudence. However, the internet age gave this concept whole new
perspective and dimension.

Intermediaries are third party organizations that offer intermediation services
between the parties trading amongst themselves. Such organizations act as ducts for
services offered by a supplier to the relevant consumer. Value addition to the service in
question is a key aspect of the trading platform offered by such intermediaries, which is
highly improbable if the trading is done directly. Provision of a trading platform for any
kind of electronic commerce is the key link of the existence of an intermediary.

As existing in the technological age the surfaced usage includes the financial
militaries along with the insurance sector. Financial services where insurance brokers,
mortgage brokers and financial advisors offer select intermediation services for and in
the supply of financial products such as mortgage loans, insurance premiums and
investment services and products.

The intermediaries find their relevance in the Barter system in the following
manner for in the aforementioned system, the intermediary is a person or a group who
stores valuables in practices such as trade until those are needed. Parties to such
transaction have space available to take delivery of them and store them or until and
unless the requirements that follow are met. Facilitator of a contract between two
parties is also an intermediary.

Classification of intermediaries is very important aspect of any transaction or for
understanding purposes. Such can be classified as merchant intermediaries and or as
accountant intermediaries. The landmark case of Baile and Bakos (1997) analysed a
number of prevalent case studies and jurisprudence and thereby identified four such
rules and duties of electronic intermediaries inclusive of information aggregating,
provision of trust, matching and meeting of minds and facilitation.1

1Bailey, J. P., &Bakos, J. Y. (1997). An Exploratory Study of the Emerging Role of Electronic Intermediariations and
Policy, 19(5), 406-417.

Market is like a human body wherein information is the backbone. All
transactions in pertinence to a buyer and a seller must have the exchange of
information about the product, about the service, about the price and about the
settlement of disputes if any arose. Hence the acquisition of information is one of the
few most important aspects of a transaction. Information must be acquired in order to
make informed decisions in the purchase of both services along with its commodity.
Information is an essential component of any recognized market. In all such
transactions, buyers and sellers must exchange information about the product, price,
and adjustments of the issues that might rise during the course of the transaction.
Hence, individuals must acquire information to make informed decisions in the purchase
of both goods and services2.The tagline of information economy has been recently glued
to economy yet till date the market has always relied on the exchange of relevant
information.

Neoclassical model of economics has largely ignored the importance of
information3. As per the assumptions of a neoclassical model of the market, the market
information should be perfect wherein the transaction costs are low whereas in reality
such a perfect market is impossible. Actors of such structures are not having the
adequate and asymmetric information so they shall and they do make decisions based
on bounded rationale. The aforementioned lack of perfect information rests and results
in increased transaction costs for the sellers as well as buyers.

Traditionally the intermediaries in question have served to reduce such
information related transaction costs. An economic agent is what an intermediary shall
act as, which in turn helps buyers and sellers find each other and help in executing a
transaction stacked. In addition to that the said intermediaries help in order to classify
followed by sorting the market information and finally distribute the market information
and goods. The role of intermediaries does not end at the behest of distribution of the
goods and services but has grown and become more specialized as advances in
transportation as technology increases the size and complexity of any such market
place.4

As for the present day, however, advances, which take us into far future,
threaten the role of a tradition intermediary. If the logs of the World Wide Web were to
be checked such technologies transform the said locale of any such business
transaction-taking place under themselves from the traditional to the cyber market
place. The Internet does exponentially expand the scope and the size of any said
market, it also give direct link access in between the seller and the consumer.

2Kingma, B. R. (2001). The economics of information: A guide to economic and cost-benefit analysis for information
professionals (2nd ed.). Englewood, CO: Libraries Unlimited.
3Wolpert, S. A., &Wolpert, J. F. (1986).Economics of information. New York: Van Nostrand Reinhold.
4Beniger, J. R. (1986). The control revolution: Technological and economic origins of the information society.
Cambridge, Mass.: Harvard University Press.

Businesses do advertise and market directly to the consumers whilst the said consumers
employ and enjoy web tech capabilities to seek out the services they seek.
Disintermediation is what is addressed by such technological capabilities of today’s era.
And thus eliminate the middleman in any such transaction.

Advancement of the paradigm concerned is shifting its focus on the html space
from the traditional goods to such information goods and services thereby entering into
a true information economy. Infrastructure of the Internet adds value to such
information by the enhancement of the ability to retrieve, filter, store, repackage and
distribute the same.5 Information can be very easily and in accordance to the consumer/
seller/ retailer being turned into a commodity and be bought or sold at a market place.
Usage of Internet for businesses now days can attract a huge client base and
opportunities. Information about credit cards/ bank accounts and other personal
data.6Online businesses, in today’s era collect consumer data and sell it for direct
marketing. Business can, truly, maximize profits and minimize transaction costs. Thereby
proving that information commodities are not only intangible goods but also personal
information is negatively politicized.

There is, however, a greater potential for the information, personal, to be
misused by such Internet based businesses. Capitalizing on consumer information
compromises on consumer’s privacy rights and loss of property.7Consumers never have
any kind of control over how their information, personal, shall be used. Not so
surprisingly, there has been a relevant concern in pertinence to consumer privacy.8

6.1 INTERMEDIARY LIABILITY IN INDIA SCATTERS AMONG VARIOUS LEGISLATIONS

Section 79 of Information Technology Act, 2000
Section 52 of Copyright Act 1957
Intermediary liability guidelines 2011

The concept of intermediary according to section 79 and 2 (w) strictly restricts to the
websites, ISPs and like intermediary.

5Shapiro, C., & Varian, H. R. (1998). Information rules: A strategic guide to the network economy. Boston, Mass.:
Harvard Business School Press.
6Larson, E. (1992). The naked consumer: How our private lives become public commodities (1st ed.). New York: H.
Holt.
7Larson, E. (1992). The naked consumer: How our private lives become public commodities (1st ed.). New York: H.
Holt.
8Cavoukian, A., &Tapscott, D. (1997). Who knows: Safeguarding your privacy in a networked world. New York:
McGraw-Hill.

Section 79 is one of the sections required to be analyzed in detail since it has a positive and
a negative effect. The concept enshrined in the section is simple. If an intermediary has the
knowledge of the alleged third party information, data or communication link, he will be
liable. Otherwise he will be provided with a safe harbor. As usual the words used by Indian
legislature are ambiguous and provides for a lot of room for misinterpretation.

6.2 COMPLIANCE UNDER “THE INFORMATION TECHNOLOGY (INTERMEDIARY
GUIDELINES) RULES, 2011”

Apart from the aforementioned compliance requirements, “Intermediaries” must also
adhere to the guidelines under Section 79 of the Information Technology Act. An
‘Intermediary’ shall not knowingly host or publish any information or shall not initiate
the transmission, select the receiver of transmission, and select or modify the
information contained in the transmission. Upon obtaining actual knowledge of a
violation must act expeditiously of the complaint, the intermediary must acknowledge
the same within thirty six hours and then act within a reasonable time to remove
access to such information9.

An ‘Intermediary’ is under a legal obligation to:

1. publish the terms and conditions of use of its website, user agreement and
privacy policy

2. inform its users that in case of non-compliance with terms, the Intermediary has
the right to immediately terminate the access rights of the users

3. provide information to government agencies that are lawfully authorized for
investigative, protective, cyber security or intelligence activity

4. report cyber security incidents and also share cyber security incidents related
information with the Indian Computer Emergency Response Team.

5. not deploy or install or modify the technological measures which may change
the normal course of operation of the computer resource

6. publish the details of the Grievance Officer on its website and the designated
agent to receive notification of claimed infringements

An ‘Intermediary’ must also notify users of the computer resource not to host, display,
upload, modify, publish, transmit, update, share or store any information that:

1. belongs to another person
2. is harmful, threatening, abusive, harassing, blasphemous, objectionable,

defamatory, vulgar, obscene, pornographic, pedophilic, libelous, invasive of
another's privacy, hateful, or racially, ethnically or otherwise objectionable,

9 This has been changed by a recent notification from the High Court

disparaging, relating or encouraging money laundering or gambling, or otherwise
unlawful in any manner whatever
3. infringes any patent, trademark, copyright or other proprietary rights
4. violates any law for the time being in force
5. impersonate another person
6. contains software viruses or any other computer code, files or programs
designed to interrupt, destroy or limit the functionality of any computer
resource

6.3 MY SPACE, DELHI HC AND DEATH OF SAFE HARBOR PROVISIONS

6.3.1 The conceptual net of an intermediary and its conceptualization

Any question related to the success rate of an intermediary shall be dealt with once the
prospect of intermediaries is clear to us. Examination of the aspect of reduction of
uncertainties in digital age also has to be dealt with caution and should be preceded by
laying out a conceptual framework which would inherently focus on uncertainties in the
digital age of today. The key aspect of the digital information is to be understood if at all
we intend to find out what role an intermediarydoes play in our economic system.Such
hitting the nib of concepts will serve as a basis and further when intermediary is
analyzed both in historical and present-day markets.

6.3.2 Information and how it is relevant

Information is an ambiguous aspect, which has started to affect the economy in the last
100 years, and therefore needs to be addressed.10Given the focus of this thesis on the
role and liabilities of an intermediary, a definition, which aptly relates to the same,
exists.11 Anything which can be exploited to remove/ reduce uncertainty in decision-
making is information.12“‘Depression of individuals’/ the subjective belief of
distributions over all state of the world is what uncertainty can be defined as”.13
Thereby information is any diction which a user/ individual receives and that reduces
the uncertainty in prevalent in his current environment; this is referral to the product,
its price and the like.

Uncertainty has in the past created markets for information. Wherein agents are un-
aware of the future event; the quality of the product, the honestly another person

10Rose, F. (1999). The economics, concept, and design of information intermediaries: A theoretic approach. New
York: Physica-Verlag.

12Rose, F. (1999). The economics, concept, and design of information intermediaries: A theoretic approach. New York:
Physica-Verlag.
13Hirshleifer, J. (1973). Where are we in the theory of information? The American Economic Review, Vol. 63 (No. 2,
Papers and Proceedings of the Eighty-Fifth Annual Meeting of the American Economic Association), 31-39.

carries, they seek information to reduce uncertainty.14 Information has always
decreased the risk involved in complex and complicated transactions. Risk, as defined is
“the potential for loss when uncertain future events might cause harm to the
economy”.15The understanding of the exploitation of information it is first, absolutely
required to remove any such queries.

Information can largely be described by properties, which hold a common referral value.
Information for one is an intangible source and resource and a good, which does not
have any materialistic value.16 In continuance, information is a highly fungible reserve.
All information can be described by common properties.17Information trading can be a
barter system trading and can be exchanged as a resource for another information or its
source. The value of information always does vary with the perception and
requirements of the current user.18The nature/ significance and the value of information
vary according to its use. The production of information goods requires high fixed costs
and comparatively low marginal costs.19Information, as we may understand is costly to
produce but very cheap to be reproduced.20Information trading is a very profitable
venture very much unlike the tangible goods and services. Post the initial payment,
information can be used, reused and recycled any number of ways without any sort of
additional costs. In the similar manner, information can be replicated at zero value and
without any sort of limitation bar. Information never deteriorates or goes rugged unlike
tangible goods. Information, however, may become obsolete and or untrue with the
passage of time and its value may suffer because of that.21

A common feature that creates uncertainties in markets all together is the non-
exclusivity and information is a non-exclusive product.22 For referral the transfer of
information in between a producer and a user, only one single copy of the information is
actually mortgaged. The production house keeps the actual information. This in turn
gives the producer the advantage of sharing and/ or using that piece of information
again and again. In the similar manner, when the good is sold, the seller enjoys its

14Kingma, B. R. (2001). The economics of information: A guide to economic and cost-benefit analysis for information
professionals (2nd ed.). Englewood, CO: Libraries Unlimited.
15ibid
16Rose, F. (1999). The economics, concept, and design of information intermediaries: A theoretic approach. New York:
Physica-Verlag.
17Sampler, J. L. (1998). Redefining industry structure for the information age. Strategic Management Journal, Vol. 19
(No. 4, Special Issue: Editor's Choice), 343-355.
18 ibid
19Shapiro, C., & Varian, H. R. (1998). Information rules: A strategic guide to the network economy. Boston, Mass.:
Harvard Business School Press.
20ibid
21Evans, P., &Wurster, T. S. (2000). Blown to bits: How the new economics of information transforms strategy.
Boston, Mass.: Harvard Business School Press.
22Kingma, B. R. (2001). The economics of information: A guide to economic and cost-benefit analysis for information
professionals (2nd ed.). Englewood, CO: Libraries Unlimited.

subsequent benefits.23The information given to the seller can be replicated and sold by
the buyer without him having to give any information about the aforementioned
transaction to the seller. In such cases, the seller loses the compensation for the future
use of the information so transacted. Disclosure is also an issue in case of the
information being non-exclusive because such commercial use of the information may
be revealed to others. Additional market uncertainty develops when such agents
hesitate in publishing information and it is likelihood that the agents are likely to invest
comparatively less in the production of information and its knowledge.24

Uncertainties in markets also develop because the information’s true value can never be
predicted.25The consumer can never know the value of information before he buys the
same. The exhibition of the information by the seller before selling has a way to create
certain other uncertainties as well. A traditional buyer is always at risk, never he shall
know the surest nature of the information being transacted, purchase. Under-
development of markets is also a repercussion of such uncertainties.

Consideration of such unique persona of a piece of information, we are bound to ace
that information does not fit comfortably in the neo-classical market system and its
economy. Boisot in 98’ pointed out that the problem of neo-classical economics has
been addressed schizophrenically.26 Information is treated as a free good by the
economic system and not subject to trading yet on the other had it is being traded.
Efficient markets gain a perfect foresight as a support to the information-trading era and
practice.27

Overcoming the problem of imperfect information and information symmetry, a
mediator can be appointed who would in –short mediate between the buyer and the
seller/ creation of any such agent is a solution, a mediator w/ agent who would act in
both the buyer and sellers interests. The repeating of dealing and reputation affects
would discourage misrepresentation of such information to the buyer. Such a solution
aligns all kinds of incentives in between producers and users. Thus, a third party -an
intermediary-reduces information asymmetry.

Neoclassical finances fail to take into attention the uncertainty of intelligence, requiring
alternate principles to explain the business of markets. Such two theories are hereby
discussed.

23 ibid
24Rose, F. (1999). The economics, concept, and design of information intermediaries: A theoretic approach. New York:
Physica-Verlag.
25Rose, F. (1999). The economics, concept, and design of information intermediaries: A theoretic approach. New York:
Physica-Verlag.
26Boisot, M. (1998). Knowledge assets: Securing competitive advantage in the information economy. New York:
Oxford University Press.
27ibid

6.3.3 Agency Cost theory

An agency cost is a financial concept concerning the rate to a "principal" (an
organization, person or assemblage of persons), when the principal selects or hires a
"mediator" to act on its behalf. Because the two parties have diverse interests and the
manager (mediator) has more information, the major (party with the issue) cannot
directly ensure that its agent is continually acting in its (the principals') best welfares.28

Mutual examples of this cost include that which aretolerated by shareholders (the
primary), when corporate organization (the agent) buys other corporations to expand its
market, or spends currency on wasteful pet schemes, instead of maximizing the value of
the business's worth; or by the voters of a politician's area (the principal) when the
representative (the agent) passes legislature helpful to large suppliers to their campaign
rather than the supporters.29

Though effects of help cost are near in any agency connection, the term is most used in
trade contexts.

6.3.4 Transaction Cost theory

In social science and connected disciplines, The value of a deal may be a value incurred
in creating associate economic exchange (restated: the price of taking part in an
exceedingly big/growing market).30

Transaction prices are divided into three broad categories:31

o Search and data prices are unit prices, like those incurred in deciding that
the specified functional article is accessible on the market; that has all-time
low worth, etc.

o Bargaining prices are unit specific prices in which case the buyer needs to
come back to an appropriate agreement with the opposite party to do the
dealings, draw up associate applicable contract then on. In theory of games
this can be analyzed for example with the game of chicken. On quality
markets and in market microstructure, the dealings value is which a very few
perform in the space between the bids and rise.

28^Pay Without Performance by Lucian Bebchuk and Jesse Fried, Harvard University Press 2004
29nvestopedia explains ‘Agency Costs’
30Cheung, Steven N. S. (1987). Economic organization and transaction costs. The New Palgrave: A Dictionary of
Economics v.2 p 55-58
31Commons, J.R (1931). “Institutional Economics”.American Economic Review21: 648–657. Retrieved February 8,
2013.

o Controlling and social control prices are unit specific prices that tend to
create positive scenarios so that the opposite party sticks to the terms of the
contract, and taking applicable action (often through the legal system) if the
behavior of the opposite parties seems questionable. For example, the
customer of a brand new automotive faces a spread-jam of various dealings
prices. The search prices are the prices of finding an automobile and
deciding the car's condition. The dialogue focuses on the diversification of
the prices thereby negotiating upon a price with the retailer.

The interpreting difficulty faced in this decision was created by the legislature itself. Section
79 empowers an intermediary to claim the defense of knowledge if they had no knowledge
of the content posted in their website. However, section 81 comes into picture and when
both the sections are read together, intermediaries are not eligible to claim any such
defenses in case of Copyright or patent infringements. The entire provision only applies in
the case of other offences like defamation, etc.

6.3.5 Internet Service suppliers and their liability

The DMCA defines‘service provider’ in two such ways that, each is applicable to totally
different subsections. A ‘service provider’ as‘ an entity giving transmission, routing or
providing the relevant connections for digital on-line communications,
between or among points mere by a user, of the material of user’s selection, without
modification to the content of material as sent or received’,32the second half of the
section states that a ‘service supplier’ is loosely outlined as‘ a provider of online services
or network access, or the operator of facilities so required.’33 This broad definition
is aimed directly on the half of the framers to embrace universities and different
establishments that offer Internet access to their students and researchers, etc.
Moreover, it is conjointly broad to embrace the current ISPs, as well as suppliers of new
services in the future.34The four main provisions of the DMCA address varying functions
of the said associate ISP. In Section 512(a) protection is given for the passage operate
and it protects ISP for ‘transmitting, routing, or providing connections for, material
through a system or network controlled or operated by or for the service supplier.’
Section 512(b) limits liability of associate ISP for caching and Section 512(c) protects
storage of material on the provider’s system or network at the direction of the user and

3217 USC Section 512(k)(1)(A), http://www4.law.cornell.edu/uscode/html/uscode17/usc_sec_17_00000512-- --000-
.html(17 May 2007).
3317 USC Section 512(k)(1)(B), http://www4.law.cornell.edu/uscode/html/uscode17/usc_sec_17_00000512----000-
.html(17 May 2007).
34Joseph B G & Wasylik D P, Copyright issues on the Internet and the DMCA, Practicing Law Institute-Patents,
Copyrights, Trademarks, and Literary Property Course Handbook Series, 2003, 451.

finally, ISPs who offer data location tools such as links or directories that are also
protected, subject to bound circumstances.35

Despite varied laws protective IPR; it is still associate enormous task to keep a check on
the copyright infringers on the web. Several lobbying teams and especially those who
are acting as individuals in the music industry36 in USA were in favour of holding ISPs
liable for copyright infringement by the subscribers. It is important to take note of the
truth that there is a fundamental distinction between on-line services involving
transfer of content and the services themselves providing the contents.37
Though, it is truthful enough to hold ISPs liable in the latter situation, it is transparently
unfair to hold ISPs liable for the infringing actions of their subscribers. ISPs can be liable
for copyright infringement if they are directly concerned in the repetition of protected
material. For example, if an ISP makes offered ill-gotten copies of latest songs on its
web site it would be guilty of copyright infringement. However it is not
truthful to hold ISP liable for the actions of a subscriber who shares ill-gotten copies of
songs over Internet without ISP having any knowledge of these infringing actions of the
subscriber.

One of the main reasons behind involving ISPs in the method and holding them liable is
a definite result of typical contracts that they enter into with their customers; ISPs are
authorized to shut down websites as well as e-mail addresses in case of infringement. In
order to take requisite action(s) they also have facilitated stern lines for news abuse.38In
United Kingdom, beneath the information Protection Act, the ISPs are prevented from
revealing the names of subscribers without their permission or an associate order from
the court to a third party. Wherefore, in the event of a copyright infringement, a
copyright owner cannot determine anything pertaining to the address or location of the
wrong doer. In order to directly sue the wrongdoer, the copyright owner has to force ISP
to disclose the offender’s name.39 Some believe that turning to ISPs is associate,
economic as well as a productive means to deal with copyright infringers or even
different e-infringers in general, particularly in locating the culprits.40 The web permits

35Section 512(d) of the Digital Millennium Copyright Act (DMCA).

36Cooper R, Media law, music copyright, ISP’s liability for file sharing, http://ezinearticles.com/?Media-Law---Music-
Copyright---ISP%E2%80%99s-Liability-for-File-Sharing&id =360608 (9 May 2007).

37Wei W, The liability of Internet Service Providers for copyright infringement and defamation actions in the United
Kingdom and China: A comparative study, European Intellectual Property Review, 28 (10) (2006) 528.
38Osborne D, Copyright and trademark infringement on the net – Looking to the Internet Service Provider first,
http://www.iprights.com/cms/templates/articles.aspx?articlei d=146&zoneid=2 (9 May 2007).

39Cooper R, Media law, music copyright, ISP’s liability for file sharing, http://ezinearticles.com/?Media-Law---Music-
Copyright---ISP%E2%80%99s-Liability-for-File-Sharing&id =360608 (9 May 2007).
40Osborne D, Copyright and trademark infringement on the net – Looking to the Internet Service Provider first,
http://www.iprights.com/cms/templates/articles.aspx?articlei d=146&zoneid=2 (9 May 2007).

users to remain anonymous and consequently, it has become impossible to zero in on
the perpetrators, thus many are in favor of holding ISPs liable for the copyright
infringements by their subscribers.

Moreover, the cost of proceedings way outweighs what is recovered in the end and
holding an individual liable will fetch you the same outcome for an ISP shall pay more
damages. However it is absurd to hold ISP liable for the actions of its user merely as a
result of ISP has deeper pockets than the individual. Another argument in favor of
holding ISPs liable was due to the nature of electronic transmission of information; if a
subscriber uploads infringing copyright material his ISP would have reproduced it on its
laptop servers and thereby be primarily liable for copyright infringement. But, this
argument might not hold still for long, as mentioned earlier in this paper, the courts set
that temporary electronic copies are excluded from the definition of ‘copies’. ISPs take
unit vehement in their refusal to take blame for infringing action by the subscribers.
They say that ISP’s are mere conduits of data and are no different than a post workplace
that is not liable for calumniator(s) letter that is announce through it or a phone
company that is not accountable for any obscene decision created by a user. Thus,
liability of ISPs ought to conjointly be restricted. They conjointly argue that imposing
liability on ISPs would in flip mean barricading the potential growth of web.

ISP liability for the actions of the subscribers is based on their data of the activities of
subscribers. Where, the ISP is unaware of the subscriber’s activities, the courts are
reluctant to hold ISP liable, however in cases wherever the concerned ISP is aware of
the subscriber’s copyright infringement or wherever ISP should have well-known the
activities of subscriber’s, it is highly attainable that the courts would hold ISP liable for
copyright infringement by the subscribers.41 At present, several national governments
are of the view that ISPs ought to escape liability for infringements on suits instituted by
the subscribers on the ground that they are unaware of such infringement; however
they have a duty to take away such content once such action is brought to their
notice.42There are varied reasons as to why it is not feasible in applying the same to ISPs
to be accountable for cases of copyright infringement. Taking note of the immense
range of transactions that take place through ISPs, it is not sensible to expect ISPs to
monitor the content that passes through their systems. It is not possible and
economically feasible for the ISPs to police the content of the websites used by millions.
Moreover, the instant nature of the transactions conjointly make it difficult to choose
the content or even to edit it or merely keep a watch over it. As per William

41Unni V K, Internet Service Provider’s liability for copyright infringement- How to clear the misty Indian perspective,
Richmond Journal of Law and Technology, 8 (2001) 13.ISP liability, http://www.bitlaw.com/internet/isp.html (9 May
2007).

42Osborne D, Copyright and trademark infringement on the net – Looking to the Internet Service Provider first,
http://www.iprights.com/cms/templates/articles.aspx?articlei d=146&zoneid=2 (9 May 2007).

Foster, ‘ISPs are similar to common carriers in that they have no control over that
members of the public use their facilities, or the content, members of the public
choose to transmit.’ so, requiring ISPs to monitor transactions in order to trace
copyright violations would violate the rights of the subscribers and it would
conjointly amendment ISP business model. The latest argument is that ISPs ought to
be liable for direct copyright infringement in cases wherever they interfere with
the automatic information flow and conduct a human screening method of objects
announce to the websites they host. However what has to be taken note of is
that in spite of human screening, it is humanly impossible to be hundred percent
correct as to there is no infringement of copyright at all. The terribly truth that ISP
has concerned a person to check for violations in addition to the terms and
conditions is smart enough proof that ISP is doing its best to forestall subscribers
from copyright infringement. In such a case, it is morally wrong to hold ISPs liable
for the actions of the subscribers. However there are differing views on this point.43

6.3.1 IS NIRMAL BABA A FRAUD?

Even though the actual effect of the title is not a concern of intermediary liability, the case is
very important for the discussion. For the first time in the history a case is filed against an
intermediary for enforcing a right other than protecting intellectual property rights. The
facts are simple a website called indijobs.com hosted contents titled “Is Nirmalbaba a
Fraud?” According to the contents the saint Nirmalbaba was a fake and his practices were
fraudulent. The plaintiff resorted to Information Technology (Intermediaries Guidelines)
Rules 2011 (here in after IT rules). The Court ordered that the websites are to be blocked
and content has to be removed since it causes defamation to the plaintiff.

6.4 INFORMATION TECHNOLOGY (INTERMEDIARIES GUIDELINES) RULES 2011

IT rules are created by Ministry of Information and Technology by virtue of the power
divested in them in section 79 of the IT Act. As the title reveals the guidelines are to hold
intermediaries liable if they are not in compliance with the provisions. The safe harbor
provisions in section 79 are also present in the guidelines. The important aspect brought out
by these guidelines is it empowers third parties to flag or notify the intermediary about the
contents that are illegal. The content according to the rules can be a comment, a post or
even a link. The legal notice from such third party has to be regarded as a valid objection.
Thirty six hours is provided to the intermediary to comply with such notice to remove the
content. If they failed to do they will be held liable according to the rule.

The IT Rules is condemned to be violative of various constitutional rights. This aspect I
would rather not dwell upon as it is off the topic. However, one aspect requires the

43Costar v Loopnet, 373 F 3D 544 (4th CIR 2004).

attention. The time frame provided in rules is “Thirty Six” hours. It is a bit problematic. The
intermediaries are mandated to comply with the legal notice with in thirty six hours on
receipt of the notice. If intermediary fails to comply with it he can be easily held liable for
infringement or other liability like defamation. The only defense available to intermediary is
“Knowledge”. Once intermediary fails to comply with the 36 hour time frame the plaintiff
can easily pin for the presence of knowledge. Thus 36 hours in this scenario has a very good
role to play. The rules are currently under challenge before the Hon’ble Kerala High Court.
Results are yet to be seen. A study conducted by CIS (Center for Internet and Society)
reveals that intermediary on receipt of such notice simply remove the content without
bothering to check the validity of such complaints.

6.5 FOREIGN TREATMENT OF INTERMEDIARIES

United States as always has the laws which logically sound and adapt to the circumstances.
To keep up the marks, their Digital Millennium Copyright Act in my view can be considered
as the most apt legislation for defining intermediary liability. DMCA and recent decision
Viacom v YouTube embarks the Whole concept of intermediary liability.

The decision is very important as far as intermediary liability is concerned. It defines the
existence different types of knowledge and general defenses available for an intermediary
in detail.

The facts of the case are simple. Viacom a media giant sued YouTube for hosting infringing
materials. So far the US courts permitted the YouTube to claim immunity from infringing
suit as they have no knowledge of the actions.
The 2nd Circuit Court by explaining the legislation put down various standards for the
“Knowledge” namely, Actual Knowledge, Willful Blindness and Red-Flag Knowledge. These
are the normal types applicable to the defense.

Almost all the jurisdiction follows such scenario. European Union Directives44 also provides
such kind of shield to the intermediaries provided they are not rogue. Rogue intermediaries
are those websites dedicated to host contents that are against law. File sharing cites like
megaupload, napster, piratebay etc can be categorized under rogue intermediaries. ISPs
around the world have been ordered to block these sites45.

Pre-DMCA situation

44 EU Copyright Directive Directive 2001/29/EC
45 Motion Picture Association Successfully Sued British telecommunications to prevent acess to
TPB (The pirate Bay) [[2011] EWHC 1981 (Ch)]
Culcatta HC in Sagarika Music Pvt. Ltd. & Ors vs Dishnet Wireless Ltd. & Ors on 27 January,
2012 successfully blocked Songs.pk a rogue website.

Prior to the Digital Millennium Copyright Act(DMCA) once the liability of ISPs
came up before the courts, there was nothing however the copyright law torely
on. Thus, some courts relied on strict liability while others control ISPs to be not
liable at all. However, in 1996, the Congress passed the Communications Decency Act
providing immunity to ISP’s.

The Communications Decency Act, 1996

In 1996, the Communications Decency Act was enacted in the United States and Section
230 of the Act states that ‘no supplier or user of associate interactive computer service
shall be treated as the publisher or speaker of any data provided by another information
content provider.’ Thus, it gives immunity to interactive service providers from liability
beneath state intellectual property laws.46 As a result of this provision, holding ISPs
liable for deciding to publish, withdraw or alter content is not possible.19 Similar
to DMCA provisions that shield ISPs in case of third party copyright infringement,
this provision was conjointly brought in as a result of holding ISPs liable for
communications of others would adversely affect free speech and it would be
unfair to hold ISPs liable for those actions. Moreover, as mentioned earlier in this
paper, it is not possible to monitor the problematic content by ISPs.

In Chicago Lawyers’ Committee for Civil Rights beneath the LawInc v Craigslist INC;47

The court adjudged that the immunity provided to ISPs beneath Section 230(1) of
the Communications Decency Act, extends to claims, seeking to hold associate ISP
liable as a publisher for content authored by third parties, and not to all claims
arising out of the ISP’s role in giving public access to such content. Thus, it will
be seen that the immunitygiven to ISPs has limitations and ISPs will not
escapefrom its liability in all circumstances.
Playboy Enterprises INC v Frena48

This was one of the initial cases wherever liability of ISPs for the copyright infringement
of subscribers was examined. The defendant, George Frena, operated a
Bulletin Board Service (BBS) for those who purchased bound product from the suspect
and anyone who paid a fee might log on and browse through totally different BBS

46CDA Section 230, Immunity covers state intellectual property-related, right of publicity claims,
http://brownraysman.typepad.com/technology_law_update/2 007/04/cda_section_230.html#more (24 May 2007).

47Chicago Lawyers’ Committee for Civil Rights Under TheLaw Inc v Craigslist Inc, Case No. 06 C 0657 (NDIll,
14November 2006) inOnline Defamation/Libel/Communications Decency Act-
Internet library of law andcourtdecisions,http://www.internetlibrary.com/topics/online_defamation.cfm (24 May 2
007).

48Playboy Enterprises Incv Frena, 839 F Supp 1552 (M D Fla 1993).

directories to look at the pictures and they might conjointly transfer copies of the
photographs. Among several images that the defendant created offered to his
customers, one hundred and seventy were unauthorized proprietary photographs
that belonged to the litigant. The Court noted that the intent of the BBS operator
was irrelevant and applied strict liability principle of the Copyright Act. The BBS
operator was liable for direct infringement as a result of the defendant’s system
itself equipped unauthorized copies of proprietary work and created them offered to
the public. It was irrelevant that the suspect did not create infringing copies itself.
However, with time the Court’s ruling was widely debated and discredited.

Religious Technology Center v Netcom49

Few years later, came the Netcom case. The plaintiffs, Religious Technology Centre
(RTC) control copyrights in the unpublished and revealed works of L Ron Hubbard,
the founder of the Church of Scientology. The suspect, Erlich was a former minister
of religion who had later on become a vocal critic of the Church. On associate on-
line forum for discussion and criticism of religion, Erlich announce portions of the
works of L Ron Hubbard. Erlich gained his access to the web through BBS that was
not directly joined to web, however was connected through Netcom On-Line
Communications INC. After failing to win over Erlich to stop his postings, RTC
contacted BBS and Netcom. The owner of BBS demanded the litigant to prove
that they owned the copyrights of the works announce by Erlich therefore that he
would be unbroken off the BBS. The plaintiffs refused BBS owner’s request as
unreasonable. Netcom similarly refused plaintiffs’ request that Erlich not be
allowed to gain access to web through its system. Netcom contended that it
would be not possible to pre-screen Erlich’s postings and that to forestall Erlich
from victimization the web meant doing the same to hundreds of users of BBS.
Consequently, plaintiffs sued BBS and Netcom in their suit against Erlich for
copyright infringement on the web. The Court reasoned that even though
‘copyright is a strict liability statute, there ought to be some part of volition or
causing that is lacking wherever adefendant’s system is simply used to produce a
copy bythird party.’ The Court additional noted that, when thesubscriber is directly
liable it is senseless to hold different parties (whose involvement is simply
providing Internet facilities) liable for actions of the subscriber. The Court conjointly
noted that the notice of infringing activity of service supplier can implicate him for
contributory negligence as failure to forestall associate infringing copy from
being distributed would constitute substantial participation.

49Religious Technology Center v Netcom, 907 F Supp 1361 (N D Cal 1995), http://www.tomwbell.com/NetLaw/Ch07/
Religious-C.html (17 May 2007).

Substantial participation is wherever the suspect has data of primary
infringer’s infringing activities and induces, causes or materially contributes to the
infringing conduct of primary infringer. The Court rejected the argument of the
suspect that associate ISP is similar to a common carrier and so entitled to
exemption from strict liability written in Section III of the Copyright Act and
declared that carriers are not sure to carry all the traffic that passes through
them. Nevertheless, the Court did not impose direct infringement liability on ISP as
that would result in liability for every single server transmitting information to each
different laptop.

Sega Enterprises Ltd v Maphia50

In this specific case, the BBS Operator wittingly created his BBS to enable users to
transfer the plaintiff’s proprietary video game package therefore that users might
transfer and use the package uploaded by different users for free. The Court noted
that simply because the suspect is not liable for direct infringement, however, will
not mean that he is free from liability. Although, the Copyright Act will not
expressly impose liability on anyone different than direct infringers, courts have
long recognized that in bound circumstances, liability for conducive infringement will
be obligatory. The Court discovered that conducive copyright infringement stems
from the notion that one who directly contributes to another’s infringement should
be control liable. Such liability is established where the defendant, ‘with the
knowledge of infringing activity, induces, causes or materially contributes to the
infringing conduct of another.’ Thus, the Court took note of the data of BBS
operator and his material contribution in the copyright infringement by subscribers
and control BBS operator contributory liable.

Three years once the Netcom case, the DMCA was brought in. The on-line
Copyright Infringement Liability Limitation Act11 was conjointly enacted as half of
the Digital Millennium Copyright Act of 1998.However, the DMCA was associate
update of the general law governing copyright, viz, the Copyright Act,1976, that
restricted the potential liability of ISPs regarding bound activities, and subject to
their complying with bound conditions however did not exempt ISPs from liability.51
In addition to limiting the liability of ISPs in bound instances, the DMCA conjointly
lays down wherever ISPs will be control liable for infringement of copyright by their
subscribers. The DMCA permits ISPs to avoid each copyright liability and liability to

50Sega Enterprises Ltd v Maphia, 948 F Supp 923, 932 (N D Cal 1996), http://www.tomwbell.com/NetLaw/Ch07/
Sega.html (17 May 2007).

51Final Report of the Inter-Governmental Copyright Committee, http://www.unesco.org/culture/copyright/images/
IGC1971XII9e.pdf (9 May 2007).

subscribers by adhering to certain tips set out in this that are legendary as ‘safe
harbours’. Through these safe harbour provisions, DMCA limits ISP liability to four
categories, viz., firstly, temporary digital network communications, secondly, system
caching, thirdly, information residing on systems at the direction of subscribers;
and fourth, data location tools. The DMCA accepts the ruling of the Netcom case
and provides categorical protection to ISPs, hence, as long as the information is
mechanically transmitted through the server and the ISP is not concerned in
sterilization the content, the ISP can not be liable for mere transmission of
infringing information through its server. The DMCA conjointly exempts ISPs from
direct liability for reception or temporary storage of fabric in their networks if bound
measures are taken by ISPs. The DMCA in Section 512(i)(1) states that the limitation of
liability of the ISP beneath this Section is provided only if such ISP:-

‘(A) has adopted and fairly enforced, and informs subscribers and account holders of the
service provider's system or network of, a policy that provides the termination
inappropriate circumstances of subscribers and account holders of the service provider's
system or network WHO are repeat infringers; and
(B) accommodates and doesn't interfere with standard technical measures.’

Thus, firstly, ISPs have to follow a policy wherever it terminates access to
subscribers who are repeat offenders;52 second, they have to place in place technical
measures to forestall infringements.53 There are further needs in the individual
sections of the activities protected.3The DMCA has a system of ‘notice and take
down’ under that once associate ISP receives a notification from a right-holder
informing it that a breach of copyright had been committed through its system,
the ISP disobliged to take account of that data and to act to prohibit all access to
the offensive data through its system. The ISP is place beneath pressure of either
proscribing access to user at the risk of being sued for breach of contract in case
of false notification or for being sued by the alleged copyright owner for not
taking action once advised of a copyright violation by the user of ISP. however if
ISP follows thestatutory procedure in such a scenario, he is protectedby the law.
therefore in such a scenario, the ISP will repostthe material taken down if the
user files a counter notice stating that his posting of material will not infringe

52http://www4.law.cornell.edu/uscode/ html/uscode17/usc_sec_17_00000512--000-.html (27 August 2007).USC
512(i)(1)(A),

53http://www4.law.cornell.edu/uscode/ html/uscode17/usc_sec_17_00000512--000-.html (27 August 2007).
http://www.murdoch.edu.au/elaw/ issues/v9n4/mercurio94. html (9 May 2007). Francisco Castro, The Digital
Millennium Copyright Act: Provisions on circumventing protection systems and limiting liability of service providers,
Chicago-Kent Journal of Intellectual Property, 3 (2004) 3.USC 512(i)(1)(B),

anyone’s copyright. However this will be done solely if the copyright owner has not
filed associate infringement action seeking a preparation order against the user.54

Initially, USA was to adopt a procedure wherever ISPs were to be liable for the
content that was transmitted and as transmission was regarded to be equivalent
to reproduction. However later on in 1996 they adopted a policy that provided that
ISPs are not liable for content that they unwittingly transmit. However, ISPs would
be control accountable for taking down content that copyright holders will show to
violate their copyright rights. This puts the burden of monitoring the content on
the house owners of intellectual property and not on the ISPs. It is associate
attention-grabbing solution that will be adopted by national governments in dealing
with copyright infringement problems on the Internet.

What is to be noted is that USA Congress has not granted general immunity to
the ISPs through DMCA, but it has restricted the liability of the ISPs based mostly
on their data and involvement of the infringing activity.55 The ISPs square measure
willing to adhere to DMCA provisions, and request refuge in the safe harbors
therefore that they square measure warranted of non-liability.56 This system of
limiting the responsibility of ISPs has enabled USA to produce associate even-
handed balance among the interests of all parties involved.57 Thus, ISPs do not
escape liability at all prices and copyright holders conjointly cannot harass ISPs
where the sole responsibility for infringing action is on a subscriber.

Post DMCA

Costar v Loopnet58

Costar, a copyright owner of numerous photographs of business real estate brought a
suit of copyright infringement against Loopnet Iraqi National Congress, an ISP, for
direct infringement because Costar’s copyrighted pictures were denote by Loopnet’s
subscribers on Loopnet’s web site. If a subscriber includes a photograph for a real
estate listing, he must fill out a type and agree to the ‘terms and conditions’,
along with associate degree further specific warrantee that the subscriber has ‘all

54http://www4.law.cornell.edu/uscode/html/ uscode17/usc_sec_17_00000512--000-.html (27 August 2007).USC
512(g).

55http://www.legalservicesindia.com/articles/isp_in_us.htm (9 May 2007).

56http://www.murdoch.edu.au/elaw/issues/v9n4/mercurio94.html (9 May 2007).

57http://www4.law.cornell.edu/uscode/html/uscode17/usc_sec_17_00000512--000-.html (27 August 2007).

58Costar v Loopnet, 373 F 3D 544 (4th CIR 2004).

necessary rights and authorizations’ from the copyright owner of the
photographs. The subscriber then uploads the photographs into a folder in
Loopnet’s system, and the photograph is transferred to RAM of one of the
Loopnet’s computers for review. Then a Loopnet employee quickly reviews the
photograph first off to determine whether or not the photograph in truth depicts
commercial real estate, and second to establish any obvious proof, such as, a text
message or copyright notice, that the photograph might have been copyrighted by
another. If the photograph fails either one of these criteria, the worker deletes
the photograph and notifies the subscriber. Otherwise, the employee clicks
associate degree ‘accept’ button that prompts Loopnet’s system to associate the
photograph with the web page for the property listing, creating the photograph out
there for viewing.

The Court adjudged that direct liability attaches solely when there is some
conduct that causes the infringement. The Court took note of the truth that the
infringing activity is initiated by the subscriber and therefore he is the direct
infringer. The majority control that associate ISP ought to not be liable as a direct
infringer when its facility is used to infringe a copyright however when it engaged
in no intervening conduct.59 With regard to Loopnet’s gate keeping apply, the
Court observed that ‘the employee’s look is therefore casual as to be insignificant’.
The Costar call additionally created it clear that DMCA will not limit ISPs to the safe
harbour provisions statute in the statute. Rather, ISPs might believe on either DMCA
safe harbor provisions, unwritten defences or each.60

6.6 JUDICIAL SAFE HARBOR

There are two cases accounted under this aspect. One is a US origin namely Field v Google61
and the other is a German reference case Vorschaubilder II62. Both the cases have identical
question of law and similar facts.

6.6.1 FIELD V GOOGLE63

Field is a blogger and a lawyer from Nevada. Google’s WebCrawler software without his
consent used the contents and added the same to its search database. Field sued Google for
copyright infringement as he had not give consent to Google to use his blog in any manner
possible. The Court in this case held that Google is not liable. Court said that a blogger and
usual netizen, field had the knowledge of Google’s web crawlers and he could have easily

59http://jip.kentlaw.edu/art/volume%206/6%20Chi-Kent%20J%20Intell%20Prop%201.doc (9 May 2007).

60ibid
61 412 F.Supp. 2d 1106 (D. Nev. 2006)
62 case reference I ZR 140/10 of 19 October 2011-
63 412 F.Supp. 2d 1106 (D. Nev. 2006)

avoided such detection by including a simple html code. The court held that Google had
implied license from Field since he failed to take necessary steps to prevent the caching of
his website.

6.6.2 VORSCHAUBILDER II

In this case a photographer was the victim of Google’s WebCrawler. Plaintiff sued Google
for copyright infringement as his photograph was used for Google’s search result without
the consent. Proprietary search database of Google refreshes and updates automatically.
During such a process Google’s crawler stored the photograph in its memory and showed as
a search result. The Court on reference held that the plaintiff knew about the existence of
Google’s technology and hence by posting the picture on the net impliedly consented to the
Google to use the picture for search results. Decision of the court can also be justified to a
certain extent because the search results will only provide for a smaller resolution (quality)
of the original picture and hence it will also fall within the ambit of fair use.

6.7 THE INDIAN PERSPECTIVE

India is bit by bit developing its data technology market and the variety of web
subscribers is increasing everyday. On with this development, there is would like to have
higher and a lot of comprehensive laws to tackle the problems that might arise in close
to future. The Copyright Act, 1957 will not deal with the liability of the ISPs at all.
However, the liability of ISPs finds mention in Section 79 of the Information Technology
Act, 2000 (IT Act) as follows:

‘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 there
under 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.

Explanation: - For the purposes of this Section, - (a) ‘network service provider’ means an
intermediary;

(b) ‘Third-party information’ means any information dealt with by a network service
provider in his capacity as an intermediary’64

Section 79 of the IT Act exempts ISPs from liability for third party info or
knowledge created available by him if the ISP had no data of the offence

64 Section 79, IT Act (2000)

committed or if the ISP had exercised ‘all due diligence’ to stop any infringement.
This in flip means that unless the case in hand falls below these two exemptions:

ISPs are liable for copyright infringements as well as any different
violations that take place in their websites, even if the act is done by the
subscribers. Section seventy nine is very loosely worded and there is a risk that
these exceptions mentioned in the IT Act will be used additional as a tool of
harassment of firms by the authorities.65 The Section exempts ISPs from liability if
the ISP has exercised ‘all due diligence’. What is due diligence? It ought to have
been worded clearer since the manner in completely different ISPs perceive ‘all due
diligence’ can be completely different and one will perpetually say that disregarding
of the measures taken by ISPs that it is not ‘all due diligence’. The clarification to
Section seventy nine conjointly has the risk to be loosely interpreted and thereby
making almost any intermediary a ‘network service provider’. A better definition ought
to have been given to the term ‘network service provider’. One will presumably argue
that this broad definition permits several completely different sorts of service
suppliers to be enclosed, however at the same time there is conjointly the risk of it
being understood in a manner broader than what was contemplated by the
framers. According to some legal specialists on Indian law, caching amounts to
reproduction and such unauthorized copy would be equal to infringement. Since
caching is done by ISPs themselves, ISPs could notice it troublesome to plead ignorance.
ISPs would sure be liable if the owner of the copyright informs ISP regarding such
infringement and no action is taken by the ISP. As in any different jurisdiction the
truthfulness of the copyright owner’s claim is Associate in Nursing issue in Republic
of India as well. whereas Section seventy nine of the IT Act, 2000 liberates ISPs of
its liability if it will prove its cognitive content and due diligence, it will not specify
who would be held liable for such contravention in such Associate in Nursing
event. Therefore, this provision can cause issues once Associate in Nursing offence
regarding third party info or provision of knowledge is committed.66therefore it will
be ascertained that the existing legal provisions do not clearly visit the extent of
the ISP’s liability in cases of copyright infringement by the subscribers.67

The liability of ISPs can arise in a number of cases by application of different statutes.
This can be criminal or civil in nature depending on various factors. However, it is
impractical to find out the liability if 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

65http://cyberlaws.net/cyberindia/liablity.htm (15 May 2007).

66http://www.sudhirlaw.com/cyberlaw-itact.htm (10 May 2007).

67http://www.legalservicesindia.com/articles/isp_in_us.htm (9 May 2007).

to limit their liability.68The later has not been attempted in any Indian Legislation
including Copyright Act, 1957 till date. Therefore, by Information Technology Act, 2000
the attempt is to supply a mechanism which works as a filter for all such ISPs for the
purpose of determining their liability. To clarify, we take an illustration, if an ISP is
accused of illegally distributing pirated copies of music or videos then his liability be first
determined under Section 51(a)(ii) and Section 63 of the Copyright Act, 1957. If he is
found liable then his liability would be tested on the touchstone of Section 79 of the
Information Technology Act, 2000. Under the Information Technology Act, 2000 itself
ISPs can qualify exemptions under two grounds i.e. Lack of Knowledge and Exercise of
Due Diligence.69 These exemptions work as Safe Harbor for these intermediaries.
Nonetheless, the extents of the safe harbors allowed under the Act are limited. 70

There can be potentially three types of liability on an intermediary which can be
imposed, it include, (1) direct; (2) vicarious; and (3) contributory liability which might be
civil or criminal in nature.71Existing liability schemes generally join traditional fault-
based liability and strict liability rules with broad Internet-specific liability exemptions.
The amendment S. 72(2) protects the identity of subscribers to the services of an
intermediary. Under this the intermediary should (i) gain access to any material or other
information relating to a subscriber who avails his services; (ii) discloses such
information or material to any other person; (iii) without the consent of such subscriber;
and (iv) with intent to cause injury to him.72In case of breach of confidentiality and
privacy the liability by way of compensation under the draft is not exceeding Rs 25
lakhs.

68S.K. Verma& Raman Mittal, “Legal Dimensions of Cyberspace”, (2004, Indian Law Institute, Delhi)

69K. Mani‟s, “A Practical Approach to Cyber Laws” ̧ (2009 Edn., Kamal Publishers, Delhi)

70Diane Cabell, “Unlocking Economic Opportunity in the South Through Local Content Appendix A: Potential
Liability Concerns for an Open Content Exchange Network”, Berkman Center for Internet & Society (January 2002),

st
available at http://cyber.law.harvard.edu/openeconomies/oknliability.html#n86, Last visited on 1 March, 2010.

71Apar Gupta, “Liability of Intermediaries in India — From troubled waters to safe harbors”, (2007) PL May 3,
www.ebc-india.com/practicallawyer, Last visited on 1stMarch, 2010.

72Proposed Amendments to the IT Act, 2000, Expert Committee on Review of the IT Act, 2000, “Report of the Expert
Committee: Full Text” (Proposed 29-8-2005), available at http://www.mit.gov.in/itact2000/ITAct.doc (hereinafter
proposed Amendments to the IT Act, 2000), Section 72(2).

Religious Technology Centre v. Netcom Online Communications Services Inc73

The court observed that lack of knowledge or intent was often emphasized by the ISPs.
The Court has found out in many judgments that a lack of intention to infringe is not a
defense in copyright actions. In this case the judge expressly rejected the allegations
that the ISP has infringed directly and refused to follow Playboy Enterprises v. Frena, on
the ground that Netcom could only be guilty of direct infringement if it has caused the
infringing copies to be made:

“...the mere fact that Netcom‟s system incidentally makes temporary copies of plaintiff‟
works does not mean Netcom has caused the copying.”

The Singapore Electronic Transactions Act, 1998 under Section 10 gives various liabilities
of network service providers. Under Section 10(3) of the Act it does not grant immunity
for hosting third party resources, because such hosting would be automatic and
temporary storage of those resources. It recognizes some kind of immunity from liability
for the content the ISP carries if national ambitions for e-commerce are to be achieved.
In similar fashion German Multimedia Law 1998 Article 574gives responsibilities which
need to consider by the Service Providers on Cyberspace. There is certainly extensive
requirement of such legislations in India which can govern the jurisdictional aspects and
extensive immunities for ISP‟s and other internet intermediaries extending to copyright
infringement and criminal law as well as to civil actions for torts such as defamation.

Google Inc v. Louis Vuitton Malletier75

It was observed that the Commission's first report on the application of Directive
2000/31 shows by stating:-
'...the Commission will, in accordance with Article 21 [of Directive 2000/31], continue to
monitor and rigorously analyse any new developments, including national legislation,
case-law and administrative practices related to intermediary liability and will examine
any future need to adapt the present framework in the light of these developments, for

73907 F Supp 1361 (ND Cal, 1995)

74Trans. Christopher Kuner, www.kuner.com, Last visited on 1stMarch, 2010.

75Opinion of Advocate General PoiaresMaduro, delivered on 22nd September 2009, Joined Cases C-236/08, C- 237/08
and C-238/08, www.manupatra.com, Last visited on 1stMarch, 2010.

instance the need of additional limitations on liability for other activities such as the
provision of hyperlinks and search engines'.

Hence from the above explanation we observe that considerable variations in laws
relating to: (a) intermediary liability; (b) safe harbour regimes; (c) notification regimes
must be seen in future since its the need of the hour. There are too many uncertainties
in application of intermediary liability law in all jurisdictions which must be resolved
through amendments. We must have a detailed compliance regime for intermediary
liability and jurisdictional disputes. For all above said suggestions we require to maintain
litheness to counter to changes in technology & not be controlled by exhaustive and
detailed Treaty responsibility.76

Need for higher legislation on ISP liability India has a long approach to go in
delivery of a comprehensive legislation on the liability of ISPs in cases of copyright
infringement in digital context. It is of utmost importance for a country such as
Republic of India with an increasing range of net users Associate in Nursing thereby
increasing the threat to infringing the rights of copyright holders. At the same
time, Republic of India is apace becoming digitalized and if new laws are not
brought in to defend ISPs from copyright infringement by subscribers and the
connected aspects, it would adversely affect the ISP business as a whole although
cases regarding the same are nevertheless to come back before any court of law in
Republic of India. Moreover, it is conjointly necessary for India to update their laws
concerning this facet to remain in competition with different Asian countries such
as Singapore that have come back up with comprehensive laws limiting the
liability of ISPs. Some argue that taking note of the borderless nature of the net,
all nations ought to develop a set of rules for ISPs that are universally applicable.
Given the variations in the systems, different countries can come back up with
completely different approaches regarding the liability of ISPs and consequently
ISPs operating in multiple countries can face completely different liabilities in
completely different countries. Another facet is that there can be clash of varied
domestic laws on ISPs where Associate in Nursing ISP is operational a internet
hosting web site in one country and wherever it has allegedly committed copyright
violations in another country wherever the web site has been accessed.77 Thus, a
universal set of rules to be made applicable in the context of the net is being
suggested.

6.8 SOME SOLUTIONS

76SSRN-id1800837; Sonia Verma, B.Sc., LL.B (Corporate Hons.), IV Year, National Law University,
Jodhpur.UpvanMadhurPrakash, B.A., LL.B (Corporate Hons.), IV Year, National Law University, Jodhpur.

77http://www.isoc.org/inet97/proceedings/B1/B1_2.HTM (9 May 2007).

6.8.1 Double mind perspective when screening content

The unnerving effect can primarily be ascribed to the requirement for private
intermediaries to achieve subjective judicial determination in the course of ordering the
takedown. From the retorts to the takedown notices, it is outward that not all
intermediaries have sufficient legal fitness or resources to un-hurried on the legality of
an countenance, as a effect of which, such intermediaries have a predisposition to err
on the side of caution and chill lawful expressions in order to edge their liability. Even if
such intermediary has ample legal competence, it has a tendency to prioritize the
allocation of its legal resources according to the professed importance of assailed
expressions. Further, if such subjective fortitude is required to be done in a controlled
timeframe and in the want of adequate facts and contexts, the intermediaries have no
choice but to mechanically (without application of mind or proper judgment) comply
with the takedown notification.

6.8.2 Outlook to the aforementioned issue

It is suggested that the need for private intermediaries to subjectively verify the
lawfulness of associate expression gets replaced with associate objective test. Such
associate objective check is introduced by dynamic the data requirement. For instance,
for the ‘hosting’ category of intermediaries, the target check ought to be to work out
“whether or not the third party supplier of data is willing to defend his expression in
court”. By legal fiction, Actual data is attributed to the intermediator given that the third
party supplier of data refuses to defend his expression or fails to reply with a counter
notice among the notice point.

Problem in understanding and or interpreting the criterion laid down in the concerned
statute.

The content policy (criteria for administering the takedown) uses terms that are not
outlined to explain prohibited expressions. The responses of the takedown notices
demonstrate that multiple interpretations of identical term can create uncertainty and
thus a chilling impact - as it induces the negotiator to adopt the broadest attainable
interpretation of the term and to err on the aspect of caution.

It may be possible that every single terminology used in the content policy (criteria for
administering the takedown) be clearly outlined or be replaced with a statement that
prohibits all expressions and would be unlike “violate any law for the nowadays in force”
so that only specific legislatively barred expressions, within the scope of ‘cheap/adult’
restrictions as pictured within the Constitution of India, will be taken down and used.

6.9 CONCLUSION

There seems to be a world movement towards adopting a “notice and take-down”
policy (the EU regime, the Digital Millennium Act, etc.). Such a regime passes the prices
of judgment on to personal parties (who successively square measure possible to pass
them on to users) and will additionally inhibit free speech. The shortage of judicial
oversight will be a problematic issue, particularly within the case of tiny businesses or
short-run censorship.

The Indian law at first took a step forward with the passing of the IT modification Act in
2009 however with the introduction of the go-between tips, the safe harbor provided by
Section seventy nine of the Act has been worn therefore on be much non- existent. The
Asian country position at the instant looks unreasonable particularly the maximum
amount of the content accessed in India is formed abroad, which implies Indian
intermediaries can bear the forcefulness of any liability claims.

The issue of a way to wear down intermediary liability is thus one that there's no
straitjacket answer. However, I think that any palm system should be designed on the
subsequent principles that square measure additional compatible with the
improvement of the inter-internet as a medium of communication:

Self-regulation by intermediaries appears to guide to suboptimal social control of the
law and promotes whimsicality and reduces transparency by promoting private action
during a public sphere.

The law must differentiate between intermediaries on the premise of practicality and
will offer immunity wherever the go-between wasn't during a position to regulate or
assess the offence (practically or in law).

The law should differentiate between varied crimes on the premise of harshness and
maltreatment and wear down every class appropriately (and probably through changes
in alternative relevant statutes like the Copyright Act, Indian legal code, etc). For in-
stance, within the case of threats to national security, commission of knowable
offences, etc, a notice and takedown regime ought to be acceptable. This might change
such claims to be proscribed efficiently and stop harm. Even within the event executive
action is found necessary in extreme cases (say involving terror threats), there should be
judicial consciousness of the action inside such a time, failing that the makes an attempt
to censor should stop. Just in case of copyright, defamation and obscenity- connected
claims, there's no reason for a different commonplace to be applied compared to
ancient ways of dissemination of data. It might thus be appropriate if any complaints
received square measure place through a judicial method before censor- ship. In any
event, damages in such scenario square measure possible to be financial and per se any

tiny delay occasioned by having to require the touch on court wouldn't unduly hurt the
parties concerned (especially as courts square measure sceptred to grant injunctive
relief). Such a system would additionally cut back false claims, and guarantee
intermediaries’ square measure safe from having to create powerful decisions regarding
matters they can't be expected to possess experience in.

Provision of data concerning in- stances of censorship could be a must and therefore
judicial and government authorities square measure best suited to adjudicate on
instances wherever censorship is needed. Inserting the concern of policing the web on
nonpublic intermediaries is clearly impractical and in- economical within the end of the
day.

Simply obstructing content is associate impractical and unreal methodology to bind net
crimes.