Case Laws on Intermediary Liability and Exemption — Information Technology Act, 2000 read with Information Technology (Reasonable Security Practices and Procedures and Sensitive Personal Data or Information) Rules, 2011 and Copyright Act

1. Kent Ro Systems Ltd v. Amit Kotak

High Court of Delhi 18-01-2017

This is a case dealing with Information Technology (Reasonable Security Practices and Procedures and Sensitive Personal Information) Rules, 2011

While referring to the Information Technology Act, 2000, it has been observed that for a case to be made out under Section 79(3), making the provision of Section 79(1) exempting an intermediary from liability to be inapplicable, the plaintiffs have to plead and prove conspiracy or abetment or aiding or inducing within the meaning of Section 79(3) of the IT Act. The words ‘conspired’, ‘abetted’, ‘aiding’ and ‘inducing’ are legal terms meaning whereof has been settled for long. They require pleading and proof of common intention. That is not the case pleaded by the plaintiffs.

https://www.legitquest.com/case/kent-ro-systems-ltd-v-amit-kotak/B3254

2. ‘X’ v. UNION OF INDIA AND ORS

High Court Of Delhi 20-04-2021

This is a case dealing with Information Technology (Reasonable Security Practices and Procedures and Sensitive Personal Information) Rules, 2011.

Excerpts-

“82. Upon a composite reading of section 79(2) and (3), the conditionalities and obligations subject to which an intermediary enjoys exemption from liability under the IT Act, may be summarized as under :

(a) The exemption applies only if the function of the intermediary is limited to providing access to a communication system over which information is transmitted, temporarily stored or hosted;

(b) The exemption applies only if the intermediary does not initiate the transmission nor selects the receiver of the transmission nor selects or modifies the information contained in the transmission;

(c) The exemption applies only if the intermediary observes due diligence while discharging its duties under the IT Act and observes all other guidelines prescribed by the Central Government in relation to its duties;

(d) The exemption is not available if the intermediary has conspired, abetted or induced the commission of an unlawful act;

(e) Most importantly, the exemption is not available if the intermediary fails to expeditiously remove or disable access to material upon receiving actual knowledge or being notified by the appropriate government or its agencies that any information/data/communication link residing in or connected to a computer resource controlled by that intermediary is being used to commit an unlawful act.”

Clearly therefore, if the intermediary fails to fulfil the conditionalities and obligations cast upon it, both in the positive and in the negative, as set-out above, such intermediary is liable to forfeit the exemption from liability available to it under section 79(1) of the IT Act.

It cannot be ignored that the law and judicial opinion in India as also in several other jurisdictions mandates intermediaries to remove and disable, access to offending content once they receive ‘actual knowledge’ by way of a court order or upon being notified by the appropriate government or its agency, failing which the intermediary is liable to lose the exemption from liability available to it under section 79(1) of the IT Act.

https://www.legitquest.com/case/x2018xx2019-v-union-of-india-and-ors/1E5EB9

3. Super Cassetes Industries Ltd v. Myspace Inc. & Another

High Court Of Delhi 29-07-2011

Keeping in consideration, Section 81 of the IT Act, 2000, it has been observed here that-“the combined effect of reading Section 81 and the proviso is that the provisions of IT act may override other laws for the time being in force but cannot restrict the rights of the owner under the Copyright Act and the Patent Act. In other words, the rights of the owners under the Copyright Act, 1957 and/ or Patent Act, 1970 shall remain unfettered by any of the provisions of IT Act.

Accordingly, Section 79 cannot restrict the rights of the copyright owner by saving the liability of the defendants of the infringing acts caused under the provisions of Section 51 (a) (ii) of the Act by operation of proviso to Section 81 of the Act.”

It has also been opined that – “conjoint reading of Section 79 and Section 81 makes it amply clear that the proviso to Section 81 prevents any provisions of IT Act to act as restriction on exercising of the rights by the copyright owner.”

Excerpt – 

“The defendants, their agents, representatives, servants, their officers or any person on their behalf are restrained from modifying the works (more specifically the works of the plaintiff), by adding advertisements to the said works of the plaintiff adding logos and/ or sponsorships to the works, or earning profit otherwise in any manner in relation to the said works consequent upon uploading to their website/webspace of www.myspace.com or in.myspace.com without making endeavours to enquire the ownership of the plaintiff (as at that stage of modification, the defendants have all means to enquire about the same) and thereby making them available to the public either by displaying (or playing or exhibition) of on the website or allowing the downloading from their website or otherwise of the said works in the modified form which will lead to permitting the place for profit within the meaning of Section 51 (a) (ii) of the Act and causes infringement of copyright of the plaintiff.”

It has also been stated that there is no corresponding law which is in pari materia to that of Digital Millennium Copyright Act (“DMCA”). The said Act specifically addresses the issues relating internet related wrongs, however existing law of Copyright Act, 1957 does not provide any such  safe harbor provisions and rather the later enactment of IT Act, 2000 and its new amendment in 2009 speaks otherwise which I have already examined Section 81 of IT Act (as amended in 2009), proviso to which excludes the operation of the IT law in cases of copyright infringement.”

https://www.legitquest.com/case/super-cassetes-industries-ltd-v-myspace-inc–another/58184

4. CHRISTIAN LOUBOUTIN SAS v. NAKUL BAJAJ & ORS

High Court Of Delhi  02-11-2018

Excerpt –

“The trademark owner loses its huge customer base especially in the case of luxury products. If the products turn out to be counterfeit or not up to the mark, then it is the trademark owner’s brand equity which is diluted. The seller himself does not suffer. Such immunity is beyond what is contemplated to intermediaries under Section 79 of the IT Act. While Section 79 of the IT Act is to protect genuine intermediaries, it cannot be abused by extending such protection to those persons who are not intermediaries and are active participants in the unlawful act. Moreover, if the sellers themselves are located on foreign shores and the trade mark owner cannot exercise any remedy against the said seller who is selling counterfeits on the e-commerce platform, then the trade mark owner cannot be left remediless.

While the so-called safe harbour provisions for intermediaries are meant for promoting genuine businesses which are inactive intermediaries, and not to harass intermediaries in any way, the obligation to observe due diligence, coupled with the intermediary guidelines which provides specifically that such due diligence also requires that the information which is hosted does not violate IP rights, shows that e-commerce platforms which actively conspire, abet or aide, or induce commission of unlawful acts on their website cannot go scot free.”

https://www.legitquest.com/case/christian-louboutin-sas-v-nakul-bajaj–ors/1098C3

5. Shreya Singhal v. Union of India

Supreme Court Of India 24-03-2015

Section 79 is valid subject to Section 79(3)(b) being read down to mean that an intermediary upon receiving actual knowledge from a court order or on being notified by the appropriate government or its agency that unlawful acts relatable to Article 19(2) are going to be committed then fails to expeditiously remove or disable access to such material.

https://www.legitquest.com/case/shreya-singhal-v-union-of-india/90624

6. SASIKALA PUSHPA v. FACEBOOK INDIA & ORS

High Court Of Delhi 02-06-2020

Excerpt –

“It thus follows that merely because any information on the internet is offensive or causes announce, inconvenience, danger etc. to a person does not entitle that person to call upon the intermediary to remove that information/content or to disable access thereto and the intermediary is not liable to do so. It further follows that such a person is required to either approach the designated governmental agency or the Court for issuance of such a direction to the intermediary and the Court will issue such a direction only if the person concerns makes out a case of the information being actionable in law and not merely because the information may be an irritant without being actionable in law.”

https://www.legitquest.com/case/sasikala-pushpa-v-facebook-india–ors/1ADA07

7. TITAN COMPANY LIMITED Versus ROHIT KUMAR JAIN AND ORS.

High Court of Delhi 29-07-2019

In the year 2019, a Civil Lawsuit was filed by Titan against Snapdeal and some of its sellers. Herein, Titan had sued the defendants, for permanent injunction restraining counterfeiting of the products of the plaintiff under the marks “TITAN” and “FASTTRACK”.

The defendants no.1 and 2 (Rohit Kumar Jain and Dharam Pal) were restrained from selling, marketing or otherwise dealing in the goods bearing the marks “TITAN” and “FASTTRACK” of the plaintiff and the defendant no.3 (Snapdeal Pvt. Ltd.) was directed to forthwith, within 24 hours of service of this order, remove the URLs of which complaint had been lodged by the plaintiff with the defendant no.3 and of which particulars were given in the plaint also and to thereafter also, immediately on receipt of complaint from the plaintiff of other / further URLs selling counterfeit goods of the plaintiff, remove the same.

https://www.legitquest.com/case/titan-company-limited-v-rohit-kumar-jain-and-ors/1E7863

8. SNAPDEAL PRIVATE LIMITED versus M/S FUTURETIMES TECHNOLOGIES PVT. LTD

High Court Of Delhi 17.03.2020

Herein, the case set up by the plaintiff(Snapdeal Pvt. Ltd. ) was that the defendant(M/S Futuretimes Technologies ) was not only infringing its registered trademark “Snapdeal”, but was also indulging in acts, which tend to degrade or tarnish its registered trademarks. It was claimed that the defendant had resorted to false advertisement inasmuch as it sought to inform the world at large that the goods available on its website were cheaper than those which were available on the plaintiff’s website.

It was also put forth that it would be nearly impossible for anyone to peg the price of the goods offered on the website of either the plaintiff or the defendant to a particular amount as the price itself was dynamic. It was also contended that the defendant’s use of the byline “everything cheaper than Snapdeal” in its advertising campaign was false.

The Court opined that if the defendant was allowed to carry on what the plaintiff claimed was a false advertisement campaign, it would degrade its trademarks and reputation. Accordingly, till the next date of hearing, the defendant was restrained from using the byline “everything cheaper than Snapdeal” qua every social media platform or otherwise.

https://www.legitquest.com/case/snapdeal-private-limited-v-ms-futuretimes-technologies-pvt-ltd/1E786F

News Excerpts on Meesho-

According to a latest news article, an FIR has been filed against Meesho, on a complaint filed by a customer who said that he was sold a fake Rolex watch and GUCCI t-shirt on the social commerce platform.¹

A news piece has also mentioned that in January, there has been a police probe against founders of social commerce platform Meesho – Vidit Aatrey and Sanjeev Barnwal – for retailing fake products on their marketplace.²

A public interest litigation (PIL) has also been filed in the Delhi High Court against Meesho and two other social commerce platforms – GlowRoad and Shop101 – for not displaying names of manufacturers, country of origin and the MRP of products sold on their platforms. The petition claims that the respondent websites such as meesho.com is not displaying details of seller and also seller detail is not available on packing slip/invoice.³

The PIL has been filed against the E-Commerce companies/websites which are involved in the business of online selling of all kind of goods including food items, electronics, electrical, clothing /merchandise, furniture, toys and Sports and Home /Living in India. The PIL is mainly seeking issuance of directions to ensure the display of mandatory declarations on the products offered for sale at e-commerce websites and the Compliance of Legal Metrology Act, 2009 and Consumer Protection Act, 2019.

In the latest Orders, Notice had been issued to the Respondents (Union of India through its Secretary Ministry Of Consumer Affairs Food and Public Distribution and Ors.) and the matter is now listed for further hearing on 08.07.2021.

Conclusion

In the case of ‘X’ v. Union Of India And Ors. it has been discussed that the law and judicial opinion mandates intermediaries to remove and disable access to offending content once they receive ‘actual knowledge’ by way of a court order or upon being notified by the appropriate government or its agency, failing which the intermediary is liable to lose the exemption from liability available to it under section 79(1) of the IT Act.

In Kent Ro Systems Ltd v. Amit Kotak, it has been opined that in making the provision of Section 79(1) exempting an intermediary from liability to be inapplicable, the plaintiffs have to plead and prove conspiracy or abetment or aiding or inducing within the meaning of Section 79(3) of the IT Act.

In the case of Myspace Inc v. Super Cassettes Industries Ltd, it has been concluded that Sections 79 and 81 of the IT Act and Section 51(a)(ii) of the Copyright Act have to be read harmoniously. Accordingly, it is held that proviso to Section 81 does not preclude the affirmative defence of safe harbor for an intermediary in case of copyright actions.Section 51(a)(ii), in the case of internet intermediaries contemplates actual knowledge and not general awareness. Additionally, to impose liability on an intermediary, conditions under Section 79 of the IT Act have to be fulfilled.

It has also been opined in the aforementioned cases that the rights of the owners under the Copyright Act, 1957 and/ or Patent Act, 1970 shall remain unfettered by any of the provisions of IT Act. Section 79 cannot restrict the rights of the copyright owner by saving the liability of the defendants of the infringing acts caused under the provisions of Section 51 (a) (ii) of the Act by operation of proviso to Section 81 of the Act.

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¹ https://entrackr.com/2021/01/after-pil-meesho-and-its-directors-face-fir-for-selling-fake-products/

² https://www.livemint.com/companies/news/petition-filed-against-flipkart-amazon-others-for-selling-fake-products- 11613665185484.html

³ https://entrackr.com/2021/01/after-pil-meesho-and-its-directors-face-fir-for-selling-fake-products/