TO WHAT EXTENT INTERMEDIARIES ARE BOUND TO ACT UPON RECEIPT OF ANY IP INFRINGEMENT COMPLAINTS ON THEIR PLATFORM?

 INTRODUCTION

With the proliferation of digital platforms, the internet has become a breeding ground for both creativity and infringement. Intermediaries, ranging from social media networks to e-commerce websites, serve as conduits for user-generated content and transactions. While these platforms enable global connectivity and innovation, they also confront complex legal issues, particularly concerning intellectual property rights.

WHO IS AN INTERMEDIARY?

“Any person who on behalf of another person receives, stores, or transmits that record or provides any service with respect to that record” is what Section 2(w) of the Information Technology Act, 2000 defines as an intermediary. This includes telecom service providers, web-hosting service providers, search engines, online payment sites, online auction sites, online marketplaces, and cyber cafes. The 2008 Amendment Act has expanded and made inclusive the definition of the term "intermediary.”

INTERMEDIARY LIABILITY UNDER THE INFORMATION TECHNOLOGY ACT, 2000

The Information and Technology Act, 2000 included "safe harbor" provisions—provisions that offer protection to intermediates—in response to the acknowledged necessity to safeguard intermediaries. The Avinash Bajaj v. NCT case, however, brought these clauses' shortcomings to light.

Safe harbor' clause found in Section 79 of the Act shields intermediaries from liability for activities of third parties under certain conditions. It provides immunity with regard to any data, information, or communication link that they host or make available to other parties. However, this protection is restricted by the Act's Sections 79(2) and 79(3).

In essence, situations when the intermediary engages in technological, automatic, and passive activities are covered by Section 79(2). In order for Section 79(2) to be applicable, the intermediaries must not be aware of or in charge of the data that is transferred or stored. In addition, the IT Act, 2000's Section 79(3)(b) envisions a “notice and takedown” system in which the intermediary must remove illegal content as soon as it becomes aware of it. In addition, the Central Government announced the Information Technology (Intermediary Guidelines) Rules, 2011, which among other things required intermediaries to implement due diligence procedures.

LIABILITY IN CASE OF ACTIVE PARTICIPATION OF INTERMEDIARIES

The protection provided by the IT Act is revoked for intermediaries that actively participate in intellectual property infringement. In Christian Louboutin SAS v. Nakul Bajaj and Ors.; The Delhi High Court ruled that the defendant's involvement in this case went beyond simple middlemanship, as it involved locating the vendors, giving them active support, publicizing them, and facilitating the sale of the goods in India. It was also noted that although identifying oneself as an intermediary does not qualify all e-commerce platforms or online marketplaces as such, they remain intermediaries as long as they are merely conduits or passive transmitters of the records or of the information.

The Court further concluded that intermediaries would not be eligible for the safe harbor exemption under Section 79(3)(a) if their actions amounted to "conspiring, aiding, abetting, or inducing unlawful conduct" as defined by the statute of limitations.

CHALLENGES AND CONTROVERSIES

Despite legal safeguards, intermediaries face challenges in balancing the interests of rights holders and users. Determining the validity of infringement claims can be intricate, especially in cases of fair use or parody. Moreover, the sheer volume of user-generated content makes it impractical for platforms to pre-screen every submission for potential infringement.

CASE STUDIES

Several high-profile cases have shaped the landscape of intermediary liability. In the landmark case of Viacom International Inc. v. YouTube, the court ruled that YouTube was shielded from liability for copyright infringement under the DMCA's safe harbor provisions. Conversely, in L'Oreal v. eBay, the European Court of Justice held that eBay could be liable for trademark infringement if it played an active role in promoting counterfeit goods.

Viacom International Inc. v. YouTube-

●       Background: Viacom, a major media conglomerate, filed a lawsuit against YouTube, alleging massive copyright infringement due to user-uploaded content. Viacom argued that YouTube failed to adequately police copyrighted material uploaded by users, thereby profiting from infringing content.

●       Ruling: In 2010, the United States District Court for the Southern District of New York granted summary judgment in favor of YouTube, invoking the safe harbor provisions of the Digital Millennium Copyright Act (DMCA). The court held that YouTube was shielded from liability for copyright infringement because it promptly removed infringing content when notified by copyright holders, as required by the DMCA.

●       Impact: This case established an important precedent for online platforms regarding their liability for user-generated content. It emphasized the significance of complying with the DMCA's notice-and-takedown procedures to qualify for safe harbor protection.

L'Oreal v. eBay-

●       Background: L'Oreal, a cosmetics company, sued eBay, an online marketplace, alleging that it was liable for trademark infringement due to the sale of counterfeit L'Oreal products on its platform. L'Oreal argued that eBay should be held responsible for actively promoting and profiting from the sale of counterfeit goods.

●       Ruling: In 2011, the European Court of Justice (ECJ) ruled that eBay could be held liable for trademark infringement if it played an active role in promoting counterfeit goods or failed to take sufficient measures to prevent such sales. The court held that eBay could not benefit from the safe harbor provisions if it had knowledge of infringing activity and failed to act.

●       Impact: This case highlighted the responsibility of online marketplaces to actively monitor and prevent the sale of counterfeit goods on their platforms. It underscored the importance of proactive measures to combat trademark infringement and protect intellectual property rights.

CONCLUSION

In conclusion, intermediaries play a crucial role in the digital ecosystem, but they are not immune to legal obligations regarding intellectual property infringement. While legal frameworks provide certain protections, the evolving nature of online content poses ongoing challenges for platforms and rights holders alike. Striking a balance between fostering innovation and protecting intellectual property remains a complex endeavor in the digital age. As technology continues to advance, policymakers and stakeholders must collaborate to develop pragmatic solutions that uphold both creativity and accountability on digital platforms.