India Court Gives MySpace Breathing Room on Copyright

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By Madhur Singh

The social networking site MySpace isn’t liable for posts that infringe copyright unless it has “actual knowledge” of the infringement and then fails to remove the posts, a Delhi High Court appeals bench held.

The court’s Dec. 23 order, which puts the responsibility for flagging infringing content squarely on the shoulders of copyright holders, impacts other internet “intermediary” websites, such as Facebook Inc. and Google’s YouTube, where users post content that can be seen and used by other users.

Meanwhile, rightsholders must be ready to scour websites, identify infringing content and formally notify the respective intermediaries.

Raja Selvam of Chennai-based Selvam and Selvam told Bloomberg BNA in a Dec. 29 e-mail that the ruling is sound because it would be far-fetched to expect sites to check every third-party post for infringing content.

But Ranjan Narula, founder and partner at RNA IP Attorneys, said rightsholders will have to direct resources to “constantly” monitor online content and — even then — it will be difficult, if not impossible, to prove “actual knowledge” of infringement on the part of a hosting site.

“The judgment in effect has left it to the IP holder to trawl through all content on a portal to point out the infringing content,” Narula told Bloomberg BNA Dec. 29 in an e-mail.

MySpace Appeals Injunction

The ruling came after MySpace appealed an order from a single-judge bench of the Delhi High Court that it stop hosting all works from Super Cassettes India Ltd. (SCIL), a company that produces and publishes music and video CDs, magnetic tapes and cassettes, and player systems in India and internationally.

SCIL had sought a permanent injunction to protect its intellectual property — primarily copyright in cinematographic films, sound recordings and literary and musical works — plus damages for any infringement.

But the appeals court set aside the single-judge bench’s injunction and said MySpace is a “neutral platform” that enables users to freely exchange data without adding or contributing information on its own. The main issue it considered was MySpace’s liability for “secondary infringement” — whether it could be held liable for content uploaded by third-party users.

“The remedy here is not to target intermediaries but to ensure that infringing material is removed in an orderly and reasonable manner,” the appeals court said. Also, tasking intermediaries with the responsibility of separating infringing content from non-infringing content “could have a chilling effect” on free speech, it said.

MySpace said it didn’t know about copyright infringement of SCIL’s works, and that without specific information, it could not be held liable. The court agreed, rejecting SCIL’s argument that MySpace’s insertion of advertisements disclosed content knowledge. Advertisements are inserted through an automated process, and modification is only to the format and not the content uploaded, the court said.

The court ordered the single-judge bench to hear and decide the case by the end of 2017. The trial will determine details such as the level of actual or manual control applied by MySpace, and whether MySpace is culpable for any “primary infringement.”

In the meantime, SCIL’s label T-series must provide MySpace with a “specific” list of any copyrighted works posted without authorization on MySpace and their location, the court said. Within 36 hours of receiving notice, MySpace must remove or block access to the infringing content, as specified in Rule 3(4) of the Intermediary Guidelines Rules of 2011. MySpace was also ordered to track how many times infringing content is viewed before it’s taken down, and any advertising revenue earned from it, for potential damages calculations.

Appeals Court Relies on India IT, Copyright Laws

The appeals bench relied on Section 79 of the Information Technology Act of 2000, which says an intermediary can be found guilty of infringement if, after receiving “actual knowledge” of an “unlawful act,” it fails to expeditiously remove or disable the infringing content, and Section 51(a) (ii) of Copyright Act, which says a copyright is infringed when a person without a license, among other acts, “permits use of a place for communication of infringing works"—unless he or she wasn’t aware or didn’t have reasonable grounds to believe the communication would infringe.

In the case of MySpace, it had installed a notice and take-down procedure and developed safeguard tools such as “Hash Block Filter,” “Take Down Stay Down” and “Rights Management Tool” at its own cost to ensure that infringing content, once removed, could not be uploaded again, the court said. Because MySpace had established procedures, as required under Section 79, it could claim safe harbor, it said.

The single judge had applied a “general awareness” test, but “actual knowledge” must be proved to show liability, the court said. SCIL was responsible for identifying specific infringing content, it said, and should have communicated the relevant details to MySpace before assigning knowledge of infringement.

To contact the reporter on this story: Madhur Singh in Chandigarh at correspondents@bna.comTo contact the editor on this story: Mike Wilczek at mwilczek@bna.com

For More Information

The court order is available at http://src.bna.com/k6Z

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