Madras High Court rules against ‘safe-harbour’ for ISPs – a victory for copyright owners

Image from here

The Hindu and Medianama, have both recently reported on a judgment of the Madras High Court in the copyright infringement lawsuits filed by the copyright owners of ‘Dhammu’ & ‘3’ against 15 Internet Service Providers (ISPs). These are the lawsuits which led to the entire blocking of file-sharing websites on the suspicion that these websites were being used to distribute pirated copies of the newly released movies. Outraged internet users had responded to these orders by hacking the websites of the Madras High Court and several other institutions. Some ISPs like Airtel were fined by consumer courts for interrupting services to their customers.

The Madras High Court, acting on a subsequent petition by the ISPs, modified its initial ex-parte order to allow ISPs to block only specific links and not entire file-sharing websites. We have blogged about these orders of the Madras High Court over here and here. The present judgment of the Madras High Court can be accessed over here.

The present judgment was the result of a plea by the ISPs to dismiss both lawsuits or alternatively to vacate both interim injunctions in their entirety. Justice Chandru of the Madras High Court declined to grant any of these prayers by the ISPs and the lawsuits and the interim injunction stand as of now. The judgment is very interesting since it is one of the first Indian lawsuits to discuss the legality of John Doe orders, their ‘qua timet’ nature and most importantly it is the first judgement on the applicability of the ‘safe-harbour’ provisions in Section 79 of the Information Technology Act, 2001 to ‘Internet Service Providers’ in the case of copyright infringement. Justice Manmohan Singh of the Delhi High Court had delivered last year the first judgment on the applicability of the Section 79 ‘safe harbour’ to online content providers like MySpace. (Amlan has discussed the MySpace judgment over here)

Also interesting in the present case was the fact that the Plaintiffs were represented by Advocate Arun Mohan who appears to have argued the case by himself against a battery of Senior Advocates who were representing the ISPs. It is rare to see young lawyers like Arun, who is about 28 years, to take on Senior Advocates in the High Court and it is even rarer to see them win.

Getting down to the main issues in the present case:

(i) Section 79 of the Information Technology Act, 2001: The crux of this case was whether or not the ISPs would be covered under the ‘safe-harbour’ provided in Section 79 for network service providers. ISPs like the BSNL and Bharti-Airtel also argued that they were bound by the terms of their licence to provide uninterrupted internet access to all their service providers and that they could not exercise any editorial control over what their users did or did not access.

Justice Chandru of the Madras High Court shot down this argument on the grounds that it was bound to give a literal interpretation to the law and if it were to extend the ‘safe-harbour’ provision in Section 79 of the IT Act to ISPs for copyright infringement it would render null and void the ‘proviso’ to Section 81 which was inserted via an amendment to the Act in 2008. The ‘proviso’ reads as follows “Provided that nothing contained in this Act shall restrict any person from exercising any right conferred under the Copyright Act, 1957 or the Patents Act, 1970.”

Further, Justice Chandru appears to have been significantly influenced by Justice Manmohan Singh’s order in the Myspace case since he has cited Jusitce Singh’s order liberally.

The final conclusion of the Court was as follows “In view of the above discussion, I find that there is no impact of provisions of Section 79 of IT Act (as amended on 2009) on the copyright infringements relating to internet wrongs where intermediaries are involved and the said provision cannot curtail the rights of the copyright owner by operation of proviso of Section 81 which carves out an exception cases relating to copyright or patent infringement.”

(ii) The legality of qua timet actions: A ‘qua timet’ action, is one where a lawsuit is filed in anticipation of an alleged wrong. Normally a lawsuit can be filed only after an alleged wrong has taken place and not in anticipation of a wrong. Once again, Justice Chandru liberally quotes from Justice Manmohan Singh’s judgement in the MySpace case to rebut the ISPs.

(iii) The non-joinder of essential parties: The ISPs had also sought dismissal of the lawsuits on the grounds that the plaintiffs had not impleaded the actual websites which were hosting the infringing content. Once again, Justice Chandru liberally quotes from Justice Manmohan Singh’s judgement in the MySpace case to rebut the ISPs.

(iv) The legality of ‘John Doe’ orders: In his judgment, Justice Chandru upholds the legality of the concept of John Doe orders on the basis of a Delhi High Court order in the case of ESPN Software India Private Ltd. Vs. Tudu Enterprise and others in C.S.(OS)No.384 of 2011. The Plaintiff had cited this case and also argued that the requirements of naming the defendants under the Code of Civil Procedure be waived. In pertinent part the Plaintiffs argued “The CPC provides that under Order 7 Rule 1, the plaint shall contain the name, description and place of residence of the defendants so far as they can be ascertained. In this case, the violators are many in number, the plaintiffs could not identify each and every one.”

My problem with this aspect of the order is that the ESPN order by the Delhi High Court was an ex-parte order – it was passed on the first day without hearing any of the defendants. Such orders have zero precedential value and at the very least the Madras High Court should have provided a much more detailed reasoning to uphold the concept of John Doe order instead of placing reliance on the ESPN order.

An update on the MySpace appeal before the Delhi High Court: Justice Manmohan Singh’s judgment in the MySpace case was appealed last year by MySpace. The hearing of the appeal was adjourned on several occasions since MySpace and Super Cassettes were interested in settling the matter. This is not all so surprising since Super Cassettes appears to have licensed its music to Youtube and clearly there is a right price for Super Cassettes. In any case, in an order dated 12^th September, 2012 the Delhi High Court records that all efforts at a compromise have failed and that the appeal against the denial of the interim injunction will be heard in January, 2013. At the same the Delhi High Court has also ordered that the main trial be expedited.

Interestingly, the order (available over here) also records that a third party, represented by Advocates Shewtasree Majumdar & Eashan Ghosh, is seeking to intervene in the appeal. The identity of the third party is not revealed in the order.