Fermat Education v. M/S Sorting Hat Technologies Ltd.

High Court of Madras

Case No.: CS(OS) 330 of 2018

Order Dated: 08.11.2019

 

FACTS

In this case, the Plaintiff Fermat Education is a provider of online coaching and courses for various competitive exams. Among various courses, Plaintiff offers an online course for the Common Admission Test of IIM known as ‘2IIM CAT’. The material was available online on the plaintiff’s website in the form of indigenously, created/penned/authored 2IIM CAT questions and videos.The defendant, in this case, Sorting Hat Technologies is a provider of an online coaching platform ‘Unacademy’, where the third party can upload study material in literary as well as video format. The Plaintiff found that certain questions and videos uploaded on the Platform (Unacademy) were a reproduction of the copyrighted works belonging to the Plaintiff.

Upon discovering such infringement, there were some e-mail correspondences between Plaintiff and Defendant in which Defendant not only admitted to the infringement but also agreed to take down such infringing content. However, nothing was done to remove the content.Thus, Plaintiff filed a suit seeking permanent injunction restraining Defendants from using literary works of Plaintiff. The injunction was granted by the court. In response to this decretal order, Defendant filed an application which was dismissed by the Learned Single Judge. Aggrieved by this the Defendant appealed in the High Court of Madras.

 

ISSUES

Whether Defendant is an intermediary within the meaning of Section 2(1)(w) of the Information Technology Act, 2000?

 

Key Observations

Defendant’s counsel argued that the Plaintiffs have not filed a copy of their copyrighted material on which they claim their copyright and the suit is based on only e-mail correspondences exchanged. It was further argued that Defendant is an intermediary within the meaning of Section 2(1)(w) of the Information Technology Act, 2000. According to this section, an intermediary with respect to any particular electronic records means any person who on behalf of another person receives, stores or transmits that record or provides any service with respect to that record.

The counsel submitted that injunction vis-a-vis can be given only where the plaintiff provides specific in respect of which it holds copyright along with location/URL of such work on which the alleged infringement has taken place, where this is not so[1]. The counsel also submitted that Defendant only acts as a hosting platform for questions uploaded by various tutors and it is not possible to check the source and originality of every question.

The Defendant’s counsel also claimed an exception under Section 52(1)(i) of the Copyright Act, 1957 and argued that the content was used for educational purposes and does not amount to infringement. The counsel relied upon a precedent established by Delhi High Court wherein the reproduction by making photocopies of particular portions of books of various publishers and collating them into a separate book for students, does not constitute infringement by virtue of Section 52(1)(i) of the Copyright Act, 1957.[2] Hence, the interim order contains onerous and impossible directions.

The Learned counsel for Plaintiff on the other hand argued that the suit is based on the acceptance of infringement by Defendant in email correspondences. The counsel further submitted that Defendant is not acting as an intermediary. The counsel also argued that Plaintiff keeps updating their website with new and unique content which is being regularly copied and hosted on the Defendant’s platform. Hence, the order of Learned Single Judge requires no interference.

 

DECISION

The Court in this case decided that Defendant is not an intermediary within the meaning of Section 2(1)(w) of the Information Technology Act, 2000 and it cannot plead ignorance. The terms and conditions of the Platform clearly indicate the Defendant’s control over uploaded content and its regulation. Further, the Court highlighted that the Defendant was paying tutors for uploading content as well as restricting them from uploading the same content on other platforms. Hence, the Defendant was involved in commercial activity and cannot claim fair use defense under Section 52(1)(i) of the Copyright Act, 1957. Hence, based on the above findings, the Court restored the injunction order granted earlier.

CONCLUSION

This case is a gentle reminder for all the intermediary platforms acting as a host for third-party content that they cannot claim ignorance always. They need to adhere to the new IT rules according to which an intermediary shall not knowingly host or publish any information or shall not initiate the transmission, select the receiver of the transmission, and select or modify the information contained in the transmission[3]. Such intermediaries need to scrutinize content before they allow it to be posted on their respective platforms. Also, the terms and conditions of these hosting platforms need to be structured with utmost carefulness so as to qualify for reliefs available to intermediaries. The intermediaries should immediately take down infringed content from their platform after receiving satisfactory evidence from the original owner of the content claiming copyright.

 

[1] My Space Inc vs Super Cassettes Industries Ltd (2017) 236 DLT 478

[2] Chancellor, Masters & Scholars of the University of Oxford and others v Rameshwari Photocopy Services and another [MIPR 2017 (1) 0039]

[3] Rule 3 of Information Technology [Intermediaries Guidelines] (Amendment) Rules, 2018

 

For Order copy order-dated-13.08.2019

 

By

Vaishali Kaushik

Intern

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