Generative AI and Intermediary liability under the Information Technology Act

The issue of intermediary liability in the context of online platforms/ websites for content uploaded on their portals is one which is hotly debated world over. There are divergent views on how and in what circumstances can platforms be made liable for the mode and manner in which they are used by consumers.

An interesting issue of intermediary liability arises in the context of deepfakes and AI-generated content online. The question to be determined is can the Generative-AI platform be made liable for use made of its platform for deepfake content creation and or satirical content?

Generative-AI is a form of Artificial Intelligence through which content of various types, such as text, images, videos, code, etc. can be produced. The underlying technology, in simple terms, consists of models and algorithms which are capable of creating seemingly new and original content from analyzing data on which it has been trained. Generative-AI technologies are built on powerful foundation models which are “trained” on vast amounts of data, in order to identify patterns and generate output which has characteristics similar to the data it was trained on. While Generative-AI has several positive and convenient applications, there could be implications under various Intellectual Property Laws of the data being used by the AI technology and outputs being generated.

While it can be argued that the ultimate output may be an original work, but borrowing from the source material without giving due credit could amount to intellectual property violations of different kinds, including but not limited to copyright infringement, trademark violations, violations of personality rights, etc., amongst some. In this context, can developers of these Generative-AI platforms claim immunity from liability for any violations which take place by use of their platforms?

In India, the safe harbour provisions vis-à-vis intermediaries are contained in Section 79 of the Information Technology Act, 2000. Any entity claiming intermediary status was obligated to adhere to the due diligence requirements of the Information Technology (Intermediary Guidelines) Rules, 2011. The scope of the Section 79 and the Intermediary Guidelines 2011 was addressed by the Hon’ble Supreme Court in Shreya Singhal v. Union of India. As per the said judgment, the test for invoking liability of intermediaries was whether they have “actual knowledge” of a violation which has taken place on their platforms. It was also clarified that this actual knowledge can be attributed to an intermediary only on receipt of a court order of any violation which has taken place on the platform. The judgment clarified that there was no positive obligation on intermediaries to monitor content on their platforms.

This actual knowledge test was later reaffirmed by a Division Bench of the Hon’ble Delhi High in the context of allegations of copyright violations online against a social media intermediary in the case of MySpace Inc. v. Super Cassettes Industries Ltd. Here, the Division Bench specified that intermediaries are obligated to act upon actual knowledge in the form of a Court order and not constructive knowledge to avoid liability under Section 79. It was reaffirmed that intermediaries cannot be put under a positive obligation to monitor content which can be violative of IP rights on their platforms.

Guidance can also be sought from the decision of the Hon’ble Delhi High Court in Christian Louboutin v. Nakul Bajaj, where the Hon’ble Court, in the context of trademark infringement online, acknowledged classification of intermediaries into active and passive and held that the protection under Section 79 of the Information Technology Act is available only to passive intermediaries, acting as mere conduits. Lack of knowledge claimed merely on the ground that the content on an online platform is user-generated is not sufficient to avail of the safe harbour provision.  

As a consequence of the growing litigation in the context of intermediaries, a need was felt to modify the law as it stood at the time. Thus, the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 were promulgated. These are amended from time to time. The said Guidelines, in their current form, primarily regulate three kinds of intermediaries – social media platforms, OTT websites and digital media and online news agencies which could use individuals who run news channels. By subsequent amendments, online gaming platforms were also brought within the ambit of the Guidelines.

Other than this, specific rules and guidelines under different statutes are also applicable to different categories of intermediaries, which guidelines aligned with the overall object and purpose of the statute. For example, consumer redressal mechanisms put in place for e-commerce entities under the Consumer Protection Act.  

The aim of the Intermediary Guidelines, 2021 was to affix greater responsibility on intermediaries operating in various sectors for user-generated content. The Intermediary Guidelines, now mandate intermediaries to make reasonable efforts by themselves to not host, display, publish or share information which is obscene, harmful to children, infringes any Intellectual Property, violates any law for the time being in force, etc. They are obligated to inform their users periodically as to what could amount to such a violation.

Upon receipt of actual knowledge in the form of a court order or notification by the appropriate government agency, the intermediary is obligated to take action within thirty-six hours of receipt of intimation against any content violative of the Intermediary Guidelines, 2021.

In addition, a Grievance Redressal Mechanism for users also has to be put in place by all intermediaries and complaints received have to be resolved within a period of 15 days of receipt of such complaint. However, requests for removal of content have to be addressed within 72 hours. In case of significant social media intermediaries and online gaming intermediaries, additional due diligence obligations are provided for.

From a holistic reading of the above, the test for claiming exemption from liability under the Information Technology Act and prevalent Rules is to see when “actual knowledge” of the violation was received by the intermediary and consequent actions taken.

However, under Section 79(3) of the Information Technology Act, an intermediary is not exempt from liability if it:

a. Conspires, abets, aid or induces commission of an unlawful act, in any manner whatsoever; or

b. Omits, upon receipt of actual knowledge, to remove expeditiously or disable access to any unlawful content from its platform.

The provision was also considered by a Division Bench of the Hon’ble Delhi High Court in Google LLC v. DRS Logistics Ltd. & Ors., in the context of Google’s AdWords programme. By way of the AdWords programme, Google enabled any person to purchase keywords to ensure that the search results would show their webpage first on the Google search engine platform. To distinguish AdWords from organic searches, the AdWords’ search results are preceded by the word “Ad." An issue arose before the Court because of sale of registered trademarks as keywords by Google to persons who had no right over them. This was resulting in an anomaly, whereby an individual searching for a specific brand would show the website of a completely unrelated entity as the first search result. Thus, Google was implicated as a contributing party to the infringement, for failing to monitor sale of registered trademarks as keywords. 

The Division Bench, in the above context, considering the provisions of Section 79(3) of the Information Technology Act, held Google liable for trademark infringement. The test laid down by the Division Bench was that Google, by sale of trademarks as keywords, enabled its users infringe registered trademarks. This was considered as aiding violation of trademark rights and Google could not claim exemption from liability under Section 79 of the Information Technology Act.

The above judgment was subsequently followed by a Single Judge in Puma Se v. Indiamart Intermesh Ltd. where Indiamart was not allowed to claim exemption under Section 79 as it allowed for sale of Puma branded shoes by a seller on its platform without verification of any authorization that the seller had for making the sale. It was held that providing a platform to individuals for sale of different products without Indiamart having an IP verification programme in place enabled infringement.

From the above, it is clear that the Hon’ble Courts have been mindful of the changing relationship between the online platforms and their users. The law had initially provided for complete immunity from liability for any user-generated content. Then the Courts developed the test of what actions an intermediary took when actual knowledge of a violation was received. It has developed now to see if the intermediaries are enabling infringing acts on their platforms.

With the above background, the issue of when the threshold of receipt of “actual knowledge” can be attributed to Generative-AI platforms, is one which is up for debate. It can it be argued that developers of such Generative-AI tools already have the knowledge that their platforms may lead to content creation which cannot be credited to the original source material. By enabling users to distort, morph, change voices, swap images, etc., original content, which may be IP protected, can lead to infringement. In such a scenario, there is a possibility that these Generative-AI platforms could be made liable for any violations which have been claimed against the user of the platform as well. How this test of “enablement” is applied, if at all, on developers of Generative-AI platforms will be interesting to see.  

About the author: Vrinda Bagaria is a Principal Associate at Singh & Singh Law Firm LLP.

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