The development of the World Wide Web in the early 90s has led to the evolution of the Internet from a mere technological infrastructure to a network linking people and ultimately to the forerunner of information and the digital age, which now plays a major role in the global economy. What initially started as a scientific and academic network has unleashed an era of electronic commerce with its easy access and multifunctional character. The increase in .com enterprises has led to the inception of new commercial models and business dynamics, whereby organisations are developing ways to exploit the Internet as a marketing and commercial tool. Ecommerce has opened up avenues to increase revenues by engaging new clientele and by minimising staff expenses. A recent survey conducted by the Boston Consultancy Group reveals that India’s total online retailing which constituted 0.9% of its total retailing industry in 2010 is expected to grow to 4.5% by 2016. User interest and participation are the main drivers that are leading India’s Internet industry to `10.8 trillion by 2016 which is about 5.6% of the country’s Gross Domestic Product (GDP).
This profound use of the Internet has also affected the legal world in so far as the protection of intellectual property (IP) asset is concerned. IP has assumed similar importance in electronic commerce as it has in the offline commercial sphere, albeit with different aspects to be addressed. This article attempts to provide an insight to the major issues being faced by India in the cyber space.
After the advent of Internet, majority of the corporate Intellectual Property is held in the digital form as it provides affordable access of all the IPR resources to the public at large. However, internet has also made infringement of IPR, in particular copying of Copyright material easy and simple. Internet is being termed as the world’s biggest copying machine. India has specific legislations to deal with various kinds of IPR infringement however these legislations are not equipped to deal with some of the modern-day copyright violations. The Copyright Act, 1957 prohibits reproduction of the copyrighted work in any material form including the storing of it in any medium by electronic means, by any unauthorized person but is incapacitated to deal with illegal duplication, importation, distribution and sale of pirated music as it becomes difficult to trace the location of information.
In this scenario, where sharing of information among people has become the major function of the internet, the peer-to-peer file sharing services provided by various websites, linking, deep linking, framing and other innovations which have changed the way people share information over the world wide web, have given rise to a legal controversy. While the users downloading music, software, computer games and other copyrighted material are held liable for direct copyright infringement, the service providers go scot free as the existing Copyright Act has no provision for making a service provider liable in such a situation. The rapid dissemination of data over the Internet means that one has to spend a lifetime and fortune tracking down copies of the work that infringes those rights, identifying the infringer and litigating in each concern jurisdiction.
The protection to computer software is derived out of two Acts, the Indian Copyright Act, 1957 and the IT Act, 2000.
While the Copyright Act grants protection to the computer program as it is granted to other forms of copyrighted work, the technological and complex nature of the computer programs calls for technically effective protection.
The Indian Copyright Act, 1957 accords a special status to computer software as compared to other forms of copyrighted work. The Copyright Act regards the computer programs as literary works, and in addition to the general exclusive rights provided to other literary works, it grants extraordinary exclusive rights to the owners of the computer programs like right to sell or offer for sale, and the right to give on commercial rental or offer for commercial rental. The Act has also exempted computer programs from ‘fair dealing exception’ (i.e. private use for research, criticism or review of that work or any other work) which is available in case of other copyright works.
The IT Act, 2000 provides for punishment for tampering with the ‘source code’ of a computer program but this protection applies to computer source codes ‘which are required to be kept or maintained by law for the time being in force’. Hence, the protection accorded by the IT Act is only for ‘source code’ of computer programs of government agencies and the ‘source code’ of computer programs of private users still stand unprotected.
The Technological progress has also given a new dimension to the various crimes which traverse through various territories thus creating the issue of jurisdiction. Identity theft, misuse of credit cards, hacking, leaking of critical information and frauds are some of the issues which are being faced by the Indian cyber consumer. Some of these cyber offences are explained below:
Spamming – Spamming means sending unsolicited bulk/commercial mails over the net which clogs the network and reduces the speed. . With IT Act having no provisions on spamming, the legal picture on these lays still unclear.
Phishing and Pharming – Phishing means to misrepresentation on the internet, which may lead the user to disclose their personal data at their own will. This is known as phishing and pharming and is not addressed by the IT Act.
Cyber Stalking – Cyber stalking involves a person following a web-surfer through cyberspace inspite of the objections by the later, which could result into causing severe mental agony, stress and harassment to the person being stalked. While the IT Act does not address the issue, it could be regulated by the Indian Penal Code, although there exists a need for specific and appropriate provisions to be included in the IT Act for an effective check on such activities.
Credit Card Frauds – The use of credit card through internet, for making payment of goods or services, has opened major routes for frauds against the cyber consumers. As the transaction, while using credit card through internet, takes place CNP (Card Not Present), it opens the room for people stealing information of cards and misusing it for making a purchase. As the IT Act does not deal with credit card frauds, there exists a need express provisions to be formulated for checking such activities.
Internet technology facilitates the gathering of personal data. But this also brings a possibility of a threat to the privacy of a cyber consumer or netizens. With the boom in online service provider companies in India, misusing of the personal data of a cyber consumer has become a major menace.
However, there is no specific legislation to protect the personal data of a person though to a little extent protection may be given under the Copyright Act, 1957.
With US and EU having strict policies relating to privacy and protection of personal data, it becomes very important for India, considering the inflow of foreign investments and other business opportunities, to have specific data protection and privacy laws. The Information Technology Act protects privacy rights only from government action and it’s unclear if such protection can be extended to private actions as well.
The absence of data protection and privacy law has also been creating obstacles for Indian companies while dealing with the EU as the data protection directives require a very high level of protection. India needs to adapt to the changing needs of the time and provide for a comprehensive data protection regime which will not only help in gaining consumer confidence but also increase the amount of business that Indian BPO service providers receive from the EU.
With the advancement of e-commerce, the domain names have come to acquire the same value as a trademark or the business name of a company. The value attached to domain names makes it lucrative for cyber criminals to indulge in domain name infringements and the global nature and easier and inexpensive procedure for registering domain names further facilitates domain name infringements. When a person gets a domain name registered in bad faith, i.e. in order to make huge profits by registering a domain name corresponding to a trademark of another person, with an intent to sell the domain name to the trademark owner at a higher price, such activities are known as cybersquatting. The IT Act does not deal with the domain name issues. In India the domain name infringement cases are dealt with according to the trademark law. With most of the countries providing for specific legislations for combating and curbing cybersquatting, India also needs to address the issue and formulate legal provisions against cybersquatting. For settlement of Disputes, WIPO has introduced a new mechanism called ICANN (Internet Corporation for Assigned Names and Numbers) for settlement of disputes relating to domain names. As the parties are given the right to file the case against the decision of ICANN in their respective jurisdictions, the decisions of ICANN is having only persuasive value for the domain users.
India passed the Information Technology Act, 2000 (“the Act”) to deal with the emerging cyber issues. It aims to provide for the legal framework so that legal sanctity is accorded to all electronic records and transactions carried out by the means of electronic data interchange and other means of electronic communication (ecommerce). However, it does not deal with major issues like Spaming, Cyber Stalking, Phising etc.
For the effective regulation of a phenomenon, the legal regime for it must be abreast with the latest developments taking place in that field, which becomes difficult in the case of Information Technology as it has an accelerated pace of development and hence the statute requires constant updating.
The Act extends the application of its penal provisions to persons outside India, irrespective of their nationality if the offence under the Act relates to a computer located in India. Such extra-territorial jurisdiction is fraught with limitations as to its enforcement.
The jurisdiction of a particular country over online transactions, which involves more than one jurisdiction, has been left open. This can lead to a conflict of jurisdictions.
The Act fails to address the issue of cross border taxation that may arise in international contracts.
The Act does not address the issue of protection of intellectual property on the internet.
The Act does not deal with privacy and data protection issues on the internet.
The Act fails to cover cyber laundering of money, spamming, phishing, cyber stalking, cyber squatting and other innovative cybercrimes.
The Act does not clarify the situation regarding the liability of network service providers.
In order to have enforcement relating to Intellectual Property Right in Information Technology, firstly it would require the coordination that focus on the development, dissemination and education of the laws and policies. Secondly, it would require the present laws and policies to be reviewed and analyzed for the continued applicability and effectiveness. And lastly, there is need to formulate the policy and laws related to specific issues, situations and incidents.
The Indian Information Technology Act reaffirms India’s commitment towards building a knowledge-based society and keeping in pace with the rest of the world by providing a legal framework within which such society can flourish. While the Indian Government has taken its first step in regulating the cybercrimes by legislating the IT Act 2000, the legal regime on Information Technology in India is still in its nascent stage. There exist numerous grey areas and loopholes in the Act which need to be looked into and also the accelerated pace of technological development has raised many unprecedented issues that do not find express solution in the existing Act. The issues relating to intellectual property rights on internet, spamming, cybersquatting, cyber stalking, credit card frauds, data protection and privacy on the net need to be addressed. Following the footsteps of United States and EU which have adopted specific legislations for data protection and privacy, India Government is also in the process of formulating laws to tighten its legal regime over the issues relating to data protection and privacy to bolster its offshore credibility. The government has taken into account the modern ways of cybercrimes, violation of data protection norms and prepared the Draft Information Technology Amendment Act 2006 addressing issues relating to electronic contracts, breach of confidentiality and privacy, child pornography, e-commerce frauds like Phishing, identity theft, sending offensive mails, in order to bring a comprehensive legislation to protect the rights of the netizens. This will go a long way in making Internet and cyber space safer, people friendly and commercially more viable.
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