Copyright Law and the Creator Economy: Transformative Use and Due Process in the Digital Age

The emergence of digital platforms has facilitated the rise of the creator economy, a decentralised ecosystem in which individuals function as publishers, critics, educators, and entertainers without reliance on traditional media institutions

“Copyright law is premised on the promotion of creativity through sufficient protection. On the other hand, various exemptions and doctrines in copyright law, whether statutorily embedded or judicially innovated, recognise the equally compelling need to promote creative activity and ensure that the privileges granted by copyright do not stifle dissemination of information.” – Justice S. Ravindra Bhat

The digital age has precipitated a fundamental shift in the way information is produced, disseminated, and consumed. The emergence of digital platforms has facilitated the rise of the creator economy, a decentralised ecosystem in which individuals function as publishers, critics, educators, and entertainers without reliance on traditional media institutions. This transformation has altered patterns of audience engagement and cultural production, enabling participatory and interactive forms of expression at an unprecedented scale.

This exponential growth of digital platforms and user-generated content has exposed significant gaps in the law, particularly in relation to the protection of the rights of digital content creators who rely on online platforms for their expression, dissemination of their content and in most cases earning their livelihood. The frequent imposition of copyright strikes, content takedowns, and monetisation restrictions, often triggered by automated enforcement mechanisms, operates at a fraught intersection with creators’ freedom of expression, the doctrine of fair use or fair dealing, and the fundamental requirement of due process prior to the imposition of punitive sanctions.

The Structure of Fair Dealing under Indian Copyright Law:

Section 52 of the Copyright Act, 1957 sets out the situations in which the use of copyrighted material is legally permitted without the copyright owner’s consent. Often referred to as the “fair dealing” provision, it allows limited use of protected works for purposes such as research, criticism, review, news reporting, and education. This provision reflects the core policy objective of copyright law: to protect creators while ensuring that copyright does not unduly restrict the free flow of information and ideas. Unlike open-ended fair use regimes, Indian copyright law adopts a closed-list, purpose-based framework, making the legality of unauthorised use dependent on its inclusion within enumerated categories, albeit with some judicial flexibility based on factors such as purpose, extent of use, and market impact.

Indian Courts in a plethora of judgments such as Kartar Singh Giani vs. Ladha Singh [AIR 1934 Lah 777]; E. M. Forster vs. A. N. Parasuraman [AIR 1964 Mad 331]; R. G. Anand v. Delux Films [(1978) 4 SCC 118]; and Chancellor Masters and Scholars of the University of Oxford v. Narendra Publishing House and Ors. [2008 SCC OnLine Del 1058] among many others, have consistently demonstrated a liberal and purposive approach to the interpretation of the exceptions under Section 52. In doing so, courts have implicitly drawn upon the broader fair use doctrine developed in the United States.

However, notwithstanding this progressive judicial interpretation, the statutory framework itself remains unchanged and ill-suited to the realities of the digital age. Enacted in a pre-digital, print-centric era, Section 52 has become increasingly misaligned with contemporary platform-mediated expression, where content is iterative, referential, and often transformative, combining commentary, satire, and critique. This disconnect between statute and practice generates legal uncertainty, encourages over-enforcement, and ultimately chills legitimate digital speech.

Transformative Use and Digital Expression

“[A]ll intellectual creative activity is in part derivative. There is no such thing as a wholly original thought or invention. Each advance stands on building blocks fashioned by prior thinkers.” – Judge Pierre N. Leval

‘Transformative use’ occupies a central position in modern digital creativity. In the online context, copyrighted material is frequently repurposed to convey new meaning, critique, or insight, rather than to serve as a substitute for the original work. Reaction videos, explanatory content, parodies, and memes exemplify creative practices that rely on reference rather than reproduction. Indian Courts have propounded a principle resembling the ‘transformative work’ doctrine developed in the United States. It has been held that where the theme is the same but is presented and treated differently so that the subsequent work becomes a completely new work, no question of violation of copyright arises. It has been observed across jurisdictions that ‘transformative works’ have a greater chance of falling within the fair use defense.

However, Indian copyright law does not explicitly articulate the concept of transformative use, leaving its recognition to judicial interpretation within the confines of Section 52. This ambiguity places digital creators in a precarious position, as the legality of their work often depends on post hoc adjudication rather than clear statutory guidance. The resulting uncertainty discourages legitimate creative practices and disproportionately affects independent creators with limited access to legal resources.

Platform-Based Copyright Enforcement and Procedural Deficits

The most acute challenges faced by digital creators today arise from platform-level copyright enforcement mechanisms. Online platforms increasingly rely on automated detection tools and algorithmic moderation systems to identify potential infringements. These systems prioritise efficiency and scale, often operating on strict liability assumptions without meaningful contextual analysis.

India has no specific, established human oversight body solely for automated digital strikes. As a consequence, content that would qualify as fair dealing upon legal scrutiny is frequently subjected to copyright strikes, takedowns, or monetisation restrictions. Automated enforcement mechanisms are inherently ill-equipped to assess qualitative factors such as transformative purpose, critical intent, or proportional use. The absence of robust human oversight exacerbates the risk of over-enforcement.

More significantly, these enforcement processes lack basic procedural safeguards. Creators are often denied prior notice, meaningful opportunity to contest allegations, or access to reasoned decisions. Such practices raise serious concerns regarding procedural fairness, particularly where punitive measures affect livelihood and expression. The conflation of fair dealing with piracy through automated enforcement undermines the normative foundations of copyright law.

Structural Gaps in the Existing Legal Framework

Several structural deficiencies are inherent in the existing copyright regime, most notably the absence of any statutory framework governing due process in the imposition of copyright strikes, content takedowns, or monetisation restrictions by digital platforms. The Copyright Act, 1957 neither contemplates digital-first content creation nor regulates platform-based dissemination and algorithmic enforcement mechanisms, leaving enforcement practices entirely unmoored from procedural safeguards such as prior notice, an opportunity to be heard, or reasoned decision-making. This legislative silence permits disproportionate and often arbitrary sanctions, including for trivial or incidental uses of copyrighted material. The vacuum is further exacerbated by the predominance of platform terms of service, which frequently override statutory rights and enable private intermediaries to unilaterally determine the scope of permissible use, thereby displacing public law norms with opaque systems of private governance.

Towards a Responsive Copyright Framework

A modern copyright framework must acknowledge that digital creators are active participants in cultural production rather than passive consumers of content. Reform efforts should be guided by three core principles. First, statutory recognition of transformative digital use is essential to align legal doctrine with contemporary creative practices. Second, enforcement mechanisms must adhere to principles of proportionality, distinguishing between transformative reference and commercial exploitation. Third, procedural safeguards such as notice, opportunity to respond, and reasoned decision-making should be mandatory prior to punitive action.

The challenges posed by the creator economy necessitate a re-evaluation of the foundational assumptions underlying copyright law. The central question remains whether the existing copyright regime is sufficiently equipped to address the realities of the digital age. Without substantive and procedural reform, copyright law risks privileging automated enforcement and private governance over statutory rights and constitutional freedoms. A recalibrated framework that embraces digital creativity while preserving legal fairness is essential for ensuring the continued relevance and legitimacy of copyright law in an evolving cultural landscape.

Disclaimer – The views expressed in this article are the personal views of the authors and are purely informative in nature.