INTRODUCTION: There was a concern that online service providers that were providing the new technology might become so fearful of ability that they would be reluctant to invest in the sort of all experimentation and innovation that would ultimately enhance the public benefits of the digital environment. On the other there was the danger that copy right holders would refuse to make works available online at all unless they were assured of adequate protection of their exclusive rights. So this gave rise to safe guard provisions under the copy right act. THEORIES OF LIABILITY FOR ONLINE SERVICE PROVIDERS: DIRECT LIABILITY: