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Impact of the New Copyright Laws on Online Copyright Infringement By Steve Workman, Esq.

In another last article, also found on this web site, we took a look at the principles of copyright law and traditional notions of "third-party" liability for online copyright infringement. Hopefully, you are now armed with a good understanding of how those principles might apply to your Internet activities.

Now, let's turn out attention to the Digital Millennium Copyright Act. The DMCA is not an example of legislative clarity -- it's a terribly cumbersome statute. Nevertheless, it's my purpose here to try to relate its meaning and intent. As far as web site owner/operators and service providers are concerned, the main import of the DMCA is found at Title II: the "Online Copyright Infringement Liability Limitation." Title II adds a new section to the Copyright Act, Section 512, which limits liability for online service providers for acts of copyright infringement committed by their clients.

The liability limitations in Section 512 relate to four, distinct categories of conduct by a service provider: (1) transitory communications; (2) system caching; (3) storage of information on systems or networks at the direction of clients; and (4) information location tools. Each limitation affords a total bar on monetary damages against the service provider, and restricts the availability of injunctive relief. Moreover, a finding that a service provider qualifies for one of the limitations has no relevance to a determination of whether the provider qualifies for any of the other three -- they are distinct and separate inquiries.

The fundamental question in this entire new regime is, of course, who is eligible as a "service provider"? For purposes of the first limitation concerning transitory communications, a "service provider" is defined as "an entity offering the transmission, routing, or providing connections for digital online communications, between and among points specified by a user, of material of the user's choosing, without modification to the content of the material as sent or received." For purposes of the other three limitations, "service provider" is more broadly defined as "a provider of online services or network access, or the operator of facilities therefor."

Now this is important, so take note of this next condition: Section 512 also requires that, in order for a service provider to be eligible for liability limitations, it must do two things: first, it must adopt and reasonably implement a policy of terminating in appropriate circumstances the accounts of clients who are repeat infringers and, second, it must accommodate and not interfere with "standard technical measures" regarding copyright identification and protection.

Limitations for Transitory Communications

Section 512(a) protects providers when they serve merely as a pipeline for data, transmitting digital information from one point on a network to another at someone else's request (initiation). The liability limitation here includes acts of transmission, routing or providing connections for the information, as well as intermediate and transient copies of the information that are made automatically in the operation of the network. To be eligible for this limitation, the service provider must meet the following conditions:

the transmission must be initiated by a person other than the provider; the transmission, routing, provisions of connections, or copying must be carried out by an automatic technical process without selection of material; the provider must not determine who receives the material; any intermediate copies must not ordinarily be accessible to anyone other than anticipated recipients and not retained for longer than reasonably necessary; and the material must be transmitted without modification to its content. Limitation for System Caching

Section 512(b) of the new law limits the liability of service providers for retaining copies of material that has been made available online by someone other than the provider, and then transmitted to a subscriber at his request. The provider retains the material so that later requests for the same material can be fulfilled by transmitting the retained copy, rather than retrieving the material from the original source. This practice reducers the service provider's bandwidth requirements and reduces waiting time on subsequent requests for that material. A drawback of this "caching" practice is that it can result in outdated material being provided to a subscriber and can deprive webmasters of accurate "hit" information.

The liability limitation of Section 512(b) applies to intermediate and temporary storage carried out through an automatic process for the purpose of making the material available to subscribers who subsequently request it. The following conditions apply:

the content of the retained material cannot be modified; the provider must comply with rules about "refreshing" material when specified in accordance with generally accepted industry protocol; the provider cannot interfere with "hit" information technology; the provider must limit access to the material in accordance with the terms imposed for access by the person who posted the information (e.g., the webmaster); and any material posted in violation of copyright, and which has been removed or blocked on the originating site, must be removed or blocked by the provider. Limitation for Information Residing on Systems at the Direction of Users.

The next limitation is set forth at Section 512(c), and concerns liability of service providers for infringing material appearing on web sites hosted by their systems. In order to be eligible for this limitation on liability, the provider must meet the following conditions:

the provider must not have the requisite level of knowledge of the infringing activity; if the provider has the right and ability to control the infringing activity, it must not receive a financial benefit directly attributable to the infringing activity; if the provider receives a notice in proper form concerning alleged copyright infringement relating to material appearing in a client web site, the provider must expeditiously remove or block the material, unless a proper counter-notice is received by the provider. the provider must have filed with the U.S. Copyright Office a designated agent for receipt of notices of claimed infringement.

Of course, the knowledge standard is of critical importance here. A service provider will only be eligible for this limitation on liability if (i) it does not have actual knowledge of the infringing activity; (ii) it is not aware of facts from which infringing activity by the web site is apparent; or (iii) upon learning such facts, it responds expeditiously to remove or block access to the infringing activity.

The notice provision is also important because the copyright owner, or other person claiming rights under copyright, must comply with the notice specifications set forth in the statute. A simple letter which demands the allegedly infringing material be removed is not enough. The notice must contain the following: (i) a signature or equivalent of the copyright claimant or authorized representative; (ii) a complete or representative list identifying the copyrighted works allegedly infringed by the user; (iii) information about the location of the allegedly infringing material such that the provider can locate and remove or block the material; (iv) adequate contact information to enable the provider to contact the complaining party; (v) a statement from the copyright claimant or his representative stating in good faith that the complained of material is infringing copyright; and (vi) a statement signed under pen lajgguia. moncler womens jacketsalty of perjury by the complaining party that he is authorized to be asserting the complaint.

Once such a notice has been received by the service provider's designated agent (whose identity and address must be listed on the provider's web site), the provider must take reasonable steps to forward the notice to the alleged infringing user, e.g., the webmaster. This is because the statute wants to afford users an adequate time to respond, in order to prevent removal of material based on inaccurate or fraudulent notices. After receiving the notice, the user may submit a counter-notice, in essentially the same form as the notice, to the provider's agent, then the provider must pass the counter-notice on to the complaining party. If this occurs, the provider must restore access to the material removed or blocked as a result of the original notice within 10-14 business days after receipt of the counter-notice.

Limitation for Information Location Tools

The fourth category of activity covered by Section 512 concerns online directories, search engines and hyperlinks. Section 512(d) limits liability for the acts of referring or linking users to a site that contains infringing material, if the following conditions are met:

the provider must not have the requisite level of knowledge that the material is infringing (same "scienter" standard as used in Section 512(c)); if the provider has the right and ability to control the infringing activity, the provider must not receive a financial benefit directly attributable to the infringing activity; and upon receiving notification of claimed infringement, in the form of a proper notice, the provider must expeditiously take down or block access to the allegedly infringing material.

The conditions described above are essentially the same as those for Section 512(c), but with some differences to the notification requirements. There are also safeguards here against erroneous or fraudulent notifications. As with section c, this section also includes protections for the provider against claims which may be asserted as a result of the material having been removed or blocked.

*   *   *

The DMCA could be interpreted to concede that a service provider has the requisite level of participation for potential liability under a contribution theory. But the second prong of the equation, i.e., knowledge, must also be present to support a finding of contributory infringement. If a service provider is reasonably unaware of copyright infringement occurring on a client site, liability cannot properly follow. Of course, a party complaining of copyright infringement on a client sites could attempt to impose knowledge a provider by making a phone call, or sending a brief, cryptic e-mail, informing it of the alleged infringement. This is where the "safe harbor" provisions of Section 512 become so helpful. Unless such notice conforms to the requirements set forth in that statute, a service provider cannot be deemed to have "knowledge" of the infringement!

On the other hand, when might a service provider be held vicariously liable for copyright infringements occurring on a client site? The answer to this question, obviously, depends on the extent of control exercised over client sites, together with the basis of the financial participation in the client sites' revenues. In my opinion, vicarious liability cannot follow from the mere fact that a host reserves the right to terminate or refuse service if it determines that client site content may be unlawful or otherwise objectionable. I believe such a contractual provision does not rise to the level of "control" or "supervision" necessary to create a situation analogous to "respondeat superior." Even if it did, vicarious liability still requires the additional finding of "financial benefit" from the infringing activities. This test could be met, in theory, in circumstances where a provider receives a percentage of revenues generated by the client site. However, a mere flat rate, or fee based on bandwidth is not, in my opinion, enough to establish the requisite "financial benefit" to impose liability. This conclusion is supported by the safe harbor rules of new Section 512. If fees charged by service providers constituted "financial benefit," then no provider could ever obtain the benefits of this statute. (Extending this logic, neither should a transaction processing fee charged by a credit card processor give rise to vicarious liability; card processors have been dragged into court on this theory, but I am unaware of one ever having been found liable).

In short, new Section 512 serves to insulate service providers from the risk of being hauled into court, and thereafter being held liable, under the theories of vicarious liability and contributory infringement, so long as the provider complies with its obligations under the statute. If a service provider does not conform to the conditions set forth in the statute, whether it be sections (a), (b) (c) or (d), traditional principles of third-party liability for copyright infringement, discussed at the outset of this article, would then apply.

Does DMCA affect the liability of webmasters and web site owners for copyright infringement? The answer depends on the nature of the site. Remember, the limitations of liability contained in Section 512 are directed to "service providers." However, certain passive web site operations, such as a site which serves merely as a passive conduit for the posting of material, arguably could qualify as "service providers." In any case, I believe the DMCA will have the salutary effect of giving owners and operators of web sites more thorough notice of any alleged copyright violations. This is because, insofar as persons who seek to make claims of copyright infringement against a web site typically desire to retain the option of including that site's service providers in any subsequent lawsuit, claimants will have a strong motive to comply with the strict notice provisions of Section 512 to preserve that option. But it is important to remember that formal notice is not required as a prerequisite to filing suit against webmasters and site owners for copyright infringement, whether as a direct, vicarious or contributory infringer. For this reason, to the extent a webmaster receives complaints of copyright infringement, those complaints should be handled in a professional fashion and related to your legal counsel, or a designated staff person, for further investigation.

Steven Workman, is an intellectual property, entertainment law and new media attorney, secializing in e-commerce and the Internet industry. Mr. Workman is a memberof the bars of the States of California and Illinois and is a pending member of the Florida bar. Mr. Workman received his J.D. with highest honors from the University of Illinois in 1986.

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Protecting Yourself Against Copyright Claims Based on User Content

If you publish or use the creative work of others, their trademarks, or certain confidential business information without the permission of the owner, you may be exposing yourself to legal liability for violations of intellectual property law . Fortunately, if you allow your site's user to post this type of content you can protect yourself from copyright infringement claims under the Digital Millennium Copyright Act (DMCA) , as long as you establish effective "notice-and-takedown" procedures, promptly remove content when a copyright owner notifies you that it is infringing, and have no knowledge that the material in question is infringing.  This page explains how this important law works.

Section 512 of the DMCA  contains what are called the "safe-harbor" provisions for online service providers. These safe harbor provisions may shield you from liability for the copyright infringements of your site's users and for linking to copyright-infringing material from other online sources, as long as you establish effective "notice-and-takedown" procedures, promptly remove content when a copyright owner notifies you that it is infringing, and have no actual or effective knowledge that the material in question is infringing. Section 512 has a somewhat confusing structure; if you are interested in navigating the language of the statute, this paper from Fenwick & West LLP attempts to lay out the terms of section 512 in a more logical fashion.

You are not legally required to comply with the safe harbor provisions of section 512, but doing so may help you avoid copyright infringement liability. The sections below address those provisions of section 512 that may apply to you and discuss what you need to do in order to take advantage of the safe harbor provisions.

Storing and Linking to Copyrighted Content: Sections 512(c) and (d)

There are two safe-harbor provisions that potentially apply to your online publishing activities.

The first safe-harbor provision relates to materials posted to your blog or website at the direction of a user. This could include a file (e.g., a photograph, a film clip, an audio file) that a user posts to a comment section on your site or to a forum thread. (There are many other potential examples, the important thing is that the material is posted by another person, not you). This safe-harbor provision is found in section 512(c), and it states that, as the administrator of a website or other service, you will not be held liable for money damages for infringing content posted "at the direction of a user," as long as you

do not have actual knowledge that there is infringing content on your servers, or know any surrounding facts that would make the infringing use apparent; do not receive any financial benefit directly attributable to the infringing activity if you have the ability to control such activity; and act expeditiously to remove or disable access to the infringing material upon obtaining knowledge or awareness that the material is infringing or upon receiving a properly drafted notice of infringement (more below).

The second safe-harbor provision relates to links you post to other online material located elsewhere. This safe-harbor provision is found in section 512(d), and it states that an online service provider will not be held liable for money damages "for infringement of copyright by reason of the provider referring or linking users to an online location containing infringing material or infringing activity, by using information location tools, including a directory, index, reference, pointer, or hypertext link. " (emphasis added). If you linked to material without knowing that it infringed copyright, the language of this section appears to relieve you of liability, as long as you

do not have actual knowledge that the material you linked to is infringing, or know any surrounding facts that would make the infringement apparent; do not receive any financial benefit directly attributable to the infringing activity if you have the ability to control such activity; and act expeditiously to remove or disable access to the infringing material (such as by taking away the link) upon obtaining knowledge or awareness that the material is infringing or upon receiving a properly drafted notice of infringement (more below).

These safe harbor provisions could be valuable protections for you as a website operator, but in order to take advantage of them, you have to meet a few further administrative requirements.

Note: the existence of the safe-harbor provisions does not imply that you will be held liable for copyright infringement if you opt not to use the safe harbors. Rather, your liability will depend on the independent principles of direct and secondary infringement. For details, see the Chilling Effects FAQ about Copyright - What constitutes copyright infringement? and its FAQ about DMCA Safe Harbor Provisions - What is third-party liability, also known as secondary liability?

Administrative Requirements for Safe Harbor Protection

There are a few additional administrative steps that you need to take before you can enjoy the benefits of the safe-harbor provisions. These steps seem complicated at first, but in fact do not require a significant amount of effort or cost in order to comply with them. The steps are as follows.

1. Designate a Copyright Agent to Receive DMCA Takedown Notices

The U.S. Copyright Office maintains a list of designated agents  to receive notices of claimed copyright infringement. This list enables copyright owners who believe that their work is being infringed to send complaints or "takedown notices" to internet service providers hosting or linking to the disputed material. You need to designate an agent, which can be you or someone else who agrees to do it, in order to take advantage of the DMCA safe-harbor provisions. To do this, you file an Interim Designation with the United States Copyright Office, along with an $105 filing fee.

2. Adopt and Communicate to Users a Copyright Infringement Policy

In order to qualify for the safe harbor protections, you must also publish a statement on your site giving notice to your users of your DMCA agent's contact information and your policies regarding copyright infringement and the consequences of repeated infringing activity. The notice can be a part of the website's terms of use or some other notice displayed prominently on the site. For more on terms of use, see the Terms of Use and Website Privacy  section for details. The statement should explain that you respond expeditiously to notices of claimed copyright infringement andterminate users or account holders who are "repeat infringers." If you have no subscribers or account holders, your policy may state "If we become aware that one of our users is a repeat copyright infringer, it is our policy to take reasonable steps within our power to terminate that user."

You may want to include a statement detailing the proper form for a notice of claimed infringement, which must include:

a physical or electronic signature of a person authorized to act on behalf of the owner of the infringed copyright; identification of the copyrighted work or works claimed to have been infringed; identification of the material that is claimed to be infringing or to be the subject of infringing activity and that is to be removed; information reasonably sufficient to permit the service provider to contact the complaining party (e.g., the address, telephone number, or email address); a statement that the complaining party has a good faith belief that use of the material is not authorized by the copyright owner; and a statement that information in the complaint is accurate and that the complaining party is authorized to act on behalf of the copyright owner.

17 U.S.C. § 512(c)(3)(B)  states that if a complaining party does not substantially comply with these requirements, its notice will not serve as "actual notice" for the purpose of Section 512. Your policy statement should also include a statement explaining the procedure for users of your site to make a counter-notification (discussed below).

3. Properly Comply with a Notice of Claimed Infringement When Received

You may from time to time receive a notice of claimed infringement from a copyright owner, alleging that content on your site infringes the holder's copyright. Such a notice must comply with the form outlined above. Once you verify that a copyright notification substantially meets these formal requirements, in order to qualify for the safe harbor, you are required to:

expeditiously remove or disable access to the material that is claimed to be infringing (there is little guidance on what counts as "expeditious"); notify your user or subscriber that the material has been removed so that they may file a counter-notice should they wish (you are not required to notify the user before removing the material); if proper counter-notice is provided, notify the copyright holder and provide a copy of that counter-notice; and if proper counter-notice is provided and if the copyright holder does not file suit within 10 business days, restore the removed material.

For information on the content of a proper counter-notice or if your content has been removed by your service provider as a result of a DMCA takedown notice, see Responding to a DMCA Takedown Notice Targeting Your Content . 

A Warning: Not Every Cease-and-Desist Letter is a DMCA Takedown Notice

The DMCA gets a great deal of attention in discussions of online speech, especially in technical circles. This attention is warranted, and vigorous debate about this controversial provision of the Copyright Act is necessary. But it is important to remember that other legal issues may also affect your online activities. The DMCA safe-harbor provisions apply only to claims of copyright infringement. They do not apply to trademark infringement claims, defamation claims, or claims alleging misappropriation of trade secrets, to name just a few of the possibilities. This means that you cannot insulate yourself from liability on one of these other claims simply by "expeditiously removing" the disputed content. In many situations, you may be protected by section 230 of the Communications Decency Act for publishing the statements of your users. See the Primer on Immunity -- and Liability -- For Third-Party Content under Section 230 of the Communications Decency Act for details on this provision.

Website and blog operators get cease-and-desist letters based on non-copyright claims with some frequency. You should not assume that every threatening letter you receive is a DMCA takedown notice -- you need to look at the precise allegations and legal claims made in the letter and evaluate your next steps from there. It is not sufficient, for example, to conclude that a cease-and-desist letter relating to defamation or trade secrets law is somehow "defective" because it has not met the formal requirements for a notice of claimed copyright infringement under section 512. This will only muddle your thinking and could potentially exacerbate a delicate situation. For more on what to do if you receive a cease-and-desist letter, consult the Responding to Correspondence Threatening Legal Action  section. For more on the confusion between other kinds of cease-and-desist letters and notices of claimed infringement, see our blog post, Not Every Cease-and-Desist Letter is a DMCA Takedown Notice .

This confusion may also work in reverse. There may be times when you receive a DMCA takedown notice for material that is technically not eligible for safe-harbor treatment, such as material you posted yourself. If it satisfies the complaining person that you take the material down, and you have no serious objection, you might want to do so.

A Specialized Question: What About Embedded Video?

It is becoming more and more common to embed videos from other online sources into an article or post in order to illustrate a point or get a laugh. This raises the question of whether you could be held liable for embedding an infringing video on your website or blog. The technical point to keep in mind is that an embedded video is just a link. So, there is no copy of the video being stored on your server, just the HTML code for the embed. Therefore, you may be able to claim the protection of the safe harbor found in 17 U.S.C. § 512(d), discussed above. For details see our blog post, Embedded Video and Copyright Infringement .

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Digital Millennium Copyright Act

Digital Millennium Copyright Act

It is our policy to respond to notices of alleged infringement that comply with the Digital Millennium Copyright Act (found at the U.S. Copyright Office) and other applicable intellectual property laws. It is our policy to remove material from public view that we believe in good faith to be copyrighted material that has been illegally copied and distributed by any of our members or users. It is also our policy to terminate the accounts of repeat offenders. If we remove or disable access to comply with the Digital Millennium Copyright Act we will make a good-faith attempt to contact the owner, author, or administrator of each affected site so that they may make a counter notification pursuant to sections 512(g)(2) and (3) of that Act.

Infringement Notification

If you believe that content residing on or accessible through our website infringes a copyright for which you own or are a designated agent, please send a notice of infringement by contacting us HERE with information that sets forth the items specified below.

To expedite our ability to process your request, please use the following format:

Title of the specific thread or article that contains the copyrighted work. Post number of the specific post that contains the copyrighted work. Link to the specific post (available via the “this post” link on each post) or article you believe contains the copyrighted material. Specific nature of the copyright infringement you believe is occurring. Details of your claim to the material, or your relationship to the material copyright holder. Provide your full name, address, and telephone number should we need to clarify your claim. Provide a working email address where we can contact you to confirm your claim. Include the following statement: “I have a good faith belief that use of the copyrighted materials described above on the allegedly infringing web pages is not authorized by the copyright owner, its agent, or the law.” Include the following statement: “I swear, under penalty of perjury, that the information in the notification is accurate and that I am the copyright owner or am authorized to act on behalf of the copyright owner to make this complaint.”

We will review your claim and determine its merit. If, after our review, we believe your claim is sufficient to remove the information from public view, we will do so immediately and provide you with confirmation. If your claim is insufficient to act upon, or, in our consideration the material has been posted with a good faith effort and compliant with the DMCA, we will notify you and provide you opportunity to clarify or seek additional remedy.