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Online Service Providers: Are You Protected From Copyright Infringement Liability Arising From the Acts of Your Users?

Wednesday, October 08, 2008

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Online service providers are especially vulnerable to claims of copyright infringement where users have access to upload or post infringing text, graphics or other copyrighted materials without the service providers' knowledge. Users who copy, distribute, modify or display copyrighted material without permission from the copyright owner are in violation of U.S. copyright laws. By hosting or storing unauthorized copyrighted material uploaded or posted by their users, service providers may also be in violation of those laws. Lack of knowledge that the copyrighted material uploaded or posted is infringing is not a defense to an infringement claim. As a result, service providers are often subject to liability for monetary damages and/or injunctive remedies for acts of copyright infringement committed by their users. By complying with the safe harbor provisions provided in the Digital Millennium Copyright Act of 1998 (the "DMCA"), however, service providers may protect themselves against such liability.

The DMCA provides five safe harbor provisions limiting the liability of online service providers for online copyright infringement emanating out of the conduct of those using their networks. Extending the safe harbors to direct, vicarious and contributory theories of liability for copyright infringement, the DMCA bars monetary damages and limits the availability and scope of injunctive relief for copyright infringement caused by third parties, as long as the service provider does not know about the infringement, does not participate in the infringement and acts in good faith.

In order to enjoy the benefits of the limitations on liability, an entity must qualify as a "service provider" under the terms of the DMCA. The mere fact that an entity designates itself as a service provider, as the term has come to be defined in the technological community, is not enough; that entity must still meet the definition of "service provider" of the DMCA. The DMCA defines "service provider" in two different ways, each applicable to different safe harbors: (i) as "a provider of online services or network access, or the operator of facilities therefore" and (ii) as "an entity offering the transmission, routing, or providing of connections for digital online communications, between or among points specified by a user, of material of the user's choosing, without modifications to the content of the material as sent of received."

Additionally, the DMCA imposes several threshold requirements, and other specified obligations, with which a service provider must comply before it will be protected from copyright infringement liability under any of the DMCA's safe harbors. Service providers that fail to implement the outlined procedures and comply with the requirements and obligations of the DMCA will be unable to benefit from the DMCA's safe harbor provisions. Such requirements and obligations vary somewhat based on the nature of the services provided.

With regard to an online service provider whose services allow users to store at their direction materials on a system or network controlled or operated by or for the service provider (e.g., web hosting or chat room services), the service provider must take the following steps before it will be protected from copyright infringement liability under the DMCA.

Designate a person to act as the agent for the service provider. The agent will be responsible for receiving and sending notices regarding copyright infringement. The agent's name and address must be posted on the service provider's web site.

Advise the U.S. Copyright Office of the agent's name and address. The form filed must be clearly titled "INTERIM DESIGNATION OF AGENT TO RECEIVE NOTIFICATION OF CLAIMED INFRINGEMENT" and must be accompanied by the required $80 filing fee, made payable to the Register of Copyrights -

Develop and post on the service provider's web site a policy for termination of the accounts of repeat copyright infringers.

Comply with "take down" notices. When the agent receives notice that there is infringing copyrighted material on the web site, the service provider must expeditiously remove or disable access to the material that is claimed to be infringing or to be the subject of infringing activity. A notice, however, must meet very specific requirements in order to obligate the service provider to act upon it. At the very least, the "take down" notice must: (i) be in writing; (ii) identify the work by title and specify what material in the work violates copyright; (iii) specifically request that the material be taken down; (iv) state in good faith the belief that the material is used in an unauthorized manner; (v) be filed by the copyright owner or a person authorized to act on the owner's behalf; (vi) provide information to locate the complaining party, such as phone and fax numbers; and (vii) be signed electronically or physically.

Comply with "put back" notices. If the agent receives a counter notice to "put back" the material it must be done only if specific requirements are met. At the very least, the counter notice must: (i) be in writing; (ii) specify the location where the material used to appear; (iii) specifically request that the material be put back; (iv) state in good faith that the material was taken down by mistake or misidentified; (iv) be filed by the person who posted the material or their agent; (vi) provide information to locate the party issuing the notice, such as phone and fax numbers; and (vii) be signed electronically or physically. Assuming the receipt of an appropriate "put back" notice, the service provider must "put back" the material and send notice to the complaining party within 10 to 14 business days of receipt of the notice, unless the service provider has received notice that the copyright owner has filed a suit in federal district court.

Ensure that the service provider's network or system accommodates and does not interfere with standard technical measures adopted and used by copyright owners to identify their works or protect them from unlawful access and copyright infringement. Such measures might include, for example, digital watermarks or technological means for preventing copying of a work.

Notwithstanding compliance with the foregoing, however, a service provider may not take advantage of the DMCA's safe harbor provisions if the service provider: (i) has actual knowledge that the material or an activity using the material on the system or network is infringing; (ii) is aware of facts or circumstances from which infringing activity is apparent; or (iii) does not expeditiously remove or disable access to the material upon obtaining such knowledge or awareness of the infringing material.  In addition, in order to be protected by the DMCA, the service provider must not receive a financial benefit that is directly attributable to the infringing activity if the service provider has the right and ability to control such activity.

This article is intended to serve as a summary of the issues outlined herein. While it may include some general guidance, it is not intended as, nor is it a substitute for, legal advice. Your receipt of Good Company or any of its individual articles does not create an attorney-client relationship between you and Sheehan Phinney Bass + Green or the Sheehan Phinney Capitol Group. The opinions expressed in Good Company are those of the authors of the specific articles.