Over the last couple of months, we’ve seen some interesting cases (e.g., Veoh and Scribd) crop up where parties claimed the “safeharbor immunity” of the Digital Millennium Copyright Act’s (DMCA) section 512. This seemed like the perfect time to give you a rundown on section 512 and its application to User Generated Content (UGC) websites.
So, grab a cup of coffee or your favorite beverage, sit back, and prepare to dive into an abyss of procedural nuance and murky definitions!
(Prefatory note: This is NOT a comprehensive analysis of all section 512 issues. So please don’t treat this as a guide or an authority on this area of law, as it includes as much opinion as it does statutory language. As always, this is NOT intended to be advice. If you think you have legal problem consult with an attorney and DO NOT rely on the information here.)
THE BASICS OF 17 U.S.C. §512 and §512(c)(1)
DMCA §512 has multiple parts that limit liability of service providers for infringement of online content. The main provisos that apply to the hosting and storage of UGC on a website including §§ 512(c), 512 (g), 512(i), and 512(k). Each of these sections imposes requirements on online service providers in order to qualify for a limitation of liability. §512(c) sets forth the basic components of the limitation of liability, 512(g) gives us the “notice and takedown” procedures and counter notification process, 512(i) imposes some additional requirements on website service providers to create policies to inform and handle users of site DMCA procedures, and 512(k) is chock full of useful definitions.
The language that provides the teeth of the safeharbor is found in §512(c)(1)which states:
(c) Information Residing on Systems or Networks At Direction of Users.—
(1) In general.— A service provider shall not be liable for monetary relief, or, except as provided in subsection (j), for injunctive or other equitable relief, for infringement of copyright by reason of the storage at the direction of a user of material that resides on a system or network controlled or operated by or for the service provider, if the service provider—
(i) does not have actual knowledge that the material or an activity using the material on the system or network is infringing;
(ii) in the absence of such actual knowledge, is not aware of facts or circumstances from which infringing activity is apparent; or
(iii) upon obtaining such knowledge or awareness, acts expeditiously to remove, or disable access to, the material;
(B) does not receive a financial benefit directly attributable to the infringing activity, in a case in which the service provider has the right and ability to control such activity; and
(C) upon notification of claimed infringement as described in paragraph (3), responds expeditiously to remove, or disable access to, the material that is claimed to be infringing or to be the subject of infringing activity.
§512(c)(1) is a mouthful. More concisely stated, if you qualify as a “service provider” (as is defined under section 512(k)), you are immune from liability as long as you do not have “actual knowledge” of infringing material or infringing activity on your network, OR, if you are not aware of apparent facts or circumstances which would give inference to the presence of infringing materials or activity, OR, if you do become aware, you act “expeditiously to remove or disable access to the material.” Note that in addition to 512(c)(1)(A)(i),(ii), and (iii), requirements under (B), no financial benefits from infringing activity, and (C), takedown request compliance, will also need to be satisfied for the safeharbor to apply to a service provider (Sidenote– if you are wondering why this is, or have no experience with interpreting statutory construction, use of the word “;and” following (B) as well as the hierarchy of (A), (B) and (C) read together accomplish this.).
The definition of “service provider” is found separately in §512(k)(1)(A) and (B) and means “a provider of online services or network access, or the operator of facilities therefor, and includes [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 modification to the content of the material as sent or received].” As the statute is worded, many entities can qualify as a “service provider” for immunity, as long as the other criteria in §512(c)(1) is satisfied. This broad definition allows websites like YouTube and Veoh to potentially qualify for protection, as well as ISPs and other network conduits that send infringing packets between routers.
A separate section, §512(i), adds additional conditions. It’s labeled “conditions for eligibility” and sets forth some requirements to be eligible for liability immunity under all of section 512. §512(i) requires a service provider must have “adopted and reasonably implemented,” a “policy that provides for the termination in appropriate circumstances of subscribers and account holders of the service provider’s system or network who are repeat infringers; and accommodates and does not interfere with standard technical measures.” That phrase “standard technical measures” goes on to be defined as “technical measures that are used by copyright owners to identify or protect copyrighted works and– have been developed pursuant to a broad consensus of copyright owners and service providers in an open, fair, voluntary, multi-industry standards process; are available to any person on reasonable and nondiscriminatory terms; and do not impose substantial costs on service providers or substantial burdens on their systems or networks.”
§512(i) is a little more clearly worded than some of the other portions of §512. Just as the language reads, a service provider needs to have implemented a policy and system for notifying users of policies and identifying and terminating repeat infringer accounts. YouTube has some great examples of how they appear to have implemented these requirements, see YouTube’s Terms of Service, Content Management, DMCA Notification pages.
Provided that the requirements are met, the effect of §512(c) is that a website will not be held liable for an infringement of online content which is being hosted at the direction of a user. Prior to 1998, the year the DMCA was enacted, websites that hosted content at the direction of users were at risk for lawsuits based on the legal theory of contributory infringement. This form of liability arises when at least 2 parties are involved– a “direct” infringer who is actually violating the copyright, and the contributory infringer, who has (i) knowledge of the infringing activity and (ii) some form of material contribution to the infringement, either through assisting the direct infringer or inducing infringement. In some early cases, the mere inference that some infringing activity was afoot or that the service was being used to facilitate acts of copyright infringement were enough for courts to find a service provider liable. Even though the website was merely hosting a service and data, they could still find themselves embroiled in costly lawsuits even though they did not intend to participate in infringing activity. This would have chilled innovation in this market chasm if the DMCA hadn’t been enacted. Interestingly, during the legislative process of promulgating the DMCA, the concept of Web 2.0 was hardly as developed as it is today– so it’s hard to imagine the legislators envisioned the safehabor would be applied as it is today. Nonetheless, it has played an absolutely critical role to ensure the continuation of similar innovations.
Note, however, that there are gray areas in the broad statutory language that is used. For example, at what point does a service provider who is manipulating third-party content lose immunity because they are inserting or pre-rolling advertisements into user videos? What is a financial benefit “directly attributable to the infringing activity”? Some of these provisions are particularly troubling to website owners as there isn’t always a clear answer. Moreover, certain groups of plaintiffs have an interest in ensuring the safeharbor is not broadly applied to new web services that become new conduits for hosting infringing materials. Case law has provided some guidance, but often these decisions are highly fact dependent to the case at issue, leaving the application of immunity obfuscated and subject to well-developed technical arguments that simply aren’t addressed in the statutory language.
NOTICE AND TAKE DOWNS, §512(c)(3)
§512 has spawned what we’ve come to know as the “notice and take down” system for UGC websites like Veoh, YouTube, and Scribd. If a lawful content owner finds his protected works being infringed on one of these websites, section §512 provides a remedy for the “expeditious” removal of the offending material. The take down notice requirements are laid out in section 512(c)(3):
(c) . . . .
(3) Elements of notification.—
(A) To be effective under this subsection, a notification of claimed infringement must be a written communication provided to the designated agent of a service provider that includes substantially the following:
(i) A physical or electronic signature of a person authorized to act on behalf of the owner of an exclusive right that is allegedly infringed.
(ii) Identification of the copyrighted work claimed to have been infringed, or, if multiple copyrighted works at a single online site are covered by a single notification, a representative list of such works at that site.
(iii) Identification of the material that is claimed to be infringing or to be the subject of infringing activity and that is to be removed or access to which is to be disabled, and information reasonably sufficient to permit the service provider to locate the material.
(iv) Information reasonably sufficient to permit the service provider to contact the complaining party, such as an address, telephone number, and, if available, an electronic mail address at which the complaining party may be contacted.
(v) A statement that the complaining party has a good faith belief that use of the material in the manner complained of is not authorized by the copyright owner, its agent, or the law.
(vi) A statement that the information in the notification is accurate, and under penalty of perjury, that the complaining party is authorized to act on behalf of the owner of an exclusive right that is allegedly infringed.
So, assuming a proper notice is sent to the correct “Designated Agent” of a service provider, the service provider must “act expeditiously” to “remove, or disable access to, the material.” If the service provider complies with the take down procedure, they will be able to enjoy immunity from liability of copyright infringement under 512(c)(A)(iii). This is why we see those wonderful notices on websites like YouTube such as “This video contains an audio track that has not been authorized by UMG. The audio has been disabled.” or “This video is no longer available due to a claim of ownership by UMG.”
COUNTER NOTICE AND PUT BACK PROCEDURES FOR UPLOADERS, §512(g)(3)
If you are a third-party user of an online service whose uploaded content was removed by the service provider, you are not without recourse if you have a “good faith” belief that the uploaded content does not infringe as suggested by the copyright holder. §512(g)(3) lays out the requirements for a counter notification:
(g) . . . .
(3) Contents of counter notification.— To be effective under this subsection, a counter notification must be a written communication provided to the service provider’s designated agent that includes substantially the following:
(A) A physical or electronic signature of the subscriber.
(B) Identification of the material that has been removed or to which access has been disabled and the location at which the material appeared before it was removed or access to it was disabled.
(C) A statement under penalty of perjury that the subscriber has a good faith belief that the material was removed or disabled as a result of mistake or misidentification of the material to be removed or disabled.
(D) The subscriber’s name, address, and telephone number, and a statement that the subscriber consents to the jurisdiction of Federal District Court for the judicial district in which the address is located, or if the subscriber’s address is outside of the United States, for any judicial district in which the service provider may be found, and that the subscriber will accept service of process from the person who provided notification under subsection (c)(1)(C) or an agent of such person.
After a notice is received by the service provider, the material may be replaced on the site without subject the service provider to further liability. The essential effect of the counter-notice is that the third-party user acknowledges the claim of infringement and individually bears the liability from that point forward. Once the counter notice is received by the service provider, they must wait 10-14 days to see if a lawsuit is filed. If no suit is filed, the material can be put back onto the website.
An interesting point of contention is whether a claim of “fair use” suffices the “mistake or misidentification” requirement under 512(g)(3)(C). The answer is yes, probably. This comes with a huge caveat: fair use is a defense to copyright infringement, not an inalienable or affirmative right, and, whether something qualifies as a fair use is by no means black and white. The only true way to determine whether something qualifies as a fair use is a judicial determination in the course of litigation. This hinges on the four factors set forth under 17 U.S.C. §107. Even then, you could be looking at an extended period of litigation (as well as the associated costs!) that is subject to appeal before you have a finalized determination.
The characterization of fair use as a defense, rather than an affirmative right, underscores the opposing argument against allowing a fair use counter notice– if it’s not a right immediately conferred to a third party, then it cannot be grounds for “mistake” in a take down notice. Due to the inherent ambiguity in pre-litigation fair use determinations, a person considering using such a counter-notice should understand the full implications before using one. That said, there may be certain scenarios where the fair use claim is so strong that a copyright holder might not be willing to test it in court. An interesting example from several years back which involved Wendy Seltzer (a friend and former law professor of mine) and a notorious NFL clip on YouTube that grabbed headlines for a period of time.
Some of the copyright research and public advocacy organizations (See e.g., the EFF, Citizen Media Law Project, and Chilling Effects) acknowledge fair use to be grounds for counter notices, but simultaneously caution against using such grounds without the advice of an intellectual property attorney. Indeed, this is advice well heeded.
WHERE’S THE BEEF?: FINAL THOUGHTS
A quick reading of 512 might make the purposes of the section appear clear; however, the application of the safehabor is mired in shades of imprecise phrasing– perhaps even intentionally as is often done in legislative drafts. If your brow is wrinkled after reading the statutory language, you are definitely not alone.
Certain phrases or words have become key points of litigation. For instance, the latest UMG v. Veoh case, where UMG attempted to argue that meant that because Veoh’s web service was frequently used for infringing uploads, UMG (or the RIAA) did not have to send individual notices per infringement. This argument compounded the phrasing of the notice requirements under 512(c)(3) and the ambiguity of the phrase “facts or circumstances from which infringing activity is apparent” in 512(c)(1)(A)(ii). Also argued in the same case was whether the “reasonable technical measures” described in 512(i)(1)(B) and 512(i)(2) and consequential imputation of “actual knowledge” under 512(c)(1)(A)(iii) would require a putative service provider to enable the best technology available to identify repeat infringers and other filter infringing content. The court in UMG v. Veoh disagreed with these readings, and held that compliance with the notice and take downs and other requirements was sufficient to grant immunity to Veoh. We will have to wait and see the reaction from other jurisdictions and whether this issue continues to be challenged by copyright owners.
The above points only represent a smattering of the problems when interpreting the 512 safeharbor. Some other questions you might ask yourself include: “What is an ‘expeditious’ removal of material? Two hours? Four days?”; “Does my online activity qualify as a ‘Service Provider’ under 512(k)?”; “What if the material alleged in a take down notice may qualify as a ‘fair use’?”; “What if it’s unclear that the material alleged in a take down notice is even protectable as ‘copyrightable subject matter’?”‘; “Where is the exact point ‘actual knowledge’ get imputed onto service providers?”
Many of these questions are not well defined under section 512. Various jurisdictions have also provided some guidance in case law, although some splits in opinion still exist as a result of quirky facts, clever arguments, and unclear meaning. Even so, the facial ambiguity of §512, like many areas of codified law, is not without purpose. If the drafters of §512 made the statutory language more precise the law would not be well adapted to changes in technology paradigms or trends in UGC websites. To some extent, we do want to rely on the ability of the parties and judges to clarify the imprecision to ensure a proper application of the underlying purposes of §512.
That should cover the tip of the DMCA safeharbor iceburg! I can feel my co-bloggers cringing at the thought of such a long post. As I noted before, this wasn’t mean to cover everything; but, hopefully it brings to light some of the nuances and functionality of the statute. Hopefully in the near future we can dive into the case law that actually interprets some of the more murky provisions in section 512!
Comments Off Posted in: Commentary on October 9, 2009