On October 28, 1998, new laws went into effect governing copyright liability for online service providers (traditionally referred to as ISPs and referred to in this Bulletin as a "Service Provider" or "SP" in conformance with the statute). Title II of the DMCA provides protection from monetary liability, and in most instances injunctive relief, based on copyright infringement, for various types of Internet activities, including transmitting, caching, hosting or linking to other sites. The definition of an SP is broad and can protect any entity that provides online access.1
For each type of potentially infringing activity, the statute sets forth conditions under which the SP can gain immunity from liability for copyright infringement. Thus, provisions governing transitory communications, caching, web hosting and linking each have different conditions, and in some cases, different affirmative requirements, in order for the SP to take advantage of the applicable safe harbor provision. For example, as discussed further below, the section covering web hosting, "Information Stored at the User's Direction" requires the SP to (a) designate an individual responsible for receiving complaints, (b)publicly publish such information on its web site, and (c) file such information with The Copyright Office.
In addition, in order to take advantage of any provision under the statute, the SP must have in place a policy that provides for termination of account holders who are repeat offenders. The DMCA also requires the SP to accommodate "standard technical measures" used to identify and protect copyrighted works. In order to encompass future innovations, these standards are loosely defined as technical measures that are developed by a broad consensus of copyright owners and service providers in an "open, fair, voluntary, multi-industry standards process," are available to anyone, and do not impose substantial costs on service providers or substantial burdens on their systems.
The individual safe harbor provisions are discussed separately below.
Transitory Digital Network Communications: Section 512(a) is intended to remove the possibility of direct infringement liability for automatic copies made in connection with the mere transmission of information (such as routing packets or Usenet postings). A service provider is not liable for monetary damages or, in general, subject to injunctive relief, based on the content of routine Internet communications under the DMCA. However, the following conditions must be met: The communications must be initiated by someone other than the SP. The transmission, routing, connections or storage of material must be carried out through an "automatic technical process," that is, the SP may not select the material to be transmitted, or modify the material. The SP may not select the recipients of the material (except as an automatic response to another's request). Finally, the SP may not maintain a copy of the material except as needed for the intended recipients or for a period longer than is reasonably necessary for the transmission, routing, or provision of connections. As set forth in the Judiciary Committee report to the House of Representatives, this subsection is intended to codify the result in Religious Technology Center v. NETCOM On-Line Communication Services, Inc., 907 F. Supp. 1361 (N.D. Cal. 1995) (a decision successfully obtained on behalf of NETCOM by Pillsbury Madison & Sutro LLP) with respect to liability of service providers for direct infringement.
Section 512(a) relates to copies made in connection with the transmission of material only. The practices of storing newsgroup and other information for short periods of time in order to allow intended recipients to access that material, or caching to improve system performance, are covered in the sections below.
System Caching: Section 512(b) protects SPs from liability for copyright infringement based on "intermediate and temporary storage of material on a system or network," for example, material stored on the system server so that it can be accessed more quickly by the user. However, the protection from liability applies only if (a) the material is made available online by a person other than the SP, (b) the material is accessed by someone other than the person putting the material online and (c) the storage is carried out through an "automatic technical process for the purpose of making the material available to users of such system or network." There are further detailed requirements for the availability of this exception. These include the requirements that the SP cannot modify the content of the posting or material, must refresh, reload or update the material in accordance with generally accepted industry standard data communications protocol, must not interfere with the operator of the original site to obtain "hit" counts, and must comply with rules on updating the cached material that are specified by the originator of the material.
In addition, the SP must "respond expeditiously" to remove or disable access to material that is the subject of a complaint, but only if the material has been removed from the originating site or a court has ordered it to be removed from the originating site (removal absent such an order would be futile, since the material would automatically be recopied onto the SP's server, or re-cached, from the originating site.)
Information Stored at the User's Direction and Information Location Tools: Sections 512(c) and (d) are intended to protect the SP from liability for content supplied by the user or customer, such as a customer web site, and for the linking of users to other locations online, respectively. While separately set forth in the DMCA, the requirements for the protection of the statute for both types of activity are similar, and therefore the respective requirements are discussed together here. The SP is not liable for the content of stored material, such as a customer web site, or for linking a user to a location containing infringing material, unless (a) the SP knows or should know the material is infringing, (b) the SP receives information that the material is infringing and fails to remove or disable access to it, (c) the SP obtains a financial benefit "directly attributable" to the infringing activity and has the right and ability to control the activity (the legislative history makes clear that a set-up fee and flat monthly fee or use-based charge do not constitute such a financial benefit), or (d) the SP fails to take action after receiving notification of a claimed infringement. Subsection (c) also requires the SP to take affirmative steps to publicize where a complainant should send a complaint in order to notify the SP of a dispute. These immunity provisions apply only if the SP has (a) designated an agent to receive notification of claimed infringement, (b) published that information publicly on its web site and (c) provided the same information to the United States Copyright Office. The Copyright Office has issued interim regulations regarding the form of such information. While the Copyright Office hasn't mandated a set form at the time of this publication, the interim regulations require the full name and address of the SP, the name of the agent that will receive notices for the SP, and the fax, telephone, and email of the agent. The form must be signed by an officer of the SP making the filing.
In addition to the above requirements, the SP must respond to notifications of complaints in order to take advantage of the limitations on liability for subsections (c) and (d). The statute specifies six items of information that must be included in such a complaint. However, if the complainant provides only the following three items of information, the statute imposes an obligation on the SP to follow up on the complaint in order to attempt to obtain complete notification. These three items are: identification of the copyrighted work at issue, identification of the allegedly infringing material, or link, and contact information for the complaining party. Fewer items would not be considered notice under the statute. However, a significant policy underlying the DMCA is the encouragement of voluntary cooperation between SPs and copyright complainants, and courts may look to that policy in construing the law. Thus, SPs should review complaints carefully. This is particularly so, since, as discussed below, the statute provides immunity from liability for removing material which is the subject of a complaint.
Good Faith Take-Down and Put Back Provisions: The DMCA protects the SP from liability for a good faith take-down of information, based on receipt of the information contained in the proceeding paragraph. However, in order to claim such exemption from liability, the SP must notify the subscriber or customer in question. In addition, the SP must follow the statutory "counter notification" procedure. That procedure allows a subscriber to refute an allegation of infringement by providing the SP with certain specified information, including identification of the material that has been removed, a statement under penalty of perjury that the removal was improper, the subscriber's contact information, and the subscriber's consent to jurisdiction in a federal court in the United States. If the SP receives a counter notification, the SP must notify the original complainant both of the counter notification and that the SP intends to replace or cease disabling access to the material within ten to fourteen days. The SP must replace the material to avoid liability for the original take-down. However, the SP is sheltered from liability for re-posting based on receipt of a counter notification.
While the SP is not required to monitor the content on its systems, the SP cannot fail to act when presented with a "red flag" that certain material is highly likely to be infringing. Failure to qualify for the protection of the DMCA does not result in automatic liability for the SP. In that instance, liability would be determined under traditional copyright principles.2
For questions about the DMCA, please contact our office. We would be pleased to assist you.
Endnotes
1 For purposes of transitory digital network communications, a service provider is defined as an entity that offers "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." For all other purposes, a service provider is defined as "a provider of online services or network access, or the operator of facilities therefore, and includes an entity described [above]." The narrower definition applicable to the subsection dealing with transitory digital communications reinforces the intention that the subsection apply only to such activity. The broader definition may extend to a broad range of actors involved with the Internet.
2 The DMCA Title II also covers a few subjects not discussed here, for example, the statute provides a streamlined procedure for obtaining information concerning anonymous or pseudonymous postings, as well as provisions relating to the interaction of the statute with electronic information privacy laws.