By David Snead
This article appears in the August 2005 issue of Web Host Industry Review magazine. Click here for a free subscription.
August 3, 2005 — (WEB HOST INDUSTRY REVIEW) — The Digital Millennium Copyright Act established procedures to mitigate or even eliminate liability for copyright infringement initiated by your customers (third party liability). In three relatively simple steps, hosts can bring their potential liability down from the hundreds of thousands to next to zero.
The most surprising discovery I’ve made when talking to hosts, is that fully half have not taken steps to qualify under the DMCA’s “safe harbor.” Associations representing the recording, motion picture, and software industries have been ruthless in their pursuit of copyright infringers. Given the Supreme Court’s decision in favor of MGM over peer-to-peer technology operator Grokster, hosts that do not follow the procedures set out in the DMCA are at greater risk than ever before.
Step One Designate a Copyright Agent
The DMCA requires that you designate an individual to receive notifications from copyright holders alleging that your customers are engaged in copyright infringement. The Copyright Office maintains this list of designated agents. All you need to do is fill out the “Interim Notice of Designated Agent,” designate an employee or other individual to handle copyright infringement notices and pay a $30 fee.
Step Two Draft a DMCA Policy
The DMCA requires that you draft and implement a policy. But beyond that draft, it is critical that you respond to the notices you may receive. Under the DMCA you will receive, and be required to analyze and respond to, the initial notice, possible counter notices, injunctions and “repeat infringer” notices.
Your policy itself might include: a checklist of the six elements set out in the DMCA that are to be included in the copyright holder’s DMCA Notice, and a discussion of which of these are “required”; the steps you take to notify your customer of the DMCA notice, the time period your customer has to present you with a “counter notice” and how and when a site will be disabled; a checklist of the four DMCA-required elements to be included in your customer’s “counter notice,” and a discussion of which of these are “required”; the steps you take to notify the copyright holder of the counter notice; your method for responding to a notice that the copyright holder has procured an injunction prohibiting you from providing access to the allegedly infringing material, and the steps the DMCA requires you to take when you receive that notice; your method for organizing your records so that you document receipt of DMCA notices, counter notices and injunctions, and how you will determine whether a particular customer is a “repeat infringer”; and form letters you send to copyright holders and customers.
Step Three Publicize DMCA compliance
Finally, the DMCA requires that you identify your DMCA agent, and set out the steps that a copyright holder must follow to present you with a DMCA notice. Most hosts do so in their AUP or TOS. Some hosts simply include a link to the text of the DMCA itself. However, that route will likely create more work for you and your staff, since you will be required to send letters informing copyright holders when their DMCA notices are defective, and the ways in which they are defective.
MGM v. Grokster
In a widely-reported story, MGM and other copyright holders sued peer-to-peer file sharing software makers Grokster and StreamCast, alleging that they were liable for their users copyright infringement. The US Court of Appeals for the 9th Circuit held that because the Grokster and StreamCast devices could be used for non-infringing purposes, the companies could not be held liable for their users’ infringing acts. The Supreme Court
reversed that decision.In a strongly worded opinion, Justice Souter, writing for a unanimous Court, set the following standard for determining third-party liability: an entity that distributes a device capable of copyright infringement, and such infringement is either the express purpose of the device, or evidence shows that the distributor took affirmative steps to encourage such a use, can be held liable for the resulting infringement. The court discounted Grokster and StreamCast’s arguments that they had no idea what was going on their networks.
The key, it seems, is that a copyright holder must demonstrate the third party did more than merely provide services that enabled copyright infringement. This means that when you receive notice of alleged infringement, you must take steps to respond to the notice and investigate the facts. More importantly, it means that you should not market yourself, or design your service in such a way as to induce copyright infringement. Of course, the easiest way to avoid most liability for copyright infringement is to follow the safe harbor provisions set out in the DMCA.
