Among the many statutory goals of the Digital Millennium Copyright Act of 1998 (the "DMCA"),1a primary one was to broadly prevent the unauthorized distribution of copyrighted works in a manner that deprives copyright holders of compensation. In addition to addressing various other copyright issues, this legislation codified two "1996 World Intellectual Property Organization" treaties into U.S. law. While the breadth of the DMCA is wide, Viacom International Inc. v. YouTube Inc. (Case No. 07 Civ. 2103),2(referred to herein as " Viacom" ) dealt specifically with the applicability of Title II of the DMCA to the services provided by Google's YouTube®service.
Title II of the DMCA, known as the "Online Copyright Infringement Liability Limitation Act," adds Section 512 to the U.S. Copyright Code, which provides for four limitations on the liability of commercial online service providers for copyright infringement, namely liability based on: (a) transitory communications; (b) system caching; (c) storage of information on systems or networks at the direction of users; and (d) information location tools.3These new limitations operate as a complete bar to monetary recovery, as well as a limit on a plaintiff copyright holder's ability to obtain injunctive relief, against a DMCA compliant defendant. At issue in Viacom are the limitations on liability specified in Section 512(c), which bar recovery by a plaintiff asserting either copyright or contributory copyright infringement for infringing material placed on a defendant's website by a third-party user.
This liability limitation is available only to defendants who have complied with specific DMCA requirements. To gain the protection of the DMCA, and thus avoid all liability for the storage of copyright-protected information on a network, the service provider must: (1) not have actual knowledge of the infringement nor be aware of facts or circumstances from which the infringing activity is apparent; (2) where the service provider has the right and ability to control the infringing activity, not receive a financial benefit from that infringement; and (3) upon receiving notification of the existence of the infringement, respond expeditiously to remove or disable access to the infringing material.4
Additionally, the service provider must have designated an agent to receive notifications of claimed infringements, have registered that agent's contact information with the U.S. Copyright Office and have posted that agent's contact information on its website.5When the service provider receives notification from those claiming infringement, and that notice complies with specific statutory requirements,6the service must expeditiously block access to remove the infringing material. If the service provider does comply, it is immune from any liability under the U.S. Copyright Code by virtue of the DMCA's safe harbor provision.
Viacom v. YouTube: Just How Powerful Is This Shield?
On June 23, 2010 the federal district court for the Southern District of New York handed down its long-awaited decision in Viacom, handing content providers such as Viacom a major defeat - and service providers such as YouTube, and its parent company Google, Inc., a clear victory - with regard to the extent of service providers' liability for infringement by their users. The court determined that the §512(c) "safe harbor" provisions of the DMCA shield service providers, like YouTube® , against all direct and secondary infringement claims as well as contributory liability claims for the acts of their users. The court observed that the principles of §512(c) are clear and practical:
[I]f a service provider knows (from notice from the owner, or a "red flag") of specific instances of infringement, the provider must promptly remove the infringing material. If not, the burden is on the owner to identify the infringement. General knowledge that infringement is "ubiquitous" does not imply a duty on the service provider to monitor or search its service for infringements.
Viacom at page 10.
This reasoning is rooted in the belief that limiting the liability of service providers incentivizes them to continue to provide their services, and conversely, that expanding liability may cause Internet service providers to stop providing their services and grind the Internet to a halt. Very similar reasoning has guided the Federal Communications Commission's relatively "hands-off" approach towards the regulation of the Internet since its inception.
The Inner Workings Of Notice And Take-Down
From a service provider's perspective, there are three necessary elements that must be present if it wants to avail itself of the statutory protection of §512(c): (1) it must have designated an agent for service of notices of violation with the U.S. Copyright Office; (2) it must have received "notice" as specified by the DMCA; and (3) and it must promptly remove the infringing material once notified.
In Viacom the court held that the DMCA's notification procedure places the burden of policing copyright infringement squarely on the owners of the copyright and declined to shift this substantial burden to the service providers by requiring them to police their sites to determine which content is, and which content is not, infringing.7Therefore, a general description of infringing content is not sufficient notice to trigger a take-down requirement. To be effective, a notice must provide "information reasonably sufficient to permit the service provider to locate the material."8An example of such sufficient information would be a copy or description of the allegedly infringing material and the "uniform resource locator" (the URL, or website address), which allegedly contains the infringing material.9
Similarly the definition of "red flags" that would put a service provider on notice is extremely narrow. While the legislative history provides that, if a service provider, in the performance of its regular business, turns a blind eye to "red flags" such as "pirate" or "bootleg" directories, it would lose the protections of §512(c); this seems almost theoretical. If any degree of discretion or further investigation is necessary to determine whether content is infringing, then no "red flag" is raised. ( See Viacom at page 14.) ("[A]wareness of pervasive copyright-infringing, however flagrant and blatant, does not impose liability on the service provider. It furnishes at most a statistical estimate of the chance any particular posting is infringing - and that is not a 'red flag' marking any particular work.")
The court found that YouTube clearly complied with its requirement to act promptly once put on notice by removing over 100,000 infringing videos the very next business day after receiving notice from Viacom. See Viacom at pages 9, 11. The court further held that YouTube was under no obligation to police its site for other infringing works based on Viacom's argument that the list was "representative" of other infringing works. The court reasoned that the list was merely a "generic description" if it did not give the works' location on the site, and as such puts the onus on service providers to engage in a factual search in contravention of §512(m) of the DMCA.10
The Practical Applicability Of Viacom
In the wake of Viacom, it is clear that the DMCA provides a powerful shield to service providers. We now live in a world of social networking, hyper-linking and posting of digital content to various online websites. And frequently, these postings can contain copyright infringing materials.
Unless a service provider is on "actual notice" from the content provider sufficiently identifying specific infringing works - or in the alternative it confronts clear "red flags" as to the nature of the infringing content on its servers - it is under no duty to act. Once it has been put on notice, the service provider's only duty is to promptly remove that content, which has been specifically identified, but no further duty to locate other infringing work arises.
Any company that operates a website allowing third-party users to post their own content will always bear the risk that a third party would post some material that infringes another's copyright protections. In order to protect the company from copyright infringement liability, as general or outside counsel, you must institute a strict notice and take-down policy that complies with the provisions of 17 U.S.C. §512.
First, the service provider must designate an agent for receipt of infringement notifications. Second, you must post on the website, and register with the U.S. Copyright Office, the name, address, telephone number and email address of the designated agent. If and when the service provider receives compliant notices of the existence of infringing material on its website, it must quickly block access to or remove entirely from its services that instance of the infringing material.
Successful claims for copyright infringement can be extremely expensive to any client. The Copyright Code provides for statutory damages of up to $150,000 per incidence of infringing material, not to mention the costs associated with defending these claims. Where your client operates online services that permit third parties to post content, your clients can easily prevent such claims by taking these few simple prophylactic steps.
If, on the other hand, you serve as counsel to holders of copyright-protected material, you cannot advise your client to simply sue a website operator by virtue of the protected material appearing on that website. Instead, first verify that the operator has designated an agent for receipt of these notifications and send a compliant and specific notification. Only consider suit for infringement if the service provider fails to block access to or remove entirely your client's protected content after it has received notice, or if it failed to designate an agent for the service of that notice. 1 Pub.L. 105-304 - Oct. 28, 1998.
2 -F.Supp.2d-,2010 WL 2532404 (S.D.N.Y.2010).
3 17 U.S.C. §512 (a) through (d).
4 17 U.S.C. §512(c)(1).
5 17 U.S.C. §512(c)(2).
6See generally 17 U.S.C. §512(c)(3).
7Viacom at pgs. *8-9, citing Perfect 10 , Inc. v. CCBill LLC , 488 F.3d 1102, 1113 (9th Cir.2007).
8 17 U.S.C. §512(c)(3)(A)(iii).
9Viacom at pg. *14, citingUMG Recordings, Inc. v. Veoh Networks, Inc., 665 F.Supp.2d 1099, 1109-10 (C.D.Cal. 2009).
10See Viacom at pg. *14.
Alexander Malyshev is an Associate in the litigation department of Stern & Kilcullen LLC in Roseland, NJ. He may be reached at (973) 535-1900. Daniel J. Margolis is an Associate in the Communications, Media and Information Technology practice group of Garvey Schubert Barer in Washington, DC. He can be reached at (202) 298-2179.