The Digital Millennium Copyright Act: Basics and Issues

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1 The Digital Millennium Copyright Act: Basics and Issues Lesley McCall Grossberg, BakerHostetler 2015 Lesley McCall Grossberg 2 Purpose & Overview Amends Copyright Act of 1976 Implements WIPO Copyright Treaty and WIPO Performances and Phonograms Treaty Makes copyright enforcement on the Internet easier Criminalizes unauthorized distribution and circumvention of digital rights management (DRM) Limits liability of internet services providers (ISPs) 1

2 3 Breakdown of the Act Title I WIPO Copyright and Performances and Phonograms Treaties Implementation Act of 1998 Title II Online Copyright Infringement Liability Limitation Act Title III Computer Maintenance Competition Assurance Act Title IV Miscellaneous Provisions Title V Vessel Hull Design Protection Act 4 Legislative History Lawmakers sought to develop a standard for determining when ISPs should be held liable, and when they should be exonerated. ISPs proposed the notice and takedown scheme. Copyright owners rejected the idea, arguing it was a formality barred under the Berne Convention Even after this scheme was adopted, there is still criticism from copyright owners that they have an endless task of identifying infringement and sending notifications. Some have proposed a notice and stay down scheme See Nimmer 12B.01 [B] 2

3 5 Legislative History In overarching structure, [17 USC] Section 512 preserves strong incentives for service providers and copyright owners to cooperate to detect and deal with copyright infringements that take place in the digital networked environment. At the same time, it provides greater certainty to service providers concerning their legal exposure for infringements that may occur in the course of their activities. See Nimmer 12B.01 [C] 6 Safe Harbor Provisions 17 USC 512 Apply to Online Services Providers (OSPs) and Internet Service Providers (ISPs) Limitations on Liability for Infringement: Transitory communications 512(a) System caching 512(b) Storage of information on systems/networks at user direction 512(c) Information location tools 512(d) 3

4 7 Closer Look 512(c) Safe harbor provision for storage of infringing material No liability for direct or contributory infringement if: OSP or ISP lacks knowledge of infringing activity or circumstances (i.e., has not received a takedown notice, and is otherwise unaware of facts or circumstances from which infringing activity is apparent); OSP or ISP does not receive a direct financial benefit from the infringing activity; and OSP or ISP acts expeditiously to remove or disable access to purportedly infringing material upon receiving notice from copyright owner of infringement 8 Eligibility Requirements 512(i) Eligibility requirements of OSPs and ISPs for the safe harbor protections: Adopt and reasonable implement a policy of terminating the accounts of subscribers who are repeat infringers; and Accommodate and do not interfere with standard technical measures taken by copyright owners to identify and protect their works 4

5 9 Viacom Int l, Inc. v. YouTube, Inc., 676 F.3d 19 (2d Cir. 2012) Reviewed the contours of the DMCA safe harbor provisions in the context of an infringement suit brought by copyright owners against YouTube and Google ISP must have actual knowledge or awareness of specific infringing material or activity (interpreting 512(c)(1)) to be disqualified from the safe harbor provisions Doctrine of willful blindness may be applied in certain circumstances to show knowledge or awareness. However, ISPs do not have an affirmative duty to monitor 10 Notice & Takedown Process - 512(c) Notice Removal Counter-Notice 5

6 11 Step #1 Notification Copyright owner/agent must give notice to ISP s designated agent of infringing material or activity Notice must be written, identify copyrighted work, identify allegedly infringing work, include statement that owner has a good faith belief use is not authorized by the owner/agent/law, and include owner/agent contact info and signature Notice must state 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 the infringed right All elements of notice must be present in a single communication. Perfect 10, Inc. v. CCBill LLC, 488 F.3d 1102 (9th Cir. 2007) US Copyright Office maintains a list of designated agents at 12 Step #2 Removal Upon receiving notice, the ISP must promptly remove or disable access to the infringing material or activity 6

7 13 Step #3 Counter-Notification Subscriber may give notice to ISP s designated agent if they believe material was mistakenly removed or disabled ( 512(g)) Notice must be written, identify the material removed/disabled, location where material was, include good faith belief statement under penalty of perjury, and subscriber s contact info and signature Notice must include a statement of consent to the jurisdiction of the federal district court for the judicial district in which the subscriber resides If counter-notification is valid, ISP notifies copyright owner that the material will be restored in business days, unless ISP receives notice that copyright owner has filed suit seeking to enjoin the alleged infringement. If copyright owner does not file infringement lawsuit, ISP may restore the material at issue ( 512(g)(2)) 14 Misrepresentations - 512(f) If any person knowingly and materially misrepresents that material or activity is infringing or that material or activity was removed or disabled by mistake or misidentification, they are liable for damages, including costs and attorney s fees, that result from the ISP relying on such misrepresentation ( 512(f)) But ISPs themselves will not be held liable for takedowns, regardless of whether the activity or material is ultimately determined to be infringing ( 512(g)(1)) Note actual damages resulting from the takedown, particularly where the material in question was restored after a counter-notification, will often be nominal. Provision allowing recovery of attorney s fees is more significant. Lack of damages not a basis for dismissal of 512(f) claim 7

8 15 Fair Use Issues Does a copyright owner/agent have to conduct a fair use evaluation prior to sending takedown notice? Lenz v. Universal Music Corp., 2015 WL (9th Cir. Sept. 14, 2015) Lenz posted 29-second video on YouTube of her son dancing to Prince song Let s Go Crazy Copyright holder Universal sent takedown notice to YouTube YouTube removed the video Lenz sent a counter-notification YouTube restored the video Lenz brought suit under 512 (f) misrepresentations, asserting that Universal misrepresented that her use of the song was unauthorized because Universal had not evaluated whether the video constituted fair use Universal argued fair use is an affirmative defense, and thus not relevant to whether Lenz s use was unauthorized 16 8

9 17 Lenz v. Universal Music Ninth Circuit rejected Universal s argument [W]e hold for purposes of the DMCA fair use is uniquely situated in copyright law so as to be treated differently than traditional affirmative defenses. We conclude that because 17 U.S.C. 107 created a type of non-infringing use, fair use is authorized by the law and a copyright holder must consider the existence of fair use before sending a takedown notification under 512(c). 18 Lenz v. Universal Music Misrepresentation claim remanded for trial on the question of whether Universal knowingly misrepresented that it had formed a good faith belief that the video did not constitute fair use Lenz argued that Universal had not conducted a fair use analysis at all Universal asserted that its procedure, while not labeled a fair use analysis, w[as] tantamount to such consideration Ninth Circuit A jury must determine whether Universal s actions were sufficient to form a subjective good faith belief about the video s fair use or lack thereof. 9

10 19 Lenz v. Universal Music Criticism of requiring copyright holder to conduct a fair use analysis before sending takedown notice: the pressing crush of voluminous infringing content that copyright holders face in the digital age Ninth Circuit: In order to comply with the structures of 512(c)(3)(A)(v), a copyright holder s consideration of fair use need not be searching or intensive. Because copyright holders must conduct an infringement assessment before sending a takedown notice, the fair use analysis is simply part of that initial review Court notes that algorithms may be a valid way to review a plethora of content for fair use. No requirement that a lawyer or even a human conduct the fair use review 20 Lenz v. Universal Music Lenz not permitted to present a willful blindness theory of misrepresentation on remand Failure to create genuine issue of whether Universal subjectively believed, before sending the takedown notice, that there was a high probability that the video was protected by fair use 10

11 21 Anti-Circumvention Provisions 17 USC 1201 et seq. Prohibits: Making or selling devices or services that are used to circumvent technological measures used by copyright owners to prevent unauthorized access to, or copying of, a copyrighted work ( 1201(a)(2), 1201(b)(1)) Circumventing technological measures intended to prevent unauthorized access to copyrighted works ( access controls ) ( 1201(a)(1)) Falsification, removal, or unauthorized alteration of copyright management information (including the name of the work, the author, any copyright notice, and terms and conditions for use of the work) ( 1202) 22 Anti-Circumvention Provisions Example of Prohibited Conduct: Reproducing photograph without gutter credit identifying author of photograph. See Murphy v. Millennium Radio Grp. LLC, 560 F.3d 295 (3d. Cir. 2011) 11

12 23 Anti-Circumvention Provisions Circumvention of technological measures intended to prevent unauthorized copying ( rights controls ) is not prohibited: Fair use is a defense to unauthorized copying. Section 1201(c)(1) expressly states that the DMCA s anti-circumvention provisions are subject to all rights, remedies, limitations or defenses to copyright infringement, including fair use Copyright infringement action probably sufficient to address individual circumventions of rights controls 24 Anti-Circumvention Exceptions Nonprofit libraries, archives, educational institutions Law enforcement and government agents engaging in investigative, protective, information security, or intelligent activities Reverse engineering to achieve interoperability with an independently created computer program, and encryption research Protection of minors, personal privacy, security testing Provisions are targeting companies and individuals trying to circumvent digital protections for purposes of infringement 12

13 25 Latest Developments Triennial Anti-Circumvention Exemption Rulemaking: Effective October 28, 2015 Helpful exemptions for individuals wanting to make their own repairs or modifications: Vehicles, motion pictures, wireless devices (i.e. unlocking iphones), smart TV, and video games Other exemptions include some security research, 3-D printers, and implanted medical devices The exemptions contain very specific limitations, and thus are not as broad as they may seem 26 Civil Remedies 17 USC 1203 Private cause of action Preliminary injunction 51% 49% Damages available Trebling of damages for repeat violators Damages may be reduced for an innocent (unknowing) violation 13

14 27 Civil Remedies 17 USC 1203 Elements of violation Ownership of a valid copyright on a work effectively controlled by a technological measure, which has been circumvented that third parties can now access without authorization, in a manner that infringes or facilitates infringing a right protected by the Copyright Act, because of a product that the defendant either: Designed or produced primarily for circumvention; Made available despite only limited commercial significance other than circumvention; or Marketed for use in circumvention of the controlling technological measure Chamberlain Grp., Inc. v. Skylink Techs., Inc., 381 F.3d 1178 (7th Cir. 2004) 28 Criminal Penalties 17 USC 1204 Violations made willfully and for purposes of commercial advantage or private financial gain: Fine of up to $500,000, or imprisonment up to 5 years, for first offense Fine of up to $1,000,000, or imprisonment up to 10 years, for any subsequent offense Nonprofit libraries, archives, educational institutions, and public broadcasting entities are exempt Guilty Not Guilty 14

15 29 Criminal Penalties 17 USC 1204 United States v. Reichert, 747 F.3d 445 (6th Cir. 2014) Reichert was convicted under 1201 and 1204 for willfully trafficking in video game modification chips that enabled video game consoles to play pirated games On appeal, Reichert challenged the district court s deliberate ignorance instruction Sixth Circuit held that evidence showing that Reichert knew his conduct was in a gray area and that he technically was not supposed to modify the game consoles was sufficient to support the jury s willfulness finding 30 Select DMCA Issues Evolving Technology for File-Sharing Effect on Research & Innovation Abuse on DMCA Takedowns Extraterritorial Enforcement Cyber-Plagiarism Willful Blindness What About Trademarks? 15

16 31 Evolving Technology for File-Sharing What are the implications for music and movies? While Napster and Grokster provide parameters for an earlier generation of file-sharing, and Viacom v. YouTube did the same for video more recently, the platforms by which copyrightprotected content may be distributed are constantly changing Has the DMCA been sufficiently fleshed out to force a path toward legal, DRM-effective sources of content (e.g. Spotify, Google Music, itunes) or is blatantly infringing activity just shifting to the darknet? 32 Effect on Research & Innovation Anti-circumvention provisions may discourage cybersecurity research and technological innovation Exemptions rulemaking creates an opportunity for stakeholders to seek appropriate scope of protections for proposed research 16

17 33 Abuse of DMCA Takedowns Injunction should be an extraordinary remedy, but in DMCA context, can be effected with little due process and there is little incentive for service providers to risk losing safe harbor status See Computer & Communications Industry Association, Copyright Reform for a Digital Economy, Copyright-Reform-for-a-Digital-Economy.pdf, at 16: Proposing a statutory damages award for infringement for willful misrepresentations, similar to statutory damages for willful copyright infringement, in order to deter DMCA takedown abuse 34 Extraterritorial Enforcement Although the DMCA came about due to international WIPO treaties intended to create consistency between borders, infringing material may be hosted by overseas ISPs who are beyond the reach of U.S. law enforcement and judicial authority 17

18 35 Extraterritorial Enforcement US Foreign Takedown notice might be ignored by an overseas entity, with little recourse to a copyright owner beyond retaining foreign counsel and proceeding with enforcement efforts in the ISP s home country. However, if infringing material is copied and shared via U.S. servers, even if infringer is extraterritorial, infringement and misrepresentation claims may lie, if infringer can be served and subject to personal jurisdiction. Shropshire v. Canning, 809 F. Supp. 2d 1139 (N.D. Cal. 2011) Foreign US This situation is less problematic. What matters is where the reliance, wrongful removal, and the resulting injury occurred. Automattic Inc. v. Steiner, 82 F. Supp. 3d 1011 (N.D. Cal. 2015) (granting default judgment against UK individual in 512(f) misrepresentation claim in favor of American blogger whose blog post was removed from WordPress in California) 36 Cyber-Plagiarism Would the objectives of the DMCA benefit from a new safe harbor provision aimed at digital media store owners that would impose more stringent monitoring duties in exchange for stronger protection from indirect infringement liability? See Sam Castree, III, Cyber-Plagiarism for Sale!: The Growing Problem of Blatant Copyright Infringement in Online Digital Media Stores, 14 Tex. Rev. Ent. & Sports L. 25 (2012) 18

19 37 Willful Blindness Not mentioned in text of DMCA, but comes up frequently in infringement/safe harbor context (Viacom), as well as misrepresentation (Lenz) and criminal liability for circumvention (Reichert) Standard is borrowed from patent law Global-Tech Appliances Inc. v. SEB S.A., 563 U.S. 754 (2011) but difficult to apply in practice, as shown in jury instruction dispute in Reichert 38 What About Trademarks? The DMCA does not apply to trademarks, and Congress has not enacted any comparable procedure by which trademark holders can enforce their rights Many websites and registrars have adopted trademark policies that borrow heavily from the DMCA and allow users to submit trademark infringement-based takedown requests. See, e.g., Academy of Motion Picture Arts & Sci. v. GoDaddy.com, Inc., 2015 WL (C.D. Cal. Sept. 10, 2015); Tiffany Inc. v. ebay Inc., 600 F.3d 93 (2d Cir. 2010) (approving ebay s Verified Rights Owner program extending notice and takedown system to all IP; ebay not liable for sales of counterfeit Tiffany jewelry) Judicially-created safe harbor for service providers: generalized knowledge of sale of counterfeit items or other trademark infringement not enough to impose direct or contributory infringement liability 19

20 39 Hypo Ashley Madison After the July hack, the owner of the Ashley Madison website sent DMCA takedown notices to various ISPs to try to prevent the dissemination of its user s personal information Is this an abuse of the DMCA? 40 Hypo Volkswagen Volkswagen programed vehicle software to conceal the amount of air pollution emitted Do you think the DMCA anti-circumvention provisions should include an exemption independent research on vehicle software to uncover/prevent similar scandals? 20

21 41 Thank you! Lesley McCall Grossberg, Esq

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