SOPA and the DMCA Safe Harbors

The Internet is a great facilitator of commerce and discourse. Our laws and policies are designed to preserve this character by preventing sites that host content of others from being shut down or crippled by money damages for their users’ illegal actions. Copyright law achieves this objective by exempting content hosts, such as Youtube and flickr, from liability for their users’ infringing actions so long as these sites comply with certain conditions. These conditions are premised on the idea that copyright owners are primarily responsible for policing sites on the Internet for infringement and protecting their rights. The recently introduced Stop Online Piracy Act (SOPA) would undermine this principle. In the process, it would undermine a vital legal protection that has fostered today’s Internet.

So why are limitations on liability provided by copyright law so important to sites that host content? Consider this: Under copyright law, damages for infringing copyright in a single work could be as high as $150,000. The law allows third parties, such as content hosting sites, to be held accountable for infringements of others in some circumstances. And because sites like Youtube and flickr host thousands of works, the per-work amount can easily multiply into astronomical amounts, even if a small portion of their user base acts illegally.

The DMCA and content hosts

The provisions of copyright law that deal with the liability of content hosts—the “safe harbor” provisions—were made part of copyright law by the Digital Millennium Copyright Act (DMCA). These provisions prevent content hosts from being held responsible for infringements of their users under three conditions:

1. the content host does not have “actual knowledge” of infringement or is not aware “of facts and circumstances” that indicate infringement and once it acquires knowledge, promptly disables access to infringing material

2. where the content host can prevent infringement, it does not financially benefit from infringement

3. when the copyright owner provides proper notice of infringement, the content host promptly disables access to infringing material.

The law also explicitly states that content hosts are not obliged to actively police their networks and root out infringement.

For some time, copyright owners have unsuccessfully tried to shift this burden from themselves to services that host content. Viacom’s lawsuit against Youtube is a prime example of these attempts. In that suit, Viacom claimed that Youtube was aware of widespread infringing activity on its site and did not do enough to prevent it. This was despite the fact that Youtube promptly removed material when Viacom provided notice of specific material that allegedly infringed its rights. Viacom claimed that in addition to responding to notices of infringement, Youtube should have taken down all infringing material because it had “actual knowledge “ (condition 1 I mentioned above) of infringement because it was generally aware that its site was being used for infringement. Similar claims were made in another case called UMG Recordings Inc. v. Veoh.

In both cases, courts rejected the copyright owners’ arguments and held that a generalized knowledge that a site was being used for infringement was insufficient to hold a content host liable. The site had to have “knowledge of specific and identifiable infringements of particular individual items.” In UMG Recordings v. Veoh, the court recalled why Congress enacted this provision:

“in ordinary course of their operations, service providers must engage in all kinds of acts that expose them to potential copyright infringement liability. By limiting the liability of service providers, the DMCA ensures that the efficiency of the Internet will continue to improve and that the variety and quality of services on the Internet will continue to expand.”

How SOPA would undermine the DMCA

Section 103 of SOPA would give copyright owners the power to require ad services and payment processors to stop doing business with a site where infringement occurs by merely giving a notice that the site is “dedicated to the theft of U.S. property.” The definition of a “site dedicated to theft of U.S. property” is so broad that it could encompass any site that does not actively police its networks to prevent infringement. Furthermore, lack of knowledge of specific infringing acts would not be an excuse. For example, sites that merely “avoid confirming a high probability of use” of the site for infringement can have their funding cut and their operations enjoined. This runs directly counter to the safe harbor principles, which don’t mandate monitoring and which require quite a bit more than not “confirming a high probability” of some else’s infringement.

In addition, SOPA would route around the safe harbor provisions of copyright law with very few procedural safeguards and in a manner that turns principles of copyright law on its head. The procedural problem is that section 103 would require payment processors and ad services to act based on mere notice from the copyright owner and without a judge’s order in most circumstances. A judge would come into picture only if the accused site provides a counter notice, or if the ad networks or payment processors somehow don’t act. Even then, it is likely that the site will be taken down first even before a counter notice can be given. Section 103 requires take down “expeditiously” and in no event later than 5 days. In contrast, it requires notice by payment processor or ad service to the accused site in a “timely” manner. This means that the site remains unfunded for some unknowable amount of time between the 5 days after the notice and whenever the payment processor or ad network decides to re-initiate service.

SOPA also upsets the principles of copyright law in that it would allow owners to cut off payments and services to sites based on an allegation of harm that falls short of an allegation of infringement. Thus far, a copyright holder has had to allege that her copyright was infringed before she can take action under the law. Under SOPA, however, a copyright owner could argue that because a site allows users to upload material, and indeed many have uploaded infringing material, she is harmed by the site’s activities. After all, her work could be in imminent danger of being uploaded without her permission.

So what is the consequence of SOPA undermining the DMCA? Content hosts would be put in the position of policing their users and deciding which uses are legitimate and which are not. A decision that the copyright owner disagrees with could put the site at risk of losing its sources of income, before any judge ever sees the dispute. And these consequences take place under a newly lax standard for determining who can bring an action to de-fund and enjoin a website. Fair use and other lawful uses would be sure to suffer under this regime. Copyright practices would evolve under a system of private ordering influenced by risk-averse content hosts and self-interested copyright owners and not by informed debates in public. Is this the world we want? If not, let your Congressional representatives know how you feel.

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