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Last October Congress passed a new law, the Digital Millennium Copyright Act, Public Law 105-304 (October 28, 1998) ushering in significant changes for the protection of copyrights on the Internet. Title II of the Act created new protections from legal liability for online service providers. Anyone who qualifies as an "online service provider" under this act should become familiar with its requirements in order to benefit from its protections.
This article offers a brief summary of the new protections that the Act creates against liability for online service providers. Anyone desiring comprehensive information about the Act should review the law in-depth (the text of the law can be found online through the Thomas service at thomas.loc.gov), or consult with an attorney.
Prior to the passage of this law, the liability of online service providers for Internet content was uncertain. As an illustration of the problem, suppose a customer of an online service provider maintains a Web site and posts material on his site that infringes someone else's copyright. Is the service provider legally responsible for the infringement? It may be. Copyright infringement may occur anytime one makes an unauthorized copy of copyrighted material. When a copyrighted work is reproduced in a tangible, fixed medium--even if very briefly--a "copy" is made. So, if the actions of a service provider's customer cause a copyrighted computer file to be reproduced on the service provider's server, even if momentarily, an unauthorized "copy" may be deemed to be made, making the service provider potentially liable.
In the last few years, several courts and numerous commentators have addressed the issue of service provider liability. Until the passage of the Digital Millennium Copyright Act, though, there was no universally applicable rule of liability across the country.
The Act has changed that. Under the new law, qualifying "service providers" enjoy significant protections from liability--as long as they take the steps necessary to obtain the protection of the law.
The Act defines an online service provider as an "entity offering 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." The key to qualification under this section is that the service provider must not modify the content of the material sent or received. So, for example, an entity that posts infringing material and also acts as its own service provider does not qualify for protection under this law.
In addition, to qualify an entity must satisfy two conditions. First, it must adopt and reasonably implement a policy of terminating in appropriate circumstances the accounts of subscribers who are repeat infringers. What are "appropriate circumstances"? The law doesn't say.
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Second, the service provider must accommodate and not interfere with "standard technical measures" taken by copyright owners to identify or protect their copyrighted works.
If they qualify, service providers enjoy significant limitations on liability for four different services. The first is "transitory communications," which is when the service provider is truly acting only as a conduit for the transmission of digital information and is not involved in determining who the recipient is or in modifying content in any way.
The second protected service is system caching, the retention of copies of material made available by someone else, and then transmitted to a subscriber at his or her direction. A service provider is protected from liability only if its caching system does not modify the content in any way.
The third service is Web site hosting. Under the new law, a Web site host is protected from liability as long as it does not receive any benefit from the infringing activity itself, and as long as it has no knowledge of the infringing activity or facts from which the infringing activity would be apparent. In addition, once a Web site host is notified of infringing activity, it must take steps to block access to or remove the site with the infringing activity.
The fourth protected service is "information location tools", meaning search engines, online directories, hypertext links, and similar devices that allow the user to link to a site that may contain infringing material. As with web hosting, the provider is free from liability for offering links to infringing material as long as the provider lacks the requisite knowledge of the material, reaps no financial benefit from the material, and blocks access after being notified of the infringement.
In addition, in order to obtain protection from liability for hosting a web site, the service provider must designate an agent to receive notifications of infringement. This designation must be filed with the Copyright Office and must be made available to the public (including publishing the designation on the provider's web site). A copy of a suggested form for this purpose can be downloaded from the Copyright Office site at lcweb.loc.gov/copyright/onlinesp/.
The Act further limits the liability of nonprofit educational institutions that act as service providers. Under this limitation, as long as the institution satisfies certain conditions, it generally will not be held liable for the infringing acts of professors and students.
Readers should keep in mind that this Act only limits liability for copyright infringement; it doesn't protect service providers from liability for defamation, trademark infringement, or other activities. We may yet see more comprehensive laws limiting the liability of service providers, but they haven't been passed yet.
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