In 1998, the US Congress brought United States copyright laws into the digital age when it passed the Digital Millennium Copyright Act (DMCA). The DMCA provides guidelines for handling copyrighted information that is stored or transmitted online. An important component of the DMCA is the “safe harbor” clause.

Congress laid out four safe harbors in the DMCA. These safe harbors limit the liability for copyright infringement. The four safe harbors, in Section 512, are; (a) Transitory digital network communications; (b) System caching; (c) Information residing on systems or networks at the direction of users; and (d) Information location tools. These safe harbors protect service providers from liability for the infringing activities of third parties.

For example, if Timmy recorded a video playing a song he wrote, and then Sarah put that video on her YouTube channel without Timmy’s permission, the safe harbors created by the DMCA protect YouTube from being held liable for Sarah’s copyright infringement. However, liability protections are not absolute, and if YouTube violates requirements of safe harbor protections, they may be liable to Timmy after all.

One requirement for safe harbor protection is that the provider must pass the “red flag” test, which says that a service provider cannot be aware of infringing activity. This test basically asks whether the provider should have known there was infringing material.

A widely known lawsuit involving copyright violations and the DMCA Was Viacom v. YouTube, in which Viacom alleged “brazen” and “massive” copyright infringement on the part of Google, the owner of YouTube, for allowing users to upload hundreds of thousands of copyrighted videos onto the site. The proceedings found that the safe harbor provisions of the DMCA protected Google.

Recently, service providers experienced another huge win in Capitol Records v. Vimeo. The Second Circuit Court of Appeals held that Vimeo, a video sharing site, is protected by the DCMA recordings from 1972 or earlier that its users uploaded. Capitol Records initially convinced the lower court that state law protected the pre-1972 recordings, and therefore Vimeo infringed on its content and ignored red flags. However, the Court of Appeals held that the DMCA’s intent was to protect hosting services just like Vimeo, so it would be unreasonable to hold them liable.

Capitol Records claimed that a “reasonable” employee would know that there was infringed material on the site, so Vimeo failed the red flag test and should not be protected by the DMCA safe harbors. Therefore, Vimeo owed money damages to Capitol Records.

However, the Court said that “leaving service providers subject to liability under state copyright laws for postings by users of infringements of which the service providers were unaware would defeat the very purpose Congress sought to achieve in passing the statute:” basically, the DMCA and its safe harbor clause trumped the state copyright act that Capitol Records used to bring the lawsuit. At the end of the day, the Court’s rule stated that the service provider does not have a duty to constantly monitor for infringement, and that suspicion of infringement is not enough to hold a provider liable unless the infringement was extremely obvious.

Service providers won a major victory in this case, as they now have greatly expanded protections. As more and more copyrighted content is stored and transmitted online, this type of case and protection will become increasingly important to people creating that content.

Contact Revision Legal’s team of experienced copyright and internet attorneys through the form on this page, or call 855-473-8474.

Image courtesy of Flickr user Dennis Skley

What Capitol Records v. Vimeo Means for Platforms and Content Owners

Capitol Records, LLC v. Vimeo, LLC, 826 F.3d 78 (2d Cir. 2016), resolved a significant question about the scope of the DMCA’s safe harbor provisions: do they extend to pre-1972 sound recordings protected under state law rather than federal copyright? The Second Circuit’s answer — yes — has lasting implications for both platform operators and rights holders.

Pre-1972 Sound Recordings and the Copyright Gap

Sound recordings were not brought under federal copyright until 1972. Recordings fixed before February 15, 1972 — including an enormous volume of culturally significant music — were protected only under a patchwork of state common law and statutory rights. Capitol Records argued that because these recordings were not subject to the federal Copyright Act, the DMCA did not provide safe harbor protection for platforms hosting them. The Second Circuit disagreed, holding that the DMCA’s safe harbor provisions apply to infringement of all copyrights cognizable under federal law. Congress subsequently addressed the remaining gap through the Music Modernization Act of 2018.

The Red Flag Knowledge Standard

Section 512(c) requires that the service provider not have actual knowledge that the material is infringing; not be aware of facts or circumstances from which infringing activity is apparent — the red flag standard; and not receive a financial benefit directly attributable to the infringing activity when the provider has the right and ability to control that activity. The Vimeo court held that a service provider must have both subjective awareness of facts that make infringement apparent and those facts must objectively suggest infringement. A provider who views a user-uploaded video does not automatically acquire knowledge sufficient to lose safe harbor protection; the infringing nature of the content must be obvious even to a lay person with no specialized copyright knowledge.

Requirements for Maintaining Safe Harbor Protection

• Register a designated DMCA agent with the U.S. Copyright Office through the online registration system — an outdated or unregistered agent can cost you safe harbor protection entirely.
• Post a clear, accessible DMCA policy describing how rights holders can submit takedown notices and how users can submit counter-notifications.
• Implement and enforce a repeat infringer policy that terminates accounts of repeat infringers — this is a hard statutory requirement under 17 U.S.C. § 512(i).
• Respond expeditiously to valid takedown notices — courts have found that delays of more than a few days can be problematic.
• Do not interfere with standard technical measures that rights holders use to identify or protect their copyrighted works.

Rights Holders: Enforcing Against Infringing Platforms

For copyright owners whose content appears on user-generated content platforms, Capitol Records v. Vimeo defines both the limits of platform immunity and the paths to overcoming it. A platform that knows of specific infringing content and fails to act, that has a financial interest in hosting infringing material and the ability to control it, or that systematically ignores red flags loses safe harbor protection and can be held liable for direct or contributory infringement. Rights holders pursuing claims against platforms should build a record demonstrating: the platform received actual notice of specific infringing content; the platform failed to act expeditiously; and the platform had the right and ability to control the infringing activity and derived a direct financial benefit from it.

If you operate an online platform and need to ensure your DMCA compliance program is adequate, or if you are a copyright owner whose content is being distributed without authorization, Revision Legal’s copyright attorneys can help. Contact us through the form on this page or call 855-473-8474.

The Capitol Records v. Vimeo decision remains controlling authority in the Second Circuit and is persuasive precedent in other circuits for the proposition that DMCA safe harbor protection extends broadly to user-generated content hosting platforms, provided those platforms maintain strict compliance with the statute’s procedural requirements. Platform operators that invest in their DMCA compliance programs benefit from both legal protection and the trust of their user communities.