Websites, beware: Using third-party content can be illegal

These days most websites and other online service providers accept and host some sort of third-party content. The hosting and display of user-generated content can potentially subject the website or service provider to liability for its users’ online copyright infringement.

Seeing that this potential liability may stifle the development of interactive environments and the restriction of user-generated content by service providers, Congress enacted a safe harbor for service providers with the Digital Millennium Copyright Act (DMCA). The safe harbor limits a service provider’s liability if it is in compliance with the act and follows a certain protocol, which has become to be known as Notice and Takedown. 

To be eligible for the safe harbor, however, a service provider must register a copyright agent with the copyright office and provide contact information for that agent. The agent is responsible for reviewing takedown notices and following the procedures set forth in section 512(c) of the DMCA. Upon receipt of a notice meeting the requirements of Section 512(c) by a copyright owner or its agent, the service provider is to block access to the infringing content.

The service provider then sends notice to the alleged infringer about the claimed infringement and that the material has been removed, as well as notice that the alleged infringer may provide a counter notice to get the material reinstated. If the alleged infringer sends a proper counter notice providing why their use of the copyrighted material is allowed under the law (e.g. a license, fair use etc.) the service provider can reinstate the material without liability to the content owner.

But to benefit from the notice and takedown procedures and the liability protection they afford, a service provider must first appoint a copyright agent with the copyright office. Since the advent of the DMCA, this has been a paper-driven process in which the notice of agent forms were filled out and either mailed or faxed to the copyright office. These forms are then scanned and placed in the office’s database for public viewing. A service provider only had to fill the form out once and they were good to go, until now.

It seems that the Copyright Office has decided to enter the modern age and require that all new companies must register through the Copyright Offices new online system. All existing service providers will have until Dec. 31, 2017 to file under the new system or risk losing their protection under the safe harbor.

The renewals during this period will be $6, reduced from the “oh-so logical” amount of $105 going forward. The designations will need to be renewed every three years, even if the information is the same. Failure to renew the designation will result in a loss of the safe harbor protection.

This seemingly minor change could have large impacts for businesses that utilize user-generated content, especially smaller companies. First, companies need to be aware that if they previously filed a paper notice, they still need to create a user account with the copyright office and refile through the electronic system, even if the information has not changed. Failure to do so by December 31, 2017 will result in a loss of the safe harbor protections and the company could be liable for the copyright infringements of its users.

Secondly, companies also need to now establish a system to prompt them to file renewals every three years. This is a change from the old “file and forget it” system. It is not clear whether the Copyright office will send out electronic reminders in regards to renewing. As a result, companies would be best to calendar these dates themselves as a backup precaution in case the Copyright Office does not elect to send reminders.

Additionally, companies should also start adding the $105 renewal fee to their IP budgets. While these costs are not large, increases could happen in the future and it is a wise practice to note these as expected line item expenditures.

The DMCA has proved to be a very valuable tool for both service providers and content owners. The new regulations now make it more incumbent on the service provider to make sure they are in compliance with the terms of the safe harbor. Failure to do so could result in a vengeful (or entrepreneurial) content owner taking advantage of the lack of a safe harbor and pursue monetary damages against a service provider for the acts of its users.