Failure to Follow DMCA Safe Harbor Requirements Leads to Stormy Seas

Recent cases suggest that Internet Service Providers or “ISPs” need to understand, and act upon, the statutory requirements associated with the safe harbor provisions of the Digital Millennium Copyright Act(“DMCA”).  Recall that the DMCA’s safe harbor provisions protect service providers from copyright liability related to user generated content that might infringe the rights of a third party copyright holder.

In order to qualify for safe harbor protection, the service provider must first adhere to certain requirements including the following:

            (i)         be a “service provider” as that term is defined in the DMCA;

            (ii)        adopt and implement a repeat infringer policy; and

(iii)       not interfere with technical measures copyright owners use to protect their copyrighted works.

Once it is determined that the ISP meets the necessary qualifications for safe harbor protection, the next part of the analysis includes whether the ISP had

(i)         actual knowledge of the infringement at issue (referred to as the “red flag” test);

(ii)        whether the ISP received any direct financial benefit as a result of the infringement; and 

(iii)       whether the ISP acted quickly to disable the infringing material.

In a recent Southern District of New York case, Capitol Records v. Vimeo, the court refused to recognize that, as a matter of law, all content that was the subject of claims brought by Capitol Records and EMI Blackwood Music against Vimeo, a video upload site, fell under the safeguards provided by the DMCA’s safe harbor.  While the court did find that much of the content did fall under the act’s protection, the court also found that a sizeable portion of the content required a fact finder’s assessment in order to properly determine if the statutory requirements were properly followed.

In Vimeo, certain materials had been uploaded by employees of the site itself, which raised the issue of whether the content was user directed or uploaded as a result of the site’s own employees.  In fact, labels identifying the content as having been uploaded by “STAFF” were included on the site to identify the related content.  In addition, raising the “red flag” rule, Vimeo employees had placed certain content in specific sections or categories of the site including on employee only channels and, moreover, employees had commented on some of the content as well.  As a result, the court found that the content associated with these actions presented triable issues of fact.

It should also be noted that this case follows on the heels of a recent U.S. District Court for the Southern District of Florida case, Disney Enterprises, Inc. v. Hotfile Corp. that found no safe harbor protection where a site failed to take action against repeat infringers after receiving proper takedown notices by rights holders.