Tick Tock - Website Owners Face Deadline to Preserve Liability Safe Harbor

by Eversheds Sutherland (US) LLP
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Eversheds Sutherland (US) LLP

[co-author: Susan Russell]

All owners of websites accessible in the United States need to be aware of new rules that directly control a website owner’s potential liability for copyright infringement. On December 1, 2016, the United States Copyright Office (Copyright Office) implemented a new online registration system and new regulations for designating an agent to receive notifications of claimed copyright infringement on a website under the Digital Millennium Copyright Act (DMCA), Title 17, United States Code Section 512(c).1   

Regardless of previous DMCA Designated Agent registration, online service providers (OSPs) of websites hosting user-generated content must submit and comply with the new online registration system and requirements in order to maintain DMCA safe harbor protection. OSPs currently in compliance with the “old directory” have a grace period that expires on December 31, 2017, to register with the new online system and comply with the new regulations.

WHO MUST COMPLY?

The new DMCA Designated Agent requirements apply to all website owners that allow third parties to post any type of content on the website owner’s website. The new requirements apply to large-scale OSPs with affiliate organizations and websites, as well as “mom and pop” website owners that allow any third parties to post any type of content on a website, such as reviews or comments. Website owners that don’t comply risk losing DMCA safe harbor protection against monetary damages for hosting copyright-infringing, third-party, user-generated content.

BACKGROUND – DMCA SAFE HARBOR 

On October 28, 1998, the DMCA went into effect. Section 512 of the DMCA provides conditional safe harbor protection for OSPs against their own acts of direct copyright infringement, in addition to secondary liability for the infringing acts of their users. The DMCA safe harbor protections were meant to modernize and harmonize United States federal copyright law with the 1996 World Intellectual Property Organization (WIPO) Copyright Treaty by providing a balance between the rights of copyright owners to protect their work, and the public’s interest in access to and use of information.

Certain requirements must be met under Section 512(c) of the DMCA for OSPs to receive safe harbor protection from monetary damages for hosting copyright-infringing, user-generated content, including: (1) notification and compliance with the repeat infringer policy; (2) no direct financial benefit related to the infringement; (3) no actual or constructive knowledge of the infringement; and (4) upon notice of infringement, OSPs must act “expeditiously” to remove the infringing content. Additional administrative requirements include: (1) adopting and communicating a copyright infringement policy; (2) registering a DMCA Designated Agent to receive DMCA Takedown Notices from the Copyright Office; and (3) proper compliance with a DMCA Takedown Notice.

OLD DIRECTORY OF DMCA DESIGNATED AGENTS 1998-2016

Under Section 512, the Copyright Office is required to maintain a “current directory” of DMCA Designated Agents to receive DMCA Takedown Notices. For almost 20 years, the Copyright Office used a hard copy registration system that required an OSP to complete and submit a paper form designating a specific natural person by name to receive notifications of claims of copyright infringement pursuant to the DMCA. The Copyright Office would then digitally scan the forms into the online directory.

NEW DMCA DESIGNATED AGENT DIRECTORY AS OF DECEMBER 1, 2016 – CHANGES AND BEST PRACTICES

On December 1, 2016, the new Copyright Office regulations under 37 C.F.R. § 201.38 went into effect, which require all OSPs to register a DMCA Designated Agent through a new online system. 2       

The changes in, and best practices for, the new regulations for OSPs include:

  • Online registration and updates. The new directory and registration requirements are an effort to modernize Copyright Office practices to allow OSPs to electronically submit and update DMCA Designated Agents for accurate contact information. Additionally, OSPs can manage multiple affiliate service providers and DMCA Designated Agents from one account.
  • Functional DMCA Designated Agent. The old registration system required designating an individual natural person (Jane Doe), and unofficially allowed registering a specific title or position (General Counsel). Now, in addition to an individual natural person, the new registration system officially recognizes a functional registration using a specific title, position, department within the OSP’s organization, third-party entity or department within a third-party entity. 

     Although an individual natural person is still allowed as a DMCA Designated Agent, it is recommended to register a title, position, department or third party as a DMCA Designated Agent. As long as the named position exists, this approach ensures continuous compliance in the event that a designated individual natural person named moves to another position within the OSP organization, or leaves the organization altogether.
  • Register Designated Agent for separate entities. For OSPs that serve as parent companies to affiliates, it is important to register a DMCA Designated Agent for the parent company and for each affiliate hosting user-generated content.3  However, the registered DMCA Designated Agent can be the same person or position for the OSP and each affiliate.
  • Alternate name registration. To ensure accurate search results in the new directory, OSPs are required to include alternate names with registration. For example, an organization with the name “XXX-XXX, Incorporated” would include the full name of its organization (XXX-XXX, Incorporated), and all other names, domain names and app names by which the organization is associated, such as “XXX-XXX, Inc.,” “XXX-XXX” or “XXX-XX.com.”
  • Online directory. The Copyright Office states that the new directory features an improved search engine for the public to efficiently locate accurate contact information, along with a history of DMCA Designated Agents for an OSP.
  • Reduced registration fees. Moving from the time and labor intensive hardcopy system to the online registration system enabled the Copyright Office to: (1) significantly reduce fees from $105 to $6; and (2) to eliminate the additional fee of $35 for each alternate name used by the OSP.4  
  • Registration renewal required every three years. The DMCA requires OSPs to keep their DMCA Designated Agent registration information updated. According to the Copyright Office, a study of a large sample of OSP registrations indicated that OSPs typically kept the contact information for their DMCA Designated Agents updated on their websites. However, only 65% of the OSPs maintained accurate registrations with the Copyright Office. Additionally, the Copyright Office study indicated that 22% of the DMCA Designated Agent registrations were for defunct OSPs.5 To receive DMCA Section 512(c) safe harbor protection, OSPs must maintain a current DMCA Designated Agent registration with the Copyright Office, and OSPs must also provide accurate contact information for a DMCA Designated Agent on their websites.

    The new copyright registration renewal requirement is meant to weed out outdated contact information for defunct OSPs; ensure that the contact information in the DMCA Designated Agent directory is current and in compliance with the DMCA; and ensure efficient access for the public to accurate contact information for DMCA Designated Agents.
  • Copyright Office reminders. Prior to the expiration date to renew registration, the Copyright Office will send a series of email reminders to the OSPs. The Copyright Office will send reminders 90, 60, 30 and seven days prior to an OSP’s renewal deadline. OSPs should use a “permanent” email address for the reminder, and not a transitory email address that will be deactivated if a particular person leaves the employment of the OSP.
  • DMCA Designated Agent docketing systems. OSPs are not required to maintain their own docketing systems. However, to ensure compliance with the Copyright Office requirements and the benefits of the DMCA safe harbor protection, it is recommended that OSPs utilize a docketing system to: (1) send quarterly reminders throughout the year to update contact information; and (2) renewal registration reminders 24 months, 12 months, six months, three months, two months, one month, two weeks and one week prior to an OSP’s renewal deadline.

CONSEQUENCES OF FAILURE TO COMPLY

For OSPs that never registered a DMCA Designated Agent, or OSPs that are not currently in compliance with the pre-December 1, 2016, “old directory,” immediate registration is recommended. An OSP could be liable for any copyright infringement by third-party postings that occurred during a time of non-compliance with the DMCA. 

For currently compliant OSPs, the clock on the grace period is ticking. Currently compliant OSPs should update their registrations well in advance of the end of the year deadline on December 31, 2017. DMCA Designated Agent registration in the new directory is recommended to ensure continued DMCA safe harbor protection.

Website owners should consult a copyright attorney for questions about current compliance with the Copyright Office’s new DMCA Designated Agent registration, for assistance in complying with the new requirements, or for help in maintaining a docketing system to ensure their registration remains current and up to date. 
                                 

1 See Final Rule - Designation of Agent To Receive Notification of Claimed Infringement, Federal Register, Rules and Regulations, Vol. 81, No. 211 (November 1, 2016).

2 New Directory, DMCA Designated Agent Registration Account, https://dmca.copyright.gov/osp/login.html (last visited March 9, 2017).
  
3 See BWP Media USA Inc. v. Hollywood Fan Sites LLC., 115 F. Supp. 3d 397 (S.D.N.Y. June 30, 2015). 
  
4 See 37 C.F.R. § 201.3 (c)(17).
  
5 See Copyright Office Announces Electronic System for Designating Agents under DMCA, Issue No. 640 – October 31, 2016, https://www.copyright.gov/newsnet/2016/640.html, last visited March 9, 2017.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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