Online Product Management Beyond DMCA Safe Harbor

by Holland & Knight LLP

The Digital Millennium Copyright Act (DMCA) was in large part designed to help content providers prevent copyright infringement on the Internet. Nonetheless, a countervailing concernt is firmly embedded into its text. In realizing the potential for copyright infringement claims against entities that merely provide the infrastructure and storage capability that others will utilize to commit actual copyright infringement, the statute contains a safe harbor provision, 17 U.S.C. § 512(c). This provision is designed to protect online service providers from copyright infringement liability arising from the storing infringing material on their networks when directed by users. As the number of websites proliferate that offer opportunities for users to upload and subsequently store files of significant size, the cases analyzing and deciding the purview of the safe harbor have increased.

The governing precedents in the Ninth Circuit have held that the loss of the safe harbor requires a showing of "something more" than merely having the "general ability" to locate infringing material and terminate users' access. Although this holding does not offer a service provider carte blanche to undertake directly infringing conduct if the service provider allows users to upload content at will, it expanded the reach of the safe harbor in a noticeable fashion.

District courts within the Ninth Circuit have begun to issue decisions that deal with the implications. For example, in Gardner v. CafePress Inc., No. 3:13-cv-1108-GPC-JMA, 2014 WL 794216 (S.D. Cal. Feb. 26, 2014), the court was faced with a summary judgment motion from an e-commerce website defendant based on the safe harbor. The defendant, CaféPress, Inc. (CaféPress), is an online vendor that permits users to upload images of their artwork, slogan and designs for printing on various items, such as shirts. These images are automatically uploaded and reformatted to thereafter be stored on servers run by CafePress. Once uploaded, the products can be sold in three different ways, including via the CafePress Marketplace. The user products are automatically placed in the Marketplace unless the user opts out.

The plaintiff (Gardner) sued CafePress based on the use of his copyrighted image called "Alaska Wildlife" by another user on the site. The user had placed the image on a product and subsequently sold it in CafePress's "Marketplace." The user defendant who uploaded the copyrighted image was dismissed from the case, leaving only CafePress.

CafePress is structured so that it has ultimate authority over what products get onto the "Marketplace" and it establishes prices of the products, of which the user receives a commission on each sale. With respect to the products utilizing "Alaska Wildlife," Café Press removed it upon notice that it contained a copyrighted image. Nonetheless, CafePress did not avoid suit, and the court ultimately held that the website could not avail itself of the safe harbor, at least at the summary judgment stage, for two reasons. As an overarching principle, Section 512(c) shields an ISP from liability when a user stores at its direction material on the website that the ISP is unaware is infringing. However, to qualify under this aspect of the immunity, a condition precedent is that the ISP does not interfere with "standard technical measures" designed to identify and/or protect copyrighted works. In the instant case, when images were uploaded to CafePress, metadata used to identify the image's copyright information was automatically deleted. As such, the court found a triable issue of fact as to whether the metadata stripping constituted interference with "standard technical measures."

The second reason why CafePress was outside of the reach of the safe harbor has to do with the DMCA definition of "service provider." Within the statute, "service provider" means a provider of online services or network access, or the operator of the facilities therefor. At common law, this is considered a broad but hardly all-encompassing definition. See Hendrickson v., Inc., 298 F. Supp. 2d 914 (C.D. Cal. 2003) (noting that an online service that directly sells products likely falls outside of the definition of "service provider"). CafePress does not merely facilitate the sale of goods by third-parties, but rather it set prices on user products and paid users only a royalty or commission on products sold. As a result, CafePress could not be said to merely facilitate transactions or exchange of information between Internet users.

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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