Facilitator: David Kramer, Wilson Sonsini Goodrich & Rosati
Netcom: OSP couldn’t be strictly liable for copyright infringement for automated copying/display of content occasioned by users, but contributory liability was available if OSP knew of infringing activity and failed to take action to prevent it, as was vicarious liability if there was right and ability to control and profit. Congress described Netcom as the leading/most thoughtful opinion on OSP liability and expressed intent to codify it; Judge Whyte’s opinion became the charter for the internet age. Netcom has been the most important/influential copyright decision in the last 30 years.
Judge Ronald Whyte, Senior United States District Judge, Northern District of California
Litigants were Scientology/critic; at each other’s throats, which explains some of the litigation issues raised. Did not want to be result-oriented, but he thought about what the proper result should be given the analogy of the copy machine. RTC v. Netcom presented the pure issue of access provision, as compared to bulletin board cases where the operator was making money from infringement. When Congress cites you, you have to wonder whether it’s like being affirmed by the 9th Circuit.
Kramer: did you give any thought to the result if you didn’t decide that way?
Judge Whyte: Seemed to make everyone liable. Unrealistic. Squelch a lot of activity.
Kramer: still trying to get a handle on what constitutes a “financial benefit”—since UMG v. Veoh just did more on what constitutes “control” for DMCA purposes.
Jay Monahan, Zynga
1999: not a single case interpreting the DMCA, no litigation pending. First day on the job at eBay (before), other lawyer introduces him to RIAA; MPAA etc. already knew that. For the next year and a half, got 5 demand letters/day saying they were going to sue. Most demanded that we make sure no similar items ever appeared again. Survival was the goal; the business model included software, music, movies, books—also TM items, from luxury apparel to everything else. Right of publicity: celebrity autographs, etc. Content owners that came first were copyright owners, and we had extensive talks with all of them; they knew the precedents and the law, but said “don’t even think the DMCA applies to eBay.” They argued that notwithstanding the language a service provider wasn’t protected. Until Hendrikson, we didn’t have a judicial interpretation saying we were protected by the DMCA. Another thing in that case: the lack of duty to monitor.
Goal at the time: don’t get sued, but certain demands were totally unscalable, and most far exceeded what the statute required and what he thought a reasonable trier of fact would say was enough. When he responded to copyright & TM, was always guided by the principle: I need to be able to explain to a judge so the judge thinks “I don’t know what the line is, but these guys have gone beyond it, whatever it is.” Played out in Tiffany.
Should we have a notice form? We don’t need one; many sites just repeat the DMCA. But administratively, there’s value to having a form. Most people don’t notice that the penalty of perjury language asks you to say you have a good faith belief that the work is infringing, not just that you represent the rights owner. Also required reporting parties to provide email address/contact info to provide to the person whose listing was being removed: wanted the disputants to talk to each other, not to the platform. Virtually every rights owner has found that not unreasonable. The DMCA subpoena: an intelligent provision enabling a rightsowner to obtain certain information about the user using a special subpoena that doesn’t require a separate lawsuit.
Quickly became apparent that this was a big burden on rights owners; formerly represented rights owners; tried to make it easy for them. Wanted to provide information to them already provided by the statute (contact info).
Monitoring: immunity isn’t conditioned on monitoring. Didn’t want monitoring to be equivalent to control, but we thought that it was the lesser of two evils and we decided to monitor, despite opening ourselves up to the argument that we therefore had control of infringement, which Hendrickson then made. The beauty of the DMCA was protection against claims by users/sellers as well as content owners. We looked for red flags—actual knowledge or facts from which the infringing activity is apparent. When you search yourself, you’re acquiring facts—we applied an apparent infringement test/something like a blatancy/obviousness test. We didn’t require expertise. Rights owners initially wanted to come down and give us a tutorial on all their products; Tiffany and Rolex wanted to do the same things. We said: we’ll never do that. That was our line in the sand. There were some weak knees over that, but I said that if we go down the path of trying to be experts we’ve defeated the whole purpose. Rule: can you look at the four corners of the listing and see indicia of infringement, then take it down; if those are absent, rights owners need to report it. If community members say “Pearl Jam never made an album by this name,” I need a rights owner to report it.
Suspension: 1 strike, 2, 6 as ISPs now use? Only one case addressed strikes and said 3 was sufficient; we tried 2 and evolved a consequence guideline—a matrix of action based on infringement. Wanted to be able to explain who was suspended and who wasn’t in a careful way; never had a problem with that standard. We also moved fast.
You have to keep up however you can, even with resource disparities—we chose the business model. If you fail to remove expeditiously, you’ve blown it. If you fail to suspend a repeat offender, you’ve blown it. So we made sure we complied with the minimum, and then eventually developed sophisticated internal tools, including software, that went beyond that.
Kramer: you said going beyond the DMCA was valuable to show judges you complied with the DMCA. Does that make a difference? If someone minimally complies, is that enough, or does it help to show you’ve gone beyond the DMCA?
Whyte: the more reasonable anyone is, the more they influence me. Looking at what’s reasonable under the circumstances. Anyone acting in good faith and going beyond the minimum is a plus.
Monahan: primary policing duty is on the IP owner. Tiffany: judge basically excoriated them for stopping reporting altogether at one point, as a protest; he emphasized that the primary responsibility was with the TM owner.
Kramer: with Disney/Zynga hat on: why are content owners dissatisfied with OCILLA and pushing for SOPA?
Monahan: it’s a lot of work. I’m sympathetic that the internet has made a difficult product immensely more difficult. They’d love to be able to shift responsibility to someone else. “Why can’t you just block this/filter this/use hashtags?” Even the well-intentioned ones wanted to reduce the burden on themselves. Balancing the need for innovation/creativity, the DMCA strikes the right balance. Provide immunity with clear rules of the game, minimum expectations, simple way for content owners to get a remedy 99.9% of the time, when the recipient of the notice takes the stuff down. This can even be an electronic notice done by an API through a third party service.
Kramer: did eBay have a problem with illicit notices?
Monahan: We did, though not a huge one. Chilling Effects tracks notices; his experience has been that even aggressive rights owners wanted to do the right thing and not go after fair use; wanted to find distributors. There are some exceptions to that. He got a letter from a reputable law firm. They’d simply searched for every mention of the client’s TM on the site and demanded they all be taken down. He called the lawyer and said “I’m going to do you a favor and not take these down.” Reminded him about 512(f) penalties for false notifications, and said that if he insisted on the takedowns eBay would countersue for violation of 512(f) and state law unfair competition. Never heard from them again.
The only way this works is if companies occasionally have a backbone and refuse to take stuff down on behalf of their users. He’s spent 6 years fighting to protect copyrights, but there’s a balance and sometimes only the ISP can stand up for rights. Statute doesn’t require that, but they should do that anyway.
Goldman: what are the implications of doing more than the statute?
Monahan: risks of raising the bar for yourself, as well as others. Watch company wanted us to remove listings on the basis of price. Saw where they were coming from, but as soon as you do that, you’ve established a dangerous precedent (and hard to implement). At the same time, massive piracy is bad for our users. Did that make those doing less unhappy? Yes, but as the larger provider, we drew lines that benefited smaller companies as well.
Fred von Lohmann: was a young associate in 1999, when Yahoo was sued for its auction service by Electronic Arts, Sega, and Nintendo; settled, but one of the first active litigations about the safe harbor.
Are there any perjury prosecutions from the 512 notice? Does that penalty matter? Has any user ever sued a service provider over a facially valid takedown?
Monahan: a few cases over “false reporting.” He’d change the standard to recklessness—right now unless you’re essentially defrauding people you have complete protection as a rights complainant. There was one case (Fred’s case) about promo CDs, when the rights owners claimed that eBay had to treat promo CDs as infringing. eBay: you can report it and we’ll take it down, but we won’t consider it blatantly infringing. Eventually the record companies did lose the case; that was an example of backbone on our part.