Moderator: Thomas D. Halket, Attorney and Chartered Arbitrator, Halket & Weitz LLP
Practitioners provide guidance about things to be aware of when advising intermediaries.
Ian C. Ballon, Shareholder, Greenberg Traurig
Different liability frameworks for counseling clients:
Copyright: notice and takedown
UGC has generated a lot of cases about website liability. Congress wanted sites to have flexibility in their policies, but a service provider must have a policy, even if it doesn’t publicize that policy (it must inform users that it has such a policy), including provisions for terminating repeat infringers—he says that’s someone who’s gotten a second notice. (Really? Notice? Not a determination of infringement?) One court accepted a three-strikes rule, which tends to seem fair to Americans.
Red flag notice also suffices to require the service provider to take material down. In the 9th Circuit, even red flags aren’t red. Stolencelebritypics.com wasn’t a red flag by name alone. When dealing with adult material, a false claim of “stolen” adds to the marketability. The burden is on the copyright owner, not the content provider. Not everyone would go with the 9th Circuit, which also found that “free passwords” wasn’t a red flag, because the passwords could have been fake or promotional; the only party with a burden to investigate is the copyright owner. (The passwords weren’t infringing, were they? At best the ISP would have been subject to tertiary liability, no?)
What kind of acts are covered? Veoh case: If material is stored at the direction of the user, anything else that happens to it—public performance, translation to Flash, etc.—doesn’t change the character of the material to kick the ISP out of the safe harbor.
Does the DMCA preserve vicarious liability? What counts as a disqualifying direct financial interest plus right and ability to control? Courts have defined this narrowly, but it’s something to focus on with a client.
Filtering: Grokster made clear that filtering isn’t required, but an unwillingness to filter in combination with other factors may support an inducement finding. Filtering is thus good practice. (Eek.)
Other issues:
Trade secret: reason to know material is a trade secret. What is reason to know? That’s a tough one; maybe the standard should be closer to TM standard in eBay.
Trademark: very narrow grounds for third party liability. If you’re compliance oriented like eBay, then having notice and takedown is a good practice even without a statutory framework even without the DMCA. (I’d note that this depends on what you do: if you help people sell stuff, then yes, notice and takedown makes sense; if you host reviews or other content where people talk about, denigrate, applaud, or show pictures of trademarked products/services, then notice and takedown is a terrible idea. I’m guessing he’d actually agree and was just thinking about auction-type sites.)
Child porn: reporting requirement—reporting it absolves you of liability.
Obscenity—scienter requirements in almost all statutes; no prosecutions of intermediaries for user-generated obscene material. Best practice: take down obscene material, except it can be hard to figure out what is obscene.
“Harmful to minors”/child safety—Congress persistently sought to legislate; ACLU persistently got the laws knocked out. MySpace and Facebook have accords with state AGs that only bind them but are good indicators of best practices.
Defamation and state law civil claims other than IP: CDA 230! (In the 9th Circuit, even state law IP claims go.)
Jay Westermeier, Of Counsel, Finnegan, Henderson, Farabow, Garrett & Dunner LLP
Contracts are a neat way to deal with risk. Browsewrap is more prevalent than clickwrap these days. (Westermeier made a bunch of suggestions about the contracts for practitioners.) Is a provision in a browsewrap contract saying that data is only for personal use enforceable against someone who’s making money by using the website? Yes, that’s commercial. Enforced against a woman who was using data from the Southwest Airlines website for her own business.
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