SPRING 2006
Cyberlaw
Course No.:  9200-710-001
Course ID:  17105
Tu, Th 4:45 - 6:15 p.m.
Room W-206
Professor Jay Dratler, Jr.
Room 231D (IP Alcove)
(330) 972-7972
dratler@uakron.edu,
dratler@neo.rr.com
Copyright © 2000, 2001, 2002, 2003, 2004, 2005, 2006   Jay Dratler, Jr.  
For permission, see CMI.


H. R. Rep. No. 551 (Part 2), 105th Cong., 2d Sess., 49-66
(July 22, 1998) (excerpts)

      [Professor's Note: After this Report was written, the bill that became the Digital Millennium Copyright Act was amended to insert current subsection (e), relating to the liability of nonprofit institutions of higher education. Pre-existing subsection (e) and all following subsections were then renumbered.  The subsection references have been edited to refer to the Act as passed into law.]
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TITLE II–

INTERNET COPYRIGHT INFRINGEMENT LIABILITY

The liability of on-line service providers and Internet access providers for copyright infringements that take place in the on-line environment has been a controversial issue.  Title II of the Digital Millennium Copyright Act addresses this complex issue.  Title II preserves strong incentives for service providers and copyright owners to cooperate to detect and deal with copyright infringements that take place in the digital networked environment.  At the same time, it provides greater certainty to service providers concerning their legal exposure for infringements that may occur in the course of their activities.

New Section 512 contains limitations on service providers' liability for five general categories of activity set forth in subsections (a) through (d) and subsection (f).  As provided in subsection ([l]), new Section 512 is not intended to imply that a service provider is or is not liable as an infringer either for conduct that qualifies for a limitation of liability or for conduct that fails to so qualify.  Rather, the limitations of liability apply if the provider is found to be liable under existing principles of law.

The limitations in subsections (a) through (d) protect qualifying service providers from liability for all monetary relief for direct, vicarious and contributory infringement.  Monetary relief is defined in subsection ([k])(2) as encompassing damages, costs, attorneys' fees, and any other form of monetary payment.  These subsections also limit injunctive relief against qualifying service providers to the extent specified in subsection ([j]).  To qualify for these protections, service providers must meet the conditions set forth in subsection ([i]), and service providers' activities at issue must involve a function described in subsection (a), (b), (c), (d) or ([e]), respectively. The liability limitations apply to networks ‘operated by or for the service provider,' thereby protecting both service providers who offer a service and subcontractors who may operate parts of, or an entire, system or network for another service provider.

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Section 202.  Limitations on liability for Internet copyright infringement
    (a)  In general
Section 202(a) amends chapter 5 of the Copyright Act (17 U.S.C. Sec. 501, et seq.) to create a new Section 512 . . .  New Section 512(a) applies to communications functions associated with sending digital communications of others across digital networks, such as the Internet and other on-line networks.  It establishes a limitation on liability for infringements that may occur in the provision of services falling within the definition of subsection ([k])(1)(A).  The limitations on injunctive relief set forth in subsection ([j])(1)(B) are applicable when the functions at issue fall within the provisions of subsection (a), and the service provider meets the threshold criteria of subsection ([i]).  These threshold criteria apply to all of the liability limitations contained in new Section 512.

Subsection (a) applies to service providers transmitting, routing, or providing connections for material, and some forms of intermediate and transient storage of material in the course of performing these functions.  For example, in the course of moving packets of information across digital on-line networks, many intermediate and transient copies of the information may be made in routers and servers along the way.  Such copies are created as an automatic consequence of the transmission process.  In this context, ‘intermediate and transient' refers to such a copy made and/or stored in the course of a transmission, not a copy made or stored at the points where the transmission is initiated or received.  The use of the term "transmitting" throughout new Section 512 is not intended to be limited to transmissions of "a performance or display" of "images or sounds" within the meaning of Section 101 of the Copyright Act.

Subsections (a)(1) through (5) limit the range of activities that qualify under this subsection to ones in which a service provider plays the role of a "conduit" for the communications of others.  This limitation on liability applies if: (1) the communication was initiated by or at the direction of a person other than the service provider; (2) it is carried out through an automatic technical process without selection of the material by the service provider; (3) the service provider does not select the recipients of the material except as an automatic response to the request of another; (4) no copy of the material made in the course of intermediate or transient storage is maintained on the system or network so that it is ordinarily accessible to anyone other than the anticipated recipients, and no copy is maintained on the system or network in a manner ordinarily accessible to the anticipated recipients for a longer period than is reasonably necessary for the communication; and (5) the content (but not necessarily the form) of the material is not modified in the course of transmission.   Thus, for example, an e-mail transmission may appear to the recipient without bolding or italics resulting from format codes contained in the sender's message.

The term "selection of the material" in subsection (a)(2) means the editorial function of determining what material to send, or the specific sources of material to place on-line (e.g., a radio station), rather than "an automatic technical process" of responding to a command or request, such as one from a user, an Internet location tool, or another network.  The term "automatic response to the request of another" is intended to encompass a service provider's actions in responding to requests by a user or other networks, such as requests to forward e-mail traffic or to route messages to a mailing list agent (such as a "Listserv") or other discussion group.  The Committee intends subsection (a)(4) to cover copies made of material while it is en route to its destination, such as copies made on a router or mail server, storage of a web page in the course of transmission to a specific user, store and forward functions, and other transient copies that occur en route.  The term "ordinarily accessible" is intended to encompass stored material that is routinely accessible to third parties.  For example, the fact that an illegal intruder might be able to obtain access to the material would not make it ordinarily accessible to third parties.  Neither, for example, would occasional access in the course of maintenance by service provider personnel, nor access by law enforcement officials pursuant to subpoena make the material "ordinarily accessible."  However, the term does not include copies made by a service provider for the purpose of making the material available to other users.  Such copying is addressed in subsection (b).

New Section 512(b) applies to a different form of intermediate and temporary storage than is addressed in subsection (a).  In terminology describing current technology, this storage is a form of "caching," which is used on some networks to increase network performance and to reduce network congestion generally, as well as to reduce congestion and delays to popular sites.  This storage is intermediate in the sense that the service provider serves as an intermediary between the originating site and the ultimate user.  The material in question is stored on the service provider's system or network for some period of time to facilitate access by users subsequent to the one who previously sought access to it.  For subsection (b) to apply, the material must be made available on an originating site, transmitted at the direction of another person through the system or network operated by or for the service provider to a different person, and stored through an automatic technical process so that users of the system or network who subsequently request access to the material from the originating site may obtain access to the material from the system or network.

Subsections (b)(1) through (b)(5) clarify the circumstances under which subsection (b) applies.  Subsection (b)(1) provides that the material must be transmitted to subsequent users without modification to its content in comparison to the way it was originally transmitted from the originating site.  The Committee intends that this restriction apply, for example, so that a service provider who caches material from another site does not change the advertising associated with the cached material on the originating site without authorization from the originating site.

Subsection (b)(2) limits the applicability of the subsection to circumstances where the service provider complies with certain updating commands.

Subsection (b)(3) provides that the service provider shall not interfere with the ability of certain technology that is associated with the work by the operator of the originating site to return to the originating site information, such as user ‘hit' counts, that would have been available to the site had it not been cached.  The technology, however, must: (i) not significantly interfere with the performance of the storing provider's system or network or with intermediate storage of the material; (ii) be consistent with generally accepted industry standard communications protocols applicable to Internet and on-line communications, such as those approved by the Internet Engineering Task Force and the World Wide Web Consortium; and (iii) not extract information beyond that which would have been obtained had the subsequent users obtained access to the material directly on the originating site.

Subsection (b)(4) applies to circumstances in which the originating site imposes a prior condition on access.

Subsection (b)(5) establishes a notification and take-down procedure for cached material modeled on the procedure under new Section 512(c).  However, this take-down obligation does not apply unless the material has previously been removed from the originating site, or the party submitting the notification has obtained a court order for it to be removed from the originating site and notifies the service provider's designated agent of that order.  This proviso has been added to subsection (b)(5) because storage under subsection (b) occurs automatically, and unless infringing material has been removed from the originating site, the infringing material would ordinarily simply be re-cached.

New Section 512(c) limits the liability of qualifying service providers for claims of direct, vicarious and contributory infringement for storage at the direction of a user of material that resides on a system or network controlled or operated by or for the service provider.   Examples of such storage include providing server space for a user's web site, for a chatroom, or other forum in which material may be posted at the direction of users.  Subsection (c) defines the scope of this limitation on liability.  It also sets forth procedural requirements that copyright owners or their agents and service providers must follow with respect to notifications of claimed infringement under subsection (c)(3).   Information that resides on the system or network operated by or for the service provider through its own acts or decisions and not at the direction of a user does not fall within the liability limitation of subsection (c).

New subsection (c)(1)(A) sets forth the applicable knowledge standard.  This standard is met either by actual knowledge of infringement or, in the absence of such knowledge, by awareness of facts or circumstances from which infringing activity is apparent.  The term `activity' is intended to mean activity using the material on the system or network.  The Committee intends such activity to refer to wrongful activity that is occurring at the site on the provider's system or network at which the material resides, regardless of whether copyright infringement is technically deemed to occur at that site or at the location where the material is received.  For example, the activity at an on-line site offering audio or video may be unauthorized public performance of a musical composition, a sound recording, or an audio-visual work, rather than (or in addition to) the creation of an unauthorized copy of any of these works.

New subsection (c)(1)(A)(ii) can best be described as a ‘red flag' test.  As stated in new subsection (c)(l), a service provider need not monitor its service or affirmatively seek facts indicating infringing activity (except to the extent consistent with a standard technical measure complying with new subsection ([i])), in order to claim this limitation on liability (or, indeed any other limitation provided by the legislation).  However, if the service provider becomes aware of a ‘red flag' from which infringing activity is apparent, it will lose the limitation of liability if it takes no action.  The ‘red flag' test has both a subjective and an objective element.  In determining whether the service provider was aware of a ‘red flag,' the subjective awareness of the service provider of the facts or circumstances in question must be determined.  However, in deciding whether those facts or circumstances constitute a ‘red flag'—in other words, whether infringing activity would have been apparent to a reasonable person operating under the same or similar circumstances—an objective standard should be used.

New subsection (c)(1)(A)(iii) provides that once a service provider obtains actual knowledge or awareness of facts or circumstances from which infringing material or activity on the service provider's system or network is apparent, the service provider does not lose the limitation of liability set forth in subsection (c) if it acts expeditiously to remove or disable access to the infringing material.  Because the factual circumstances and technical parameters may vary from case to case, it is not possible to identify a uniform time limit for expeditious action.

New subsection (c)(1)(B) sets forth the circumstances under which a service provider would lose the protection of subsection (c) by virtue of its benefit from and control over infringing activity.  In determining whether the financial benefit criterion is satisfied, courts should take a common-sense, fact-based approach, not a formalistic one.  In general, a service provider conducting a legitimate business would not be considered to receive a ‘financial benefit directly attributable to the infringing activity' where the infringer makes the same kind of payment as non-infringing users of the provider's service.  Thus, receiving a one-time set-up fee and flat, periodic payments for service from a person engaging in infringing activities would not constitute receiving a ‘financial benefit directly attributable to the infringing activity.'  Nor is subsection (c)(1)(B) intended to cover fees based on the length of the message (e.g., per number of bytes) or by connect time.  It would however, include any such fees where the value of the service lies in providing access to infringing material.

New subsection (c)(1)(C) establishes that in cases where a service provider is notified of infringing activity by a copyright owner or its authorized agent, in accordance with the notification procedures of new subsection (c)(3), the limitation on the service provider's liability shall be maintained only if the service provider acts expeditiously either to remove the infringing material from its system or to prevent further access to the infringing material on the system or network.  This ‘notice and take-down' procedure is a formalization and refinement of a cooperative process that has been employed to deal efficiently with network-based copyright infringement.

The Committee emphasizes that new Section 512 does not specifically mandate use of a notice and take-down procedure.  Instead, a service provider wishing to benefit from the limitation on liability under new subsection (c) must ‘take down' or disable access to infringing material residing on its system or network in cases where it has actual knowledge or that the criteria for the ‘red flag' test are met—even if the copyright owner or its agent does not notify it of a claimed infringement.  On the other hand, the service provider is free to refuse to `take down' the material or site—even after receiving a notification of claimed infringement from the copyright owner.  In such a situation, the service provider's liability, if any, will be decided without reference to new Section 512(c).

At the same time, copyright owners are not obligated to give notification of claimed infringement in order to enforce their rights.  However, neither actual knowledge nor awareness of a ‘red flag' may be imputed to a service provider based on information from a copyright owner or its agent that does not comply with the notification provisions of new subsection (c)(3), in which case the limitation on liability set forth in new subsection (c) may still apply.

New Section 512(c)(2) provides that to qualify for the limitation on liability in new subsection (c), the service provider must designate an agent to receive notifications under new subsection (c)(1)(C).  The designation, provided to the Register of Copyrights, and made available on the service provider's web site, is to contain certain information necessary to communicate with the service provider concerning allegedly infringing material or activity.  The Register of Copyrights is directed to maintain a directory of designated agents available for inspection by the public, both on the web site of the Library of Congress, and in hard copy format on file at the Copyright Office.  The Committee does not intend or anticipate that the Register will publish hard copies of the directory.  The directory shall have entries for the name, address, telephone number, and electronic mail address of an agent designated by service providers.  The service provider's designation shall substantially comply with these elements.

New Section 512(c)(3) sets forth the procedures under which copyright owners and their agents may provide effective notification to a service provider of allegations of infringement on the provider's system or network.  New subsection (c)(3)(A) requires that to count as an effective notification, the notification must be in writing and submitted to the service provider's designated agent.  New subsections (c)(3)(A)(i)-(vi) then set forth the information to be included in an effective notification.  The standard against which a notification is to be judged is one of substantial compliance.  New subsection (c)(3)(A)(i) provides that the notification must be signed by the copyright owner, or its authorized agent, to be effective.  The requirement for signature, either physical or electronic, relates to the verification requirements of new subsections (c)(3)(A)(v) and (vi).  New subsection (c)(3)(A)(ii) requires that the copyright owner identify the copyrighted work alleged to have been infringed.  Where multiple works at a single on-line site are covered by a single notification, a representative list of such works at that site is sufficient.  Thus, for example, where a party is operating an unauthorized Internet jukebox from a particular site, it is not necessary that the notification list every musical composition or sound recording that has been, may have been, or could be infringed at that site.  Instead, it is sufficient for the copyright owner to provide the service provider with a representative list of those compositions or recordings in order that the service provider can understand the nature and scope of the infringement being claimed.

New subsection (c)(3)(A)(iii) requires that the copyright owner or its authorized agent provide the service provider with information reasonably sufficient to permit the service provider to identify and locate the allegedly infringing material.  An example of such sufficient information would be a copy or description of the allegedly infringing material and the so-called ‘uniform resource locator' (URL) (i.e., web site address) which allegedly contains the infringing material.  The goal of this provision is to provide the service provider with adequate information to find and examine the allegedly infringing material expeditiously.

New subsection (c)(3)(A)(iv) requires that the copyright owner or its authorized agent provide reasonably sufficient identifying information concerning the owner or its agent who submits the notification, such as an address, telephone number, and (if available) an electronic mail address so that the service provider may contact the complaining party.  New subsection (c)(3)(A)(v) makes clear that the notification from complaining parties must contain a statement that the complaining party has a good faith belief that the allegedly infringing use is not authorized by the copyright owner, or its agent, or the law.

New subsection (c)(3)(A)(vi) specifies that the notification must contain a statement that the information contained therein is accurate.  The complaining party—be it the copyright owner, or an authorized representative—also must confirm under penalty of perjury, that it has authority to act on behalf of the owner of the exclusive right that is allegedly being infringed.  The term ‘perjury' is used in the sense found elsewhere in the United States Code.  See, e.g., 28 U.S.C. Sec. 1746; 18 U.S.C. 1621.

New subsection (c)(3)(B) addresses the effect of notifications that do not substantially comply with the requirements of new subsection (c)(3).  Under new subsection (c)(3)(B), the court shall not consider such notifications as evidence of whether the service provider has actual knowledge, is aware of facts or circumstances, or has received a notification for purposes of new subsection (c)(1)(A).  However, a defective notice provided to the designated agent may be considered in evaluating the service provider's knowledge or awareness of facts and circumstances, if: (i) the complaining party has provided the requisite information concerning the identification of the copyrighted work, identification of the allegedly infringing material, and information sufficient for the service provider to contact the complaining party; and (ii) the service provider does not promptly attempt to contact the person making the notification or take other reasonable steps to assist in the receipt of notification that substantially complies with new subsection (c)(3)(A).  If the service provider subsequently receives a substantially compliant notice, the provisions of new subsection (c)(1)(C) would then apply upon receipt of such notice.

The Committee intends that the substantial compliance standard in new subsections (c)(2) and (c)(3) be applied so that technical errors (e.g., misspelling a name, supplying an outdated area code if the phone number is accompanied by an accurate address, supplying an outdated name if accompanied by an e-mail address that remains valid for the successor of the prior designated agent or agent of a copyright owner) do not disqualify service providers and copyright owners from the protections afforded under subsection (c).  The Committee expects that the parties will comply with the functional requirements of the notification provisions—such as providing sufficient information so that a designated agent or the complaining party submitting a notification may be contacted efficiently—in order to ensure that the notification and take-down procedures set forth in this subsection operate efficiently.

New Section 512(d) addresses instances where information location tools refer or link users to an on-line location containing infringing material or infringing activity.  The term ‘infringing activity' means the wrongful activity that is occurring at the location to which the user is linked or referred by the information location tool, without regard to whether copyright infringement is technically deemed to have occurred at that location or at the location where the material is received.  The term ‘information location tools' includes: a directory or index of on-line sites or material, such as a search engine that identifies pages by specified criteria; a reference to other on-line material, such as a list of recommended sites; a pointer that stands for an Internet location or address; and a hypertext link which allows users to access material without entering its address.

New subsection (d) incorporates the notification and take-down procedures of new subsection (c), and applies them to the provision of references and links to infringing sites.  A service provider is entitled to the liability limitations of new subsection (d) if it: (1) lacks actual knowledge of infringement on the other site, and is not aware of facts or circumstances from which infringing activity in that location is apparent; (2) does not receive a financial benefit directly attributable to the infringing activity on the site, where the service provider has the right and ability to control the infringing activity; and (3) responds expeditiously to remove or disable the reference or link upon receiving a notification of claimed infringement as described in new subsection (c)(3).  The notification procedures under new subsection (d) follow those set forth in new subsection (c).  However, the information submitted by the complaining party under new subsection (c)(3)(A)(iii) is the identification of the reference or link to infringing material or activity, and the information reasonably sufficient to permit the service provider to locate that reference or link.

New Section 512(d) provides a safe harbor that would limit the liability of a service provider that refers or links users to an on-line location containing infringing material or activity by using ‘information location tools,' such as hyperlink directories and indexes.  A question has been raised as to whether a service provider would be disqualified from the safe harbor based solely on evidence that it had viewed the infringing Internet site.  If so, there is concern that on-line directories prepared by human editors and reviewers, who view and classify various Internet sites, would be denied eligibility to the information location tools safe harbor, in an unintended number of cases and circumstances.  This is an important concern because such on-line directories play a valuable role in assisting Internet users to identify and locate the information they seek on the decentralized and dynamic networks of the Internet.

Like the information storage safe harbor in Section 512(c), a service provider would qualify for this safe harbor if, among other requirements, it ‘does not have actual knowledge that the material or activity is infringing' or, in the absence of such actual knowledge, it is ‘not aware of facts or circumstances from which infringing activity is apparent.'  Under this standard, a service provider would have no obligation to seek out copyright infringement, but it would not qualify for the safe harbor if it had turned a blind eye to ‘red flags' of obvious infringement.

For instance, the copyright owner could show that the provider was aware of facts from which infringing activity was apparent if the copyright owner could prove that the location was clearly, at the time the directory provider viewed it, a ‘pirate' site of the type described below, where sound recordings, software, movies, or books were available for unauthorized downloading, public performance, or public display.  Absent such ‘red flags' or actual knowledge, a directory provider would not be similarly aware merely because it saw one or more well known photographs of a celebrity at a site devoted to that person.  The provider could not be expected, during the course of its brief cataloguing visit, to determine whether the photograph was still protected by copyright or was in the public domain; if the photograph was still protected by copyright, whether the use was licensed; and if the use was not licensed, whether it was permitted under the fair use doctrine.

The intended objective of this standard is to exclude from the safe harbor sophisticated ‘pirate' directories—which refer Internet users to other selected Internet sites where pirate software, books, movies, and music can be downloaded or transmitted.  Such pirate directories refer Internet users to sites that are obviously infringing because they typically use words such as ‘pirate,' ‘bootleg,' or slang terms in their URL and header information to make their illegal purpose obvious, in the first place, to the pirate directories as well as other Internet users.  Because the infringing nature of such sites would be apparent from even a brief and casual viewing, safe harbor status for a provider that views such a site and then establishes a link to it would not be appropriate.  Pirate directories do not follow the routine business practices of legitimate service providers preparing directories, and thus evidence that they have viewed the infringing site may be all that is available for copyright owners to rebut their claim to a safe harbor.

In this way, the ‘red flag' test in new Section 512(d) strikes the right balance.  The common-sense result of this ‘red flag' test is that on-line editors and catalogers would not be required to make discriminating judgments about potential copyright infringement.  If, however, an Internet site is obviously pirate, then seeing it may be all that is needed for the service provider to encounter a ‘red flag.'  A provider proceeding in the face of such a ‘red flag' must do so without the benefit of a safe harbor.

Information location tools are essential to the operation of the Internet; without them, users would not be able to find the information they need.  Directories are particularly helpful in conducting effective searches by filtering out irrelevant and offensive material.  The Yahoo! directory, for example, currently categorizes over 800,000 on-line locations and serves as a ‘card catalogue' to the World Wide Web, which over 35,000,000 different users visit each month.  Directories such as Yahoo!'s usually are created by people visiting sites to categorize them.  It is precisely the human judgment and editorial discretion exercised by these cataloguers which makes directories valuable.

This provision is intended to promote the development of information location tools generally, and Internet directories such as Yahoo!'s in particular, by establishing a safe harbor from copyright infringement liability for information location tool providers if they comply with the notice and take-down procedures and other requirements of new subsection (d).  The knowledge or awareness standard should not be applied in a manner which would create a disincentive to the development of directories which involve human intervention.  Absent actual knowledge, awareness of infringement as provided in new subsection (d) should typically be imputed to a directory provider only with respect to pirate sites or in similarly obvious and conspicuous circumstances, and not simply because the provider viewed an infringing site during the course of assembling the directory.

New Section 512([f]) establishes a right of action against any person who knowingly misrepresents that material or activity on-line is infringing, or that material or activity was removed or disabled by mistake or misidentification under the ‘put-back' procedure set forth in new subsection ([g]).  Actions may be brought under new subsection ([f]) by any copyright owner, a copyright owner's licensee, or by a service provider, who is injured by such misrepresentation, as a result of the service provider relying upon the misrepresentation in either taking down material or putting material back on-line.  Defendants who make such a knowing misrepresentation are liable for any damages, including costs and attorneys' fees, incurred by any of these parties as a result of the service provider's reliance upon the misrepresentation.  This subsection is intended to deter knowingly false allegations to service providers in recognition that such misrepresentations are detrimental to rights holders, service providers, and Internet users.

New Section 512([g]) provides immunity to service providers for taking down infringing material, and establishes a `put back' procedure under which subscribers may contest a complaining party's notification of infringement provided under new subsection (c)(3).  The put-back procedures were added to balance the incentives created in new Section 512 for service providers to take down material against third parties' interests in ensuring that material not be taken down.  In particular, new subsection ([g])(1) immunizes service providers from any claim based on the service provider's good-faith disabling of access to, or removal of, material or activity claimed to be infringing.  The immunity also applies where the service provider disables access to, or removes, material or activity based on facts or circumstances from which infringing activity is apparent.  This immunity is available even if the material or activity is ultimately determined not to be infringing.  The purpose of this subsection is to protect service providers from liability to third parties whose material service providers take down in a good faith effort to comply with the requirements of new subsection (c)(1).

New subsection ([g])(2) establishes a ‘put back' procedure through an exception to the immunity set forth in new subsection ([g])(1).  The exception applies in a case in which the service provider, pursuant to a notification provided under new subsection (c)(1)(C) in accordance with new subsection (c)(3), takes down material that a subscriber has posted to the system or network.  In such instances, to retain the immunity set forth in new subsection ([g])(1) with respect to the subscriber whose content is taken down, the service provider must take three steps.

First, under new subsection ([g])(2)(A), the service provider is to take reasonable steps to notify the subscriber promptly of the removal or disabling of access to the subscriber's material.  The Committee intends that ‘reasonable steps' include, for example, sending an e-mail notice to an e-mail address associated with a posting, or if only the subscriber's name is identified in the posting, sending an e-mail to an e-mail address that the subscriber submitted with its subscription.  The Committee does not intend that this subsection impose any obligation on service providers to search beyond the four corners of a subscriber's posting or their own records for that subscriber in order to obtain contact information.  Nor does the Committee intend to create any right on the part of subscribers who submit falsified information in their postings or subscriptions to complain if a service provider relies upon the information submitted by the subscriber.

Second, pursuant to new subsection ([g])(2)(B), the subscriber may then file a counter notification, in accordance with the requirements of new subsection ([g])(3), contesting the original take down on grounds of mistake or misidentification of the material and requesting ‘put back' of the material that the service provider has taken down.  If a subscriber files a counter notification with the service provider's designated agent, new subsection ([g])(2)(B) calls for the service provider to promptly forward a copy to the complaining party who submitted the take down request.

And third, under new subsection ([g])(2)(C), the service provider is to place the subscriber's material back on-line, or cease disabling access to it, between 10 and 14 business days after receiving the counter notification, unless the designated agent receives a further notice from the complaining party that the complaining party has filed an action seeking a court order to restrain the subscriber from engaging in the infringing activity on the service provider's system or network with regard to the material in question.

Subscriber counter notifications must substantially comply with defined requirements set forth in new subsection ([g])(3).  Notifications shall be signed by the subscriber physically or by electronic signature; identify the material taken down and the location from which it was taken down; include a statement under penalty of perjury that the subscriber has a good faith belief that the material was taken down as a result of mistake or misidentification of the material; and include the subscriber's contact information, as well as a statement consenting to the jurisdiction of a Federal district court and to accept service of process from the complaining party or the complaining party's agent.  The substantial compliance standard is the same as that set forth in new subsections (c) (2) and (3).

New subsection ([g])(4) is included to make clear the obvious proposition that a service provider's compliance with the put-back procedure does not subject it to liability for copyright infringement or cause it to lose its liability limitation with respect to the replaced material.

New Section 512([h]) creates a procedure by which copyright owners or their authorized agents who have submitted or will submit a request for notification satisfying the requirements of new subsection (c)(3)(A) may obtain an order for identification of alleged infringers who are users of a service provider's system or network.  Under this procedure, the copyright owner or agent files three documents with the clerk of any Federal district court: a copy of the notification; a proposed order; and a sworn declaration that the purpose of the order is to obtain the identity of an alleged infringer, and that the information obtained will only be used to protect the owner's rights under this Title.

Orders issued under new subsection ([h]) shall authorize and order the service provider expeditiously to disclose to the person seeking the order information sufficient to identify the alleged infringer to the extent such information is available to the service provider.  The Committee intends that an order for disclosure be interpreted as requiring disclosure of information in the possession of the service provider, rather than obliging the service provider to conduct searches for information that is available from other systems or networks.  The Committee intends that such orders be expeditiously issued if the notification meets the provisions of new subsection (c)(3)(A) and the declaration is properly executed.  The issuing of the order should be a ministerial function performed quickly for this provision to have its intended effect.  After receiving the order, the service provider shall expeditiously disclose to the copyright owner or its agent the information required by the order to the extent that the information is available to the service provider, regardless of whether the service provider responds to the notification of claimed infringement.

New Section 512([i]) sets forth two conditions that a service provider must satisfy to be eligible for the limitations on liability provided in new subsections (a) through (d).  First, the service provider is expected to adopt and reasonably implement a policy for the termination in appropriate circumstances of the accounts of subscribers(1) of the provider's service who are repeat on-line infringers of copyright.  The Committee recognizes that there are different degrees of on-line copyright infringement, from the inadvertent and noncommercial, to the willful and commercial.  In addition, the Committee does not intend this provision to undermine the principles of new subsection ([m]) or the knowledge standard of new subsection (c) by suggesting that a provider must investigate possible infringements, monitor its service, or make difficult judgments as to whether conduct is or is not infringing.  However, those who repeatedly or flagrantly abuse their access to the Internet through disrespect for the intellectual property rights of others should know that there is a realistic threat of losing that access.

Second, a provider's system must accommodate, and not interfere with, standard technical measures used to identify or protect copyrighted works.  The Committee believes that technology is likely to be the solution to many of the issues facing copyright owners and service providers in this digital age.  For that reason, the Committee has included new subsection ([i])(1)(B), which is intended to encourage appropriate technological solutions to protect copyrighted works.  The Committee strongly urges all of the affected parties expeditiously to commence voluntary, inter-industry discussions to agree upon and implement the best technological solutions available to achieve these goals.

New subsection ([i])(1)(B) is explicitly limited to `standard technical measures' that have been developed pursuant to a broad consensus of both copyright owners and service providers in an open, fair, voluntary, multi-industry standards process.  The Committee anticipates that these provisions could be developed both in recognized open standards bodies or in ad hoc groups, as long as the process used is open, fair, voluntary, and multi-industry and the measures developed otherwise conform to the requirements of the definition of standard technical measures set forth in new subsection ([i])(2).  A number of recognized open standards bodies have substantial experience with Internet issues.  The Committee also notes that an ad hoc approach has been successful in developing standards in other contexts, such as the process that has developed copy protection technology for use in connection with digital video disk players.

New Section 512([j]) defines the terms and conditions under which an injunction may be issued against a service provider that qualifies for the limitations on liability set forth in new subsections (a) through (d), but is otherwise subject to an injunction under existing principles of law.  New subsection ([j])(1) limits the scope of injunctive relief that may be ordered against a qualifying provider.  New subsection ([j])(2) identifies factors a court must consider in deciding whether to grant injunctive relief and in determining the appropriate scope of injunctive relief.

New subsection ([j])(1) is divided into two subparagraphs.  New subparagraph (A) defines the scope of injunctive relief available against service providers who qualify for the limitations of liability set forth in new subsections (b), (c) or (d).  Only three forms of injunctive relief may be granted.  First, pursuant to new subsection ([j])(1)(A)(i), the court may provide for the removal or blocking of infringing material or activity that is residing at a specific location on the provider's system or network.  This is essentially an order to take the actions identified in new subsection (c)(1)(C) to ‘remove, or disable access' to the material that is claimed to be infringing or to be the subject of infringing activity.

Second, under new subsection ([j])(1)(A)(ii), the court may order the provider to terminate the accounts of a subscriber(2) of the provider's service who is engaging in infringing activity.  And third, pursuant to new subsection ([j])(1)(A)(iii), the court may, under appropriate circumstances, enter a different form of injunction if the court considers it necessary to prevent or restrain infringement of specific copyrighted material that resides at an identified on-line location.  If a court enters an injunction other than that contemplated in new subparagraphs (A) (i) or (ii), the court must determine that the injunctive relief is the least burdensome relief to the service provider among those forms of relief that are comparably effective.

New subsection ([j])(1)(B) sets forth a different set of remedies available for injunctions against service providers qualifying for the limitation on remedies set forth in new subsection (a).  In such cases, if a court determines that injunctive relief is appropriate, it may only grant injunctive relief in one or both of two specified forms.  The first, pursuant to new subparagraph (B)(i), is an order to the service provider to terminate subscriber accounts that are specified in the order.  The second form of relief, pursuant to new subparagraph (B)(ii) and available in cases in which a provider is engaging in infringing activity relating to a foreign on-line location, is an order to take reasonable steps to block access to a specific, identified foreign on-line location.  Such blocking orders are not available against a service provider qualifying under new subsection (a) in the case of infringing activity on a site within the United States or its territories.

New subsection ([j])(2) sets forth mandatory considerations for the court beyond those that exist under current law.  These additional considerations require the court to consider factors of particular significance in the digital on-line environment.  New subsection ([j])(3) prohibits most forms of ex parte injunctive relief (including temporary and preliminary relief) against a service provider qualifying for a liability limitation under new Section 512.  A court may issue an order to ensure the preservation of evidence or where the order will have no material adverse effect on the operation of the provider's network.

New Section 512([k]) provides definitions of the term ‘service provider' as used in this Title, as well as a definition of the term ‘monetary relief.'  Only an entity that is performing the functions of a ‘service provider' is eligible for the limitations on liability set forth in new Section 512 with respect to those functions.

The first definition of a ‘service provider,' set forth in new subsection ([k])(1)(A), narrowly defines a range of functions and applies only to use of the term in new subsection (a).  As used in new subsection (a), the term ‘service provider' means any entity offering the transmission, routing or providing of connections for digital on-line communications, between or among points specified by a user, of material of a user's choosing without modification to the content of the material as sent or received.  This free-standing definition is derived from the definition of ‘telecommunications' found in the Communications Act of 1934 (47 U.S.C.  Sec. 153(48)) in recognition of the fact that the functions covered by new subsection (a) are essentially conduit-only functions.  The Committee, however, has tweaked the definition for purposes of new subsection ([k])(1)(A) to ensure that it captures offerings over the Internet and other on-line media.  Thus, the definition in new subsection ([k])(1)(A) not only includes ‘the offering of transmission, routing or providing of connections,' but also requires that the service provider be providing such services for communications that are both ‘digital' and ‘on-line.'  By ‘on-line' communications, the Committee means communications over interactive computer networks, such as the Internet.  Thus, over-the-air broadcasting, whether in analog or digital form, or a cable television system, or a satellite television service, would not qualify, except to the extent it provides users with on-line access to a digital network such as the Internet, or it provides transmission, routing, or connections to connect material to such a network, and then only with respect to those functions.  An entity is not disqualified from being a ‘service provider' because it alters the form of the material, so long as it does not alter the content of the material.  As a threshold matter, a service provider's performance of a particular function with respect to allegedly infringing activity falls within the ‘service provider' definition in new subsection ([k])(1)(A) if and only if such function is within the range of functions defined in new subsection ([k])(1)(A).  For example, hosting a web site does not fall within the new subsection ([k])(1)(A) definition, whereas the mere provision of connectivity to a web site does fall within that definition.  The new subsection ([k])(1)(A) definition is not intended to exclude providers that perform additional functions, including the functions identified in new subsection ([k])(1)(B).  Conversely, the fact that a provider performs some functions that fall within the definition of new subparagraph (A) does not imply that its other functions that do not fall within the definition of new subparagraph (A) qualify for the limitation of liability under new subsection (a).

The second definition of ‘service provider,' set forth in new subsection ([k])(1)(B), applies to the term as used in any other new subsection of new Section 512.  This definition is broader than the first, covering providers of on-line services or network access, or the operator of facilities therefor.  This definition includes, for example, services such as providing Internet access, e-mail, chat room and web page hosting services.  The new subsection ([k])(1)(B) definition of service provider, for example, includes universities and schools to the extent they perform the functions identified in new subsection ([k])(1)(B).  The definition also specifically includes any entity that falls within the first definition of service provider.  A broadcaster or cable television system or satellite television service would not qualify, except to the extent it performs functions covered by ([k])(1)(B).

Finally, new subsection ([k])(2) defines the term ‘monetary relief' broadly for purposes of this Section as encompassing damages, costs, attorneys' fees and any other form of monetary payment.

New Section 512([l]) clarifies that other defenses under copyright law are not affected and codifies several important principles.  In particular, new Section 512 does not define what is actionable copyright infringement in the on-line environment, and does not create any new exceptions to the exclusive rights under copyright law.  The rest of the Copyright Act sets those rules.  Similarly, new Section 512 does not create any new liabilities for service providers or affect any defense available to a service provider.  Enactment of new Section 512 does not bear upon whether a service provider is or is not an infringer when its conduct falls within the scope of new Section 512.  Even if a service provider's activities fall outside the limitations on liability specified in the bill, the service provider is not necessarily an infringer; liability in these circumstances would be adjudicated based on the doctrines of direct, vicarious or contributory liability for infringement as they are articulated in the Copyright Act and in the court decisions interpreting and applying that statute, which are unchanged by new Section 512.  In the event that a service provider does not qualify for the limitation on liability, it still may claim all of the defenses available to it under current law.  New section 512 simply defines the circumstances under which a service provider, as defined in this new Section, may enjoy a limitation on liability for copyright infringement.

New Section 512([m]) is designed to protect the privacy of Internet users.  This new subsection makes clear that the applicability of new subsections (a) through (d) is in no way conditioned on a service provider: (1) monitoring its service or affirmatively seeking facts indicating infringing activity except to the extent consistent with implementing a standard technical measure under new subsection (h); or (2) accessing, removing or disabling access to, material if such conduct is prohibited by law, such as the Electronic Communications Privacy Act.

New Section 512([n]) establishes a rule of construction applicable to new subsections (a) through (d).  New Section 512's limitations on liability are based on functions, and each limitation is intended to describe a separate and distinct function.  Consider, for example, a service provider that provides a hyperlink to a site containing infringing material which it then caches on its system in order to facilitate access to it by its users.  This service provider is engaging in at least three functions that may be subject to the limitation on liability: transitory digital network communications under new subsection (a); system caching under new subsection (b); and information location tools under new subsection (d).  If this service provider (as defined in new subsection ([k])(1)(A) in the case of transitory digital communications, or as defined in new subsection ([k])(1)(B) in the case of system caching or information location tools) meets the threshold criteria spelled out in new subsection ([i])(1), then for its acts of system caching defined in new subsection (b), it may avail itself of the liability limitations stated in new subsection (b), which incorporate the limitations on injunctive relief described in new subsection ([j])(1)(B) and ([j])(3).  If it is claimed that the same company is committing an infringement by using information location tools to link its users to infringing material, as defined in new subsection (d), then its fulfillment of the requirements to claim the system caching liability limitation does not affect whether it qualifies for the liability limitation for information location tools; the criteria in new subsection (d), rather than those in new subsection (b), are applicable.  New Section 512([n]) codifies this principle by providing that the determination of whether a service provider qualifies for one liability limitation has no effect on the determination of whether it qualifies for a separate and distinct liability limitation under another new subsection of new Section 512.

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Footnotes

1.   [footnote 3 of House Report]  In using the term "subscribers," the Committee intends to include account holders that have a business relationship with the service provider that justifies treating them as subscribers, for the purposes of new Section 512, even if no formal subscription agreement exists.  For example, "subscribers" would include students who are granted access to a university's system or network for digital on-line communications; employees who have access to their employer's system or network; or household members with access to a consumer on-line service by virtue of a subscription agreement between the service provider and another member of that household.

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2.   [footnote 4 of House Report]  See supra note 3.

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