Appeals Court Finds MP3 Company Lost DMCA Safe Harbor Protection

Appeals Court Finds MP3 Company Lost DMCA Safe Harbor Protection

As discussed here, the Digital Millennium Copyright Act has “safe harbor” provisions that protect internet service providers and website platforms from most liability for infringing actions of their users. In order to receive these protections, service providers must follow certain conditions, including “notice and takedown” procedures that give copyright holders a way to disable infringing content.

Another major requirement for safe harbor protection is that the service provider “adopt and reasonably implement” a policy to terminating repeat infringers. This has been at the center of disputes in two closely watched cases recently.

EMI Christian

In EMI Christian Music Group Inc. et al. v. MP3tunes LLC, several record companies and music publishers filed a copyright lawsuit against MP3tunes and its CEO, alleging that two of its internet music services infringed their copyrights in thousands of sound recordings and musical compositions. MP3tunes ran a website that allowed users to upload and store songs found on the Internet.

The district court ruled, in part, that MP3tunes qualified for the DMCA’s safe harbor protection and had reasonably implemented a repeat infringer policy. The Second Circuit overturned that decision in October, finding the lower court used too narrow a definition of repeat infringer.

More specifically, the appeals court said repeat infringer is not limited to those who willfully infringe copyrights. While noting the DMCA doesn’t explicitly define a repeat infringer, it said that the legislative history of the law “indicates that a ‘repeat infringer’ does not need to know of the infringing nature of its online activities, or to upload rather than download content.”

Explaining the circumstances when an online service provider must act in order to keep its DMCA safe harbor, the Second Circuit said there is not an “amorphous” duty on a service provider to actively monitor or act on only a “generalized awareness” of infringement. It said the copyright owner must show the service provider had knowledge of the infringement (or of facts and circumstances from which infringing activity was obvious) and failed to take down the infringing matter. “In other words, a copyright owner must point to a defendant’s ‘actual knowledge or awareness of facts or circumstances that indicate specific and identifiable instances of infringement.” Based on this rule, the court affirmed the jury verdict against MP3 with respect to red-flag knowledge and willful blindness.

BMG Rights

This decision builds on another closely watched case, BMG Rights Management et al. v. Cox Communications, where a court in November 2015 held that Cox forfeited the immunity of the DMCA by failing to shut down the accounts of subscribers who repeatedly downloaded music illegally. The ruling, which cleared the way for a $25 million jury verdict finding Cox liable for willful contributory copyright infringement, put the burden on internet service providers to develop real programs to combat infringement. Cox has filed an appeal with the Fourth Circuit.

Conclusion

Taken together, these cases demonstrate the importance of ISPs and online service providers developing and maintain response mechanisms to prevent repeat infringers. Failure to do so can put them at risk of losing their protection under the DMCA safe harbor, and open them up to potentially crippling liability.

 

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