July 02, 2020

DMCA 512 Report: Key Findings by the U.S. Copyright Office

8 min

The U.S. Copyright Office recently issued the long-awaited and first comprehensive U.S. government study on the 20-year-old Section 512 of the Copyright Act. Section 512 is a widely used, high-stakes and regularly litigated provision of the federal copyright law that is relevant to many. The 250-page study (which we will refer to here as the "512 Report") contains an incredibly thorough and well-done analysis of the current law in this area, the learned challenges of this provision, and the viewpoints of various stakeholders with regard to some of the challenges that exist with Section 512. This article is intended to provide a very brief overview of the key findings. The 512 Report can be found at https://www.copyright.gov/policy/section512/section-512-full-report.pdf for those interested in reading it in full.

By way of background, Congress enacted Section 512 of the Copyright Act in 1998 as part of the Digital Millennium Copyright Act (DMCA), and it was meant to be a balancing tool for online service providers (OSPs) and content creators/rights holders to address copyright infringement in the complex and ever-changing online landscape. Section 512 was intended to shield OSPs from copyright infringement liability, under certain specific circumstances, as we discussed in a previous article, when third parties upload or post unauthorized copyrighted material to a platform or website, among other methods, and put a system in place for rights holders to have their unauthorized works removed from these websites, known as the DMCA takedown notice. If executed properly, a DMCA takedown is meant to be an efficient process to put the OSP on notice that the rights holder's work is being used without permission; remove the work from the platform expeditiously; and put the third party on notice that the third party has infringed a copyrighted work. OSPs that fail to respond appropriately to a valid notice lose the safe harbor they may otherwise have had, if other requisite steps are followed, from the otherwise strict liability for the infringing material they are hosting (even if unwittingly). Twenty years later, and after experiencing how legal precedent has developed around Section 512 while technology continues to change rapidly, OSPs and rights holders continue to have rather different views regarding whether Congress struck the right balance with Section 512.

In 2015, the Copyright Office ("Office") began the Section 512 Study ("Study") to "evaluate the impact and effectiveness of the DMCA safe harbor provisions" at Congress's request. The Office put tremendous work into the Study, reviewed thousands of written responses, and held numerous roundtables to hear from the OSPs and rights holders. Although somewhat of a generalization, the OSPs largely do not see the need for changes to 512 of the DMCA, but the rights holders view the process as a tiresome game of whack-a-mole. The OSPs argue that a more stringent approach would limit their innovation and progress. Rights holders respond, however, that with the ease in which content is transferred online, there is no way they will be able to monitor and effectively remove content that infringes their copyrights.

There have been several collaborative efforts between the OSPs and the rights holders to come to better terms, but these have not produced a solution that satisfies everyone. Several "best practices" guidelines have been released to address user-generated content, fair use, and online piracy.1 Formal agreements have also been signed by the parties to facilitate "the operations within the notice-and-takedown framework."2 There have also been private initiatives, such as educational outreach and technological tools, to help combat copyright infringement. Many OSPs believe they are doing their part in limited infringing material on their sites, but many rights holders believe more can be done.

The 512 Report by the Copyright Office articulated that the 512 mechanism is not working as intended and opined that the burdens on rights holders are increasing while the OSPs enjoy protections beyond what Congress intended. In proposing its recommendations to Congress, the Office used the following principles to guide the Study:

  • Copyright protection online must be meaningful and effective;
  • OSPs operating in good faith must be afforded legal certainty and leeway to innovate;
  • Congress intended to incentivize cooperation between OSPs and rights holders, but cooperation cannot be the only answer;
  • To the extent possible, government decision-making should be based on evidence; and
  • Internet policy in the twenty-first century cannot be one-size-fits-all.3

To be clear, the Copyright Office did not recommend "any wholesale changes to section 512, instead electing to point out the numerous areas where Congress may wish to fine-tune section 512's current operation."4 Specifically, the Office recommends that Congress reexamine the following areas of the statute:

  • Eligible Types of OSPs: The Office recommends clarification of some of the eligibility requirements to qualify for the safe harbor, for instance, §512(c) activities related to storage or hosting, §512(b) timing guidelines for what constitutes "temporary" storage, and whether other technology services, such as payment processors and peer-to-peer systems, should qualify under §512(a).
  • Repeat Infringer Policies: Currently, an unwritten repeat infringer policy, provided such policy is implemented, is enough for OSPs to be eligible under §512(i)(1)(A). However, the Copyright Office recommends that this policy should be clearly accessible to deter infringers. Additionally, the Office recommends additional guidance on what "appropriate circumstances" are when OSPs are terminating repeat infringers.
  • Knowledge Requirements for OSPs: The Office recommends that Congress clarify the actual versus red flag knowledge requirements as they relate to §512(c), (d); the willful blindness standard used in connection with §512(m); and the right and ability to control standard in §512(c)(1)(B).
  • Representative List and Identification of Location: Per §512(c)(3)(A)(ii)-(iii), rights holders must identify the work "claimed to have been infringed," and "information reasonably sufficient" to identify such material. In light of the tension between the statutory language and the interpretations by some courts and OSPs, the Office recommends that Congress clarify whether "a unique, file-specific URL" is needed or should be necessary to identify each infringing occurrence.
  • Knowing Misrepresentation and Abusive Notices or Counter-Notices: The Office simply notes that stakeholders have asked for increased penalties for misrepresentations in notices or counternotices to serve as a deterrent effect. No recommendations were made, as the Office appears to believe that this provision, §512(f), has been interpreted correctly by the courts, which have generally required actual knowledge or willful blindness of falsity.
  • Knowing Misrepresentation and Fair Use: The Office questions the Lenz court's test for a knowing misrepresentation under Section 512(f) and recommends that Congress monitor the impact of the Lenz court5 test for knowing misrepresentation under §512(f) that may cause liability to the rights holder for not considering a fair analysis prior to sending a DMCA notice and consider clarifying language on this issue as necessary.
  • Standard & Non-standard Notice Requirements: The Office recommends shifting the notice standards requirements in §512(c) to a "regulatory process." Some of the OSP-imposed requirements in their takedown forms are not efficient for rights holders. Additionally, some of the current notification standards are becoming out of date.
  • Time Frames Under Section 512: Per §512(g)(3), an OSP within 10-14 days must restore the allegedly infringing content in response to a counternotice if the alleged infringer does not file a lawsuit related to the content at issue. The Office recommends an alternative dispute resolution model because the current mechanism is considered to be too long to block speech and yet too short to realistically file suit.
  • Subpoenas: The Office believes the language in §512(h) is ambiguous as to whether mere conduit OSPs may also be subpoenaed for alleged infringer identification, and thus recommends some clarification as to this area.
  • Injunctions: The Office does not see a need for congressional intervention in this area unless Congress believes that the current narrow interpretation of injunctive relief under §512(j) should be broader than it has been in practice.

In addition, the Office believes that voluntary efforts can greatly increase the efficiency of the takedown process, including education. The Copyright Office plans to lead these efforts by unveiling a new website, copyright.gov/DMCA, which will include model notices and practical tips, among other useful information, and we look forward to seeing this take shape.

Section 512 is a fascinating area for copyright practitioners and scholars, and should be understood by a great many businesses, beyond the most active content owners and OSPs who have been at the forefront of these issues. The above is intended to be only a general overview. For a more comprehensive analysis of the Office's findings and recommendations, you may read the Section 512 Study Report in full, or contact one of the authors of this article should you need guidance.


Footnote:

1 For example, the Principles for User Generated Content Services ("UGC Principles") were created as "a set of guidelines designed to address the proliferation of uploaded content that infringes copyrighted works." Subsequently, the Fair Use Principles for User Generated Video Content ("Fair Use Principles") were also published as "a set of guidelines meant to provide concrete steps to be taken to minimize unnecessary, collateral damage to fair use in light of the techniques advocated in the UGC Principles." U.S. Copyright Office Section 512 Report, pp. 36-38 (2020).
For example, the RogueBlock program, created by the International AntiCounterfeiting Coalition, was implemented "to create a streamlined, simplified procedure for members to report online sellers of counterfeit or pirated goods directly to credit card and financial services companies." Id. p. 39.
Id. pp. 64-72.
Id. pp. 7, 198.
Lenz v. Universal Music Corp., 801 F.3d 1126, 1154 (9th Cir. 2015) (holding that a rights holder must consider fair use before sending a DMCA takedown notification).