NARROWING OF THE “SAFE HARBOR” PROVISIONS OF THE
Ivan Hoffman, B.A., J.D.
The Digital Millennium Copyright Act (“DMCA”) provides certain “safe harbor” provisions for online “hosts” of other parties’ content. Section 512 of the Copyright Act provides in part:
(c) Information Residing on Systems or Networks At Direction of Users.—
(1)In general.—A service provider shall not be liable for monetary relief, or, except as provided in subsection (j), for injunctive or other equitable relief, for infringement of copyright by reason of the 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, if the service provider—
(A) (i) does not have actual knowledge that the material or an activity using the material on the system or network is infringing;
(ii) in the absence of such actual knowledge, is not aware of facts or circumstances from which infringing activity is apparent; or
(iii) upon obtaining such knowledge or awareness, acts expeditiously to remove, or disable access to, the material;
(B) does not receive a financial benefit directly attributable to the infringing activity, in a case in which the service provider has the right and ability to control such activity; and
(C) upon notification of claimed infringement as described in paragraph (3), responds expeditiously to remove, or disable access to, the material that is claimed to be infringing or to be the subject of infringing activity.
[There are other provisions not relevant to this scope of this article. You should read “The Notice and Take Down Provisions of the DMCA” on my site.]
I previously wrote about how parties who “host” sites but who also have designed or otherwise maintain those sites risk losing their “safe harbor” protection because it seems likely that they cannot claim that they do not have “actual knowledge” or even “red flag” knowledge of the infringing material. Read “Web Design and Hosting Combinations: Cautionary Tales” and “Are You A Service Provider?” and “Are You The Provider Of An “Interactive Computer Service?” on my site.
The Ninth Circuit Court of Appeals decided a case involving so-called “moderated forums” that further potentially narrows the scope of the possibility of these “safe harbors.” A “moderated forum” is one in which, although other parties may post materials (including in this instance materials that may infringe on the rights of copyright of third parties), those postings are not automatically viewable by others on the forum but instead are reviewed and curated by parties who may have legal relationships with the host or platform. If it turns out that those reviewers or curators are employees or agents or otherwise under the control of the host or platform, then, as with the web designer who is also a host, the host or platform may not be able to claim the benefits of the above “safe harbor” provisions.
In Mavrix Photographs, LLC. vs. Live.Journal, Inc., 853 F.3d 1020 (2017), these were the facts in part as recited by the Court:
ONTD is a popular LiveJournal community which features up-to-date celebrity news. Users submit posts containing photographs, videos, links, and gossip about celebrities’ lives. ONTD moderators review and publicly post some of the submissions. Other users engage in conversations about the celebrity news in the comments section of each post.
ONTD has nine moderators, six maintainers, and one owner. ONTD users submit proposed posts containing celebrity news to an internal queue. Moderators review the submissions and publicly post approximately one-third of them. Moderators review for substance, approving only those submissions relevant to new and exciting celebrity news. Moderators also review for copyright infringement, pornography, and harassment.
When ONTD was created, like other LiveJournal communities, it was operated exclusively by volunteer moderators. LiveJournal was not involved in the day-to-day operation of the site. ONTD, however, grew in popularity to 52 million page views per month in 2010 and attracted LiveJournal’s attention. By a significant margin, ONTD is LiveJournal’s most popular community and is the only community with a “household name.” In 2010, LiveJournal sought to exercise more control over ONTD so that it could generate advertising revenue from the popular community.
The Court reviewed the provisions of section 512 (c) as discussed above. The key issue was the legal status of these moderators and reviewers in relationship to the host/platform LiveJournal.
The Court stated:
The § 512(c) safe harbor, however, focuses on the service provider’s role in publicly posting infringing material on its site. See Shelter Capital, 718 F.3d at 1018; S. Rep. No. 105-190, at 43-44 (1998). Contrary to the district court’s view, posting rather than submission is the critical inquiry. See Perfect 10, Inc. v. Giganews, Inc., 847 F.3d 657, 668-69 (9th Cir. 2017) (distinguishing between the service provider’s passive role when users “upload[ ] infringing content onto  servers” and “any sort of active role” on the basis of who “caused the images to be displayed”). In the context of this case, that inquiry turns on the role of the moderators in screening and posting users’ submissions and whether their acts may be attributed to LiveJournal. (853 F.3d 1020, 1028) [emphasis added]
Mavrix argued that the common law of “agency” should be applied to determine that legal relationship and the Court agreed. The Court stated:
“Agency is the fiduciary relationship that arises when one person (a `principal’) manifests assent to another person (an `agent’) that the agent shall act on the principal’s behalf and subject to the principal’s control, and the agent manifests assent or otherwise consents so to act.” Restatement (Third) Of Agency § 1.01 (Am. Law Inst. 2006). For an agency relationship to exist, an agent must have authority to act on behalf of the principal and “[t]he person represented [must have] a right to control the actions of the agent.” Restatement (Third) Of Agency § 1.01, cmt. c (Am. Law Inst. 2006).
LiveJournal argues that it did not assent to the moderators acting on its behalf. Mavrix, however, presented evidence that LiveJournal gave its moderators explicit and varying levels of authority to screen posts. Although LiveJournal calls the moderators "volunteers," the moderators performed a vital function in LiveJournal's business model. There is evidence in the record that LiveJournal gave moderators express directions about their screening functions, including criteria for accepting or rejecting posts. Unlike other sites where users may independently post content, LiveJournal relies on moderators as an integral part of its screening and posting business model. LiveJournal also provides three different levels of authority: moderators review posts to ensure they contain celebrity gossip and not pornography or harassment, maintainers delete posts and can remove moderators, and owners can remove maintainers. Genuine issues of material fact therefore exist regarding whether the moderators had actual authority. (853 F.3d 1020, 1029-30)
Keep in mind that the Ninth Circuit was ruling on whether or not the trial court’s granting of a motion for summary judgment was proper. On that basis, the Ninth Circuit ruled that there were triable issues of fact and thus the granting of that motion was not proper. This means that there was enough issues of fact to proceed to trial.
A further issue the Court discussed was whether the posts were “at the direction of a user” or whether, because of the intervention of the moderators, the posts were not “at the direction of a user” but instead at the direction of the site. So LiveJournal would have to show that the posts were “at the direction of a user” in order to even meet the minimum standards of the “safe harbor” provisions.
Furthermore, LiveJournal would also have to show that it did not have either actual knowledge of infringing material or that it did not have “red flag” knowledge. In this context, this would mean that it would have to show that the photographs’ bearing watermarks did not create this “red flag” knowledge. The statute provides:
“is not aware of facts or circumstances from which infringing activity is apparent”
There were other issues in the case that are not directly related to the subject of this article.
“Online” law continues to evolve. It makes lawyering in this environment a continually exciting thing.
If you host sites or platforms or design sites or platforms, you should consult an attorney with experience in these matters.
Copyright © 2018 Ivan Hoffman. All Rights Reserved.
This article is not legal advice and is not intended as legal advice. This article is intended to provide only general, non-specific legal information. This article is not intended to cover all the issues related to the topic discussed. You should not rely on this article in any manner whatsoever and you should not draw any conclusions of any sort from this article. The specific facts that apply to your matter may make the outcome different than would be anticipated by you. This article is based on United States laws but the laws of other countries may be different. You should consult with an attorney familiar with the issues and the laws of your country. This article does not create any attorney client relationship and is not a solicitation.
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