ONLINE SERVICE PROVIDER LIABILITY

May 1999

For several years there has been concern about whether an Internet online service provider(OSP) is liable for contributory infringement when a subscriber or user of its service infringes copyright. The 1998 Digital Millennium Copyright Act answers the question, and it depends. Why is this important to special libraries? Because not only are service providers such as America On-Line and Mindspring at risk, but many organizations also provide Internet services for their employees. Whether the company, agency or institution is responsible for the infringing acts of the users of the online system is determined by the DMCA.

The section that deals with OSP liability is the Online Copyright Infringement Liability Limitation Act, and is now incorporated into the Copyright Act as section 512. The goal of the amendment is to exempt from liability the OSP that acts merely as a conduit for messages by using an automatic process for routing, providing connections or storage. Thus, if the OSP does not: (a) initiate transmission of the material, (b) select the material to be transmitted, (c) select the recipients of the material, (d) store the material longer than is reasonable necessary for the transmission, or (e) modify the content of the material, it is not liable for copyright infringement.

In addition to these requirements, the OSP must not have actual knowledge that the material is infringing or, if there is no actual knowledge, it must not be aware of the infringing activity from the facts or circumstances surrounding it. Should the OSP become aware of the infringing activity, it must expeditiously remove or disable access to the material. Additionally, the OSP must receive no financial benefit from the infringing activity. The OSP also is required to adopt and implement a policy to terminate the rights of infringing users of the system. Finally, if the OSP receives notice of claimed infringement, it is obligated to remove or disable access. In order to qualify for the exemption in the first place the OSP has to designate an agent to receive notifications of claimed infringement by sending the name and contact information to the U.S. Copyright Office where it is posted on the Office website <http://lcweb.loc.gov/copyright/onlinesp/>. The OSP also must include the name and contact information of the agent on the OSP’s own publicly available website.

This notice and takedown provision protects the OSP from liability, but its use certainly may threaten the fair use rights of users of the system. Assume that the OSP is a corporation, and the user is a librarian. She places some items on the library’s webpage that she and the director believe are fair use, but a copyright owner files a complaint with the corporate contact person. The corporation is then obligated to take down the material while it makes a determination about whether the use is infringing. The corporation could put the material back up if it determines that the use is a fair one. However, OSP’s literally could be flooded with such complaints which may have little merit. There is some protection against spurious claims of infringement by an OSP in that liability is imposed on persons who knowingly and materially misrepresent that online material or activity is infringing.

But what it the alleged owner is wrong, but it is not knowingly wrong? An OSP, especially a university OSP, may develop very strict regulations on what may and may not be included on websites just to avoid potential liability. Since it can avoid liability by taking down the material, it is likely that such policies well could be so strict that fair use is sacrificed to the interest of reducing the number of complaints that the OSP has to investigate. Other possible outcomes could be that the OSP simply takes down any material about which there is a complaint and, since it will not put up the material again, conducts no investigation. Or it could requires permission for all inclusion of materials that may be copyrighted and for all hyperlinks. Fair use clearly will have become a victim of well-meaning over caution.

If the OSP is an outside entity, it is even insulated against liability for erroneously taking down material in response to a complaint. So, the OSP has nothing to lose in taking down material even permanently. Nor does it have a duty to investigate for again making the material available. The loser then is fair use and ultimately society.

An organizational OSP automatically loses its exemption if the library in the organization creates a websites that include material which someone may allege is copyrighted. Through employees of the organization, the OSP, such as a corporation, nonprofit organization or educational institution has been involved in the selection and maybe even modification of the content of the material transmitted. Thus, the organizational OSP is liable.

There is a peculiar provision for nonprofit educational institutions that purports to limit the liability of such institutional OSP’s. Section 512(e) states that an educational institution OSP is not liable when a faculty member or graduate student who is performing a teaching or research function places copyrighted materials on a webpage if: (1) the material is not instructional material that is assigned or recommended to students, (2) the institution has not had more than two notices of infringement against such person during the preceding three years, and (3) the institution provides to all users of the system informational material that “accurately describes, and promotes compliance” with the copyright law.

This is practically a non-exemption since the only reason most faculty and graduate teaching assistants would be placing materials on a website for students is that it is assigned or recommended. Further, the DMCA provisions are silent about fair use under the classroom guidelines. It seems to indicate that even limiting access to students in a particular class would not permit the educational institution to claim an exemption. Further, to avoid liability, the institution would have to take down the material while it investigates, and the time for use of the material may pass while the investigation proceeds. Thus, educational institutions stand to lose considerably under this exemption.

The online service provider liability exemption will be problematic for all types of libraries as they strive to make materials available to users in digital format and create finding tools and hyperlinks. Librarians must work with corporate and university counsel to encourage them to preserve fair use by developing policies for web-based materials and finding tools that take full advantage of the privilege fair use provides to users of copyrighted works.