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Imagine that you operate a Web site and host message boards and chat rooms as part of your business mission to create a community of interest among your users. Now imagine that you are served with a lawsuit claiming that you have infringed the copyright of a major record company by distributing on your site the latest hot tune on the charts. You say, of course, “No way! We aren’t in the music business and we don’t infringe copyrights by unauthorized copying, hosting or distribution!” Maybe you use other, more colorful words to that effect. Then you find out that someone has been using your message boards to post unauthorized music for others to download. Unfortunately for you, you find out that copyright is what lawyers call a strict liability tort, meaning that you are guilty of infringement whether or not you even knew the material was on your site, and whether or not you authorized it. The good news is that, at your lawyer’s suggestion, you had already implemented a simple notice procedure and take-down policy that provides you a safe harbor under federal law and protects you from liability under this scenario. How can your company enjoy the same happy ending? By complying with the Digital Millennium Copyright Act (the “DMCA”). 17 U.S.C. � 512. Of course, the safe harbor (17 U.S.C. � 512(a)) is applicable only if you fall within and follow its provisions, and the law governing its application is relatively new and untested, so we can’t be certain precisely what circumstances it covers. But at the least, timely and proper implementation of the DMCA preserves your argument that you fall within its safe harbor for claims of copyright infringement, and does so at a low cost. Web site providers — and who isn’t these days? — subject themselves to liability by allowing others to post material on the site when the material infringes copyright. Examples include pirated software, songs, articles, graphics, and photos that are not the property of the poster. In addition, although this issue has not yet been interpreted by a court, the DMCA’s limitations on liability likely also apply to content on the Web site provided by third party content providers or contract developers who “direct” storage of material on the site. That said, contracts with each content provider should certainly include thorough indemnification of the site owner for any infringing material provided for the site. In late 1998, Congress enacted the DMCA which provides protection for online service providers as defined by 17 U.S.C. � 512 (k)(1)(A). Service providers clearly include Internet service providers that offer dial-up and broadband service for transmission, routing and connectivity. By the plain language of the DMCA, we believe that the definition of service provider also extends to any Web site hosting material posted by third parties. This would include message boards, chat rooms and similar technologies that can provide a forum for bad actors, as well as those who just don’t know any better, to post, copy and distribute infringing materials. At the least, the DMCA’s safe harbor provision provides a colorable argument for non-liability for infringing activities that take place in such areas over which the host has no control. In the first court case on the subject ( A&M Records v. Napster, N. Dist. Calif. No. C 99-05183 MHP, May 5, 2000), Napster, the start-up peer to peer file-sharing technology company famous for providing a service which allows users to share music files, lost its argument that it was protected under the safe harbor. In its opinion on the motion for summary judgement, issued on May 5, 2000, Judge Patel of the U.S. District Court for the Northern District of California, refused to afford the safe harbor to Napster because, among other things, it was late in implementing a notice and take-down policy. Id.at 13. Judge Patel further found that Napster inadequately implemented its attempts to block access to its users who were identified or alleged to be infringers. Id.at 14. In a finding of greater concern to peer to peer service providers than to Web site hosts, Judge Patel also found that Napster did not meet the definition of a “service provider” under the DMCA as it pertains to the safe harbor provisions, because Napster “does not transmit, route or provide connections for allegedly infringing material through its system”. Id. Again, this last conclusion is based on its peer to peer connectivity model and would not apply to companies which host chat rooms or message boards on their Web sites. This case represents the first and so far only, but certainly not the final, word on the DMCA’s safe harbor. On July 26, 2000 Judge Patel granted a preliminary injunction against Napster without further addressing the safe harbor provisions of the DMCA. A&M Records v. Napster, N. Dist. Calif. No. C 99-5183 MHP No. C 00-0074, July 26, 2000. On July 28, a two judge panel of the Court of Appeals for the Ninth Circuit stayed the injunction pending appeal. HOW TO AVOID NAPSTER’S FATE Eager to avoid Napster’s fate? Fortunately the safe harbor is easy to implement, and at the least preserves the argument that you deserve protection against suits involving infringing material about which you were unaware and over which you had no control. TERMS OF SERVICE AGREEMENT Every Web site — and certainly those which offer interactive areas such as message boards and chat rooms — should adopt a written or electronic policy allowing removal of inappropriate material from the site and providing for termination of access for account holders who are repeat infringers. 17 U.S.C. � 512(i)(1)(A). Users should be informed of the termination policy, for example by including the policy on the registration gateway through which users must pass to gain access to such features, and requiring affirmative acceptance of these terms. A Web site operator can accomplish this by including a termination of access provision as part of the Terms of Service. Before granting users access to interactive areas of the site such as message boards, chatrooms or other areas where they can post content, users should be required to register and affirmatively accept the Terms of Service agreement. This can be accomplished without requiring the user to click through extra steps by designing the registration gateway so that when users submit their registration information, they are presented with an embedded window containing the Terms of Service, then click on a submission button (perhaps labeled “I Accept”) associated with a notice that indicates that the user has not only completed the registration form, but also has read, understands and agrees to be bound by the Terms of Service presented. Users should be given another button allowing them to opt out of the registration as well. DESIGNATE AN AGENT To qualify for the DMCA’s safe harbors, a service provider must first take the following actions: (1) Designate an agent to receive notification of claimed infringement from copyright owners. The agent can be an employee of the company, or someone outside the organization. Designate someone in a position to respond quickly to any notices of claimed infringement. (2) Register the designated agent with the U.S. Copyright Office. The Copyright Office has issued interim regulations about this registration. The Copyright Office has prepared sample forms available in .pdf format online at http://lcweb.loc.gov/copyright/onlinesp/agent.pdf. These are very brief and simple forms that a company can usually complete on its own. The cost of registration is only $20 payable to the Register of Copyrights. (3) Adopt a written procedure providing for termination of users — subscribers and account holders — who repeatedly violate the copyrights of others. The policy and contact information for your designated agent also must be posted on your Web site. A sample policy is included as this week’s practice tool for your reference. SUMMARY OF “TAKE-DOWN” PROCEDURES Designating and registering an agent with the Copyright Office satisfies only part of the safe harbor’s requirements. To fall within its protection, a company must also establish a “take-down” procedure to be followed in instances where an appropriate complaint of copyright infringement is made. See 17 U.S.C. � 512(c)(3)(A). Here’s what such a procedure must entail: Exemption from Liability. If a service provider in good faith removes or blocks access to material that it has cached, stored at a user’s request, or referred users to, either because the service provider has received proper notice from a copyright owner, or because the service provider has become aware of apparent infringement, the DMCA exempts the service provider from any liability for such removal or blocking and from liability, whether equitable or monetary, for copyright infringement resulting from the material provided the service provider “expeditiously” acts to remove or block access to the offending content. Notice and Putback. If a service provider removes or blocks material posted by a user in response to a complaint of infringement, it must take some steps designed to protect the user’s rights which may ultimately lead to putting the material back on the system: (1) The service provider must take reasonable steps to promptly notify the user that the service provider has removed or blocked the material; and (2) If the user sends a proper “counter notification” to the service provider stating that the removal or blocking was a result of a mistake or a misidentification of the material; then (3) The service provider, to remain exempt from liability for the “take-down”, must provide a copy of the counter notification to the alleged copyright owner that sent the original notice; and (4) Unless the party claiming to own the infringing material then notifies the service provider that it has filed a court action seeking to restrain the alleged infringement, the service provider must replace or unblock the material within not less than 10 nor more than 14 business days of receiving the counter notification. These procedures are sufficiently complex that subscribers rarely contest take downs. However, your posted Terms of Service for users of message boards or chat rooms should nonetheless clearly establish that you have the right to remove or disable access to any content which you, in your sole discretion, deem to be inappropriate. We believe that, with properly drafted procedures, allegations of infringement will be rare. The notice and take-down procedure we provide in the accompanying tool is designed to discourage spurious submissions, and makes plain that a proper notice requires fairly substantial specifics and preparation. Nonetheless, determination of copyright infringement is often a difficult question, and any allegations or suspicions you may have as a Web site owner of infringing material on your site should promptly be brought to the attention of your in-house or outside counsel. Additionally, bear in mind that this article provides only a general overview of these issues, but that analysis of copyright infringement and related statutes is complex. Your needs may vary according to your specific facts. CONCLUSION While the courts have just begun to wrestle with the safe harbor provision of the DMCA and the contours of the provision are yet to be established, companies hosting third party content have no reason to delay in fulfilling the qualifying requirements of the DMCA’s safe harbor. By doing so, to the extent they are available to you, you are positioned to take full advantage of the protections provided by the DMCA. Alan Lewine is an Associate in the Venture Capital and Emerging Growth Companies practice group of Piper Marbury Rudnick & Wolfe LLPwho focuses his practice on eCommerce intellectual property, licensing and strategic alliance agreements. He also is a member of the Business & Technology, Intellectual Property and eCommerce and Privacy Policy practice groups. This article provides general information only and not legal advice. Legal issues are complex and highly fact-dependant. You should discuss your particular needs with an attorney before making any decisions.

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