As user-generated content explodes over the Internet, intellectual property disputes over posting or uploading such content without the owner’s consent continue to escalate. As we touched on in a recent post, social media platforms, hosting websites or other online service providers (OSPs) may be entrapped in these disputes based on the infringing actions of users of these OSPs. In such a situation, the Digital Millennium Copyright Act (DMCA) provides a safe harbor provision to the OSP known as the Online Copyright Infringement Liability Limitation Act (OCILLA.) This provision, found at 17 U.S.C. § 512(c), protects service providers from liability for “infringement of copyright by reason of the storage at the direction of a user of material that resides” on the provider’s system or network, if certain requirements are met.

To take advantage of this safe harbor provision, the service provider must 1) lack actual knowledge of the infringing material or activity on its system or network; 2) be unaware of any facts or circumstances from which infringing activity is apparent; and 3) act promptly to remove or disable access to any infringing material once becoming aware of such material. In addition, assuming the service provider has the right and ability to control the infringing activity, it cannot be receiving a financial benefit directly attributable to said activity.

Finding in Favor of Clarity
However, the interpretation of the phrase “direction of a user” has been litigated in several cases. Most recently, a district court in Colorado defined “user” as “a person or entity who avails itself of the service provider’s system or network to store material.” This definition would appear to include the OSP’s employees. In BWP Media USA Inc. v. Clarity Digital Group LLC, the plaintiff argued against such an interpretation, saying that doing so would allow the OSP to benefit from Section 512(c) even if it is the provider’s own employees uploading the infringing material. In the case, Clarity operated a news website where contributing authors called Examiners could post content and receive compensation. Clarity staff would conduct preliminary screening of the Examiners and did provide some supervision, but the Examiners were otherwise independent contractors. BWP Media sued Clarity when the website allegedly displayed 75 copyrighted photographs without plaintiff’s permission. Clarity sought summary judgment based on immunity from the claims pursuant to Section 512(c). BWP Media argued that the definition of “use” should exclude an OSP’s “owner, employee and/or agent.” However, the Court rejected these arguments and adopted the definition of “a person or entity who avails itself of the service provider’s system or network to store material.” Accordingly, the Court granted summary judgment in favor of Clarity.

Maintainers, Moderators and LiveJournal
In Mavrix Photographs LLC v. LiveJournal, Inc., a California district court reached a similar conclusion. LiveJournal was sued for copyright infringement for seven sets of celebrity photographs that were posted on its platform. LiveJournal operates a web-based social media platform that allows users to create personalized online “journals” and allows its users to create “communities” around specific topics or shared interests. Anyone can set up a LiveJournal account and participate in the service. Each community has at least one user that acts as a “maintainer,” who has administrative privileges that allow him or her to add new maintainers, delete posts or comments, and/or remove or ban users from the community. Communities can also have “moderators,” who are users who volunteer to moderate a discussion by rejecting posts uploaded by the general users (e.g., spam, pornographic, harassing or irrelevant). A maintainer can remove a moderator. The photographs at issue were posted by a user to the ONTD! Community; however, LiveJournal has no technical means to determine which moderator approved the posts. It was undisputed that third-party users selected the infringing content for the seven posts in question, created the posts, and uploaded the posts to LiveJournal’s platform. The Court found that the fact that all posts had to be approved by a moderator before becoming visible on the site did not disqualify LiveJournal under the “broad” statutory language of the DMCA safe harbor for “infringement … by reason of the storage at the direction of the user.”

Every Harbor Has Its Limits
The above two cases seem to suggest that an OSP is immune from liability for the actions of its agents and even employees. However,Capitol Records LLC v. Vimeo LLC, helps to draw a line. In that case, Capitol Records brought a copyright infringement action against an online video-sharing platform based on videos uploaded to the site. The difference was that at least 10 of the 199 videos at issue were undisputedly uploaded by Vimeo employees. Thus, plaintiffs argued that “the ten employee-uploaded videos may not fairly be characterized as stored at the direction of users but rather must be characterized as stored at the direction of Vimeo through common law agency principles.” In addition, 55 of the videos were interacted with by Vimeo employees, although not uploaded by them. These interactions included commenting on a video or listing the video on a “Staff Picks” channel. As to these videos, plaintiffs argued that such evidence demonstrated that Vimeo had actual or red flag knowledge of the infringing content. Vimeo cited to Capitol Records, Inc. v. MP3tunes, LLC, in which the Court concluded that the employees’ personal use of the defendant’s website could not be the basis of a direct infringement claim against the defendant (emphasis added). Ultimately, the Court in Vimeo found a triable issue with respect to whether the employees were storing their content as “users” within the meaning of § 512(c) or as employees acting within the scope of their employment. Thus, Vimeo’s motion for summary judgment based on the safe harbor protection was denied as to the 10 videos uploaded by its employees (as well as the 55 videos that Vimeo’s employees interacted with). The Court did grant Vimeo’s summary judgment as to 144 of the disputed videos uploaded by users and with which Vimeo’s employees did not interact.

As these cases demonstrate, while Courts generally interpret Section 512(c)’s safe harbor provision broadly as to “user,” OSPs do need to be careful as to what their employees upload, as the employees’ actions may likely impute knowledge of any infringement to the OSP.