Photobucket is an online photo storage site that gets referral fees from third-parties if it encourages artists to have the third-party print photos on the third-party's website. Photobucket was sued by a visual artist who claimed that a number of her copyrighted images were uploaded to Photobucket without her consent. She notified Photobucket, and some of her notices were compliant with the Digital Millennium Copyright Act (DMCA). The DMCA provides immunity to interactive service providers from copyright infringement liability based on storage at the direction of its users, when, among other things, the provider promptly removes content upon receipt of a properly formatted notice that the content is infringing. However, the DMCA does not provide immunity when the provider has actual knowledge of the infringement and directly profits from the infringement. When Photobucket received DMCA complaint notices of infringement, it took down the allegedly infringing photos, and even took down photos in some cases when the notice was not compliant with the DMCA. The artist, convinced that more infringing photos remained in Photobucket, filed suit for copyright infringement, and a motion for a preliminary injunction. On March 17, 2011, the U.S. District Court for the Southern District of New York denied her motion, and held that Photobucket had no duty to ensure that photos on its website were non-infringing, even if it has received notice of infringement in the past. The court found that Photobucket met the requirements of the DMCA even though it received referral fees from a third-party photo printing website because Photobucket did not have actual knowledge of specific photos that were infringing, did not have a duty to police for such infringements, and did not directly profit from any infringement because it received referral fees for all photos that were printed by the third-party, not just the photos that were allegedly infringing.

TIP: Companies that host content generated or uploaded by their users should ensure that they are compliant with the DMCA, and may, like Photobucket, want to consider even taking down infringements if the notices they receive are not 100% compliant with the Act.