Many nonprofit organizations operate websites or other electronic communication forums that allow member-generated content to be posted in one form or another (uploads, comments, posts, contents, etc.). Often the nonprofit owner of the website has no idea what is being posted by its users and can be held liable for copyright infringement caused by user-generated content unless appropriate protective measures are followed under the federal Digital Millennium Copyright Act (DMCA). As a result, most nonprofits have established an appropriate policy for removing copyright-infringing content from their websites. Compliance is required in order to be protected by the safe harbor under the DMCA, which limits the web host's liability.

However, a recently promulgated rule from the U.S. Copyright Office may drastically affect copyright liability for nonprofits and other online service providers. The new rule changes how online service providers, such as nonprofits, designate registered agents with the U.S. Copyright Office and updates the steps service providers must follow to remain in compliance under the DMCA. Any nonprofit that operates a website can be classified as an online service provider under the statute.

Section 512(c) of the DMCA provides a safe harbor for online service providers from monetary liability based on copyright-infringing activities of users or third parties. However, this protection is not automatic. To be eligible, the DMCA requires online service providers to first register an agent with the U.S. Copyright Office to receive notifications of alleged infringement claims. The U.S. Copyright Office is charged with creating and maintaining a directory of all the registered agents that is accessible to the public.

Since its inception, the information contained in the U.S. Copyright Office directory has always been generated by paper filings submitted on a one-time basis by online service providers. But a recent study conducted by the U.S. Copyright Office revealed that 22% of the registered entities were defunct, and 65% of the non-defunct service provider designation agents had inaccurate information. This was determined by comparing the information provided on the entities' websites with what they had registered with the U.S. Copyright Office. In other words, organizations were not updating the information. Therefore, as of December 1, 2016, the U.S. Copyright Office ceased accepting paper designations. Instead, it is now modernizing this process by establishing a new online forum that allows nonprofits to register or change designated agents online, which it hopes will encourage service providers to keep their information up to date. All nonprofits that have already registered an agent through the paper system will have until December 31, 2017 to update their designation with the new system or risk losing the safe harbor protections under Section 512(c).

The New Rule

Under the finalized rule, all new nonprofits can register only with the new online system, and all previously registered nonprofits must re-register online by December 31, 2017. The U.S. Copyright Office will charge a $6.00 fee for designation renewals, reduced from $105.00. To register a designated agent using the new online system, service providers must first create an online account with the U.S. Copyright Office. Additionally, to remain under the protections of the safe harbor, the new rule requires all service providers to submit the following information:

  1. The nonprofit's legal name and street address. Just as in the previous system, the new rule does not allow a service provider to list a P.O. Box as a street address.
  2. All names the nonprofit is doing business as. These should include commonly used names and names the public might use to search for the provider's agent.
  3. Up-to-date contact information and mailing address for the designated agent. Under the new rule, an agent's address can be filed as a P.O. Box, and an agent's name can be filed as either an individual or a department title or third-party entity.

Implications

The most dramatic change from the current paper-based directory is the rule's new requirement that all online service providers renew designations every three years, even if the information is the same. Since renewal is not required under the current regulation, many nonprofits and other organizations may fail to re-register and unknowingly lose protections under the DMCA safe harbor. This minor change exposes nonprofits to a significant risk of copyright liability for simply forgetting to update an online form every few years. And unfortunately, this new liability risk will likely have a more considerable impact on the smaller organizations that lose protective status based on new technicalities.

The rule, which has been criticized for its risk of inadvertent loss of safe harbor protections, will likely face multiple challenges in court. However, it is still incumbent upon every nonprofit operating a website or other electronic communication forum that accepts user-generated content of any kind to update its DMCA agent's designations.