DMCA’s Safe Harbor Provisions Allow Startups to Grow and Thrive
TLDR: The U.S. Copyright Office released a long-anticipated report last week which found that the system for resolving claims of online infringement should be updated. While the agency said that it was not recommending any wholesale changes to the current process, it has advocated for updates that would substantially alter the framework for startups that host user-generated content. With more Americans than ever before relying on digital services and online resources to create and share content during the pandemic, it’s critical for lawmakers and federal officials to carefully balance any changes to the law that could have an outsized impact on startups and their users.
What’s Happening This Week: Internet companies, consumer groups, and copyright holders are examining the conclusions made in the U.S. Copyright Office’s multi-year report on Section 512 of the Digital Millennium Copyright Act as lawmakers consider whether to revise the landmark law.
The Copyright Office’s Section 512 report, released late last week, asserts that the notice-and-takedown system for resolving claims of online infringement is out of sync with the framework that Congress had in mind when it passed the DMCA in 1998. That critical safe harbor framework allows copyright holders to identify and flag claims of infringement on online platforms. Internet companies that comply with certain requirements—including addressing rightsholders’ complaints about potential infringement—will not be automatically liable for users’ alleged infringement.
The Copyright Office still recommended that Congress review the DMCA’s safe harbor provisions to balance "the rights and responsibilities of online service providers and rightsholders in the creative industries," updates that would substantially alter the framework for online startups.
Senator Thom Tillis (R-N.C.), chairman of the Senate Judiciary Subcommittee on Intellectual Property, previously announced plans to review the DMCA this year “to evaluate both the policy baseline created by the DMCA and the current practices and operations of both platforms and creators in response.” The subcommittee has already held several hearings and has indicated a desire to offer a legislative change to the DMCA before the end of the year.
Why it Matters to Startups: The DMCA’s safe harbor provisions have carefully balanced the rights of copyright holders, service providers, and Internet users for decades. The law correctly reflects that it is impossible for Internet platforms to identify copyright infringements on their own. Particularly at a time when so many people are relying on digital services in the midst of the coronavirus outbreak, it is clear that startups should not be in the position of adjudicating infringement.
The law’s current safe harbor provisions are designed to protect rightsholders while also providing certainty to online platforms that host user-generated content. That’s why lawmakers should carefully scrutinize any potential changes to the DMCA—particularly Section 512’s notice-and-takedown framework—to guarantee that the startup community is not harmed by any changes to the law.
As we have previously noted, damages in copyright infringement cases could be as high as $150,000 per work infringed—an amount that would likely bankrupt most early-stage startups if they were held legally liable for their users’ actions. The DMCA protects startups from being held automatically liable for infringement if they follow the law’s safe harbor provisions, which require—among other things—that platforms remove content when they receive notices that accuse their users of infringement.
The current protections also ensure that startups do not need to spend a significant amount of their time or resources developing expensive and imperfect filtering technologies, or hiring staff to identify and remove user-generated content with infringing materials. Even if startups were forced to incur the costs of reviewing every user-generated post for potential infringement, they would never be able to determine whether a given post was infringing without facts relevant to copyright status, ownership, and fair use.
The Copyright Office’s Section 512 report largely focused on the concerns of specific rightsholders instead of weighing multiple interests, including those of the startup community. Online platforms of all sizes are already working to remove infringing user-generated content from their platforms, and making the changes that the report suggests—without additional feedback—would undermine the interests of Internet users, platforms, and creators.
Of particular concern to the startup community is the report’s assertion that, while wholesale changes to the DMCA are not warranted, the safe harbor provisions are “unbalanced” and in need of legislative clarification. Any changes to the safe harbor provisions will have a drastic impact on the entire online ecosystem, and it’s critical that congressional leaders consider the impact on Internet platforms, especially the small and new ones that make up the U.S. startup ecosystem.
The coronavirus pandemic has underscored the important role that online resources and digital services play in our daily lives. With so many of these online services experiencing a surge in usage, Internet companies are being pushed to their limits by the effort to effectively moderate their users’ content. Without the DMCA’s carefully-balanced framework, many of these online firms would be subjected to crippling litigation at a particularly vulnerable time.
Before making any changes to the critical safe harbor provisions that these firms depend upon to grow and thrive, lawmakers need to engage the startup community further to make sure that the DMCA continues to promote balanced copyright rules for rightsholders, online users, and Internet companies.
On the Horizon.
The Schools, Health & Libraries Broadband (SHLB) Coalition is holding a webinar this Friday at 1 p.m. to provide a legislative update on congressional efforts to fund broadband connectivity across the United States.
The Senate Judiciary Subcommittee on Intellectual Property is holding a hearing at 2:30 p.m. next Tuesday, June 2nd to discuss whether or not the DMCA’s notice-and-takedown system is working for the 21st century.
