The Importance of DMCA for Startups
Section 512 of the Digital Millennium Copyright Act (“DMCA”) is a landmark law that has provided startups, copyright holders, and Internet users with a balanced framework to address allegations of online infringement. But Congress is considering revising the law, and in that process it is critical for policymakers to carefully consider the importance of the DMCA to the startups and creators that rely on its protections.
The Senate Judiciary Subcommittee on Intellectual Property held a hearing Tuesday to discuss how the DMCA’s notice-and-takedown framework is working in the 21st century. The hearing included testimony from Abby Rives, Engine’s IP Counsel, who discussed the importance of the DMCA to startups.
Abby explained that any changes to the DMCA—even minor—could harm startups. The DMCA is critical to U.S. startups, providing early-stage firms and smaller tech companies with the legal certainty they will not be automatically liable when their users are accused of infringement. Instead, the law sets up requirements startups must abide by to avoid liability, including the notice-and-takedown system, where copyright owners can send notices claiming infringement and startups take down the accused material in response. This system, and its associated safe harbor protections, strike a sensible balance.
Most Internet platforms—large or small—see very few claims of potential infringement, so the notice system allows them to focus in on the small fraction of content that might be infringing. Moreover, startups in particular lack the resources and staffing to address these concerns solely on their own. And technology filters have inherent limitations that make them incapable of fully addressing online copyright infringement. Since Internet firms lack the necessary information to identify infringing content (for example, companies do not and cannot shoulder the knowledge of all copyright works and owners), it makes sense for rightsholders to identify instances of alleged infringement.
While the DMCA’s notice-and-takedown framework has worked well for startups and creators, improper and abusive takedown notices remain a real problem. Some notice-senders intentionally exploit the framework to target competitors or remove non-infringing content they just do not like. While there are some mechanisms in place to help combat this type of abuse, they are rarely used and have proved ineffective. Policymakers need to keep these concerns in mind as they consider any changes to the DMCA’s framework, since changing the law in ways that encourage companies to take down even more content will exacerbate existing problems.
Some have proposed changes to the DMCA—such as imposing a duty on Internet platforms to monitor everything their users post—which would make copyright litigation more costly for startups, potentially forcing them into bankruptcy. Damages in copyright infringement cases can reach as much as $150,000 per work infringed, and it can easily cost millions of dollars to litigate these cases. Lawmakers need to be careful that proposed updates to the DMCA do not harm the overall startup ecosystem.
Policymakers should not go about their review of the DMCA by setting up a false dichotomy of “tech stakeholders” and “copyright stakeholders.” This framing inaccurately captures the realities of the modern Internet ecosystem, and could potentially lead to changes that are harmful to content creators and the platforms they depend upon to reach customers.
Read Abby’s full testimony here.
