CONGRESS ROCKS THE WEB

By Jim Jenal

The newly enacted Digital Millenium Copyright Act (DMCA) radically shifts the balance of power between copyright holders and World Wide Web site owners. For companies with easily copied intellectual property, the Act offers a low-cost way to protect that investment. At the same time, companies establishing a Web presence must think long and hard about posting materials whose copyright pedigree is in doubt.

While the DMCA contains provisions covering everything from implementation of the World Intellectual Property Organization treaties to protection for boat hulls, it is Title II’s provisions that are responsible for this radical restructuring of relationships on the Web. Designated the “Online Copyright Infringement Liability Limitation,” Title II provides a safe-harbor from copyright liability for online service providers (OSPs) who comply with the law’s requirements. Unfortunately in the process, Congress has set the stage for the most drastic change in Internet culture since the World Wide Web first shattered the taboo against commercialization of the ‘Net.

Here’s how it will work. An owner of copyrighted material who believes that their intellectual property is being infringed can send a “notification of claimed infringement” to the OSP hosting the offending page. Although the copyright owner must swear under penalty of perjury to be the owner of, or hold the exclusive rights to, the copyrighted material allegedly infringed, any other allegations only require a “good faith belief” that the identified web site is using the material without permission.

Upon receiving this notification, the OSP who wants to avoid copyright liability, must remove, or block access to, the offending pages and “take reasonable steps promptly to notify” the owner of the web page that this material has been removed or blocked. For the web page owner to contest this summary disruption of their Internet presence, they must provide the OSP with a “counter notification” swearing, under penalty of perjury, as to their good faith basis for believing that the copyright owner’s claim is either a mistake or a matter of misidentification. Furthermore, the web page owner must consent to the jurisdiction of the federal court in their judicial district, or any judicial district in which the OSP may be found if thee owner is not a U.S. resident, and to accept service of process from the copyright owner. If their counter notification is lacking in any substantial manner, it will be ineffective and the disputed pages will remain off the Web.

However, even those measures may not be enough to restore the status quo ante. While the OSP must generally reinstate the allegedly offending material within 10 to 14 business days after receiving the counter notification, if the copyright owner advises the OSP that it is suing for infringement, the allegedly offending material will remain off the Web.

Strikingly absent from what amounts to an extra-judicial procedure for obtaining an injunction is any analysis of the actual merits of the copyright owner’s claim, or evidence of irreparable harm the typical requirements in an ex parte proceeding for equitable relief. Also absent is any examination of statutorily available defenses under the Copyright Act, such as fair use. Instead, a mere good faith allegation of infringement is sufficient under the DMCA to rip allegedly offending material from the Web. While the Act does provide penalties, including attorney’s fees, for knowing misrepresentations by the complaining party, that is a very difficult thing to prove and presupposes that the web page owner has the resources to take the matter to court.

The potential impact of this radical restructuring is hard to overstate. Copyright owners who until this Act have had to tolerate “trivial” infringements of their protected material now have a powerful weapon to use against offending web sites. That may seem like a boon to the righteous and a blow to scofflaws, but even good corporate citizens have reason to be alarmed at this shift in power. Since many companies farm out the development of their web sites to small web design firms, they are all too often unaware of the copyright pedigree for much of the art and other incidental material appearing on their pages. Yet if clearance has not been obtained to use what the web designers might consider freely useable content, the company may find its considerable investment in a Web presence disrupted by the application of this Act.

There are several lessons to be learned from this revolution in the law. Online service providers will want to make certain that they are in compliance with the provisions of the Act. Companies with a substantial portfolio of easily copied intellectual property may want to dedicate some resources to policing their rights, given the inexpensive remedy now available. Conversely, in-house counsel would be well advised to take a much more proactive approach to reviewing their nascent web pages and insist that web designers verify their right to use the art and other content underlying their designs.

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Jim Jenal is an associate in the litigation department of O’Melveny & Myers LLP and is a co-founder of the firm’s Internet Law Practice Group. Mr. Jenal is also an Adjunct Professor of Law at Loyola Law School where he teaches Internet Law.