On 21 May 2020, the US Copyright Office issued its first full Report on Section 512 of the US Copyright Act, analysing the effectiveness of section 512 in achieving the intended balance of interests between online service providers (OSPs) and rightsholders.
The Office concluded that the system is unbalanced in favour of OSPs and made recommendations for how Congress might amend certain elements of section 512 to achieve a fairer balance in practice.
Section 512 was enacted in 1998 as part of the Digital Millennium Copyright Act.
Congress sought to balance two interests: providing legal certainty for OSPs and protecting the legitimate interests of rightsholders. To achieve this balance, section 512 creates a “safe harbor” system where “OSPs can enjoy certain limitations on copyright liability in exchange for meeting certain conditions while giving rightsholders an expeditious and extra-judicial method for addressing infringement of their works” [page 1].
There are four safe harbors contained in section 512: (1) Transitory Digital Network Communications; (2) System Caching; (3) Information Residing on Systems or Networks at Direction of Users; and (4) Information Location Tools [17 U.S.C. §§ 512(a)–(d)].
As part of this, all OSPs must adopt and reasonably implement termination policies for repeat infringers [17 U.S.C. § 512(i)] and maintain “notice and takedown” processes [17 U.S.C. §§ 512(b)–(d)].
The OSPs that meet the eligibility criteria will not be liable for monetary relief resulting from copyright infringement committed by its users and will be subject to only limited injunctive relief [17 U.S.C. §§ 512(b)–(d), (j)].
TRANSFORMATION OF THE INTERNET
Since section 512 was enacted in 1998, the internet has transformed astronomically. With this, copyright in the online sphere has developed: “authors have new tools with which to produce original works and to reach wide audiences; creative industries have built a host of ground-breaking distribution and licensing models; and consumers, researchers, educators, and others can access more copyrighted content, through a greater number of lawful channels, than at any other time in history” [page 9].
Substantial questions have been raised in recent years concerning the adequacy of section 512 to address the large volume of copyrighted online material, especially the maintenance of unauthorised material. Part of these concerns surround time, resources and reliance on automation [page 11].
In light of these concerns the Office undertook a study to “consider the statute’s current impact and effectiveness, along with potential improvements” [page 12].
The Office outlined a set of five guidelines to follow in conducting its review. These include online copyright protection being meaningful and effective [page 64]; OSP’s good faith affording legal certainty [page 65]; co-operation not being the only answer [page 66]; evidence-based decision making wherever possible [page 68]; and departure from a one-size-fits-all internet policy [page 71].
The Office offered twelve recommendations for legislative action, with the guiding principles in mind, some of which are explored below.
Many of the recommendations relate to the need for clarification from Congress of the scope of legislative terms. For example, the first recommendation concerns narrowing the scope of eligible types of OSPs for the safe harbor system [page 86].
Specifically, the Office drew attention to the need for Congressional clarification of certain broad terms such as “temporary” in section 512(b) and “by reason of the storage” in section 512(c) as activities related to hosting have wrongly been caught. The third recommendation further highlights the need for clarification, directing Congress to the knowledge requirements for OSPs, specifically focusing on “red flag knowledge” [17 U.S.C. §§ 512(c), (d)], the common law “willful blindness standard” and the common law “vicarious liability standard”.
Some of the recommendations propose the adoption of new processes. For example, the second recommendation proposes the introduction of clear, documented and publicly available repeat infringer policies and for Congress to clarify the “appropriate circumstances” for termination of a repeat infringer’s account [page 95].
The Office also brought attention to the effect of case law post the enactment of section 512. The sixth recommendation considers the impact of Lenz v. Universal Music Corp on section 512 of potentially placing liability on rightsholders who fail to undertake a fair use inquiry before sending a takedown notice, without regard to whether or not the material is actually infringing. The Office suggests that Congress monitor the impact of ongoing case law on section 512 and consider making amendments as necessary [page 150].
The Office further considered the effect of section 512 in practice. The seventh recommendation recommends that Congress consider shifting the required minimum notice standards for a takedown notice to a regulatory process in order for the submission of takedown notices to become more streamlined across OSPs [page 153].
The Office also looked at the introduction of non-statutory approaches, including the launch of educational materials on section 512 for both rightsholders and OSPs [page 171].
At present, the recommendations remain mere proposals to Congress for legislative action and further exploration. The Senate Judiciary intellectual property subcommittee has announced plans to draft changes to the DMCA later this year. Whether any legislative changes include the recommendations of the Office remain speculative as the Office were keen to stress they were not recommending any “wholesale changes” to section 512.
As well as the US, online intermediaries and the safe harbor system are also under discussion in the EU in relation to the Digital Services Act. Interestingly, the Office did not recommend the adoption of the notice-and-staydown initiative, which the DSM Directive now requires.