Secondary liability for copyright infringement occurs without the defendants directly committing an act of copyright infringement themselves. There is no direct language pertaining to secondary infringement in U.S. copyright law, but there are sets of common law precedents that have enabled its implementation in the courtroom. In a landmark court case this past December, a well-known provider of Internet services was held accountable for secondary copyright infringement on a large scale. A legal brief follows, and the case will be discussed after that.
For secondary infringement to occur there must be a primary act of copyright infringement, i.e. one of the six exclusive rights under the Copyright Act must be violated directly by an individual or group of individuals. For example, an owner of an MP3 reproducing and distributing an unauthorized copy through a P2P file sharing website, is directly committing an act of copyright infringement. Or, say an aspiring DJ remixes Bruno Mars’ hit Uptown Funk without obtaining a derivative works license, and proceeds to reproduce and distribute it digitally via the Internet. While both individuals are violating copyright law, those websites and Internet service providers within which the infringing activity takes place may also be liable for copyright infringement in a secondary manner (we will collectively referred to them as Online Service Providers or OSP’s for the remainder of this article). In the case of copyright infringement of sound recordings and compositions of musical works, these secondarily liable parties are often streaming websites such as YouTube and Soundcloud, and file sharing sites such as Limewire and the Pirate Bay.
Secondary liability for copyright infringement is legally classified as either vicarious or contributory. For a judgment of vicarious liability, the party at fault must have no “actual knowledge” of the infringement taking place, but it must be profiting in some way.1 The intent of the law is “to punish one who unfairly reaps the benefits of another’s infringing activity.”2 It is, in the end, a case of negligence, where the party in question is not deliberately ignoring illegal activity across an OSP. Contributory liability is different. It implies that the defendant knowingly committed copyright infringement, and is actively causing, encouraging or contributing to that activity in their OSP. In Viacom International v. YouTube, Inc., Viacom claimed that YouTube was actively encouraging its users to upload videos time and again, knowing full well that this could promote the illegal use of Viacom’s catalog. The case was settled out of court, likely because it would have been difficult for YouTube to refute the premise that it was failing to take down the offending material and acting as a contributing infringer. Cases of vicarious liability are less likely to be prosecuted, for evidence may be harder to come by. In effect, there are more instances of contributory infringement because a connection can be more easily made between the defendant and the act of infringement.
The 1998 Online Copyright Infringement Liability Limitation Act (OCILLA), a component of the Digital Millennium Copyright Act, limited the secondary liability of OSPs for copyright infringement. The OCILLA (17 U.S.C. § 512) specifically lays out a legal framework through which OSP’s can be found not liable for copyright infringement. This is commonly referred to as the “safe harbor” provision of the DMCA. An OSP is not liable (i) if they do not have “actual knowledge” of infringing activity taking place on their service; (ii) they are not aware of “facts or circumstances from which infringing activity is apparent”; or (iii) if they remove infringing content expeditiously upon being made aware of infringing activity.3 Additionally, the OSP is not liable if they do not receive a financial benefit directly attributable to the infringing activity. The OCILLA also stipulates a ‘non-compete’ clause, where the OSPs can be made liable for taking down or limiting access to fair use works, including original songs and videos (the OSP issuing the takedown notices would be liable for any damages incurred for loss of access to the non-infringing content).
OCILLA’s provisions mirror many of the themes discussed above, and there is congruence between the common law interpretation of secondary liability in copyright infringement and the stipulations of the DMCA embodied in its safe harbor exemptions. However, a safe harbor defense is now less effective than it has ever been.
This became clear in December when BMG Rights Management and Round Hill Music LP filed suit against Cox Communications, a big player in the high-speed broadband market and the third-largest cable television provider in the United States. The ISP, it was said, was at fault for being both deliberately negligent and willfully ignorant of blatant copyright infringements on their network. Its users were frequenting Torrent sites and Cox Communications “repeatedly refused to terminate the accounts of repeat offenders”. Further, it was alleged that Cox allowed the infringing activity to take place in order not to lose revenue from Internet fees, playing fast and loose with copyright law.4 Cox pleaded ignorance, which entitled them to protection under the OCILLA of the DMCA; BMG and Round Hill replied that they made the infringing activity abundantly clear to them on many occasions.
Cox Communications was found guilty of contributory copyright infringement and ordered to pay $25 million in damages.5 The damages paid by Cox do not include any expense for policing the network on an ongoing basis.6 Moreover, there will be strong ripple effects of the judgment, because it was against one of the largest communications companies in the U.S. Precedent determines the interpretation of common law and this is one case that cannot be dismissed.
The End of the Far West
The days of the Internet’s Far West may well be over. “Actual knowledge” is easy to prove with dedicated spider bots roaming the Web and reporting in real time to the aggrieved parties. Copyright infringement watchdog companies, such as Rightscorp, are getting better at their job and are increasingly seen as effective tools to enforce copyright protection. The common law judgment of December adds much more incentive for similar operations to come to market and will likely tightens the protective circle around content creators.
The recent settlement of SoundCloud with most of the U.S. majors, covered elsewhere in this issue of The MBJ, also speaks to a tougher legal climate for OSPs. Playing unlicensed music is becoming harder and SoundCloud is the music industry’s most current example of this shift towards licensed content. This also applies to YouTube. A licensing deal will always be an insurance payment against a lawsuit and it makes new business much easier.
But Darwin is on the side of pirates too. Even if the service providers run a carefully gated operation, some infringers may still fly under the radar. Moreover, the new ruling could lead to an increased sense of responsibility and due diligence by the OSPs in filtering unwanted content and in turn affect the availability of recorded music on the Internet. Civil society, and the music industry, might then be worse for the punishment.
By Spencer Ritchie
1. Berger, 2010.
3. United States Copyright Office, 1998.
4. Jones, 2015.
5. Resnikoff, 2015.
6. Jones, 2015.
Berger, A. (2010, 10 3). Secondary Liability under the DMCA: Has the DMCA Shrunk Contributory Infringement and Vicarious Liability? Retrieved 2 8, 2016, from IP in Brief: http://www.ipinbrief.com/dmca-contributory-infringement-vicarious-liability/
Electronic Fronteir Foundation. (2016, 01 01). Digital Millenium Copyright Act. Retrieved -2 08, 2016, from Electrinic Fronteir Foundation: https://www.eff.org/issues/dmca
Ginsburg, J. (2006, 03 01). Secondary Liability for Copyright Infringement in the US. Retrieved 02 8, 2016, from Columbia Law School: https://www.law.columbia.edu/law_school/communications/reports/winter06/facforum1
Jones, A. (2015, 11 24). Judge Rules Against Cox Communications in Copyright Case. Retrieved 2 8, 2016, from The Wall Street Journal: http://www.wsj.com/articles/judge-rules-against-cox-communications-in-copyright-case-1448404833?mg=id-wsj
Office, U. S. (1998). Copyright Law of the United States of America. Retrieved 2 8, 2016, from Copyright.gov: http://www.copyright.gov/title17/92chap5.html#512
Resnikoff, P. (2016, 1 29). After Legal Victory, BMG Demands Injunction Against Cox Communications. Retrieved 2 8, 2016, from Digital Music News: http://www.digitalmusicnews.com/2016/01/29/after-legal-victory-bmg-demands-injunction-against-cox-communications/
Resnikoff, P. (2015, 12 17). Federal Jury Finds Cox Communications Guilty of Willful Copyright Infringement. Retrieved 2 8, 2016, from Digital Music News: http://www.digitalmusicnews.com/2015/12/17/breaking-cox-communications-loses-in-jury-trial-willful-infringement-found/