Derivative Liability for User Content/Actions by Eric Goldman

C.E.B. ELECTRONIC COMMERCE AND INTERNET LAW & PRACTICE:
5th Annual Recent Developments
Derivative Liability for User Content and Actions

Eric Goldman
Epinions, Inc.

1.         What is the Problem?

  • Users engage in bad behavior on the Internet
  • Bad users are too numerous to pursue individually
  • Users may be hard to find or judgment proof
  • Companies hate suing their users
  • Intermediaries offer:
    • Deep pockets
    • Ability to act quickly
    • “Leverage”

2.         Congress Has Spoken (Part 1)

47 USC 230(c)(1):

“No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.”

3.         “Provider or User of an Interactive Computer Service”

  • America Online (Zeran, Ben Ezra, Doe, Blumenthal, Oliver, Morrison)
  • Internet access provider/library (Aquino, Kempf, Patentwizard, Mainstream Loudon, Kathleen R.)
  • Web host (Franco)
  • Website (Gentry, Stoner, Amazon.com)
    • But see Batzel
  • Chatroom operator (Marczeski)
  • Mail list operator (Truelove)
  • Person who forwards email to a maillist (Barrett)

4.         “Treated as the Publisher or Speaker”

  • Defamation (Aquino, Barrett, Ben Ezra, Blumenthal, Kempf, Marczeski, Morrison, Amazon.com, Truelove, Zeran)
  • Negligence (Oliver. PatentWizard, Truelove, Zeran)
  • Breach of contract (TPB) (Morrison)
  • State anti-pornography laws (Doe, Mainstream Loudon, Kathleen R.)
  • Privacy rights/nuisance (Franco)
  • Sale of fake sports memorabilia (Gentry)
  • Sale of bootleg recordings (17200) (Stoner)

5.         “Provided by Another Information Content Provider”

  • Zeran: Didn’t matter if AOL knew of the defamation and failed to act
  • Blumenthal: Drudge wrote column as an independent contractor; AOL had contractual rights to edit
  • Amazon.com: Amazon obtained a non-exclusive license to the user reviews and had contractual rights to edit

6.         What Happens if 230(c)(1) Isn’t Available?

  • 230(c)(2)—actions taken to restrict access to objectionable material
  • Attack the elements
    • Hart v. Internet Wire (no liability under securities law for bogus press release)
    • Tzougrakis (no liability for defamation when it was reasonable to rely on the source)
  • Common law safe harbor
    • Lunney (Prodigy not the publisher of defamatory emails and message board postings; and even if it was, there was a safe harbor akin to that provided to telephone companies)

7.         What Doesn’t 230(c) Cover?

  • Intellectual property laws
    • Copyright
    • Trademark
    • Patent/trade secret
    • Others?
  • Federal criminal laws (including federal obscenity and child pornography laws)
  • ECPA violations

8.         Congress Has Spoken (Part 2)

Digital Millennium Copyright Act (17 USC 512)

(a): Internet access provider safe harbor

(b): caching safe harbor

(c): web host safe harbor

(d): safe harbor for linking to infringing items

(e): university safe harbor

9.         512(c): Web Host Safe Harbor

No liability for storing material at a user’s direction if

  • No “red flags” that infringement is occurring
  • No direct financial benefit from infringement when provider has right and ability to control infringement

10.       What is a “Red Flag”?

512(c)(3)—Notice of Infringement:

  • ID the infringed work (or representative sample)
  • ID the infringing copies so provider can find them
  • statement of a good faith belief that use is not authorized
  • statement that complaint is accurate and, under perjury, person is authorized to act
  • signature of person authorized to act
  • contact information

11.       What Happens if 512(c)(3) Notice is Not Sent?

  • Hendrickson: eBay entitled to safe harbor when 512(c)(3) notice not sent
    • Plaintiff needed to ID specific item numbers that were infringing
  • ALS Scan: deficient notice eliminates safe harbor so long as it “substantially” provided the specified information
    • Generalized statement that USENET groups contained infringing items was enough
  • Napster
    • District court initially did not require any notice; Napster had red flags based on its behavior
    • 9th circuit required record companies to provide some information to Napster

12.       Eligibility for 512 Safe Harbors

  • Register with the copyright office
  • Post contact information on the website
  • Notify users in the user agreement that repeat infringers will be terminated
  • Follow a policy of terminating repeat infringers
  • Accommodate and not interfere with “standard technical measures”

13.       Vicarious Copyright Infringement

  • “Direct Financial Benefit”
    • Used to arise when provider made more money attributable to the infringement (e.g., banner ads, not subscription fees)
    • But Napster had direct financial benefit even though it had no revenues
  • “Right and Ability to Control”
    • Napster’s contract said it could refuse service and terminate accounts in its sole discretion
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