Seeing Red Over The DMCA

The U.S. Copyright Office last week released its long-awaited report on the operation and efficacy of Section 512 of the Digital Millennium Copyright Act, which created a number of conditional “safe harbors” for online service providers against liability for copyright infringement committed by their users.

The 250-page report concludes that the original balance Congress intended to strike in crafting Section 512, between encouraging the development of the internet ecosystem and protecting the interests of copyright owners, has gone awry in the 2-plus decades since the DMCA was enacted. But the report stops short of recommending wholesale changes to the law:

The Office is not recommending any wholesale changes to section 512, instead electing to point out where Congress may wish to fine-tune section 512’s current operation in order to better balance the rights and responsibilities of OSPs and rightsholders in the creative industries.
Should Congress choose to continue to support the balance it devised the DMCA and move forward on the issues identified in this Report, then the Office harbors some optimism that a path toward rebuilding the section 512 balance could be found.

There is no guarantee Congress will take up the report’s recommendations, particularly this year, in the midst of a pandemic and with lawmakers focused on the election. The Copyright Office itself is also currently headed by an acting Register of Copyright, and the Library of Congress, of which the Copyright Office is part, is actively recruiting a new, permanent Register, who may, or may not, make pushing the report’s recommendations a priority.

If and when Congress does get around to addressing the issue, however, it’s likely to find itself mired in more than than mere legislative “fine-tuning.”

Among the report’s 12 suggested legislative fixes is a recommendation that Congress “clarify” the degree and type of knowledge an online service provider must have of infringing activity to trigger an obligation to remove or block it.

That is, how much circumstantial, or “red-flag,” evidence of infringement should be sufficient to compel an OSP to act even if it has not received a formal notice-and-takedown request from a copyright owner?

Here’s how the report describes the problem:

Congress did not define “actual knowledge” in section 512, nor did it discuss its scope in either the House or Senate Reports. But the concept of actual knowledge is well understood to mean actual—as distinct from red flag or constructive—knowledge…

In the absence of actual knowledge, section 512 holds OSPs to a “red flag” knowledge standard. The phrase “red flag” does not appear in the statute, but Congress used that phrase to refer to “facts or circumstances from which infringing activity is apparent.” Congress intended for this red flag standard to obligate OSPs to remove or disable access to infringing content for which they learned enough [sic] information to indicate a likelihood of infringement—but short of obtaining actual knowledge.

How much knowledge is “enough” to require preemptive removal has been a key question at the heart of some of the most important and precedential litigation over the DMCA since its enactment, including UMG v. Veoh and Viacom v. YouTube.

In those cases and others, courts have generally set the bar for red-flag knowledge quite high, much to the dismay of copyright owners. But in its report, the Copyright Office makes clear it thinks the courts have got it wrong and that Congress should “clarify” that it intended the bar to be lower.

Apart from undoing a lot of case law, that could a long way toward shifting the burden of policing infringement from rights owners to platform providers — something rights owners have been pushing for for a long time.

It would also come against a backdrop of the EU Copyright Directive, which aims to shift the burden decisively toward the platforms.

So far, the Copyright Directive has only been implemented in one EU country, France, and even there only partially. Given the current turmoil within the EU, fueled by the rise of far-right parties in several EU countries, the pandemic and lockdown, and the looming recession, it’s not clear whether any member country will get around to meeting the official deadline for fully implementing the directive by June 2021. YouTube and other platform providers, meanwhile, are using the delay to lobby EU governments furiously to limit the directive’s impact.

Still, the EU Copyright Directive put the question of burden-shifting squarely on the table. The U.S. Copyright Office is now seeking to do the same here.

That’s likely to start a lot more arguments than it settles.