United States: "Oh No They Didn't!" – Ninth Circuit Throws DMCA Safe Harbors For Moderated Content Into Disarray

A three-judge panel of the Ninth Circuit handed down its latest decision on the scope of the optional safe harbor for web hosting services under Section 512(c) of the Digital Millennium Copyright Act. The April 7 decision in the case, Mavrix Photographs, LLC v. LiveJournal, Inc., limits the availability of safe harbor protection for social media platforms and other sites that use moderators to review user-submitted posts in copyright cases, even where the website has processes in place for expeditiously removing materials identified in DMCA takedown notices. And it will likely have broad implications on what screening procedures, if any, a service provider adopts for user-generated posts and material.

The case concerns 20 photographs posted to a popular community for celebrity news called "Oh No They Didn't!", hosted by the social media platform LiveJournal. ONTD users submit proposed articles, and moderators decide whether to post them publicly. The moderators themselves are typically unpaid volunteers. LiveJournal also has notice and takedown procedures that copyright holders may use to notify LiveJournal of alleged infringements on ONTD or other communities. Rather than use these procedures to have the photos removed, however, Mavrix—a celebrity photography agency that owns the copyrights for several photographs of Beyoncé Knowles—filed suit against LiveJournal.

The district court ruled in favor of LiveJournal. On summary judgment, it held that the Section 512(c) safe harbor shielded LiveJournal from liability because, although moderators screened all ONTD posts, the posts were made at the direction of the user. Moreover, with respect to discovery, the lower court denied Mavrix's motion to compel disclosure of the identity of ONTD moderators, based on the moderators' First Amendment right to anonymous internet speech.

On appeal, the Ninth Circuit reversed the summary judgment holding, vacated the discovery order, and remanded for further proceedings.

The Ninth Circuit Holds that Hosting Platforms Are Ineligible for Safe Harbor Based on Acts of Agents

To be eligible for the Section 512(c) safe harbor for hosting platforms, a service provider must, among other things, show that the materials at issue are stored "at the direction of a user." The Ninth Circuit held that this threshold inquiry "turns on the role of the moderators in screening and posting users' submissions and whether their acts may be attributed to LiveJournal," the service provider. The Mavrix Court also found that the district court erred by not applying common law principles of agency to this determination, and it adopted the factor-based analysis appearing in the 1989 Supreme Court decision of Community for Creative Non-Violence v. Reid.

In Reid, the Supreme Court applied agency principles to determine whether material constitutes a work made for hire under the Copyright Act. The Reid framework is intensively factual and requires consideration of several factors, including but not limited to the skill required; the location of the work; the extent to which the individual has discretion over when and how long to work; and the method of payment, if any.

Ultimately, the Mavrix Court held that the record raised genuine issues of material fact regarding the level of control LiveJournal exercised over ONTD moderators, and it remanded for further fact-finding on this point. In particular, the Ninth Circuit marked a distinction between activities directed toward "enhancing the accessibility of the posts," i.e. screening for harassment or pornography, and more extensive review: "The fact finder should determine whether LiveJournal's manual, substantive review process went beyond the automatic processes we have approved as accessibility-enhancing activities such that the posts were still at the direction of the user."

The Mavrix Decision Creates a Circuit Split on the Threshold Section 512(c) Inquiry

Last April, in BWP Media USA Inc. v. Clarity Digital Group., LLC, the Tenth Circuit also considered the scope of the Section 512(c) safe harbor with respect to materials stored "at the direction of a user." There, the BWP Court tackled the question of whether contractors can qualify as "users" for purposes of Section 512(c). The Tenth Circuit held that they could, ruling that a hosting service may qualify for safe harbor under the DMCA for the conduct of paid independent contractors. The BWP Court suggested that safe harbor protection may extend even to employee conduct, under a plain meaning reading of the statute: "simply because someone is an employee does not automatically disqualify him as a 'user' under § 512."

With Mavrix, the Ninth Circuit raises a potential conflict with the Tenth Circuit's BWP decision. Indeed, in a footnote addressing the Tenth Circuit's decision, the Mavrix Court appears to announce a circuit split: "To the extent that BWP's holding contradicts our case law that common law principles of agency apply to the DMCA such that a service provider is liable for the acts of its agents, including its employees, we reject it." While it is still too early to tell, given the important role the DMCA plays in the operations of national internet service providers, Mavrix may soon become the first case before the Supreme Court to squarely address the DMCA's safe harbor provisions.

The Ninth Circuit Imposes Stricter Burdens on Additional Section 512(c) Conditions

Beyond vacating and remanding the district court's decision on the threshold question of agency, the Ninth Circuit offered guidance on additional conditions for Section 512(c) safe harbor that it determined "may be contested on remand." Once "an internet service provider shows that the infringing material was posted 'at the direction of the user,' it must then also show that (1) it lacked actual or red flag knowledge of the infringing material; and (2) it did not financially benefit from infringements that it had the right and ability to control." The failure of a service provider to establish either of these conditions defeats its eligibility for the safe harbor. On both points, the Mavrix Court narrows the availability of the safe harbor, at least with respect to service providers that use moderators, and it also suggests that service providers may have to incur significant additional discovery costs to litigate the safe harbor issue. 

Lack of Knowledge

With respect to actual or red flag knowledge, the Ninth Circuit acknowledged that Mavrix, in failing to provide notice of alleged infringements to LiveJournal before suit, had foregone its strongest evidence of knowledge. But the Court then went on to offer Mavrix a road map of the types of activities that might defeat LiveJournal's assertion that it lacks knowledge of infringement. For instance, the Court proposed that Mavrix should be able to compel disclosure of the identities of individual moderators, in order to depose them about their subjective knowledge of infringement. Setting aside the First Amendment's protection of a moderator's right to anonymous internet speech, this inquiry could substantially increase the cost of discovery for service providers seeking safe harbor protection. Similarly, the Ninth Circuit suggested that the presence of a watermark on the photograph may constitute knowledge sufficient to defeat the safe harbor: "To determine whether LiveJournal had red flag knowledge, the fact finder should assess if it would be objectively obvious to a reasonable person that material bearing a generic watermark or a watermark referring to a service provider's website was infringing."

The upshot is that a court applying Mavrix may well attribute red flag knowledge to a hosting service that uses moderators based merely on the existence of images containing watermarks on its site. That leaves a service provider seeking Section 512(c) safe harbor protection with two distasteful options: either the site does not use moderators at all, or it affirmatively screens posts for watermarks or other indicators of potential infringement. The latter course is not only unduly burdensome, it directly contradicts Section 512(m)'s promise that a service provider need not affirmatively monitor its service for allegedly infringing activity to be eligible for safe harbor under the DMCA. And the former means sacrificing efforts to quality control or curate the materials on a platform.

Lack of Direct Financial Benefit

Meanwhile, the Mavrix Court's discussion of what evidence is necessary for LiveJournal to show that it did not financially benefit from infringements that it had the right and ability to control further calls into question the availability of the safe harbor to sites with moderators. Here, the Ninth Circuit agreed with the district court's conclusion that the right and ability to control requires "something more" than the mere ability to remove or block access to allegedly infringing materials. But it also rejected the notion that LiveJournal's screening practices, i.e. its "extensive review process, infringement list, and blocker tool," could not satisfy this showing, and it remanded that issue to the fact finder.

The Court also distinguished the DMCA's direct financial benefit inquiry, § 512(c)(1)(B), from both the threshold determination under § 512(c)(1) and the knowledge showing under § 512(c)(1)(A). For the financial benefit inquiry, the Ninth Circuit noted, the "fact finder should consider the service provider's general practices, not its conduct with respect to the specific infringements." And it advised that a jury might reasonably conclude on remand that the mere presence of allegedly infringing material on an ad-supported website—with no causal link to the specific material a copyright plaintiff claims to be infringing—might suffice to establish a financial benefit and defeat safe harbor.

By focusing on a service provider's "general practices," the DMCA's direct financial benefit analysis under Mavrix is more onerous than anything required under the substantive standards for secondary copyright liability. Indeed, just earlier this year, the Ninth Circuit in Perfect 10 v. Giganews reaffirmed its view that a copyright plaintiff "must demonstrate a causal link between the infringing activities and a financial benefit" to a defendant service provider to establish a claim of vicarious liability for copyright infringement.  Thus, the Mavrix decision suggests that making out a DMCA defense requires evidence that is qualitatively different from that which a copyright defendant would rely upon to defeat a substantive claim of infringement: an infringement claim requires a copyright plaintiff to make affirmative showings tied to specific asserted works, while the DMCA safe harbor considers evidence that may bear no relationship to any works that a plaintiff asserts.

Takeaways from the Mavrix Decision

Even where a website, like LiveJournal here, has procedures for expeditiously removing allegedly infringing user-generated materials identified on takedown notices, Mavrix teaches that a service provider may still lose safe harbor protection based on its efforts to curate materials available on its platform. This ruling incentivizes platforms seeking to avail themselves of the safe harbor to exercise less oversight of materials that users submit for posting. That is particularly true in light of the impracticability of having a platform, which lacks both information about the ownership of posted materials and competence to make judgments about their legal status, to screen materials based on infringement. 

Indeed, the Mavrix ruling demonstrates that the Section 512(c) safe harbor may not be that safe after all. In many instances, a service provider in the context of a litigation may be better off not invoking it. That way the burden remains where it should: on the plaintiff to establish the elements for its affirmative claims based on the substantive standards for infringement, rather than on the defendant to prove entitlement to the safe harbor.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Events from this Firm
18 Oct 2017, Conference, California, United States

This three-day program will focus on the tax issues presented by the entire spectrum of modern major corporate transactions, from relatively simple single-buyer acquisitions of a division or subsidiary to multi-party joint ventures, cross-border mergers, and complex acquisitions of public companies with domestic and foreign operations, including spin-offs and other dispositions of unwanted operations.

19 Oct 2017, Conference, California, United States

Privacy professionals are facing a number of challenges in determining how best to achieve GDPR compliance and maintain compliance for the long term. The Alliance of Global Privacy Solution Providers (the "Alliance") has been formed with a mandate to educate privacy professionals on making informed decisions on their approach to planning, implementing and managing GDPR and long-term privacy compliance.

30 Oct 2017, Seminar, California, United States

This program will address some of the hottest legal and policy topics that online platforms have brought to the fore: free speech, hate speech, fake news, privacy and surveillance, artificial intelligence, augmented reality, changing notions of “ownership” of information and software-enabled consumer products, and the perennial issue of copyright.

 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.