Want to Limit Liability Against Copyright Infringement Claims when Hosting User Content on your Website?

If you host a website that invites the public to submit content, often called UGC (or User Generated Content), you may want to read the recent summary judgment decision in Arista Records LLC v. Myxer Inc. and stay tuned to the final outcome at trial.  Website hosts that allow UGC run the risk of being sued for copyright infringement, among other claims, because users sometimes submit material whose copyright belongs to someone else.  If a copyright owner sues you for copyright infringement in your role as a website host, one of the most common defenses asserted is that the web hosting is protected under the DMCA (Digital Millennium Copyright Act). 

On April 1, 2011, a federal court in California issued the above decision in a case pitting content owners against website hosts.  UMG Records and other music companies sued Myxer and its principals for copyright infringement because Myxer hosts a website that invites the public to upload music and then download it as ring tones on cell phones.  Myxer doesn't pay UMG anything, and UMG argues that it loses money every time a ring tone is downloaded through Myxer.

Myxer asserted two primary defenses: that its use was fair use and that it was protected by the DMCA's "safe harbors."  On summary judgment, the court rejected Myxer's fair use defense, finding that converting the songs into ring tones did not qualify as a "transformative" use and finding that Myxer's business model likely cut into UMG's market. 

But the court kept alive Myxer's DMCA defense.  It found that genuine issues of fact existed regarding Myxer's implementation of a DMCA policy and regarding the speed with which it removed allegedly infringing material.  Now it will be up to Myxer to prevail on this defense at trial.

Just like Myxer is hoping to do, businesses that allow the public to post content on their websites may limit their liability against copyright infringement lawsuits by following some steps under the DMCA.  As a ground rule, if you create or direct content on your website that infringes on another's copyright, you can't turn to the DMCA for help.  But if all you do is host content created by others, to get the benefits of DMCA protection you need to (1) adopt a  DMCA policy and communicate it to your users, (2) appoint a DMCA agent, (3) follow the DMCA steps of quickly responding to accusations of hosting material that infringes another's copyright, (4) permanently remove repeat infringers, and (5) receive no financial benefit directly attributable to any infringing activity on your site. 

To read more about how to protect your business under the DMCA, check out this great resource from the EFF (Electronic Frontier Foundation), or contact an attorney with experience in copyrights and intellectual property law.

Best Practices for Businesses: Tip #1: Adopt a Social Media Policy

According to a February 14, 2011 article on Mashable.com "social media is predicted to see one of the biggest increases in online marketing spending this year."  With that in mind, businesses need to adopt and implement a social media policy.  In fact, they should implement two policies: one for all employees, and another for those employees responsible for official social media communications on behalf of the business.

Some businesses may say that there's no need to have a social media policy because they aren't officially engaged in social media.  Even if a business doesn't officially participate in social media, you can bet its employees are on Facebook or Twitter.  They're definitely using social media after work, but probably using it during working hours, too.  Their unofficial use of social media makes it important for businesses to set some guidelines.

Businesses should consider adopting two separate policies:

1.  A social media policy for ALL employees.  Businesses should provide all employees general guidelines on certain matters, for example: keeping business matters confidential, affirming that employees should have no expectation of privacy for anything posted on a publicly-accessible site, and reminding employees that they should clarify that any opinion expressed is made in their individual capacity, not on behalf of their employer.  In light of a recent NLRB settlement with a Connecticut ambulance company who discliplined an employee for making negative comments about her employer on Facebook, businesses should be very reluctant to limit employees' right to discuss the terms of their employment (like wages and conditions).  Businesses should adopt this policy even if they do not officially engage in social media as a company.

2.  A policy for employees responsible for official social media communications of the business.  Those employees responsible for communicating on behalf of the company through social media need guidelines.  They need to know what is acceptable language, how to respond to negative reviews of the business, and their responsibilities when inviting user generated content.  There are laws governing marketing to minors and regulations requiring disclosure of any material connection between a blogger and a business.  These are just a few of the items a business should consider when crafting its social media policy.