Online Service Provider Liability Under The Digital Millennium Copyright Act

Co-written by Jeffrey H. Blum and Denise Gough

As the Internet continues to grow and more companies move into the online world, the federal government has taken steps to protect those entities that provide conduits for online information. In the area of defamation law, Section 230(c) of the Communications Decency Act immunizes online service providers from liability for defamatory information that originates with third parties.1 In the area of copyright law, the newly implemented Digital Millennium Copyright Act ("DMCA") provides that online service providers "shall not be liable . . . for infringement of copyright" for doing any of five things: storing, linking, transmitting, routing, or caching infringing material.2 This article discusses how service providers can limit their copyright liability under the DMCA, which took effect on October 28, 1998. Although the conditions of each limitation differ, the essence of the DMCA is that a service provider may not be liable for monetary damages for copyright infringement caused by third parties as long as the service provider does not know about the infringement, does not participate in the infringement and acts in good faith.3

Understanding the DMCA is important not only for service providers, but also for copyright holders - including traditional media content providers - who wish to limit potential online infringement. The DMCA specifies notification procedures, discussed later in this article, that must be followed before an eligible service provider is required to remove or block access to infringing material.

General Guidelines For Eligibility

In order to qualify for any limitation on liability, an entity must first meet the definition of service provider under the DMCA. Two definitions exist for the term "service provider." In the context of transmitting and routing, "service provider" is defined as an entity which offers transmission, routing, or connections for digital online communications for materials sent by Users which are not modified by the entity. For the remaining sections of the service provider provisions of the DMCA, a service provider includes the entities in the previous definition as well as "a provider of online services or network access." Both definitions clearly contemplate including entities such as Netcom Communications and MCI WorldCom, which serve as conduits in transporting messages from computer to computer across the Internet. The second definition also clearly encompasses "traditional" Internet or online service providers such as America Online, Prodigy, Yahoo!, and bulletin board services.

Less obviously, the definition is broad enough to potentially include employers who provide e-mail accounts to their employees, and may even include other entities - including newspapers, magazines, and other media companies - who simply host informational websites. Although this definition may be broad enough to cover these less traditional "service providers", the definition was not intended to cover all parties who provide content or services online. How broadly this definition...