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TITLE II: ONLINE SERVICE PROVIDER LIABILITY

Title II of the Act limits an online service provider’s ("OSP") liability for copyright infringement in several important situations. Because the term "service provider" is defined extremely broadly in some instances - "a provider of online services or network access, or the operator of facilities therefor"33 - many entities which are not in the business of providing online services may nonetheless take advantage of Title II’s protection.34

The exemptions from liability that the DMCA creates are additional to any defense that an OSP might have under copyright law or any other law.35 In essence, the Act creates certain "safe harbors" for specified OSP activity. If an activity falls within the safe harbor, then the OSP qualifies for the exemption from liability; if the activity does not come within the safe harbor, then the questions of whether the activity in fact constitutes infringement and whether the OSP has any defense are to be decided under traditional copyright analysis. In addition, whether an OSP qualifies for any particular exemption is determined independently of whether the OSP qualifies for any other exemption.36

General Conditions for Eligibility

Termination Policy. To be eligible for any of the exemptions, an OSP must adopt, reasonably implement, and inform its subscribers and account holders (its "Users") of, a policy providing for termination of Users who are repeat infringers.37

Accommodation of Technical Measures. In addition, an OSP must accommodate and not interfere with "standard" technical measures used by copyright owners to identify and protect copyrighted works. Such technical measures might include, for example, digital watermarks or technological means for preventing copying of a work. In order to qualify as "standard", such a measure must have been developed by a broad consensus of copyright owners and OSPs in a fair multi-industry process, must be available to anyone on reasonable and nondiscriminatory terms, and must not impose substantial costs on OSPs or substantial burdens on OSP systems.38

No Need to Monitor or Access. The Act makes clear that in order to qualify for the exemptions, an OSP does not need to monitor its service or affirmatively seek out information about copyright infringement on its service (except as part of the standard technical measures discussed in the previous paragraph). In addition, the Act states that an OSP does not have to access, remove, or block material in order to qualify for its exemptions if such action is prohibited by law (such as, for example, the Electronic Communications Privacy Act).39 At the same time, the Conference Report states that the legislation is not intended to discourage OSPs from voluntarily monitoring their sites, and that OSPs do not lose eligibility for the safe harbors by virtue of such monitoring.

Safe Harbors for System Storage and Information Locating Tools

The most straightforward exemptions in the Act cover two common OSP activities: (1) storing material (such as a Web page or chat room, for example) on an OSP’s system at the request of a User and (2) referring Users to material at other online locations by means of, for example, a search engine, a list of recommended sites, or a hypertext link.40

The Act limits an OSPs liability for copyright infringement based on the material stored or referred to if the OSP meets certain conditions:

1. the OSP doesn’t actually know that the material is infringing;
2. the OSP isn’t aware of information from which the infringing nature of the material is apparent;
3. if the OSP acquires such knowledge or awareness, the OSP acts expeditiously to remove or block access to the material;
4. the OSP doesn’t get a financial benefit directly attributable to the infringing material (for example, a special fee paid by each party that accesses the material) while having the right and ability to control the material; and
5. the OSP complies with the "notice and take down" provisions of the Act (discussed below).41 Safe Harbors for System Caching