Copyhype

This morning, the House Judiciary Committee Subcommittee on Courts, Intellectual Property, and the Internet will continue its ongoing review of the Copyright Act, focusing this time on Section 512 of Title 17, the DMCA’s notice and takedown provisions.

No doubt, copyright’s skeptics will trot out their usual line of DMCA abuse, so I thought it would be appropriate to offer my own. Here, in no particular order, are my top examples of DMCA notice and takedown abuse: sites and services which had claimed the protection of the law while receiving millions of notices of infringing content and profiting handsomely, to the detriment not just of the large copyright holders who could afford to send takedowns (and litigate if need be) but especially to the detriment of individual creators and small businesses, who effectively have no recourse:

Hotfile

Filelocker Hotfile was founded in 2009. By the time it was sued for copyright infringement by the major motion picture studios in 2011, it had become one of the most popular such sites. In part, this was because the site did such a good job facilitating infringement among its users—evidence showed over 90% of files downloaded through the service were infringing, and the court noted that these efforts “worked a significant financial benefit to Hotfile and its founders.”

Hotfile, of course, argued strenuously that it was operating consistent with the DMCA.

The facts showed a different story. One of the requirements for the DMCA safe harbor is that a site adopts and reasonably implements a “repeat infringer” policy, one that terminates accounts in appropriate circumstances. The court found that Hotfile was doing anything but. When the litigation began, Hotfile had received over 10 million takedown notices for infringing content on its system.  But records show that it had only ever terminated a grand total of 43 users—though 33 of those came as a result of a court order from prior litigation. Nearly twenty-five thousand Hotfile users had accumulated over three infringement notices. Over sixty of those users were sitting on at least three hundred notices.

And as proof that Hotfile could have adopted a reasonable repeat infringement policy but didn’t, and that it would make a difference, the service revamped its policy after the litigation began and almost immediately 444 of its 500 highest paid affiliates were terminated for repeated infringement. Hotfile ended up shutting its doors and settling with the motion picture studios for $80 million the day before it was set to face a jury.

It’s difficult enough for creators to detect and deter online infringement, but some bad actors use the DMCA as legal cover, window dressing that places a façade of legitimacy over plain old for-profit exploitation. The law, however, is more than just a notice-and-takedown mechanism, and services have a number of requirements they must meet to enjoy its protection.

Megaupload

In 2012, the US government brought criminal charges against filelocker Megaupload and seven of its officers. Like Hotfile, Megaupload argued that it was merely an innocent cloud storage provider, shielded by the DMCA, but publicly released evidence shows the site used the law as a sword, helping it rake in $150 million and causing around $500 million in damages to copyright holders.

While the government alleges Megaupload failed to meet most of the DMCA’s requirements, one policy in particular stands out as DMCA abuse. According to the Department of Justice:

If there are multiple links to a file, then any attempt by the copyright holder to terminate access to the file using the Abuse Tool or other DMCA takedown request will fail unless all of the URL links to the infringing file are known and submitted, because the file will continue to be available through any undisclosed URL links. The infringing copy of the copyrighted work, therefore, remains on the Mega Conspiracy’s systems as long as a single link remains unknown to the copyright holder. The Mega Conspiracy maintains a record of links that have been generated by the system, but duplicative links to infringing materials are neither disclosed to copyright holders, nor are they automatically disabled or deleted when a copyright holder either uses the Abuse Tool or makes a standard DMCA copyright infringement takedown request. During the course of the conspiracy, the Mega Conspiracy has received many millions of requests to remove infringing copies of copyrighted works, and yet the Mega Conspiracy has, at best, only deleted the particular URL of which the copyright holder complained, and purposefully left the actual infringing copy of the copyrighted work on the Mega Conspiracy-controlled server and any other access links completely intact.

This is a deliberate end-run around the law’s purpose of cooperation between service providers and copyright owners to detect and deter infringement. “Takedown” should mean “takedown” (ideally, it should also mean “stay down”, but that’s another story).

Grooveshark

One of the safe harbors in the DMCA protects against liability for material stored at the direction of users. So why couldn’t you have users store music files on your servers and then provide an on-demand streaming platform with a catalog rivaling licensed music services? That’s the too-clever-by-half strategy employed by Grooveshark (along with allegations that it requires employees to upload music themselves to plug any holes). Grooveshark is currently involved in copyright infringement litigation with a number of record labels, and indie musician Erin McKeown has repeatedly called them out for their practices:

https://twitter.com/erinmckeown/status/423887986150092801

Noted copyright scholar Peter Menell has also written about the service, calling it a case study in DMCA safe harbor abuse. The “DMCA license” that services like Grooveshark believe they are entitled to under the law—where services believe it’s ok to build full-fledged content platforms without licenses so long as they “launder” the content through users—not only allows them to divert money out of the hands of musicians, but it makes it more difficult for legitimate, sustainable online platforms to grow.

IsoHunt

At one point, IsoHunt was one of the world’s most popular BitTorrent search engines, indexing and helping users search and find torrent files—90-96% of which were infringing. As with the services above, IsoHunt claimed DMCA protection. But last year, the Ninth Circuit rejected that claim.

The primary reason was that IsoHunt was actively inducing infringement through its service:

As noted, the record is replete with instances of Fung actively encouraging infringement, by urging his users to both upload and download particular copyrighted works, providing assistance to those seeking to watch copyrighted films, and helping his users burn copyrighted material onto DVDs. The material in question was sufficiently current and wellknown that it would have been objectively obvious to a reasonable person that the material solicited and assisted was both copyrighted and not licensed to random members of the public, and that the induced use was therefore infringing.

It would seem obvious that service provider actively engaged in encouraging infringement (and, as the record showed, profiting from it) could find refuge in a statue designed to protect service providers from incidental and innocent infringement that occurs on their facilities. But that is unfortunately not always the case. The DMCA should not be so broad that it protects against deliberate infringing behavior.

Though these sites have been or are currently the subject of legal action, there are sadly far too many like them continuing to operate, hiding behind the DMCA to profit off the work of others without their permission. This abuse penalizes good faith service providers and stymies the growth of legitimate innovative services. It exploits creators—and worse, chill their ability to create and disseminate new works for the public to enjoy.

As Congress looks at the DMCA, it should look for ways to reduce the ability of bad faith actors to abuse the important protections the law provides. That would better foster the type of sustainable and innovative online creative ecosystem that the public deserves.