The Case of the Missing Designated Agent: Omitting Subsidiaries From Your DMCA Filing May Be Costly

HollywoodMany of our fine readers are by now well acquainted with the Digital Millennium Copyright Act (DMCA), the late-‘90s era addition to the Copyright Act intended to address an increasingly digital copyright landscape.  The DMCA includes treaty compliance updates, anti-circumvention provisions and, most important for present purposes, the Online Copyright Infringement Liability Limitation Act (OCILLA), 17 U.S.C. § 512, section (c) of which provides a safe harbor for internet “service providers” that host content uploaded by their users.  Because Section 512 is perhaps the most frequently discussed portion of the DMCA, it is often referred to not as OCILLA but simply as the “DMCA.” So, with my deepest apologies to whoever painstakingly developed the acronym OCILLA, I’ll be doing the same here.

By complying with the DMCA, service providers are shielded from two types of liability — first, liability for contributory copyright infringement for hosting infringing content uploaded by others; and second, liability that might otherwise attach for removing that uploaded content.  The DMCA was intended to strike a balance between the interests of copyright owners on the one hand and internet users on the other, while generally fostering the “open” nature of the then-nascent medium.  Fair criticism has been leveled at abuse of the DMCA take-down process, but thus far it appears to have stood the test of time.

DMCA Compliance

Taking advantage of the DMCA safe harbor involves the following elements:

  • A service provider can’t receive a financial benefit directly attributable to the infringing content, or have “actual knowledge” of infringing material (or facts or circumstances from which infringement is “apparent”);
  • A service provider must have a written DMCA notice-and-take-down policy listing the requirements for issuing a take-down notice;
  • Once a take-down notice is issued that substantially complies with DMCA requirements, the service provider must “expeditiously” remove or disable allegedly infringing content, and then notify the alleged infringer to provide an opportunity for a counter-notification;
  • The service provider must have a policy for removing repeat infringers; and
  • Finally, the service provider must provide contact information for a “designated agent” to receive take-down notices, both with a notice on its website and by filing the appropriate form with the U.S. Copyright Office.

This might seem pretty straightforward in theory, but DMCA compliance is often not so simple in practice.  It’s not always easy to tell, for instance, whether facts or circumstances make infringement “apparent,” or what level of speed is required to constitute “expeditious” removal of allegedly infringing content.  Many commentators have suggested that DMCA compliance is in fact ridiculously complicated.

Of all the requirements, however, one would think that the mere formality of filing the designated agent form with the Copyright Office would be the most cut-and-dry.  See where this is going?

A Costly Assumption

In January 2014, a group of plaintiffs brought suit against, LLC (Hollywood) and two of its subsidiaries, one of them called Hollywood Fan Sites LLC (HFS).  The plaintiffs, owners of various celebrity photographs, alleged that the defendants, the owners of several thousand websites dedicated to celebrities, directly and contributorily infringed the plaintiffs’ copyrights by reproducing various photos on the websites.  The defendants claimed that they merely hosted the infringing content, and therefore the plaintiffs’ infringement claims were barred by the DMCA safe harbor.

The plaintiffs filed a motion for summary judgment, seeking to strike the DMCA safe harbor defense. In response, Hollywood submitted a declaration that its designated agent form, filed back in 2008, had been filed “on behalf of itself and its subsidiaries and affiliates,” and that Hollywood had therefore assumed that the filing would cover all subsidiaries and affiliates despite not listing them on the form.

The judge disagreed. In June 2015, the United States District Court for the Southern District of New York held, inter alia, that the DMCA safe harbor did not apply at all to the subsidiary.  Because HFS was not specifically listed on the filing, it had not complied with the DMCA formalities and could not therefore claim the safe harbor.  It didn’t matter, said the court, that HFS listed the proper designated agent information on its website, because the DMCA specifically requires “two parallel sources” (the website and the Copyright Office form) for providing designated agent information.  Finally, the court noted that “it is far from clear that a single designation can cover multiple entities” as opposed to merely alternate names for a single entity.  Thus, even if Hollywood had specifically listed the subsidiaries on the form, those subsidiaries still might not have been protected.

A Simple Takeaway

This arguably harsh ruling has a simple lesson for service providers (and their counsel): file a separate designated agent form for each and every entity for which safe harbor protection is sought, even if those entities are affiliated in some way.

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