Transcript Slide 1

Legal Issues Facing Online Communities
Dominic Bray, Sarah Stone and Paul Massey
12 July 2007
www.klgates.com
Overview of Presentation
Potential Legal Liabilities for service providers
Exemptions to liability for service providers
Moderation
Terms and Conditions – notice and takedown procedure
Ownership of IP
Data Protection
Potential legal liabilities for Online Communities
Defamation
 The publication of a statement which tends to lower the
claimant in the estimation of right thinking members of
society.
 Is the intermediary a publisher at common law?
 If not a publisher: no liability
 If it is a publisher, consider:
 Innocent dissemination under Defamation Act
 Exemptions under E-Commerce Regulations –
mere conduit, caching and hosting
Bunt V. Tilley, Hancox, Stevens, AOL, Tiscali and
BT [2006] EWHC 407 (QB)
 AOL not a publisher. Passive involvement does not incur
liability as a publisher. There must be knowing
involvement in publication of words.
 ISPs argued exemption under the E-Commerce
Regulations and under the defence of innocent
dissemination in the Defamation Act.
Statutory Offences
 Obscenity
 Obscene Publications Act 1959
 Obscene Publications Act 1964
 Contempt of court
 Contempt of Court Act 1981
 Harassment
 Protection from Harassment Act 1996
 Sex discrimination Act 1975
 Race Relations Act 1976
 Other offences
Primary acts of copyright infringement
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Copying
Issuing copies to the public
Perform, show or play the work in public
Communicate the work to the public
 (i) broadcasting the work; and
 (ii) making available to the public by electronic transmission in
such a way that members of the public may access it from a
place and at a time individually chosen by them
 Make an adaptation of the work or do any of the above in
relation to an adaptation
 Authorisation
Authorisation of Copyright Infringement
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A developing area of law and not yet tested in the UK in relation to online
copyright infringement.
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CBS v Amstrad (1988)
 A high water mark: no contributory infringement where a device is
“capable of substantial non-infringing use”
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US Cases
 Napster – contributory and vicarious infringement
 Grokster- introduced doctrine of inducement of copyright infringement
Australian case law - Kazaa
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Guidance on what constitutes authorisation:
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2.
the extent of the person's power to prevent infringement;
the nature of the person authorising and the person performing the
infringing act; and
whether the person alleged to be authorising took reasonable steps to
prevent infringement
3.
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Warnings to users and an End User Licence Agreement were ineffective in
preventing infringement.
Technical measures could have been adopted to reduce infringement but
were not.
Kazaa actively encouraged users to increase levels of sharing activities.
Viacom v YouTube
Remedies Sought
 Declaration of Infringement:
 direct copyright infringement and authorisation
 secondary infringement: inducement, contributory and vicarious
infringement.
 Permanent injunction requiring YouTube to employ
reasonable methodologies to prevent or limit infringement of
Viacom’s copyright.
 Maximum damages for past and present infringement plus
YouTube’s profits (estimated at least $1bn).
Viacom v YouTube
Viacom’s Arguments
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Viacom claim YouTube provide more than hosting facilities:
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Copies content to servers.
Creates thumbnails.
File sharing and embedding technology increases potential for infringement.
Control its site and could remove material infringing copyright. Terms and
conditions reserve the right to remove material. For example, YouTube remove
pornographic material.
YouTube encourage infringement:
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Tags and search features enable easy identification of copyright material.
No steps taken to remove infringing material until take-down notice received.
Only the specific urls identified will be blocked. Many copies not removed.
Friends feature allows private areas where copyright infringement may take
place undetected.
Exemptions and defences for service providers
Dominic Bray
Take-down
on notice
No control
Caching
Conditions
Hosting
No knowledge
Qualifying
Service?
Host?
Mere conduit
Information
Society
Service?
EXEMPTIONS AND
DEFENCES
No knowledge or
reason to believe
Reasonable
care
Contempt of
Court Act
eCommerce
Regulations
Statutory
Defences
Obscene
Publications
Act
Publisher at
common law?
Publisher under
The Act?
Defamation
(Innocent
Dissemination)
Reasonable
care?
No reason to
believe causing
or contributing
Exemptions & defences for service providers
 USA - ‘Safe Harbour’ under Digital Millennium
Copyright Act
 UK exemptions under E-Commerce Regulations
2002
 Innocent dissemination under Defamation Act 1996
 Statutory Defences re obscene publications,
contempt of court, etc
E-Commerce Regulations
Three categories of protected activity/service:
 Mere Conduit (Regulation 17)
 Caching (Regulation 18)
 Hosting (Regulation 19)
 If exempt – no liability for service provider for third party
activity on its service.
Hosting Exemption Reg 19 E-Commerce Regs
 Where an information society service is provided which
consists of the storage of information provided by a recipient
of the service, the service provider … shall not be liable for
damages … as a result of that storage where …
(a)The service provider:
(i) does not have actual knowledge of unlawful activity or
information …
(ii) upon obtaining such knowledge … acts expeditiously to remove
or disable access to the information, and
(b)The recipient of the service was not acting under the authority
or control of the service provider.
Hosting exemption
Two areas to consider:
 Is the community a qualifying service?
 Is it an “Information Society Service”?
 Is it an host?
 Does the community satisfy the conditions?
 No actual knowledge of infringement or reason to
believe.
 Take down on notice.
 User not under control of service provider.
Is the service a qualifying service? (1)
 Is the community an “Information Society Service”?
 “Any service normally provided for remuneration, at a
distance, by means of electronic equipment, for the
processing … and storage of data and at the
individual request of a recipient of a service.”
 Provided for remuneration?
Is the service a qualifying service? (2)
 Is the community service provider an “host”?
 A service “which consists of the storage of information
provided by a recipient of the service.”
 Compare ISP web-hosting v online communities
 What if the service does more than simply store
information?
 ‘Lafesse’ (Societe Lambert Anonyme) v MySpace,
France
 Viacom v YouTube and FAPL v YouTube – challenge
to YouTube’s assertion that it is a ‘host’ under DMCA.
Hosting – knowledge of unlawful activity
 The service provider shall not be liable … where the
service provider:
 Does not have actual knowledge … or is not aware of
facts or circumstances from which it would have been
apparent … that the activity or information was
unlawful; or
 Upon obtaining such knowledge or awareness, acts
expeditiously to remove or to disable access to the
information
 (Regulation 19(a))
Hosting – knowledge of unlawful activity (2)
 Knowledge of what?
 Knowledge of the actual infringement/unlawful
activity; or
 Is general knowledge of circumstances enough
(Viacom v YouTube)?
 Has service provider received adequate notice of
unlawful activity?
Hosting – Notice and Takedown
 Requirement to act “expeditiously to remove or
disable access to the information” on obtaining
knowledge (Regulation 19(a)(ii)).
 Knowledge requirement + obligation to remove are
legal basis of notice and takedown procedure.
 Similar to innocent dissemination defence to
defamation.
E-Commerce Regulations – summary
 Is the service an information society service?
 Probably.
 Is the service a hosting service?
 Maybe.
 Does the service provider have knowledge?
 Notice? Moderation?
 Does the service provider comply with notice and
takedown?
 Put in place a clear policy and follow it.
Specific Defences
 Defamation – innocent dissemination
 Obscene Publications – knowledge and belief
 Contempt of Court – knowledge and belief
Defamation – innocent dissemination (1)
 Is community a publisher at common law (Bunt v
Tilley & Ors)?
 If not, no liability
 If publisher, then consider Section 1 Defamation Act
Defamation – innocent dissemination (2)
 Defence if the community:
 Is not the author editor or publisher (as defined)
 Took reasonable care in relation to the publication
 Didn’t know and had no reason to believe that it
caused or contributed to the defamatory statement
Innocent dissemination (3)
 Is the service provider a “publisher” under the Act?
 Publisher” means commercial publisher: “a person
whose business is issuing material to the public...”
(Section 1(2)).
 Not a publisher if only the “operator or provider of
access to a communication system through which the
statement is transmitted or made available” (Section
1(3)(e)).
Innocent dissemination (4)
 Did the provider take reasonable care?
 Includes looking at whether provider complied with
notice.
 Godfrey v Demon – Demon failed to take down
following notice.
 Bunt v Tilley – ISPs did take reasonable care – the
notice was inadequate.
Innocent Dissemination (5)
 Did the community know or have reason to believe
that it caused or contributed to the publication of a
defamatory statement?
 notice?
 moderation?
 other circumstances?
Moderation
 Common theme of defences and exemptions:
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Take reasonable care but:
Do not do more than ‘hosting’
Do not be a publisher or editor
Do not have actual knowledge
 So what do you do?
 Damned if you moderate, damned if you don’t?
Moderation – minimising risk
 Liability control and quality control
 Brand protection, user experience, user safety
 Consider:
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What type of community is it?
Who will access the service?
What content would you expect?
What resources do you have?
What risk are you willing to accept
What are your priorities?
Moderation
 Options:
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No moderation
Pre-vet all material
Moderate after posting?
Alert moderation
24/7 or periodic?
Third party providers
Online communities - terms and conditions
Sarah Stone
Terms of Service / Terms of Use
 Key risk management terms
 right to remove / block access to content
 notification procedure for alleged unlawful content
 sanctions - warning, suspension, account termination
 financial protection - indemnity (value against user? enforceable?)
 IP ownership / rights to use
 Data protection / privacy
Notice & take-down procedure
 Best practice: What should the notice contain?
 clear description of disputed content and why complainant
believes it is unlawful
 details of URL or other location information
 complainant's contact details – verify identity
 statement by complainant
 info provided is accurate
 complainant has right to complain
 good faith belief that disputed content is not authorised / lawful OR
it is untrue and harmful to their reputation (defamation)
 Easy to find and use
IP ownership / rights to use
 Service provider ownership
 MMOGs eg., World of Warcraft, City of Heroes
 User ownership with service provider right to use
 Second Life: participants own content they create in-world, to
the extent they have such rights under applicable law
 Licence scope - in-service (MySpace) / beyond (MTV Flux)
 Open-source - 'community' rights to copy, modify, distribute
 open source software communities eg., Linux
 Channel 4 Fourdocs – Creative Commons licence
Data protection – collection methods
 user registration - provide personal information
 business model - open exchange of personal information eg.,
LinkedIn, FaceBook
 use of 'hidden' technologies to gather information about user
activity (eg., cookies, web beacons)
 User profiling - targeted advertising as a means of monetising
online communities
Data protection - compliance
 Register as a data controller - failure to notify is a criminal
offence (www.ico.gov.uk)
 Privacy policy
 inform users of the purposes for which their personal information
will be processed ('fair and lawful processing’)
 Use of cookies, web beacons; how to disable (PEC Regulations)
 data sharing with third parties – who, why
 Other issues
 no data export outside EEA unless consent / other derogations
 targeted advertising on-site vs email marketing sent to individual
– compliance with PEC Regulations
Data protection - risk of getting it wrong
 UK - general approach, weak enforcement powers
 Fines (up to £5,000), compensation, rectification or destruction
of data
Compared to
 US - sectoral approach, large penalties
 Xanga.com - social networking site fined US$1m by FTC for
breaching Children's Online Privacy Protection Act (COPPA) by
allowing children under 13 to sign up for the service without
getting their parent's consent
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