5th Annual Recent Developments

Derivative Liability for User Content and Actions


Eric Goldman

Epinions, Inc.


1.         What is the Problem?


      Users engage in bad behavior on the Internet

      Bad users are too numerous to pursue individually

      Users may be hard to find or judgment proof

      Companies hate suing their users

      Intermediaries offer:

    Deep pockets

    Ability to act quickly



2.         Congress Has Spoken (Part 1)


47 USC 230(c)(1):

“No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.”


3.         “Provider or User of an Interactive Computer Service”


      America Online (Zeran, Ben Ezra, Doe, Blumenthal, Oliver, Morrison)

      Internet access provider/library (Aquino, Kempf, Patentwizard, Mainstream Loudon, Kathleen R.)

      Web host (Franco)

      Website (Gentry, Stoner, Amazon.com)

    But see Batzel

      Chatroom operator (Marczeski)

      Mail list operator (Truelove)

      Person who forwards email to a maillist (Barrett)


4.         “Treated as the Publisher or Speaker”


      Defamation (Aquino, Barrett, Ben Ezra, Blumenthal, Kempf, Marczeski, Morrison, Amazon.com, Truelove, Zeran)

      Negligence (Oliver. PatentWizard, Truelove, Zeran)

      Breach of contract (TPB) (Morrison)

      State anti-pornography laws (Doe, Mainstream Loudon, Kathleen R.)

      Privacy rights/nuisance (Franco)

      Sale of fake sports memorabilia (Gentry)

      Sale of bootleg recordings (17200) (Stoner)


5.         “Provided by Another Information Content Provider”


      Zeran: Didn’t matter if AOL knew of the defamation and failed to act

      Blumenthal: Drudge wrote column as an independent contractor; AOL had contractual rights to edit

      Amazon.com: Amazon obtained a non-exclusive license to the user reviews and had contractual rights to edit


6.         What Happens if 230(c)(1) Isn’t Available?


      230(c)(2)—actions taken to restrict access to objectionable material

      Attack the elements

    Hart v. Internet Wire (no liability under securities law for bogus press release)

    Tzougrakis (no liability for defamation when it was reasonable to rely on the source)

      Common law safe harbor

    Lunney (Prodigy not the publisher of defamatory emails and message board postings; and even if it was, there was a safe harbor akin to that provided to telephone companies)


7.         What Doesn’t 230(c) Cover?


      Intellectual property laws



   Patent/trade secret


      Federal criminal laws (including federal obscenity and child pornography laws)

      ECPA violations


8.         Congress Has Spoken (Part 2)


Digital Millennium Copyright Act (17 USC 512)

(a): Internet access provider safe harbor

(b): caching safe harbor

(c): web host safe harbor

(d): safe harbor for linking to infringing items

(e): university safe harbor


9.         512(c): Web Host Safe Harbor


No liability for storing material at a user’s direction if

      No “red flags” that infringement is occurring

      No direct financial benefit from infringement when provider has right and ability to control infringement


10.       What is a “Red Flag”?


512(c)(3)—Notice of Infringement:

      ID the infringed work (or representative sample)

      ID the infringing copies so provider can find them

      statement of a good faith belief that use is not authorized

      statement that complaint is accurate and, under perjury, person is authorized to act

      signature of person authorized to act

      contact information


11.       What Happens if 512(c)(3) Notice is Not Sent?


      Hendrickson: eBay entitled to safe harbor when 512(c)(3) notice not sent

    Plaintiff needed to ID specific item numbers that were infringing

      ALS Scan: deficient notice eliminates safe harbor so long as it “substantially” provided the specified information

    Generalized statement that USENET groups contained infringing items was enough


    District court initially did not require any notice; Napster had red flags based on its behavior

    9th circuit required record companies to provide some information to Napster


12.       Eligibility for 512 Safe Harbors


      Register with the copyright office

      Post contact information on the website

      Notify users in the user agreement that repeat infringers will be terminated

      Follow a policy of terminating repeat infringers

      Accommodate and not interfere with “standard technical measures”


13.       Vicarious Copyright Infringement


      “Direct Financial Benefit”

   Used to arise when provider made more money attributable to the infringement (e.g., banner ads, not subscription fees)

   But Napster had direct financial benefit even though it had no revenues

      “Right and Ability to Control”

   Napster’s contract said it could refuse service and terminate accounts in its sole discretion