The DMCA was enacted in 1998 to preserve “strong incentives for service providers and copyright owners to cooperate to detect and deal with copyright infringements that take place in a digital networked environment.”  As part of this implicit bargain, Title II of the DMCA offers safe harbors for qualifying service providers to limit their liability for claims of copyright infringement.  The Section 512(c) safe harbor protects storage providers (and has been the subject of the much litigation over the past decade).

Specifically, Section 512(c) applies to infringements that occur “by reason of the storage at the direction of a user of material” on a service provider’s system or network.  The statute does not define “user” and it seems, until recently, no court had interpreted the term.  Is a “user” simply anyone who uses an online storage platform, or should the definition exclude those persons who may have an independent contractor or similar relationship with the service provider?  In the typical situation, a website or app might offer to host content and facilitate online sharing and viewing of uploaded photos and videos.  But what if the online site only allows selected applicants to post content on the site on specific topics and offers financial incentives based upon the number of clicks?

In BWP Media USA, Inc. v. Clarity Digital Group, LLC, No. 14-00467 (D. Colo. Mar. 31, 2015), the court was compelled to take a deep dive into what “storage at the direction of a user” means in the context of new media — specifically, the business model of, a so-called “content farm” style site which posts articles written by third parties on popular news, entertainment and lifestyle topics.  Unlike the popular video sharing sites, has more involvement in what goes up on its site. The site does not assign stories and asserts that it does not pre-screen or edit the work of its contributors.  However, the site conducts background checks on individuals who apply to be “Examiners” on a chosen topic, requires contributors to comply with its Editorial Requirements, and may decide to feature a contributor’s work outside his or her topic page (such as on the main page). In some circumstances, contributors may be paid based upon an article’s page views, traffic and similar metrics.  In addition, contributors must also enter into the “Examiners Independent Contractor Agreement and License” before receiving permission to post to the site.  The agreement holds contributors to certain editorial requirements and obligates them to “regularly create and post new Works to the Web Page and update the Web Page as often as reasonably needed.” The agreement also states that contributors must not include copyrighted content on their pages without permission.

The plaintiffs alleged that the Examiner hosted user-submitted articles that contained their copyrighted photos without an appropriate license.  The defendant admitted that the site displayed 75 of plaintiffs’ copyrighted photographs without permission, but argued that the Examiners who included those images in posted content did so without involvement from staff.  In claiming protection under the DMCA safe harbor, the defendant countered that it had no involvement or specific knowledge of the infringing use of plaintiffs’ photographs before they were posted to the site, that it didn’t pre-screen or approve the articles at issue and that it otherwise complied with the requirements of the DMCA and removed the photos at issue in a timely manner after it received a takedown notice.

The dispute centered on whether the defendant was entitled to protection under the § 512(c) safe harbor.  More specifically, the question became whether the contributors to the Examiner were “users” under § 512(c), that is, were the plaintiffs’ photographs stored on defendant’s system at the direction of the site’s contributors or stored at the direction of defendant.  In rejecting the plaintiffs’ copyright claims, the court found no evidence that a content manager, review team, or any staff had any actual control or influence over the content of the articles containing plaintiffs’ photographs so as to render the use of plaintiffs’ photographs at the direction of defendant.  Moreover, the court stated that in the absence of evidence that the defendant directed the contributors to upload plaintiffs’ photographs to the site, defendant’s policies (e.g., prohibiting use of infringing content in the user agreement, having a repeat infringer policy and offering contributors free access to a licensed photo library) further supported the conclusion that plaintiffs’ photographs were not stored on the site at the direction of defendant.

Finding that the defendant complied with the remaining requirements of the statute, the court ruled that the defendant was entitled to § 512(c) safe harbor protection, dismissing the case.

The ruling appears to be the first court to interpret the term “user” under the § 512(c) safe harbor and the broad reading is certainly notable for providers and distributors of new media.  Today’s online “storage” providers that rely on the DMCA for legal protection are so much more than simple web hosts.  Indeed, the BWP Media ruling echoes prior, expansive readings of the safe harbor, where courts have avoided rigid interpretations and ruled that certain automated functions that make files accessible – such as transcoding or converting uploaded content to certain file formats, extracting metadata to aid searching or assigning permalinks – fell within the ordinary meaning of “storage.”