The following is Section III.A of the comment I submitted in the Copyright Office’s study on the operation of Section 512 of the copyright statute.
Question #1 asks whether Section 512 safe harbors are working as intended, and Question #5 asks the related question of whether the right balance has been struck between copyright owners and online service providers. To the extent that service providers have been insulated from the costs associated with liability for their users’ content, the DMCA, with its safe harbors, has been a good thing. But the protection is all too often too complicated to achieve, too expensive to assert, or otherwise too illusory for service providers to be adequately protected.
Relatedly, Question #2 asks whether courts have properly construed the entities and activities covered by the safe harbor, and the answer is not always. But the problem here is not just that they have sometimes gotten it wrong but that there is too often the possibility for them to get it wrong. Whereas under Section 230 questions of liability for intermediaries for illegality in user-supplied content are relatively straight forward – was the intermediary the party that produced the content? if not, then it is not liable – when the alleged illegality in others’ content relates to potential copyright infringement, the test becomes a labyrinth minefield that the service provider may need to endure costly litigation to navigate. Not only is ultimate liability expensive but even the process of ensuring that it won’t face that liability can be crippling. Service providers, and investors in service providers, need a way to minimize and manage the legal risk and associated costs arising from their provision of online services, but given the current complexity outlining the requirements for safe harbors they can rarely be so confidently assured.