The Digital Millennium Copyright Act Of 1998: A Summary (1999) The Alderman Law Office Attorneys Silver Spring Maryland

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THE DIGITAL MILLENNIUM COPYRIGHT ACT OF 1998: A SUMMARY

Greater Richmond Intellectual Property Law Association
Richmond, Virginia
May 20, 1999

The Digital Millennium Copyright Act (DMCA), Pub. L. No. 105-304, 112 Stat. 2860, was signed into law by President Clinton on October 28, 1998. The Act implements two international treaties -- the World Intellectual Property Organization (WIPO) Copyright Treaty (WCT) and Performances and Phonograms Treaty (WPPT).
The DMCA is divided into five titles:

TITLE I: WIPO COPYRIGHT AND PERFORMANCES AND PHONOGRAMS TREATIES IMPLEMENTATION ACT OF 1998
1. Title I provides technical means to protect content. This is becoming a trend as technology causes creators to lose control over the dissemination and use of their works (e.g. use of Serial Copy Management System in Audio Home Recording Act of 1992).
2. The DMCA introduces two new rights:
  1. The first right forbids the circumvention of technological measures used by copyright owners to protect their works.
    1. There are two categories of technological measures:
      1. The first prevents access to works; the second prevents copying (which includes all exclusive section 106 rights).
      2. Bypassing access control is prohibited, but one may bypass copy prevention. (The problem with this, however, is that public domain works and works subject to fair use can still be protected by unscrupulous copyright owners, who substitute their judgment for that of a court).
    2. The DMCA prohibits the making or selling of devices used to circumvent technological measures, if the devices:
      1. are primarily designed or produced to circumvent;
      2. have a limited commercially significant purpose or use beyond circumvention;
      3. are marketed for use in circumvention.
    3. Manufacturers of consumer electronics, telecommunications and computer equipment are not required to design products to respond to particular technological measure. Exception : within 18 months, analog VCRs must conform to the Macrovision anti-copying system.
    4. The DMCA does not change the rights relating to copyright infringement, nor the standards for vicarious and contributory infringement.
    5. There is an exemption to the circumvention prohibition for law enforcement, intelligence and other governmental activities.
    6. There are also exceptions to the circumvention of access control measures:
      1. for nonprofit libraries, archives and educational institutions, who may circumvent to make good faith determinations of whether they want to gain authorized access to a work.
      2. for lawful users of computer program to reverse engineer, to identify and analyze program elements necessary to achieve inter operability with other programs, consistent with copyright law.
      3. to identify flaws and vulnerabilities of encryption technologies.
      4. where a court considers it necessary to prevent access of minors to Internet materials.
      5. to avoid the collection of identifying materials that violate personal privacy.
      6. to test the security of a computer, system or network, with the authorization of the owner or operator.
  2. The second right prohibits tampering with copyright management information (CMI).
    1. CMI is identifying information about:
      1. a work, an author, a copyright owner, and sometimes a performer, a writer or a director of a work, the terms and conditions for the use of a work, and the information prescribed by Copyright Office regulation. Information concerning users is excluded .
    2. The DMCA forbids:
      1. the knowing provision or distribution of false CMI, with the intent to induce, enable, facilitate or conceal infringement.
      2. the intentional removal or alteration of CMI without permission, and the dissemination of CMI or copies of works with the knowledge that the CMI is removed or altered without authority.
      3. There is an exemption for law enforcement, intelligence and other governmental activities.
      4. There are also limitations on liability for broadcast stations and cable systems for the removal or alteration of CMI in some situations, where there is no intent to induce, enable, facilitate or conceal an infringement.
    3. Remedies:
      1. injured persons may bring civil actions in federal court.
      2. there are equitable and monetary remedies similar to those in the Copyright Act, including statutory damages.
      3. courts may reduce or remit damages for innocent violations. Nonprofit libraries, archives and educational institutions may get a complete remission of damages in some situations .
      4. there are criminal offenses for willful violations for commercial advantage or private financial gain. There is a penalty for a first offense of up to $500,000 fine and five years prison. Subsequent violations go up to $1,000,000 fine and 10 years in prison. Nonprofit libraries, archives and educational institutions are entirely exempt from criminal liability.
    4. The CopyrightOffice and the NTIA are required to conduct two studies: one on encryption; the other on the effects of the DMCA on sections 109 and 117 of the Copyright Act.
    5. Title I also contains several technical amendments:
      1. requiring national treatment for works from member countries.
      2. amending section 104 of the Copyright Act to expand protection for foreign works.
      3. restoring protection, similar to the TRIPS agreement, for WCT and WPPT works that went into the public domain because of U.S. formalities or lack of treaty relations.
      4. amending section 411(a) of the Copyright Act to broaden the exemption for all foreign works, so that U.S. copyright registration is no longer a prerequisite to suit.
  TITLE II: ONLINE COPYRIGHT INFRINGEMENT LIABILITY LIMITATION
  1. Title II contains four new limitations on liability for: transitory communications, system caching, storage of information on systems or networks at the direction of users , and for information locations tools . A "service provider" is defined differently according to the particular limitation. For the first limitation, a service provider is an entity offering the transmission, routing, or providing of connections for digital online communications, between or among points specified by a user, of material of the user's choosing, without modification to the content of the material as sent or received. For the other three limitations, the definition is broader: a provider of online services or network access, or the operator of facilities therefor .
  2. To be eligible for the limitations, an online service provider (OSP or Provider) must also:
    1. adopt and reasonably implement a policy of terminating accounts of subscribers who are repeat infringers, and
    2. accommodate and not interfere with standard technical measures.
  3. Copyright owners must still demonstrate copyright infringement, and Providers may still use relevant Copyright Act defenses. Each limitation is a complete bar on damages, and restricts the availability of injunctive relief. Additionally, eligibility for each limitation is determined separately.
  4. There is also a new procedure where a copyright owner can subpoena an OSP to disclose the identity of an infringing subscriber. But the OSP does not have to choose between the liability limitation and the privacy rights of subscribers. Providers do not have to monitor their services or access forbidden materials.
  5. The four new limitations are:
    1. For transitory communications , liability is limited where a Provider merely transmits digital information from one point on a network to another at another's request. This limitation extends to the transmission, routing or providing of connections for information, and the intermediate and transient copies made automatically in the operation of the network.
      1. The OSP must meet the following eligibility criteria:
        
        The Provider cannot initiate transmissions.
        
        The transmission, routing, provisions of connections and copying must be done by an automatic technical process, without selection of material by the Provider.
        
        The Provider may not determine the recipients of the material.
        
        Any intermediate copies made may only be accessible to the anticipated recipients, and may not be retained for longer than reasonably necessary.
        
        No transmitted material may be modified.
    2. For system caching , OSPs may retain copies for a limited time of materials made available by persons other than the Provider, and then transmitted at the direction of a subscriber.
      1. The OSPs may cache materials to fulfill later requests, by transmitting retained copies instead of going to the original sources on a network. Caching reduces the OSP's bandwidth requirements and waiting time on later requests for the same information.
      2. However, one of the drawbacks of caching is that outdated information may be delivered. Additionally, caching may cause inaccurate "hit" information, which is often the basis of advertising revenue.
      3. The eligibility criteria for this limitation are:
        
        The content of retained material may not be modified.
        
        The Provider must follow rules about "refreshing" material (i.e. replacing retained copies with material from the original location).
        
        The Provider may not interfere with "hit" monitoring technology.
        
        The OSP must follow the access instructions of the person posting materials.
        
        Any materials posted without the copyright owner's permission must be promptly removed or blocked once a Provider is notified.
    3. There is also a liability limitation for information residing on systems or networks at a user's direction . The eligibility criteria are:
      The Provider must not have the requisite knowledge of the infringing activity. The standard is: whether the Provider has actual knowledge of any infringement, or is aware of any facts or circumstances indicating an apparent infringement .
      
      The Provider has the right and ability to control activity, but does not receive direct financial benefit.
      
      The Provider must take down or block access to materials upon receiving proper notice of claimed infringement.
      
      The provider is also required to have filed with the Copyright Office a designation of an agent to receive notifications of claimed infringements.
      b. The chronology of a notification is as follows:
      A copyright owner submits a notification under penalty of perjury to an OSP's designated agent.
      
      The Provider has no liability if it promptly removes or blocks access to the materials.
      
      The subscriber may then file a counter notification.
      
      To prevent false claims, there is a built-in security measure: persons who knowingly make material misrepresentations are liable for the resulting damages (including costs and attorney's fees) of the alleged infringer, the copyright owner or licensee, or the service provider.
    4. Finally, there is a limitation for the use of information location tools . Here, liability is limited for referring or linking users to sites containing infringing material - for example, hyperlinks, online directories and search engines.
      1. The eligibility criteria are:
        
        The Provider must not know that the material is infringing.
        
        If the Provider has the right and ability to control the infringing activity, it may not receive direct financial benefit.
        
        Upon receiving a notice of infringement, the OSP must promptly take down or block access to the materials.
      2. As with the limitation for information residing at a user's direction on systems or networks, there are checks and balances against erroneous or fraudulent notifications, and protection for the OSP against take down claims.
      3. There are also special rules for the liability of nonprofit educational institutions . To avoid making an educational institution ineligible for the four liability limitations, the DMCA does not impute the actions and knowledge of faculty members or graduate student employees performing teaching or research functions.
      4. For transitory communications and system caching, employees are considered a "person other than a provider," so their actions do not void their institution's eligibility. For the other limitations, the knowledge or awareness of employees is not imputed to an institution, if three conditions are met:
        
        An employee's infringing acts do not involve providing online access to course materials from the last three years.
        
        The institution has received less than three notifications over the last three years that an employee was infringing.
        
        The institution provides its users with materials describing and promoting adherence to copyright law.
  TITLE III: COMPUTER MAINTENANCE OR REPAIR
  1. Title III expands existing section 117 of the Copyright Act to allow the owner or lessee of a computer to make, or permit the making of, a copy of a computer program in the course of maintaining or repairing the computer.
  2. Note: This exemption only applies for copies made automatically when a computer is activated (e.g. RAM), and only if the program contained in the computer is an authorized copy. Additionally, the new copy cannot be used in any other way and must be destroyed immediately after the maintenance or repair is completed.
  TITLE IV: MISCELLANEOUS PROVISIONS
  1. Title IV confirms the Copyright Office's authority to perform its policy and international functions.
  2. There is also a provision relating to ephemeral recordings for broadcasters. Section 112 of the Copyright Act currently grants an exemption for the making of ephemeral recordings to facilitate a transmission. For example, a radio station may record songs for a broadcast, and broadcast from the new recording instead of the originals.
    1. Background: In 1995, the Digital Performance Right in Sound Recordings Act (DPRA) created for the first time in U.S. copyright law a limited public performance right in sound recordings made by digital transmission.
    2. Title IV expands the section 112 exemption to include recordings made to facilitate digital sound recording transmissions.
    3. Title IV also contains webcasting amendments to the DPRA. Since streaming audio technology does not fall squarely within the digital performance right, the DMCA expands the statutory license for subscription transmissions to include webcasting as "eligible non subscription transmissions."
  3. Title IV also requires the Copyright Office to report to Congress on the promotion of distance education through digital technologies.
  4. The Title also amends the current exemption for nonprofit libraries and archives to accommodate digital technologies and preservation practices.
  5. Finally, Title IV contains a provision requiring distributors to assume producer obligations to make residual payments. Specifically, the Title amends Title 28 to impose on transferees the producer's obligation to make payments under existing collective bargaining agreements.
  TITLE V: PROTECTION OF CERTAIN ORIGINAL DESIGNS
  1. Title V's Vessel Hull Design Protection Act (VHDPA) creates a new system for protecting the original, attractive and distinctive designs of vessel hulls no longer than 200 feet.
  2. Design protection begins for a ten year term when a useful article is made public, or a registration for the design is published. Protection is lost if an application is not made within two years after a design is made public. A design is not registrable if it has been made public more than one year before the date of application.

The DMCA is generally effective upon enactment, with certain exceptions for provisions keyed to relevant treaties. The circumvention of access provision is not effective until October 28, 1999 (or two years from enactment).

Presentations

THE DIGITAL MILLENNIUM COPYRIGHT ACT OF 1998: A SUMMARY