Federal Court Holds Diebold Liable for Misleading DMCA Takedown Notices
On Sept. 30, 2004, the United States District Court for the Northern District of California held that Diebold Election Systems, Inc., a manufacturer of electronic voting machines, and an affiliated company (“Diebold”) violated a provision of the Digital Millennium Copyright Act (“DMCA”) by sending misleading copyright infringement notices to several Internet service providers (“ISPs”). Enacted in 1999 as part of the DMCA, 17 U.S.C. § 512(f) imposes liability and damages, including costs and attorneys’ fees, on anyone who “knowingly misrepresents” that material or an activity is infringing. The decision is significant because it is the first reported decision by any court enforcing Section 512(f) of the Copyright Act.
The dispute arose when two Swarthmore College students posted Diebold’s email archive, containing emails by Diebold employees discussing problems with some of the company’s machines, to a website, and the online newspaper “IndyMedia” included a hyperlink to the archive in an article criticizing Diebold. (The email archive had previously been obtained and posted elsewhere on the Internet by an unknown source.) Diebold had been the subject of negative press because of alleged flaws in its voting machines. The company sought to have the hyperlink and the email archive removed from websites by sending “takedown notices,” alleging that the material infringed Diebold’s copyrights in the emails, to several ISPs, including Swarthmore College and the entities hosting IndyMedia. (Under the DMCA, compliance with certain “takedown notices” from copyright owners gives qualifying ISPs “safe harbor” protection from liability for infringement.)
Although Diebold never sued either the college students or IndyMedia, the students and IndyMedia’s ISP sued Diebold for a violation of Section 512(f), in Online Policy Group v. Diebold, Inc. Analyzing the purpose, character, nature of the use, and effect of the use upon the material’s commercial value, the Court first concluded that use of at least some of the emails in question, including previously unpublished emails, constituted permissible “fair use.” Rejecting both the plaintiffs’ proposed “likelihood of success” standard and the defendants’ “frivolous” standard, the Court reasoned that under the plain language of the statute, copyright owners will be liable if they actually knew, should have known, or “would have had no substantial doubt if [they] had been acting in good faith” that they made “material” representations affecting an ISP’s response to the notice. In particular, the Court stated: “The fact that Diebold never actually brought suit against any alleged infringer suggests strongly that Diebold sought to use the DMCA’s safe harbor provisions—which were designed to protect ISPs, not copyright holders—as a sword to suppress publication of embarrassing content rather than a shield to protect its intellectual property.” Because IndyMedia’s ISP, for example, was not actively hosting the website in question, it did not have the capability of removing the offending hyperlink without removing IndyMedia’s entire connectivity. (Note: If you don’t host, you can’t take down; but if you link or hyperlink, under the DMCA, you may have to remove the link.) Pending the disposition of the lawsuit, the ISP agreed to refrain from discontinuing IndyMedia’s access. Although damages have not yet been determined, the Court’s decision invited the plaintiffs to submit a brief supporting their claims for monetary relief, implicitly affirming that damages, costs, and attorneys’ fees may be assessed against violators of Section 512(f).
If you have any questions regarding the DMCA’s “safe harbor” provision for ISPs, Section 512(f), or this decision, please contact us.