At its best, the Digital Millennium Copyright Act (“DMCA”) remains a contentious topic for discussion amongst the talking heads and commentators, as well as those personally involved and affected. For example, professional photographer Alex Wild’s recent article on ars technical, “How rampant online piracy squashed one insect photographer,” as well as videos and even grass root websites, are all devoted to the problems with the DMCA. While the DMCA helped foster growth of the internet, it was also arguably an immeasurable burden-shifting piece of legislation placed involuntarily onto the shoulders of rights holders.
The DMCA is even more problematic to the layman or those that, other than a rare occasion, have no cause or concern to understand what it is. They just know it has something to do with stuff on the internet. The greatest misconception I hear from those in this group is that the DMCA provides some kind of exception or defense to copyright infringement – this could not be further from the truth. In fact, for the ‘safe harbor’ to even apply, a plaintiff must first prove (or defendant must admit) copyright infringement by the service provider, making it more akin to an affirmative defense.
Thus what the DMCA does do is provide certain ‘safe harbors’ to qualified service providers related to specific acts of the related infringement. But what is a ‘service provider’; what is a ‘Safe Harbor’; what specific acts of infringement are relevant; what does it mean to be ‘qualified’; are but just a few often overlooked or misunderstood questions.
The DMCA and Service Providers.
Signed into law in 1998 by President Clinton, the DMCA was a conglomeration of legislation and then-existing case law intended to move the US forward into the new digital economy. While the DMCA actually includes five (5) distinct “Titles”, it is Title II, the “Online Copyright Infringement Liability Limitation Act” (or “OCILLA”). OCILLA is the bread and butter of the amendment made to the Copyright Act with 17 USC § 512  that gives rise to protection for service providers, such as Google, Facebook, Pinterest, and Cafe Press.
The four (4) categories of service provider activities subject to projection under § 512 are designated as a) transitory communications; b) system caching; c) data storage at direction of users; and d) information location tools.
Of primary interest to rights holders is 512(c), which laid the path for companies to flourish as a result of user activity. Unfortunately these companies also flourish by benefiting from copyright infringement by user activity, with a primary example being Pinterest, whose entire concept is about “pinning” (i.e., copying!) photos as a medium of communication. The Founder of Pinterest is even described as admitting “there are issues with Pinterest and the fear of claims of copyright infringement.”
How do they do it?
What is a “Service Provider”?
Very broadly speaking, and in the context of § 512(c), a ‘service provider’ means “a provider of online services or network access, or the operator of facilities therefor”.  Or basically any person or business that provides an online service. However, the discussion does not end there because in order to receive the benefits (e.g., the ‘Safe Harbors’) associated with OCILLA, one has to be a qualified service provider.
To be a qualified service provider is not difficult in practice or implementation, but it can be arduous and involve complexity in getting to the point of practice or implementation. And while a person or business can be a service provider at all times, he/she or it may only be a qualified service provider sometimes, and not a qualified service provider at other times.
Is it worth it? What are the benefits?
Simply speaking the treasure trove of DMCA 512(c) is the removal of liability of a qualified service provider for any “monetary relief” as a result of copyright infringement. ‘Monetary Relief’ means damages, costs, attorneys’ fees, and any other form of monetary payment. So it is worth noting the benefits of the DMCA safe harbor have nothing to do with a defense, exception, or exemption to acts of copyright infringement by a service provider.
And so it is without question that service providers benefit from the ability to commit indirect infringement (i.e., infringement as a result of direct infringement by users) without any financial ramification whatsoever as a result of any related liability. As a result of waiving this liability, the bottom line for any service provider thus includes the question, “can we make more money by facilitating user-directed copyright infringement than not?”
What is a Qualified Service Provider?
As hinted at, the benefit of 512(c) does not come with unfettered qualification. Indeed, the legislative history and subsequent case law indicate the need for 'strict compliance' with the DMCA in order to be a qualified service provider.
Follow up articles will discuss topics of qualification (or failures of qualification), including:
- Notice and Knowledge
-Repeat Infringer policy
-Designation and Identification of a DMCA Agent
More to come!
 http://vimeo.com/89323099 and http://fixthedmca.org
 Title I – WIPO Treaties; Title III - Computer Maintenance Competition Assurance Act; Title IV – functions of the Copyright Office; and Title V - Vessel Hull Design Protection Act
 17 USC 512
 See 512(K)(1)(B)
 See 512(K)(2)