File-hosting companies are the latest class of online service providers to successfully dodge copyright infringement claims. Like online marketplace and search engine providers, cyberlockers have also triumphed in lawsuits filed against them because they were protected by the Digital Millennium Copyright Act (DMCA) safe harbor.
A recent example involved a lawsuit filed against a popular online file-hosting service provider, Scribd, for copying and inserting copyrighted work into an internal filtering system. Ironically, this filtering system was in place to help the cyberlocker detect copyright infringement on their site. The suit, filed by an author, maintained that the act of filtering her copyrighted material was a form of copyright infringement and that Scribd failed to stop illegal downloads of her book. This closely watched lawsuit was eventually dropped.
Scribd lawyers asserted that the DMCA provided safe-harbor protection and also stated, They didnÛªt realize that Scribd had a very strong protection under the law. The quote appears to ring true and is in line with the outcome of two similar cases decided in the U.S. earlier this year. The first case included another popular online file sharing provider RapidShare vs. media company Perfect 10. The second was a highly visible case involving YouTube vs. entertainment giant Viacom. In both cases the online service provider prevailed.
The message is clear. The DMCA continues to protect the online service provider provided the online service provider takes down copyrighted material once notified. The burden remains on the copyright owner to police the Internet to detect cases of infringement online.”