3D rendering of Copyright Symbol made of transparent glass with Shades and Shadow isolated on white background.

If your company operates a website or blog that hosts user-generated content, you’ll want to read this post carefully.

We’re ringing the alarm bell on an important new U.S. copyright law development that, if ignored, could significantly increase your company’s potential liability exposure in connection with user-generated content.

If your company hosts user-generated content, such hosted content may include materials that were posted without the permission of the owners of the copyrights in such materials—potentially subjecting your company to copyright infringement liability.

For nearly two decades, however, Section 512(c) of the U.S. Copyright Act, enacted in 1998 as part of the Digital Millennium Copyright Act (DMCA), has provided a safe harbor insulating online service providers from monetary damages for hosting copyright-infringing materials posted by their users. To receive protection under the Section 512(c) safe harbor, service providers must, among other things, designate an agent to receive notifications of claimed infringement with the Copyright Office.

If a website operator fails to so designate an agent for its website, that operator runs the risk of incurring monetary damages for copyright-infringing materials hosted on its site. So, if your company is hosting user-generated content, it’s important to have designated an agent with the Copyright Office.

By our rough count, over 100,000 online service providers have designated agents with the Copyright Office. Under the Copyright Office’s “interim” regulations that had been in effect since the DMCA’s enactment, a service provider would register by filling out a paper form and filing the completed form with the Copyright Office.

Just last week, however, the U.S. Copyright Office rolled out a new online system for the designation of agents to receive notifications of copyright infringement. The new system, effective as of December 1, 2016, replaces the old paper-based system. Under the system, an online service provider with an agent registered through the old system must also register that agent through the new system by December 31, 2017, in order to maintain a valid designation. Failure to do so by that deadline could result in the online service provider no longer receiving the benefits of the Section 512(c) safe harbor in connection with its hosting of user-generated content, at least until such provider finally gets around to registering through the new system.

Moreover, going forward, online service providers will need to renew their agent designations every three years in order to maintain safe harbor protection in connection with their hosting of user-generated content. There was no such periodic renewal obligation under the old system.

Why is the Copyright Office doing this? Although by no means perfect, the old system was relatively easy to use and has worked well for bloggers and website operators ever since Bill Clinton was president. Why fix something that isn’t broken, particularly if, in fixing the system, this risk is created of online service providers losing safe harbor protection? Not surprisingly, the Copyright Office’s actions have generated some blistering criticism from Internet law pundits.

The Copyright Office, however, apparently believes that the system was in fact broken due to the failure of online service providers to keep their agent designation information up to date. For example, in announcing its new registration system, the Copyright Office noted that it had found that 22 percent of existing agent designations were for defunct service providers and that, with respect to non-defunct service providers, an estimated 65 percent of their agent designations contained inaccurate information. The new system seeks to address this problem by allowing service providers to more efficiently submit and update designated agent information through the use of an online system and by requiring periodic renewals of designations.

Perhaps in an effort to further incentivize online service providers to keep their records updated, the cost of designation under the new system will be cheaper than under the old system. Each paper form designation under the old system would have cost a service provider $105, not including additional fees to list non-legal names used by the service provider. Under the new online system, the designation fee is $6 with no additional fee for alternative names. This same fee would apply to each renewal of an agent designation.

The Copyright Office’s new approach also expands the options available to online service providers in designating an agent. Under the old system, service providers were required to name a natural person or a specific position or title. The new regulations provide that a designated agent may be an individual, a specific position or title held by an individual, or a specific department within the service provider’s organization or within a third-party entity.

The Copyright Office has released a series of tutorials to assist online service providers in registering an agent under the new system. The Copyright Office regulations adopting the new system can be found here.

Here are our key takeaways regarding this important development:

  • If your company hosts, stores or even links to user-generated content, it should ensure that it has registered an agent with the Copyright Office. If your company has never registered an agent, it should do so under the new system.
  • Even if your company has already registered its DMCA agent with the Copyright Office, if that registration was done under the old paper-based system, it will need to re-register under the new agent designation system by December 31, 2017.
  • After registering under the new system, online service providers will need to ensure that they observe the “every three years” deadlines for renewing their registrations.
  • Until January 1, 2018, copyright owners seeking to determine whether a blog or website hosting infringing user-generated content is in compliance with the DMCA agent designation requirement will want to check both the old directory and the new directory—prior to 2018, it should be sufficient that the requisite agent designation appears in either of the two directories.

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For other Socially Aware blog posts on DMCA agent designation issues, please see: New Court Decision Highlights Potential Headache for Companies Hosting User-Generated Content; and Court Holds That DMCA Safe Harbor Does Not Extend to Infringement Prior to Designation of Agent. For a recent blog post on risk issues surrounding user-generated content, please see: Commercializing User-Generated Content: Five Risk Reduction Strategies.