The Small Business Guide to the DMCA and Copyright Law

Megan Marrs
Last Updated: November 18, 2021 | Marketing Ideas
HomeBlogThe Small Business Guide to the DMCA and Copyright Law

Deciding how to handle copyright law in a time where 3D printers are on the rise and online media sharing is the norm is troublesome at best. Many critics admonish movie studios and record labels for their desperate attempts to retain the status quo, rather than embrace and adapt to cultural shifts. This stalwart stubbornness is reflected in the big media industries’ use of the DMCA to levy absurd fines against online copyright infringers.

DMCA Notice

That being said, it’d be unfair to suggest that copyright holders or intellectual property owners should have no rights when it comes to the wild west of the Internet. It all comes to a problem of balance and fairness. While we’re likely many years away from finding a suitable balancing point for properly protecting the rights of owners while being reasonable with infringers, we do hope to offer some key highlights and aspects of the DMCA and copyright law that YOU need to know as a small business or, heck, just a resident of the World Wide Web.

In this post, we’ll be examining:

DMCA Summary: What is it?

The DMCA, officially named The Digital Millennium Copyright Act, is a 1998 US copyright law, implementing two 1996 treaties of the World Intellectual Property Organization (WIPO).

The DMCA criminalizes technology intended to circumvent measures that control access to copyrighted materials (also known as digital rights management or DRM). It also criminalizes the act of circumventing an access control, even in cases where there is no copyright infringement occurring.The DMCA dramatically increases the penalties for copyright infringement via the Internet.

Why the DMCA is Just Plain Terrible

The DMCA has a lot of haters, and it’s really no shock considering that:

It has outrageous penalties for menial crimes. The DMCA has helped create outrageous penalties for downloading music, movies, or other media illegally. Just 6 months ago, an appeals court approved a $675,000 fine for a Boston student who was caught illegally downloading 30 songs. Guess how much a Harvard student was fined recently for sending a false bomb threat, evacuating several buildings, wasting hours of the FBI, Boston, Cambridge, and Harvard University police departments’ manpower, all in hopes of avoiding a final? The answer: $250,000. So apparently downloading a few songs is the greater offense.

It’s rigid in a fluid world. The DMCA is rigid and restricting, enforcing strict old-school guidelines that don’t fit right in the new realm of the Internet. The Internet breaks apart classic forms of ownership as online creations mutate and multiply at an unprecedented rate. Memes alone are a copyright nightmare.Take the old meme classic Philosoraptor for example. Originally it was a t-shirt design on LonelyDinosaur, but it’s grown into something much bigger, with countless variations across the web.

DMCA copyright law

It lets the rich get richer while hurting the little guy. The DMCA enables those with big pockets to profit while perpetuating the embarrassing concept that the U.S. is a lawsuit-hungry monster of a country. The practice of leveraging copyrights and patent suites to make profit is damaging the economy by preventing innovation and creativity from thriving. (This American Life has a fascinating story about the upsetting patent troll schemes happening across the country – check it out when you have the time.)

It serves Hollywood, not the people. Ultimately, the DMCA can be seen as a tool that has enabled Hollywood movie studios and large record labels to prevent the natural forward movement of the entertainment industry. In a world where users are increasingly consuming the majority of their media content online, groups like the Motion Picture Association of America (MPAA) have long made efforts to throw their weight around to prevent an easy online transition out of simple laziness.

It restricts an owner’s rights over their property. The DMCA prevents users from ripping and burning their purchased DVDs (even for personal use) so that movie studios can charge astronomically higher prices for the same content. Digital Rights Management (DRM) coding was placed in DVDs to prevent such copying, and circumventing this coding is extremely illegal. Under the umbrella of circumvention, the DMCA has also made it illegal to jailbreak phones, consoles, or other electronics.

It violates free speech and academic advances— or so one could argue. Researches who study DRM technologies are not allowed to share information that could aid in circumvention. Programmer Dmitry Sklyarov was incarcerated in 2001 for working on software that could modify the format of e-books, and others have also suffered punishment for similar research. The DMCA is stifling technological innovation, damaging the economy as a result.

DMCA takedown notice

FoxTrot comic borrowed from Against Monopoly

Why the DMCA is Necessary (Kind Of)

The DMCA in its current state is too absurd to be helpful to many, but the concept itself isn’t unreasonable.

We DO need to protect creators somehow. A law built on such extremes can’t really be called good, especially when it functions mainly as the Igor assistant for big Hollywood lobbyists. However, there does need to be some kind of structure designed to support artists and creators – simply posting something online shouldn’t mean sacrificing the work, credit, and compensation creators deserve for their efforts.

DMCA small businesses

Yet in an age where most creative works come to fruition online and morph into new mutations constantly, it would be a huge mistake to stifle creative energies.

How do we reach this delicate balancing point? The answer isn’t obvious. However, it’s clear that the first step is adjusting the penalty system so that the fine fits the crime (remember the war on drugs? Yeah, sending generations of young minority men to prison for marijuana didn’t seem to work out so well). Charging $22,000 per song is nothing short of moronic.

How DMCA and Copyright Law Hurt Small Businesses

While the DMCA appears to protect small businesses and content creators at face value, it is ultimately a wolf in sheep’s clothing. Photographers are one group often victimized by the very laws that claim to protect them. Imagine that Conglom-O, a large mega company, uses a photographer’s photos without permission – let’s say $300 worth. The photographer has lost that money, and additionally loses time tracking down the photos, figuring out what is happening, and writing a response. Perhaps he’d like $600 total in reparations.

The problem is that, as this article by Alex Wild shows, it makes no economic sense for someone seeking a relatively low claim to go through the federal court. One report by the U.S. Copyright Office notes that It has been estimated that the median cost for a party to litigate a copyright infringement lawsuit with less than $1 million at stake through appeal is $350,000.”

This means that in order to fight against Conglom-O, the photographer needs to request $350,000 to make it worth his effort. The cost of going forward with a copyright infringement lawsuit is so enormously disproportionate to what most small businesses or individuals can afford (and what they would hope to earn from such a lawsuit), that it makes no sense whatsoever.  The photographer needs to ask for more than they even want and the infringer needs to pay damages that don’t match the offense. Meanwhile, lawyers make bank. It’s either go big or go home, which means that the majority of infringement cases are never pursued – unless the cases are brought forward by Conglom-O, Hollywood, and their ilk, the only ones who can afford to leverage such sums of money.

Some suggest that the solution lies in making copyright a local issue rather than federal. The photographer only wants $600-700 in damages, which really should be considered small claims. Is there a chance of changes like this happening? Maybe someday, but at the snail’s pace the government is currently operating at, you’d best not hold your breath.

YouTube’s Content ID System: Copyright Gone Wrong

Similar copyright issues have recently plagued content creators on YouTube, where a new content ID system has been put in place. The content ID system scans a new uploaded video against a database of copyright-protected content. If there’s a match the copyright owner as the option of:

  • Monetizing your videos for profit
  • Blocking your video, effectively removing it fromYouTube
  • Tracking your video, letting the copyright owner simply view the video’s stats

The problems that have arisen from this “compromise” between YouTube and copyright owners are disastrous. The major issue is that many of the videos now being flagged for copyright violation based on the content ID system are, in fact, allowable under fair use. This also means that copyright owners have the ability to profit off of other’s creative labor. Many have hailed the new content ID system as the end of YouTube, threatening to tear apart the small content creators that can no longer make a living off their work and effectively destroying the unique video content that had made YouTube so successful in the past.

The deeper problem at play here is YouTube’s need to protect itself. YouTube wants to play nice with copyright owners, since it doesn’t want to be taken to court. But giving publishers and copyright owners the reigns with the content ID system wreaks havoc and hurts those using copyrighted material appropriately.

What is a DMCA Takedown Notice?

Maybe you’ve recently received a DMCA takedown notice from your service provider and are wondering – what exactly does this mean?

When the owner of a copyrighted piece of content sees it’s being used without permission, they can file a complaint. Normally this would involve a lawsuit against the service provider, who is hosting the offending material on the web. However, exemptions exist to protect service providers from getting sued (as you can imagine, if service providers were held responsible for all content published on the web with their services, they wouldn’t survive very long). These protective measures are referred to as safe harbor provisions, which we will discuss in more detail below. The safe harbor protections apply so long as service providers immediately remove the offending content. If you’ve gotten a DMCA takedown notice, it means your service provider is saying, “Hey, we were told you are using this without permission, so we’re taking it down.”

Some huge flaws of DMCA takedown notices are:

  • They are often issued without prior discussion or alternate recourse
  • They are used by some parties as a censorship tool against material with legitimate fair use of copyrighted material.
  • You are guilty until proved innocent (and good luck proving your innocence and reversing the takedown in such a dysfunctional kangaroo court)
  • Competitors may use takedown notices as a (extremely) black hat method of online marketing.

Really, labeling the use of DMCA takedown notices as black hat is a tremendous understatement – such practices are the darkest coach roach-iest of strategies, but it does happen.

DMCA copyright complaint

The problem is, even if you are completely innocent of copyright infringement, there isn’t much you can do to fight a takedown notice.

What is DMCA Safe Harbor?

Safe harbor is a provision that allows online service providers (OSPs) like search engines, content hosting sites, and ISPs to exist without being subject to DMCA lawsuits. This takes the blame off of OSPs when a user posts copyright infringing content using their services.

The DMCA safe harbor exemptions are very important – without them sites like YouTube wouldn’t stand a chance. Just think of every time a TV clip has been posted on YouTube – copyright violations like those would destroy YouTube without safe harbor.

DMCA Safe Harbor

However, there is a problem. The DMCA safe harbor measure only applies when the service provider quickly takes down the offending material following a complaint from a copyright holder. This causes most service providers to take immediate action and ask questions later, making it extremely difficult for users to contest takedowns.

Safe harbor protects the tech industry while giving individuals the short end of the stick. MPAA lobbyist Fritz Attaway notes, “The ISPs wanted safe harbor provisions in return for their support for the anti-circumvention provisions, which was one of the major and most important compromises in this legislation.” Per usual, the individuals are left out in the cold while those with money and power stay protected, and big media lobbyists get richer.

You Received a DMCA Notice – But You Did Nothing Wrong! Now What?

Unfortunately, even for non-copyright-infringing users, you’ve got a tough battle ahead if you want to fight your DMCA takedown notice. So what can you do? It helps to look at others in similar situations, such as Stephanie Lenz.

Lenz posted a 30-second video on YouTube of her baby son dancing to a Prince song back in 2007. The video itself isn’t too exciting, likely only holding interest for the child’s parents and relatives. Yet that didn’t stop Universal Music from sending out a DMCA takedown notice shortly after it was posted, claiming infringement. While Lenz did file a counter notice, it still took a month and a half for her video to be restored. Angry, Lenz decided she wouldn’t let this one go – she filed a suit claiming a violation of fair use and free speech rights, arguing that Universal did not have a good faith belief that her video was infringing when they sent the DMCA takedown complaint. You see, one of the requirements of sending a takedown notice is that copyright owners must, under penalty of perjury, have a good faith belief that the use of the material is not authorized.

Unfortunately, analyzing a copyright owner’s good faith belief is extremely difficult. The Ninth Circuit Court of Appeals states that “a copyright owner cannot be liable simply because an unknowing mistake is made, even if the copyright owner acted unreasonably in making the mistakes…. Rather, there must be a demonstration of some actual knowledge…on the part of the copyright owner.” That’s no easy task to prove, which is why arguing against a copyright owner’s good faith belief is really tough.

In short, all this means that you’ve really only got two options.

Option #1: File a counter notice. Those who feel they’ve been wrongly accused of copyright infringement may file a DMCA counter notice, but by doing so they risk taking on a court battle. The way it works is that you file a counter notice, and if the copyright owner doesn’t bring a lawsuit to the district court within 14 days, the service provider must restore your removed content. However, if the copyright owner choses to go forward, you may find yourself in a messy court case, in which case you’ll need proof showing that the copyright owner sent the notice without a good faith belief of infringement.

Option #2: Sit back and forget it. Two terrible options for a terrible situation.

How to File a DMCA Complaint

Is your intellectual property or copyrighted material being used without permission?

Before you pursue filing a DMCA complaint, consider contacting the offending party directly. Be diplomatic and fair in your appeal, kindly asking the party to comply in either removing the material, adding a link to your site or wherever the original content is hosted, or paying to use the content (whichever applies in your situation). No one wants to enter a legal battle, so always consider the direct approach before resorting to additional measures.

If you don’t get a response contacting the problem party, then it’s time to consider other options.

Most websites and hosting services have their own pages for filling out a DMCA complaint form. A few common ones you may be looking for are:

Gigaverse has a fairly extensive guide for contacting different web hosts, which is worth checking out, along with a template for filing a DMCA complaint form with a website, which you can find below:

Date: [Month, DD, YYYY]

To Whom It May Concern,

This letter is a Notice of Infringement as authorized in § 512(c) of the U.S. Copyright Law under the Digital Millennium Copyright Act (DMCA).  I wish to report an instance of Copyright Infringement.  The infringing material appears on your website.
1.  The copyrighted material, which I contend belongs to me and appears illegally on the website for which you provide hosting services, is the following:
[Work type- e.g. article, photo, video, blog post] titled “[Title]” by [Name], posted on [Month, DD, YYYY]

It appears at: [URL of your work]

2.  The page infringing the copyrighted work appears at the website address: [URL]

3.  My contact information is as follows:

4. I have a good faith belief that use of the copyrighted materials as described above is not authorized by the copyright owner, its agent, or the law.

5.  I swear, under penalty of perjury, that the information in the notification is accurate and that I am the copyright owner or am authorized to act on behalf of the owner of an exclusive right that is allegedly infringed.

[Printed Full Name]

From Gigaverse DMCA Guide

If the infringing material is ranking higher on targeted keywords than the original, you may also consider contacting search engines like Google.

DMCA Google

DMCA Fair Use: When is it OK to Use Copyrighted Material?

The repercussions of the DMCA can seem pretty frightening – outlandish copyright lawsuits are something we all want to avoid. So what is DMCA fair use and how do you know when you can use copyrighted material?

Fair use is a doctrine that applies in United States copyright law, permitting the (limited) use of copyrighted work without permission under certain circumstances, such as commentary, criticism, news, teaching, and research. We will go more in-depth below.

When It’s OK to Use Copyrighted Material:

1. Commentaries or critiques

Commenting on or critiquing a copyrighted piece usually requires referencing the content, especially with a video critique. In this case, you’re good to use the copyrighted material.

2. For example or illustration of an argument

People may use copyrighted material when the content supports an argument or point. An example would be clips from Hollywood films used to show a series of film cut styles, or a collection of songs demonstrating a cultural shift.

3. When it is obtained accidentally

This isn’t referring to “Whoops, I didn’t mean to download that entire season of Mad Men, I clicked it by mistake!” Rather, it refers to when a copyrighted piece of material is recorded by happenstance when it is not the primary focus. An example would be a recording of a child opening her birthday presents while “You’re So Vain” is playing in the background. The primary focus is the child opening presents – the song was accidentally recorded in the process.

4. In order to preserve an experience or event

Examples include documenting one’s presence at a concert, recording a gaming performance on Xbox, posting a controversial moment on television like a Jon Stewart speech or a recent Miley Cyrus escapade. There is a limit to this though – the content can’t be reproduced in amounts disproportionate to the purposes of documentation – for example, a part of a favorite rock band performance may be recorded, but not in its entirety. Material can also be recorded for archiving, but not if it is available from authorized sources.

5. For launching a discussion or debate

Here we’re looking mainly at how this content is being presented – is it a simple copy, or is it being used with a certain intention to spur discussion? It could be cultural, political, educational, or social, so long as the intention is clearly to spark conversation.

6. As part of a new creation

Copyrighted content is often used in conjunction with creating entirely new content. What courts ultimately try to determine here is whether the use of the copyrighted material is “transformative.” Does the use add new expression or meaning to the original content? Or is it a copy of the original work? Examples might include:

What constitutes “transformative” is pretty open to interpretation, so long as the new piece cannot be considered a substitute for the original.

Other factors courts consider in determining fair use:

  • Commercial or educational? If the content is being used for a nonprofit or for educational purposes, you’re likely to have much more freedom than if it is being used for commercial purposes.
  • Fact vs. fiction: The use of content from factual works is more likely to be considered fair use than the use of content from fictional work.
  • Amount of content being used: Courts look at how the portion of content you are using relates the entire copyrighted piece – is it just a small snip you are using, or a large portion? Courts also take into consideration the substance of the portion you are using – a small portion of copyrighted content may still not be considered fair use if it could be considered the “heart” or main point of the work.
  • How will it affect the copyrighted work? Does your use potentially affect the copyright owner’s ability to profit for their work? If it does, it may not fall under fair use.
  • Did you show good faith? A little attribution goes a long way. If you’re using copyrighted material, be polite and attribute the original sources. It gives credit where credit is due and makes you reputable.

NOTE: This has been a collection of recommendations for applying fair use as we understand it. If you’re considering using copyrighted material, it’s best to speak with a lawyer, as we cannot provide legal advice.

Information from this section came from two very helpful guides, one from YouTube and one from the Center for Media and Social Impact. Both are worth reading in their entirety if you’d like to understand more about fair use.

The Future of the DMCA: Will it Get Better?

Whether you’re looking at the DMCA from a copyright holder’s view, or as an infringer, the DMCA has oceans of room for improvement. The good news is that several major online organizations like Mozilla and the Electronic Frontier Foundation have joined together to advocate for a reevaluation of the DMCA. Groups hoping for changes have a lot fighting against them, with the MPAA, the Record Industry Association of America, and Hollywood movie execs standing in opposition.

However, we’ve seen before how forces online can be gathered for the greater good of the web – when SOPA was in the works, enough opposition was gathered online to put a stop the bill which would have crippled the Internet. So there is hope!

This concludes our guide to the DMCA. What will the future of the DMCA look like? What would YOU like to see be changed? Let us know in the comments!

Meet The Author

Megan Marrs

Megan Marrs is a veteran content marketer who harbors a love for writing, watercolors, oxford commas, and dogs of all shapes and sizes. When she’s not typing out blog posts or crafting killer social media campaigns, you can find her lounging in a hammock with an epic fantasy novel.

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