Digital Millennium Copyright Act and Protecting Individual Creative Rights: A Proposal for On-Line Copyright Arbitration

By: Susan Hong

[*110] INTRODUCTION

In October 1998, the United States Congress passed, and the President signed, the Digital Millennium Copyright Act (“DMCA”).[1] Section 512 of the DMCA addresses the problem of Internet copyright infringement suits against Internet Service Providers (“ISPs”). The ease of electronic distribution on theInternet[2] and the freedom of information exchange through the World Wide Web[3] precipitated a significant increase in the user transgression of copyrighted works.[4] Section 512 of the DMCA was the culmination of combined influences from conflicting case law determining the extent of ISP liability for on-line copyright infringement,[5] the Clinton Administration’s Information Infrastructure Task Force (“IITF”),[6] and complaints from ISPs fearing that existing copyright law would render them extinct from high costs associated with liability.[7] The DMCA mitigates an ISP’s copyright liability in connection with transmitting and automatic copying of copyrighted works on their networks. The mitigation is in the form of safe harbors that require an ISP to expeditiously take down alleged copyright infringing websites upon a copyright owner’s notification.[8]

This Note argues that even though the DMCA may protect the ISPs from unwarranted copyright liability, it tilts the balance of interests between the individual creator and the ISP too far in favor of the ISP by granting them almost unbridled and arbitrary discretion to eliminate and take down allegedly infringing copyrighted work.[9] As a result, the DMCA undermines the objective of promoting independently created works by legitimate authors. The DMCA essentially allows the ISPs to act as their own on-line copyright judges and take down creative works that are merely alleged to be infringing, but not infringing in fact or law. Such conduct is equivalent to a store owner taking all of Van Gogh’s paintings and reprints off its shelves merely because someone declares that one of the reprints infringes her copyrighted work. ISPs are not qualified nor equipped to make fair determinations on whether a work constitutes copyright infringement pursuant to the 1976 Copyright Act.[10] The DMCA’s support for such arbitrary take-down is fundamentally unfair, and the safe harbor provisions violate the Fifth Amendment of the United States Constitution by depriving the property of individuals without due process of law.[11]

This Note proposes online copyright arbitration as a solution to the DMCA’s central dilemma—the tension between protecting ISPs from frivolous suits and ensuring due process rights of legitimate authors.[12] To remedy the serious lack of procedural protection in the DMCA, ISPs should be required to submit their copyright infringement complaints to an on-line copyright tribunal for a preliminary determination on the author’s copyright liability before taking down any creative works. Widely used to resolve Internet domain name disputes,[13] online arbitration is a growing area of legal practice that should be utilized to resolve copyright claims under the DMCA. More importantly, Congress should amend the DMCA to include a provision requiring ISPs to submit [*111] on-line copyright infringement disputes to on-line copyright arbitration panels before the commencement of any litigation. Alternatively, Congress should require ISPs to include, in their contract with subscribers, an arbitration clause that requires complaining copyright owners to obtain a decision from an on-line arbitration panel before requesting ISPs to take down alleged infringing work.

Part I discusses the mechanics of § 512 and its underlying legislative purposes. Part II exposes the inherent flaws of § 512 and argues that it disregards individual rights and does not serve the purpose of the DMCA. Section 512 tilts the balance too far in favor of protecting ISPs without giving due consideration to the rights of the end-users. Part III illustrates the due process factors that must be considered by the DMCA. Part IV discusses on-line arbitration as a remedy for due process concerns and explains how it operates in the context of Internet copyright infringement. Finally, Part V proposes that on-line arbitration is a more equitable method to resolve copyright infringements than what currently exists in the DMCA, because it provides the necessary protection of rights of end-users without imposing undue burden on ISPs.

I. SECTION 512

Section 512 of the DMCA limits direct, contributory, or vicarious liability for ISPs with respect to five specific activities: acting as a conduit for infringing material, caching infringing material,[14] storing infringing material at the direction of a user, providing access (such as link or search reference) to infringing materials, and removing potentially infringing materials from a provider’s servers.[15] The DMCA provides, in relevant part: “The service provider shall not be liable for monetary . . . injunctive or other equitable relief for infringement of copyright . . . if . . . the service provider responds expeditiously to remove, or disable access to, the material that is claimed to be infringing upon notification of claimed infringement . . . “[16] In all cases the service provider must have no actual knowledge of the infringement.[17] Moreover, to qualify for protection under the DMCA, the service provider must agree to terminate subscribers who engage in repeated acts of infringement,[18] and must respond expeditiously to remove or disable access to the materials that is claimed to be infringing.[19]

A. Legislative History of the DMCA

Prior to the enactment of the DMCA, ISPs argued that they should not be held liable for contributory or vicarious infringement because:

[T]he volume of material on a service provider’s system is too large to monitor or screen; even if a service provider is willing and able to monitor the material on its system, it cannot always identify infringing material; that failure to shield on-line service providers will impair communication and availability of information; that exposure to liability for infringement will drive service providers out of business, causing the NII (National Information Infrastructure) to fail.[20]

Congress was concerned that ISPs would become hesitant towards making corporate investments to expand the speed and [*112] capacity of the Internet without the assurance that their potential liability for copyright infringement would be limited.[21] Congress also feared that because digital works can be copied and distributed worldwide easily and instantaneously, copyright owners would be hesitant to make their works available on the Internet without the assurance that their works would be protected against massive piracy.[22] Title II of the DMCA therefore set forth rules concerning the liability of ISPs for copyright infringements that occur over their networks.[23] These rules are intended to facilitate the growth of electronic commerce by reducing the legal uncertainties surrounding the operation of digital networks, while preserving strong incentives for copyright owners and service providers to cooperate in detecting and dealing with online piracy.[24] Additionally, Title II does not change existing laws on what constitutes a copyright infringement, when one party may be held responsible for infringements carried out by others, and whether a party has a defense against infringement claims.[25]

The Congressional rationale was that by limiting the liability of ISPs, the DMCA would maintain and improve the efficiency, diversity, and quality of services on the Internet.[26] “[O]nline service providers play an integral role in the development of the NII [National Information Infrastructure] and facilitate and promote the free exchange of ideas.”[27] ISPs are in a unique position to protect, promote, and enforce copyright privileges and law because they have a “business relationship with their subscribers.”[28] ISPs also know the identity and activities of their subscribers and are in a better position than copyright owners to stop unlawful activities.[29] Thus, in exchange for limiting ISP copyright infringement liability, the DMCA charges the ISPs with the duty of protecting copyright owners and enforcing the copyright law.

B. Take-down Safe Harbor Provisions

There are three types of ISP activities for which the DMCA provides safe harbors. With respect to system caching, the DMCA protects the service provider from liability for monetary, injunctive, or equitable relief where the ISP satisfies the following requirements: (1) it was not the source of the infringing material, (2) the material in question was transmitted through an automatic technical process to users who requested access to the infringing material, (3) the service provider did not modify the material, and (4) upon notification of infringement, the service provider acted expeditiously to remove, or disable access to, the material that is claimed to be infringing.[30] In cases where the service provider stores material in their systems at the direction of a user, such as through postings to a Bulletin Board Service (“BBS”)[31] or a website, the DMCA protects a service provider if it does not have actual knowledge that the material on the system or network is infringing, does not receive any financial benefit from the material, and upon obtaining such knowledge or awareness acts expeditiously to remove, or disable access to, the material.[32] When a service provider, acting as a search engine or on-line directory, provides access to infringing material, it is exempt from monetary, injunctive, or equitable relief where it meets criteria similar to the ones explained in the preceding sentence.[33] In all cases, the DMCA provides strong safeguards against future copyright liability by requiring the ISPs to quickly and immediately take down any allegedly infringing work.

[*113] C. Initial Notification Procedure

The DMCA requires complaining copyright owners to follow an initial notification procedure.[34] The infringement claim process begins when the copyright owner sends a written notice to her service provider’s agent designated to receive all such requests.[35] The copyright owner must identify her infringed work and provide information that would allow the ISP to locate the allegedly infringing works.[36] The complaining party must also state that she has a good faith belief that the use of the infringing material was not authorized.[37] After this simple notification procedure, the ISP, in order to be qualified for limited liability, must respond expeditiously to remove or disable access to the alleged infringing material.[38]

The DMCA permits the ISP to take down creative works before notifying the infringing party. A counter-notification procedure was included to safeguard the ISP from potential liability from a disgruntled author whose work was mistakenly taken down.[39] The counter-notification procedure requires that the alleged infringer provide the ISP with a physical or electronic signature, identification of the material that was removed and the location where it last appeared, a statement made under penalty of perjury that the subscriber has a good faith belief the material was removed mistakenly, the subscriber’s personal contact information, and his or her consent to the jurisdiction of the federal district court in which the service provider is located.[40] Upon receiving the counter-notification, the service provider must promptly provide the complaining party with the counter-notification.[41] Unless this party seeks a court order restraining the restoration of the infringing material, the service provider must replace the removed material or cease disabling access to it in no less than ten and no more than fourteen business days following the receipt of the counter-notice.[42]

Even in the counter-notification procedures, the ISP is largely immune from liability. If the work removed by ISP is not later found to be infringing, the ISP escapes liability for the mistaken removal so long as its removal was in “good faith” and the infringement was “apparent.”[43] Thus, there is no liability for taking down “apparently” infringing material.[44] The DMCA gives ISPs wide discretion to decide whether the material is “apparently infringing.” The only procedural requirements before the ISP takes down the material is that the ISP must designate one agent to receive all infringement claims.[45] Once the ISP receives notification of any alleged infringements, the ISP must, in good faith and based on available “facts or circumstances,” determine whether the infringing activity is apparent.[46] The ISP must then promptly notify[47] the subscriber that her work was taken down. Thus, under the DMCA, an alleged infringing work may be removed from the Internet before the author of the work is notified of the removal.[48]

D. Due process

Congress was concerned, and rightly so, that copyright owners whose works were mistakenly or wrongly taken down would assert violation of due process rights.[49] In anticipation of such claims, Congress argued that any due process objections to the take-down procedure are flawed for two reasons. First, in order to assert a due process claim under the FourteenthAmendment, the copyright owner must show state action.[50] In cyberspace, users gain access to the Internet through service provider contracts, [*114] which are private contracts that do not give rise to state interests or state actions.[51] Second, Congress reasoned that “the procedural protections afforded by the notification requirements of § 512(c)(3) and the provisions for the replacement of removed or disabled materials in § 512(f) provide all the process that is due.”[52] Congress believes that the counter-notification procedure properly balances the need for a rapid response to potential infringements with the right of recourse to end-users whose works are removed.[53] Thus, the rationale for allowing the immediate take-down of allegedly infringing works is that the counter-notification right acts as the due process safeguard for the rights of the end-users.

II. THE PLAIN LANGUAGE OF § 512 LACKS APPROPRIATE PROCEDURAL SAFEGUARDS FOR CREATIVE WORKS

From the plain text of the DMCA, it is unclear as to when works constitute a copyright infringement that would warrant a legitimate take down. This demonstrates a fundamentally unfair process by which ISPs may remove works that could possibly be the product of legitimate and independent creation, fair use, public domain, and parody. Pursuant to section 512, the ISP is required to take down works as long as a notice is made and the work is apparently infringing. Although the text of the DMCA does not define “apparent,” the legislative history of the DMCA demonstrates that the apparent infringing activity is a “red flag” test.[54] That is, if the ISP becomes aware of a “red flag” from which infringing activity is apparent, it will lose the limitation of liability if it takes no action.[55] Congress intended, under the apparent standard, that an ISP would have no obligation to seek out copyright infringement, but that it should not turn a blind eye to “red flags” of obvious infringement.[56] Obvious infringement means that the alleged infringements use words such as “pirate,” “bootleg,” or “slang terms” in their uniform resource locator (“URL”) or refer Internet users to other selected Internet sites where pirated software, books, and movies can be downloaded.[57] Absent such “red flags” or actual knowledge, a directory provider would be expected to find apparent infringing activity merely because, for example, it sees one or more well-known photographs of a celebrity at a site devoted to that person.[58] Congress stated:

“[T]he provider could not be expected, during the course of its brief dataloguing visit, to determine whether the photograph was still protected by copyright or was in the public domain; if the photograph was still protected by copyright, whether the use was licensed; and if the use was not licensed, whether it was permitted under the fair use doctrine.”[59]

Congress intended that ISPs remove only materials that meet the red flag test of obvious infringements.[60] In this way, the red flag test strikes the right balance between the interest of the copyright owners with the interest of the ISPs.[61] The ISPs would not be required to make in-depth legal judgments about potential copyright infringement.[62] The ISPs, upon merely seeing an apparently infringing site—regardless of whether the site is in fact an infringement—will be required to remove it from accessibility to the world.[63]

[*115] The text of the DMCA, however, does not require the ISPs to strictly adhere to such a ‘red flag’ test. The DMCA does not specify how long and how deep an investigation the ISP should make when deciding to take down material. Nor does the text provide who at the ISP should make the determination to remove or disable access to the alleged infringing work. This means that a person not skilled in the art of law or making copyright infringement determinations can decide to take down any creative work. It is only the legislative history that indicates the ISP should examine any allegedly infringing work, but just for a “brief period of time”[64] and the term “brief period of time” is not defined.

In sum, the DMCA empowers the ISPs to remove creative works from the Internet without first determining whether the disputed work constitutes an infringement under the Copyright Act. Such a power is clearly unwarranted because it permits the ISPs to effectuate a remedy equivalent to a court-imposed injunction, i.e., the taking down of published works, without having to establish the basic elements of a copyright infringement.[65]

A. Safe Harbor Provisions and the ISP Contracts

Congress has stated that § 512 does not require ISPs to use the notice and take-down procedure, and that the ISP has the choice to refuse taking down material when it receives a notification of alleged infringement.[66] Section 512 limitations apply only if the ISP is found liable under existing principles of copyright law.[67] Regardless, ISPs have strong incentives to utilize § 512 procedures to mitigate their potential copyright liabilities at an early point in the process.

This desire to take advantage of the safe harbor provisions and the likelihood that ISPs would remove material expeditiously without concern for the due process protections of the end-user is evidenced by an examination of the terms and conditions of the major ISP contract, especially those from the America On-line (“AOL”),[68] Microsoft Network (“MSN”),[69] Earthlink,[70] Lycos,[71]and Yahoo!.[72] Common to all their terms is that users, when making a copyright infringement claim, must submit, pursuant to § 512(c)(3) of the DMCA; proof of ownership of copyright, the URL location of the copyrighted work, the URL location of the infringing work, personal contact information, and a statement that the claimant has a good faith belief that the purported work is infringing.[73]

MSN has the most comprehensive copyright infringement claim procedure in their contract with subscribers, which follows almost verbatim the text of the DMCA.[74] The contract informs their subscribers of the requirements for making an initial notice of infringement; of how MSN will proceed to investigate the claim, the consequences against the user whose work is removed; and of the procedure available to the owner of the removed work for making a counter-notification. [75]

Lycos and Earthlink provide a summary of the DMCA, stating that its subscribers have the opportunity to make copyright infringement claims through the company in accordance with the DMCA and that these materials will be removed expeditiously.[76] Lycos, but not Earthlink, provides a counter-notification procedure, but it does not specify how it is done.[77] Lycos is also the only ISP that provides the option of arbitration.[78] The arbitration, however, occurs only after Lycos has [*116] expeditiously removed the alleged infringing material pursuant to the DMCA.[79]

The contracts of AOL, Earthlink, and Yahoo! do not provide the subscriber whose work is removed the right to a counter-notification procedure. These ISPs provide merely their designated agents who will receive the initial infringement notification, and the information the notification must contain. As additional precautionary measures, major ISPs have also included a catch-all provision stating that they reserve the right to remove the material, or terminate a user’s account without notice, for any reason, or for no reason at all.[80]

B. Balance Tilted Too Far

The determination of copyright infringement is too complicated for an ISPs to perform. According to existing case law, a fact-intensive inquiry is often required to determine copyright infringement.[81] It would require the ISP to solicit testimony, make detailed analysis of the works involved, and apply the statutory limitation and standards.[82] Moreover, the process would take much too long, posing an undue economic burden on ISPs. Thus, instead of being forced to go through this long and arduous process, a task usually left to the courts, under section 512, the ISPs are required only to find apparent infringement from the facts and circumstances surrounding the claim.[83] There are a myriad of defenses that a legitimate end user can invoke: independent creation, exclusion of ideas, fair use, and parody.[84] However, Congress did not include any of these defenses in the DMCA, thus exempting ISP from considering these defenses.[85]

Additionally, notwithstanding the legislative history indicating that only obvious infringements should be removed, no where in the text of the DMCA does it limit removal to only obvious infringements that contain words such as “piracy,” “pirated,” or “bootleg” on the website or locator information, as indicated by the legislative history.[86] Plain text interpretations of the statute give service providers leeway to remove material that is not so obvious and does not contain such words. Nor does the Act specify the level of investigation the ISP must perform before removal.[87] Furthermore, the Act does not specify who at the ISPs may decide whether to remove the material.[88] The current legislation enables anyone who works at the ISP to remove infringing material regardless of whether the removal is supervised by persons with legal training.

Congress sought to facilitate the growth of the Internet by limiting liability of on-line service providers through the safe harbors.[89] However, Congress did so at the expense of the rights of innocent users. ISPs retain too much power to set the rules in deciding when to take down a work. The incentive is to take down a work almost immediately upon receipt of a claim of infringement, because the safe harbor is triggered by expeditious removal, and there is no real penalty for removing materials that are later found not to constitute an infringement. Thus, ISPs can take down material that is legitimately published, non-infringing, a fair use, or independently created without facing any punishment. Moreover, ISPs can take down such works even before the end users have an opportunity to fully defend themselves.[90]

The punishment is also the same for everyone regardless of how severe the infringement is. Thus, a flagrant infringer who clearly misuses a copyrighted work and reaps thousands of dollars receives the same punishment as a person who independently [*117] created, but whose work only slightly differs from that of the claimant. Both the flagrant violator and the independent creator wrongfully accused receive the same punishment of removal. This is inherently unfair and the DMCA makes no distinctions between the two because it does not provide a clear standard of infringement.

Compared to existing copyright law, the process mandated in § 512 is unfair even with the counter-notification procedure, because the procedure is effective only after the removal.[91] The innocent end user may have depended heavily upon the business generated from the website, thus the loss from the absence of a website in a brief period of time can be financially ruinous. The ISP will not put the work back up until after at least ten days, and even longer if the claimant simply files a claim for injunction in court regardless of whether the injunction is meritorious.[92]

Additionally, copyright owners are not legal experts; they can be irrational, paranoid, and overly protective of their works, which often prompts them to make frivolous claims against legitimate users and other independent creators. Moreover, an ISP’s designated agent or legal department may not be fully equipped or qualified to make a fair determination on whether a work constitutes infringement. For example, it is doubtful that an ISP operator would understand difficult copyright doctrines such as the merger doctrine, idea/expression dichotomy, conceptual separability and other important theories.

Congressional rationale that the counter-notification procedure would provide adequate safeguards against any due process concerns is unacceptable when there are alternative means to protect both the copyright owners and innocent publishers. The Senate asserted that to produce the most robust national information infrastructure, it must protect authors who provide content for information exchange on the Internet.[93] Without copyright protection, authors would be reluctant to publish their works on the Internet, which in turn undermines the vitality of the Internet.[94] In acting expeditiously to remove the material, the ISP may not take more than a few hours comparing and contrasting the claimed infringement before it acts to remove it. This procedure and “apparent good faith” standard does not give due justice to the person whose work is removed, particularly where the person is a legitimate copyright owner.[95]

Additionally, arbitrary take down cannot be justified on the ground that the agreement between end users and ISPs is a private contract and thus is not subject to due process requirement. The fact that the signing of agreement gives the ISP authority and the right to terminate a user’s account for any reason or no reason at all is a fundamentally unfair practice. The users often do not fully understand the terms of the contract. Moreover, the contract is a shrink-wrap agreement, a take-it or leave it contract not fully negotiated and often in small print. Such adhesion contract cannot be the basis for taking down user websites without procedural safeguards.

This Note does not advocate that Congress repeal the power it has given to ISPs to make initial copyright infringement determinations. In fact, this Note agrees with Congress insofar as the purpose of DMCA is to promote private regulation of the Internet. However, the way by which Congress delegated copyright protection to the private sector is unfair. There is a better way to accomplish the same objectives without sacrificing the rights of end users.

[*118] III. DUE PROCESS PROTECTION

The Fifth Amendment of the United States Constitution provides that “[n]o person shall be … deprived of life, liberty, or property, without due process of law…”[96] In order to invoke the Fifth, however, there must be state action and Congress has argued that the DMCA does not implicate state action. “While the principle that private action is immune from the restrictions of the Fourteenth Amendment is well established and easily stated, the question whether particular conduct is ‘private,’ on the one hand, or ‘state action,’ on the other, frequently admits of no easy answer.”[97] The Supreme Court in San Francisco Arts & Athletics, Inc. v. United States Olympic Committee,[98] held that a government “normally can be held responsible for a private decision only when it has exercised coercive power or has provided such significant encouragement, either overt or covert, that the choice must in law be deemed to be that of the [government].”[99] Congress purports to say that ISPs have a choice not to take advantage of § 512, but as the analysis of the terms and conditions demonstrates, no ISP is so reckless as to pass up the protection at really very little cost to the ISP. The DMCA provides such significant encouragement to the ISP to take down work that is merely alleged to be infringing that the ISP’s choice to take down work must, in law, be deemed to be that of the government. There is, therefore, state action.

Moreover, the DMCA, by allowing ISPs to take-down creative websites, causes owners of such websites to be deprived of property. This is also true where the work taken down is copyrighted. The Supreme Court has written that copyrights are a form of property protected by the due process provisions in the Constitution.[100] Therefore, taking down copyrighted works, without procedural fairness and the opportunity to be heard violates the due process clause of the Fifth Amendment.[101] “Procedural due process imposes constraints on governmental decisions which deprive individuals of ‘liberty’ or ‘property’ interests within the meaning of the Due Process Clause of the Fifth or Fourteenth Amendment.”[102]

IV. ON-LINE ARBITRATION

One such method of curing the DMCA’s lack of procedural due process is to include the use of arbitration before an ISP takes down a creative work. Arbitration lessens the arbitrary and biased nature of the take-down, and it allows the end-user the opportunity to defend herself against an accuser before her work is taken down.

Arbitration is a “creature of contract” by which private parties consent to a neutral third party to resolve their disputes.[103] It is a private tribunal created by and consented to by private individuals for the purpose of resolving specific private disputes.[104] A copyright owner accesses the Internet by agreeing to a contract provided by her ISP.[105] Thus, by way of her contract with the ISP, she is fair game for being required to submit her dispute to online arbitration.

The primary advantages of online arbitration over court litigation are threefold: (1) it keeps courts from restricting the Internet, (2) it allows the Internet to regulate itself, and (3) it promotes freedom, prosperity, and utilization of the Internet to its fullest extent. Electronic commerce demands speedy and efficient resolution of its disputes,[106] and online arbitration satisfies the rapidly changing needs of Cyberspace as it allows for the rapid resolution of disputes.[107] Arbitration [*119] resolves disputes efficiently because it allows parties to bypass the overcrowded dockets at the courthouse and to schedule hearings at each party’s convenience.[108] To speed the process, the individual parties may select a judge who possesses expert knowledge of the subject matter of the dispute.[109] This enables parties to avoid spending large amounts of time and money educating state or federal judges unfamiliar with the subject matter of dispute. This is particularly true with respect to Internet copyright infringements, which often incur high costs because they involve fact-intensive research, and require numerous experts and costly surveys.[110] Consequently, arbitration should be the preferred method of resolving copyright disputes on the Internet.[111]

Some advocate that on-line arbitration may be the best solution to resolve copyright infringements arising on-line because virtual arbitration is tailored to deal with individual acts of copyright infringement.[112] They point out that all paperwork, except the original documentation, is filed on-line. Documents can be exchanged using e-mail, fax, or televideo, while testimonies can be presented and preserved using teleconferencing.[113] The parties also have the ability to communicate with each other and the arbitrator via email, electronic chat or real-time through Internet-Phone technology.[114] In essence, individuals can participate in resolving their disputes without ever leaving their homes.[115] Arbitrations can also be scheduled to minimize problems caused by conflicting time zones.[116]

Others have criticized on-line arbitration as placing the arbitrator at a disadvantage because the arbitrator cannot observe the parties’ body language, mood, and facial expressions, which may be important factors in rendering a just and fair decision. Skeptics, however, concede that there could conceivably be an Internet jurisdiction where online offenses can be resolved by an Internet arbitration tribunal.[117] Moreover, in the case of copyright disputes, applying local, formal law to cyberspace is difficult, if not impossible, because of the global nature of Internet disputes.[118] Some difficulties that have been identified are: (1) cyberspace crosses local and international geographical and jurisdictional boundaries, making application of local law troublesome, and (2) cyberspace evolves rapidly that applying and developing formal laws may result in poorly tailored and ineffective solutions.[119] On-line arbitration promotes efficiency and serves as a more convenient means of dispute resolution because it avoids the difficulty of applying local law. Arbitrators are not bound to follow particular laws of a certain jurisdiction unless the parties contract to assert a particular jurisdiction’s law. Also important, particularly for foreign parties, is that on-line arbitration decreases the extensive and expensive travel to a court of competent jurisdiction in the United States to resolve the dispute.[120] Professor Paul D. Carrington aptly described the benefit of on-line arbitration:

A lawyer in Tokyo and one in Columbus can appear before arbitrators in Stockholm, Hong Kong, and Toronto without any of the five leaving their desks. Indeed it would be a breach of fiduciary duty for any of the five to waste their time or the parties’ money by getting on an airplane and traveling at a client’s expense to the place of the others merely to [*120] participate in the arbitral hearing.[121]

In such a manner, on-line arbitration boards can be established to protect owners of copyright material. Such boards can decide within minutes whether an on-line user had violated an owner’s copyright.[122] If so, the board can instruct an ISP, like America On-line or CompuServe to remove the infringing material.[123] Some advocate that on-line arbitration offering a quick initial ruling on an alleged copyright violation serves as a “smell test.”[124] This on-line dispute resolution satisfies the Internet’s need for the fast and efficient resolution of disputes and can give rise to a new form of alternative dispute resolution on the world wide web.[125]

The most well known test case for arbitrating disputes on-line is called Virtual Magistrate (“VMAG”).[126] Originally sponsored by the Cyberspace Institute and Villanova Law School, and now sponsored by Chicago-Kent College of Law, it rendered one of cyberspace’s first arbitration decisions: Tierney v. America Online.[127] The program offers an easy to follow on-line arbitration service to resolve disputes among on-line computer users, computer operations, and persons harmed by the posting of wrongful on-line messages.[128] A party first files a complaint with the VMAG, who then contacts the defendant and solicits its participation.[129] If the defendant agrees to use the VMAG, the defendant files an answer. VMAG then assigns an arbitrator employed by the American Arbitration Association who renders a decision to resolve the dispute within 72 hours.[130] The content of the disputes that the VMAG decide implicate on-line activities such as spamming, defamation, or inappropriate messages. The VMAG also can decide on a request for removal of a message or posted web page, which may include: copyright infringements; a contract, property or tort dispute regarding on-line issues; or concerns about the one has been treated or referred to on-line.[131] The VMAG is already set up to decide web site content disputes that are tailored to the type of content disputes, i.e., web site copyright infringement disputes, the DMCA seeks to govern.

In the case of the ISP, who hypothetically is either required by the DMCA or inserts a provision in its terms and conditions that subscribing users submit to online arbitration any and all copyright disputes arising in connection with their membership, the contractual agreement requirement for arbitration has been met. This is because users, by virtue of subscribing to the ISP’s service, contractually agree to submit their disputes to an online copyright arbitration tribunal.

Online arbitration is a rapidly growing method of resolving Internet related disputes.[132] In addition to VMGA, other online arbitration services include WIPO[133] and CyberTribunal.[134] WIPO’s current services are more tailored to resolving domain name disputes, and may soon offer on-line copyright dispute resolution services. CyberTribunal, initiated in September 1999, is an experimental project developed by the Centre de recherche en droit public (“CRDP”)[135] whose main purpose is to prevent and resolve disputes that arise in cyberspace.[136] Aware of the international nature of the Internet, CyberTribunal offers services in the languages English, French, and Spanish.[137] It processes solely issues dealing with new information and technology law; specifically in the areas of electronic commerce, competition, copyright, trademark, freedom of expression, and protection of privacy.[138] [*121] CyberTribunal also provides mediation and arbitration services and encourages parties to mediate before they arbitrate and its mediation and arbitration services are offered free of charge.[139]

V. CONGRESS SHOULD REQUIRE ISPS TO SUBMIT COPYRIGHT INFRINGEMENT CLAIMS TO AN ON-LINE ARBITRATION SUPPORTED BY THE GOVERNMENT 

An on-line copyright arbitration tribunal to resolve copyright disputes pursuant to the DMCA is a realistic and achievable idea. It may be comparable to the already existing and sophisticated on-line dispute resolution procedures for resolving Internet trademark disputes. Such a program is organized by the Internet Corporation for Assigned Names and Numbers (“ICANN”).[140] The on-line dispute resolution procedures implicate trademark Internet Domain Name Disputes that arise on-line and are resolved on-line.[141] The program was created in October 1998 by a broad coalition of the Internet’s business, technical, academic, and user communities to: ensure the operational stability of the Internet; promote competition; achieve broad representation of global Internet communities; and develop policy through private-sector, bottom-up, consensus-based means.[142] Individuals or companies that have an Internet Domain Name dispute are required to submit their dispute on-line to specific designated dispute resolution providers such as WIPO and eresolution.com. Complainants are subject to ICANN procedures and the chosen dispute resolution provider’s supplemental rules.[143]

In order to submit a dispute the complainant must assert to the applicable arbitration provider that (i) the allegedly infringing domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights; and (ii) the complainant has no rights or legitimate interests in respect of the domain name; and (iii) the complainant’s domain name has been registered and is being used in bad faith. In the administrative proceeding, the complainant must prove that each of these three elements are present.[144] If, for example, the complainant submits her dispute to WIPO, the complainant pays a fee and may select, in agreement with the opposing party, to have either one arbitrator or a panel of three arbitrators decide the dispute.[145] If the panel finds in favor of the complainant, they order the domain name to be transferred to the complainant.[146] If the panel finds in favor of the defendant, the defendant may continue to use the name in good faith.[147]

The parties never meet together to present their cases in front of the arbitrator. Instead, all communications between the parties and the arbitrator(s) are performed (i) by telecopy or facsimile transmission with a confirmation of transmission; or (ii) by postal or courier service, postage pre-paid and return receipt requested; or (iii) electronically via the Internet, provided a record of its transmission is available.[148] After all papers are submitted, the panel is required to forward its decision on the complaint to the arbitration provider within fourteen (14) days of the panel’s appointment.[149] ICANN ensures that the decisions rendered by the arbitrators are enforced.

An analogous scheme to ICANN would implicate the DMCA requiring ISPs to submit their on-line copyright infringement disputes to the Virtual Magistrate for an initial decision before taking down creative works. Removing the [*122] copyright infringement claim to an on-line arbitration tribunal specializing in resolving copyright disputes provides various incentives. The disputes: (1) will then begin an Internet common law; (2) will be handled by neutral decision makers rather than biased, profit driven, and politically motivated ISP legal departments who may not have much experience in deciding such disputes; (3) can be resolved within a matter of hours; (4) can occur on-line and therefore eliminate need for travel; and (5) will be easily enforced by a court via the Federal Arbitration Act.[150] Moreover, “[t]he Net radically subverts the system of rule-making based on borders between physical spaces” and therefore territorially defined copyright rules may find un-resolvable complications.[151] Under the current DMCA regulation, copyright disputes that ultimately entered a court would face the problem of international application of copyright law. Copyright on-line arbitration, much like the ICANN on-line arbitration procedures, would bypass such problems because of the ease with which subscribers could electronically communicate.

This Note therefore proposes that Congress amend the DMCA to require ISPs to submit on-line copyright infringement suits to an on-line copyright arbitration tribunal. Alternatively, this Note proposes that ISPs insert an arbitration clause in their terms and conditions stating that all users connecting to the Internet through them must submit any disputes that may arise to on-line arbitration. Congressional notice and take down provisions of § 512 fail to sufficiently protect end users against wrongful removal of their legitimate works. To ensure due process and equity for the protection of end users, ISPs should be required to submit their copyright infringement claims to a neutral arbiter, such as the Virtual Magistrate, who can then resolve the issue in a matter of hours.

There are three primary reasons why this approach is practical and enforceable: (1) the ISP possesses the user’s home information and credit card information and therefore can locate any alleged infringer subscribed to its service, (2) it eliminates future problems of selecting jurisdiction because in Cyberspace there is no jurisdiction, (3) users who default or receive a negative judgment can easily be identified by the ISP; (4) the ISP can easily disconnect the infringer’s service, and (5) it satisfies the legitimate concerns that Congress wanted to address that copyright owners are entitled to rapid response to potential infringement with the end-users legitimate interests in not having material removed without recourse. Moreover, such method is in line with Congressional concern to give the Internet as much autonomy as possible. It also allows for a less arbitrary method by which end-users works will be removed. As it stands, the DMCA gives ISPs too much arbitrary power to decide whether the allegedly infringing work is truly infringing.

Lastly, to ensure that an on-line dispute resolution mechanism would be economically feasible and not pose an undue strain on service providers to police copyright infringements, the U.S. government should establish a national copyright dispute resolution organization. Such an organization may begin with the Virtual Magistrate and could be supported by the American Arbitration Association.[152] Similar to the Internet Corporation for Assigned Names and Numbers, the on-line copyright tribunal-organization could be publicly funded and privately run. Such an organization could also function as a non-governmental, non-[*123]profit organization that the government endorses.

CONCLUSION

Given the global nature of the Internet and the increasing world-wide trafficking of creative works, on-line copyright arbitration provides a reasonable method by which to both protect the service provider against unwarranted liability and protects individuals from arbitrary decisions and the threat their legitimate works will be removed. Organizations such as the Virtual Magistrate can render decisions within a matter of hours. Further, on-line arbitration also allows the Internet greater autonomy to regulate itself and eliminates difficult conflict of law applications. On-line arbitration is a necessary element that service providers should take the initiative to implement, that should be amended into the DMCA, or should be federally implemented by executive order. The DMCA is fatally flawed without a more rapid system by which service providers can submit disputes before taking down allegedly infringing work. They are not equipped to do so either as proving copyright infringement is a complicated process. Title II of the DMCA provides little safeguard for authors and may ultimately stifle the growth of the Internet. Therefore, the U.S. government should require service providers to include a provision in their terms and conditions that submit all copyright infringement claims to on-line arbitrators.

[1] See 17 U.S.C.A. § 512 (1999).

[2] The Internet is a global structure of interconnected computers. See ACLU v. Reno, 31 F. Supp.2d 473, 481 (E.D. Penn. 1999). The Internet does not have a centralized control point, but is a “decentralized, global medium of communications” comprising “a giant network which interconnects innumerable smaller groups of linked computer networks.” ACLU v. Reno, 929 F. Supp. 824, 830 (E.D. Penn. 1996); see also Timothy L. Skelton, Internet Copyright Infringement and Service Providers: The Case for a Negotiated Rulemaking Alternative, 35 San Diego L. Rev. 219 (1998). At its inception, approximately 300 host computers were connected to the Internet. See Reno v. ACLU, 521 U.S. 844, 850 (1997). The number grew to about 9,400,000 by 1996, and has tripled to 36.7 million in 1998. See id. (citing ACLU v. Reno, 929 F. Supp., at 481). By 1999, approximately 70.2 million people of all ages use the Internet in the United States alone. See id. at 481-82. Worldwide the Internet is believed to connect more than 159 countries. See Cyberspace Communications, Inc. v. Engler, 55 F. Supp.2d 737, 741 (E.D. Mich. 1999). Moreover, the amount of traffic on the Internet doubles approximately every 100 days. See id. at 74. Estimates are that by 2003, every person on the planet will be networked. See Robert C. Bordone, Electronic On-line Dispute Resolution: A Systems Approach—Potential, Problems, and a Proposal, 3 Harv. Negotiation L. Rev. 175 (1998).

[3] The World Wide Web (“WWW”), as opposed to the Internet, is a series of documents, i.e. web pages, stored in different computers all over the Internet. See ACLU v. Reno, 929 F. Supp. 824, 836 (E.D. Penn. 1996). “A web page is a computer data file that can include names, words, [*124] messages, pictures, sounds, and links to other information.” Panavision Int’l v. Toeppen, 141 F.3d 1316 (9th Cir. 1998).

[4] See Information Infrastructure Task Force, Intellectual Property and the National Information Infrastructure, The Report of the Working Group on Intellectual Property Rights 12 (1995) [hereinafter Report of Working Group], available at http://www.uspto.gov/web/offices/com/doc/ipnii/ lawcopy.pdf. It states:

Any two-dimensional work can readily be “digitized”, i.e., translated into a digital code (usually a series of zeros [sic] and ones). The work can then be stored and used in that digital form. This dramatically increases: the ease and speed with which a work can be reproduced; the quality of the copies (both the first and the hundredth “generation” are virtually identical); the ability to manipulate and change the work; and the speed with which copies (authorized and unauthorized) can be “delivered” to the public. Works also can be combined easily with other works into a single medium, such as a CD-ROM, which contributes to a blurring of the lines that typically divide types of works and the rights and limitations thereto.

The establishment of high-speed, high-capacity electronic information systems makes it possible for one individual, with a few key strokes, to deliver perfect copies of digitized works to scores of other individuals – or to upload a copy to a bulletin board or other service where thousands of individuals can download it or print unlimited “hard” copies. Id.

[5] Compare Playboy Ent., Inc. v. Frena, 839 F. Supp. 1552 (M.D. Fla. 1993) (holding operator of a bulletin board subscription service directly liable for copyrighted material accessed via theservice) with Religious Tech. v. Netcom On-line Communications Serv., Inc., 907 F. Supp. 1361 (N.D. Ca. 1995) (finding Internet access provider not liable for direct, contributory and vicarious infringement for copyrighted material posted on its Bulletin Board Service).

[6] See Report of Working Group, supra note 2, at 12.

There is a view that on-line service providers, such as bulletin board operators, should be exempt from liability or given a higher standard for liability, such as imposing liability only in those cases where infringement was willful and repeated or where it was proven that the service provider had both ‘actual knowledge’ of the infringing activity and the ‘ability and authority’ to terminate such activity. Id.

[7] See S. Rep. No. 105-190, at 8 (1998). The Senate Report states:

[*125] [W]ithout clarification of their liability, service providers may hesitate to make the necessary investment in the expansion of the speed and capacity of the Internet. In the ordinary course of their operations service providers must engage in all kinds of acts that expose them to potential copyright infringement liability. For example, service providers must make innumerable electronic copies by simply transmitting information over the Internet. Certain electronic copies are made to speed up the delivery of information to users. Other electronic copies are made in order to host World Wide Web sites. Many service providers engage in directing users to sites in response to inquiries by users or they volunteer sites that users may find attractive. Some of these sites might contain infringing material.

Id. [8] See 17 U.S.C. § 512 (1999).

[9] Cf. S. Rep. No. 105-190, at 20 (1998) (stating “[t]itle II preserves strong incentives for service providers and copyright owners to cooperate to detect and deal with copyright infringements that take place in the digital networked environment”). The balance of interest is between preserving the on-line service provider’s integral role in developing the National Information Infrastructure (“NII”) to facilitate and promote the free exchange of ideas, and the individual creator to promote and publish her ideas on the Internet. See Report of Working Group, supra note 2, at 117.

[10] Even Congress admits:

[A] provider could not be expected, during the course of its brief cataloguing visit, to determine whether . . . [a] photograph was still protected by copyright or was in the public domain; if the photograph was still protected by copyright, whether the use was licensed; and if the use was not licensed, whether it was permitted under the fair use doctrine.

S. Rep. No. 105-190, at 48 (1998).

[11] See U.S. Const. amend. V. (“No person . . . shall be deprived of life, liberty, or property, without due process of law”).

[12] See S. Rep. No. 105-190, at 8 (1998) (“Due to the ease with which digital works can be copied and distributed worldwide virtually instantaneously, copyright owners will hesitate to make their works readily available on the Internet without reasonable assurance that they will be protected against massive piracy”).

[13] See generally The Internet Corporation for Assigned Names and Numbers, at http://www.icann.org (last visited Nov. 16, 2000).

[14] Caching is the process of storing data on a computer for the purpose of facilitating quick linking. See MAI Sys. Corp. v. Peak Computer, Inc., 991 F. 2d 511 (9th Cir. 1993), cert. denied, 510 U.S. 1033 (1994). Caching involves creating a fixed copy within the meaning of the [*126] Copyright Act. See Religious Tech. Ctr. v. Netcom On-Line Communication Serv., Inc., 907 F. Supp. 1361, 1378 n.5 (N.D.Cal. 1995).

[15] See 17 U.S.C. § 512 (1999).

[16] Id. §§ 512(b)(1)–(b)(2)(E) (setting forth rules on system caching); see also id. § 512(c)(1)(C) (using closely similar language limiting liability, but with respect to information residing on systems or networks at direction of users); id. § 512(d)(3) (containing similar language but regarding information location tools).

[17] See 17 U.S.C. § 512.

[18] See Kent Stuckey, Internet Law § 6-75 (1999).

[19] See id.; see also S. Rep. No. 105-190, at 45 (1998) (providing that “the service provider is free to refuse to ‘take down’ the material or site, even after receiving a notification of claimed infringement from the copyright owner; in such a situation, the service provider’s liability, if any, will be decided without reference to section 512(c)”).

[20] Report of the Working Group, supra note 2, at 115-16.

[21] See S. Rep. No. 105-190, supra note 5, at 8.

[22] See S. Rep. No. 105-190, at 19 (1998). The Senate Report provides: Although the copyright infringement liability of on-line and ISPs is not expressly addressed in the actual provisions of the WIPO treaties, the Committee is sympathetic to the desire of such service providers to see the law clarified in this area. There have been several cases relevant to service provider liability for copyright infringement. Most have approached the issue from the standpoint of contributory and vicarious liability. Rather than embarking upon a wholesale clarification of these doctrines, the Committee decided to leave current law in its evolving state and, instead, to create a series of ‘safe harbors,’ for certain common activities of service providers. A service provider which qualifies for a safe harbor, receives the benefit of limited liability. Id.

[23] See 17 U.S.C. § 512 (1999).

Title II preserves strong incentives for service providers and copyright owners to cooperate to detect and deal with copyright infringements that take place in the digital networked environment. At the same time, it providers greater certainty to [*127] service providers concerning their legal exposure for infringements that may occur in the course of their activities. Id.

[25] See id. at 55.

[26] See id. at 8.

[27] Report of the Working Group, supra note 2, at 117.

[28] See id.

[29] See id.

[30] With regard to system caching the statute states: “A service provider shall not be liable for monetary relief . . . [if] the service provider responds expeditiously to remove, or disable access to, the material that is claimed to be infringing upon notification of claimed infringement.” 17 U.S.C. § 512(b)(E) (1998).

[31] A BBS is a bulletin board service on which Internet surfers may post personal information and engage in chat rooms.

[32] 17 U.S.C. §§ 512(c)(1), (c)(1)(A), (c)(1)(C) (1999). These provisions form a safe harbor for ISP activities involving storage of information: A service provider shall not be liable for monetary relief, or . . . for injunctive relief or other equitable relief, for infringement of copyright by reason of the storage at the direction of a user of material that resides on a system of networks controlled or operated by or for the service provider, if the service provider (A)(i) does not have actual knowledge that the material or an activity using the material on the system is infringing; (iii) upon obtaining such knowledge or awareness, acts expeditiously to remove, or disable access to, the material; . . . and (C) upon notification of claimed infringement . . . responds expeditiously to remove, or disable access to, the material that is claimed to be infringing or to be the subject of infringing activity. Id.

[33] 17 U.S.C. §§ 512(d)(1)(A)–(C)(3). This section sets forth a safe harbor with respect to information location tools: A service provider shall not be liable for monetary relief, or . . . for injunctive or other equitable relief, for infringement of copyright by reason of the provider referring or linking users to an on-line location containing infringing material or infringing activity, by using information location tools, including a directory, [*128] index, reference, pointer, or hypertext link, if the service provider (1)(A) does not have actual knowledge that the material or activity is infringing; (C)(3) upon obtaining such knowledge or awareness, acts expeditiously to remove, or disable access to, the material; . . . and (C)(3) upon notification of claimed infringement . . . responds expeditiously to remove, or disable access to, the material that is claimed to be infringing or to be the subject of infringing activity. Id.

[34] See 17 U.S.C. § 512(c)(3). The section provides the initial notification procedure that a copyright owner must follow:

(A) To be effective under this subsection, a notification of claimed infringement must be a written communication provided to the designated agent of a service provider that includes substantially the following:

(i) A physical or electronic signature of a person authorized to act on behalf of the owner of an exclusive right that is allegedly infringed.

(ii) Identification of the copyrighted work claimed to have been infringed, or, if multiple copyrighted works at a single on-line site are covered by a single notification, a representative list of such works at that site.

(iii) Identification of the material that is claimed to be infringing or to be the subject of infringing activity and that is to be removed or access to which is to be disabled, and information reasonably sufficient to permit the service provider to locate the material.

(iv) Information reasonably sufficient to permit the service provider to contact the complaining party, such as an address, telephone number, and, if available, an electronic mail address at which the complaining party may be contacted.

(v) A statement that the complaining party has a good faith belief that use of the material in the manner complained of is not authorized by the copyright owner, its agent, or the law. Id.

[35] See id.

[36] See id.

[37] See id.

[38] See id. § 512.

[*129] [39] See id. § 512(g)(4) (“(4) Limitation on other liability.–A service provider’s compliance with paragraph (2) shall not subject the service provider to liability for copyright infringement with respect to the material identified in the notice provided under subsection (c)(1)(C)”).

[40] See 17 U.S.C. § 512(g)(3). This provision delineates the counter notification procedure that a user whose work was taken down must follow:

(3) Contents of counter notification.–To be effective under this subsection, a counter notification must be a written communication provided to the service provider’s designated agent that includes substantially the following:

(A) A physical or electronic signature of the subscriber.

(B) Identification of the material that has been removed or to which access has been disabled and the location at which the material appeared before it was removed or access to it was disabled.

(C) A statement under penalty of perjury that the subscriber has a good faith belief that the material was removed or disabled as a result of mistake or misidentification of the material to be removed or disabled.

(D) The subscriber’s name, address, and telephone number, and a statement that the subscriber consents to the jurisdiction of Federal District Court for the judicial district in which the address is located, or if the subscriber’s address is outside of the United States, for any judicial district in which the service provider may be found, and that the subscriber will accept service of process from the person who provided notification under subsection (c)(1)(C) or an agent of such person. Id.

[41] See id. § 512(g)(2)(B).

[42] See id. This section sets forth the provisions protecting the ISP from liability to the copyright owner whose work was wrongly taken down:

(2) Exception.–Paragraph (1) shall not apply with respect to material residing at the direction of a subscriber of the service provider on a system or network controlled or operated by or for the service provider that is removed, or to which access is disabled by the service provider, pursuant to a notice provided under subsection (c)(1)(C), unless the service provider–

(A) takes reasonable steps promptly to notify the subscriber that it has removed or disabled access to the material;

(B) upon receipt of a counter notification described in paragraph (3), promptly provides the person who provided the notification under subsection (c)(1)(C) with [*130] a copy of the counter notification, and informs that person that it will replace the removed material or cease disabling access to it in 10 business days; and

(C) replaces the removed material and ceases disabling access to it not less than 10, nor more than 14, business days following receipt of the counter notice, unless its designated agent first receives notice from the person who submitted the notification under subsection (c)(1)(C) that such person has filed an action seeking a court order to restrain the subscriber from engaging in infringing activity relating to the material on the service provider’s system or network. Id.

[43] See id. § 512(g)(1). This section provides:

“[A] service provider shall not be liable to any person for any claim based on the service provider’s good faith disabling of access to, or removal of, material or activity claimed to be infringing or based on facts or circumstances from which infringing activity is apparent, regardless of whether the material or activity is ultimately determined to be infringing.” Id.

[44] See id.

[45] 17 U.S.C. § 512(c)(C)(2).

[46] S. Rep. No. 105-190, at 48 (1998).

[47] S. Rep. No. 105-190, at 48 (1998) (stating that notification is sufficient where the provider sends an e-mail notice to the person associated with the posting). See id. Service providers are not required to look “beyond the four corners of the subscriber’s posting” in order to obtain contact information. Id.

[48] See 17 U.S.C. § 512(g)(1).

[49] See S. Rep. No. 105-190 (1998). The Committee was acutely concerned that it provide all end-users-whether contracting with private or public sector online service providers-with appropriate procedural protections to insure that material is not disabled without proper justification. The provisions in the bill balance the need for rapid response to potential infringement with the end-users legitimate interests in not having material removed without recourse. Id.

[*131] [50] Id. The second concern raised about the applicability of § 512 to public universities and libraries, and indeed other public entities which operate as online service providers, is that by complying with the notice and take-down provisions of § 512, the public entities might violate the due process rights of their users. Any such due process objection suffers at least two flaws. In the first place, a prerequisite to any due process claim is a state law property interest. In the case of the relatively new concept of Internet access, the service provider contract, rather than any common law property interest, would appear to be the yardstick of the Internet user’s property interest in continued access. The contract for Internet service, therefore, can limit any property interest that would form the basis for a procedural due process claim. Id.

[51] See id.

[52] Id.

[53] See id.

[54] See S. Rep. No. 105-190, at 49 (1998). It provides: Subsection(c)(1)(A)(ii) can best be described as a “red flag” test. As stated in subsection (1), a service provider need not monitor its service or affirmatively seek facts indicating infringing activity (except to the extent consistent with a standard technical measure complying with subsection (h)), in order to claim this limitation on liability (or, indeed any other limitation provided by the legislation). However, if the service provider becomes aware of a “red flag” from which infringing activity is apparent, it will lose the limitation of liability if it takes no action. The “red flag” test has both a subjective and an objective element. In determining whether the service provider was aware of a “red flag”, the subjective awareness of the service provider of the facts or circumstances in question must be determined. However, in deciding whether those facts or circumstances constitute a “red flag” – in other words, whether infringing activity would have been apparent to a reasonable person operating under the same or similar circumstances – an objective standard should be used. Id.

[55] See id.

[56] See id.

[57] See id. at 48. The Senate Report states:

[*132] The important intended objective of this standard is to exclude sophisticated “pirate” directories – which refer Internet users to other selected Internet sites where pirate software, books, movies, and music can be downloaded or transmitted –from the safe harbor. Such pirate directories refer Internet users to sites that are obviously infringing because they typically use words such as “pirate”, “bootleg”, or slang terms in their uniform resource locator (URL) and header information to make their illegal purpose obvious to the pirate directories and other Internet users. Because the infringing nature of such sites would be apparent from even a brief and casual viewing, safe harbor status for a provider that views such a site and then establishes a link to it would not be appropriate. Id.

[58] Id.

[59] See id.

[60] See id. at 49. The Senate Report provides: “[i]n deciding whether those facts or circumstances constitute a ‘red flag’ – in other words, whether infringing activity would have been apparent to a reasonable person operating under the same or similar circumstances – an objective standard should be used.” Id.

[61] See id. “In this way, the ‘red flag’ test in § 512(d) strikes the right balance. The common-sense result of this ‘red flag’ test is that on-line editors and catalogers would not be required to make discriminating judgments about potential copyright infringement. If, however, an Internet site is obviously pirate, then seeing it may be all that is needed for the service provider to encounter a ‘red flag.'” Id.

[62] See id.

[63] See id.

[64] S. Rep. No. 105-190 (1998). The report articulates that: “[t]he provider could not be expected, during the course of its brief cataloguing visit, to determine whether the photograph was still protected by copyright or was in the public domain; if the photograph was still protected by copyright, whether the use was licensed; and if the use was not licensed, whether it was permitted under the fair use doctrine.” Id. It seems like this is saying that ISPs are only expected to remove obviously pirated matter in order to qualify for a safe harbor. It cannot be held liable, because it cannot be expected to distinguish the subtleties of copyrighted works – something a judge is expected to do.

[65] See 17 U.S.C. § 512 (1999).

[66] See S. Rep. No. 105-190, at 41 (1998) (stating that the service provider is free to refuse to “take down” the material or site, even after receiving a notification of claimed infringement from the copyright owner). Id.

[*133] [67] See id. The report provides that: “[s]ection 512 is not intended to imply that a service provider is or is not liable as an infringer either for conduct that qualifies for a limitation of liability or for conduct that fails to so qualify. Rather, the limitations of liability apply if the provider is found to be liable under existing principles of law.” Id.

[68] AOL provides email, bulletin board, search engine, web hosting, and news services. See http://www.aol.com/.

[69] MSN also provides email and news services. See http://www.msn.com/.

[70] Earthlink primarily provides hyperlinking and search engine services. See http://www.earthlink.com/.

[71] Lycos is primarily a search engine, but also offers email service, web hosting, Usenet Discussion groups, a Lycos Image Gallery, and a Lycos Download Library. See http://www.lycos.com/.

[72] Yahoo! started as a search engine, but now provides email services. See http://www.yahoo.com/.

[73] See, e.g., Yahoo!, at http://www.yahoo.com/ (providing that its copyright infringement complaint procedure follows step by step the DMCA initial notification procedures).

[74] See http://www.microsoft.com/info/cpyrtInfrg.htm.

[75] See id.

[76] The Lycos website states: Lycos promptly processes and investigates notices of alleged infringement and will take appropriate actions under the Digital Millennium Copyright Act. Upon receipt of notices complying or substantially complying with the DMCA, Lycos will act expeditiously to remove or disable access to any material claimed to be infringing or claimed to be the subject to infringing activity and will act expeditiously to remove or disable access to any reference or link to material or activity that is claimed to be infringing. Lycos, at http://www.lycos.com/.

[77] See http://www.lycos.com/lycosinc/legal.html. When Lycos removes or disables access to any material claimed to be infringing, Lycos may attempt to contact the user who has posted such material in order to give that user an opportunity to respond to the notification, although Lycos makes no promise to do so. Any and all counter notification submitted by the user will be furnished to the complaining party. Lycos will give the complaining party an [*134] opportunity to seek judicial relief in accordance with the DMCA before Lycos replaces or restores access to any material as a result of any counter notification. Id.

[78] See id. It states: Any controversy or claim arising out of or relating to these Terms and Conditions or any user’s use of the Products and Services shall be settled by binding arbitration in accordance with the commercial arbitration rules of the American Arbitration Association. Any such controversy or claim shall be arbitrated on an individual basis, and shall be not be consolidated in any arbitration with any claim or controversy of any other party. Id.

[79] Id.

[80] Lycos, MSN, and Earthlink reserve the right, in their sole discretion, to terminate any user’s account at any time, for any reason, or for no reason at all, and without notice. See http://www.lycos.com/lycosinc/legal/html; http://www.msn.com/help.legal/terms.htm; http://www.aol.com/copyright/infringement.html.

[81] Copyright infringement is established by satisfying a two-prong test: (1) that defendant copied from plaintiff’s work, and (2) that the copying constitutes improper appropriation. See Arnstein v. Porter, 154 F.2d 464, 468 (2d Cir. 1946). To satisfy the first prong, the evidence may consist of defendant’s admission that he or she copied, or circumstantial evidence from which the trier of fact can reasonably infer copying. See id. Circumstantial evidence must demonstrate similarity. See id. If plaintiff can prove that defendant had access to the work and similarities exist, then there must be sufficient similarity to constitute copying. See id. If there is no substantial similarity, no amount of evidence will suffice to prove copying. See id. If evidence of access is absent, the plaintiff must prove striking similarity so as to preclude the possibility that plaintiff and defendant independently created the work. See id.

In some cases, the similarities between the plaintiff’s and defendant’s work are so striking that there is no need to prove both an inference of copying and improper appropriation. Arnstein, at469; see, e.g., Selle v. Gibb, 741 F. 2d 896 (7th Cir. 1984). In such cases there is a presumption of access. See id. Where there is no presumption of access, it is proved by demonstrating that that defendant had a reasonable opportunity to view or copy the work. See Bright Tunes Music Corp. v. Harrisongs Music, Ltd., 420 F. Supp. 177 (S.D.N.Y. 1976) (finding access to copyrighted song because of its popularity as a billboard charted hit song in the United States and in England where defendant lived and worked).

[82] See, e.g., Selle v. Gibb, 741 F.2d 896 (7th Cir. 1984).

[83] See 17 U.S.C. § 512(g)(1) (1999).

[*135] [84] See Harper & Row Publishers, Inc. v. Nation Enterprises, 471 U.S. 539 (1985) (standards of fair use); Baker v. Selden, 101 U.S. 99 (1879) (copyright law excludes protection of ideas); Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569 (1994) (parody).

[85] Although § 512 does use the general term “copyright infringement” in the provision as a triggering requirement, it does not provide any specific directions on how to make that determination. The lack of a specific standard inevitably exempts ISPs from performing any searching inquiry into the claims and instead leaving the courts to bear the burden of making such determination. In light of the proliferation of on-line copyright infringement, this will inevitably impose substantial strains on the judicial system.

[86] See 17 U.S.C. § 512 (1999).

[87] See id.

[88] See id.

[89] See S. Rep. No. 105-190, at 25 (1998).

[90] See 17 U.S.C. § 512.

[91] See 17 U.S.C. § 512(g)(2)(A).

[92] See 17 U.S.C. § 512(g)(2)(B).

[93] See S. Rep. No. 105-190, at 25 (1998).

[94] See id.

[95] The net effect of the legislation is also that it deprives a legitimate user, an independent creator (regardless of whether it has a high or low level of creativity), from reaping the benefits of his or her creation.

[96] U.S. Const. amend. V.

[97] Jackson v. Metro. Edison Co., 419 U.S. 345, 350 (1974) (citing Burton v. Wilmington Parking Auth., 365 U.S. 715, 723 (1961)).

[98] 483 U.S. 522, 546 (1987).

[99] Id. (quoting Blum v. Yaretsky, 457 U.S. 991, 1004 (1982)).

[100] See Downling v. United States, 473 U.S. 207 (1985). “Thus, the property rights of a copyright holder have a character distinct from the possessory interest of the owner of simple ‘goods, wares, [or] merchandise,’ for the copyright holder’s dominion is subjected to precisely defined limits.” Id.; see also Denise Chavez v. Arte Publico Press, 204 F.3d 601 (5th Cir. 2000). [*136] The Supreme Court held in Florida Prepaid that patents are considered property within the meaning of the due process clause. See Florida Prepaid Postsecondary Educ. Exp. Bd. v. College Sav. Bank, 527 U.S. 627 (1999). Since patent and copyright are of a similar nature, and patent is a form of property protectable against the states, copyright would seem to be so too.

[101] 234 U.S. 385 (1914).

[102] See Mathews v. Eldridge, 424 U.S. 319, 332 (discussing administrative procedures for terminating social security disability benefits).

[103]See Llewellyn Joseph Gibbons, Rusticum Judicium? Private “Courts” Enforcing Private Law and Public Rights: Regulating Virtual Arbitration in Cyberspace, 24 Ohio N.U. L. Rev. 769, 775 (1998).

[104] See Murray, Rau, & Sherman, ARBITRATION, 1996.

[105] See Gibbons, supra note 103, at 776. “The Net is a contract machine . . . contracts are defining the law of information.” Id.

[106] See Alejandro E. Almaguer & Roland W. Baggott III, Shaping New Legal Frontiers: Dispute Resolution for the Internet, 13 Ohio St. J. on Disp. Resol. 711, 715 (1998).

[107] See id.

[108] See Gibbons, supra note 103. “One of the circumstances which supports the need for an alternative forum to resolve disputes arising out of cyberspace is the congested nature of the American Court System.” Id.

[109] See Gibbons, supra note 103, at 776.

[110] See On-Line Dispute Resolution Procedures for Domain Names and Other Intellectual Property Disputes, WIPO Arbitration and Mediation Center, January 1998, at http://www.wipo.org/eng/arbit/on-line.htm.

[111] See also Gibbons, supra note 103, at 775. “Arbitration may be the best hope for formal adjudication in cyberspace – in fact, the more sophisticated disputants may find it the most efficient method of dispute resolution.” Id.

[112] See Trevor Cox, Information and the Internet: Understanding the Emerging Legal Framework for Contract and Copyright Law and Problems with International Enforcement, 11 Transnational Law 23, at 74 (1998).

[113] See Gibbons, supra note 103, at 785.

[114] See Cybercourt: A Virtual Resolution of Differences or An Alternative Proposal for Law and Order in Cyberspace, at http://www.mudd.org/professional/articlesclm/cybercourt.html. [*137]

[115] See Gibbons, supra note 103, at 785. Every individual who owns a computer could access the Cybercourt. Ultimately this system of dispute resolution would reduce the cost of utilizing a courtroom and reduce costs of travel to and from traditional forums. Additionally, the costs of hiring and retaining lawyers would be reduced. Thirdly, in disputes which require a jury, the jurors will be able to serve from home and not incur expenses nor loss of income. Thus jurors would not need to be paid for their services. Finally cost to taxpayers would be reduced. The nature of the electronic transmissions create a permanent document without the need for court reporters and there will also be no shortage of rooms in which to hold a hearing. Id.

[116] See Gibbons, supra note 103, at 785.

[117] See, e.g., Paul D. Carrington, Virtual Arbitration, 15 Ohio St. J. Disp. Res. 669 (2000).

[118] Todd H. Flaming, The Rules of Cyberspace: Informal Law in a New Jurisdiction, at http://www.sw.com/rulescyb.html (visited Mar. 4, 2000).

[119] Id.

[120] See Carrington, supra note 117.

[121] See id. He further illustrates: Of course, this would not be so if there were live witnesses to be examined. But there will be none. Testimony will be taken at depositions and recorded digitally. The depositions will be discontinuous. The party calling a witness will prepare a direct examination on videotape and send a print to the adversary. When the adversary is prepared to do so, he may conduct a cross-examination at a time reasonably convenient for the deponent. If need be, there can be redirect and re-cross, each examination to be conducted at the mutual convenience of the examiner and the deponent. Neither deponent nor examiner need leave her home or place of business. Id.

[122] Id.

[123] Id.

[124] See Gibbons, supra note 103, at 786.

[125] Id.

[126] See Virtual Magistrate, at http://www.vmag.org/. [*138]

[127] See http://users.clinic.net/jtierney/articles/virtmag.html. It provides information on the first case decided by VMAG stating: The first decision by the Virtual Magistrate Project was handed down May 20. The case, VM Docket No. 96-0001 (May 8, 1996), involved a disputed subscriber message posted on America Online (AOL) by Email America, which offered the sale of as many as 20 million e-mail addresses. The complainant in the case was James Tierney, who alleged that Email America’s message was an invasion of privacy, against sound public policy and deceptive. The case was decided by Virtual Magistrate N.M. Norton Jr., a partner with the law firm of Wright, Lindsey & Jennings in Little Rock, Ark, Norton, who is one of eight individuals selected to serve as Virtual Magistrates, ordered America Online to remove or block the advertisement offering to provide mailing lists of e-mail addresses. Id.

[128] See id.

[129] See Virtual Magistrate, supra note 126, at http://www.vmag.org/started.html.

[130] See id. at http://www.vmag.org/docs/concept.html.

[131] See id. at http://www.vmag.org/docs/rules.html.

[132] The following are additional on-line dispute resolution services available to any subscriber: eResolution, at http://www.eresolution.com. Cybersettle.com is available to users 24 hours a day, 7 days a week and enables users to negotiate settlements within short periods of time. It is available at http://www.cybersettle.com. ClickNSEttle.com is also available to users 24 hours a day, 7 days a week and offers negotiation services and available at http://clickNSettle.com. CompuJustice offers mediation and binding arbitration services as an alternative to litigation. It is available at http://www.compujustice.com. iCourthouse provides real jurors and binding verdicts for those who choose to use its services. It is not limited to attorneys. Users can even get married through the services it provides. Some of the cases pending on its docket include divorce, truck hitting a bicycle, birth control pills and auction fraud. It is available at http://www.i-courthouse.com. Resolution Forum, Inc. is yet another alternative dispute resolution service that provides arbitration, mediation, and neutral case evaluation by alternative dispute resolution professionals. It is a non-profit educational organization created in conjunction with the South Texas College of Law. Its services include on-line conferencing. It is available at http://www.resolutionforum.org.

[133] Per the author’s investigation, a representative from WIPO has stated that WIPO plans to establish an on-line copyright infringement tribunal whereby parties can submit their disputes on-line and engage in on-line copyright arbitration.

[134] See CyberTribunal, at http://www.cybertribunal.org. [*139]

[135] See id.

[136] See id.

[137] See id.

[138] See id.

[139] In addition to the above mentioned efforts are several private individual and organizations such as the Janzen Group and Cyberjury, who offer their services to resolve disputes on-line. See The Janzen Group, at http://www.janzengroup.com; Cyberjury, at http://www.cyberjury.com.

[140] See The Internet Corporation for Assigned Names and Numbers, at http://www.icann.org.

[141] See id. at http://www.icann.org/udrp/udrp.htm.

[142] See id. at http://www.icann.org/udrp/udrp-policy-24oct99.htm.

[143] See id. at http://www.icann.org/udrp/approved-providers.htm.

[144] See id. at http://www.icann.org/udrp/udrp-rules-24oct99.htm.

[145] See id.

[146] See id.

[147] See id.

[148] See id.

[149] See id.

[150] In 1925, Congress passed the Federal Arbitration Act (“FAA”) which declared a federal policy to support arbitration as an alternative to traditional litigation to resolve domestic commercial or contract disputes. See 9 U.S.C.A. § 1. Section 2 of the FAA mandates that any doubts concerning the scope of arbitrable issues be resolved in favor of arbitration. See 9 U.S.C.A. § 2; see also Gibbons, supra note 101, at 781 (stating that “Federal Law in the United States clearly supports the use of arbitration to resolve disputes and existing law does not foreshadow cyberspace arbitral awards receiving less deference than those awarded following traditional arbitral procedures”).

[151] Johnson & Post, Law and Borders – The Rise of Law in Cyberspace, 48 Stan. L. Rev. 1367 (1996). They state: The Net is almost entirely independent of physical location. Messages can be transmitted from one physical location to any other location without degradation, [*140] decay, or substantial delay, and without any physical cues or barriers that might otherwise keep certain geographically remote places and people separate from one another. The Net enables transactions between people who do not know, and in many cases cannot know, each other’s physical location. Id. at 1370-71.

[152] See American Arbitration Association, available at http://www.adr.org. * Co-Editor in Chief, Cardozo Online Journal of ConflictResolution. J.D. Candidate (January, 2001). The author would like to thank Professor Barton Beebe for his feedback, and Peter Yu for his guidance and insightful suggestions; she would also like to thank past and present members of the Cardozo Online Journal of Conflict Resolution, especially Leila Zubi, Jageshwar Sharma, Ryon Fleming, and Mustapha Ndanusa. The author also expresses much gratitude and appreciation to Albert for his invaluable comments during the development of this Note, in addition to his encouragement and unconditional support.