eBAY Escapes Liability for Copyright Infringement Finds Protection Under the DMCA

November 17, 2004

By: Lisa DeJaco

You can find anything in the world on eBay . . . including the occasional copyright infringement., the online auction house, offers an internet website service for more than 25 million buyers and sellers. Unfortunately, not all of the articles bought and sold are legitimate. However, a California federal court recently granted summary judgment in favor of eBay on claims of secondary liability for copyright infringement.

Traditionally, any party who facilitates an act of infringement (such as distributing infringing articles) can be held liable. But the Digital Millennium Copyright Act (DMCA) carves out a safe harbor for internet service providers who can meet certain criteria regarding material stored and displayed on the providers website. The service provider must lack actual or constructive knowledge of the infringement. The service provider must not receive a direct financial benefit from the infringement, and must not have the right to control that activity.

Finally, the service provider must act promptly to remove the infringing material when it is properly notified. Under the DMCA, a service providers duty to act is triggered by a written, signed notification which identifies the copyright and the infringing work, which gives sufficient information to enable the service provider to identify the material, and which contains a statement that the copying is not authorized. eBay has taken advantage of the DMCA. It has established procedures to enable intellectual property owners to identify and request removal of allegedly infringing articles.

To combat infringement, eBay offers its VeRO program for Verified Rights Owners, giving them access to a specialized customer support group, priority e-mail queues for reporting infringements and a personal shopper feature allowing users to conduct automatic searches for infringing items. The California federal court found eBays actions in the case at hand to be sheltered by the DMCA safe harbor.

This is good news for other internet service providers, who can look to eBays procedures for guidance. As for copyright owners, the decision offers some measure of insight into the application of the DMCA, and what it will mean in the struggle to minimize sales of pirated goods over the Internet.