Home Copyright Laws User Generated Content (UGC) and federal preemption in copyright

User Generated Content (UGC) and federal preemption in copyright

June 3, 2024

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This article is written by Sonal Sinha and Anindita Deb. The article deals with the nuances of User Generated Content (UGC) and the issue of underlying copyright, along with aspects relating to who would be considered the original author and owner of the copyright. The article further discusses the federal preemption in copyright, by analyzing the various related legal theories and applicable laws.

Table of Contents

Introduction

In today’s world where technology has emerged as a new and strong player in every market, we see new issues relating to the legal implications of the same. One such issue relates to User-Generated Content (UGC), and the underlying issues of copyright ownership in such content. Debates are taking place all across the globe, and different scholars suggest different approaches. While the jurisprudence around this new aspect is still in the nascent stage, let us discuss what UGC really is and what the current legal framework governing the same in the US is.

User-Generated Content (UGC)

With the new modes of socialization and interactions heralded by technology, communication and information are now also generated by the users. While earlier, with technologies like television and radio, the users were mainly on the receiving end of the information, in the new digital era, technologies like social media have enabled the users to also take part in this exchange of information and also create and share information.

One of the biggest shifts in this domain has been caused by social media sites that allow their users to stay connected with their friends, family and colleagues despite being separated by distance. Social media has expanded the scope of networking and marketing by allowing its users to now generate, proliferate and widely share content, akin to broadcasting mediums. Users can now share textual, visual, and audio-visual content freely. This content, generated and shared freely and generously by the users, is known as User-Generated Content (UGC).

UGC has been a part of the digital communication space for a long time, starting with e-mails. What has caused a significant change in recent times, introducing it into public debate, is its growth in volume and wide use by netizens, making it a social phenomenon. Breaking down the term UGC, i.e., “User”, “Generated”, and “Content”, it is easy to nail down the definition of User-Generated Content (UGC) in simpler terms. “User”, refers to the computer user or the user of the internet, particularly one who accesses social media websites. The term “Generated” is just another word for the word created, and in the present context, it means just that. However, it is pertinent to clarify that generated content in the context of UGC refers to the work created by the user and not the one that is merely copied or re-shared. Just like copyright law, the user must add creative input for the work to fall under the meaning of “generated”. Lastly, dealing with the term “content”, there is a subtle distinction from the creative content in art. In UGC, the content may or may not be creative, hinting at the aesthetic neutrality in the meaning of the term; the mere requirement in the context is that the content must be digital, or online, created by an internet user.

Such easy and rampant production of UGC has also raised new questions regarding the applicability and enforceability of copyright to such content. While in general understanding, users in UGC are understood to be amateurs, considered to be using the content platform for entertainment or leisure, it is also known that there are many such users benefitting from the content platforms, building careers by producing content from these platforms and getting paid for it. Hence, asking questions regarding the applicability of law and policy to UGCs becomes an important issue.

Further, the broader understanding of UGCs can be further bifurcated into two forms. First, the creative content, consisting of videos, images, and sound recordings, was created by individuals in a casual manner and shared within a smaller circle of close relations or informal groups. This includes content created mostly on social networking platforms such as Facebook, YouTube, Instagram, Medium, etc. The second form of UGC involves a more sophisticated use of tools or applications.

In respect of copyright, within the meaning of the term “generated” or “created,” UGC raises the question concerning the minimum modicum of creativity that is required or expected. As seen widely, creators on YouTube often use clips and screenshots from various copyrighted sources in their videos. These borrowed works are then juxtaposed with the inputs of the creator, via audio commentary or clips created by the creator itself; however, this is not always the case. In such a situation, questions arise as to whether this video would itself qualify as a copyrightable work or, worse, whether the copyright owners of the borrowed works can bring a suit for copyright infringement.

There is further dissonance in the copyright regime caused by the fact that copyright law and the underlying justification behind it concern mostly traditional forms of work that were not easy to recreate, copy-paste, or proliferate within a matter of a few minutes. The features of content platforms and social media websites make it easy for users and creators to reproduce, adapt and communicate frequently and quickly, and the pace of copyright law is not at par with the same. Under the domain of copyright law, UGCs raise the following major concerns:

Copyrightability of the created work
Issues of infringement arising from the created work
The legal relationship between the creators or users and the content platform, vis-a-vis the right and duties of each party
Liability and the extent of involvement of the content platforms in case of infringement claims

The article aims to explore the various aspects of User-generated content and copyright law in light of the federal preemption of copyright law as laid down in the statute.

Federal Preemption in Copyright

Under the legal system of the United States of America, there are two sets of law, first, the federal law, consisting of a federal regime set up by the Congressional statute, and the state law, consisting of the legal regime set in place by individual state legislatures. While both regimes run parallel to each other, in order to create harmony between the two and to ensure conflict, there is a supremacy clause set up in place. The supremacy clause states that in instances of conflict, the state shall be prohibited from encroaching upon the scope of federal law. Under this clause, various statutes are enacted by Congress as federal law, which shall be the prime governing law. This is known as preemption, wherein the state law shall be preempted by the federal statute. In the case of copyright, Section 301(a) of the Copyright Act (provided under 17 U.S.C.) lays down a preemption clause. As per the federal preemption under copyright, the federal law laid down under 17 U.S.C. shall control the protection and enforcement of any of the rights that are equivalent to the exclusive rights to the works of expression guaranteed and governed under the Copyright Act.

In order to ascertain and confirm the preemption under the Copyright Act, a two-part test is employed by the courts. The first condition states that the work in question must be stated in Sections 102 and 103 of the 17 U.S.C. The second condition is that the right as laid down in the specified state law must be equivalent to rights provided under the Copyright Act, as per 17 U.S.C. Section 301(a). In the case of Balboa Ins. Co. v. Trans Global Equities (1990), in which the issue was whether state trade secret law could be pre-empted by the Copyright Act, it was laid down that a right that may be infringed by acts of either reproduction, performance, distribution or display is considered to be the right that shall be equivalent to rights under the Copyright Act. Further, it was stated that if the rights created by the state law are not present in the Copyright Act or if they bring material changes to the cause of action, then such rights and the resulting claims shall not be preempted by the Copyright Act.

In Computer Associates Intern. Inc. v. Altai Inc. (1992), a general scope test was laid down by the court, as per which, if an extra act or element is needed in order to infringe the right and bring in a subsequent cause of action that falls outside the scopes of reproduction, performance, distribution or display, then the right so set up by the state law shall not be subject to federal preemption under the Copyright Act. However, it is important to note that the “extra act or element” test is a factor considered in preemption analysis, not the sole test. Other factors, such as the nature of the state-created right and its relationship to the rights protected by the Copyright Act, are also relevant. In Daley v. Firetree Ltd. (2006), it was laid down that in order to determine whether a claim raised by the Plaintiff under the state law is preempted by the Copyright Act, the plaintiff’s claims are to be examined, to determine what the plaintiff is claiming, the underlying theories behind the claim and the rights being enforced by the plaintiff. The court also applied the “extra element” test as laid down in the Altai case.

However, in spite of the measures taken by the federal preemption to avoid the confusion and conflict between the state laws and the federal law, owing to the evolution in technology, the advent of the internet, and digital connectivity, the lines separating the states and the lines between state and federal law have been blurred, giving rise to issues in the enforceability of the federal preemption. The copyright law is now entangled with numerous new aspects, such as software licensing, user agreements and ownership of copyrighted work. In the case of User-Generated Content, complications arise from conflicts in ownership of the generated work shared on social networking platforms and the agreements between the users and the platform. Further, 17 U.S.C. Sections 102 and 103 also leave ambiguities and interpretations open for ancillary rights arising out of copyrighted works, raising the question of whether the same are preempted under Section 301(a) of the Act.

User-Generated Content sites and their legality

As defined in the above section, a User-Generated Content (UGC) is content created by the users of the internet that is easily accessible and freely visible to the users. UGC includes general, day-to-day interactions carried out by the users on social networking websites, such as texts, posts on social media, stories, videos, audio recordings, comments, etc. In terms of UGCs and websites that enable UGC, there are a number of legalities and legal issues involved. In respect of these legalities, there are a number of stakeholders involved and their respective rights. Important stakeholders include users of the UGC website, its employees, government agencies, and the website itself.

The central issue arising in the case of UGC is the conflict between the copyright holders and owners of the website, particularly in cases of content liability and copyright violation or infringement caused by the user-generated and shared content. Under the Copyright Act, for a work to fall under the subject matter and eligibility of copyright protection, there are two general requirements that must be fulfilled, originality and fixation on a tangible mode of expression. In order to fulfill the originality requirement, the claimant must show independent creation and a minimum modicum of creativity. Independent creation requires that the work not be directly imitated from another source but have a minimum of creativity. This requirement is a sine qua non for copyright protection. In the world of social media, this requirement of minimum creativity is easily met. In respect of the fixation requirement, a user’s content is fixed in the following mediums:

The user’s device,
Server of the social media website, and
The system of the user who is viewing the content.

Concerning copyrights, the major issue in UGC is the ownership and commercial exploitation of content by the enterprises behind the social media platform. As per the Copyright Act, ownership vests with the original creator or the author of the work. Thus, users of the social media platform that create and upload the work shall be considered the original owners of the UGC in question. Thus, a woman posting pictures of her pet dog owns the copyright to the pictures. The social media websites recognize the same and expressly state these in the terms of agreement as well. For example, the terms of service agreement signed between the user and the Facebook platform state that users retain control over the posts uploaded on the platform. Further, YouTube also states that users retain ownership over their submissions to the platform.

However, these platforms further add clauses that subtly and eventually grant themselves the rights to use and exploit the content uploaded on their platform. Facebook states that, subject to their privacy, the users license non-exclusive rights to the platform to use all the intellectual property that subsists in the uploaded content. Further, such a license of the rights is also transferrable and royalty-free. This license does come to an end once the user deletes their account, but if the content has been shared with users and they have not deleted it, the platform still retains the intellectual property. In YouTube’s terms of service, similar rights are retained by the platform that allows it to use, reproduce, distribute, and prepare derivative works of the user-generated content. Twitter, on the other hand, grants even more expansive sets of rights to itself. Along with allowing itself to use, reproduce, distribute, and prepare derivative works of the content, it also grants itself the rights to share the content with other companies that work in partnership with Twitter for the purposes of syndication, broadcast, distribution or publication of the content. Further, the terms go on to add that there shall be no compensation to the user for the use of the content by the platform. As is evident, via these terms, the platforms grant themselves unbridled rights to exploit the content with a wide scope of rights. All the terms highlighted above allow the platforms to use the content, such as images and videos, and embed them in their advertising campaigns without taking explicit permission from the users.

In light of the broad and expansive rights that these websites grant themselves, questions arise regarding the enforceability of these agreements. While the issue is still unexplored in the case of user-generated content and social media websites, such terms of service are analogous to End-User Licensing Agreements (EULAs) entered into by the buyers of software packages and are presented to the user right before they open the software package, via a click-wrap agreement, on a splash-screen during the installation process. Under the click-wrap EULA, the users are required to check a box by clicking a button and stating their compliance with and agreement to the terms and conditions of the agreement.

Similar to software EULAs, the terms of service of social media websites are also a form of click-wrap agreement. While signing up for a social media website, before setting up the final account or profile, the users are presented with an agreement and the terms of service, and the users are supposed to merely check a box to express their acceptance before the sign-up is completed. In the case of click-wrap agreements, the courts have held that EULAs are enforceable. In ProCD Inc. v. Zeidenberg (1996), general rules regarding Shrink Wrap agreements (similar to a click wrap agreement, but packaged within a product) were set up by the court. It was held that shrink-wrap agreements are enforceable with exception only in cases where the terms of the agreement are questionable and objectionable in contract law, such as when they violate basic fundamental rights. Further, the courts have stated that the only requirement for shrink-wrap agreements is that users must be given reasonable opportunity to review and understand the terms of the agreement.

Case study: who pays if I upload to YouTube

YouTube is one of the most popular user-generated content websites that allows its users to share videos, giving them the freedom to explore their creativity. With billions of users on its platform, whether content creators or viewers of such uploaded content, the website generates billions of views daily. Further, within a span of 24 hours, the platform gains hundreds of millions of viewership hours. Such is the impact of the platform that creators on it have gained huge amounts of revenue and made careers out of it, leading to the rise of the term “YouTubers”, which refers to the people who use the platform to create content and generate revenue out of it.

YouTube as a platform has made it easy for people to generate money via monetizing their content using Google AdSense, via fulfillment of certain conditions.

Availability of YouTube Partner Programme within the user’s jurisdiction
Originality of the content
Refraining from uploading objectionable content and mature themes
Agreement to the Terms of Service and Community Guidelines of the platform
Going through the copyright education material of YouTube

With such easy accessibility and rampant usage, claims of copyright infringement come with the territory. Since its launch, the platform has been dragged to court by various companies and individuals. In Viacom Int’l Inc. v. YouTube Inc. (2013), Viacom filed a lawsuit against YouTube, claiming that YouTube had around 15,000 unauthorized videos owned by Viacom on its platform. It was further alleged by Viacom that YouTube had failed to take any action against these videos despite being notified by Viacom. It was claimed by Viacom that, despite being a user-generated content platform, it plays an important role in promoting infringement on its platform by allowing users to upload copyrighted content without proper authorisation from the owners. The case dealt with the applicability of safe harbor provisions under the Digital Millennium Copyright Act (DMCA). It was held that generalized knowledge of infringement on their website does not form sufficient grounds to refuse safe harbor escape.

The Digital Millennium Copyright Act

https://lawsikho.com/course/certificate-course-in-patent-law-licensing-claims-and-litigation

The Digital Millennium Copyright Act (DMCA) was enacted in 1998 with the aim of ensuring stringent enforcement and protection of intellectual property rights on the internet and online platforms and to ensure a safer and more appropriate use of the internet. Section 512 of the DMCA sets up limitations on liability for the social media platforms or UGC platforms (referred to as “internet service providers” or “ISP”) for the material made available on their platform. Section 512(c) provides safe harbor protection to UGC platforms on the fulfillment of the following conditions in case of claims of copyright infringement:

Lack of actual knowledge about the infringing activity
Lack of awareness concerning the actual facts and circumstances regarding the infringing activity, in the absence of actual knowledge
Expeditious actions and measures must be taken by the UGC platform to remove or disable the material leading to infringing activity
Where the UGC platform is in a situation that allows it the ability to control such activity, the platform must not be in receipt of financial benefit that directly arises from such infringing activity
Availability of a properly designated agency tasked with receipt and review of DMCA notices by the users.

Actual/ apparent knowledge and expeditious removal

The DMCA does not require intensive affirmative monitoring; however, once the UGC platform becomes aware of the infringing activity, immediate, active and appropriate measures must be taken by the platform to take action against the post. In Viacom Int’l Inc. v. YouTube Inc. (2013), the difference between actual knowledge and apparent knowledge was defined by the court. The liability on the UGC platform arises when it is subjectively aware of the facts that have the potential to make infringement objectively obvious to persons of reasonable understanding. In UMG Recordings, Inc. v. Shelter Capital Partners LLC (2013), it was held that UGC platforms cannot wilfully ignore the situation and facts of infringing activity when the same is made apparent. The service provider becomes liable when it wilfully ignores the infringing activity and fails to take expeditious action against it when it is brought to their notice.

Concerning expeditious removal, while there is no exact timeline provided in the DMCA or the case laws, the determination of the appropriate timeline depends on the facts and circumstances. The timeline is purported to be determined on a case-to-case basis. Given that the surrounding and important facts and circumstances vary from case to case, determining a fixed time limit for expeditious action shall be inappropriate for the proper realization of the intent behind the DMCA.

Direct financial benefit

Direct financial benefits drawn by the UGC websites from its users or alleged infringers may lead to vicarious liability in certain cases. However, in Marobie-FL, Inc. v. National Ass’n of Fire Equip. Distrib. (2002), it was held that when a UGC platform charges a one-time setup fee and, subsequently, a recurring payment mechanism at a fixed rate, that shall not qualify as a direct financial benefit, causing vicarious liability on the UGC platform in case of infringement claims. The House Report on the DMCA lays down as an example that when a UGC platform charges or receives a certain amount for providing access to infringing material, such may lead to direct financial benefit, triggering liability for the UGC platform.

Expeditious removal

There is no set timeline defined under the DMCA as acceptable under expeditious removal for a UGC platform. The reason for omitting the same arises from the understanding that it was intended to be left open and to be determined on a case-to-case basis. The surrounding factual circumstances and demands of the situation may vary from case to case, depending upon the mode of operation of the UGC platform, and given the minute variations and differences between each platform, it is not possible to determine a uniform or fixed time period for expeditious removal.

Notification under DMCA

In order to invoke the liability of the UGC platform, the copyright owner must take appropriate steps to notify the platform of the infringing activity as prescribed. The guidelines for notification under the DMCA have been laid down in Section 512. Unless a proper notification is issued by the copyright owner, the liability of the UGC platform will not arise, and it will continue to get benefits under the safe harbor provision. The DMCA prescribes the following to be included in a notification for it to be appropriate:

A written communication, as required under Section 512(c)(3)(A).
Sent to the designated agent set up by the platform under the DMCA designated under Section 512(c)(2).
Consisting of the following information, as prescribed under Section 512(c)(3):

Physical or electronic signature of the copyright owner, or authorized personnel acting on their behalf
Proper identification of the original copyrighted work purported to be infringed as per the notification
Proper identification of the alleged infringing material sought to be removed or taken down from the platform
Requisite information needed by the UGC platform in order to contact the complainant
A statement by the complainant expressing their bona fide belief that the use of their copyrighted work in the infringing material was unauthorized
A statement expressing that the notification by the complainant is accurate and that the complainant is authorized by the copyright to act on their behalf

On receipt of the proper notification as prescribed, the UGC platform is under the duty to act expeditiously and remove the infringing material from their platform. The following measures are to be taken by the UGC platform to avail protection under safe harbor provisions:

Promptly remove or disable the alleged infringing material and notify the uploader of the content consisting of infringing material
The uploader of alleged infringing content shall be given an opportunity to issue a response to the takedown via a counter-notification
On receiving the counter-notification, the UGC platform must send a copy of the response under the counter-notification to the complainant
The UGC provider shall also inform the complainant that, upon proper review, the removed material will either be replaced or access will be re-enabled within 10 business days, but not more than 14 days.

Content ID

As a response to the DMCA regulations and the rise of rampant copyright infringement claims on its platform, YouTube launched the Content ID system. The Content ID forms an automatic system that allows the platform to recognize potential infringement issues in the content that is shared on the platform. The system assists with the identification, management, and protection of the copyrighted material on the platform.

Under the ContentID system, YouTube content creators, with a large repertoire of copyrighted content to their name, can register with the platform and submit their uploads to be embedded with a digital footprint via a process known as Automatic Content Recognition (“ACR”), after which their content is uploaded onto the Content ID database. Each time new content is uploaded onto the platform, the Content ID function scans the newly uploaded content for any similarity or identity with the already uploaded copyrighted material on the platform. Through this, the Content ID system provides YouTube content creators with a way to prevent unauthorized copying of their content.

However, it is to be noted that the Content ID system of YouTube is different from the takedown mechanism provided by YouTube as mandated via the DMCA. A takedown under DMCA is mandated under U.S. copyright law, 17 U.S.C. Section 512(c). On the other hand, the Content ID system and copyright infringement claims under it are an internal mechanism for allowing YouTube and the YouTubers to monitor the content on their own. Further, an infringement claim raised under the Content ID system shall not result in a direct copyright strike; however, a DMCA takedown notice shall lead to a copyright strike as soon as the notice of infringement activity comes to the attention of YouTube and shall be in place until the response is submitted by the alleged infringer.

Creative commons and other movements

Creative commons

Started in 2001 by a legal scholar, Lawrence Lessig, Creative Commons is a global movement launched with the goal of revolutionizing the traditional copyright regime to fit in with the requirements of the digital era. Since its launch, the movement has gained widespread recognition and acceptance among the digital audience and online content creators. The Creative Commons movement has gained force in the world of copyright and creativity, enabling creators with access to a wide repertoire of content to draw inspiration from and create further content. The movement, now run by a non-profit organization in America, aims to make available a range of creative work, free of copyright protection, under various licenses, commonly known as Creative Commons licenses. Under the licenses, creators and authors of the work can choose their mode of licensing, and decide which aspects of their work they can license and which to withhold.

By sharing their work under a Creative Commons license, creators and artists of the shared work get to maintain their ownership and copyright protection while, at the same time, replacing the negotiations between the licensor and licensee, considered important under the traditional copyright licensing method. Creative Commons was one of the first outcomes of the copyleft movement, aimed at granting a substitute for copyright in order to grant creative freedom and easy accessibility of protected work. Under the copyleft movement, Creative Commons launched alternative copyright solutions and was hailed as a “re-thinking” of the importance and functions of common access in the digital age. As a copyright alternative, the Creative Commons movement has enabled the creators and artists of the digital era to create more content freely and share it with the rest of the community, allowing others to benefit. But in the process, the creators also retain the power and control of their intellectual property rights and legal protection over their work.

The goal of Creative Commons is to move away from the so-called “permission culture” or “all rights reserved” culture that restricts the free movement and sharing of creativity and, ultimately, the inspiration for further creation and proliferation of creativity. The founders of the Creative Commons movement maintain that traditional copyright theories and content distribution models lead to the monopolization of content by creators, restricting the free flow of information and creativity in society. On the other hand, Creative Commons provides alternatives to these restrictions provided by the traditional model.

In the world of User Generated Content (UGC), the Creative Commons movement provides immense power and strength for online content creators. Creative Commons enables the facilitation of creativity by allowing collaboration and the further creation of more creativity and creative works available on the internet. The Creative Commons license allows the owners of copyrighted works to choose the exclusive rights and permissions that they would like to include in the licenses while retaining the ultimate intellectual property rights. This provides a win-win situation for both parties, the licensee and the licensor. While the licensor retains the ultimate control and power over their work, the licensee is enabled to use the work without going through the long-drawn and tedious negotiations under the licensing discussions. One of the most commonly used examples of the Creative Commons movement seen online is Wikipedia, which allows its users to build upon their articles via contributions and modifications.

The Creative Commons movement has also led to a significant impact and improvement in online education. Creative Commons licensing is now widely used by various educational organizations and ventures, allowing them to share knowledgeable material and resources, including research articles, papers, presentations, lectures, notes and textbooks, while at the same time retaining the ultimate control and exclusivity over their work. Free and unrestricted distribution enables a democratic utilization of resources and a free proliferation of information, allowing for further research and development and innovation that benefits society as a whole.

Through the use of a Creative Commons license, various content creators and companies using UGC platforms have now gained the power and ability to create more engagement with their content and drive more recognition. By providing creators with the opportunity to create derivative content with their followers and, at the same time, retain the ultimate ownership, they have the power to create more engagement on their accounts and derive success from the online community. Many fashion and beauty brands run campaigns where they allow their customers to share content where they use the products sold under the brand with specific hashtags. A recent example is young Indian actress Suhana Khan being the new face for Maybelline Cosmetics and Kendall Jenner for L’Oreal Paris. Such strategies create brand recognition in the online marketplace and also allow their customers to feel a sense of connectedness with each other.

Contrary to the traditional theories under copyright law that aim to protect and gate-keep the works created and protected as subject matter of copyright, the content created and shared on the UGC sites thrives on copying. The main aim of the majority of content creators on UGC websites is to reach a level of popularity where their content is widely copied or modified. Such content that is widely copied and modified online is referred to as viral content. The Creative Commons licensing allows the content creators to open their work and allow such copying and modification that enables them to gain popularity while retaining the ownership and copyright. When their followers, and ultimately other creators, use their content, it allows the content creators to reach a wider audience and grow their online presence, leading to an increase in their brand exposure and organic growth over the internet.

Copyleft

Copyleft is a kind of licensing granted under the copyright law wherein the owner of copyright in a certain work allows others to use their work and create further derivative works on fulfillment of certain conditions. For instance, there are a number of copyleft software, wherein the owners of the copyright in the software allow others to copy their software codes with the condition that the original code remains open. Further, the users of the software code are also mandated to agree that software created using the code shall also be open to transmission under copyleft.

Unlike copyright, which grants creators control over their work and the ability to deter others from copying it, copyleft aims to provide users with certain freedoms, i.e.,

Freedom 0: freedom to use the work
Freedom 1: freedom to study the work
Freedom 2: freedom to copy the work and share it with others
Freedom 3: freedom to modify and create derivative works out of the work

One of the earliest and most widely known copyleft licenses was the GNU General Public License (GPL). The original software code and license therein were written by Richard Stallman, an American programmer. Under his GNU Manifesto, Richard Stallman stated that while GNU is open to be used and modified by everyone, anyone who uses it is also under an obligation to keep the modified versions open and free for all. No redistribution of the GNU shall cause restrictions, and all versions of the GNU created thereafter shall remain free.

Permissive

A permissive software license, similar to copyleft, is a free and open to all software license, that carries a smaller number of restrictions regarding the subsequent use of the software code as compared to copyleft. It is also sometimes known as a non-copyleft license, and carries with it not only the freedom to copy and create derivative works but also the freedom to determine how the modified versions will be used and redistributed. Under the permissive software license, the owner of the copyright in the original software license allows others to use their code and loses control over determining how the derivative work shall be used, as long as the original owner is attributed by the licensee.

Federal preemption of state law and sound recording protection

Section 301 of the Copyright Act (provided under 17 U.S.C.) lays down a preemption clause in respect of copyright law and a specific provision in the case of sound recordings. Concerning sound recordings, the federal law under copyright preemption states that for sound recordings that are created prior to February 15, 1972, all the subsisting rights granted under common law or the respective state law shall not be preempted via annulment or limited under federal copyright law until the date of February 15, 2067. Therefore, the law under federal preemption laid down by the Copyright Act shall come into effect in respect of sound recording after the given date, February 15, 2067. It is important to note that the preemption clause applies to certain types of state law rights, not all of them. For example, state laws regarding unfair competition and trade secrets may still apply to sound recordings created before 1972.

Therefore, while sound recordings have been a subject matter of copyright protection since 1972, the ones that were created and fixed in a tangible form prior to 1972 continue to be governed by the respective state laws instead of the federal copyright statute, the Copyright Act (provided under 17 U.S.C.). It is to be noted that while the pre-1972 sound recordings continue to be governed by state laws, after the end of their term, i.e., in 1967, the protected sound recordings shall fall into the public domain. The Music Modernization Act (MMA) of 2018 grants federal copyright protection to pre-1972 sound recordings, albeit with a limited scope compared to recordings created afterward.

International/Berne Convention

In terms of international copyright law, there are two major treaties, the 1886 Berne Convention and the 1994 Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). Both of these international treaties, laying the foundation for international protection and uniformity of copyright law, were set up under the negotiations and discussions involved in the setting up of the World Trade Organization (WTO).

Berne Convention

The Berne Convention is considered to be the foundation of international copyright law, with 200 member nations as its signatories. Since its launch in 1886, the Berne Convention has been revised numerous times, with the latest one being in 1971 via the Paris Act. The Berne Convention is founded on three main principles that provide a yardstick for determining the minimum standards of protection under the international copyright regime. The three basic principles are known as:

National Treatment
Automatic Protection
Independence of Protection

The principle of national treatment states that works that originated in one of the member states must be accorded with the same standard and type of protection as provided in the originating state of the subject work. The principle of automatic protection states that the protection of work copyrightable and protectable as a subject matter of copyright protection in one state must not be protectable under the remaining member states on meeting a conditional formality. The principle of independence of protection states that protection of the created work under copyright law is not dependent on whether the protection is provided in the country of origin.

Along with the aforementioned affirmative and economic rights of protection granted in the original work, the Berne Convention also lays down certain exceptions. These exceptions are known as “free uses” under Article 9(2) of the Berne Convention and act as limitations to the exclusive rights to exploitation guaranteed to the author. The limitations as provided under this Article are determined via a three-step test, akin to the fair use exception under the Copyright Act. According to the three-step test, reproduction and use of the protected work shall be permitted:

In certain cases of special circumstances or facts.
When the reproduction of the protected work does not clash with the normal exploitation of the work by the original author.
Does not cause hindrances to or adverse effects on the rights of the original author or owner of the copyrighted work.

Principle of National Treatment and UGC

While the principle of national treatment aims to create a uniformity of copyright protection by stating that works that originated in one of the member states must be accorded with the same standard and type of protection as provided in the originating state of the subject work. However, the national treatment and territoriality principles of copyright law create a direct clash with the principle of national treatment. Indeed, although the territoriality of protection has been relaxed in various fields of law, the copyright law and the whole intellectual property law in general remain territorial. In cases of copyright disputes involving international players, the jurisdiction and the state laws that shall be applicable still remain to be determined. This determination of the competent state and jurisdiction is not simple in the case of User Generated Content. If all three players in the case, i.e., the copyright holder, the company owning the UGC platform, and the uploader of the content, reside in three different nations, then laws of which state are to be applied? When it comes to the internet and UGC platforms, the players are acting in a borderless world where the lines of jurisdiction are blurred.

Principle of Automatic Protection and UGC

The principle of automatic protection under the Berne Convention states that protection of work copyrightable and protectable as a subject matter of copyright protection in one state must not be protectable under remaining member states on meeting of a conditional formality. Simply put, it means that copyrightable works are to be granted protection without any requirement for fixation, in the absence of formal requirements. However, this principle is flexible. In case of UGC, fixation is not a cause for concern, before being uploaded on the server of the UGC platform, the works are fixed and would be in existence on some platform, mostly, on the hard drives of the user’s systems. Therefore, such UGC, free of any copyright infringement, shall be protected automatically, in the absence of any formal requirement as prescribed.

TRIPS Agreement

The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) is a more recent treaty concerning intellectual property and copyright law, signed in 1994. In contrast to the Berne Convention, which deals with creative protection, the TRIPS concerns itself with international trade and related issues in copyright protection and intellectual property rights as a whole. The exclusive rights of economic exploitation of the work as granted to the copyright owner are the subject matter of discussion and concern for TRIPS, which aims at utilization of these rights for trade-related aspects. Over the course of time, the past few decades have seen a growth in the economic exploitation of artwork and literary work by artists and companies. The TRIPS Agreement aims to inculcate regulations for increased protection of copyright law. Lack of proper regulation of copyright protection was the main cause of concern, and subsequently, the World Trade Organization’s Dispute Settlement Body (DSB) was set up as an enforcement agency.

The international copyright law in its present form lacks appropriate principles in order to offer assistance and concrete guidance in the protection of copyright law in Web 2.0, ruled primarily by social media websites and the UGCs therein. The growth of UGC has led to a confrontational tussle between the traditional norms of copyright law, which aim to protect copyrighted work from getting copied, and those that aim at giving the utmost control to the owner of the copyrights. Whereas, on the other hand, the world of social media and UGC aims to thrive on the rampant copying and virality of their content. In the present times, a balance is needed between the two sides, where the authors, creators and owners of original copyright in the original work are protected from unauthorized copying, while at the same time, such protection of copyright must not lead to the stifling of further creativity and innovation.

EU-specific law and “Making Available”

In the European Union (EU), copyright law is subject to a medley of international agreements and objections. In an attempt to harmonize the various aspects of international agreements at play in the copyright protection regime, the European Union has launched the InfoSoc Directive. It lays down the regime for harmonization of exclusive rights under copyright law, which include the right of reproduction, distribution, communication of works to the public, and making works available to the public. Further, as seen in the Berne Convention, the exceptions as seen in the three-step test principle are also implemented via the InfoSoc Directive.

In April 2019, the European Union announced the Directive on Copyright in the Digital Single Market (the “Copyright Directive” or “DSMD”) as part of the European Copyright regime. The Copyright Directives set up a comprehensive legal framework applicable to online UGC platforms. Article 17 of the Copyright Directives imposes certain duties upon the UGC platforms and directs them to put in place effective and proportionate methods that deter the users of the UGC platform from violating copyright laws. Article 17 imposes three essential duties to be fulfilled by the UGC platforms:

The platforms are duty-bound to make the best efforts to obtain requisite licenses and permissions from the copyright owners of the content that is shared and uploaded on their website by the users.
Allow users of the UGC platform to upload content without any restrictions, in exceptional cases that include quotation, criticism, review, caricature, parody and pastiche.
Put in place transparent methods dealing with the rules regarding exploitation of copyrighted work, provide the users with a system via which license holders may be paid, and provide a dedicated alternative dispute resolution mechanism.

In line with the Copyright Directive, UGC platforms are required to take extra measures and put in place internal policies and terms of usage that allow the websites to engage actively in filtering content that might be unlawful and content that might fall under exceptional cases that include quotation, criticism, review, caricature, parody and pastiche. Further, stricter and more stringent takedown methods are required to be put in place, as Article 17 mandates that there must be a human review involved in the set up takedown process. The decision regarding whether content is liable to be removed as infringing content or not is to be taken by a human.

Case Laws

Viacom International, Inc. v. YouTube Inc.

The case of Viacom International, Inc. v. YouTube Inc. (2013), deals with safe harbor provisions under the Digital Millennium Copyright Act (DMCA), and the duties of the intermediary platforms. In this case, Viacom had filed a lawsuit against YouTube, claiming that YouTube had around 15,000 unauthorized videos owned by Viacom on its platform. It was further alleged by Viacom that YouTube had failed to take any action against these videos despite being notified by Viacom. It was claimed by Viacom that, despite being a user-generated content platform, it plays an important role in promoting infringement on its platform by allowing users to upload copyrighted content without proper authorisation from the owners. The case dealt with the applicability of safe harbor provisions under the Digital Millennium Copyright Act (DMCA). It was held that generalized knowledge of infringement on their website does not form sufficient grounds to refuse safe harbor escape.

It was held that safe harbor protection as prescribed under the Digital Millennium Copyright Act (DMCA) mandates that the UGC platform must have actual knowledge and awareness of specific infringing activity that takes place on the platform, as the basic text of Section 512(c) of the Digital Millennium Copyright Act (DMCA) states the same. The knowledge or awareness on its own is not sufficient to invoke the liability of the UGC platform unless there is specificity to it. Further, once the platform gains the required specific knowledge or awareness, it must act expeditiously to remove the material or disable access to it, whichever is possible. It was also observed by the court that, from the language of the section dealing with the requirement of the removal of the content, it becomes evident that the Digital Millennium Copyright Act (DMCA) requires specific knowledge and awareness, as expedient and swift removal is not possible unless there is specific knowledge of the item that has to be removed.

UMG Recordings, Inc. v. Shelter Capital Partners LLC (2013)

In UMG Recordings, Inc. v. Shelter Capital Partners LLC (2013), the plaintiff, Universal Music Group (UMG), a music publishing corporation, filed a suit against Veoh Networks, a video-sharing platform that allowed its users to share videos with other users of the platform free of charge. It was held by the plaintiff that Veoh had uploaded copyrighted content that was owned by UMG. The court, siding with Veoh, held that UMG had failed to comply with the requirement of notification as mandated under the DMCA. UMG had not notified Veoh of specific content that caused copyright infringement on its platform. The court stated that UMG had failed to comply with the requirements under the DMCA, and therefore, Veoh did not gain any actual knowledge of copyright infringement on its platform. Merely hosting copyrighted content uploaded and shared by the users of the platform does not lead to actual knowledge as per the DMCA regulations. A general understanding of the UGC platform is that its website may be used to share copyrighted material and cause copyright infringement, which does not qualify as enough to invoke the liability of the UGC platform.

Cohen v. Facebook, Inc.

The case of Cohen v. Facebook, Inc., (2011) deals with the issue of exploitation of the likeness and name of the users by UGC platforms. A class action lawsuit was filed against Facebook, wherein the complainants stated that their likeness and other aspects of their personal details were used by Facebook under its friend finder service. The friend finder service allowed the users to look for more friends on Facebook by relying on the contacts saved by the users on their registered email accounts. The service mentioned the name and shared the profile of those users in the contacts that had also signed up for the friend finder service. Stating that the plaintiffs had failed to prove any injury caused by the service, the court dismissed the case.

Chang v. Virgin Mobile USA

The case of Chang v. Virgin Mobile USA (2009) deals with licensing and privacy issues on UGC platforms. A lawsuit was initiated against Virgin Mobiles by the parents of a teenage girl for using her pictures in an ad campaign. The photo of the girl was uploaded on flickr.com by her youth pastor, who clicked the picture during a church event. The photo was uploaded by the youth pastor under a Creative Commons License that allowed the platform to use the uploaded material for non-commercial purposes without obtaining a license from the uploader of the picture or the owner of copyright. Taking the picture from flickr.com, Virgin Mobile used it on an advertisement campaign, which was a commercial use, wherein they put the girl’s picture on billboards, juxtaposed with the text “Dump Your Pen Friend.” In the lawsuit, the parents of the girl claimed that the advertisement infringed the girl’s right to privacy and caused her mental distress by adversely affecting her reputation and causing embarrassment. While the case was dismissed due to procedural errors, it still holds significant importance by bringing to attention the repercussions of UGC platforms and unfair licensing agreements entered into between the users and the platforms, where the latter gains unrestricted powers to use the content.

Armstrong v. Virgin Records

In Armstrong v. Virgin Records (2000), the plaintiff, a performing artist, was a resident of the United States of America. The plaintiff brought a lawsuit against the defendants, claiming that the defendants, which consisted of British performing artists and record producers, had sampled the recorded performances of the plaintiff without obtaining the requisite permissions and licenses. The recordings of the defendant’s work were distributed in both jurisdictions—the United Kingdom and the United States of America. However, these recordings were created in the United Kingdom.

The defendants claimed that the lawsuit ought to be dismissed owing to the lack of subject matter jurisdiction arising from the fact that the copyright law as applicable in the United States of America shall be inapplicable in the United Kingdom. Hence, the violation of exclusive rights to make derivative works as applicable under the copyright law in the United States of America shall not be applicable to the creation of recordings in the United Kingdom. The court agreed with the defendant that there was a lack of an affirmative action or a predicate act in the United States of America and that copyright law as applicable in the United States of America was not applicable in the United Kingdom. However, despite the observation, the court held that it was competent to hear the case and rule in this case. It was observed by the court that there has been reluctance on the part of courts to hear cases dealing with foreign law and the applicability of law in international space; there is no inherent prohibition against the same in cases of copyright infringement claims.

Itar-Tass Russian News Agency v. Russian Kurier, Inc.

In the case of Itar-Tass Russian News Agency v. Russian Kurier, Inc. (1998), the defendant, Russian Kurier, owned and operated a newspaper by the name Kurier newspaper (Kurier), based in New York City, which was circulated in Russian. Kurier had copied material from approximately 500 Russian language news articles owned by third-party organizations, which also included the plaintiff, Itar-Tass Russian News Agency (Itar), several Russian newspapers and magazines, Russian language magazines published in Israel, and the Union of Journalists of Russia. The United States Court of Appeals for the Second Circuit decided the copyright infringement case and laid down the rules that shall be applicable in determining the extent of copyright laws from the country of origin that shall be applicable in cases of disputes involving international parties.

The court in the present case held that in cases of copyright infringement involving international parties, determining whether the copyright in the work forming the subject matter of the dispute would belong to the plaintiff, the laws of the country of origin shall be applicable under normal circumstances. Copyright, being a form of property, is to be ascertained by the law of the state with the most significant relationship to the property and to the parties, as per the approach stated by the Second Restatement. However, in determining whether the acts of the defendant led to copyright infringement or not and to decide which remedies shall be applicable, the law of the state where the infringement is alleged to have taken place shall be applied. Here, the law of the origin country, i.e., the country where the work originated, is called lex originis, whereas the law of the country where the infringement took place, i.e., the law used to determine whether or not the infringement has taken place and for the computation of damages, is called lex loci delicti.

Toney v. L’Oreal, USA, Inc.

The case of Toney v. L’Oreal, USA, Inc. (2002) deals with the publicity rights of celebrities and the concept of federal preemption of copyright law. In this case, the plaintiff was June Toney, a model whose pictures were used on the package of hair products named “Ultra Sheen Supreme”, sold by Johnson Products. An agreement was entered into between the parties, wherein the plaintiff had authorized the use of her likeness on the package of the hair relaxer product “Ultra Sheen Supreme” for five years. The agreement also included an exclusivity clause, as per which the plaintiff was prohibited from using her image and likeness on other packaging of products related to hair relaxers.

After the expiration of the term of agreement between the parties, the defendant continued to use the image and likeness of the plaintiff on their product packages. Subsequently, the plaintiff filed a suit against the defendant for using her image and likeness in connection with the packaging and promotion of hair relaxer products beyond the term set forth in the contract. The plaintiff also alleged that the defendant had violated her right to publicity as defined under the Illinois Right of Publicity Act (IRPA). On the other hand, the defendant claimed that the rights under IRPA were preempted under the Copyright Act, via Section 310.

The court held that contrary to the work forming the subject matter of copyright material or artwork, the likeness of a celebrity is not a work of authorship that can be fixed on a tangible medium and expressed. A likeness, at best, remains comparable to an idea, which is not protectable under copyright law. Although her picture, which formed an aspect of her persona and likeness, was fixed in a physical form on the package, the agreement between the parties pertained to the likeness of the celebrity personality carried by the plaintiff and attracted a large consumer base. Section 301 aims to preempt the state law concerning copyright protection in artistic work and images, whereas in the present case, the dispute arose with respect to the personality of the plaintiff, which cannot be authored or expressed in a fixed and tangible medium. The likeness and persona of the celebrity were protected under IRPA. Hence, the court held that relief sought by the plaintiff for protection of her likeness and persona under the IRPA was not preempted by the federal copyright legislation.

Heigl v. Duane Reade, Inc

The lawsuit, Heigl v. Duane Reade, Inc., No. 14-CV-2502, 2014 WL 1383558 (S.D.N.Y. April 9, 2014) against the drugstore brand Duane Reade by the celebrity and actor Katherine Heigl for unauthorized use of her image and likeness, deals with the concern of privacy and publicity rights on UGC platforms and social media websites. The defendant, Duane Reade had taken and posted a picture of the plaintiff holding a bag carrying the defendant’s trademark, “Duane Reade” on their social media handles, with a caption “Love a quick #DuaneRead run? Even @KatieHeigl can’t resist shopping at #NYC’s favorite drugstore”. The purpose of the social media post, as is evident, was to promote their brand and use the popularity and likeness of the actress to gain popularity amongst the consumers. It was claimed by the actor that the defendant had not taken any permission from her to use her image. While the case was eventually settled outside the court, this lawsuit highlights the issue of celebrity personality rights, privacy concerns and unauthorized commercial exploitation of celebrity personalities over UGC platforms.

Conclusion

The technological development and digitization have led to new forms of socialization, the most common one being communications carried out via social media websites. Social media sites that allow its users to stay connected with their friends, family and colleagues, despite being separated in distance. UGC, though gaining popularity, has upended the copyright regime and created ripples in the world of intellectual property protection. Under the domain of copyright law, UGCs raises some major concerns, such as- copyrightability of the created work, issues of infringement arising from the created work, legal relationship between the creators or users and the content platform, vis-a-vis the right and duties of each party, and liability and the extent of involvement of the content platforms in case of infringement claims. While many social media websites have taken measures such as including robust terms of agreement and taking proactive measures under the Digital Millennium Copyright Act (DMCA), as we move further, newer technologies, as they emerge, are only going to challenge the existing regime and require more proactive legislation in order to deal with the blurring of jurisdictions caused by the internet. In such a situation, within the legal regime of the United States of America, federal preemption of copyright law provided under the Section 301(a) of the Copyright Act (provided under the 17 U.S.C.) provides a great first step, taken by the United States Congress to deal with confusions that arose with conflicting laws in different states.

Frequently Asked Questions (FAQs)

What is User Generated Content?

User-Generated Content (UGC) is such content that is created by the users of the internet that is easily accessible and freely visible to other users. UGC includes general, day-to-day interactions carried out by the users on social networking websites, such as texts, posts on social media, stories, videos, audio recordings, comments, etc.

What is Federal Preemption in Copyright law?

Federal preemption in copyright law is a method via which the federal law in terms of copyright law, the Copyright Act (provided under the 17 U.S.C.) aims to remove the conflict due to varied copyright laws in each individual state. Section 301(a) of the Copyright Act lays down that as per the federal preemption under copyright, the federal law laid down under the 17 U.S.C., shall control the protection and enforcement of any of the rights that are equivalent to the exclusive rights to the works of expression guaranteed and governed under the Copyright Act.

What is the safe harbor principle under the DMCA?

Section 512 of the Digital Millennium Copyright Act (DMCA) provides a safe harbor protection to UGC websites or social media websites, wherein the websites are exempted from liability in cases of copyright infringement when they meet certain conditions, that are,

Lack of actual knowledge of infringing activity.
Expeditious removal or disability of the infringing content on obtaining actual knowledge.
Setting up proper review mechanisms for DMCA notices as prescribed by the law.

What is actual knowledge?

A UGC platform gains actual knowledge of infringing activity when it is subjectively aware of the facts that have the potential to make infringement objectively obvious to persons of reasonable understanding. The UGC platforms cannot wilfully ignore the situation and facts of infringing activity when the same is made apparent. The service provider becomes liable when it wilfully ignores the infringing activity and fails to take expeditious action against the same, when it is brought into their notice.

What is Content ID?

Content ID is an internal system launched by YouTube to ascertain copyright infringement on its platform. The Content ID is an automatic system that allows the platform to recognize potential infringement issues in the content that is shared on the platform. The system assists with identification, management, and protection of the copyrighted material on the platform.

What are creative commons?

Creative Commons is a global movement launched in the year 2001, with the goal of revolutionizing the traditional copyright regime to fit in with the requirements of the digital era. The Creative Commons movement aims to make available a range of creative work, free of copyright protection, under various licenses, commonly known as Creative Commons licenses. Under the licenses, creators and authors of the work can choose their mode of licensing, and decide which aspects of their work they can license and which to withhold.

References

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