What liabilities do hosting company have in relation to a clients content?

[debrown3rd]

I perspective client came to us looking for a new host. After a brief conversation, it turns out their present hosting company took them offline after receiving a threatening letter from a competing company's lawyer stating that some documentation on their website was infringing on copyrights from their company. The client states that it is not true and is current in some sort of lawsuit with the company that threatened the hosting company.

My question is this:

What legal ramifications (we are in the state of Colorado) might a hosting company be liable for if a hosted company posts something that might be an infringement of copyright. Would the hosting company be liable for any of this information or would they be able to wait until a court had decided who was in the wrong? As a third party I would think that a person is innocent until proven guilty. I'm not excited about dealing with a lawsuit from any company over something like this even if I am in the right. As a note, we do have a $1000 deductible and a $1000000 coverage policy for our hosting company. We are small and do not have any on staff legal representation so cost would be out of pocket. This client (company) claims that they are not in the wrong in any way, but I feel that for the small monthly fee, it is not worth the potential hassle/problems.

My second question:

Although I'm not keen on taking this particular hosting contract, I figure this is bound to happen at some point in the future so I am very interested in any recommendations one might have as to who or what company they use for legal disputes pertaining to hosting or the internet in general.

[debrown3rd]

I'm a bit curious now. Has no one encountered this sort of problem? I would have imagined that this sort of thing might be a bit more common place with larger hosting companies?

[blue27]

I don't see an issue here.
If you choose to host this client you have no liability at all unless someone issues a formal complaint.
Simply stating that there is a copyright infringement is not grounds to take a site down without providing some sort of evidence.
If you are provided with the evidence then a C&D order can be issued and the offending site can be given 24 hours to remove the content.

You have no liability unless you choose not to remove the offending site after this warning has been given.

[hobbestec]

IANAL, but I have gotten DMCA notices before. You are not liable for the content of your users sites as long as you are not aware of it's infringment. It doesn't sound like it's infringing yet since there is a pending lawsuit, though the DMCA seems to say that the content would be taken down if there is a counter-takedown notice sent by the client, and the copyright holder files a lawsuit. That whole series of events may have already happened with their previous hosting provider.

There is some information on Wikipedia here: http://en.wikipedia.org/wiki/Online_Copyright_Infringement_Liability_Limitation _Act

[debrown3rd]

IANAL, but I have gotten DMCA notices before. You are not liable for the content of your users sites as long as you are not aware of it's infringment. It doesn't sound like it's infringing yet since there is a pending lawsuit, though the DMCA seems to say that the content would be taken down if there is a counter-takedown notice sent by the client, and the copyright holder files a lawsuit. That whole series of events may have already happened with their previous hosting provider.

There is some information on Wikipedia here: http://en.wikipedia.org/wiki/Online_Copyright_Infringement_Liability_Limitation _Act

Thanks for a great reference here. I have forwarded this information to the perspective client in the hopes of determining if this has already taken place.

If I'm reading this correctly, the hosting company IS obligated to remove the content if a DMCA is sent to them. The hosted client would then have 10-14 days to file a sort of objection. It seems a bit fuzzy here, but it appears that the content would then have to be kept offline (and some notice of the change posted) until it is settled in court. I'm sure I'm confusing something since it would seem that anyone could reasonable file this and the client has to prove he/she is innocent before it can be put back up.

It was somewhat disturbing to read that they has never been a case where a client has posted the "objection".

[Nico]

Secondary Liability
The person who posted the material is the direct infringer. You as the ISP are considered the contributory infringer. You have a small degree of lee way for not having knowledge of the infringement, but you are considered a vicarious infringer if you gain financial benefit from the infringement. A vicarious infringer need not have knowledge of the direct infringement. Both represent potential claims by the copyright owner.

There are a number of penalties for infringement:

Monetary damages

Statutory damages - $500 to $20,000 per work infringed. Willfull infringement can be up to $100,000 per work infringed. Innocent infringement is a minimum of $200 per work infringed.
Under the Omnibus Reform Act wilfull infringement has been raised to $150,000 and Statutory damages will be increased to $750 and $30,000 per work infringed.

Attorney's fees

Preliminary Injuction (restraining order)


There's also the No electronic Theft Act that establishes copyright liability even without econmic gain to the user, when the material consists over one or more works over a retail value of $2,500.

Source: Cyberlaw Text and Cases
ISBN 0324164882
It's a Westlaw Book and severly over priced.

The first part of the book will bore you to tears, but the second half is fairly interesting. If you ever have to take this class drink lots of coffe before you get there.

Most Copyright claims are those marketing the material in excess for profit.
For example, a member of one of those 3 letter organizations informed me that they don't even bother with software claims unless they are in possession or have sold over 1,000 copies. When it comes to ISPs, if you ever get a letter from an Attorney or legal dept it's best to save yourself the headache and just remove it.

[GordonH]

It depends which country you are in.

In England the host is the publisher of the materialand totally liable in the same way sas the site owner.

[NyteOwl]

The simplest and best way is to ask your attorney.

[debrown3rd]

The simplest and best way is to ask your attorney.

Does anyone know a relatively good internet lawyer that they hire on a regular basis? I do not keep an attorney staffed. It would be out of the state of Colorado since this might make a difference in some of the laws.