Derek Slater is on a roll when he points out a recent decision involving 17 USC 512 liability (part of the DMCA's ISP safe harbor provision) (Ellison Appeal and the 512 Standards). See also, Not Quite a Blog's post on this (Ellison v. AOL: Many organizations could be held contributorily liable).

This is an important decision in the developing law of ISP liability, which is growing more complex. The case involves bad boy science-fiction author Harlan Ellison suing AOL for the unauthorized posting of Ellison's work in newsgroups. The particular issue on point is whether or not AOL met the burdens required for eligibility for the safe harbor. The decision was that there is a question of fact as to whether AOL complied with the safe harbor provisions. AOL's main problem was that they changed their notification email address, did not notify the Copyright Office for months and did not forward emails to the old address. It is this cavalier attitude toward notification that also created a question of fact with regard to contributory infringement. This summary may sound fairly straightfoward, but the interweaving complexities of 17 USC 512 make it much more complex. Read the decision: Ellison v. Robertson [PDF].

Derek brings up an issue that the court did not directly address, what the definition of "repeat infringer" is. One interpretation would be that one is only a repeat infringer when a court has found copyright infringement twice. While that would be a plausible interpretation of the statute, it doesn't make much sense as a policy. With a strict definition of "repeat infringer," the law would require copyright holders to sue infringers in order to have any sway over their conduct. I'm not sure we really want a policy where suing is the only option.

However, if we don't have a strict definition of "repeat infringer," the DMCA as currently structured gives too much power to the copyright holders. For example, a notice-and-takedown letter might very well be sent against a legitimate work of fair use. The author of the fair use work might take down the work simply because they cannot afford to fight a court battle, not because the work was illegitimate. Without a strict definition of "repeat infringer", such an action would probably be considered infringement - leading to "repeat infringement" down the road.

Having a quick notice-and-takedown provision for copyright infringement makes a lot of sense - but only in cases of blatant infringement. Thus, I would allow the use of notice-and-takedown but with a reverse liability clause. Use of notice-and-takedown provisions that were ultimately found not to be infringement would create liability for the copyright holder making the claim. This would mean that blatant copyright infringements would be subject to notice-and-takedown claims, and rightfully so. On the other hand, copyright holders would be less likely to abuse such notices for fear of liability. If they still wanted to pursue copyright infringement arguments without liability, they still could using the traditional tools of a lawsuit and request for preliminary injunction.

I think this would have solved the whole Diebold mess, see Derek again (Arguments Heard in Diebold Case).