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Digital Publisher Isn't Liable for Freelancers With No Oversight

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By Jonathan R. Tung, Esq. on May 04, 2016 11:57 AM

The Tenth Circuit recently handed down a decision that could present a wonderful business opportunity to some enterprising online "journalism" sites.

The circuit court's opinion will likely stand for the rule that outfits like Examiner.com can drape themselves within a safe-harbor cloak when their independent contractors run afoul of copyright laws.

Examiner and "Examiners"

The controversy first began when Examiner.com -- an innocent player according to the circuit -- posted up pictures owned by paparazzi/gossip outfit BWP without prior authorization. Examiner.com, however, is not like The Wall Street Journal. Instead of permanent on-site staff, the company only hires independent contractors. In fact, it was the contractors who posted the allegedly infringing photos.

BWP argued that the current safe harbor rules for ISP should not apply to Examiner. Current federal law shields companies ISPs from liability for unwittingly hosting infringing content stored "at the direction of a user." Plaintiff BWP argued that the term "user" does not include independent contractors.

But the Tenth Circuit agreed with the lower court and dodged the whole "user" issue. The real issue is whether or not the paying company "directed" the storage of infringing content. And "no reasonable trier of fact," the court said, "could find that the infringement was at the direction of" Examiner's parent company.

Profit-Minded Publishers

Well, you know what that means. Opportunity.

Reuters' Alison Frankel has boiled down the facts and opinion into a bare-bones online-publishing business scheme. In her words:

If you are a profit-minded digital publisher, there's a business model here for you. Fire your employees and hire a bunch of "independent contractors" who upload content belonging to other people. As long as your contracts include infringement prohibitions and you respond to takedown notices, you've got nothing to lose under the 10th Circuit's reasoning.

The plaintiffs' lead counsel certainly felt this way. "A smart operator can structure the business so you can infringe for free," BWP's lawyer said.

Of course, reasonable people can disagree. In fact, a few business models that Reuters is aware of make heavy use of the DMCA takedown provisions, the federal legislation that requires that allegedly infringing material be removed immediately.

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