Legal Implications of User Generated Content: YouTube, MySpace ...

V. Practical TipsA. For UGC Website Operators1. Do everything possible to ensure that your business falls under the § 512(c)safe harbor provision. This means consultation with an attorney versed inthis area of the law. This also means strict and prompt compliance with thenotice and takedown procedures.2. But rather than relying on the safe harbor, a safer approach may be to seekout licenses from content owners. YouTube, MySpace, and other UGCwebsites have recently begun utilizing this procedure.3. Use click-wrap agreements rather than passive terms and conditions.What is the difference? Click wrap agreements require the user to scrollthrough the terms and conditions and click an “accept” button. Whereaspassive terms and conditions can just be language on the webpage oraccessible via a link but where there is no requirement to click on the link foracceptance. Courts are more likely to enforce a click wrap agreement ratherthan passive terms and conditions. 514. Think carefully about the contents of the click wrap agreements so as toensure that all appropriate representations, warranties, and indemnities fromsubmitting users are given. As an example of the largest UGC sites approachto terms and conditions, attached are the latest terms and conditions fromYouTube and MySpace.5. In order to make it more likely to fall within the § 512(c) safe harbor by nothaving a “direct financial benefit,” consider removing ads from areas of yourwebsite where UGC is posted.a. For example, when a YouTube user plays a video, one will notice thatthere are no advertisements that precede the video. Contrast thiswith a non-UGC video on a website such as ESPN.com. This wascertainly a deliberate step taken to try to prevent a court from rulingthat YouTube receives a “direct financial benefit” from the infringingmaterial. It remains to be seen whether this will be sufficient orwhether the presence of an ad on the same webpage as the UGCvideo will rise to the level of “direct financial benefit.”51 1 John W. Hazard, Jr., COPYRIGHT LAW IN BUSINESS AND PRACTICE § 6:30 (rev. ed.) (“With respect to click wraplicenses for downloaded software, a technical option that may greatly enhance enforceability of a license as to a particularlicensee is if the affirmative action of assent (typically clicking on an ‘I agree’ icon) is recorded and attributed toinformation identifying the licensee, e.g., information transmitted pursuant to an online registration process.”).14