DMCA Notices Interdict Online Distribution of Infringing Software

Beyond being useful to remove infringing images, videos and articles from web pages, Digital Millenium Copyright Act (“DMCA”) notices can be used to interdict online platforms and fulfilment services that support the distribution and sale of infringing software.

Our successful client develops Software Development Kits (SDKs) for implementing document format conversions on online platforms.  Frustratingly, a competitor’s product was available at a significantly lower price.  The competitor had a reasonable online presence through its web site, and could easily be found through searches using the competitor’s product name. When our client’s software engineers examined the competitor’s product, it turned out to be a rebranded version of our client’s product.  Following an initial cease and desist letter, the competitor changed the nomenclature used in the software to avoid using the client’s proprietary file names, but the files and code otherwise remained the same.  Despite further contact with the infringer, its sales continued.

It seemed impractical to litigate locally or abroad.  The competitor was based in an unfamiliar jurisdiction and certain technical hurdles stood in the way of a successful action in that jurisdiction.  Yet, if the matter were litigated in the U.S. or Canada, it would likely be difficult to realize on any judgment as the competitor likely has few if any assets in North America. 

We turned to the DMCA and its European counterpart, the Electronic Commerce Directive.  Notices were sent simultaneously to the German ISP that hosted the competitor’s website, to the competitor’s product fulfilment provider and to Google (on the basis that the search results for the infringing product assisted in the online distribution of the product).  The competitor initially sent a counter-notice to the German website host, but Google complied by suppressing the infringing product from Google’s search results and the fulfilment service complied by discontinuing fulfillment of orders for infringing product.  Under simultaneous pressure from all sides the competitor withdrew the infringing product, avoiding the need to protracted and expensive litigation. 

While resort to DMCA-type notices may not provide monetary recovery for the rights owner, they can achieve very rapid and practical results in protecting a copyright owner’s market.  And the notices can be effective by targeting the online platforms and service providers that support the distribution, promotion, searching for and sale of infringing software.

DMCA notices will not necessarily result in the immediate interdiction of the infringing activities.  A US-based ISP could ignore the notice and forego the safe harbour offered by the DMCA regime, although most ISPs will comply.  Alternatively, the infringer might issue a counter-notice under the DMCA protocol.  Either case triggers the need to litigate to pursue the complaint. 

Europe’s Electronic Commerce Directive does not provide any safe harbour effect and a counter-notice does not necessarily insulate the ISP from liability.  The ISP must determine whether it has reasonable grounds to suspect infringement, taking into account the notice and the counter-notice, and decide whether to risk becoming a defendant in an infringement action asserting that the ISP knowingly contributed to the continued distribution of the infringing product.  As in any DMCA case, the client must be willing to sue if necessary to make effective use of the notice against European ISPs.

Under Canada’s “notice and notice” provisions, the ISP is required to forward an infringement notice to the subscriber of the site on which the infringement takes place.  If the complainant needs to pursue the matter, an application must be made to court for an order that the ISP disclose the identity of the subscriber.  Canada therefore provides a path to the end result of prosecuting the infringer but litigation is necessary to prosecute the infringement by a recalcitrant party.

Part of the strategy in interdicting infringement is the thoughtful selection of which notice regime to engage having regard to the roles of the various ISPs involved and the jurisdictions in which they are located.  Such notices nonetheless provide a very useful tool for securing quick and practical results in many cases.

 To discuss further, contact Paul Smith