Legal and business advice for online publishers and bloggers

Over the months that I’ve been writing about legal issues for OJR, the consistent issue that has emerged is that online publishers need good legal representation. But that imperative has been matched by an equally vexing question: how does a small publisher get the right legal advice at an affordable price? Fortunately, there’s a host of good resources available, and some fairly clear guidelines on when legal advice is needed. Here’s what I learned from talking to the experts and scouring the Web.

Consider your legal exposure when choosing a structure for your business. Mark Anderson, an intellectual property attorney at Masur & Associates, says that, “Especially in terms of copyright infringement claims, damages can be very high, and if you’re not insulated by a corporate entity… then, your personal assets are potentially at stake. If somebody sues you for something that you wrote on your website, they’d be suing you personally, then you could lose your house; you could lose your car. But if you’ve got a business set up, that’s separate from you, it’s the business that would be sued, and the most you could lose from that is what you put into the business.”

According to Anderson, many small publishers find that a limited liability company, or LLC, provides the right combination of tax and legal advantages. Because an LLC is a corporation, its assets and liabilities are separate from those of its principals. However, some corporate structures have a disadvantage, because both the corporation and the individuals deriving income from them pay taxes. Owners of LLCs, along with S Corporations, can avoid this double taxation when their revenues are small, but they can change the way they are taxed if they start to make more money. LLCs have other additional advantages – for example, the ownership rules are more flexible.

An ethics policy or code of conduct may help protect you from libel or defamation charges. Ethics codes have their own virtues, and they don’t protect a publisher from legal action by themselves, but they can help to set the tone for an online community and clarify the publishers’ intent.

The debate over codes of conduct has become more intense because of the recent controversy surrounding threatening comments and pictures posted about prominent technology blogger Kathy Sierra. Sierra told readers that safety concerns led her to cancel speaking engagements and hide out in her home, awaiting the results of a police investigation. What followed was a vigorous, ongoing debate including efforts to create a bloggers’ code of conduct. [Full disclosure: I am a contributing editor for BlogHer one of the groups that figures prominently in both the Sierra controversy and the debate over blogging guidelines. BlogHer’s community guidelines inspired a proposed code of conduct proposed by well-known web writer Tim O’Reilly. Both codes pledge that online publishers will ban “unacceptable content” — content that might be libelous, abusive, or that might infringe on a copyright or trademark.

Anderson says it’s “tough to say” how a bloggers’ code of conduct might affect a legal proceeding. “There are certain protections under the law for journalists, and now it’s getting tougher and tougher to define who, exactly is a journalist. Potentially, adhering to one of these codes might be a factor that weighs in favor of somebody being treated as a journalist under certain laws.”

Small publishers doing journalism have to think carefully about the risks they are willing to take, especially since the legal definition of a journalist is subject to debate. Of course, freelancers and small publishers who commit acts of journalism have to understand that courts may not be willing, for example, to extend state shield laws protections to them. It’s also important to understand that federal prosecutors have broad subpoena powers when it comes to forcing the disclosure of information they deem important for a criminal investigation.

Nothing better illustrates the risks small publishers take than the case of videoblogger Josh Wolf, who was released from federal prison in early April after serving 8 months for refusing to turn over video outtakes from a July 2005 demonstration to a grand jury. Wolf claimed that, as a journalist, he was entitled to withhold the information under California’s shield law. However, the court rejected his claim because Wolf was not employed by a news organization at the time that he shot the video.

Be clear about your purpose. It’s because of Wolf and other citizen-journalists that Christine Tatum, president of the Society of Professional Journalists, thinks that the definition of a journalist should be expanded beyond those who are paid to report the news. “We want to define journalists as people who are gathering information with the purposes of distributing it,” Tatum says. “Rather than question for me being, ‘was that person a journalist?’ the question for me is, ‘was that person practicing journalism?'”

That view of journalists was part of the reason SPJ donated $31,000 to Wolf’s legal defense and helped him obtain the services of top-notch legal counsel. But Tatum acknowledges that the law has not embraced that definition, and neither do many bloggers. Noting that many bloggers say they aren’t journalists but want the legal protections afforded to journalists, she said, “I encourage people to really take a long and hard look at what is it you are, really?”

Take advantage of the growing number of educational resources and training opportunities made available by advocacy groups and professional organizations. Small business attorney Nina Kaufman notes that the Electronic Frontiers Foundation has a plethora of free resources, including legal guides for bloggers. The Media Bloggers Association is just one of several organizations that offers training in journalistic practices and legal issues. They have also taken the lead in advocating for press credentials for its members, most notably in the recent trial of Lewis “Scooter” Libby.

The MBA’s success echoes Anderson’s argument that, “the more professionally you run your blog site, the more you act like a traditional journalist, the more you are going to be treated as a real journalist. That would include adhering to a code of ethics.”

Be smart about copyrights. Anderson quips, “For starters, don’t use anything that belongs to any one else.” Seriously, Anderson urges publishers to educate themselves about fair use guidelines, which permit the use of small portions of copyrighted material for comment, criticism, parody or educational purposes. It’s a serious matter: Anderson warns that copyright judgments come with statutory damages that can be as high as $150,000 per violation. For that reason, Anderson urges publishers to think carefully before choosing to defy a request to remove material that someone claims is infringing on a copyright or trademark.

EFF maintains that major copyright holders such as entertainment companies often make abusive use of copyright laws — combating that abuse is one of their major areas of advocacy.

But online publishers are also copyright holders, and sometimes they, too, have to take action to protect themselves. Blogger Elise Bauer warns that there are some people who use RSS feeds to aggregate others’ content without their permission, forming their own revenue-generating website. Bauer urges using the Digital Millennium Copyright Act against them, either by filing a complaint with Google for content scrapers who use its AdSense program, or by complaining directly to the DMCA office itself.

When in doubt, ask a lawyer Anderson said the published guides and training workshops are great for general knowledge, but it’s best to consult an attorney for really specific questions. And EFF spokeswoman Rebecca Jesschke says that their attorneys have found that some media lawyers are willing to consult with small publishers for a reduced fee, assuming that the matter in question isn’t too involved.

Bottom line: choosing to publish online is an enormous responsibility, and it carries risks. But a professional attitude, self-education and a few proactive steps can go a long way.

Consider liability insurance Anderson says media liability insurance can offer “peace of mind” for online publishers. One leading provider, Media/Professional/Insurance, says the right policy offers much more. M/PI is one of two companies specializing in policies tailored for cyberspace-based businesses.

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In addition: The SPJ, EFF and MBA are just a few of the professional organizations and advocacy groups that offer legal advice and support. Others include:

Fair use under fire

How Internet publishers and copyright owners are negotiating the murky waters of fair use rights in our world of hyper-fluid technological boundaries is an increasingly common news topic. Last week, for example, the Electronic Frontier Foundation posted news that the Recording Industry Association of America does not consider it fair use to copy one’s own CDs to an MP3 player. And just this week, a Los Angeles federal judge ruled that Google’s use of thumbnail images is not fair use and infringes on an adult website’s copyrights.

Marjorie Heins, founder and coordinator of the Free Expression Policy Project at the Brennan Center for Justice at NYU’s School of Law, explained that it is “very difficult to predict” how judges will rule in fair use cases, making it important for journalists to educate themselves.

Because fair use principles form a cornerstone of free expression, in 2004 the Brennan Center started researching the health of fair use among people involved in cultural or democratic exchanges of ideas. The result of the research is contained in the recently-released public policy report Will Fair Use Survive? Free Expression in the Age of Copyright Control, written by Heins and Tricia Beckles, a former research associate at the Brennan Center.

As mounds of snow in the New York City streets turned gray and slushy, Heins spoke with Online Journalism Review at length about the report and about the state of fair use as it pertains to online journalists.

OJR: Describe fair use as it relates to news reporting.

Marjorie Heins: News reporting is one of the classic examples of fair use, but like all of the examples, it is very difficult to predict when a particular court might determine that a reporter or an editor has stepped over the line from fair use into copyright infringement. So, journalists are facing some of the same problems as artists and scholars and bloggers — and almost anybody else who wants to discuss, report on or share cultural materials faces — with respect to copyright.

There are similar problems with trademark law, which also has fair use provisions, and the courts have developed a kind of sensitivity to free expression interests so that trademark owners don’t totally control the use that’s made of their images, their phrases, their logos. But that’s also hard to predict.

The main purpose of the research we did — which is summarized in the report Will Fair Use Survive? — was: to determine how well the fair use and free expression principles, that are so important to preventing control and censorship of information and speech, are doing. To what extent people are really able to make use of them? And to what extent are the industry practices such as sending cease and desist letters that contain overly broad assertions of copyright or trademark control interfering with fair use?

OJR: What did you find?

Heins: Let me back up a bit just to give a sense of the methods we used. The first challenge was to figure out how we were going to do our research because it’s very difficult to design a truly random study of, to even identify, people who have received cease and desist letters, who have had questions or concerns or who have self-censored because of fear of being sued.

So we figured out a couple of different methods of research. We created focus groups. We talked to people, writers and filmmakers … just to have general discussions and get a sense of what their attitudes and knowledge was and what experiences they’ve had. We did an online survey.

We analyzed over 300 letters from the Chilling Effects website, both cease and desist letters and what are called take-down letters under the Digital Millennium Copyright Act, which is a law passed by Congress in 1998. The DMCA, among many other things, gives copyright owners the power, pretty much to demand from Internet Service Providers that materials be taken off their servers, just simply on the bald assertion that it violates copyright. So, we analyzed those letters to get a sense of what kind of claims are being made, and, to the extent we could, to figure out what kind of responses, how much material was actually taken down, to what extent people were able to get material back up, to what extent people were intimidated by cease and desist letters or not. And we did some telephone interviews of some people who had posted letters on this Chilling Effects website. …

So, what did we conclude after we had pulled together all this information? There is basic awareness that fair use exists. … We had lots of people who were not particularly engaging in political speech or reporting on public affairs but maybe had a small business out of their home who would get a cease and desist letter from a big company saying, “You’re using our trademark.” …

One of my favorites was the woman who was making ceramic piggy banks, and she called her website Piggy Bank of Sure enough, the Bank of America sent a cease and desist letter. She found her way to a student law clinic, which sent a response to Bank of America saying, “Go away. This is not a trademark infringement.”

All kinds of people are generally aware of fair use and of copyright law, but they, for the most part, have very little idea of what it is. That’s understandable because the fair use statute, the part of the copyright law that delineates fair use, is not very precise. …

We concluded that there really is a need for more straightforward, simple information — and it’s always a challenge to translate law into simple English — and guidance with some basic things, like how to respond to a cease and desist letter.

And another thing that’s very much needed is more pro bono legal help. A half dozen law student clinics around the country are providing very valuable service for lots of people, but it’s hardly enough to meet the need, and most people cannot afford — we’re not just talking about the very poor, we’re talking about most middle-class people — to be involved in a copyright lawsuit or in many cases even to pay a lawyer the $10,000 to $20,000 it might cost to try to head off a lawsuit. So, many people tend to cave, they tend to settle, they tend to be intimidated.

And another thing we determined [has to do] with this Digital Millennium Copyright Act, the provision [Section 512] that allows for these take-down letters. Basically, it’s called a safe harbor provision, and it says to Internet Service Providers [that they] will not be liable as a contributory infringer if [they] respond to one of these take-down letters expeditiously by removing the material that is assertedly a copyright infringement. So, the law doesn’t force [ISPs to do this], but it holds a very powerful club over their head.

The underlying question is, why should an Internet Service Provider, which is basically like your telephone company, ever be liable for what you say over the telephone line? So the law starts from an assumption that’s dubious, but there you have it. So Internet Service Providers, for the most part, are going to respond expeditiously in order to take advantage of the safe harbor and avoid what the law says would be possible contributory infringement liability. So there’s a situation where [the law] gives a very powerful weapon to copyright owners to get material taken down.

There’s another report that came out from USC. Jennifer Urban, at the law school runs the Intellectual Property Clinic, which just got started last year, and a former fellow from the Samuelson Clinic up at Boalt, Laura Quilter, wrote a paper analyzing DMCA take-down letters from the Chilling Effects website as well. And the conclusions are quite similar.

A lot of these letters have flaws, to begin with. They sort of don’t comply with the law. But ISPs tend to respond by taking down the material anyway. [We found that in] lot of the letters that do sort of comply with the formalities of the law — they give all the information required and say it’s in good faith and assert copyright infringement — [but] the claims of infringement are rather thin or questionable, or at least there would be a question for a court as to whether it’s fair use. … There are some numbers in the report which you can look at, but there are certainly many situations in which material is coming down and is not being put back up.

The person who is being targeted [sometimes] never finds out that there is a procedure for writing a counter-notice and getting the material back up, so another conclusion of the report is that it would be very useful to work with ISPs to try to encourage them to give better information and assistance to their subscribers in these situations. Very often they just take the letter at face value and respond by threatening the subscriber that they’re going to take down their whole website unless the material is removed immediately, or they’ll shut down the website without even communicating with the subscriber. …

One example that we saw a lot of on the Chilling Effects site is this group, which calls itself Avatar, and it describes itself as a planetary enlightenment group, sort of like Scientology. … Some of the critics of Avatar, people who’ve been through the process and think it’s a sham, say it’s an offshoot of Scientology. There are discussion groups, where people exchange their experiences and exchange critiques and often post parts or even all of Avatar materials. So Avatar sends these Section 512 take-down letters to Google to basically get these discussions removed from the Internet. … Certainly the primary purpose of these discussions was commentary and critique. And these are persons who are not subscribers and so under Section 512 they probably don’t even get notice that their commentaries are being removed. So here’s a case in which this company is using this DMCA take-down procedure as a method of suppressing criticism, basically.

OJR: What is your reaction to the news that the Recording Industry Association of America may not consider it fair use to copy a CD that you own to your MP3 player?

Heins: There’s been quite a lot of discussion among copyright profs about this statement — especially since the RIAA’s lawyer apparently said the opposite at the Supreme Court argument in the Grokster case. My own view is that copying a CD which you own to an iPod or other device for personal use should be fair use.

OJR: What is your reaction to the news that Google has lost a lawsuit alleging copyright infringement for images found in its Image Search results?

Heins: This decision in the case of Perfect 10 v. Google takes too narrow a view of fair use and conflicts with a court of appeals precedent in Kelly v. Arriba Soft, which held that using thumbnail images on a search engine is fair use. The judge in Perfect 10 v. Google pointed to little differences between the Google and the Arriba search engines, but its analysis is not convincing. Hopefully, this will be reversed on appeal.

OJR: What do online news publishers need to be especially aware of? Especially with the problems of unpredictability in fair use judgments as it is, and then in the rapidly changing world of the Internet — are there particular pitfalls or traps awaiting online news publishers that people should be aware of?

Heins: I think the problem is similar in journalism, both online and off, to other areas where free expression guarantees are needed. And in the context of copyright law, fair use is one of the main free expression guarantees. And in the past, news reporting has been considered a very strong case for fair use because of its obvious importance in disseminating information and the timeliness issue, the fact that even if you could get permission and could afford to pay whatever the license fee was, by the time you did so, it wouldn’t be news anymore. … I think it was the Rodney King tape which became a valuable property but was also highly newsworthy — could you use it, how much of it could you use? There are obvious copyright pitfalls with the use of any copyrighted material, even a small snippet of it.

You know there’s a lot of reproduction of articles on the Web, websites that simply take articles from somewhere else and reproduce them without permission under the theory that this is part of news reporting and commentary and is part of the exchange of ideas and it should be considered fair use. … It’s an unclear area of the law. There are some court decisions that suggest that an article, an image, a photograph, something that is taken complete and reproduced without any transformative use, … just taken and reproduced complete, there is some case law that suggests that is almost always infringement. But the Supreme Court has not weighed in on that, so these are lower court decisions. And there are important arguments why disseminating — my being able to send to you a whole article from the New York Times because I think you’d be interested and it’s the best way of sharing the information or the opinion that’s in the article — there’s a very strong argument that that kind of exchange serves one of the important purposes underlying fair use.

So, both from the point of view of journalists being able to quote freely and in a timely fashion and journalistic commentators being able to quote and critique in ways that the copyright owner might not want to permit, and in terms of the rest of us who might not be considered journalists — which of course in the online world becomes an increasingly difficult distinction — the ability of the rest of us to be able to share and exchange complete articles … ought to be fair use. …

One of the big problems that arises — and people have looked at this and argued about this for the last 30 years since the 1976 Copyright Act incorporated fair use officially; it had existed before in the case law — is this argument that people really need something more specific. [In this argument, people say]: the fair use factors are so vague, it’s so unpredictable that it’s naturally going to have a chilling effect, and added to that are the very stiff penalties of copyright law, the fact that if you lose, you have to pay the other side’s attorney’s fees, which can be literally hundreds and hundreds of thousands of dollars. All that combines to chill the exercise of fair use and people need something more specific that they can rely on. It’s a very powerful argument.

Or, alternatively, people say, “Fair use just isn’t working because of all these factors that produce such a chilling effect, so let’s just forget about it and just have mandatory licensing.” [This is] like we have if a radio station wants to play a song, they don’t have to ask permission, they just have to pay a set fee. Or, “Let’s have everybody join Creative Commons.”

Those are all understandable arguments, and I’m all for Creative Commons, and in some circumstances, mandatory licensing is very valuable too, but we can’t give up on fair use. It’s critical because it’s precisely the fact that it doesn’t depend on permission, that the copyright owner doesn’t have total control of the way in which his or her words or images are used, commented upon, reproduced. Once you send it out into the world you don’t have total control. That’s what expression and culture and communication is about, so we need to figure out ways to make fair use easier for people to take advantage of and without reducing it to a specific counting of lines, counting of words, counting of pixels, which reduces the flexibility of it and the ability of the doctrine to respond to new needs. …

OJR: What should online journalists know about linking to other people’s websites?

Heins: I don’t want to be in the position of offering legal advice to the world in an interview. Any specific situation ought to be researched. But I am not aware of any legal precedent that says simply linking raises an issue of copyright. You’re not reproducing; I don’t think you’re really distributing. The copyright law lists the rights that are within the copyright bundle: publishing, reproduction, distribution, performance, making derivative works. I don’t see a link as any of that.

OJR: What are the best ways for online journalists to educate themselves?

Heins: They should read the report. They should read the Chilling Effects website — the Electronic Frontier Foundation has good information. They should be aware that there are a lot of different viewpoints about copyright and fair use. …

You have to be careful, or at least thoughtful, about where you get your information because there are a lot of different viewpoints out there on fair use. If you go to the Copyright Society of the U.S.A. website you’ll get warnings that basically say, if you use anything but a very short snippet and if you’re not absolutely sure, don’t take a chance on fair use. Well, that’s the opinion of one group, but you get a very different view if you go to the Electronic Frontier Foundation.

Now one thing that anybody who has looked into this area much … realizes is that what is fair use is basically what a court is going to consider fair under all the circumstances, including general practices in a particular environment. So … statements of best practices are important because they can influence the law. To the extent that fair use is not used, it will shrink, and to the extent that it is used and asserted, it will remain healthy and even grow. And in the area of journalism, it’s especially important that that happen. There are lots of examples in the report of online commentators, journalists of various kinds, [who face] attempts by those who are the targets of their criticism or commentary to shut them up.

One example is this blogger Robert Cox who was angry at the New York Times, and especially Maureen Dowd, because they didn’t have a requirement that columnists publish corrections, so he created a parody website with the New York Times’ correction page logo and put up his own correction. The Times sent a take-down letter to his ISP and a cease and desist letter to him, and he started publicizing that on his website and soon got a pro bono lawyer to write a letter to the New York Times saying, “You’re wrong, this is fair use.” And so in that situation the blogger prevailed. But I think it’s a fair inference that the Times just didn’t like the criticism.