In my unprofessional legal view, it seems that what the copyright clique is really hoping to gain from this case is a precedent for making website owners responsible for ensuring that content uploaded to their site is copyright kosher.
Currently, the copyright holder has to crawl the internet to make sure their copyright isn't being violated somewhere and if so - file a takedown order. This is very whack-a-mole and when it comes to cyberlockers - intractable, since many external links can resolve to the same file. Locker admins have to only remove the offending link to comply with a takedown request, as it is impossible (without knowing the internal code structure) to prove whether two links resolve to the same file or different copies thereof. The linkers can simply check periodically to make sure their links are current and update as necessary, which can be easily automated.
The copyright holders cannot automate the discovery process (not without huge resources, anyway), while the copyright infringing parties can easily automate their side. This inherent unbalance creates a difficult policing problem that copyright holders (naturally) don't want to be responsible for.
It will be interesting to see how this plays out. If UGC site admins become legally compelled to monitor what they are hosting, the overhead will kill most ad-only revenue models. If not, copyright holders will have to hire some sort of copyright police (does it already exist? if not --> startup_idea_masterlist.add() ).
Opinion question: what is the "ok/not ok" line for encouraging your users to use your (online) service for illegal activities (esp. copyright infringement)? Paying them to do it seems to be clearly "over the line", as far as US gov. is concerned. What about publicly announcing that you are not going to police their data?
It could potentially kill all UGC. There is no foolproof way to determine the copyright status of a given piece of content, unless it happens to be a piece that you can demonstrate was published long enough ago that copyright must have expired.
E.g. if website owners are made liable for the copyright of uploaded content, a successful (illegal) attack on any site hosting copyrighted content would be for two parties secretly cooperating (secretly, because conspiring like this would almost certainly in itself be illegal):
One party operates an offline (to prevent it from showing up in Google searches or otherwise being easy for the copyright owners to identify as possibly infringing) newsletter that publishes assorted essays that might for example include responses suitable for the forum of a specific UGC site. They might be written specifically for that purpose...
The other party uploads a copy of said content to the site.
The first party sues the website.
You could do this without someone cooperating with you to write custom-written content, but it'd be easier to spot that something was off, and since you wouldn't hold the copyright on the content you wouldn't have standing to sue so you'd be dependent on making third parties pissed off. Since you'd be infringing on copyright in the first place, it might be easier to just use an accomplice.
All it takes is someone who dislikes you strongly enough, and you're potentially out of business if you depend on UGC in this kind of scenario...
Currently, the copyright holder has to crawl the internet to make sure their copyright isn't being violated somewhere and if so - file a takedown order. This is very whack-a-mole and when it comes to cyberlockers - intractable, since many external links can resolve to the same file. Locker admins have to only remove the offending link to comply with a takedown request, as it is impossible (without knowing the internal code structure) to prove whether two links resolve to the same file or different copies thereof. The linkers can simply check periodically to make sure their links are current and update as necessary, which can be easily automated.
The copyright holders cannot automate the discovery process (not without huge resources, anyway), while the copyright infringing parties can easily automate their side. This inherent unbalance creates a difficult policing problem that copyright holders (naturally) don't want to be responsible for.
It will be interesting to see how this plays out. If UGC site admins become legally compelled to monitor what they are hosting, the overhead will kill most ad-only revenue models. If not, copyright holders will have to hire some sort of copyright police (does it already exist? if not --> startup_idea_masterlist.add() ).
Opinion question: what is the "ok/not ok" line for encouraging your users to use your (online) service for illegal activities (esp. copyright infringement)? Paying them to do it seems to be clearly "over the line", as far as US gov. is concerned. What about publicly announcing that you are not going to police their data?