Online service providers (OSPs) and Internet service providers (ISPs) provide critical infrastructure support to the Internet, allowing millions of people to access online content and electronically communicate and interact with each other. The potential for computer users to infringe intellectual property rights using the Internet, specifically copyrights, could expose "intermediary" service providers to claims of secondary liability, such as contributory and vicarious copyright infringement. Concerned about this significant legal vulnerability of service providers, Congress passed the "Online Copyright Infringement Liability Limitation Act," Title II of the Digital Millennium Copyright Act (DMCA) of 1998, in an effort to adapt copyright law to an evolving digital environment. The act added a new Section 512 to the Copyright Act (Title 17 of the U.S. Code), which provides limitations on the liability of OSPs and ISPs against claims of copyright infringement arising from their users' activities on their digital networks. The act's legislative history indicates that Congress wanted to provide service providers with "more certainty ... in order to attract the substantial investments necessary to continue the expansion and upgrading of the Internet." At the same time, Congress desired to preserve "strong incentives for service providers and copyright owners to cooperate to detect and deal with copyright infringements that take place in the digital networked environment." The DMCA therefore includes several conditions that the service provider must satisfy in order to qualify for § 512 "safe harbor" protection from most infringement liability, and requires that the service providers' activities be encompassed within one of four specified categories of conduct. The safe harbors correspond to the following four functional operations that might otherwise constitute copyright infringement: (1) transitory digital network communications, (2) system caching, (3) storage of information on systems or networks at direction of users, and (4) information location tools. One federal district court assessed the "dual purpose and balance" of § 512 in the following manner: Congress created tradeoffs within the DMCA: service providers would receive liability protections in exchange for assisting copyright owners in identifying and dealing with infringers who misuse the service providers' systems. At the same time, copyright owners would forgo pursuing service providers for the copyright infringement of their users, in exchange for assistance in identifying and acting against those infringers. A public interest group has praised the importance of the DMCA's safe harbor provisions to the development of the Internet: Without these protections, the risk of potential copyright liability would prevent many online intermediaries from providing services such as hosting and transmitting user-generated content. Thus the safe harbors have been essential to the growth of the Internet as an engine for innovation and free expression. Although all four safe harbors will be described at the beginning of this report, the primary focus for the rest of the report will be on the third category that encompasses the function of many popular Internet businesses today: "storage of information on systems or networks at direction of users." This safe harbor is essential to the business model of most ISPs and OSPs that permit user generated content (UGC) to be stored or shared using their networks. Copyright is a federal grant of legal protection available to the creator or owner of certain original works of creative expression, including books, movies, photography, art, and music. A copyright holder possesses several exclusive legal entitlements under the Copyright Act, which together provide the holder with the right to determine whether and under what circumstances the protected work may be used by third parties. The grant of copyright permits the copyright holder to authorize or refuse to authorize others to exercise the following exclusive rights: the reproduction of the copyrighted work; the preparation of derivative works based on the copyrighted work; the distribution of copies of the copyrighted work; the public performance of the copyrighted work; and the public display of the copyrighted work, including the individual images of a motion picture. Therefore, a party desiring to reproduce, adapt, distribute, publicly display, or publicly perform a copyrighted work must either (1) obtain the permission of the copyright holder (usually granted in the form of a license agreement that establishes conditions of use and an amount of monetary compensation known as a royalty fee); (2) comply with the terms of compulsory licenses established by law; or (3) assert that such use falls within the scope of certain statutory limitations on the exclusive rights such as the "fair use" doctrine—but the validity of such claim may be subject to the judgment of a federal court. Each exclusive right of a copyright holder is potentially subject to licensing; for example, a third party wishing to reproduce a copyrighted work as well as publicly perform the work must negotiate separate licenses from the copyright holder to engage in the different activities. Unauthorized use of a copyrighted work by a third party in a manner that implicates one of the copyright holder's exclusive rights constitutes infringement. The copyright holder may file a lawsuit in federal court against an alleged infringer for a violation of any of the exclusive rights conferred by copyright. The Copyright Act provides several civil remedies to the copyright holder that is harmed by infringement, including the possibility of obtaining injunctive relief, actual damages suffered by the copyright owner due to the infringement, statutory damages, and costs and attorney fees. The rights conferred by a copyright do not last forever. Copyrights are limited in the number of years a copyright holder may exercise his/her exclusive rights. In general, an author of a creative work may enjoy copyright protection for the work for a term lasting the entirety of his/her life plus 70 additional years. At the expiration of a term, the copyrighted work becomes part of the public domain. A work in the public domain is available for anyone to use without the need to seek prior permission of the creator of the work. Someone who directly infringes a copyright is not the only party potentially liable for infringement; one who significantly "aids and abets" another party's commission of a direct infringement may also be sued by the rights holder for indirect , or secondary, infringement. The concept of secondary infringement has its roots in tort law and the notion that one should be held accountable for directly contributing to another's infringement. The federal courts have recognized secondary infringement liability in copyright and trademark law, while the Patent Act contains provisions that expressly authorize it. Because online service providers often solely provide the means for their users to upload and distribute content, rather than providing the content themselves, service providers are more likely to be charged with secondary infringement liability rather than sued for direct infringement. In copyright law, there are three common theories of indirect infringement liability: contributory, vicarious, and inducement liability. For contributory copyright infringement liability to exist, a court must find that the secondary infringer "with knowledge of the infringing activity, induces, causes or materially contributes to the infringing conduct of another." "Vicarious" infringement liability in copyright law is possible where a defendant "has the right and ability to supervise the infringing activity and also has a direct financial interest in such activities." In 2005, the U.S. Supreme Court expressly adopted a relatively new theory of secondary infringement in copyright cases referred to as "inducement liability." In Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd. , the Court articulated the standard for inducement liability: [O]ne who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties. ... [M]ere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability. ... The inducement rule, instead, premises liability on purposeful, culpable expression and conduct... Copyright protection extends to electronic documents, videos, photos, music, and other copyrightable subject matter that may be accessible via the Internet. Uploading and downloading copyrighted works without the authorization of the copyright holders is generally a violation of the copyright holders' exclusive rights to control, respectively, the distribution and reproduction of their works. However, the fair use doctrine may apply to materials that are posted on websites—that is, someone accused of online copyright infringement may be able to assert fair use to escape liability; as explained above, however, a federal court would need to determine whether the use of such material on a website qualifies as a fair use. Several types of Internet technologies enable the storage and sharing of "user generated content" (UGC), which is digital content (such as documents, photographs, music, and video) that is supplied by Internet end-users. Many Internet businesses rely on their users to upload and share UGC to further interest in and usage of their websites or software. In most cases, the UGC is protected by copyright (whether owned by the user or a third party), although online posting or sharing of the material may be authorized by the copyright holder (for promotional purposes, for example), the copyright holder may not object to the posting, or the particular unauthorized activity could nevertheless qualify for a liability defense such as "fair use." A commonly used UGC technology is the "cyberlocker" or "file hosting service," which provides online storage in the Internet "cloud" for users' digital files. After users have uploaded their files to the online storage location, they may access them from mobile devices or other computers as well as share them publicly or with designated friends and coworkers. Dropbox, Google Drive, YouTube, Facebook, and Instagram are all examples of such cyberlocker services. Although these services all require their users to agree to "Terms of Use" or "Terms of Service" that specifically prohibit the uploading of copyrighted content which they do not have the legal right to post, users often violate these terms by engaging in the unauthorized uploading and sharing of copyrighted music files, television shows, and movies. Limitations on liability, often called "safe harbors," shelter service providers from copyright infringement suits. The DMCA's safe harbor provisions, codified at 17 U.S.C.