This week’s musings on tech contracts…
A lot of companies add their DMCA* and privacy policies to their contracts. They link those policies and add language incorporating them by reference. That’s a mistake. Your policies are not contracts, and you gain nothing by incorporating them. In fact, you pay a price.
Privacy Policy
A privacy policy explains how you use personal information. Applicable privacy laws almost certainly require that you post one. And you may face legal trouble if you don’t comply with your posted policy. But privacy laws generally don’t require that you incorporate your privacy policy into a contract. And again, a privacy policy certainly isn’t a contract itself. It’s a notice to the public.
So unless you’re subject to an unusual law (worth checking), you gain nothing by incorporating your privacy policy into any contract.
DMCA/Copyright Policy
What is a DMCA policy?
Digital Millennium Copyright Act policies are for online service providers (OSPs). The DMCA defines OSP as, “a provider of online services or network access, or the operator of facilities therefor.” If that’s not you, you don’t need a DMCA policy.
The DMCA provides a safe harbor, protecting OSPs against copyright liability related to their users’ infringement. To take advantage of the safe harbor, an OSP has to follow certain procedures when it gets a copyright infringement notice about one of its users. A DMCA policy tells the public about those procedures.
Use of the DMCA
You don’t actually need a DMCA policy to take advantage of the safe harbor. (You do need to publish contact information for someone assigned to receive copyright notices – and there are other procedures you should look up.) But you might find it easier to take advantage of the DMCA if you do post a policy.
Either way, a DMCA policy, once again, isn’t a contract. And it would make little sense to put one in a contract. The policy serves as an announcement to the public, not to your customers. It’s directed to any third party who might claim copyright infringement by one of your customers or users. So you should post it somewhere the public will see it.
That’s probably not your customer contract. It’s not even your website terms of service, since a lot of visitors won’t think to look there, and DMCA provisions might be buried anyway. You just need a simple online notice: “Click here for our copyright policy.”
The Consequences
If you don’t follow your privacy policy, you could face liability to consumers or government agencies. If you don’t follow your DMCA policy, you could lose safe harbor protection. Putting those policies in your contract, or not, won’t change those consequences. It might, however, make your troubles worse if you do violate one of the policies (which could happen by accident). Now you’re liable for breach of contract, on top of all your other problems.
Plus, adding those policies to your contract limits your freedom to amend them.
Referenced, Not Incorporated
Usually, your contract doesn’t need to say anything about your DMCA or privacy policy. But sometimes it helps to make sure each customer acknowledges your policies. You still don’t need to incorporate them. You could add language saying: “Customer is on notice of SillyCo’s DMCA Policy and Privacy Policy, posted at ____, and Customer recognizes that such policies are not part of this Agreement and that this Agreement does not restrict Provider’s right to revise them.” That should head off any customer claims related to those policies. (“We never agreed to that!”)
BTW, in case you were wondering, it usually does make sense to incorporate an acceptable use policy (AUP) into user/customer contracts. The AUP is user/customer-focused, and it really does involve contract terms.
You can learn more about contract terms through our trainings – and about online polices through The Tech Contracts Handbook (3rd ed.), Appendix 4.
* Digital Millennium Copyright Act: a statue on copyright infringement.
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