United States Court of Appeals
for the Ninth Circuit
Ellison v. Robertson et al.
Harlan Ellison, a natural person,
plaintiff and appellant,
Stephen Robertson, an individual;
RemarQ Communities, Inc., a corporation;
Critical Path, Inc., a corporation;
and Does 1 Through 10,defendants,
America Online, Inc., defendant and appellee.
On appeal from the United States District Court
for the Central District of California, Western Division
U.S.D.C. No. 00-04321 FMC (RCx)
Honorable Florence-Marie Cooper, Judge
Reply Brief of Appellant
TABLE OF CONTENTS
TABLE OF AUTHORITIES
ARGUMENT IN REPLY
I. THIS CASE MUST BE REMANDED FOR TRIAL ON APPELLANT'S CLAIM OF CONTRIBUTORY INFRINGEMENT BECAUSE AOL IS NOT ELIGIBLE FOR THE SAFE HARBOR PROTECTION OF SECTION 512(A) OF THE DMCA.
A. The Plain Text of Section 512(a) Refutes AOL's Position.
1. AOL's Interpretation Ignores the Plain Language of Section 512(a) Because AOL's Storage of USENET Messages Is Not "Intermediate and Transient" (Section 512(a)(4)).
2. AOL's Interpretation Ignores the Plain Language of Section 512(a) Because AOL's Selection of USENET Newsgroups is Selection of Content (Section 512(a)(2)).
B. AOL Distorts the Legislative History.
II. AOL IS NOT ENTITLED TO A LIMITATION ON LIABILITY UNDER SECTION 512(c).
III. AOL DID NOT COMPLY WITH THE THRESHOLD REQUIREMENTS OF SECTION 512(i).
IV. AOL IS LIABLE FOR VICARIOUS COPYRIGHT INFRINGEMENT.
A. AOL Had the Right and Ability to Supervise the Infringing Activity on its Service.
B. AOL Had a Direct Financial Interest in the Infringing Activity.
TABLE OF AUTHORITIES
A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004 (9th Cir. 2001) ("Napster II")
Adobe Sys. Inc. v. Canus Prods., Inc., 173 F. Supp. 2d 1044 (C.D. Cal. 2001)
ALS-Scan, Inc., v. RemarQ Communities, Inc., 239 F.3d 619 (4th Cir. 2001)
Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986)
Ellison v. Robertson et al., 189 F. Supp. 2d 1051 (C.D. Cal. 2002)
Fonovisa, Inc., v. Cherry Auction, Inc., 76 F.3d 259 (9th Cir. 1996)
Gustafson v. Alloyed Co., Inc., 512 U.S. 561 (1995)
Hendrickson v. eBay, 165 F. Supp. 2d 1082 (C.D. Cal. 2001)
Playboy Enters., Inc. v. Webbworld, Inc., 986 F. Supp. 1171 (N.D. Tex. 1997)
Religious Technology Center v. Netcom On-Line Communication Servs., Inc., 907 F. Supp.
1361 (N.D. Cal. 1995) ("Netcom")
Shapiro, Bernstein & Co. v. H.L. Green Co., 316 F.2d 304 (2d Cir. 1963)
Steidl v. Gramley, 151 F.3d 739 (7th Cir. 1998)
United States v. Ron Pair Enters., 489 U.S. 235 (1989)
17 U.S.C. § 512(a)
17 U.S.C. § 512(c)
17 U.S.C. § 512(i)
17 U.S.C. § 512(k)
Fed. R. Civ. P. 5(b)
Fed. R. Civ. P. 56(a)
House Commerce Committee, H.R. Rep. 105-551 (1998) (two vols.)
Senate Judiciary Committee, S. Rep. 105-190 (1998)
Digital Millennium Copyright Act, H.R. Rep. No. 105-796 (1998)
AOL Anywhere Help, http://www.aol.com/nethelp (Oct. 29, 2002)
2A Norman J. Singer, Sutherland Statutes and Statutory Construction (6th ed. 2000)
Random House Unabridged Dictionary (2d ed. 1993)
What Are Usenet Newsgroups?, http://www.aol.com/nethelp/news/newswhatis.html (Oct. 29, 2002)
Willard V. Quine, Philosophy of Logic (1970)
ARGUMENT IN REPLY
In its brief, AOL fails totally to address the central issue in this case the
plain meaning of the text of 17 U.S.C. § 512(a). Section 512(a) of the DMCA
provides a safe harbor for ISPs such as AOL only where the ISP's sole role is
transmitting information from place to place, with only "intermediate" and
"transient" storage of the information as it passes from origin to destination.
AOL's storage of USENET postings for fourteen days to make them available for
download by its millions of subscribers can in no way be called either
"intermediate" or "transient." If AOL's reading based solely on a scrap of
legislative history discussing a draft of the DMCA that Congress expressly
rejected were correct, ISPs such as AOL could shelter massive infringement of
copyrighted material on their USENET servers, and they would be under no
obligation ever to stop such material from being disseminated to the world
without the author's permission. Congress did not intend that result.
Nor should the Court take seriously AOL's claim that the sky will fall if the
District Court is reversed. As discussed below and in Ellison's opening brief,
AOL could have claimed the protection under the safe harbor of § 512(c), if only
it had complied with the straightforward requirements of the DMCA, including
making certain that it had provided the Copyright Office with the correct contact
information for reporting instances of infringement and removing infringing
material from its USENET servers, as AOL eventually did in this case. Because
AOL failed to comply with the eligibility requirements for § 512(c)'s safe harbor
and failed to comply with § 512(i)'s requirement that it have "reasonably
implemented" a policy against repeat infringers, AOL on these facts cannot
claim the protection of any of the DMCA's safe harbors.
Finally, the District Court fundamentally misapplied this Court's precedent
on vicarious infringement, giving license to AOL to make infringing material
available to its subscribers through its USENET service even where it directly
benefits from that service and has the ability to control the material that is made
available to its subscribers, including by removing infringing postings.
For all of these reasons, the District Court's decision must be reversed,
and this case should be remanded for trial on Ellison's claims for vicarious and
I. THIS CASE MUST BE REMANDED FOR TRIAL ON APPELLANT'S CLAIM OF CONTRIBUTORY INFRINGEMENT BECAUSE AOL IS NOT ELIGIBLE FOR THE SAFE HARBOR PROTECTION OF SECTION 512(a) OF THE DMCA.
The District Court correctly held there remained a genuine issue of material fact as to whether AOL committed contributory infringement. Ellison v. Robertson, 189 F.Supp. 2d 1051, 1059 (C.D. Cal. 2002). The District Court did not hold a trial on that issue only because it believed that AOL fell within the safe harbor of § 512(a). Because that ruling is wrong, this case must be remanded for a trial on AOL's contributory infringement, regardless of whether this court reverses the District Court's ruling on vicarious infringement.
The District Court made a fundamental error in reading § 512(a) to apply
to AOL's conduct in this case, and AOL has utterly failed to rescue that reading. AOL begins by wholly ignoring the text of the statute and ends by distorting the legislative history.
AOL's primary argument is not a legal argument at all. It is a policy
argument that the sky will fall on ISPs if the storage of USENET postings
available for users to download is not eligible for the § 512(a) safe harbor. That
is simply untrue. As the Fourth Circuit found and AOL's own brief concedes,
USENET postings are material stored by an ISP and, as such, the ISP may qualify
for the safe harbor under § 512(c) if it complies with that subsection. AOL's
position is an example of a false dilemma, a classic logical fallacy. But contrary to
AOL's assertions, the alternative to classifying USENET postings under § 512(a)
is not the absence of any DMCA limitation at all, but rather evaluation under the
proper DMCA limitation § 512(c). See, e.g., Willard V. Quine, Philosophy of Logic (1970) at 83-85 (describing fallacy of the false dilemma). ISPs are thus protected
from liability so long as they take the basic steps that AOL failed to take in this
case, such as notifying the Copyright Office of a functioning e-mail address to
receive complaints of infringement and taking down infringing material upon
In contrast, if AOL's reading prevails, copyright owners will have no ability
to stop pervasive infringement of their copyrights. Under AOL's view, it has no
obligation at all to remove infringing material including whole works such as
Ellison's in this case that it knows is being maintained on its servers and being
copied and downloaded by millions of subscribers. That result cannot be squared
with the statute's text or with Congress' stated goals in enacting the DMCA.
A. The Plain Text of Section 512(a) Refutes AOL's Position.
AOL never comes to grips with the statutory text, which forecloses its
interpretation. Indeed, AOL never bothers to parse the statute. Instead, AOL's
interpretation of § 512(a) is guided by its apparent belief that a fragment of the
legislative history can overrule the plain meaning of the statute.
But that gets traditional principles of statutory construction completely
backwards. See United States v. Ron Pair Enters., 489 U.S. 235, 241 (1989) ("The
task of resolving the dispute over the meaning of [a statute] begins where all such
inquiries must begin: with the language of the statute itself.").[note 1] Regardless of the
legislative history, courts must assume
that the plain and ordinary meaning of the statute was intended by
the legislature.… Courts are not free to read unwarranted meanings
into an unambiguous statute even to support a supposedly desirable
policy not effectuated by the act as written.
2A Norman J. Singer, Sutherland Statutes and Statutory Construction § 46.01 (6th ed.
2000) (hereinafter Sutherland). All sections of a statute must be read together to
create a "harmonious whole," not as isolated words and clauses out of context.
Id. at § 46.05; see also Gustafson v. Alloyed Co., Inc., 512 U.S. 561, 568 (1995) (courts
"construe statutes, not isolated provisions").
AOL's position especially its claim that USENET communications are
transitory and that any "temporary" storage of infringing material falls under §
512(a) is not supported by either the text of the statute or the only appellate
opinion to date that applies the DMCA's provisions to USENET services, ALS-Scan v. RemarQ Communities, Inc., 239 F.3d 619 (4th Cir. 2001).[note 2]
1. AOL's Interpretation Ignores the Plain Language of
Section 512(a) Because AOL's Storage of USENET Messages Is Not "Intermediate and Transient" (Section 512(a)(4)).
Subsection (a) concerns "transitory digital network communications" and
provides a safe harbor only for "transmitting, routing, or providing connections
for, material through a system or network controlled or operated by or for the
service provider, or by reason of the intermediate and transient storage of that
material in the course of such transmitting, routing, or providing connections…"
17 U.S.C. § 512(a). [note 3] Contrary to AOL's argument, the terms "intermediate" and
"transient" are not synonyms for "temporary." Thus, the fact that AOL stored
the material for "only" fourteen days on its servers does not place AOL's conduct
within § 512(a).
"Intermediate" primarily means "between two points, stages, things,
persons, etc.," Random House Unabridged Dictionary (2d ed. 1993) at 995, while
"transient" primarily means "not lasting, enduring, or permanent," id. at 2010.
"Transient and intermediate" storage thus describes "a communication stage
between the origin and destination of a message that is not preserved." To qualify
under § 512(a), the storage must be both "intermediate" and "transient" and it
must be part of the process of "transmitting, routing, or providing connections"
- i.e., the storage must be part of the process of transmitting the information. But
information stored for fourteen days on AOL's servers and accessible by any of
its millions of subscribers simply does not qualify. Such storage is neither
intermediate nor transient. Rec. 1:46-47 (describing storage of USENET
messages on servers separate from the peering process); Rec. 1:29 ¶ 23 (admitting
that AOL retains binary newsgroup messages for fourteen days).
This reading is confirmed by § 512(a)(4), which provides "no copy of the
material made by the service provider in the course of such intermediate and
transient storage is maintained on the system or network in such a manner
ordinarily accessible to anyone other than the anticipated recipients, and no such
copy is maintained on the system or network in a manner ordinarily accessible to
such anticipated recipients for a longer period of time than is reasonably necessary
for the transmission, routing, or provision of connections." 17 U.S.C. § 512(a)(4).
Material stored on USENET servers for all subscribers to access is plainly
"maintained… in a manner ordinarily accessible" to people other than its
anticipated recipients. This is the whole point of the USENET: postings are
made available to the public at large. USENET servers, including AOL's, maintain
postings longer than required for transmission and routing of the information,
precisely so that millions of subscribers may be able to access them. [note 4]
AOL does not respond to the clear text of the statute. Indeed, AOL does
not even seek to explain what the words "intermediate" and "transient" mean.
Rather, AOL obfuscates the issue by ignoring storage on its USENET servers,
discussing instead the process of transmitting postings from its USENET servers
to other such servers. But regardless of its transmission of USENET postings
between servers in the peering process, AOL also stores the material for two
weeks, allowing anyone to view and download material, if they so desire. Ellison's
works were stored on the server aspect of AOL's USENET system for at least
two weeks, allowing all AOL subscribers to access them without Ellison's
authorization. 189 F. Supp. 2d at 1054; Rec. 1:46-47, 52, 55.
Ultimately, AOL has no argument about the text of § 512(a) because its
conduct here storing information for the benefit of all of its users potentially
qualifies it for the safe harbor in subsection (c) (see infra), but totally excludes it
from the safe harbor in subsection (a).
2. AOL's Interpretation Ignores the Plain Language of
Section 512(a) Because AOL's Selection of USENET Newsgroups is Selection of Content (Section 512(a)(2)).
AOL argues that it does not select content because, while it does select
which USENET newsgroups to store and make available, it does not choose the
postings within each newsgroup. AOL Br. 54-56. That argument which
depends on reading the term "material" to be limited to individual postings -
cannot be squared with the statute. AOL further argues that it selected USENET
newsgroups based upon strictly technical factors, not editorial considerations.
That argument cannot be squared with the facts.
The term "material" in § 512(a) is not limited or qualified in any way and
certainly not in the way that AOL suggests. Section 512(a) nowhere suggests that
the selection of groups of postings what AOL does when it selects newsgroups
is somehow different from the selection of individual postings within a group
that is defined by subject matter. An ISP such as AOL clearly makes a selection
when it chooses what newsgroups to make available to its customers. Accord,
Senate Judiciary Committee, Digital Millennium Copyright Act of 1998, S. Rep. No.
105-190 (1998) at 42 (comparing editorial function to a radio station). Unlike an
electronic mail message, which can be sent from literally any source on any
subject to an ISP's customers, an ISP must affirmatively choose to carry a
newsgroup to enable its subscribers to receive that category of information. Rec.
1:51-55. AOL's control over the USENET newsgroups it provides its subscribers
is similar to the control that an ISP exercises over the web sites it hosts. The ISP
controls what sites it hosts, but does not control the specific content within each
of those sites. The DMCA is crystal clear that hosting a web site does not qualify
for the safe harbor under § 512(a) such activities are eligible only for protection
under § 512(c). Storing USENET newsgroups is no different.
When deciding to carry specific news groups, AOL's employees considered
both technical and content reasons. AOL's employee responsible for adding the
individual news groups testified that she "accept[s] requests from AOL
members," Rec. 2:98, implying that she does not implement every request.
Indeed, AOL has now decided not to carry the alt.binaries.e-book newsgroup.
Contrary to AOL's claims, neither Ellison nor supporting amici demand
that AOL monitor its newsgroups for infringing material on a daily basis, or take
any action absent knowledge of facts and circumstances that would lead one to
conclude that infringement is occurring. When, however, an ISP has total control
over whether its millions of subscribers are able to access particular newsgroups
and it is made aware that infringement is occurring, it must remove the material
in order to retain the protections of the DMCA's safe harbor (under §512(c)).
As AOL's belated removal of the newsgroup demonstrates, this is not at all
B. AOL Distorts the Legislative History.
Rather than attempt to explain how its interpretation can be squared with
the statutory text, AOL forsakes the text entirely and relies exclusively on a
fragment of legislative history specifically its claim that § 512(a) was intended
to codify the result in Religious Technology Center v. Netcom On-Line Communication
Servs., Inc., 907 F. Supp. 1361, 1370 (N.D. Cal. 1995) ("Netcom").
That is flatly wrong. AOL distorts the legislative history by relying on a
fragment from an early draft of the DMCA. [note 5] Both the House and Senate, in later
reports concerning a version of the statute much closer to that actually enacted,
explicitly denied an intent to codify any decision, much less the Netcom decision.
S. Rep. 105-190 (1998) at 19 (expressly denying intent to codify any decision);
H.R. Rep. No. 105-551 (II) (1998) at 50-51. The Conference Committee explicitly
distinguished the DMCA from "existing law." H.R. Rep. No. 105-796 (1998) at
73. If anything, the fact that Congress deleted any reference to Netcom after
rejecting the initial draft of the statute confirms that Congress did not intend to
codify that case.
Congress's express rejection of any attempt to codify Netcom coincides with
major changes in the structure and purpose of the DMCA from its early drafts.
The earlier version sought to legislate changes to the law of direct and vicarious
infringement, of which Netcom was one recent articulation. Congress ultimately
abandoned that approach and rewrote the structure of the statute. While some
words remained the same, the drafts of the DMCA went from defining a single,
broad category of conduct that was excluded from copyright infringement to
defining several different functions, each of which was eligible for limitations on
liability so long as the service provider complied with all relevant requirements.
In particular, in the final bill, Congress created a separate safe harbor subsection
(c) that covers the storage of material exactly what AOL did here where the
service provider removes infringing material when it has reason to know that
infringing activity is occurring. It is the statute that Congress passed that this
Court must interpret, not the draft discussed at length in AOL's brief. [note 6]
In staring myopically at a single fragment of early legislative history, AOL
grossly distorts the message of the complete legislative history. S. Rep. 105-190
(1998) at 42 (§ 512(a) is limited to conduit-only functions). The complete
legislative history draws a clear line between merely transmitting material, which
falls within § 512(a), and storing material on a server for general access, which
does not. As the House Report explains, to fall within § 512(a), information may
be stored only "en route to its destination." H.R. Rep. No. 105-551(II) (1998),
at 51. AOL's reliance on a single fragment of legislative history that might
support its position is unavailing in the face of the complete legislative history and
the text of the statute.
Denying application of § 512(a) to the storage of USENET postings does
not eliminate protection under the DMCA. As the Fourth Circuit stated in ALS-Scan, § 512(c) provides another avenue for an ISP to avail itself of the DMCA's
limitations on liability. If AOL were to remove the infringing material from its
USENET servers, as required by its own policy and as it did in this case after
some delay, and otherwise comply with the requirements of the DMCA, such as
§ 512(i), it would have its liability limited for monetary damages for direct,
contributory, or vicarious infringement. This is the result that Congress intended
and one that fairly distributes a benefit to AOL in exchange for what is
concededly a minimal burden (the burden of removing access to the infringing
newsgroup, as it has now done). In contrast, if AOL's § 512(a) argument prevails,
Congress' objectives will be upended. AOL would get all of the benefits of a
limitation on its liability andall of the benefits that accrue to it by making valuable
infringing material available to its millions of subscribers without any obligation
to remove the material once it knows it is infringing.
For all of these reasons, AOL is not eligible for the safe harbor under
subsection (a) for storing and making available to its millions of subscribers
postings from USENET newsgroups. The District Court's opinion should be
II. AOL IS NOT ENTITLED TO A LIMITATION ON LIABILITY
UNDER SECTION 512(c).
As an alternative to misclassifying USENET servers as providing
"transitory communications," AOL attempts to treat those same servers as
providing stored communications under § 512(c). Ellison agrees that AOL might
qualify for this safe harbor. Accord, ALS-Scan, 239 F.3d at 623 (treating USENET
servers as stored communications under the DMCA). AOL, however, can only
avail itself of the § 512(c) safe harbor if it complies with the mandatory
prerequistites of that subsection. The District Court's findings and the record
below demonstrate AOL failed to do so.
First, AOL failed to comply with the clear requirement of § 512(c)(2),
which allows a service provider to invoke § 512(c) "only if the service provider has
designated an agent to receive notifications of claimed infringement… by making
available through its service, including on its website in a location accessible to the
public, and by providing to the Copyright Office…" 17 U.S.C. § 512(c)(2) (emphasis
AOL's brief obfuscates the matter by asserting what it did do; the problem
is instead what it did not. AOL identifies a number of places where it claims one
could find contact information to notify it of copyright infringement, but it did
not do what the statute requires: AOL did not ensure that it had supplied
accurate contact information to the statutorily designated central repository for
DMCA agent contact information. See http://www.loc.gov/copyright/onlinesp/
(publicly accessible database provided by the Register of Copyright). Thus, when
copyright holders such as Ellison attempted to notify AOL of infringement
occurring on or through AOL-based services and sent notifications to the very
place that AOL had identified, those notices went into a black hole. [note 7] The
notification messages were not forwarded to a working address or, it appears, ever
received by anyone. As the District Court recognized, this failure to receive
notices of infringement was AOL's own fault, and was relevant to whether AOL
could qualify for the § 512(c) safe harbor. 189 F. Supp. 2d at 1058, 1065 n.14.
That fact absolutely bars affirmance under AOL's alternate theory.
Second, AOL also failed to meet the mandatory preconditions in
§ 512(c)(1). Under § 512(c)(1), the safe harbor does not apply if the service
provider has actual knowledge or is aware of facts and circumstances from which
the infringing activity is apparent and fails to expeditiously stop the infringement
on its network. AOL avers that it did not have actual knowledge of the
infringements, because its designated agent allegedly did not receive Ellison's
counsel's notification e-mail, but the District Court was presented with substantial
evidence that AOL had actual knowledge, or at a minimum, an awareness of facts
and circumstances from which the infringing activity was apparent. For example,
an AOL employee designated to take complaints had actual knowledge of
rampant infringements in alt.binaries.e-book. Rec. 1:121-23; 189 F. Supp. 2d at
1058 ("Miller's phone call… is another piece of evidence which might lead a
reasonable trier of fact to conclude that AOL should have known about the
infringement of Ellison's copyrights occurring in its newsgroup"). Other evidence
also could lead a jury to believe that AOL's employees responsible for managing
the newsgroup servers were aware of alt.binaries.e-book's nature as a fencing
operation for stolen intellectual property. Rec. 2:97-98, 106, 145-47. The very
name of the newsgroup would imply to a sophisticated holder of intellectual
property rights such as AOL that it includes substantial infringing activity. Cf.
ALS-Scan, 239 F.3d at 624-25 (name of newsgroup alone could indicate infringing
Indeed, the sum of this evidence led the District Court to conclude that
AOL's knowledge was sufficient to support a finding of contributory
infringement. 189 F. Supp. 2d at 1058. [note 8] That finding must be construed against
AOL's motion for summary judgment, Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 244 (1986) (construe facts and evidence against motion for summary
judgment), and precludes affirmance under subsection (c) as well.
AOL also did not expeditiously remove the infringing material after it knew
of it. John Miller, an AOL customer, notified AOL of substantial infringing
activity in early April 2000, and Ellison's counsel notified AOL of the specific
infringements at issue on April 17, 2000. [note 9] AOL did not respond to either
notification but waited until April 28, 2000, after suit was served upon it. This is
inconsistent with AOL's own policy. Rec. 2:50 (48 hours). Neither is it
"expeditious," particularly in the moment-to-moment context of the Internet. [note 10]
Finally, AOL asserts that the notification sent by Ellison's counsel did not
conform to the requirements of § 512(c)(3). That argument is a red herring
because a service provider is eligible for the safe harbor of § 512(c) only if it
complies with the mandatory preconditions in that subsection. If the ISP fails,
as AOL did, to comply with § 512(c)(1) or (2), it does not matter what Ellison's
notice said. AOL thus does not qualify for the safe harbor, and Ellison's claims
of infringement must be tried.
In any event, AOL's claim that Ellison's notice was unsatisfactory is also
wrong. AOL's argument misinterprets both the contents of the e-mail, Rec. 1:105-07, and the statutory requirement that a notification of infringement "comply substantially" with certain statutory elements. See also ALS-Scan, 239 F.3d at 621 (similar notice found compliant).
AOL asserts that the notification fails to adequately identify either the
works or the infringing postings. [note 11] However, the letter explicitly identifies the
authors represented and the location of the infringing material in alt.binaries.e-book; it also avers that all identifiable material to be found there by several
identified authors, including Ellison, is pirated. Even cursory examination of the
subject lines in the newsgroup would disclose the identity of the works in question
and their authors. Cf. ALS-Scan, 239 F.3d at 624 ("when a letter provides notice
equivalent to a list of representative works that can be easily identified by the
service provider, the notice substantially complies with the notification
requirements"). AOL asserts that newsgroups named after the copyright holder
were the critical factor that made ALS-Scan's notice substantially compliant.
However, the Fourth Circuit actually relied upon identification of the groups as
created for the purpose of infringing copyrights; the name of the copyright holder
in the group name just confirmed identification. Id. A group named "alt.binaries.e-book" would imply that the group contains pirated material, but does not itself
identify the holder of the individual rights who can be identified with the single
additional step of reading the subject line of infringing messages found in that
III. AOL DID NOT COMPLY WITH THE THRESHOLD REQUIREMENTS OF SECTION 512(i).
AOL can claim the benefit of none of the DMCA safe harbors if it failed
to comply with § 512(i). In its brief, AOL mischaracterizes Ellison's arguments,
claiming that they concern only dicta in the opinion below. To the contrary,
Ellison challenges both the District Court's interpretation of Section 512(i) and
the court's apparent finding that there were no disputed material facts that would
preclude summary judgment.
The district court interpreted § 512(i) as not requiring service providers,
such as AOL, to ever terminate repeat infringers. In its view, the statute requires
the existence of a policy against repeat infringers, but does not require that the
policy actually to be enforced in order for the ISP to have a "reasonably
implemented" policy. For that reason, the district court viewed as irrelevant (and
thus insufficient to preclude summary judgment) the fact that AOL has never
terminated a repeat infringer and AOL provided to the Copyright Office and to
the public a non-functional e-mail address that ensured it would not receive
notices of infringement. That interpretation was legal error because a policy can
only be "reasonably implemented" as the statute requires, if it is enforced and if
the service provider provides adequate means to receive notice of instances of
infringement. See Steidl v. Gramley, 151 F.3d 739 (7th Cir. 1998) (systematic failure
to enforce a policy is evidence that can result in liability).
Once § 512(i) is properly understood, it is clear that the district court could
not have granted summary judgment to AOL. Contrary to the
mischaracterizations by AOL and its supporting amici, Ellison and his amici do not
seek to make failure to terminate any repeat infringer a per se requirement under
§ 512(i). Instead, Ellison offers this as one piece of evidence that could lead a jury
to find that AOL had not reasonably implemented its policy because AOL an
ISP with 25 million accounts had never terminated an individual as a repeat
infringer. Rec. 2:54-55.
Perhaps AOL simply chose not to enforce its policy. Or perhaps AOL did
not receive sufficient complaints to characterize any of its users as repeat
infringers because it provided inaccurate and misleading contact information to
the Copyright Office. 189 F. Supp. 2d at 1058 ("AOL's failure to receive the
April 17, 2000, e-mail is its own fault"). At a minimum, the failure to actually
impose the policy, either alone or together with the dubious credibility of AOL's
key witness, [note 12] creates a triable issue of fact as to whether AOL's policies and
procedures for dealing with repeat infringers were reasonably implemented
consistent with § 512(i).
There is no triable issue of fact, however, concerning AOL's provision of
misleading and inaccurate contact information to copyright holders who need to
notify AOL of infringements. The District Court properly found that it was
AOL's "own fault" that it did not receive notification from Ellison's counsel, and
virtually certainly from others:
Inexplicably, AOL had changed its contact e-mail address from
email@example.com to firstname.lastname@example.org in fall 1999, but waited until
April 2000 to notify the Copyright Office of this change. As a result,
the complaints of individuals such as Ellison's attorney, who
obtained AOL's e-mail address from the Copyright Office and
attempted to notify AOL of infringement occurring on its servers
were routed to the defunct account. Nor did AOL make provision
for forwarding to the new address e-mails sent to the defunct
account.… If AOL could avoid the knowledge requirement through
this oversight or deliberate action, then it would encourage other
ISPs to remain willfully ignorant…
189 F. Supp. 2d at 1058 (italics in original); compare with H.R. Rep. 105-551 (II) at
61 ("those who repeatedly or flagrantly abuse their access to the Internet through
disrespect for the intellectual property rights of others should know that there is
a realistic threat of losing that access"). It is impossible to characterize a threat as
"realistic" when an ISP not only fails to comply with the DMCA's notification
provisions, but provides affirmatively misleading contact information contact
information upon which copyright holders would rely in notifying the ISP of
infringements on its services. The District Court failed to apply its finding that
AOL could not evade the knowledge requirements for contributory infringement
by supplying inaccurate and misleading contact information, 189 F. Supp. 2d at
1058, to the underlying need to notify an ISP of repeat infringers to create that
"realistic threat" of termination under § 512(i), Id. at 1064-66.
IV. AOL IS LIABLE FOR VICARIOUS COPYRIGHT
Whether a defendant is liable for vicarious infringement must be
determined prior to, and independent of, any consideration of the DMCA. See
A&M Records, Inc. v. Napster, Inc., 239 F.3d at 1004, 1025 (9th Cir. 2001). AOL,
much like the District Court in the case of Hendrickson v. eBay, Inc., 165 F. Supp.
2d 1082 (C.D. Cal. 2001), merges the two inquiries, an inherently flawed
approach. The DMCA is a safe harbor from liability for copyright infringement,
not a complete defense. A safe harbor need only be considered if the defendant
would otherwise be liable for some form of copyright infringement, be it direct,
vicarious, or contributory. At a minimum, this Court has the opportunity to re-emphasize the common sense rule articulated in Napster that one must first
determine that vicarious liability could exist in a given case before considering any
safe harbor provision that might provide protection for that liability. Otherwise,
the doctrines of secondary liability may become irretrievably bound up with the
DMCA See also S. Rep. No. 105-190 (1998) at 19 ("the Committee decided to
leave the current law [of contributory and vicarious liability] in its current
state…"). Upholding the ruling below will obscure the doctrines of secondary
copyright liability for parties who find themselves litigating copyright cases in
non-Internet contexts. Perhaps more importantly, explicitly deferring
consideration of the DMCA in deciding whether a party would otherwise be liable
for copyright infringement would make clear that the statute did not effectively
"rewrite copyright law for the online world," a result the District Court below
does not intend. 189 F. Supp. 2d at 1061.
A. AOL Had the Right and Ability to Supervise the Infringing
Activity on its Service.
AOL insists a defendant cannot be found liable for vicarious infringement
unless it can control infringing conduct at "the root level." Tellingly, AOL ignores
an important district court case cited by Ellison in his principal brief, Playboy
Enters., Inc. v. Webbworld, Inc., 986 F. Supp. 1171 (N.D. Tex. 1997). The facts of
that case are directly on point and the analysis crystallizes Ellison's position:
That defendants had no control over those responsible for originally
uploading the infringing images onto the Internet is not relevant to
the issue of defendants' control over their infringing activity. The
only relevant question regarding the element of control is whether
defendants had the right and ability to control what occurred on the
Id. at 1177. Moreover, contrary to AOL's assertions, the "root level"
infringements in the seminal case of Shapiro, Bernstein & Co. v. H.L. Green Co., 316
F.2d 304 (2d Cir. 1963), were not the rack-jobber's sales of the infringing records
to the phonorecord section of the department store, but the recording of the
infringing records themselves. See also Fonovisa Inc. v. Cherry Auction, Inc., 76 F. 3d
259, 262-63 (9th Cir. 1996) (holding owner of swap meet vicariously liable for sales
of infringing material by individual vendors).
The true "root level" infringements of copyrighted works will often occur
behind closed doors by one individual with a pen, recording facilities, or, as in this
case, a scanner. Very rarely will the defendants who wreak the most harm such
as AOL or the H.L. Green department store ever have access to that sort of
"root level" infringer. If a large distributor of content like AOL must have
absolute "control" over an individual like Stephen Robertson in this case, the
distributor will almost never be found secondarily liable. This would fly in the face
of the burden-shifting signaled by the court in Shapiro: The infringer here a
company that facilitates distribution of infringing material is in the best position
to avoid the harm. See Shapiro, 316 F.2d at 308. [note 13]
B. AOL Had a Direct Financial Interest in the Infringing Activity.
AOL makes Ellison's point when it states that:
Napster, unlike AOL, offered its subscribers only one service…
AOL's services, on the other hand, are "radically different from that
of Napster," and AOL offers a panoply of offerings…
AOL Br. at 30, quoting Ellison, 189 F. Supp. 2d at 1062. In its brief, AOL argues
that the law in this Circuit requires that Ellison prove that the infringing works
constitute a "substantial" draw. AOL Br. at 29. This mischaracterizes the law in
this Circuit; neither this Court's decision in Fonovisa nor the opinion in Adobe Sys.
Inc. v. Canus Prods. Inc., 173 F. Supp. 2d 1044 (C.D. Cal. 2001), require a
"substantial" draw to prove direct financial benefit. The court in Adobe held only
that Fonovisa requires "a direct financial benefit from the 'draw' of the infringing
products." Adobe, 173 F. Supp.2d at 1051. As this District Court recognized, this
Court has never held that the draw be substantial. Ellison, 189 F. Supp. 2d at 1063 n.11.
The District Court below should have allowed a jury to decide whether or not
AOL's USENET services, and its admitted desire to draw customers, sufficiently
created a consumer draw to justify imposing vicarious liability. Under AOL's
reasoning, no specific service offered by a broad-based ISP like AOL would ever
create vicarious liability. Providers of a single service, such as Napster, would be
liable, but AOL would not be liable for the exact same conduct. That view finds
no support in the law. Cf. Shapiro, 316 F.2d at 308 (imposing liability for
infringements taking place in a single department at a department store).
One need only visit AOL's description of the USENET to see that
USENET offerings are an important subscriber benefit.
There are newsgroups on every topic imaginable, from celebrity
gossip to academic discussion, sports talk and personal ads, and
much, much more. And it's not just talk; you can find binary files,
such as images, sounds, and software in newsgroups.
[AOL's publicly accessible website,] What Are Usenet Newsgroups?, http://www.aol.com/nethelp/news/newswhatis.html (Oct. 29, 2002; boldface in original). USENET offerings are important enough to command the fourth entry on AOL's help page. AOL Anywhere Help, http://www.aol.com/nethelp/ (Oct. 29, 2002). The issue of whether AOL was receiving a direct financial benefit has nothing to do with whether a specific number of individuals were specifically drawn to the alt.binaries.e-book newsgroup. There is a genuine issue of material fact as to whether, like the swap meet owner in Fonovisa, AOL derived a direct financial benefit by providing its customers with access to a tremendous variety of services and content, including that newsgroup. Fonovisa, 76 F.3d at 263-64 (holding that "the sale of pirated recordings at the Cherry Auction swap meet is a 'draw' for customers"). AOL devotes at least one employee full time to managing USENET operations, and several other employees have significant duties related to the USENET. AOL would not have expended the effort to create these services and designate employees to maintain them unless the services are a sufficient customer draw to justify the effort involved in creating and maintaining them.
Ellison requests this Court reverse the determination of the district court
that AOL may not be found liable for vicarious copyright infringement. Ellison
also requests that this Court rule that AOL cannot avail itself of the limitation on
liability afforded by the DMCA by holding that AOL's policies and procedures
do not satisfy the requirements of 17 U.S.C. § 512(i); that AOL's provision of
USENET services to its members does not fall within 17 U.S.C. § 512(a), thereby
avoiding a conflict with the Fourth Circuit; and that AOL's provision of
USENET services to its members does not qualify on these facts under 17 U.S.C.
Respectfully submitted this fourth day of November, 2002.
|John H. Carmichael
Brigit K. Connelly
|Charles E. Petit
|Kulik, Gottesman, and Mouton, LLP
||Law Office of Charles E. Petit
|Attorneys for Plaintiff and Appellant
- AOL cites Ron Pair for the opposite proposition: that one must rely on
legislative history to determine intent. However, the Ron Pair court determined
that the words of the statute did not clearly contravene the underlying policy, and
began by parsing the statute. Ron Pair Enters., 489 U.S. at 242.
- Ellison respectfully notes that affirming the District Court on this issue will
create a conflict with the Fourth Circuit on the proper treatment of the USENET
under the DMCA. ALS-Scan, 239 F.3d at 623 (USENET is stored, not transitory,
- Subsection (c) concerns "the storage at the direction of a user of material
that resides on a system." If the "intermediate" in "intermediate and transient"
refers to some "intermediate term," one would expect subsection (c) in contrast
to explicitly refer to a longer period of time, using a phrase such as "long-term
storage." Subsection (c) refers only to "storage" without modification. Cf. ALS-Scan, 239 F.3d at 623 (USENET messages are stored communications and fall
under § 512(c)). It seems quite curious that one subsection would refer to a
temporal threshhold, while a corresponding subsection passed in the same bill
- The DMCA defines "service provider" differently for transitory than for
stored communications. Compare 17 U.S.C. § 512(k)(1)(A)(defining ISP as provider
of transmission, routing, or connections between points specified by user as to §
512(a)) with 17 U.S.C. § 512(k)(1)(B) (defining ISP as provider of online services
or network access, a superset of (A), for the other limitations on liability). AOL's
claim that the court cannot consider this distinction is without basis.
- An early draft of the DMCA was discussed in volume I of H.R. Rep. No.
105-551 (I) (1998). Subsequently, the Senate held hearings and reported out a
significantly revised draft. S. Rep. No. 105-190 (1998). The House considered a
version much like the Senate version (and totally different from the early draft)
and discussed that version in volume 2 of H.R. Rep. No. 105-551 (II)(1998). After
both chambers had passed a bill on the subject, the Conference Committee
reconciled the two versions to create the DMCA as passed. H.R. Rep. No. 105-796 (1998)
- The interpretation of the DMCA advocated by AOL is not a codification
of Netcom, as it suggests. Rather, it would be a massive expansion of Netcom,
which found the ISP could not be held directly liable for maintaining infringing
USENET postings but could be held liable for contributory infringement. Netcom,
907 F. Supp. at 1370, 1373-77. AOL seeks to extend Netcom's holding on direct
infringement to contributory and vicarious infringement.
- AOL asserts that the difficulty was "only a different e-mail address," AOL
Br. at 13, without disclosing that the address had been a black hole e-mail to
that address neither reached the agent nor provided any clue to the sender that
delivery had failed. Rec. 1:105-07; cf. Fed. R. Civ. P. 5(b) (sender may presume
successful electronic delivery absent positive indication of nondelivery). AOL's
own employee admitted that forwarding e-mail to the incorrect address would
have been possible, and even routine. Rec. 2:153-54. AOL also avers that it had
provided corrected contact information to the Register before 17 April 2000, but
neglects to mention that it had left the incorrect contact information in place for
nearly six months. 189 F. Supp. 2d at 1058. In any event, the infringements
occurred before AOL corrected the data it had provided to the Register.
- AOL has not cross-appealed this finding.
- The preexisting knowledge of AOL's USENET managers, long predating
the actual infringements, is also relevant. At a minimum, this provided facts and
circumstances from which the infringements were apparent.
- For the reasons discussed in the section on vicarious liability, AOL also
fails to meet the requirements of § 512(c)(1) because it does derive a financial
benefit from its USENET postings. See infra.
- AOL also claims that the notification is deficient because it was not signed
under penalty of perjury. While technically correct, the statute indicates that
identification of the infringed work and infringement, plus provision of return
contact information, is substantial compliance. 17 U.S.C. § 512(c)(3)(B)(ii) (requiring ISP
to accept notification and work with complainant to rectify any deficiencies).
- AOL offered only the affidavit of Elizabeth Compton, a paralegal in its
employ, to demonstrate its policies, procedures, and history concerning
complaints of copyright infringement. Ms. Compton was required to, and did,
state under oath that she had personal knowledge of all relevant facts. Fed. R. Civ.
P. 56(a); Rec. 2:13 ¶ 1. Her deposition testimony, however, demonstrated that she
did not have the personal knowledge to aver facts essential to AOL's ability to
satisfy the requirements of § 512(i). Compare Rec. 2:13-15 (Compton declaration,
averring personal knowledge of technical and compliance matters) with, e.g., Rec.
2:53-55, 72-74 (some of Compton's deposition testimony indicating the absence
of such knowledge); see also Ellison, 189 F. Supp. 2d at 1066 (noting Compton's
lack of knowledge, although denying applicability to § 512(i)). Plaintiff questions
the admissibility of testimony from the only witness offered by AOL in support
of its motion on the basis of her own deposition, and believes that a trier of fact
could find her testimony lacks credibility even if it was admitted.
- As pointed out in Appellant's principal brief,
the district court in Hendrickson improperly confused the vicarious infringement analysis with
applicability of the DMCA. The doctrines of secondary liability existed long
before the internet became reality, and must be analyzed first without reference
to the DMCA. The court in Hendricksonfailed to do this, and therefore its holding
on this topic must be disregarded.