In the United States Court of Appeals for the Ninth Circuit
Ellison v. Robertson et al.
Harlan Ellison, a natural person, plaintiff and appellant,
v.
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.
No. 02-55797
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
Amici Curaie Brief of BMG Music;
EMI Recorded Music, North America;
Sony Music Entertainment, Inc.; and
Universal Music Group,
Supporting Reversal
TABLE OF CONTENTS
TABLE OF AUTHORITIES
INTERESTS OF AMICI
INTRODUCTION AND SUMMARY OF ARGUMENT
ARGUMENT
I. AOL DOES NOT QUALIFY FOR THE DMCA'S SECTION 512(a) SAFE HARBOR.
A. The Text of Section 512(a) Confines the Safe Harbor to a Limited Subset of "Service Providers" Engaging in a Narrow Range of Functions.
B. The Legislative History Confirms Section 512(a)'s Plain Meaning.
C. The District Court Relied on the Wrong Legislative History.
D. AOL Does Not Qualify for the Safe Harbor under Section 512(a).
II. AOL DID NOT SATISFY THE REQUIREMENTS OF SECTION 512(i).
A. Effective Notification Procedures Are Essential to a "Reasonably Implemented" Policy Against Repeat Infringers.
B. A Service Provider Must Actually Enforce Its Policy Against Repeat Infringers.
III. THE COURT IGNORED THE LAW OF THIS CIRCUIT ON VICARIOUS INFRINGEMENT.
IV. THE DISTRICT COURT'S RULING UPSETS THE BALANCE ESTABLISHED BY THE DMCA.
CONCLUSION
TABLE OF AUTHORITIES
Cases
Bowen v. Georgetown University Hospital, 488 U.S. 204 (1988)
Burrow-Giles Lithographic Co. v. Sarony, 111 U.S. 53 (1884)
Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569 (1994)
Capitol Records, Inc. v. Mercury Records Corp., 221 F.2d 657 (2d Cir. 1955)
City of Boerne v. Flores, 521 U.S. 507 (1997)
Cohen v. California, 403 U.S. 15 (1971)
Feist Publications, Inc. v. Rural Telephone Service Co., 499 U.S. 340 (1991)
Fred Fisher Music Co. v. M. Witmark & Sons, 318 U.S. 643 (1943)
Goldstein v. California, 412 U.S. 546 (1973)
Graham v. John Deere Co., 383 U.S. 1 (1966)
Harper & Row Publishers, Inc. v. Nation Enterprises, 471 U.S. 539 (1985)
Hurley v. Irish-American Gay, Lesbian & Bisexual Group of Boston, 515 U.S. 557 (1995)
Landgraf v. USI Film Products, 511 U.S. 244 (1994)
Mills Music, Inc. v. Snyder, 469 U.S. 153 (1985)
Simon & Schuster, Inc. v. Members of the New York State Crime Victims Board, 502 U.S. 105 (1991)
Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417 (1984)
Stewart v. Abend, 495 U.S. 207 (1990)
Suntrust Bank v. Houghton Mifflin Co., 268 F.3d 1257 (11th Cir. 2001)
Turner Broadcasting System, Inc. v. FCC, 520 U.S. 180 (1997)
United Christian Scientists v. Christian Science Board of Directors, 829 F.2d 1152 (D.C. Cir. 1987)
United States v. Lopez, 514 U.S. 549 (1995)
United States v. Salerno, 481 U.S. 739 (1987)
Universal City Studios, Inc. v. Reimerdes, 111 F. Supp. 2d 294 (S.D.N.Y. 2000), aff'd sub nom Universal City Studios, Inc. v. Corley, 273 F.3d 429 (2d Cir. 2001)
Ward v. Rock Against Racism, 491 U.S. 781 (1989)
Statutes and Constitution
U.S. Const. art. I, § 8, cl. 8
17 U.S.C. § 108
17 U.S.C. § 114(b)
17 U.S.C. § 114(d)(2)
17 U.S.C. § 114(d)(2)(C)(iii)(I)
17 U.S.C. § 115
17 U.S.C. § 301(c)
Legislative Materials
Act of Oct. 19, 1976, Pub. L. No. 94-553, 90 Stat. 2541
Act of Oct. 15, 1971, Pub. L. No. 92-140, 85 Stat. 391
Act of Mar. 4, 1909, Pub. L. No. 60-349, 35 Stat. 1075
Act of May 31, 1790, 1 Stat. 124
Digital Millennium Copyright Act, Pub. L. No. 105-304, 112 Stat. 2860 (1998)
Digital Performance Right to Sound Recordings Act of 1995, Pub. L. No. 104-39, 109 Stat. 336
Sonny Bono Copyright Term Extension Act, Pub. L. No. 105-298, 112 Stat. 2827 (1998)
H.R. Rep. No. 94-1476 (1976), reprinted in 1976 U.S.C.C.A.N. 5659
S. Rep. 104-315 (1996)
Copyright Term Extension Act of 1995: Hearings on S. 483 Before the Senate Comm. on the Judiciary, 104th Cong. (Sept. 20, 1995)
Copyright Term Extension Act of 1995: Hearings on H.R. 989 Before the House Comm. on the Judiciary, Courts and Intellectual Property, 104th Cong. (July 13, 1995)
Miscellaneous
2002 IFPI Music Piracy Report (2002)
Copyright Office, Copyright Enactments, 1783-1900 (Gov't Printing Office 1990)
The Federalist No. 43 (Madison)
Charles B. Hochman, The Supreme Court and the Constitutionality of Retroactive Legislation, 73 Harv. L. Rev. 692 (1960)
Al Kohn & Bob Kohn, The Art of Music Licensing (1992)
Pierre N. Leval, Campbell v. Acuff-Rose: Justice Souter's Rescue of Fair Use, 13 Cardozo Arts & Ent. L.J. 19 (1994)
Pierre N. Leval, Commentary, Toward a Fair Use Standard, 103 Harv. L. Rev. 1105 (1990)
INTERESTS OF AMICI
Amici BMG Music, EMI Recorded Music, North America, Sony Music
Entertainment Inc., and Universal Music Group, are four of the largest recording
companies in the United States. As copyright owners and distributors of a
significant percentage of the sound recordings in the United States, amici have a
strong interest in effective enforcement of the copyright laws &151; particularly as
applied to piracy on the Internet, which has become a multi-billion dollar industry.
Amici make constant use of the provisions of the Digital Millennium Copyright
Act to ensure prompt removal of pirated sound recordings from being distributed
on the Internet. The district court's decision, if undisturbed, would severely
threaten the ability of amici to prevent pirated sound recordings from being
disseminated worldwide over the Internet.
The parties have consented to the submission of this brief.
INTRODUCTION AND SUMMARY OF ARGUMENT
This case poses the question whether the Digital Millennium Copyright Act
("DMCA"), Pub. L. No. 105-304, 112 Stat. 2860 (1998), will combat digital-age
piracy (as Congress intended) or will instead provide sweeping protection for such
piracy. The answer to that question is critical for copyright owners generally and
the sound recording industry in particular. Virtually any copyrighted work can be
put in a digital format, and then copied and distributed worldwide instantaneously
(in near perfect quality) on the Internet. This can be a great benefit, but also
leaves copyrighted works susceptible to "massive piracy." S. Rep. No. 105-190, at
8 (1998) ("Senate Report").
The DMCA seeks to stop this piracy by creating incentives for copyright
owners and "service providers" those who control access to and services on the
Internet &151; to work together to block dissemination of infringing works. Id. at 20.
To that end, the DMCA creates narrow "safe harbors" for service providers to
limit their liability for copyright infringement, so long as providers are engaging in
the specific functions outlined in each safe harbor and comply with each safe
harbor's precise requirements. 17 U.S.C. §§ 512(a)-(d). Section 512(a)'s safe
harbor applies to a narrow range of providers engaging only in transmitting and
routing information over the Internet. Section 512(b)-(d)'s safe harbors are
available to a broader array of service providers who maintain information for
users and provide other services to subscribers.
To qualify for any safe harbor, a service provider must take steps to stop
copyright infringement occurring on or accessible from its system or network.
Thus, all service providers must implement a policy to address repeat infringers.
§ 512(i). And, to qualify for the safe harbors in §§ 512(b)-(d), a service provider
must, among other things, disable access to infringing material when notified of
the infringement. The safe harbors thus do not protect infringers who would use
service providers' networks to traffic in pirated material. Rather, they ensure that
copyright holders are able to stop the dissemination of pirated material in cooperation with service providers.
The DMCA was enacted to address exactly the sort of piracy that occurred
in this case. An individual made blatantly illegal copies of the popular works of
Harlan Ellison and posted them on USENET (a collection of computers connected
world-wide that organizes information into topical newsgroups) where those
works could be copied at will. AOL makes USENET postings available to its
paying subscribers, maintaining postings for two weeks on its own servers and
disseminating copies to any subscriber that requests them. Ellison diligently
requested that AOL disable access to the pirated works, just as other service
providers had done, but AOL failed to do so until after this litigation commenced.
In absolving AOL of any liability, the district court misinterpreted the
DMCA in three critical respects that, if uncorrected, will be devastating to Congress' goals of fostering the Internet and protecting copyright in the digital age.
First, the district court erred in concluding that the safe harbor in § 512(a)
shields AOL from liability. Section 512(a) is narrowly limited in two ways. First,
§ 512(a) applies only to an extremely narrow class of service providers: those that
operate like common carriers and provide conduit-type services, such as the
transmission of digital information on the Internet backbone. AOL does not
remotely qualify. Second, § 512(a) is limited to providers that transmit information and store it only for an instant, as an incident to passing it to its ultimate
destination. Because AOL retained USENET postings on its servers for two
weeks, it does not meet this requirement that only "intermediate and transient"
storage occur. Providers, like AOL, that store and disseminate information to their
users rather than simply transmit information from place to place cannot seek the
protection of § 512(a).
If the district court's contrary conclusion were adopted, a central purpose of
the DMCA would be upended. Congress deliberately kept the class eligible under
§ 512(a) extremely narrow, because of the broad protection § 512(a) confers. In
contrast to the DMCA's other safe harbors (§§ 512(b)-(d)), § 512(a) does not
impose on the service provider the obligation to disable access to infringing material, because providers eligible for § 512(a) are ordinarily not in a position to do
so. If entities such as AOL (which can disable access to the infringing material)
qualify for § 512(a) rather than §§ 512(b)-(d) they get the benefit of this safe
harbor without the correlative obligation Congress intended to impose on them to
stop ongoing infringement.
Second, the district court effectively eliminated the key statutory
prerequisite that service providers must meet to qualify for any of the safe harbors
- Section 512(i)'s requirement that service providers "reasonably implement" a
policy for terminating repeat infringers. § 512(i)(1)(A). Here, AOL provided an
incorrect e-mail address for receiving notice of potential infringements (or failed
to check its e-mail) and thus did not receive Appellant's notice. Moreover, there
was evidence that AOL had never terminated a repeat infringer under its policy.
By holding that AOL nonetheless met § 512(i)'s threshold requirements, the
district court eviscerated the DMCA's requirement that all service providers must
take steps to terminate repeat infringers.
Third, the district court impermissibly rewrote the law of vicarious infringement, flatly contradicting Ninth Circuit law. A defendant is liable for vicarious
infringement where it "has a right and ability to supervise the infringing activity
and also has a direct financial interest in such activities." A&M Records, Inc. v.
Napster, Inc., 239 F.3d 1004, 1022 (9th Cir. 2001) (quotation omitted). AOL
obviously had the "right and ability" to stop the infringement at issue eventually
it did so. AOL also gained a financial benefit from the infringement because its
USENET offerings serve to maintain and increase its paying subscribership. The
district court nevertheless held that AOL was not liable because the court believed
that the DMCA changed vicarious liability law. That is flatly wrong. Congress
intended the law of copyright infringement to be the same for conduct on the
Internet as it is everywhere else. The district court's decision also cannot be
squared with this Court's decision in Napster and would immunize those who both
financially benefit from infringement (so long as it is a small portion of their
business) and have the ability to stop it.
For all of these reasons, the district court's decision should be reversed.
The DMCA establishes a clear and effective mechanism for preventing the
widespread dissemination of pirated works on the Internet. Upon notice from the
copyright owner, a service provider must stop the infringing activity. That is what
should have happened here. The DMCA does not protect a service provider that
fails to comply with its statutory obligations.
ARGUMENT
I. AOL DOES NOT QUALIFY FOR THE DMCA'S SECTION 512(a) SAFE HARBOR.
"[C]ourts must give effect to the clear meaning of statutes as written."
Estate of Cowart v. Nicklos Drilling Co., 505 U.S. 469, 476 (1992). In this case,
the district court ignored the statutory text, instead deriving its interpretation
wholly from legislative history. As if that were not error enough, the court relied
on the wrong legislative history a congressional report discussing a bill that was
not enacted and barely resembles the DMCA. Not surprisingly, the district
court's interpretation of § 512(a) cannot be squared with the statute Congress
actually enacted or the legislative history of the enacted provision. A correct
reading of the statute forecloses AOL's effort to qualify for the § 512(a) safe
harbor.
A. The Text of Section 512(a) Confines the Safe Harbor to a Limited Subset of "Service Providers" Engaging in a Narrow Range of Functions.
The safe harbor in § 512(a) is limited in two critically important ways.
First, it applies to a small subset of service providers. § 512(k)(1)(A). Second,
providers are eligible for the safe harbor only when they are performing specific
functions defined in § 512(a) and meet all of the requirements in § 512(a)(1)-(5).
Service Providers Who Qualify for § 512(a). The DMCA creates two
different definitions of "service provider." § 512(k). Section 512(k)(1)(A) defines
the category of "service providers" eligible for the § 512(a) safe harbor. Section
512(k)(1)(B), in contrast, defines a much broader class of "service providers"
eligible to invoke the §§ 512(b)-(d) safe harbors. Thus, the § 512(k)(1)(A)
definition dictates whether AOL qualifies for the § 512(a) safe harbor.
Under subsection (k)(1)(A), only service providers that "offer[] the transmission, routing, or providing of connections for digital online communications,
between or among points specified by a user, of material of the user's choosing,
without modification to the content of the material as sent or received" qualify for
the § 512(a) safe harbor. § 512(k)(1)(A). To qualify, a service provider must
provide only "conduit-type" services as information is transmitted from point-to-point, and have no role in the selection of content. Perfect 10, Inc. v Cybernet
Ventures, Inc., No. CV01-2595LGB, 2002 WL 731721, at *20 (C.D. Cal. Apr. 22,
2002).
Subsection (k)(1)(A) closely parallels the definition of "telecommunications" in the Communications Act of 1934 (47 U.S.C. § 153(43)) ("the transmission, between or among points specified by the user, of information of the user's
choosing, without change in the form or content of the information as sent and
received"). Indeed, Congress modeled subsection (k)(1)(A) after that definition.
H. Rep. No. 105-551(II) at 63 (1998) ("House Report"). As defined in the
Communications Act, "telecommunications" includes only common carrier-type
services, not the sort of additional services that an Internet Service Provider, such
as AOL, provides. See Virgin Islands Tel. Corp. v. FCC, 198 F.3d 921 (D.C. Cir.
1999) ("telecommunications services" refer to common carrier functions). Thus,
only service providers engaged in common carrier-like functions qualify under
§ 512(k)(1)(A). See generally America Online, Inc. v. GreatDeals.Net, 49 F.
Supp. 2d 851 (E.D.Va. 1999) (adopting AOL's argument that it does not provide
"telecommunications" services).
Substantive Limitations in § 512(a). Section 512(a) further limits the scope
of the safe harbor by defining a narrow range of functions a service provider must
be performing to qualify. It applies only to "[t]ransitory digital network communications." § 512(a) (Title). A service provider qualifies only when it is
"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." § 512(a).
A service provider must also satisfy all five conditions set forth in
§ 512(a)(1)-(5). Each condition limits the scope of the safe harbor to conduit
activities. The service provider may not initiate transmission (§ 512(a)(2)) or have
any role in selecting the material transmitted (§ 512(a)(3)). Similarly, a service
provider must ensure that "no copy of the material made by the service provider in
the course of such immediate or transient storage is maintained on the system or
network in a manner ordinarily accessible to anyone other than 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 than is
reasonably necessary for the transmission, routing, or provision of connections."
§ 512(a)(4). [note 1]
On its face, § 512(a)(4) excludes all entities performing functions, such as
AOL's storage of USENET postings, that result in maintaining information (in this
case for two weeks) and offering it for download to millions of subscribers for
free. Storage of the infringing material must be "intermediate" and "transient."
§ 512(a)(4). "Intermediate," as defined in Webster's Third New International
Dictionary, means "lying or being in the middle place or degree" or "to come
between." Webster's Third New International Dictionary of the English Language
(unabridged) 1180 (1993). "Transient" means "passing through or by a place with
only a brief stay or sojourn." Id. at 2428. "Intermediate and transient storage" is
the act of storing information briefly, as it passes from one place to another.
Thus, a service provider can invoke § 512(a) only when it performs a
conduit function, sending information through its network and storing copies for
only an instant. It applies, in other words, principally to Internet backbone
services. [note 2] That limitation is critical. Section 512(a) is the only safe harbor that
applies regardless of whether a service provider has actual knowledge that infringement is occurring over its network and regardless of whether the provider
stops the infringement by disabling access to the infringing material. Congress
intended to make § 512(a) available only to that narrow class of Internet backbone
providers who ordinarily cannot disable access to infringing material. Such
entities do not store information for users, but merely pass information along the
Internet from place to place in a matter of milliseconds. Any infringing copies
they create vanish quickly and are not ordinarily accessible to people because the
copies exist solely in routers and servers in the network. They typically cannot
stop infringement in the instant that infringing material passes over their networks.
Thus, it makes sense to extend broader protection to this class. But dramatically expanding § 512(a) is very dangerous; it would allow all providers to
turn a blind-eye toward copyright piracy and ignore calls from copyright owners to
remove clearly infringing material, without any threat of liability precisely the
opposite of what Congress intended.
B. The Legislative History Confirms Section 512(a)'s Plain Meaning.
The legislative history confirms that Congress confined the availability of
§ 512(a) to service providers engaging in "conduit-only functions." House Report
at 63. Congress recognized that Internet backbone providers make innumerable
"copies" of digital material automatically whenever information is sent over the
Internet, but that such providers typically do not store such copies or make them
accessible, and thus cannot easily delete or control access to them. Id. at 50-51.
In contrast, other types of service providers are included in the broader
definition of subsection (k)(1)(B) and are not eligible for § 512(a)'s safe harbor.
Subsection 512(k)(1)(B) expressly incorporates all entities that would fall within
§ 512(k)(1)(A), plus a host of other entities, including any "provider of online
services or network access, or the operator of facilities therefor." § 512(k)(1)(B).
As Congress explained, unlike § 512(k)(1)(A), the definition in § 512(k)(1)(B)
"includes, for example, services, such as providing Internet access, e-mail, chat
room and web page hosting services." House Report at 64. Congress drew a clear
line between the two categories. Maintaining information for access by users,
such as hosting a website, takes a service provider out of § 512(k)(1)(A) and puts
it into § 512(k)(1)(B). See House Report at 63-64 ("hosting a web site does not
fall within the new subsection [k](1)(A) definition, whereas the mere provision of
connectivity to a web site does fall within that definition").
Congress also made clear that § 512(a)(4)'s requirement that any storage of
information be "intermediate" and "transient" means that copies may be stored
only "in the course of transmission, not… at the points where the transmission is
initiated or received." Id. at 51. Thus, to fall within § 512(a), storage of material
can occur only "while it is en route to its destination." Id. Maintaining material
for any period of time longer than that needed to transmit it from origin to
destination disqualifies a provider. In that case, the material is not "en route" to
any place; it is being stored and waiting to be downloaded by anyone. Like a
grocery store, AOL, in maintaining USENET postings, is making products
available to subscribers by stocking its shelves. That violates § 512(a)(4) in two
ways: the storage is not "intermediate" or "transient," and the material is
"ordinarily accessible" by all AOL subscribers. See id. (maintaining copies "for
the purpose of making the material available to other users" violates § 512(a)(4)).
The legislative history thus confirms what the text makes clear: only
entities that provide conduit-like services, transmitting information from place to
place, qualify under § 512(a).
C. The District Court Relied on the Wrong Legislative History.
In interpreting § 512(a), the district court looked almost exclusively to
legislative history. Ignoring the plain language of the statute was itself error, but
the court compounded its mistake by looking at the wrong legislative history.
The district court focused on the legislative history of an earlier bill that
differed significantly from the DMCA as ultimately enacted. [note 3] As the leading
treatise on copyright law warns, the earlier legislative history in the House
Judiciary Committee report "cannot explicate any feature of the final law… that
was not embodied in the bill when the report was formulated &151; and even its
comments on features that survived to enactment must proceed cautiously, given
intermediate changes to the statutory text." 3 Melville B. Nimmer on Copyright
12B.01[C][3] (2002). The bill that report analyzed sought to re-define direct,
vicarious, and contributory infringement for conduct on the Internet. See H. Rep.
105-552(I) at 24-25. As enacted, the DMCA did not follow that approach. See
Senate Report at 19 ("Rather than embarking upon a wholesale clarification of…
[infringement] doctrines, we decided to leave current law in its evolving state and,
instead, to create a series of safe harbors for certain common activities of service
providers."). [note 4] Moreover, the substantive provisions of the earlier version -
including those at issue here differed greatly from the DMCA. For example, the
earlier version of the bill had only one definition of "service provider" the broad
one that Congress ultimately determined was inappropriate for the § 512(a) safe
harbor. The earlier bill also did not contain the additional safe harbor provisions
that Congress created for the broader category of service providers.
The district court's mistake infects its entire analysis. The court's
expansive reading of § 512(a) would render the other safe harbors superfluous.
For example, the safe harbors in §§ 512(b) and (c) address different types of
information storage that service providers perform. Under the district court's
interpretation, a service provider would never need to invoke those provisions
because it would almost always be protected under § 512(a). Section 512(c)
provides a safe harbor for "the storage at the direction of the user of material that
resides on a system or network controlled or operated by or for the service
provider." It applies to "providing server space for a user's website, for a
chatroom, or other forum in which material may be posted at the direction of
users." House Report at 53. That safe harbor is tailor-made for AOL's conduct
(provided it had complied with all of the requirements), but would be wholly
redundant under the district court's interpretation. See ALS Scan, Inc. v. RemarQ
Communities, Inc., 239 F. 3d 619 (4th Cir. 2001) (applying § 512(c) to storage of
USENET postings).
Ultimately, the district court's opinion obliterates the careful distinction
Congress drew between the safe harbor in § 512(a), which applies to conduit-only
functions, and the other safe harbors, which apply to storing information, making
postings available, such as bulletin boards or chat rooms, or providing other
services to users. Unlike § 512(a), those safe harbors all require service providers
to disable access to infringing material upon notice. As discussed infra, an
interpretation that expands § 512(a) (and thus relieves a broad range of providers
from their obligation to disable access to infringing material) is potentially disastrous, for it would eliminate the core incentive Congress established to encourage
service providers to cooperate in protecting works from digital piracy.
D. AOL Does Not Qualify for the Safe Harbor under Section 512(a).
Once § 512(a) is properly interpreted, there can be only one conclusion.
AOL cannot claim the protection of § 512(a) for making USENET postings
available to millions of subscribers.
First, AOL is not a "service provider" under § 512(k)(1)(A), and is thus
ineligible to invoke § 512(a). AOL provides network access, and also stores and
disseminates information to subscribers by maintaining USENET postings. Like
an entity that hosts a website, AOL saves the material and makes it available to all
who wish to access it, even though it does not select each piece of information
posted.
Second, AOL does not meet the substantive requirements of § 512(a) itself.
AOL's provision of USENET services is not related to the functions of transmitting, routing, or providing connections. In storing USENET postings, AOL does
not transmit information to a particular destination; the information is not "en
route" anywhere. Rather, AOL provides a place on its servers for USENET
postings and generates a copy of the post at the request of subscribers. At the end
of fourteen days (or whatever period AOL selects), the posting is not routed to
another user; it is merely removed from AOL's servers.
Moreover, AOL's storage of USENET postings cannot be characterized as
"intermediate" or "transient." AOL permitted users to access the USENET
posting of Appellant's novel an unlimited number of times over fourteen days.
During that period, any of AOL's over 20 million paying subscribers could obtain
it for free. Indeed, the precise purpose of maintaining the information for 14 days
is to make sure that AOL subscribers can download the postings. It strains
credulity for AOL to claim that such storage is "intermediate" or "transient." It is
similarly absurd for AOL to argue that its USENET postings are not "maintained… in a manner ordinarily accessible" to millions of people. For these reasons,
AOL does not fall within the § 512(a) safe harbor, and the district court should be
reversed.
II. AOL DID NOT SATISFY THE REQUIREMENTS OF SECTION 512(i).
The district court further undermined the DMCA by misconstruing §
512(i). A service provider cannot qualify for any safe harbor unless it has
"adopted and reasonably implemented, and informs subscribers and account
holders of the service provider's system or network of, a policy that provides for
the termination in appropriate circumstances of subscribers and account holders of
the service provider's system or network who are repeat infringers." § 512(i)(1).
The district court's interpretation of § 512(i) effectively eliminates the
requirement that service providers "reasonably implement" a policy against repeat
infringers. Under a proper interpretation of § 512(i), it is clear that AOL's policy
concerning repeat infringers was not "reasonably implemented" in two ways.
A. Effective Notification Procedures Are Essential to a "Reasonably Implemented" Policy Against Repeat Infringers.
AOL provided the wrong e-mail address to the Copyright Office as the
proper place to send notifications of copyright infringement. AOL had changed
the e-mail address, failed to publicize the change, and failed to provide for forwarding of messages sent to the old address. Ellison v. Robertson, 189 F. Supp.
2d 1051, 1057-59 (C.D. Cal. 2002). Thus, notices of infringement sent to AOL
disappeared into a void. AOL never reviewed them and thus did not respond to
the notices. Id.
The district court found that AOL's failure to receive notification of the
infringement occurring on its USENET servers was "its own fault." Id. at 1058.
Nonetheless, the court rejected the argument that a "reasonably implemented"
policy for repeat infringers "must necessarily include some procedures for actually
identifying such individuals in the first place, such as a mechanism whereby the
public can notify an ISP of copyright infringement occurring on its system." Id. at
1064. Instead, seizing on a scrap of legislative history, the court concluded that
the DMCA does not require service providers to "set up notification procedures in
an attempt to identify responsible individuals" or "to actually terminate repeat
infringers." Id. at 1065, 1066.
But the legislative history says no such thing. It states only that § 512(i)
was not intended to require providers to "investigate possible infringements,
monitor its service, or make difficult judgments as to whether conduct is or is not
infringing." House Report at 61 (quoted in 189 F. Supp. 2d at 1065) (emphasis
added). That statement, however, does not excuse providers from having a
working mechanism for receiving complaints about repeat infringers.
The district court's interpretation renders Section 512(i) all but meaningless.
To "reasonably implement" a policy on repeat infringers, a service provider must
have a mechanism in place to receive complaints that blatant infringement is
occurring over its network. With millions of pirated works being distributed on
the Internet daily, copyright owners must be able to rely on the procedures the
DMCA requires service providers to develop. Those procedures must work
quickly and effectively, because copyright owners suffer additional economic
harm each day that infringing material remains available. The recording industry,
for example, sends out tens of thousands of notices per year. If the procedures
established by service providers cannot be trusted, the system designed by
Congress in the DMCA cannot work. By maintaining incorrect contact
information, and thus ensuring that it would not receive notice of infringing
activity, AOL did exactly what Congress said it could not do turn a blind-eye to
massive copyright infringement. Perfect 10, 2002 WL 731721 at *23.
B. A Service Provider Must Actually Enforce Its Policy Against Repeat Infringers.
The district court also disregarded evidence that AOL has never enforced a
policy against repeat infringers and had not even determined "how many times a
user had to be guilty of infringement before it could be classified as a 'repeat
infringer.'" 189 F.Supp.2d at 1066. The court found that evidence irrelevant
because it believed that "subsection (i) does not require AOL to actually terminate
repeat infringers." Id.
The district court's illogical interpretation reads words out of the statute.
Under § 512(i), a service provider must 1) adopt a policy, 2) inform subscribers of
the policy; and 3) "reasonably implement" that policy. Under the court's
interpretation, however, the requirement that the policy be "reasonably
implemented" has no additional meaning. A policy has not been implemented if it
is just words on a page. See Webster's Dictionary at 1134 ("implement" means
"to give practical effect and ensure of actual fulfillment by concrete measures").
The policy must actually be enforced, i.e., lead to "the termination in appropriate
circumstances of subscribers and account holders of the service provider's system
or network who are repeat infringers." § 512(i)(1); see also A&M Records, Inc. v.
Napster, Inc., No. C99-05183, 2000 WL 573136, at *9-10 (N.D.Cal. May 12,
2000) (genuine issue of material fact concerning compliance with § 512(i) where
Napster had not blocked the passwords of any repeat infringers); Costar Group
Inc. v. Loopnet Inc., 164 F.Supp.2d 688, 703 (D.Md. 2001). An unenforced policy
is no policy at all. See, e.g., EEOC v. Harbert-Yeargin, Inc., 266 F.3d 498 (6th
Cir. 2001) (existence of policy against sexual harassment insufficient because it
was not enforced); Steidl v. Gramley, 151 F.3d 739, (7th Cir. 1998) (systematic
failure to enforce a policy can lead to a finding of liability).
Nor does the legislative history support the district court's interpretation.
To be sure, a service provider is not required to "investigate" instances of alleged
infringement. See House Report at 61. But if the copyright owner has
investigated and obtained evidence of infringement, the service provider cannot
simply refuse to act. Perfect 10, 2002 WL 731721 at *23 n.23 (noting
disagreement with the Ellison court below's interpretation of § 512(i)). Although
§ 512(i) does not require service providers to hunt down infringers of other
parties' copyrights, it does require them to act once they become aware of repeated
infringement. Where a service provider fails to enforce its policy, it cannot be said
to have met § 512(i)'s requirement that the policy be "reasonably implemented."
III. THE COURT IGNORED THE LAW OF THIS CIRCUIT ON VICARIOUS INFRINGEMENT.
A defendant is liable for vicarious infringement where it has the "'right and
ability to supervise the infringing activity and also has a direct financial interest in
such activities.'" Napster, 239 F.3d at 1022 (quoting Gershwin Publishing Corp.
v. Columbia Artists Mgmt., Inc. 443 F.2d 1159, 1161 (2d Cir. 1971)). The district
court's opinion conflicts with the controlling law of this Circuit and would significantly undermine copyright owners' ability to obtain redress for infringement from
those that benefit from it and have the ability to put an end to it.
Right and ability to supervise. Service providers such as AOL can indisputably block access to USENET newsgroups offering infringing material. That is
what all of the ISPs in this case (even AOL, eventually) did. That proves AOL's
"right and ability" to supervise the infringing activity. Relying on a perceived
inconsistency between various provisions of the DMCA, however, the district
court found the opposite. See 189 F.Supp.2d at 1061. That was error. The
DMCA does not change the test for vicarious infringement. See House Report at
59. Indeed, Congress rejected legislation that would have done so. See supra 14.
Thus, even if there were an inconsistency in the DMCA, it would not affect the
elements of vicarious infringement. [note 5]
As a result of its focus on a wrong interpretation of the DMCA, the district court misconstrued the law of vicarious infringement. AOL admitted that it can block access to bulletin boards containing infringing material. See 189 F. Supp. 2d at 1060-62; ALS Scan, 239 F. 3d at 620-21 (noting AOL blocked access in that case). Nonetheless, the trial court found, because AOL could not stop infringement at "the root level" or block the infringing material until "after the fact," it could not be a vicarious infringer.
That holding directly contradicts this Court's decisions in Napster and
Fonovisa, Inc. v. Cherry Auction, Inc., 76 F. 3d 259, 261 (9th Cir. 1996). Napster
(unsuccessfully) made the same arguments AOL makes here. First, Napster
argued that it could not stop direct infringement by individual users, i.e., "at the
root level." But that argument would obliterate any distinction between direct and
vicarious infringement. Vicarious liability exists because some one other than the
direct infringer should be held liable for the illegal conduct. Although AOL
cannot control whether an individual makes pirated copies, it can control what
occurs on its servers or is accessible from its network. Napster and Fonovisa
require no more. If the law were otherwise, copyright owners would be crippled
in efforts to address ongoing copyright piracy. Rather than addressing
infringement through ISPs that facilitate dissemination of pirated material on the
Internet and can effectively stop it, copyright owners will be forced to pursue
individual infringers one at a time. Neither the law of vicarious infringement nor
the DMCA requires that.
Second, Napster argued that it could not prevent users, before the fact, from
listing or uploading infringing material. This Court rejected that argument,
holding that "[t]he ability to block infringers' access to a particular environment
for any reason whatsoever is evidence of the right and ability to supervise."
Napster, 239 F.3d at 1023. Indeed, because Napster had the ability to remove the
material after it was determined to violate the rights of a copyright holder, Napster
could be held liable as a vicarious infringer. Id. at 1023-24. See also Fonovisa,
76 F.3d at 253 (ability to terminate vendors after the fact constitutes the right and
ability to control). Indeed, the Netcom case, on which the district court relied,
makes exactly this point. In discussing the ability of service providers to disable
access to bulletin board postings, the court explained "[w]hether such sanctions
occurred before or after the abusive conduct occurred is not material to whether
[the service provider] can exercise control." Netcom, 907 F. Supp. at 1376.
AOL clearly had the right and ability to control the USENET postings on its
own servers. In this case, it simply did not exercise that right until after the start
of litigation.
Direct Financial Benefit. The evidence established that AOL offered
USENET access precisely because it attracted paying subscribers to AOL's
service, thus increasing AOL's revenues. Appellant's Br. at 12, 27-28. The trial
court, however, ignored that evidence, instead emphasizing the relative percentage
of AOL usage dedicated to the USENET, and holding that a relatively small benefit was insufficient to trigger vicarious liability.
But the relative percentage of AOL usage dedicated to USENET postings
has nothing to do with whether the benefit to AOL was "direct" or "financial."
"Financial benefit exists where the availability of infringing material acts as a
draw for customers." Napster, 239 F.3d at 1023; Fonovisa, 76 F.3d at 263-64
(financial benefit "where infringing performances enhance the attractiveness of a
venue"). In Napster, it was sufficient that "Napster's future revenue is directly
dependent upon increases in [its] userbase" and that "[m]ore users register with the
Napster system as the 'quality and quantity of available music increases.'" 239
F.3d at 1023; Perfect 10, 2002 WL 731721, at *17 (finding "the existence of these
works provided at a cost far below that provided by a copyright owner" a direct
financial benefit because it attracts new users who pay the service provider
directly).
That is exactly the case here. If the district court's opinion were the law, a
large company could infringe at will, so long as revenues attributable to infringing
activity were a small portion of its business, whereas a small company would be
liable for the identical conduct. More importantly, the district court's opinion
cannot be squared with Napster, Fonovisa or the interpretations of countless
courts across the country. See, e.g., Famous Music Corp. v. Bay State Harness
Horse Racing and Breeding Ass'n, 554 F. 2d 1213, 1214 (1st Cir. 1977) ("direct
financial benefit" from broadcast of music that entertained patrons of a race track);
Playboy Enters., Inc. v. Webbworld, Inc., 968 F. Supp. 1171, 1177 (N.D. Tex.
1997) (benefit where "photographs enhanced the attractiveness" of website);
Polygram Int'l Publ'g Inc. v. Nevada/Tig Inc., 855 F. Supp. 1314, 1332 (D. Mass.
1994) (benefit from music used to interest trade show attendees).
IV. THE DISTRICT COURT'S RULING UPSETS THE BALANCE ESTABLISHED BY THE DMCA.
In the DMCA, Congress carefully crafted the safe harbor provisions both to
give greater certainty to service providers and to give copyright owners the tools
they need to stop piracy of their works over the Internet. House Report at 49-50.
The district court's reading of the DMCA upsets that delicate balance.
The court below conceded that its decision would allow service providers
to "willfully ignor[e]… users on its system who infringe copyrights repeatedly,"
while still remaining within the DMCA's safe harbors. 189 F.Supp.2d at 1065,
1070. But the impact of the trial court's opinion is even more far-reaching. Because § 512(a) was intended to apply only to conduit-like functions, it is not
limited to providers that lack actual knowledge of infringement over their
networks or that promptly disable access to pirated material transmitted over their
networks. Congress did not place these additional conditions on the § 512(a) safe
harbor precisely because they were not necessary the plain language of § 512(a)
itself and the narrow category of providers eligible under § 512(k)(1)(A) make
clear that only providers engaging in common carrier-type functions are eligible.
The district court's opinion, however, expands § 512(a) far beyond those
bounds. In so doing, it eliminates any incentive on the part of service providers to
address Napster-like intellectual property theft as long as such infringement takes
place for finite periods. It is as if the court gave infringers permission to give out
free, pirated copies of creative works to the public via service providers' servers.
If upheld, the district court's opinion would legitimize services dedicated to
blatant copyright infringement, using the USENET as a vehicle. As in Napster,
the individuals initiating the copying would clearly be committing direct
infringement. But, unlike Napster, the service provider would be under no
obligation to block access to the material. Rather than keeping songs on
individual computers and maintaining a file listing at the Napster website, the
district court's decision would sanction placing pirated songs on the USENET for
at least 14 days even longer than routinely occurred on the Napster system. See
Napster, 239 F.3d at 1021 (infringing files available only when user was on-line).
Because, in the trial court's view, AOL lacked the ability to control direct
infringers, even if a USENET site dedicated to pirated works (such as the site in
this case) was the primary reason why AOL maintained and increased its subscribership, AOL would still be protected from liability. Indeed, a service provider
could encourage users to put infringing material on the USENET or could advertise that, for a limited time only, infringing sound recordings are available for
download. Under all of these scenarios, the service provider would still be protected by § 512(a) and would not be committing vicarious infringement. If that
decision stands, it will lead to massive copyright infringement beyond what this
Court saw in Napster.
The impact of the ruling on the development of the Internet should not be
underestimated. The DMCA was designed to promote electronic commerce by
protecting intellectual property rights. The district court's ruling does the opposite,
rewriting copyright law and stripping away intellectual property rights. The effect will
be, as Congress feared, to make copyright owners less likely to make works available in
digital form and less likely to create works at all. See Senate Report at 8. Authors will
be encouraged to continue to create only if there are effective mechanisms to protect
their copyrights. The district court's ruling, however, renders the mechanisms
established by the DMCA ineffective and thus removes the incentive to create.
In contrast, reversal of the district court's opinion will have no deleterious
effect on service providers. With respect to USENET postings, service providers
can invoke the § 512(c) safe harbor, which was created for exactly this situation.
The provider will merely have to ensure that it 1) provides a working e-mail
address to receive notice of infringement, 2) maintains and enforces a policy
against repeat infringers; and 3) disables access to infringing material once it is
notified that pirated works are being disseminated through its network. Virtually
every service provider in the country is already doing those things to remain
within the DMCA's safe harbors in subsections (b)-(d). Even AOL appears ready
to do them (as it did after the commencement of litigation).
Reversing the district court's decision will ensure that copyright owners
have the tools they need (and that Congress gave them) to stop copyright piracy in
the digital world and that service providers are protected from liability if they take
appropriate action to halt dissemination of pirated works. But this Court should
not, as the district court did, warp the plain language of the DMCA because the
pirated material was not available to the public for very long or because AOL did
not post the infringing material itself. Neither of those reasons justify ignoring the
plain language of the statute or undermining the legal rules Congress established
in the fast-moving world of copyright in the digital age.
CONCLUSION
The district court's decision should be reversed.
Respectfully Submitted,
Donald B. Verrilli, Jr.
Thomas J. Perrelli
Kali N. Bracey
Youngjae Lee
JENNER & BLOCK, LLC
601 Thirteenth Street, N.W.
Washington, D.C. 20005
(202) 639-6000
Attorneys for Amici Curiae
Dated: August 30, 2002
Notes
- Appellant argues that AOL "selects" material for its USENET services and thus fails to
satisfy § 512(a)(2). Appellant's. Br. at 54-57. Amici agree. But, even if AOL exercised no editorial control over the USENET services available to subscribers, it would still fail to satisfy § 512(a)(4).
- When an e-mail is sent, it travels to a server of the sender's ISP, but is then broken up into packets of information which are routed over the Internet backbone, which includes many different networks (owned by many different companies), until it is reassembled at the end of its journey by the recipient's ISP. Subsection (k)(1)(A)
encompasses those entities that provide the transmission services between ISPs, not ISPs providing network access.
ISPs providing network access are expressly included in subsection (k)(1)(B) and are eligible only for the other safe
harbors.
- The report released by the House Judiciary Committee (on which the district court relied) analyzed a much different bill. See H. Rep. No. 105-551(I) (May 22, 1998) Two months later, the House Commerce Committee released its report, see H. Rep. No. 105-551(II) (July 22, 1998), which was based on a later version &151; one much closer to the DMCA as passed and to the bill reported out of the Senate Judiciary Committee. See generally Senate Report.
- The district court emphasized that the earlier bill intended to codify the decision in Religious Technology Center v. Netcom On-line Communications Services, Inc., 907 F. Supp. 1361 (N.D.Cal. 1995). But Congress expressly disclaimed that the DMCA codified any decision, much less the Netcom decision. Senate Report at 19. Moreover, the district court's interpretation represents an extension of Netcom, not a codification. In Netcom, the court found that the service provider could be held liable for contributory and vicarious infringement
for maintaining USENET postings. 907 F. Supp. at 1375.
- There is no inconsistency. The court was troubled that an entity that received a financial
benefit could not qualify for the § 512(c) safe harbor. 189 F. Supp. 2d at 1060-61. But a service provider that receives a direct financial benefit and has the right and ability to control the infringing activity is a vicarious infringer, and Congress did not intend them to be protected by the safe harbor. See Nimmer on Copyright 12B.04[A][2] (vicarious infringers not eligible for subsection (c) safe harbor).
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