Perfect 10 v. Giganews, 1/23/17, 9C
For a fee, Giganews helps people access Usenet, where people can share and access copyrighted information through servers that are owned by Giganews and other providers. When you subscribe, Giganews provides a browser to access Usenet and its content, and it hosts servers where users “post” material that can be accessed by other users. Perfect 10 owns a vast amount of adult images that users illegally share over Giganews Servers. Perfect 10 sued Giganews for copyright infringement. The trial court dismissed most of Perfect 10’s copyright claims on a 12(b)(6) motion, and granted summary judgment on its last claim. Perfect 10 appealed those rulings and the trial court’s award of over $5M in attorney’s fees. Held: Affirmed.
Usenet users (who are organized around topics of interests called “newsgroups) can post articles (text files that each have a unique Message-Id) to a bulletin board; copyrighted material like video, images, and music (called binary files) can be encoded into the “article.” Usenet servers will automatically propagate articles to surrounding servers that furnish access to that newsgroup, as long as the providers have entered into a “peering” agreement. The Giganews browser, Mimo, is used by its customers to find and access articles and to decode and display content, which includes an enormous amount of copyrighted material. Users control what is posted and shared, and the control exercised by Giganews is minimal (like preventing duplicate posts, or deleting newsgroups related to child-porn).
When Perfect 10 identified Message-Ids that were infringing its copyrighted material, it sent DMCA (take-down) notices to Giganews. Giganews complied when the Message-Ids were readable; when not readable, Giganews asked Perfect 10 to send readable Message-Ids, but Perfect 10 did not respond. Giganews does not scour the millions of messages that are posted each month for infringing material because that would take an enormous amount of time.
Perfect 10 could show ownership, it could show there had been a violation of rights that copyright law protects (display, distribution and reproduction), but 9C said it could not show causation, what many of these cases call “volitional” conduct. The court noted prior precedent that “infringement of the reproduction right requires copying by the defendant, which comprises a requirement that the defendant cause the copying.”
9C says its holding is consistent with the Supreme Court’s holding in American Broadcasting Cos., Inc. v. Aereo, Inc. In Aereo, the company streamed TV content to subscribers, rebroadcasting TV signals over the internet without the copyright holder’s consent. The Court concluded that infringed broadcasters’ copyrights, and that Aereo was not just an equipment provider. The Supreme Court in Aereo did not discuss the volitional conduct rule, and the Court distinguished between an entity that “engages in activities like Aereo’s,” and one that “merely supplies equipment that allows others” to perform or transmit.
Giganews’s browser displayed thumbnails of Perfect 10’s content. 9C said that the Mimo browser is just software and is passive; the infringing conduct is done by users. The distribution claim failed for essentially the same reason — “because this distribution happens automatically,” meaning that “Giganews has not engaged in volitional conduct by which it ‘causes’ the distribution.” Perfect 10’s reproduction claim failed because “automatic copying, storage, and transmission of copyrighted materials, when instigated by others, does not render an [Internet service provider] strictly liable for copyright infringement[.]”
Its secondary liability claims also failed. One contributory theory depends on proving that the alleged contributory infringer “has actual knowledge that specific infringing material is available using its system, and can take simple measures to prevent further damage to copyrighted works, yet continues to provide access to infringing works.” While Giganews could easily take down content when it was provided a Message-Id, to find all the infringing content would have taken over 300,000 hours of time for every 10 million messages, the number of messages ids that Giganews receives every month.
Perfect 10 also failed to show that Giganews induced copyright violations. The Supreme Court has held that “one who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties.” MetroGoldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913, 936–37 (2005). 9C found that Giganews’s evidence that Giganews had as the object of promoting its use to infringe copyright was inconclusive. Perfect 10 argued that Giganews advertises that its browser can find has built-in MP3 and File Locators that search all Giganews newsgroups for music, pictures, and movies without having to download millions of messages; that Giganews “offers 25,000 terabytes of copyrighted materials . . . without permission”; that Giganews “continues to commercially exploit the content of known repeat infringers”; and that it “advertises that it does not keep track of subscriber downloads, effectively encouraging infringement.” 9C said that was not enough.
To the uninitiated of Usenet (like me) this whole thing sounds like owning and operating warehouses that, for a fee, can be used by traffickers to house and exchange in goods that are stolen, counterfeit, or being transferred and shared in violation of contracts, licenses, and/or law. Let’s hope copyright owners can find a way to effectively protect their rights given what is happening on Usenet.