Unit 3: Infringement 3rd Party

OSPs defined

"An entity offering the transmission, routing, or providing the connections for digital online communications, between or among points specified by a user, or material of the user's choosing, without modification to the content of the material as sent or received." 17 U.S.C. § 512(k)

To qualify for exemptions

1.OSP must adopt, implement and inform subscribers and account holders of its policy providing for termination of users who are repeat infringers 2. OSP must have adopted standard technical measures used by copyright owners to identify and protect copyrighted works • Liability limited in 4 safe harbors • Transitory digital network communications • System caching • Information residing on systems networks at the direction of users; and • Information location tools

Contributory Infringement: Peer-to-Peer challenge

A & M Records v. Napster-holding Napster liable for contributory infringement • Holding based on Napster's knowledge of and material contribution to infringing activities of its users • Court acknowledged that Napster may be capable of use in non-infringing ways, but Napster's knowledge of the infringement is key In re Aimster Copyright Litigation-using a revised "Sony" test to find contributory infringement • 7th Circuit disagrees with Napster ruling that actual knowledge of specific uses is a sufficient condition for a ruling of contributory infringement • Revised Sony test would permit a service provided to avoid liability if it demonstrates actual, not merely potential, non-infringing uses of its service • Once non-infringing uses shown, test requires cost/benefit analysis to show how costly to remove non-infringing uses • Aimster introduced no evidence to show non-infringing ways its software could be used Metro-Goldwin-Mayer Studios, Inc. v. Grokster, Ltd.-Supreme Court ruled that distributors of Grokster and Streamcast may be liable for infringement if their products encourage consumers to illegally swap copyrighted works • SC unanimously remanded the case back to the 9th circuit saying that the appellate court had misapplied Sony decision by focusing only on technology and not the business model that the technology served • "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."

Vicarious Liability

Arises in cases where defendant has the right or power to supervise the acts of the direct infringer, and has a financial stake in the infringing acts, even though the defendant has no knowledge of, or did not directly participate in the infringing acts • Fonovisa, Inc. v. Cherry Auction, Inc.-flea market owner held vicariously liable for vendors' sales of counterfeit records • Rationale for liability in these cases is based on the right or power to control the infringing acts while financially benefitting from them

Transitory digital network communications [§512(a)]

As long as someone other than OSP initiates a transmission and chooses its recipients and the OSP does not interfere with the content, no liability can attach to OSP in conjunction with that transmission • Applies to transitory reproductions as long as are not maintained on the system or network for longer than necessary • Longer than necessary for transmission, routing or provision of connections

Contributory Infringement

Easiest cases for liability are those in which the related defendant has actual knowledge of and comes the closest to directly participating in the infringement • Elektra Records Co. v. Gem Electronic Distributors, Inc.-upholding Gem's contributory infringement. --Gem sells blank audio tapes, and for a fee, they would lend shoppers audio tapes filled with copyrighted music. • When defendant's knowledge and control over infringing activity is less pronounced, case for contributory liability is correspondingly weaker • Perfect 10, Inc. v. VISA Int'l Service Assoc.-credit card companies not liable for infringement when their customers purchase infringing material online

Future of p2p and Sony Doctrine

Grokster provides copyright owners new avenue for protecting rights where they can show that purveyors of technology are purposely seeking to profit on infringing acts of users • Grokster did nothing to clarify ambiguities from Sony case • When is a non-infringing use deemed "substantial" or "commercially significant" • Betamax was mostly put to legal use and harm to copyright holders was minimal; P2P technology overwhelming used to infringe and impose real damage to music industry

Information residing on systems or networks at direction of users [§512(c)]

Limits the liability for "hosting" services if OSP: 1.Does not know that the material is infringing; 2.Is not aware of information from which the infringing nature of the material is apparent; 3.If OSP acquires information about infringement, it acts expeditiously to remove or block access to the material; 4.Does not obtain financial benefit directly attributable to the infringing material while having the ability to control it; and 5.Complies with notice and take down provisions

Person can be held liable as a related defendant for the infringing activities of another

Not expressly recognized in the 1976 act • Contributory infringement--one is held liable for actively aiding another to infringe copyright • actively induced the infringement • with knowledge of the infringement, supplied the means to infringe • Vicarious liability-can be held liable for infringing if supervise or have power to supervise the acts of infringement and benefit or stand to benefit financially from the infringing acts

Notice and Take Down

OSPs must designate an agent to receive notices of alleged infringement from copyright owner, by filing with U.S. Copyright Office and by posting agent's name and address (including email) on a publicly accessible website • After receiving a notice, OSP must respond expeditiously to remove or disable access to the material that is claimed to be infringing

System caching [§512(b)]

OSPs not liable for intermediate and temporary storage of material posted online by another person as long as storage is carried out through automatic technical process and the OSP adheres to industry standards for refreshing, reloading and updating the material and does not interfere with password protection and other security measures • OSP must also comply with notice and take down measures

Information Location Tools

OSPs not liable for referring or linking users to an online location containing infringing material, or for providing the means to locate infringing material such as a directory, index or search engine • Notice and take down provisions apply to this sub section as well

Liability for activities of online service providers

Title II of Digital Millennium Copyright Act limits liability for OSPs for copyright infringement • Exemptions add to defenses for OSP under copyright law • Act creates safe harbors for specific OSP activities • Exempted from liability if activity falls within safe harbor • Overall the act provides greater certainty for OSPs, immunizing them from inadvertent liability that may arise from the nature of the Internet

Lenz v. Universal Music (9th Circuit, Decided Sept., 2015)

copyright holders are required to consider fair use before sending a takedown notice.

Subpeona for Infringement

§512(h) allows any copyright owner who has served notice on an OSP to obtain court order requiring OSP to identify individual subscriber whose material or conduct was the subject of the original notice • Issue is whether this section can be used only to identify subscribers who have posted infringing material or can be expanded to include subscribers who have used the OSP to download that material (i.e. simply using the OSP as a conduit) In re Verizon Internet Services, Inc.-RIAA tried to use §512(h) to unearth individuals who were engaged in infringing peer-topeer file sharing • Verizon refused arguing that 512(h) did not apply to situations where OSP was a mere conduit for arguably infringing transmissions • Court of appeals agreed; can make such use if the OSP is involved in storage of the material on its website but not in its capacity of transmitting data

Contributory Infringement 2.0

• Sony Corp. v. Universal City Studios, Inc.-Sony not liable as contributory infringer for off-air taping done by Betamax owners • SC holds that manufacturers of staple articles of commerce that are suitable for substantial non-infringing uses, cannot be held as contributory infringers • Sony had knowledge of possible infringing uses but less certainty of its use in that way