The Ninth Circuit Court of Appeals affirmed judgment for film studio plaintiff (Columbia) because defendant ISP’s website used BitTorrent peer-to-peer download and induced third party users to download infringing materials of Columbia’s copyrighted films. Columbia Pictures Industries, Inc., et al. v. Fung, et al., Case No. 10-55946 (9th Cir. March 21, 2013) (available here). Columbia filed suit against Internet Service Provider (ISP) Isohunt Web Technologies alleging that the services offered by the ISP induced third parties to download infringing copies of the studio’s films. The lower court found the ISP liable for contributory copyright infringement. The lower court rejected the ISP’s argument that it was entitled to protection under the safe harbor provisions of the Digital Millennium Copyright Act (“DMCA”), 17 U.S.C. § 512(c). The Ninth Circuit Appeals Court effectively affirmed the majority of the injunctive relief.
BitTorrent is a peer-to-peer (“P2P”) file sharing system, which differs from a client-server system with a central computer. A P2P system operates by making each participant of the system both a supplier of the information as well as a consumer. On BitTorrent, when a user uploads a file, the file is broken up into small pieces, permitting others to download all of the different pieces at the same time from different peers on the network. The ISP’s website had two methods of acquiring BitTorrent files: (1) soliciting them from users; and (2) using automated processes that collect BitTorrent files from other BitTorrent websites.
The lower court found the defendants liable for contributory infringement under the inducement theory. To induce infringement, one must “distribute 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, [and therefore] is liable for the resulting acts of infringement by third parties.” Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd., 545 U.S. 913, 936-37 (2005). This theory of liability has four elements: (1) the distribution of a device or product; (2) acts of infringement; (3) promoting the use of the device to infringe copyright; and (4) causation between the promotion of the device and the acts of infringement.
First, the Ninth Circuit held that the ISP offered services through its website, and these services fit within the meaning of “a device or product.” Second, the ISP did not rebut Columbia’s argument that between 90 and 96% of the material on its website related to copyrighted material. Third, the ISP promoted others to infringe copyrighted material. The ISP’s intent was clear because, for example, it hosted a forum asking users to upload specific copyrighted titles, with the specific intent of allowing others to commit copyright violations. The ISP took no steps to use filtering tools to diminish infringing activity. Revenue was generated from selling advertising space.
As for causation, the “proper proof of the defendant’s intent that its product or service be used to infringe copyrights is paramount.” Columbia Pictures, Slip Op. P. 34.
As for the DMCA safe harbors, the Court examined each of the ISP’s safe harbor defenses. First, the ISP asserted the “transitory digital network communications” safe harbor defense for its fragmented BitTorrent files. This safe harbor protects defendants from liability if (1) the transmission of the material was initiated by another person other than the service provider; (2) the transmission, routing, connections, or storage is done through an automatic technical process without selection of the material by the service provider; (3) the service provider does not select the recipients of the material; (4) the service provider does not make or maintain any copies of the material that are ordinarily accessible for periods longer than reasonably necessary to transmit the material; and (5) the material is transmitted through the system without modification of its content. 17 U.S.C. § 512(a). In this safe harbor, “the term ‘service provider’ means an entity offering 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.” 17 U.S.C. § 512(k)(1)(A). The Ninth Circuit rejected this theory because the ISP generated information about BitTorrent files transmitted that promoted further infringing use.
Second, the ISP argued that it was protected under the “information residing on systems or networks at direction of users” safe harbor, which protects a service provider who (1) lacks actual knowledge of the infringing material or activity; (2) or is unaware of facts or circumstances from which the infringing activity is apparent; or (3) upon obtaining such knowledge or awareness acts expeditiously to remove or disable access to the material; and (4) receives no financial benefit directly attributable to the infringing activity if the service provider has the right and ability to control the activity; and (5) upon notification of claimed infringement, responds expeditiously to remove or disable access to the material. 17 U.S.C. § 512(c). “Service provider” under this safe harbor is defined as “a provider of online services or network access, or the operator of facilities therefor[.]” 17 U.S.C. § 512(k)(1)(B). This defense was rejected for the same reasons the Ninth Circuit rejected the § 512(a) defense, because the infringing material did not actually reside on the ISP’s servers.
Third, the ISP claimed that it was entitled to protection under the “information location tools” safe harbor. Here, a service provider is one who refers or links users “to an online location containing infringing material or infringing activity, by using information location tools, including a directory, index, reference, pointer, or hypertext link[.]” Id. This defense was also rejected because the ISP was broadly aware of the facts from which infringing activity was apparent, the ISP received direct financial benefit from that infringement, and the ISP had the right and ability to control the infringing activity.
The Ninth Circuit affirmed the lower court’s grant of summary judgment to Columbia for the ISP’s liability and affirmed the denial of the ISP’s claims of protection under the DMCA safe harbors.