No statutory damages in online copyright case where infringement continued after copyright registration

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If a copyright infringement begins before the plaintiff registers its copyright, and continues after the date of registration, can the plaintiff recover its attorney’s fees and statutory damages for the infringement that occurs after registration? The U.S. District Court for the Southern District of Indiana recently considered that question in the case of Bell v. Turner, 2016 WL 1270221 (S.D. Ind. March 31, 2016).

The prospect of recovering statutory damages and attorney’s fees is a big motivator for copyright plaintiffs. The Copyright Act (at 17 U.S.C. § 504(c)(1)) provides that a plaintiff can receive an award of statutory damages — in lieu of actual damages and profits — in a sum not less than $750 or more than $30,000 for each infringement. If the copyright infringement is willful, “the court in its discretion may increase the award of statutory damages to an award of not more than $150,000.” And 17 U.S.C. § 505 provides that a successful party in a copyright action can recover its costs and attorney’s fees in the court’s discretion.

But statutory damages and attorney’s fees are only available if certain conditions are met. The Copyright Act precludes a plaintiff from obtaining statutory damages and attorney’s fees if the infringement of the work commenced after publication but before registration. The Copyright Act provides, at 17 U.S.C. § 412(2), that “no award of statutory damages or attorney’s fees…shall be made for…any infringement of copyright commenced after first publication of the work and before the effective date of its registration, unless such registration is made within three months after the first publication of the work”.

In Bell v. Turner, the court granted summary judgment to the defendant on the issue of whether plaintiff was entitled to recover statutory damages and attorney’s fees. Plaintiff first published his photo of the Indianapolis skyline online in 2000. In 2009, defendant copied the photo and placed it on his website. In 2011, plaintiff registered the copyright in the work, but defendant left his copy of the photo online, even after the work was registered.

In granting summary judgment to defendant, the court cited to Derek Andrew, Inc. v. Poof Apparel Corp., 528 F.3d 696 (9th Cir. 2009) and observed that “the first act of infringement in a series of ongoing infringements of the same kind marks the commencement of one continuing infringement under § 412.” Because the defendant posted the photo online more than three months before the date plaintiff registered the work, plaintiff was not entitled to recover statutory damages or attorney’s fees, even though the infringement continued after the date of registration.

Bell v. Turner, 2016 WL 1270221 (S.D. Ind. March 31, 2016)


Evan_BrownAbout the Author: Evan Brown is a Chicago technology and intellectual property attorney. Call Evan at (630) 362-7237, send email to ebrown [at] internetcases.com, or follow him on Twitter @internetcases. Read Evan’s other blog, UDRP Tracker, for information about domain name disputes.

Website operator not liable for copyright infringement despite lack of DMCA safe harbor protection

Online platforms that allow user-generated content should take advantage of the safe harbor provisions of the Digital Millennium Copyright Act (DMCA), which protect the platform in the event of a third party claim of copyright infringement over the user-generated content. But the recent case of BWP Media USA, Inc. v. T&S Software Associates, Inc., 2016 WL 1248908 (N.D. Tex., March 25, 2016) shows that a platform may still avoid liability for infringement even if it has not availed itself of the benefits of the DMCA.

Plaintiff copyright holders sued defendant online forum board operator for direct and vicarious copyright infringement, over photos uploaded by users of the online forum board. Defendant moved for summary judgment. The court granted the motion. The defendant successfully defeated these claims of copyright infringement even though it had not met the DMCA safe harbor requirement of designating an agent with the Copyright Office to receive takedown notices.

Direct Infringement

The court found there was no triable issue on plaintiffs’ claim that defendant was liable for direct infringement, because the parties did not dispute that defendant played no direct role in uploading the photos. Citing the seminal case of Religious Tech. Ctr. v. Netcom OnLine Comm’cn Servs., 907 F, Supp. 1361 (N.D.Cal. 1995), the court observed that “making an internet company liable for direct copyright infringement simply because it gave users access to copyrighted material posted by others would create unreasonable liability.”

Vicarious Liability

A defendant may be vicariously liable for copyright infringement where it “profits directly from the infringement and has a right and ability to supervise the direct infringer, even if the defendant initially lacks knowledge of the infringement.” Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd., 545 U.S. 913, 930 (2005). In this case, the court found that although plaintiffs contended that (1) the copyrighted photographs were displayed alongside paid advertising, (2) defendant received revenue from the paid advertising on its forum, and (3) the revenue received was based, in part, on the website traffic, plaintiff failed to point to any evidence in the record showing that defendant directly profited from the infringing conduct.

Observation: DMCA Safe Harbor Not Needed Here

Online service providers that make their platforms available for the storage of user-generated content (even if such ability is trivial, e.g., allowing users to upload profile pictures) are encouraged to take the appropriate steps to place the service provider within the protections of DMCA safe harbor. These steps include providing appropriate information in the platform’s terms of service, employing internal processes to handle takedown requests and repeat infringers, having a plan in place for dealing with counternotifications, and designating an agent with the Copyright Office to receive takedown notices. Being in the safe harbor means that the service provider has an affirmative defense if it is sued by a third party copyright holder for infringement causaed by the platform’s users.

Many have mistakenly believed that if a service provider fails to get safe harbor protection, it is automatically liable for infringement occasioned by user generated content uploaded to the service. That is not true, and the BWP Media case serves as an example. A copyright-owning plaintiff must still establish the elements of infringement against the service provider — whether for direct infringement or under a theory of secondary liability (like vicarious infringement) — even if the defendant does not find itself within the DMCA safe harbor.

BWP Media USA, Inc. v. T&S Software Associates, Inc., 2016 WL 1248908 (N.D. Tex., March 25, 2016)


Evan_BrownAbout the Author: Evan Brown is a Chicago technology and intellectual property attorney. Call Evan at (630) 362-7237, send email to ebrown [at] internetcases.com, or follow him on Twitter @internetcases. Read Evan’s other blog, UDRP Tracker, for information about domain name disputes.

Facebook’s Terms of Service protect it from liability for offensive fake account

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Someone set up a bogus Facebook account and posted, without consent, images and video of Plaintiff engaged in a lewd act. Facebook finally deleted the account, but not until two days had passed and Plaintiff had threatened legal action.

Plaintiff sued anyway, alleging, among other things, intrusion upon seclusion, public disclosure of private facts, and infliction of emotional distress. In his complaint, Plaintiff emphasized language from Facebook’s Terms of Service that prohibited users from posting content or taking any action that “infringes or violates someone else’s rights or otherwise would violate the law.”

Facebook moved to dismiss the claims, making two arguments: (1) that the claims contradicted Facebook’s Terms of Service, and (2) that the claims were barred by the Communications Decency Act at 47 U.S.C. 230. The court granted the motion to dismiss.

It looked to the following provision from Facebook’s Terms of Service:

Although we provide rules for user conduct, we do not control or direct users’ actions on Facebook and are not responsible for the content or information users transmit or share on Facebook. We are not responsible for any offensive, inappropriate, obscene, unlawful or otherwise objectionable content or information you may encounter on Facebook. We are not responsible for the conduct, whether online or offline, of any user of Facebook.

The court also examined the following language from the Terms of Service:

We try to keep Facebook up, bug-free, and safe, but you use it at your own risk. We are providing Facebook as is without any express or implied warranties including, but not limited to, implied warranties of merchantability, fitness for a particular purpose, and non-infringement. We do not guarantee that Facebook will always be safe, secure or error-free or that Facebook will always function without disruptions, delays or imperfections. Facebook is not responsible for the actions, content, information, or data of third parties, and you release us, our directors, officers, employees, and agents from any claims and damages, known and unknown, arising out of or in any way connected with any claims you have against any such third parties.

The court found that by looking to the Terms of Service to support his claims against Facebook, Plaintiff could not likewise disavow those portions of the Terms of Service which did not support his case. Because the Terms of Service said, among other things, that Facebook was not responsible for the content of what its users post, and that the a user uses the service as his or her on risk, the court could not place the responsibility onto Facebook for the offensive content.

Moreover, the court held that the Communications Decency Act shielded Facebook from liability. The CDA immunizes providers of interactive computer services against liability arising from content created by third parties. The court found that Facebook was an interactive computer service as contemplated under the CDA, the information for which Plaintiff sought to hold Facebook liable was information provided by another information content provider, and the complaint sought to hold Facebook as the publisher or speaker of that information.

Caraccioli v. Facebook, 2016 WL 859863 (N.D. Cal., March 7, 2016)

About the Author: Evan Brown is a Chicago attorney advising enterprises on important aspects of technology law, including software development, technology and content licensing, and general privacy issues.

Court holds browsewrap agreement not enforceable

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Plaintiff filed a consumer fraud class action lawsuit against defendant, the operator of an ecommerce website. Defendant moved to have the case heard by arbitration, arguing that the arbitration provision in its website’s terms of use required the dispute to be arbitrated instead of heard in court. The terms of use were in the form of a “browsewrap” agreement — viewable by a hyperlink displayed at the bottom of each page of defendant’s website.

The court denied the motion, finding that the hyperlink to the terms of use (containing the arbitration provision) was too inconspicuous to put a reasonably prudent internet consumer on inquiry notice. Since the agreement was not enforceable, plaintiffs were not bound by the arbitration provision. Defendant sought review with the California Court of Appeal. On appeal, the court affirmed the lower court.

It observed that for a browsewrap agreement to be enforceable, a court must infer that the end user assented to its terms. This may be more difficult to show than in situations involving “clickwrap” agreements, which require the user to affirmatively do something, such as check a box, to indicate his or her assent to the terms of use.

In this case, the court held that although an especially observant internet consumer could spot the defendant’s terms of use hyperlinks on some checkout flow pages without scrolling, that quality alone was not all that was required to establish the existence of an enforceable browsewrap agreement. Rather, as the Second Circuit observed in Specht v. Netscape, 306 F.3d 17 (2d Cir.2002), “[r]easonably conspicuous notice of the existence of contract terms and unambiguous manifestation of assent to those terms by consumers are essential if electronic bargaining is to have integrity and credibility.”

Here, the defendant’s terms of use hyperlinks — their placement, color, size and other qualities relative to defendant’s website’s overall design — were simply too inconspicuous to meet that standard.

Long v. Provide Commerce, Inc., — Cal.Rptr.3d —, 2016 WL 1056555 (Cal Ct. App., March 17, 2016)

About the Author: Evan Brown is a Chicago attorney advising enterprises on important aspects of technology law, including software development, technology and content licensing, and general privacy issues.

Photo courtesy Flickr user Patrick Finnegan under this Creative Commons license.

Communications Decency Act shields Backpage from liability for violation of federal sex trafficking law

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Three Jane Doe plaintiffs, who alleged they were victims of sex trafficking, filed suit against online classified ad provider Backpage.com (“Backpage”), asserting that Backpage violated the federal Trafficking Victims Protection Reauthorization Act (“TVPRA”) by structuring its website to facilitate sex trafficking and implementing rules and processes designed to actually encourage sex trafficking.

The district court dismissed the TVPRA claims for failure to state a claim, holding that the Communications Decency Act, at 47 U.S.C. §230, provided immunity from the claims. Plaintiffs sought review with the First Circuit. On appeal, the court affirmed the lower court’s dismissal.

Section 230 principally shields website operators from being “treated as the publisher or speaker” of material posted by users of the site. In this case, the court held that plaintiffs’ claims were barred because the TVPRA claims “necessarily require[d] that the defendant be treated as the publisher or speaker of content provide by another.” Since the plaintiffs were trafficked by means of the third party advertisements on Backpage, there was no harm to them but for the content of the postings.

The court rejected plaintiffs’ attempts to characterize Backpage’s actions as “an affirmative course of conduct” distinct from the exercise of the “traditional publishing or editorial functions” of a website owner. The choice of what words or phrases to be displayed on the site, the decision not to reduce misinformation by changing its policies, and the decisions in structuring its website and posting requirements, in the court’s view, were traditional publisher functions entitled to Section 230 protection.

Does v. Backpage.com, LLC, No. 15-1724 (1st Cir., March 14, 2016)

Evan Brown is a Chicago attorney advising enterprises on important aspects of technology law, including software development, technology and content licensing, and general privacy issues.

See also:
Seventh Circuit sides with Backpage in free speech suit against sheriff

Website operator was too involved with development of content to be immune under Section 230

Defendant started up a website to — in her own words — provide a place for others to have a dialogue and post information about their experiences at Plaintiff’s youth drug rehab facilities. Plaintiff found the content of Defendant’s website offensive, and sued for defamation and intentional interference with prospective economic advantage. Defendant filed a motion to strike under California’s Anti-SLAPP law. The court denied the motion.

In denying the Anti-SLAPP motion, the court found, among other things, that Plaintiff had established a probability of prevailing on most of its claims. This chance of prevailing withstood Defendant’s argument that she was shielded from liability by the Communications Decency Act.

This Act provides that “[n]o provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.” 47 U.S.C. § 230(c)(1).

Defendant acknowledged that her defense was relevant only to the extent that she was alleging that comments by third parties on her website were defamatory.

She quoted Batzel v. Smith, 333 F.3d 1018 (9th Cir. 2008) to assert that “the exclusion of ‘publisher’ liability necessarily precludes liability for exercising the usual prerogative of publishers to choose among proffered material and to edit the material published while retaining its basic form and message.” She argued that she was entitled to Section 230 immunity because she was an exempt publisher — she either simply posted others’ statements or made minor edits to those statements before posting.

The court did not agree with Defendant’s characterization of her publishing activities.

It found that her posts would not lead a visitor to believe that she was quoting third parties. Rather, in the court’s view, Defendant adopted the statements of others and used them to create her comments on the website. She posted her own articles, and summarized the statements of others.

Moreover, Defendant did more than simply post whatever information third parties provided. She elicited statements through two surveys that contained specific questions to gather information about specific issues. The court found this to disqualify Defendant from Section 230 immunity under the holding of Fair Housing Council v. Roommates.com, LLC, 521 F.3d 1157 (9th Cir. 2008) (wherein the website operator was not immune under the Communications Decency Act because it created discriminatory questions and choice of answers).

Diamond Ranch Academy, Inc. v. Filer, 2016 WL 633351 (D. Utah, February 17, 2016)

Evan Brown is a Chicago attorney advising enterprises on important aspects of technology law, including software development, technology and content licensing, and general privacy issues.

On avoiding anxiety-inducing words in online terms of service

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Are “worldwide” “perpetual” rights really necessary?

Designer/developer Robert Nealan wrote a post questioning whether self-hosted blogging is dead. The piece is interesting as a commentary on the current state of blogging in general — a state that has changed a lot in the past decade or more, primarily due to the influences of outside social platforms, namely, Twitter, and more recently, as Robert notes and critiques, Medium.

The piece is a refreshing singing of praise for self-hosted blogs (like the one you’re reading). But another, no less important element of the post is an undercurrent shaped by a not-unjustified freak out of sorts over what third party platforms’ online terms of service say about their claim of rights in the users’ intellectual property. When we look to the terms of service for some of these platforms (and even more so if we actually think about what those terms say), we recognize that platforms quite often over-aggressively grab onto rights to do things with the content the user posts. So much depends on how these terms of service are written.

Lawyers can learn a lot from the commentary like that Robert Nealan has posted. As an object lesson and example, he takes issue with Svbtle’s terms, particularly the following:

Marketing. As a paid customer, you give Svbtle a perpetual world-wide license to use your company’s assets and logos, unless Svbtle agrees in writing otherwise. These assets and logos will be used purely for marketing and sales efforts, such as being displayed on the home page.

Good practice here would might consider adopting the ethos of certain “by design” concepts we see in the privacy and data security world. Think of “privacy by design” or “security by design” — the idea that a technology developer (e.g., someone building an app) should build the system in a way that it does not keep data around for longer than what is needed, and certainly for no longer than what the developer promises its users it will.

The same could be applied here — and it seems even simpler — for platforms to adopt principles establishing they will only exercise rights in relation to users’ intellectual property for only as long as they meaningfully need to do so. Let’s call it “Appropriate Rights by Design“. Words like “perpetual” and “world-wide” can be frightening. A platform hosting users’ content probably doesn’t need such extensive rights. If that’s the case, then the platform shouldn’t grab those rights. Those terms can be a red-herring. Robert Nealan took comfort in his piece in Medium’s terms which say that users of Medium “own the rights to the content [they] post on Medium,” and that Medium “[doesn’t claim ownership over any of it.” Funny thing is, a platform that grabs a world-wide, perpetual license could truthfully say the very same thing. So by not grabbing more rights than necessary, i.e., applying principles of Appropriate Rights by Design,  platforms will avoid having users latch on to scary words unnecessarily. For as long as this happens, it’s likely users will continue to have anxiety about moving to a third-party hosted platform, and in the same way, keep a light shining on what’s good about self-hosted blogs and other platforms.

Evan Brown is a Chicago attorney advising enterprises on important aspects of technology law, including software development, technology and content licensing, and general privacy issues.

Photo courtesy Flickr user fady habib under this Creative Commons license.

Right of publicity case against Shaquille O’Neal over a photo he tweeted and posted to Instagram moves forward

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A federal court has held that a plaintiff has successfully pled a claim of “appropriation” (essentially, right of publicity claim) against former NBA star Shaquille O’Neal, for Shaq’s use of plaintiff’s photo on Twitter and Instagram. The case is useful inasmuch as it shows how courts will consider social media as providing a benefit to its user.

Shaq acquired a photo of plaintiff, who suffers from a condition that affects his hair, skin and teeth, then placed a photo of himself making a contorted face next to the photo, apparently to imitate the way plaintiff appeared. Given that Shaq has millions of followers, this garnered many, many likes and comments. (I of course won’t republish the image here, but if you really want to see it, just do a Google Image search using the parties’ last names.)

Plaintiff sued under several theories, including intentional infliction of emotional distress, appropriation, and unjust enrichment. Shaq moved to dismiss most of the claims. The court did throw out some of the claims (e.g., negligence — plaintiff has pled Shaq acted intentionally). On the appropriation claim, the court, applying Michigan law, held that Shaq had made use of the plaintiff’s name or likeness for his own purposes and benefit. The court rejected Shaq’s argument that plaintiff lacked any pecuniary interest in his identify, holding that the tort of appropriation under Michigan law “is not limited to commercial appropriation” and “applies also when the defendant makes use of the plaintiff’s name or likeness for his own purposes and benefit, even though the use is not a commercial one, and even though the benefit sought to be obtained is not a pecuniary one.”

The court went on to clarify that even if the tort of appropriation under Michigan law did require a plaintiff to demonstrate a significant commercial or pecuniary interest in his identity, plaintiff’s case still survived the motion to dismiss. “[A] plaintiff need not be a national celebrity to demonstrate significant commercial value.”

Binion v. O’Neal, No. NO. 15-60869, 2016 WL 111344 (S.D. Fla., Jan. 11, 2016).

Evan Brown is a Chicago attorney advising enterprises on important aspects of technology law, including software development, technology and content licensing, and general privacy issues.

ABA Journal again includes internetcases on its list of top 100 law blogs

Blawg100WebBadgeEditors of the ABA Journal have again selected internetcases as one of the 100 best law blogs. This is the second time the American Bar Association has honored the blog, having also placed it on the list of top law blogs of 2011.

The internetcases blog is included in the “9th Annual Blawg 100,” a list of the magazine’s 100 favorite legal blogs. The ABA Journal says the list recognizes “the very best law blogs, known for their untiring ability to craft high-quality, engaging posts.”

Chicago attorney Evan Brown authors the blog, which focuses on issues involving the internet, technology, intellectual property, social media, privacy, and new media. Evan created the blog in 2005 and draws from his many years of legal experience and his work as a domain name panelist for the World Intellectual Property Organization, deciding cases under the Uniform Domain Name Dispute Resolution Policy (UDRP). Evan is a partner in the Chicago-based law firm Much Shelist P.C., and is an adjunct professor at Chicago-Kent College of Law and John Marshall Law School, both in Chicago. Evan also provides analysis on cybersquatting cases at the blog UDRP Tracker.

The ABA Journal is read by half of the nation’s 1 million lawyers every month. It covers the trends, people and finances of the legal profession from Wall Street to Main Street to Pennsylvania Avenue. The ABA is the largest voluntary professional association in the world. With more than 400,000 members, the ABA provides law school accreditation, continuing legal education, information about the law, programs to assist lawyers and judges in their work, and initiatives to improve the legal system for the public.

Seventh Circuit sides with Backpage in free speech suit against sheriff

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Backpage is an infamous classified ads website that provides an online forum for users to post ads relating to adult services. The sheriff of Cook County, Illinois (i.e. Chicago) sent letters to the major credit card companies urging them to prohibit users from using the companies’ services to purchase Backpage ads (whether those ads were legal or not). Backpage sued the sheriff, arguing the communications with the credit card companies were a free speech violation.

The lower court denied Backpage’s motion for preliminary injunction. Backpage sought review with the Seventh Circuit. On appeal, the court reversed and remanded.

The appellate court held that while the sheriff has a First Amendment right to express his views about Backpage, a public official who tries to shut down an avenue of expression of ideas and opinions through “actual or threatened imposition of government power or sanction” is violating the First Amendment.

Judge Posner, writing for the court, mentioned the sheriff’s past failure to shut down Craigslist’s adult section through litigation (See Dart v. Craigslist, Inc. 665 F.Supp.2d 961 (N.D.Ill.2009)):

The suit against Craigslist having failed, the sheriff decided to proceed against Backpage not by litigation but instead by suffocation, depriving the company of ad revenues by scaring off its payments-service providers. The analogy is to killing a person by cutting off his oxygen supply rather than by shooting him. Still, if all the sheriff were doing to crush Backpage was done in his capacity as a private citizen rather than as a government official (and a powerful government official at that), he would be within his rights. But he is using the power of his office to threaten legal sanctions against the credit-card companies for facilitating future speech, and by doing so he is violating the First Amendment unless there is no constitutionally protected speech in the ads on Backpage’s website—and no one is claiming that.

The court went on to find that the sheriff’s communications made the credit card companies “victims of government coercion,” in that the letters threatened Backpage with criminal culpability when, à la Dart v. Craigslist and 47 U.S.C. 230, it was unclear whether Backpage was in violation of the law for providing the forum for the ads.

Backpage.com, LLC v. Dart, — F.3d —, 2015 WL 7717221 (7th Cir. Nov. 30, 2015)

Evan Brown is a Chicago attorney advising enterprises on important aspects of technology law, including software development, technology and content licensing, and general privacy issues.

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