Seventh Circuit: Embedding and Linking Is not Contributory Copyright Infringement

by Lee Gesmer on November 8, 2012

Before the Internet made file sharing ubiquitous, liability for “indirect” copyright infringement was something of a legal backwater.* Massive file sharing of audio, image and video files has changed that. Where a website actually hosts a copyrighted file uploaded by a user, the legal rights of the parties are relatively clear: the uploader (and subsequent downloaders) are liable for “direct” infringement.  The legal rights of the website owner are governed by the Digital Millennium Copyright Act (DMCA).**

*A notable exception being the Supreme Court’s pre-Internet decision in Sony Corp. of America v. Universal City Studios, Inc., which rejected a claim of contributory infringement directed at the VCR, since Sony did not encourage copyright infringement, and the VCR was capable of commercially significant noninfringing uses.

**Caveat: the courts are still working at interpreting and applying the DMCA. The most recent appellate decisions are Viacom v. Youtube (2nd. Cir. 2012) and UMG v. VEOH (9th Cir. 2011).

However, there are many situations where the DMCA does not apply because the illegal file is not being hosted by the defendant (that is, the file is not resident on a server owned or controlled by the defendant). In those cases, where there are countless uploaders and downloaders (many of which cannot easily be identified), copyright owners will sometimes sue the website owner. A single case, if successful, has the potential to inhibit access to thousands of illegal files. However, because the defendants in these cases never reproduced or published the works itself, copyright owners must argue “indirect” (as opposed to “direct”) infringement. Indirect infringement is an overlapping and often confusing pastiche of doctrines, which includes “vicarious” and  ”contributory” copyright infringement, as well as “inducement.”*

*For example, in the Grokster case, where the defendant provided a tool that enabled others to commit direct infringement (peer-to-peer file sharing), the Supreme Court found Grokster liable for inducing  infringement—actively encouraging infringement by use of its file sharing program—despite the fact that Grokster did not host the infringing files.

The “first generation” line of cases represented by Grokster was relatively easy for copyright owners, since the defendants naively encouraged users to use their site or product to access or exchange infringing works.  However, these “shooting fish in a barrel” lawsuits* are likely coming to an end as people creating these programs get wise to the law and stop sending each other incriminating emails that copyright owners can use to prove illegal motivation. The new, more difficult generation of cases is illustrated by the Seventh Circuit’s recent decision in Flava Works v. myVidster, where the issue was whether embedding a copyrighted video constituted contributory copyright infringement.**

*Napster and Aimster are part of this line of cases. A number of cases where the key evidence is the words of the defendant are still working their way through the courts.  A recent example, decided by a California federal district court this summer, is David v. CBS. The court denied CBS’s (actually download.com) motion to dismiss a claim of copyright infringement relating to links to third-party P2P software based on, among other things, download.com’s public statements comparing the P2P software to other P2P programs known for copyright infringement (i.e., Napster and Limewire).

**Another example of the new generation of online copyright cases is Capital Records v. Redigi, discussed here.

myVidster is a “social video bookmarking service”—users of myVidster can embed the thumbnail of a video on myVidster which, when accessed (clicked), plays the video in a “frame” on the myVidster site. However—of critical importance—the video remains on the server to which it was originally uploaded; it is not hosted on the myVidster servers. As the opinion states, “myVidster doesn’t touch the data stream, which flows directly from one computer to another, neither being owned or operated by myVidster.”

As it so happens, some of the videos are copyrighted by Flava. Flava, upset that myVidster was facilitating access to its copyrighted videos, sued Vidster for copyright infringement. However, because myVidster did not host the files (and hence was not a “direct” infringer), Flava was reduced to arguing contributory infringement. This presented a problem for Flava—myVidster must have read a few of the cases cited above, or hired a savvy lawyer, because there was no evidence it was encouraging the use of its site to host copyrighted files. And, the decisions don’t reference any inculpatory internal emails that Flava could use to prove illegal intent. So, Flava did not have as evidence the kind of “illegal talk” that has been key in many earlier contributory infringement cases.

Faced with this situation, Flava played the hand it had been dealt as best it could. It notified myVidster that it was providing links to copyrighted Flava files (in the form of DMCA take down notices), and demanded that myVidster take down links to Flava-owned videos. myVidster declined.

This was enough for the district court, which found MyVidster’s refusal to comply to be “the epitome of willful blindness.” Moreover, the District Court found that MyVidster’s actions (i.e., hosting a site that provided links and embedded videos) materially contributed to the copyright infringement. The district court issued a preliminary injunction, ordering myVidster to take a number of steps intended to exclude Flava videos from myVidster, including honoring DMCA takedown notices and actively filtering to identify and exclude Flava videos.

However, Flava could not hold on to this ruling before a Seventh Circuit panel headed by renowned Judge Richard Posner. As noted, since myVidster did not upload the video to the various sites, the question was not one of “direct” infringement, but rather contributory infringement. Capturing the legal concept of contributory infringement is not a simple matter, as the Seventh Circuit explained in a Posnerian passage:

A typical, and typically unhelpful, definition of “contributory infringer” is “one who, with knowledge of the infringing activity, induces, causes or materially contributes to the infringing conduct of another.” . . . Such a one “may be held liable as a ‘contributory’ infringer.”  . . . But does “may be held liable” mean that a person who fits the definition of “contributory infringer” may nevertheless not be a contributory infringer after all? And what exactly does “materially contribute” mean? And how does one materially contribute to something without causing or inducing it? And how does “cause” differ from “induce”?

The opinion proceeds to the conclusion that myVidster is not a contributory infringer (at least on the limited record associated with a preliminary injunction, which was the procedural posture of this case), for several reasons.

First, Judge Posner reasoned that although the initial uploaders are “direct infringers” myVidster is separated from this infringement by the linkers (or “bookmarkers”), and therefore is too remote from the infringement to be a contributory infringer. The bookmarkers are not infringers (only the uploaders are), and “the facilitator of conduct that doesn’t infringe copyright is not a contributory infringer.”

Second, Flava provided myVidster with DMCA takedown notices, but since myVidster is not hosting infringing videos, myVidster was justified in disregarding these notices. The DMCA provides a safe harbor to websites that host copyright protected works posted by users (user generated content), but in the words of the Seventh Circuit, “A noninfringer doesn’t need a safe harbor.”

Third, as noted, based on the preliminary injunction record myVidster is not inviting people to post copyrighted videos, and therefore is not inducing infringement, as was the case in the “first generation” file sharing cases referenced above.*  This is absolutely essential for defendants in cases of this sort, whether they host the infringing works (as in Viacom v. Youtube), or provide links to infringing works, as myVidster does. In this case Flava argued that myVidster was aware that its site was serving as a clearinghouse for infringing copies, and that its willful blindness to this fact caused it to cross the line.  However, the Seventh Circuit declined to hold that willful blindness led to contributory infringement where myVidster did not encourage links to copyrighted works.

*Although, it might be noted, using a “ster” suffix might not be the best choice for an online service of this kind. (Think Grokster, Napster, Aimster . . . .).

Fourth, not only is myVidster not copying the Flava copyright-protected works, but it is not performing them publicly. As noted above, myVidster doesn’t touch the datastream when a video is accessed and therefore, technically speaking (the Seventh Circuit found), myVidster is not “performing” the work. The server hosting the video and the myVidster end-user that initiates display of the video may be publicly performing the video, but myVidster is not. The Seventh Circuit’s analysis on this issue is analgous to the “server test” adopted by the Ninth Circuit in Perfect 10 v. Amazon. That is, that infringement of the public display right can occur only when the copyrighted work resides on the defendant’s own server, not when it resides on another site’s server and is framed or displayed in-line.

An interesting aspect of this decision is the Seventh Circuit’s conclusion that because MyVidster did not host the copyrighted works, it was not subject to DMCA take-down notices. This is a controversial aspect of the decision, since the DMCA could be read to make link sites subject to DMCA notice and takedown, an interpretation of the statute that Judge Posner characterized as “implausible,” given its far-reaching implications.  myVidster’s decision to ignore these notices took guts (or was foolhardy) on the part of MyVidster, since a DMCA defense would have allowed it to hedge its bets. However, the Seventh Circuit agreed with MyVidster’s argument that because MyVidster did not host the works, it was not subject to the DMCA.

This case was a close call for myVidster. The decision could easily have gone the other way in another circuit, or even before a different Seventh Circuit panel. See Perfect-10, Inc. v. Amazon.com, Inc. (“Applying our test, Google could be held contributorily liable if it had knowledge that infringing Perfect 10 images were available using its search engine, could take simple measures to prevent further damage to Perfect 10’s copyrighted works, and failed to take such steps”). It rested, in the final analysis, on the fact that myVidster was two steps removed from the infringing acts (uploader – linker – myVidster), and that myVidster did not encourage infringement. However, absent a settlement the case is far from over—this was only a preliminary injunction decision, with full discovery and trial yet to come. Flava may yet develop an evidentiary record sufficient to swing the case in the other direction.

Most importantly, the case shows how finely nuanced the law has become with respect to online contributory infringement. Stay tuned.

Flava Works v. myVidster

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