Internet Library of Law
and Court Decisions

Harlan Ellison v. Stephen Robertson, et al.

Affirming in part and reversing in part the court below, the Ninth Circuit grants so much of defendant America Online's motion for summary judgment which sought dismissal of claims of vicarious copyright infringement advanced by the plaintiff author.  These claims arose out of  the posting of plaintiff's works by defendant Robertson on a Usenet newsgroup made available by AOL to its users and others, and stored for a period of 14 days on AOL's servers.  AOL's involvement in these infringing activities was passive - it neither posted nor directed the posting of the infringing material to the Usenet newsgroup in question.  Rather, the claims against AOL were predicated on its commitment, via peering agreements, to store the content of the Usenet newsgroup to which this offending post was made on its servers, and to transmit that content to, and make it available for viewing by, others.

The Ninth Circuit affirmed the District Court's dismissal of plaintiff's vicarious copyright infringement claim, because plaintiff had failed to submit evidence that AOL "received a direct financial benefit from providing access to the infringing material" to its users.  Thus, "there [was] no evidence that indicate[d] that AOL customers either subscribed because of the availabil[ity of] infringing material or cancelled subscriptions because it was no longer available."

The Ninth Circuit also affirmed so much of the District Court's decision that denied AOL's motion to dismiss the contributory infringement claims plaintiff advanced.  "One who, with knowledge of the infringing activity, induces, causes or materially contributes to the infringing conduct of another, may be liable as a 'contributory infringer.'"  Here the court held that issues of fact existed as to whether AOL had the requisite knowledge to be guilty of contributory infringement, given the fact that plaintiff's attorneys had sent an e-mail to an AOL designated DMCA notice address that informed AOL of the infringing activity in question, after which AOL continued to allow the material in question to be posted on its servers, and made available to others.  The court held that issues of fact existed as to whether AOL, which it found had not actually received this e-mail, should nonetheless be charged with notice thereof given its failure to continue to operate this e-mail address, which it had designated with the US Copyright Office as the address to which DMCA notices of copyright infringement were to be sent.    The Ninth Circuit held that this knowledge, coupled with AOL's storage of the infringing material on its servers, and provision of access thereto to AOL users, could render AOL liable for contributory copyright infringement.

The Ninth Circuit reversed the District Court's determination that AOL was protected from this potential liability for contributory copyright infringement by operation of the safe harbor provisions of section 512(a) of the Digital Millennium Copyright Act.  This section protects a qualifying internet service provider from liability for copyright infringement by reason of the intermediate and transient storage of digital material (such as e-mails) in the course of transmitting, routing or providing connections thereto.  The Ninth Circuit, affirming the District Court, held that AOL's practice of storing the Usenet postings in question on its servers for a period of 14 days constituted intermediate and transient storage in the course of transmitting or providing connection to digital material that qualified for protection if AOL met the requirements of the  safe harbor provisions of Section 512(a) of the DMCA.  However, reversing the District Court, the Ninth Circuit held that issues of fact existed as to whether AOL had reasonably implemented a polity to terminate repeat infringers, given, as stated above, that the AOL e-mail address to which DMCA notices of infringement were to be sent was not operational.  As implementation of such a policy was a prerequisite to entitlement to the protections of the DMCA, this branch of AOL's summary judgment motion was denied.

Finally, the District Court held that AOL could not be liable for direct copyright infringement, because AOL's passive involvement in the infringing activity at issue was insufficient to sustain a direct copyright infringement claim.  This claim was "abandoned" by Ellison on appeal. 

Plaintiff Harlan Ellsion is the owner of the copyright in a number of works of science fiction he authored.  In or about April 2000, defendant Stephen Robertson posted a number of plaintiff's works onto the Usenet newsgroup alt.binaries.e-book.  Robertson utilized the services of his local ISP, Tehama County Online, as well as RemarQ Communities, Inc., to post this material.  According to the court, alt.binaries.e-book "was used primarily to exchange unauthorized digital copies of works by famous authors, including Ellison."

Defendant America Online ("AOL") is a party to a number of Usenet peer agreements.  Pursuant to these agreements, AOL's servers automatically transmit and receive newsgroup messages from another peer's servers.  Once received, AOL makes these messages available to those of its users and others who access the Usenet newsgroup.  In April 2000, AOL retained messages such as those at issue on its servers for a period of 14 days.

As a result of Robertson's actions, plaintiff's works were posted to the alt.binaries.e-book newsgroup, and were forwarded and copied onto servers operated by various Usenet peers throughout the world, including AOL.

On or about April 17, 2000, plaintiff's attorneys sent AOL a notice via e-mail of copyright infringement arising out of the aforementioned conduct.  AOL did not, however, receive this e-mail.  Plaintiff thereafter commenced this suit.  Shortly thereafter, AOL blocked its users' access to the alt.binaries.e-book newsgroup.

In his suit, plaintiff asserted claims of direct, contributory and vicarious copyright infringement against AOL as a result of the aforementioned conduct.  AOL moved for summary judgment, seeking dismissal of each of these claims.

The District Court held that the passive involvement of AOL in the infringement in question was insufficient to support a claim of direct copyright infringement.  Relying on the court's holding in Religious Technology Center v. Netcom On-line Communications Services Inc., 907 F. Supp. 1361 (N.D.Cal. 1995) the District Court held that "AOL's role in the infringement as a passive provider of Usenet access to AOL users cannot support direct copyright infringement liability. … [D]irect infringement liability should be limited to those users, like Robertson, who are responsible for the actual copying."  Ellison abandoned this claim on appeal.

The Ninth Circuit dismissed plaintiff's claims of vicarious copyright infringement.  A defendant may be held vicariously liable for the infringing activity of a third party when "he enjoys a direct financial benefit from another's infringing activity and has the right and ability to supervise the infringing activity."

The District Court held that to show that the infringer received a "direct financial benefit" the plaintiff must demonstrate that "a substantial portion of a defendant's income [   ] be directly linked to the infringing activities . . .".   The Ninth Circuit disagreed, holding that "there is no requirement that the draw be substantial" or a large percentage of the alleged infringer's overall profits.  Rather, said the Ninth Circuit:

The essential aspect of the 'direct financial benefit' inquiry is whether there is a causal relationship between the infringing activity and any financial benefit a defendant reaps, regardless of how substantial the benefit is in proportion to a defendant's overall profits.

Nonetheless, the Ninth Circuit affirmed the District Court's dismissal of plaintiff's vicarious infringement claim, because plaintiff had failed to show "that AOL received a direct financial benefit from providing access to the infringing material."  Said the Court:

We note that there is no evidence that indicates that AOL customers either subscribed because of the available infringing material or canceled subscriptions because it was no longer available.

Affirming the court below, the Ninth Circuit found that issues of fact existed as to whether defendant AOL was guilty of contributory copyright infringement.

"One who, with knowledge of the infringing activity, induces, causes or materially contributes to the infringing conduct of another, may be liable as a contributory copyright infringer."  The Ninth Circuit held that "the knowledge requirement for contributory copyright infringement [   ] include[s] both those with actual knowledge and those who have reason to know of direct infringement."  Plaintiff asserted that his attorneys sent an e-mail to AOL notifying it of the infringing activity occurring on the alt.binaries.e-book newsgroup and that AOL did not take any action in response thereto.  Rather, claimed plaintiff, AOL did not take action to prevent the complained of infringement until after the lawsuit in question was filed one week later.  Plaintiff argued that as a result of this failure, AOL was liable for contributory copyright infringement, because it continued to facilitate the infringing activities after receipt of notice thereof by allowing the infringing materials to remain available to users from its servers.

The court found that AOL did not receive the e-mail in question, and as such did not have actual knowledge of the infringing activities until after the commencement of the lawsuit, at which time it promptly took action to prevent further infringement. 

However, the Ninth Circuit held that questions of fact existed as to whether AOL should have known of the infringement earlier.  Apparently, the e-mail was sent to an address AOL provided to the Copyright Office for receipt of notifications of infringement under the Digital Millennium Copyright Act ("DMCA").  AOL had subsequently changed the address it used to receive such notices, but had not notified the Copyright Office, nor made arrangements to forward e-mail notifications sent to the previously given address to this new address.  Such conduct, held the court, could serve as a basis for a holding that AOL should have known of the infringing activities when plaintiff's counsel sent the e-mail in question.  Such a finding could also be supported by a phone call AOL received from a subscriber, reporting the existence of unauthorized copies of works by various authors on the Usenet newsgroup.

This issue of fact prevented the court from dismissing plaintiff's contributory infringement claim because, by virtue of having stored the infringing material on its servers, and making it available to AOL users, AOL could be found to have materially contributed to Robertson's infringing activity.  Such a contribution, combined with the requisite knowledge, could support a finding of contributory infringement.

Reversing the District Court, the Ninth Circuit held that AOL could not escape this potentiality liability at this time by relying on safe harbor provisions of section 512(a) of the DMCA.

Section 512(a) provides protection to internet service providers for copyright infringement claims arising out of "intermediate or transient storage" of transitory digital network communications (such as e-mail).  The statute provides that "a service provider shall not be liable for monetary relief, or except as provided in subsection (j) for injunctive or other equitable relief, for the infringement of copyright by reason of the provider's transmitting, routing or providing connections for, material through a system or network controlled or operated by or for the service provider, or by reason of the intermediate and transient storage of that material in the course of transmitting, routing or providing connections …" if the service provider meet the listed requirements of section 512(a).   Section 512(a) requires a party seeking the protection of the DMCA to show that:

(1) the transmission of the material in question is initiated by or at the direction of a person other than the service provider; (2) the transmission, routing or storage is carried out 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 expect as an automatic response to the request of another person; (4) no copy of the material made by the service provider in the course of such intermediate or transient storage is maintained on the system or network  … for a longer period than reasonably necessary for the transmission; and (5) the material is transmitted through the system without modification of its content.

To be entitled to the protections of section 512(a) of the DMCA, an internet service provider such as AOL must also meet the requirements of 512(i).  This section requires that an internet service provider "(a) has adopted and reasonably implemented, and informs subscribers and account holders of the service provider's system or network, of a policy that provides for the termination in appropriate circumstances of subscribers and account holders of the service provider's systems or network who are repeat infringers; and (b) accommodates and does not interfere with standard technical measures."

At issue in this case was whether the materials in question were in "intermediate and transient storage" for the purposes of the act or whether they were stored "for a longer period than is reasonably necessary" when they were stored on AOL's Usenet servers.  As stated above, AOL's policy in April 2000 was to store Usenet newsgroup postings for a period of 14 days.  Affirming the District Court, the Ninth Circuit held that such storage was "intermediate and transient" for the purposes of section 512(a), and hence that AOL could fall within the protections of the act if it met the other requirements set forth in section 512(a).  In reaching this conclusion, the court relied on the legislative history of the DMCA, which indicated that it was Congress's intent, in enacting section 512(a), to codify the holding of Religious Technology Center, supra.  There, the service provider who facilitated the provision of the Usenet postings at issue stored them for a period of 11 days, which activity was held insufficient to constitute direct copyright infringement.  Given that evidence of Congress' intent, the Ninth Circuit affirmed the District Court's holding that AOL's storage of Robertson's posts on its Usenet servers constitutes intermediate and transient storage that was not maintained for a longer period than is reasonably necessary for the transmission, routing or provision of connections.

The Ninth Circuit held, however, that issues of fact precluded it from determining at this time whether AOL was entitled to the protections of Section 512(a).  As stated above, under §512 (i) to be entitled to such protection, AOL must "reasonably implement" a policy that provides for the termination of service access to repeat infringers.  By failing to update with the Copyright Office the e-mail address designated in its DMCA Policy, "AOL allowed notices of potential copyright infringement to fall into a vacuum and to go unheeded; that fact is sufficient for a reasonable jury to conclude that AOL had not reasonably implemented its policy against repeat infringers" because it prevented itself from learning of their infringing activities (and thus from taking action against them).