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Designer Skin LLC v. S & L Vitamins, Inc., et al.
Unauthorized internet reseller of plaintiff’s products is not guilty of trademark infringement, and does not cause actionable initial interest confusion, by using plaintiff’s trademarks in meta tags of website at which plaintiff’s and its competitors’ products are sold, and in...

Robert Hendrickson v. Ebay, Inc., et al.

165 F. Supp. 2d 1082, Case No. CV 01-0495 RJK (RNBx) (C.D. Cal. 2001)

Court grants defendants' motion for summary judgment, and dismisses claims brought by plaintiff, the owner of a copyright in the documentary "Manson", against defendant eBay arising out of the use by unaffiliated third parties of the eBay auction site to sell unauthorized copies of the Manson documentary. The Court held that plaintiff's claims for contributory and vicarious copyright infringement were barred by operation of Section 512(c) of the Digital Millennium Copyright Act. The DMCA offers service providers such as eBay protection from copyright infringement claims arising out of the storage of material on their web site provided, inter alia, (i) they do not have actual knowledge of the infringing activity or promptly upon gaining such knowledge move to prevent the use of their service to further it, (ii) do not receive a financial benefit directly attributable to infringing activity they have the ability to control, and (iii) expeditiously remove material from their service on receipt of an appropriate notice. The court held that eBay was entitled to protection under this section because (i) it did not have actual notice of the infringing activity, (ii) could not control it as the transactions were consummated off-line without eBay's involvement, and (iii) eBay had not received the requisite notice of infringing activity because, inter alia, the infringing articles were not appropriately specified in the notice sent by plaintiff. Plaintiff's claims for trademark infringement were mooted, held the Court, because of eBay's status as an innocent infringer, and its removal from its site of those advertisements plaintiff identified as improperly offering infringing copies of his movie for sale.

Ebay operates an online auction service on which it permits individuals to post listings offering products for sale to the highest bidder. Every day, eBay posts an average of one million new listings on its site. At any given time, there are over six million listings on the web site. Each item listed on eBay's site is assigned an item number. At the conclusion of the bidding period, eBay notifies the seller and the highest bidder, who then consummate the transaction off-line.

Plaintiff Robert Hendrickson d/b/a Tobann International Pictures is the owner of the copyright in the documentary Manson. In December 2000, Hendrickson sent eBay a cease and desist letter, advising that pirated copies of "Manson" in digital video disc (DVD) format were being offered for sale on eBay's site, and requesting that eBay stop "any and all further conduct considered an infringement of Plaintiff's right[s]". Hendrickson did not in this notice, however, inform eBay of the particular items being offered for sale on its site that were allegedly infringing, or provide eBay with the item number of those articles.

Ebay contacted Hendrickson, and requested more detailed information concerning his infringement claim, and a notice that complied with the Digital Millennium Copyright Act ("DMCA"). Ebay informed plaintiff that this notice must identify the exact items he claimed were infringing, and contain a statement, under penalty of perjury, that plaintiff owned the copyright in the Manson documentary. Plaintiff refused to provide the requested information, and instead commenced three lawsuits against eBay, asserting claims of contributory and vicarious copyright infringement, and trademark infringement under the Lanham act.

Thereafter, plaintiff informed eBay that all DVD discs containing his movie were unauthorized. In response, eBay removed all listings offering such products for sale, and suspended those who repeatedly offered such products. Plaintiff did not, however, claim that all copies of Manson offered on VHS tape were unauthorized.

Plaintiff asserted copyright infringement claims against eBay arising out of its making available a facility that was used by third parties to engage in infringing activity. As noted by the Court, plaintiff's claim was akin to that asserted against the swap meet owner in Fonvisa, Inc. v. Cherry Auction Inc., 76 F.3d 359 (9th Cir. 1996). Plaintiff did not assert that advertisements posted to eBay's web site violated his copyright.

The court held that eBay was shielded from such claims by operation of the DMCA. The DMCA offers "qualifying Internet Service Providers [protection] from liability for all monetary relief for direct, vicarious and contributory infringement." Ebay "clearly meets the DMCA's broad definition of online 'service provider'" held the court.

Ebay was entitled to protection under 17 U.S.C. Section 512(c), which limits liability for "infringement of copyright by reason of the storage at the direction of a user of material that resides on a system or network controlled or operated by or for the service provider." This statute offers protection both to those facing liability because of the posting of materials on line, as well as liability arising, as in the case at bar, out of the use of such materials to further infringing activities.

To qualify for such protection, a service provider must meet three requirements: (i) the service provider must either lack both actual knowledge of the infringing activity and an awareness of facts or circumstances from which infringing activity is apparent, or must promptly upon gaining such knowledge move to prevent the use of its service to further such infringing activity, (ii) the service provider must not receive a financial benefit directly attributable to infringing activity it has the ability to control, and (iii) the service provider must expeditiously remove material from its service on receipt of an appropriate written notice.

The court held that eBay met all three requirements, and hence was entitled to dismissal of plaintiff's copyright infringement claims in accordance with the DMCA. Because plaintiff refused to identify the infringing articles, and refused to state, under penalty of perjury, that he was the owner of the copyright in question, his written notice was defective under the DMCA, and eBay was not obligated to take an action in response thereto. Said the Court:

The Court recognizes that there may be instances where a copyright holder need not provide eBay with specific item numbers to satisfy the identification requirement. For example, if a movie studio advises eBay that all listings offering to sell a new movie that has not yet been released in VHS or DVD format are unlawful, eBay could easily search its website using the title "Planet X" and identify the offensive listings. However, the record in this case indicates that specific item numbers were necessary to enable eBay to identify problematic listings.

Plaintiff's notification that all DVD's containing Manson were unauthorized did not cure this defect, because it was not contained in a writing, and came after the commencement of suit. Moreover, plaintiff provided no method for determining which, if any, of the VHS tapes of his documentary that were offered for sale were unauthorized. Because the notice did not substantially comply with the requirements of the DMCA, eBay was not obligated to take any action in response thereto (i.e. to remove allegedly infringing articles).

Moreover, because of its defective nature, the notice could not be relied upon to establish that eBay had actual notice of infringing activity on its site. Based on the submissions of eBay, the Court found that prior to the commencement of the lawsuits in question, it did not have actual notice of the infringing activities claimed by plaintiff, which evidence led the court to conclude eBay had satisfied the second of 512(c)'s requirements.

Lastly, the Court held that eBay satisfied the third of the DMCA's requirements, because it did not have the ability to control the infringing activity in question, given that sales on its site are consummated by third party sellers with third party purchasers off-line. Ebay's ability to remove listings from its site, or bar those who posted them from further use of the site, did not give it the requisite ability to control infringing activity furthered by such listings. Said the court:

The right and ability to control the infringing activity, as the concept is used in the DMCA, cannot simply mean the ability of a service provider to remove or block access to materials posted on its website or stored in its system. To hold otherwise would defeat the purpose of the DMCA and render the statute internally inconsistent.

Having found that eBay met each of the requirements of section 512(c), the court dismissed plaintiff's copyright infringement claims.

The court also dismissed plaintiff's trademark infringement claims on the ground that they were moot. "This claim is premised on a 'printer-publisher' liability for trademark/trade dress infringement." Because eBay was an innocent infringer without knowledge of any trade dress infringement before plaintiff filed suit, plaintiff's only remedy was injunctive relief. Such relief was unnecessary, however, given eBay's removal of all allegedly misleading advertisements identified by plaintiff. The court refused to enjoin eBay from allowing such advertisements to be posted in the future. Said the court:

Plaintiff argues that he is entitled to an injunction that restrains eBay from any further displaying [in the future] … of any false and/or misleading advertisements in connection with the sale/distribution of 'counterfeit' Manson DVD's via its web site. … No authority supports Plaintiff's position. Indeed, such an injunction would effectively require eBay to monitor the millions of new advertisements posted on its website each day and determine, on its own, which of those advertisement infringe Plaintiff's Lanham Act rights. … "no law currently imposes an affirmative duty on companies such as eBay to engage in such monitoring." Further, the court's recent 'innocent infringer' ruling was premised on the Court's determination that eBay has not affirmative duty to monitor its own website for potential trade dress violation and Plaintiff had failed to put eBay on notice that particular advertisements violated his Lanham Act rights before filing suit.

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