Internet Library of Law
and Court Decisions

Digital Millennium Copyright Act - Internet Library of Law and Court Decisions - Updated March 8, 2008

The court denied Napster Inc.'s ("Napster") motion for partial summary judgment, in which motion Napster sought to limit the damages and other relief that could be awarded against it for alleged direct or contributory copyright infringement by application of the safe harbor provisions of 17 U.S.C. section 512(a) of the Digital Millennium Copyright Act ("DMCA"). Section 512(a) limits a service provider's liability for copyright infringement by reason of the service provider's "transmitting, routing or providing connections for material through a system or network controlled or operated by or for the service provider ...".

The court held that Napster's role in the transmission of MP3 files by and among the various users of its system was not entitled to protection under Section 512(a) because such transmission does not occur through Napster's system. Rather, although Napster informs the user's computer of the location of a computer on which MP3 files the user seeks are stored, and its willingness to permit the user to download such files, all files transfer directly from the computer of one Napster user through the Internet to the computer of the requesting user. Similarly, any role that Napster plays in providing or facilitating a connection between these two computers does not occur through its system. "Although the Napster server conveys address information to establish a connection between the requesting and host users, the connection itself occurs through the Internet."

The court also held that issues of fact existed as to whether Napster was entitled to any protection under the DMCA at all. To be entitled to such protection, a service provider must meet the requirements of section 512(i) of the DMCA, which, among other things, obligates the service provider to "adopt[] and reasonably implement[] and inform[] subscirbers 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 system or network who are repeat infringers ...". The court held that issues of fact existed as to whether Napster had appropriately adopted and informed its users of such an effective policy which precluded at this time any relief to Napster under the DMCA.

Court allows plaintiff Adobe Systems Inc. (“Adobe”) to proceed with action to recover from its insurer St. Paul Fire and Marine Insurance Company (“St. Paul”) defense and indemnity costs incurred in connection with a series of legal actions between Adobe, Agfa Monotype Corporation (“Agfa”) and International Typeface Corporation (“International”).  These actions arose out of Adobe’s decision, without Agfa and International’s consent, to incorporate into its Adobe Acrobat software “technology designed to circumvent embedding bits in [typeface] fonts” in which Agfa and International held copyrights, which technology permitted users to embed those fonts into PDF documents the Adobe software allowed users to edit. 

The Court held that Errors and Omissions (“E&O”) policies issued by St. Paul potentially covered claims asserted in these lawsuits, as they provided coverage for losses resulting from Adobe products that are caused by a wrongful act – here the distribution of Adobe software which contained circumvention technology.  The Court reached this result notwithstanding the fact that the policy excluded coverage for intentional wrongful acts, because, while the decision to include this technology was intentional, Adobe believed it was permitted to do so.

The Court nonetheless denied Adobe’s motion for summary judgment, because there were questions of fact as to when Adobe first had notice of these claims.  As this was a claims made policy, if Adobe could reasonably foresee that a claim would be made before the policy period began, it would not have coverage under the policy.

Finally, the Court granted so much of St. Paul’s summary judgment motion that sought  dismissal of plaintiff’s bad faith claim arising out of St. Paul’s denial of coverage, as well as its claim for punitive damages, because such denial was based on a legitimate dispute as to St. Paul’s obligations to provide coverage under the policies at issue.

Court holds that the Digital Millennium Copyright Act ("DMCA") immunizes Amazon.com, Inc. ("Amazon") from copyright infringement claims arising out of the sale by nonaffiliated third party vendors on Amazon.com of photographs in which plaintiff claims a copyright.  In reaching this result, the Court held that Amazon had met both the DMCA's threshold requirements, as well as the requirements necessary to qualify for the protection of the safe harbor provisions of 17 U.S.C. § 512(c).  512(c) protects service providers from liability for copyright infringement by reason of their storage of infringing materials at the direction of a third party.

The Court dismissed plaintiff's Lanham Act claim, finding that it was the Copyright Act, and not the Lanham Act, that provided any remedy for the alleged wrongs at issue.  The Court also dismissed plaintiff's Washington State law Consumer Protection Act and tortious interference with business relations claims, finding Amazon immunized therefrom by operation of the Communications Decency Act.

Finally, the Court held that issues of fact precluded dismissal of copyright infringement claims plaintiff asserted arising out of the alleged use of one of its copyrighted images in an advertisement on a separate website owned by Amazon.

Fourth Circuit holds that web site operator is not guilty of direct copyright infringement as a result of the posting on its site by third parties of images of commercial real estate in which plaintiffs hold the copyright.  In reaching this result, the Court reaffirms the validity of Religious Technology Center v. Netcom, which holds that a party must engage in "volitional conduct" that contributes to the infringement to be liable for direct copyright infringement. 

Importantly, the Court reached this result notwithstanding the fact that defendant's involvement in the posting of images to its site was not completely passive - rather defendant conducted a limited screening of all images presented by third parties to determine if they should be posted, eliminating those that either 1) exhibited obvious evidence of copyright infringement (such as a copyright notice in someone other than the poster) or 2) did not depict commercial real estate.

In a strong dissent, Circuit Judge Gregory argued that because of this gatekeeping activity, defendant's actions were not passive and thus were not entitled to protection under Netcom.  According to Judge Gregory, Netcom protects a defendant only when its involvement in the copying of copyrighted work is passive, and the automatic result of the operation of its facilities by a third party.

Court granted defendant America Online's motion for summary judgment, and dismissed copyright infringement claims advanced by plaintiff author as a result of the posting of his 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 did not post nor direct the posting of the infringing material to the Usenet newsgroup in question.  Rather, the claims against it were predicated on its agreement, 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 court held that AOL could not be liable for direct copyright infringement, because such passive involvement in the infringing activity at issue was insufficient to sustain a direct copyright infringement claim.  The court similarly rejected plaintiff's claim that AOL was liable on a theory of vicarious copyright infringement, because it had neither the right and ability to supervise Robertson's infringing activity, nor a direct financial interest therein.  The court held that AOL's ability to block access (over its systems) to the infringing materials in question did not give it the requisite ability to control the infringing activity.  Rather, because AOL could not prevent Robertson from acting, it did not have the requisite ability to control the infringing activities necessary to make AOL vicariously liable for the acts of copyright infringement Robertson initiated.  Nor did AOL derive the necessary direct financial benefit from this infringing activity.  The court held that this required AOL to receive a substantial or significant benefit from the posting of the Usenet material in question, which the evidence showed it did not receive.

The court did, however, hold that issues of fact precluded it from determining whether AOL could be liable for the acts at issue on a theory of contributory infringement.  Under such a theory, "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 was a contributory infringer, given the fact that plaintiff's attorneys had sent an e-mail to an AOL designated 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 received this e-mail, should nonetheless be charged with notice thereof given its designation of the e-mail address to which it was sent with the US Copyright Office.  In reaching this conclusion, the court held that "providing a service that allows for the automatic distribution of all Usenet postings, infringing and noninfringing, can constitute a material contribution [to the infringing activities and hence expose the ISP to liability for contributory infringement] when the ISP knows or should know of infringing activity on its system yet continues to aid in [its] accomplishment."

Nonetheless, the court dismissed this claim, holding that AOL was protected therefrom 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 court held that AOL's practice of storing the Usenet postings in question on its servers for a period of 14 days was an intermediate and transient storage for the purpose of the DMCA, and that it met the other requirements of the DMCA necessary to obtain the protection of this provision.  The court accordingly dismissed plaintiff's claim for contributory copyright infringement against AOL.

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.

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.

Magistrate Judge grants in part and denies in part a motion to quash a subpoena issued pursuant to the Digital Millennium Copyright Act (“DMCA”).  The Magistrate Judge denied so much of the motion to quash which sought to prevent disclosure of the identity of the anonymous individual who posted a copy of a letter sent by a lawyer, for which the lawyer had obtained copyright registration, demanding the removal of other anonymous posts from a blog. 

The Court recommended granting so much of the motion to quash which sought to prevent disclosure of the identity of the anonymous individual who made the allegedly offensive posts that counsel sought to have removed in the demand letter in question.

Court holds that defendant's operation of a "visual search engine" which presents, without the owners' permission, "thumbnails" of copyrighted images that appear both without identifying copyright management information, and separated from the Internet web page in which the image was originally displayed, is a protected fair use under the Copyright Act which does not run afoul of the Digital Millennium Copyright Act ("DMCA").

The court's ruling that this represented a fair use was based predominantly on its determination that defendant's use was "transformative" of and "very different" from the original work. Said the court: "Plaintiff's photographs are artistic works used for illustrative purposes. Defendant's visual search engine is designed to catalog and improve access to images on the Internet. The character of the thumbnail index is not esthetic, but functional; its purpose is not to be artistic, but to be comprehensive."

Defendant's separation of the image from its copyright management information did not constitute a violation of Section 1202(b)(3) of the DMCA, because defendant did not have reasonable grounds to believe such separation would cause copyright infringement. The court reached this conclusion because defendant posted warnings on its site concerning the possibility of use restrictions, and referred the user to the originating web site, which could be visited via a provided link, to ascertain any applicable restrictions before copying. What made the images vulnerable to copying, according to the court, was their display by plaintiff on a web site.

Court issues preliminary injunction, enjoining defendant from continuing to manufacture and sell Smartek microchips for use in connection with plaintiff's toner cartridges.  Defendant's chips contain software that circumvents authentication procedures installed by plaintiff in its own toner cartridges, which authentication procedures prevent use of unauthorized cartridges in printers manufactured by plaintiff.  These chips also contain a copy of Toner Loading software programs in which plaintiff holds a copyright, which programs are used in the operation of the printer.  In issuing this injunction, the Court finds that plaintiff is likely to prevail on its claim that defendant's conduct infringed plaintiff's copyright in its Toner Loading Programs, as well as on its claim that defendant's chips are products which circumvent technological measures used by plaintiff to restrict access to its copyrighted works in violation of the Digital Millennium Copyright Act ("DMCA").

Court holds that defendants Diebold Incorporated and Diebold Election Systems Inc. (collectively “Diebold”) violated Section 512(f) of the Digital Millennium Copyright Act (“DMCA”) by having outside counsel send DMCA take-down notices to Internet Service Providers (“ISPs”).  These notices demanded that the ISPs disable access to or remove a website containing an archive of emails prepared by Diebold employees in which “some employees acknowledged problems associated with [Diebold’s electronic voting] machines.”  Diebold claimed a copyright in this archive, which had apparently been stolen and posted on the Internet.  The take-down notices also sought to disable a hypertext link to this website, found in an online newspaper article critical of Diebold’s electronic voting machines.  The Court held that because “portions of the email archive are subject to fair use protections,” the notices constituted knowing material misrepresentations that material or activity infringes Diebold’s claimed copyright in the archive in violation of Section 512(f), exposing Diebold to liability for the damages and attorneys’ fees resulting from actions taken by the ISPs in response to these notices.  It has subsequently been reported by the Online Policy Group that Diebold paid $125,000 to plaintiffs and their attorneys in satisfaction of this claim.

District Court dismisses claims charging Google with direct copyright infringement as a result both of its archiving Usenet postings that contain excerpts of plaintiff’s copyrighted works, and its display of excerpts of plaintiff’s copyrighted website in search results.  The District Court holds that Google has not engaged in the requisite volitional conduct necessary to be held guilty of direct copyright infringement because such copying is a by-product of the automated operation of Google’s search engine and related technologies.  As such, Google’s acts are akin to a user’s use of its ISP to transmit infringing material to a third party, which do not give rise to direct infringement claims against the ISP.  On appeal, the Third Circuit affirmed the dismissal of Parker’s direct infringement claims, on the grounds that Google’s archiving of infringing Usenet postings lacked the requisite “volitional conduct.”

Relying on Field v. Google, (D. Nevada 2006), the District Court also dismisses direct copyright infringement claims arising out of Google’s presentation to users of “archival” copies of plaintiff’s website in search results denominated “cache.”  The District Court holds that Section 512(b) of the Digital Millennium Copyright Act (“DMCA”), applicable to copyright infringement claims arising out of “system caching,” bars such claims here.

The District Court also dismissed vicarious and contributory copyright infringement claims arising out of Google’s archiving of Usenet posts created by third parties that themselves allegedly infringe plaintiff’s copyright, both because Google lacks the requisite knowledge of such inadequately identified infringing activity, and because it does not derive sufficient direct financial benefit therefrom.  This decision too was affirmed by the Third Circuit on appeal.

The District Court further dismissed defamation, invasion of privacy and negligence claims advanced by plaintiff arising both out of Google’s archiving of Usenet posts authored by third parties that allegedly defamed plaintiff, as well as out of Google’s storage and display in its “cache” of a website that purportedly defamed plaintiff.  Such claims are barred by the immunity afforded Google by Section 230 of the Communications Decency Act (“CDA”), a decision affirmed on appeal.

Finally, the District Court dismissed Lanham Act claims brought against Google as a result of its alleged republication of a website operated by a third party titled “the Official Roy Gordon FAQ.”  The District Court held that the third party was not violating the Lanham Act both because it was not using a mark in commerce as it was not selling anything on its site, and because consumers were not likely to be confused as to the origin of the site, given the criticism of plaintiff found thereon.  The Lanham Act claims against Google also failed because it was not a “moving force” or “active participant” in the creation of this site, or the alleged use thereon of plaintiff’s ‘mark.’  The Third Circuit affirmed the dismissal of the Lanham Act claims because of the absence of a likelihood of consumer confusion.  The Court also affirmed the dismissal of plaintiff’s trade disparagement claims because the statements at issue on the third party website were not made in the context of commercial advertising.

It should be noted that the plaintiff appeared pro se.  In addition, the Third Circuit’s opinion was denoted “Not Precedential.”

The Ninth Circuit allows Perfect 10 to pursue copyright infringement claims against defendants, who provide web hosting and credit card billing services, arising out of the unauthorized posting on the web by their third party customers of “adult” images in which Perfect 10 holds copyrights.  Questions of fact precluded a determination of whether defendants were immunized from monetary liability for such claims by the Digital Millennium Copyright Act (“DMCA”).  Such immunity extends only to service providers who “reasonably implement” a policy for terminating those of their customers that repeatedly infringe copyrights.  In considering this question, the Ninth Circuit held  courts should consider not only the manner in which the defendants responded to “take down” infringement notices sent by the plaintiff copyright holder, here Perfect 10, but also the manner in which they responded to similar notices from third party copyright holders.  Because the District Court failed to consider whether defendants terminated customers identified in such third party “take down” infringement notices, the Ninth Circuit could not determine whether defendants “reasonably implemented” a compliant DMCA policy, and thus whether they were entitled to DMCA immunity.  The case was accordingly remanded to the District Court for further consideration.

The Ninth Circuit held that defendants had no obligation to respond to the “take down” notices provided by Perfect 10, or take steps to prevent the infringing conduct alleged therein, due to Perfect 10’s failure to provide such notices under penalty of perjury.  Absent the sworn acknowledgement required under the DMCA that the complainant is both an authorized representative of the copyright owner, and has a good faith belief that the material at issue is unlicensed, the service provider has no obligation to act upon the notice. 

Nor, held the Ninth Circuit, were defendants obligated to take action against purported “red flag” sites defendants serviced, which included sites that purported without authorization to provide users with passwords to access plaintiff’s materials, or other websites bearing names such as “stolencelebritypics.com” or “illegal.net.”   The DMCA does not impose on service providers the obligation to conduct an affirmative investigation into the bona fides of such sites.  To qualify as a “red flag” site that imposes an obligation on a service provider to act, held the Ninth Circuit “it … need[s] to be apparent that the website instructed or enabled users to infringe another’s copyright.”

The Ninth Circuit allowed Perfect 10 to pursue direct copyright infringement claims against the defendants as a result of the posting of infringing images on hornybees.com.  The court held that sufficient evidence of defendants’ direct involvement in the operation of that site was presented to survive a motion for summary judgment.

Finally, the Ninth Circuit held that the Communications Decency Act immunized defendants from the unfair competition, false advertising and right of publicity claims advanced by Perfect 10.

Court issues preliminary injunction against Cybernet Ventures, which operates an Age Verification Service, based on the use by web sites operated by third parties of various images in which plaintiff held the copyright, or featuring a model who had assigned her right of publicity to plaintiff. 

Cybernet Ventures operates the Age Verification Service "Adult Check."  Participating web sites put a script on their site which direct first time users to Cybernet, who sells them access to the Adult Check family of sites.  The user is thereafter free to visit Adult Check sites for a set period of time.  The fees generated by this user are paid to Cybernet, who splits them with the web site which sent the user to Cybernet.  To assist the user in finding Adult Check sites to his liking, Cybernet provides both a series of links as well as a search engine.  It also advertises its network. 

Cybernet takes an active interest in the content of Adult Check sites, employing a staff of 12 to review the site both before it is admitted to the Adult Check family, and periodically thereafter.  The content of the site is reviewed by Cybernet to prevent the inclusion of prohibited images.  Cybernet also provides comment on the site's layout.  The images on each site, however, are not provided by Cybernet.  Instead, each site is run by a third party, who is responsible for locating the images, arranging to have the site hosted, and advertising the site.

Perfect 10, which holds the copyright in a number of images of nude women made available to the public both on its web site and in a magazine, brought this suit, charging that web sites in the Adult Check family contained over 10,000 images in which Perfect 10 held the copyright. 

The court determined that Perfect 10 was likely to prevail on its claims contributory and vicarious copyright infringement against Cybernet, as well on its claims of unfair competition under Cal. Bus. and Professions Code Section 17200.  The court held that Perfect 10 was likely to prevail on its contributory infringement claim because Cybernet was likely to be held to have the requisite notice of the infringing activities at issue, and to have materially contributed to this infringement by its operation of the Age Verification Service, and particular its collection of fees for, and advertising of the web sites in question.

The court further held that Perfect 10 was likely to prevail on its vicarious infringement claim, because Cybernet had the ability to control the web sites, as evidenced by the review of its content it conducted, and received a direct financial benefit from the presence on these web sites of the infringing images.  Lastly, the court held that Perfect 10 was likely to prevail on its unfair competition claim, because Cybernet was likely to be held to have aided and abetted a violation of various models' right to publicity, again by virtue of its knowledge of infringement, and contributed thereto by virtue of its operation of the AVS system.

The court further held that Cybernet was unlikely to be able to avoid this liability under the safe harbor provisions of the Digital Millennium Copyright Act, because the court was likely to hold both that the DMCA policy Cybernet adopted failed to comply with the DMCA, and that Cybernet failed to reasonably implement such a policy, or terminate repeat infringers.  Cybernet was also unlikely to be able to seek the protections of the DMCA because it received a financial benefit directly attributable to infringing activity it had the right and ability to control.

The court accordingly issued a preliminary injunction, which prohibited Cybernet from utilizing or linking to the images in question.  The injunction further obligated Cybernet to stop linking to sites containing the images in question where Cybernet had either notice thereof, or knew or should have known of the presence of the images, under circumstances specified in the injunction.  The injunction also obligated Cybernet to undertake reviews both of sites seeking to become members of the Adult Check network, and of designated existing sites, to ascertain whether they were using any of the images at issue, and to bar such new sites from entering the network without proper rights documentation.  The scope of this injunction is discussed in greater depth in the accompanying "in depth" analysis of this decision.

Court holds that copyright holder has the right under the Digital Millennium Copyright Act ("DMCA") to compel service provider to produce information which identifies individual who allegedly transmitted infringing materials over service provider's network.  Court accordingly grants motion by the Recording Industry Association of America ("RIAA") to compel Verizon Internet Services ("Verizon") to comply with a subpoena, and produce information which will identify a Verizon customer who used KazaA to download MP3 files.

Reversing the court below, the D.C. Court of Appeals holds that a copyright holder may not, under the Digital Millennium Copyright Act ("DMCA"), serve a subpoena seeking the identity of an individual who allegedly transmitted infringing materials over a P2P file sharing network, on the Internet Service Provider which provides that individual's connection to the Internet.  The Court accordingly granted the motion of Verizon Internet Services ("Verizon") to quash subpoenas issued by the Recording Industry Association of America ("RIAA") seeking information that would identify Verizon customers who, via a connection to the Internet provided by Verizon, used P2P networks to share MP3 files.  The RIAA has sought to issue subpoenas under the DMCA, in part, because it could do so without the necessity of first commencing a litigation.  The court's ruling obligates the RIAA either to commence such a litigation, or seek leave of the court, before serving such a subpoena on ISPs like Verizon.

This case arises out of the use of automated devices by ticket brokers and others to purchase tickets from plaintiff Ticketmaster, and thereby prevent the public from purchasing those tickets themselves. 

In this case, the Court holds that plaintiff Ticketmaster LLC (“Ticketmaster”) is likely to prevail on claims of direct and contributory copyright infringement as a result of defendant RMG Technologies Inc. (“RMG”) distribution of a software application that permits its clients to circumvent Ticketmaster.com’s CAPTCHA access controls, and use Ticketmaster’s  copyrighted website in manners prohibited by the site’s Terms of Use.  Among other things, Ticketmaster prohibits the use of automated devices such as the software application at issue to access Ticketmaster’s site and search for and purchase tickets to events.  Because defendant was likely to be held to have exceeded its license to use Ticketmaster’s copyrighted site, the Court held it was likely to be found guilty of direct copyright infringement, having made unauthorized copies of plaintiff’s site in its computer’s RAM when it viewed the site to create and test its product.

By distributing its software application to third parties, and encouraging them to use it in violation of Ticketmaster’s Terms of Use, the Court held plaintiff was also likely to prevail on claims of contributory copyright infringement.

The Court further held that Ticketmaster was likely to prevail on claims that defendant RMG breached its contract with Ticketmaster by using the site in a manner prohibited by the site’s Terms of Use, which, among other things, prohibited use of the site for commercial purposes, and use of automated devices on the site.  These Terms of Use were likely to be binding on defendant RMG, because it used the site with notice of the Terms, which advised that such use would constitute assent to be bound thereby.

Finally, the Court held that plaintiff Ticketmaster was likely to prevail on claims that defendant, by distributing its software application, violated the Digital Millennium Copyright Act, because it trafficked in a device designed both to circumvent technological measures that control access to, and protect, a copyrighted work – namely plaintiff’s website.

The Court held that defendant’s conduct was likely to cause plaintiff irreparable injury.  Because it constituted infringement of plaintiff’s copyright, such irreparable harm was presumed.  In addition, plaintiff submitted evidence that the use of automated devices on its site by ticket brokers and others was injuring its reputation and good will with the public, who attributed their inability to obtain tickets to events to misdeeds in which plaintiff and its employees were involved.

As a result, the Court issued a preliminary injunction, enjoined defendant from further trafficking in or using its software application.

The court issued a preliminary injunction, enjoining the defendants from continuing to provide on their web sites DeCSS, a software utility that permits users to make copies of DVD movies protected by the Content Scramble System ("CSS") copy protection system.

The plaintiffs are eight movie studios that distribute their copyrighted motion pictures on digital versatile disks, otherwise known as DVDs. DVDs contain motion pictures in digital format. To prevent unauthorized copying of these works, the plaintiffs encrypt them with CSS, which, according to the court, "is an encryption-based security and authentication system that requires the use of appropriately configured hardware such as a DVD player or a computer DVD drive to decrypt, unscramble and play back ... the motion pictures on DVDs." This hardware contains a "player key" which permits the DVDs to be unscrambled, and the motion picture thereon to be played.

In or about October 1999, the software utility DeCSS was created, which permits users to break the CSS copy protection system and make and distribute unauthorized copies of the motion pictures protected thereby. According to the court, "defendants each are associated with Web sites that were distributing DeCSS at the time plaintiffs moved for injunctive relief."

Plaintiffs moved for a preliminary injunction, enjoining defendants from further distributing DeCSS. Finding such relief warranted, the court issued the requested injunction.

The court held that the requisite showing of irreparable injury had been made because such injury is presumed when a defendant, as was the case at bar, is offering technology that facilitates copyright infringement.

The court also held that plaintiffs were likely to succeed on the merits of their claim that defendants' conduct constituted a violation of section 1201(a)(2) of the Digital Millennium Copyright Act ("DMCA"). That section provides that "no person shall ... offer to the public, provide or otherwise traffic in any technology ... that ...(B) has only limited commercially significant purpose or use other than to circumvent a technological measure that effectively controls access to a work protected under [the Copyright Act]...". The court held that plaintiffs were likely to succeed on the merits of this claim because "it is undisputed ... that DeCSS defeats CSS and decrypts copyrighted works without the authority of the copyright owners. As there is no evidence of any commercially significant purpose of DeCSS other than circumvention of CSS, defendants' actions likely violated Section 1201(a)(2)(B)."

The court rejected defendants' contentions that their acts are protected by the "fair use" doctrine embodied in section 107 of the Copyright Act or by the limited immunity provided to service providers under section 512 of the Copyright Act. The court held that these sections do not offer immunity to a claim asserted under section 1201(a)(2)(B) of the DMCA, because they only afford protection against claims of copyright infringement. Because a claim under DMCA is not a claim for copyright infringement, Sections 107 and 512 are inapplicable to claims brought under DMCA section 1201.

The court also rejected the defendants' claim that the DMCA, insofar as it prohibits the dissemination of DeCSS to the public, violates their First Amendment rights.

The First Amendment does not shield copyright infringement. Because the DMCA was a proper exercise of Congress' power under the Necessary and Proper Clause of the United States Constitution to protect the copyrights granted to authors in their writings, the court concluded that it did not run afoul of the First Amendment.

The court further upheld the DMCA statute at issue because the posting of the DeCSS "is part of a course of conduct the clear purpose of which is the violation of law" i.e. the facilitation of copyright infringement. The First Amendment, held the court, does not preclude regulation of speech when such speech is part of a violation of law. Said the court:

The record clearly demonstrates that the chief focus of those promoting the dissemination of DeCSS is to permit widespread copying and dissemination of unauthorized copies of copyrighted works. The dissemination of DeCSS therefore is the critical component of a course of conduct, the principal object of which is copyright infringement. ... [D]efendants cannot latch onto the expressive aspect in order to shield a key aspect of a chain of events, the main purpose of which is unlawful. Application of the DMCA to prohibit production and dissemination of DeCSS therefore does not violate the First Amendment.

Lastly, the court rejected defendants' claim that the DMCA, as applied in the case at bar, represented an impermissible prior restraint on speech that ran afoul of the First Amendment.

Quick Hits

The Court holds that the unauthorized use of a password to access a website does not constitute a violation of the Digital Millennium Copyright Act, 17 U.S.C. Section 1201, et seq.  The DMCA provides that “no person shall circumvent a technological measure that effectively controls access to a work protected [by Title 17, the section of the US Code governing copyright].”  Under the DMCA, “circumventing a technological measure” “means to descramble a scrambled work, to decrypt a decrypted work, or otherwise to avoid, bypass, remove, deactivate, or impair a technological measure, without the authority of the copyright owner.”  Section 1201(a)(3)(A).   Because circumvention, under the DMCA, requires an act such as descrambling, decrypting, deactivating or impairing a protective technological measure, the unauthorized use of a password does not qualify.  “[T]he court concludes that using a username/password combination as intended – by entering a valid username and password, albeit without authorization – does not constitute circumvention under the DMCA.”  In reaching this result, the Court found persuasive the decision of the District Court in I.M.S. Inquiry Mgmt. Sys. Ltd. v. Berkshire Info. Sys. Inc., 307 F. Supp. 2d 521 (S.D.N.Y. 2004).  The Court accordingly granted defendants’ motion to dismiss DMCA claims brought by plaintiff arising out of defendants’ alleged unauthorized use of a password to access plaintiff’s password protected site, and thereby to obtain and review the contents thereof.

The Court did not reach the question of whether such conduct violated the Computer Fraud and Abuse Act, 18 U.S.C. Section 1030, because plaintiff’s claim that it did was held to be time-barred by the applicable statute of limitations.  Nor did the Court reach the question of whether, by so using the password to access plaintiff’s site, defendants committed an actionable tort under state law – such as trespass – because the Court, on the dismissal of plaintiff’s Federal claims, declined to exercise pendent jurisdiction over plaintiff’s state law claims, which were accordingly dismissed without prejudice.

This dispute arose out of a prior lawsuit in which plaintiff served as an expert witness in a case in which the defendant law firms represented the defendant in that suit.  In that case, the court had issued a gag order, prohibiting the parties and their experts from publicly discussing the case.  Apparently, plaintiff, in violation of the court’s order, posted material about the case on his password protected website.  In his complaint, plaintiff alleged that defendants, without authorization, used the site’s password to obtain access.  Defendants then presented materials from the site to the judge, who issued sanctions against plaintiff – including striking the plaintiff’s expert trial testimony and instructing the jury to disregard it - for violating his gag order.  This suit sought redress for this alleged misconduct.

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The Digital Millennium Copyright Act (“DMCA”), section 17 U.S.C. Section 512 (h), does not permit copyright owners and their representatives to obtain and serve subpoenas on internet service providers to obtain personal information about an ISP’s subscribers who are alleged to be transmitting copyrighted works via the internet using so-called ‘peer to peer’ or ‘P2P’ file sharing computer programs, where the ISP acts solely as a conduit for the transmission of material by others.  The text and structure of the DMCA require the ISP to be able both to locate and remove the allegedly infringing material before a subpoena can be issued against it.  The Court based this holding on the requirements of the Act which mandate that a subpoena be accompanied by the notice described in section 512(c)(3)(A) of the DMCA.  Because an ISP cannot remove such material when it acts as a mere conduit, such an ISP cannot be served with a subpoena under the DMCA.  The First Circuit accordingly reversed the decision of the District Court below, and directed that the subpoenas at issue, seeking the identity of individuals who purportedly traded and made available MP3s via P2P programs such Kazaa, be quashed.  In reaching this result, the First Circuit followed and found persuasive the reasoning of the DC Circuit court in RIAA v. Verizon, 351 F.3d 1229 (D.C. Cir., 2003).  

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