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Image Hosting Service Wins Summary Judgment in SDNY Copyright Suit




by:
Alan L. Friel
Edwards Wildman Palmer LLP - Beverly Hills Office

John E. Ottaviani
Edwards Wildman Palmer LLP - Providence Office

 
January 18, 2012

Previously published on January 13, 2012

The Southern District of New York has granted summary judgment to the photo-sharing website, Photobucket.com, and its merchandising partner, Kodak Imaging Network, in a copyright infringement suit brought by an individual who claimed the services allowed for the unauthorized distribution, modification, and reproduction of her copyrighted images.

The decision follows precedent established by the SDNY’s decision in Viacom v. YouTube (718 F.Supp.2d 514 (2010)) (Appeal currently pending before the Second Circuit (No. 10-3270)) regarding the boundaries of protection afforded by the Digital Millennium Copyright Act (“DMCA”) to online service providers. Among other things, the DMCA creates a safe harbor from claims of copyright infringement for online service providers that host potentially infringing materials at the direction of their users. In short, a service provider has a defense to claims of copyright infringement arising out of content stored at the direction of users if: (i) it lacks actual knowledge of instances of copyright infringement occurring on its service: (ii) it implements a DMCA-compliant notice-and-takedown system to respond to complaints of infringement; (iii) it acts expeditiously to remove such infringement once made aware; (iv) it terminates the accounts of repeat offenders, and (v) it either lacks the right and ability to control the acts of infringement, or if it has the right and ability to control the acts of infringement, that it derives no direct financial benefit from the infringing activities.

Background

The plaintiff, Sheila Wolk, is a professional artist, primarily a painter. Photobucket is an online image-hosting service, similar to Flickr or Picasa, that permits users to upload, store and share photographs and other digital images. At times relevant to the suit, Photobucket had contracted with Kodak Imaging Network, an arrangement which allowed Photobucket users to order prints and other merchandise bearing images hosted on Photobucket.

In early 2008, Wolk became aware that images of her paintings were appearing on Photobucket’s site. Photobucket had implemented a notice-and-takedown system pursuant to the DMCA, through which Photobucket would disable or remove content after receiving sufficient notice from the copyright owner. Using this system, between May 2008 and January 2010, Wolk (or her agent) corresponded with Photobucket complaining of infringement of her copyrights on Photobucket’s site. When these complaints sufficiently identified the infringing images and complied with the DMCA’s requirements, Photobucket promptly removed the infringing image. When the complaint failed to sufficiently identify the infringing image, Photobucket wrote back and requested more information.

In May 2010, Wolk sued, claiming that defendants had violated copyrights in 15 of her paintings, later expanding her complaint to cover 22 of her paintings. During the pendency of the case, Wolk sent a number of additional DMCA takedown notices and Photobucket removed infringing content accordingly. Following the close of discovery, both defendants moved for summary judgment on all counts.

Kodak Imaging Network

The Court first addressed the claims against Kodak. Wolk had alleged that Kodak was not eligible for safe harbor under the DMCA and was thus liable to her for directly infringing her copyrights by creating photographic prints and other merchandise bearing infringing images. (Wolk did not advance any arguments of secondary liability against Kodak).

The Court granted Kodak’s motion for summary judgment. It found that the issue of whether Kodak qualified for DMCA safe harbor was irrelevant, because Kodak had not engaged in any act of direct copyright infringement. Kodak’s role in the merchandising program was to accept orders from Photobucket users and transmit them to a third-party order fulfillment vendor that would actually print and ship the merchandise. The Court, relying on the Second Circuit’s 2008 decision in Cartoon Network v. CSC Holdings (536 F.3d 121), analogized Kodak’s conduct to that of a store owner that provides a publicly available photocopier. The Court noted that “[d]irect liability requires volitional conduct that causes the infringement” and held that, in this case, “there is no evidence of volitional conduct, thereby preventing Wolk from establishing direct liability.” Rather, according the court, Kodak had simply made available a service that could be used for infringing acts. As such, Kodak was not liable for copyright infringement.

Photobucket

Wolk argued that Photobucket was both directly liable for infringement of her copyrights and was secondarily liable for the acts of its users. With regard to the claims of direct liability, the Court determined that Photobucket had satisfied all of the requirements of the DMCA’s safe harbor provisions for service providers that host user content. In doing so, the Court emphasized a number of important points for online service providers seeking shelter under the DMCA.

Wolk argued that her DMCA-compliant take-down notices had given Photobucket actual knowledge of infringement not only of the infringing images specifically identified by their uniform resource locators (“URL”), but of all images hosted on Photobucket that infringed Plaintiff’s copyrights. The Court specifically rejected this argument, reaffirming a similar conclusion reached by the SDNY in its 2010 holding in Viacom v. YouTube. The Court held that “Photobucket cannot be held liable for its failure to remove images for which the Plaintiff failed to provide proper notice” and that “[n]otices that do not identify the specific location of the alleged infringement are not sufficient to confer ‘actual knowledge’ on the service provider [that would undermine the provider’s safe-harbor protection].”

Wolk also argued that Photobucket had the “right and ability to control” the acts of infringement and that, by failing to exercise this control, it had received a financial benefit directly attributable to the infringement. As such, according to Wolk, Photobucket failed to comply with the requirements of the DMCA safe harbor. The Court rejected these arguments. First, the court noted that the “right and ability to control,” as that concept is used in the DMCA, does not mean simple ability to block and remove content. “Instead, such a right and ability to control must take the form of prescreening content, rendering extensive advice to users regarding content and editing user content.” The Court determined that, in this case, Photobucket did not engage in such activities and thus lacked the requisite “right and ability to control.”

Second, the Court held that, although Photobucket made money when one of the infringing images was printed through Kodak, such profit was insufficient to remove the safe-harbor protections. To void the safe harbor, Wolk needed to show that the profit resulted not from the provision of the printing service generally, but that Photobucket receives a financial benefit “because a given image that a user selects to print is infringing.” The Court, quoting the Ninth Circuit’s decision in Perfect 10, Inc. v. CCBill LLC (488 F.3d 1102, 1118 (9th Cir. 2007)), noted that “where there is no evidence in the record that the service provider ‘attracted or retained subscriptions because of the infringement or lost subscriptions because of its eventual obstruction of the infringement,’ no reasonable jury could conclude that the service provider received a direct financial benefit from providing access to the infringing material.”

In holding Photobucket shielded by the DMCA, the Court reiterated the earlier holding in Viacom that the DMCA does not impose a duty on service providers to actively police its website for infringement.

Finally, the Court held that Wolk had failed to demonstrate necessary elements of her secondary infringement claims and that, regardless, the DMCA safe harbor protected Photobucket from the secondary-liability claims for the same reasons as the direct-liability claims.

For content owners, the Wolk decision demonstrates the strength of the DMCA’s safe harbor provisions. Should you be considering suit against a service provider, the case highlights the need for evidence that the provider is failing to comply with the DMCA or that it is profiting directly from and because of the infringing conduct occurring on its service. While it takes with one hand, remember that the DMCA gives with the other, as DMCA-compliant takedown notices can be a cheap and effective method for dealing with infringement of your content.

For service providers, the Wolk decision reaffirms that the DMCA does not impose a duty to police your site for all potential acts of infringement. However, it does once again emphasize the need to properly implement and adhere to a DMCA-compliant notice-and-takedown regime.

The case is Wolk v. Kodak Imaging Networks, Inc., No. 10 Civ. 4135 (S.D.N.Y. Summary Judgment issued December 21, 2011).



 

The views expressed in this document are solely the views of the author and not Martindale-Hubbell. This document is intended for informational purposes only and is not legal advice or a substitute for consultation with a licensed legal professional in a particular case or circumstance.
 

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