Inducing Copyright Infringement

Munger Tolles attorney Jesse Max Creed discusses copyright liability for sites that induce infringement in a post on the Copyright Alliance’s blog Idea/Expression entitled “Ninth Circuit Poised to Address Torrent Site Liability.”

In Fung v. Columbia Pictures 10-55946, the studios brought a copyright infringement action against BitTorrent, an online protocol that facilitates the transfer of large digital files, predominantly movies and television shows, over the Internet. The district court granted the studios summary judgment, holding that Fung’s intent to induce infringement was “overwhelming and beyond dispute.” In opposing summary judgment, Fung raised the DMCA safe harbor defense, among others, but the district court concluded that Fung was not shielded by the DMCA because he had actual knowledge of infringing activity and profited from the infringing activity despite having the power to control such activity.

Mr. Creed notes that the studios’ evidence of liability was overwhelming. However, the district court’s statement that “[i]n many ways,” the DMCA is “simply a restatement of the legal standards establishing secondary copyright infringement -- in many cases, if a defendant is liable for secondary infringement, the defendant is not entitled to [DMCA] immunity; if a defendant is not liable for secondary infringement, the defendant is entitled to [DMCA] immunity,” is in some tension with existing Ninth Circuit law. In A&M Records, Inc. v. Napster, Inc., the Ninth Circuit rejected a “blanket conclusion” that the DMCA will never protect secondary infringers. That court cited a Senate Report that it said contemplates that defendants who might otherwise be liable for vicarious and contributory infringement might in some cases be able to establish eligibility for a DMCA safe harbor. Mr. Creed also notes the difference between standards for inducer liability and for disqualifying knowledge under the DMCA the Ninth Circuit articulated in Veoh v. Universal Music Group. In Veoh, the court held that a site’s general knowledge that its service is and could be used for infringement is insufficient evidence to disqualify it from safe harbor protection under the DMCA. But according to the district court in Fung, an inducer does not qualify for safe harbor protection if it has a “patently unlawful objective,” regardless whether the inducer is aware of specific infringing activity.”

The Ninth Circuit issued its opinion in Fung on March 21, 2013. It held that Fung induced copyright infringement and was disqualified from DMCA safe harbor protection. The Ninth Circuit cited its prior decision in A&M Records and the DMCA Senate report in rejecting the district court’s conclusion that inducement liability is inherently incompatible with DMCA safe harbor protection. The Ninth Circuit explained it was unsure whether an inducer could, in no instances, meet the criteria for DMCA safe harbor protection. It advised courts to analyze the standards for inducer liability and DMCA safe harbor protection separately.

Munger, Tolles & Olson is a member of the Copyright Alliance’s Legal Advisory Board. The board works with the organization and its members to advance copyright strategy.

Mr. Creed focuses his practice on Internet and intellectual property transactions and litigation, especially in the areas of copyright, trademark and privacy matters, and has an interest in advising innovative companies that present challenging issues arising out of the evolving Internet ecosystem.