Perfect 10, Inc. v. Giganews, Inc.
847 F.3d 657
| 9th Cir. | 2017Background
- Giganews operates fee-based Usenet servers and Livewire sells access to Giganews’ servers; Usenet content is overwhelmingly posted by third-party users and propagates automatically between peer servers.
- Perfect 10 owns copyrights to thousands of adult images and found many of those images distributed via Giganews’s service.
- Perfect 10 sent numerous DMCA takedown notices; when provided machine-readable Message-IDs Giganews promptly removed messages, but many notices lacked usable Message-IDs.
- District court dismissed many direct-infringement theories for failure to allege volitional conduct and later granted summary judgment for Giganews and Livewire on direct, contributory, and vicarious infringement; it awarded defendants attorney’s fees and denied supplemental fees and an alter-ego addition.
- Ninth Circuit affirmed: (1) volitional-conduct (causation) is an element of direct infringement and was not shown; (2) no triable contributory or vicarious liability; (3) fee award and refusals on supplemental fees and alter-ego were not erroneous.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Giganews/Livewire directly infringed (display/distribution/reproduction) | Perfect 10: Giganews caused displays/distributions via its Mimo reader and server operations and instigated copying | Giganews/Livewire: users initiated posting and requests; software/peering and automatic copying are passive, not volitional | Volitional conduct (causation) is required; no volitional conduct proved; direct infringement claims fail |
| Whether Giganews is contributorily liable | Perfect 10: Giganews knew of infringement (via notices) and could take simple measures (search terms) to remove material | Giganews: notices often lacked machine-readable Message-IDs; proposed search methods were burdensome/unreliable; when Message-IDs provided Giganews removed content | No triable issue of material contribution or inducement; summary judgment for defendants on contributory claim |
| Whether Giganews is vicariously liable | Perfect 10: Giganews financially benefits from providing access to infringing material | Giganews: no causal link showing subscriptions were attracted by the specific Perfect 10 works at issue | Plaintiff must show a causal link between infringement of plaintiff’s works and defendant’s financial benefit; no such link shown; vicarious claim fails |
| Whether fee award, supplemental fees, and alter-ego addition were proper | Perfect 10: fee award abused discretion and excessive; defendants sought supplemental fees and adding Zada as alter ego | Defendants: prevailing parties entitled to fees; supplemental request untimely; no basis to pierce corporate veil | Fee award affirmed as reasonable; supplemental fees denied for untimeliness; refusal to add Zada as alter ego affirmed |
Key Cases Cited
- Fox Broad. Co. v. Dish Network LLC, 747 F.3d 1060 (9th Cir. 2014) (volitional-conduct/causation is an element of direct infringement)
- American Broadcasting Cos. v. Aereo, Inc., 134 S. Ct. 2498 (U.S. 2014) (distinguishes equipment supplier vs. active service for performance/transmit analysis)
- Perfect 10, Inc. v. Amazon.com, Inc., 508 F.3d 1146 (9th Cir. 2007) (storage and communication of thumbnails can be direct display infringement where the provider initiates and controls storage/communication)
- CoStar Group, Inc. v. LoopNet, Inc., 373 F.3d 544 (4th Cir. 2004) (automatic copying/storage instigated by others does not create direct liability; issues analyzed under contributory framework)
- Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913 (U.S. 2005) (inducement theory: distribution with intent to promote infringement through clear expression or affirmative steps)
- Ellison v. Robertson, 357 F.3d 1072 (9th Cir. 2004) (vicarious-liability financial-benefit inquiry requires a causal link to the plaintiff’s specific infringement)