143 F. Supp. 3d 115
S.D.N.Y.2015Background
- Smith uploaded his eBook (The Hardscrabble Zone) to Smashwords, authorized 33% sampling, and Smashwords distributed a <=5% sample to Barnes & Noble (B&N) under license.
- B&N’s Digital Locker saved a customer’s acquired free sample to that customer’s cloud library; one customer saved Smith’s sample in June 2010.
- Smith terminated his Smashwords account and unpublished the book in October 2011; Smashwords’ automated takedown to retailers failed because Smith’s account deletion removed the takedown notice.
- B&N removed the book from public sale on April 20, 2012 after receiving a copyright notice, but did not remove the lone customer’s sample from that customer’s digital locker.
- After removal from the store, the sample was re-downloaded from B&N’s cloud to two devices on May 28, 2012 and July 27, 2012; Smith sued for direct and contributory copyright infringement.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Direct infringement — reproduction | Smith: B&N caused unauthorized reproductions when customer re-downloaded the sample after license termination. | B&N: copies were made by the customer’s volitional act; B&N’s system acts automatically and did not volitionally cause the copies. | No volitional conduct by B&N; summary judgment for B&N on direct infringement. |
| Direct infringement — distribution | Smith: electronic transfers from B&N’s cloud amounted to B&N distributing the work without authorization. | B&N: any transfer was initiated by the customer and B&N lacked the requisite volitional conduct. | Volitional-conduct requirement applies to distribution claims; B&N not liable. |
| Contributory infringement — knowledge & material contribution | Smith: B&N facilitated the infringing redownloads and had notice, so it materially contributed. | B&N: even if a customer directly infringed, the Digital Locker has substantial noninfringing uses; B&N did not encourage infringement. | Dismissed — B&N entitled to Sony-Betamax protection because the system is capable of substantial noninfringing uses; summary judgment for B&N. |
| Scope of liability for cloud providers | Smith: hosting residual access rights is part of B&N’s business model leading to liability. | B&N: hosting licensed content and permitting user-initiated access is lawful; no evidence of systemic unlicensed hosting. | Court: mere hosting/licensed distribution and automated re-delivery do not establish direct or contributory liability absent volitional conduct or a service designed to promote infringement. |
Key Cases Cited
- Cartoon Network LP v. CSC Holdings, 536 F.3d 121 (2d Cir. 2008) (volitional-conduct requirement for direct infringement where copies are made by a service on user request)
- ReDigi Inc. v. Capitol Records, 934 F.Supp.2d 640 (S.D.N.Y. 2013) (service design that ensures infringement defeats Sony-Betamax defense)
- Arista Records LLC v. Lime Group LLC, 784 F.Supp.2d 398 (S.D.N.Y. 2011) (contributory infringement requires knowledge and material contribution)
- Sony Corp. of Am. v. Universal City Studios, 464 U.S. 417 (1984) (sale/distribution of a product is not contributory infringement if it is capable of substantial noninfringing uses)
- Matthew Bender & Co. v. West Publ’g Co., 158 F.3d 693 (2d Cir. 1998) (reproduction requires fixation in a material object)
- Napster v. A&M Records, 239 F.3d 1004 (9th Cir. 2001) (file transfer over the Internet can constitute reproduction/distribution for copyright purposes)
- Wolk v. Kodak Imaging Network, 840 F.Supp.2d 724 (S.D.N.Y. 2012) (applying volitional-conduct and contributory-infringement principles to online services)