ALS Scan, Inc. v. RemarQ Communities, Inc.ALS Scan, Inc. v. RemarQ Communities, Inc.
- Reporters:
- ,
- Before:
- Niemeyer, Widener, Wilkins
ARGUED: Harry Brett Siegel, LAW OFFICE OF JOEL MARC ABRAMSON, Columbia, Maryland, for Appellant. Robert R. Vieth, COOLEY GODWARD, L.L.P., Reston, Virginia, for Appellee. ON BRIEF: Robert T. Cahill, COOLEY GODWARD, L.L.P., Reston, Virginia, for Appellee.
NIEMEYER, Circuit Judge:
We are presented with an issue of first impression — whether an Internet service provider enjoys a safe harbor from copyright infringement liability as provided by Title II of the Digital Millennium Copyright Act (“DMCA“) when it is put on notice of infringement activity on its system by an imperfect notice. Because we conclude that the service provider was provided with a notice of infringing activity that substantially complied with the Act, it may not rely on a claim of defective notice to maintain the immunity defense provided by the safe harbor. Accordingly, we reverse the ruling of the district court that found the notice fatally defective, and affirm its remaining rulings.
I
ALS Scan, Inc., a Maryland corporation, is engaged in the business of creating and marketing “adult” photographs. It displays these pictures on the Internet to paying subscribers and also sells them through the media of CD ROMs and videotapes. ALS Scan is holder of the copyrights for all of these photographs.
RemarQ Communities, Inc., a Delaware corporation, is an online Internet service provider that provides access to its subscribing members. It has approximately 24,000 subscribers to its newsgroup base and provides access to over 30,000 newsgroups which cover thousands of subjects. These newsgroups, organized by topic, enable subscribers to participate in discussions on virtually any topic, such as fine arts, politics, religion, social issues, sports, and entertainment. For example, RemarQ provides access to a newsgroup entitled “Baltimore Orioles,” in which users share observations or materials about the Orioles. It claims that users post over one million articles a day in these newsgroups, which RemarQ removes after about 8-10 days to accommodate its limited server capacity. In providing access to newsgroups, RemarQ does not monitor, regulate, or censor the content of articles posted in the newsgroup by subscribing members. It does, however, have the ability to filter information contained in the
Two of the newsgroups to which RemarQ provides its subscribers access contain ALS Scan‘s name in the titles. These newsgroups — “alt.als” and “alt.binaries.pictures.erotica.als” — contain hundreds of postings that infringe ALS Scan‘s copyrights. These postings are placed in these newsgroups by RemarQ‘s subscribers.
Upon discovering that RemarQ databases contained material that infringed ALS Scan‘s copyrights, ALS Scan sent a letter, dated August 2, 1999, to RemarQ, stating:
Both of these newsgroups [“alt.als” and “alt.binaries.pictures.erotica.als“] were created for the sole purpose of violating our Federally filed Copyrights and Tradename. These newsgroups contain virtually all Federally Copyrighted images. . . . Your servers provide access to these illegally posted images and enable the illegal transmission of these images across state lines.
This is a cease and desist letter. You are hereby ordered to cease carrying these newsgroups within twenty-four (24) hours upon receipt of this correspondence . . . .
America Online, Erol‘s, Mindspring, and others have all complied with our cease and desist order and no longer carry these newsgroups.
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Our ALS Scan models can be identified at http://www.alsscan.com/modinf2.html[.] Our copyright information can be reviewed at http://www.alsscan.com/copyrite.html[.]
RemarQ responded by refusing to comply with ALS Scan‘s demand but advising ALS Scan that RemarQ would eliminate individual infringing items from these newsgroups if ALS Scan identified them
[t]hese newsgroups have apparently been created by individuals for the express sole purpose of illegally posting, transferring and disseminating photographs that have been copyrighted by my client through both its websites and its CD-ROMs. The newsgroups, on their face from reviewing messages posted thereon, serve no other purpose.
When correspondence between the parties progressed no further to resolution of the dispute, ALS Scan commenced this action, alleging violations of the Copyright Act and Title II of the DMCA, as well as unfair competition. In its complaint, ALS Scan alleged that RemarQ possessed actual knowledge that the newsgroups contained infringing material but had “steadfastly refused to remove or block access to the material.” ALS Scan also alleged that RemarQ was put on notice by ALS Scan of the infringing material contained in its database. In addition to injunctive relief, ALS Scan demanded actual and statutory damages, as well as attorneys fees. It attached to its complaint affidavits establishing the essential elements of its claims.
In response, RemarQ filed a motion to dismiss the complaint or, in the alternative, for summary judgment, and also attached affidavits, stating that RemarQ was prepared to remove articles posted in its newsgroups if the allegedly infringing articles were specifically identified. It contended that because it is a provider of access to newsgroups, ALS Scan‘s failure to comply with the DMCA notice requirements provided it with a defense to ALS Scan‘s copyright infringement claim.
The district court ruled on RemarQ‘s motion, stating, “[RemarQ‘s] motion to dismiss or for summary judgment is treated as one to dismiss and, as such, is granted.” In making this ruling, the district court held: (1) that RemarQ could not be held liable for direct copyright infringement merely because it provided access to a newsgroup containing infringing material; and (2) that RemarQ could not be held liable for contributory infringement because ALS Scan failed to comply
II
ALS Scan contends first that the district court erred in dismissing its direct copyright infringement claim. It contends that it stated a cause of action for copyright infringement when it alleged (1) the “ownership of valid copyrights,” and (2) RemarQ‘s violation of its copyrights “by allowing its members access to newsgroups containing infringing material.”1 See generally Keeler Brass Co. v. Continental Brass Co., 862 F.2d 1063, 1065 (4th Cir. 1988) (describing the requirements of a direct infringement claim). In rejecting ALS Scan‘s direct infringement claim, the district court relied on the decision in Religious Technology Center v. Netcom On-Line Communication Services, Inc., 907 F. Supp. 1361, 1368-73 (N.D. Cal. 1995), which concluded that when an Internet provider serves, without human intervention, as a passive conduit for copyrighted material, it is not liable as a direct infringer. The Netcom court reasoned that “it does not make sense to adopt a rule that could lead to liability of countless parties whose role in the infringement is nothing more than setting up and operating a system that is necessary for the functioning of the Internet.” Id. at 1372. That court observed that it would not be workable to hold “the entire Internet liable for activities that cannot reasonably be deterred.” Id.; see also Marobie-FL, Inc. v. National Ass‘n of Fire Equip. Distribs., 983 F. Supp. 1167, 1176-79 (N.D. Ill. 1997) (agreeing with Netcom‘s reasoning). ALS Scan argues, however, that the better reasoned position, contrary to that held in Netcom, is presented in Playboy Enterprises, Inc. v. Frena, 839 F. Supp. 1552, 1555-59 (M.D. Fla. 1993), which held a computer bulletin board service provider liable for the copyright infringement when it failed to prevent the placement of plaintiff‘s copyrighted photographs in its sys-
Although we find the Netcom court reasoning more persuasive, the ultimate conclusion on this point is controlled by Congress’ codification of the Netcom principles in Title II of the DMCA. As the House Report for that Act states,
The bill distinguishes between direct infringement and secondary liability, treating each separately. This structure is consistent with evolving case law, and appropriate in light of the different legal bases for and policies behind the different forms of liability.
As to direct infringement, liability is ruled out for passive, automatic acts engaged in through a technological process initiated by another. Thus the bill essentially codifies the result in the leading and most thoughtful judicial decision to date: Religious Technology Center v. Netcom On-Line Communications Services, Inc., 907 F. Supp. 1361 (N.D. Cal. 1995). In doing so, it overrules these aspects of Playboy Enterprises, Inc. v. Frena, 839 F. Supp. 1552 (M.D. Fla. 1993), insofar as that case suggests that such acts by service providers could constitute direct infringement, and provides certainty that Netcom and its progeny, so far only a few district court cases, will be the law of the land.
H.R. Rep. No. 105-551(I), at 11 (1998). Accordingly, we address only ALS Scan‘s claims brought under the DMCA itself.
III
For its principal argument, ALS Scan contends that it substantially complied with the notification requirements of the DMCA and thereby denied RemarQ the “safe harbor” from copyright infringement liability granted by that Act. See
RemarQ argues in response that it did not have “knowledge of the infringing activity as a matter of law,” stating that the DMCA protects it from liability because “ALS Scan failed to identify the infringing works in compliance with the Act, and RemarQ falls within the ‘safe harbor’ provisions of the Act.” It notes that ALS Scan never provided RemarQ or the district court with the identity of the pictures forming the basis of its copyright infringement claim.
These contentions of the parties present the issue of whether ALS Scan complied with the notification requirements of the DMCA so as to deny RemarQ the safe-harbor defense to copyright infringement liability afforded by that Act.
Title II of the DMCA, designated the “Online Copyright Infringement Limitation Act,” DMCA, § 201, Pub. L. 105-304, 112 Stat. 2877 (1998) (codified at
The liability-limiting provision applicable here,
Even if we were to treat the district court‘s order as disposing of a motion for summary judgment, and not a motion to dismiss, the court still could not, as a matter of law, have resolved the conflicting affidavits about actual knowledge. Resolving whether the court actually treated the motion as one to dismiss or for summary judgment is not necessary, however, because we conclude that ALS Scan substantially complied with the third prong, thereby denying RemarQ its safe harbor defense.
In evaluating the third prong, requiring RemarQ to remove materials following “notification,” the district court concluded that ALS Scan‘s notice was defective in failing to comply strictly with two of the six requirements of a notification — (1) that ALS Scan‘s notice include “a list of [infringing] works” contained on the RemarQ site and (2) that the notice identify the infringing works in sufficient detail to enable RemarQ to locate and disable them.
Some, but not all, of the pictures users have posted on these sites appear to be ALS Scan pictures. It also appears that users have posted other non-ALS Scan‘s erotic images on these newsgroups. The articles in these newsgroups also contain text messages, many of which discuss the adult images posted on the newsgroups.
ALS Scan responds that the two sites in question — “alt.als” and “alt.binaries.pictures.erotica.als” — were created solely for the purpose of publishing and exchanging ALS Scan‘s copyrighted images. It points out that the address of the newsgroup is defined by ALS Scan‘s name. As one of its affidavits states:
[RemarQ‘s] subscribers going onto the two offending newsgroups for the purpose of violating [ALS Scan‘s] copyrights, are actually aware of the copyrighted status of [ALS Scan‘s] material because (1) each newsgroup has “als” as part of its title, and (2) each photograph belonging to [ALS
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(ii) Identification of the copyrighted work claimed to have been infringed, or, if multiple copyrighted works at a single online site are covered by a single notification, a representative list of such works at that site.
(iii) Identification of the material that is claimed to be infringing or to be the subject of infringing activity and that is to be removed or access to which is to be disabled, and information reasonably sufficient to permit the service provider to locate the material.
Scan] has [ALS Scan‘s] name and/or the copyright symbol next to it.
Each of these two newsgroups was created by unknown persons for the illegal purpose of trading the copyrighted pictures of [ALS Scan] to one another without the need for paying to either (1) become members of [ALS Scan‘s] web site(s) or (2) purchasing the CD-ROMs produced by [ALS Scan].
ALS Scan presses the contention that these two sites serve no other purpose than to distribute ALS Scan‘s copyrighted materials and therefore, by directing RemarQ to these sites, it has directed RemarQ to a representative list of infringing materials.
The DMCA was enacted both to preserve copyright enforcement on the Internet and to provide immunity to service providers from copyright infringement liability for “passive,” “automatic” actions in which a service provider‘s system engages through a technological process initiated by another without the knowledge of the service provider. H.R. Conf. Rep. No. 105-796, at 72 (1998), reprinted in 1998 U.S.C.C.A.N. 649; H.R. Rep. No. 105-551(I), at 11 (1998). This immunity, however, is not presumptive, but granted only to “innocent” service providers who can prove they do not have actual or constructive knowledge of the infringement, as defined under any of the three prongs of
In this case, ALS Scan provided RemarQ with information that (1) identified two sites created for the sole purpose of publishing ALS Scan‘s copyrighted works, (2) asserted that virtually all the images at the two sites were its copyrighted material, and (3) referred RemarQ to two web addresses where RemarQ could find pictures of ALS Scan‘s models and obtain ALS Scan‘s copyright information. In addition, it noted that material at the site could be identified as ALS Scan‘s material because the material included ALS Scan‘s “name and/or copyright symbol next to it.” We believe that with this information, ALS Scan substantially complied with the notification requirement of providing a representative list of infringing material as well as information reasonably sufficient to enable RemarQ to locate the infringing material. To the extent that ALS Scan‘s claims about infringing materials prove to be false, RemarQ has remedies for any injury it suffers as a result of removing or disabling noninfringing material. See
Accordingly, we reverse the district court‘s ruling granting summary judgment in favor of RemarQ on the basis of ALS Scan‘s noncompliance with the notification provisions of
IV
ALS Scan also appeals the district court‘s decision not to enter summary judgment on its behalf with respect to its infringement claim. Because there is a dispute as to several material facts, however, we affirm the district court‘s ruling on ALS Scan‘s motion for summary judgment. If ALS Scan is able to prove that in fact the offending newsgroups’ “sole purpose” is infringement of ALS Scan‘s copyrights, it may be entitled to a remedy. However, because it is contested both that such is, in fact, the “sole” purpose of the newsgroups, and that “virtually all” the images posted in the newsgroups are infringing, we are unable to come to any legal conclusions. Final disposition must await further development of the record and further proceedings.
V
Accordingly, for the reasons given, we reverse the district court‘s decision to grant summary judgment in favor of RemarQ, affirm the district court‘s decision not to grant summary judgment in favor of ALS Scan, and remand this case for further proceedings consistent with this opinion.
AFFIRMED IN PART, REVERSED IN PART, AND REMANDED
Notes
(c) Information residing on systems or networks at direction of users.—
(1) In general.—A service provider shall not be liable for monetary relief, or, except as provided in subsection (j), for injunctive or other equitable relief, for infringement of copyright by reason of the storage at the direction of a user of material that resides on a system or network controlled or operated by or for the service provider, if the service provider—
(A)(i) does not have actual knowledge that the material or an activity using the material on the system or network is infringing;
(ii) in the absence of such actual knowledge, is not aware of facts or circumstances from which infringing activity is apparent; or
(iii) upon obtaining such knowledge or awareness, acts expeditiously to remove, or disable access to, the material;
(B) does not receive a financial benefit directly attributable to the infringing activity, in a case in which the service provider has the right and ability to control such activity; and
(C) upon notification of claimed infringement as described in paragraph (3), responds expeditiously to remove, or disable access to, the material that is claimed to be infringing or to be the subject of infringing activity.
(3) Elements of notification.—
(A) To be effective under this subsection, a notification of claimed infringement must be a written communication provided to the designated agent of a service provider that includes substantially the following: