by George M. Borkowski
In an odd and sometimes intellectually frustrating opinion, the Seventh Circuit in Flava Works, Inc. v. Gunter, __ F.3d __ , 2012 WL 3124826 (7th Cir. Aug. 2, 2012), may have altered the direction of the law of contributory copyright infringement, ostensibly only as applied to websites that link to infringing content on the internet, but perhaps far more broadly. The fallout from this opinion promises to be significant for rights holders, social media, and other web services.
In the words of the court, Flava Works “specializes in the production and distribution of videos of black men engaged in homosexual acts.” These videos are distributed through Flava Works to its subscribers for a fee. Users of the service must agree not to copy, transmit, or sell the videos they purchase, although a user is authorized to download them to his or her computer for “personal, noncommercial use” only.
Defendant operates a website and “social bookmarking” service called myVidster that allows users who find videos on the Internet to bookmark them on the myVidster website. Once a user does this, myVidster requests an embed code from the server that is hosting the video. The embed code contains the location of the video in question. myVidster then displays a thumbnail picture of the video on its website. If a myVidster user clicks on the thumbnail, myVidster connects the user’s computer to the server that is actually hosting the video. The video plays on the user’s computer, surrounded by a frame that myVidster puts around it that runs advertisements. Because of this framing, the video appears to be playing from the myVidster website. In reality, however, it is being transmitted from the host server; the bookmarked video does not reside on myVidster’s servers. (You may recall from the Ninth Circuit’s decision in Perfect 10, Inc. v. Amazon.com, Inc., 508 F.3d 1146 (9th Cir. 2007), that this process is similar to how Google’s Image Search used to display photographs hosted on non-Google servers around the Internet that were located by Google’s search engine.)
Problems arose when some Flava Works users began to upload Flava Works videos to the internet on their computers and then bookmarked them on myVidster. In doing so, the Flava Works users violated Flava Works’ Terms of Service, which limited the use of its videos to users’ particular computers, and which expressly prohibited their further copying and distribution – by, for example, uploading them. The users also directly infringed Flava Works’ copyrights in those videos.
Recently, Flava Works sued myVidster on various theories, including direct, contributory, and vicarious copyright infringement and inducement of copyright infringement. After defending against several motions to dismiss (which appear to be continuing), Flava Works moved for a preliminary injunction on the basis of contributory and vicarious copyright infringement. The District Court for the Northern District of Illinois entered a preliminary injunction against myVidster on the contributory infringement count (not reaching the issue of vicarious infringement). myVidster appealed to the Seventh Circuit, which vacated the injunction (it had been stayed pending appeal by the district court).
The question presented to the court of appeals was whether myVidster could be a contributory copyright infringer because some of its users had bookmarked Flava Works videos (thereby infringing upon Flava Works’ copyrights in those videos), and myVidster connected others of its users to those infringing, bookmarked videos when they clicked on the thumbnails of those videos on the myVidster site. In an opinion by Judge Posner (author of the post-Napster opinion in In re Aimster Copyright Litigation, 334 F.3d 643 (7th Cir. 2003)), the Seventh Circuit said, “No.”
The core of the Seventh Circuit’s holding was that a website that links to infringing videos uploaded by others on the Internet is not a contributory copyright infringer, even if the website indexes and organizes links to those videos, and even if the website posts thumbnails of those videos on its site to make it easier for people to access them (it appears that, at one point, myVidster also allowed its users to store videos on it servers, but that conduct was not addressed except in passing by the parties and the court on appeal). How the court reached that conclusion, however, is not particularly easy to understand.
The court began by rejecting as “unhelpful” the classic definition of contributory copyright infringement from Gershwin Publishing Corp. v. Columbia Artists Management, Inc., 443 F.2d 1159, 1162 (2d Cir. 1971), which defined a contributory infringer as “one who, with knowledge of the infringing activity, induces, causes or materially contributes to the infringing conduct of another.” Instead, Judge Posner chose another Second Circuit case for the definition he preferred: “personal conduct that encourages or assists the infringement.” Matthew Bender & Co. v. West Publishing Co., 158 F.3d 693, 706 (2d Cir. 1998). This definition, however, is more akin to what the Supreme Court in Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd, 545 U.S. 913 (2005), called inducing copyright infringement – a theory that Judge Posner later stated in his opinion that was not the basis for the preliminary injunction at issue.
Next, even though the court of appeals recognized that, by connecting to websites that infringe videos, myVidster “no doubt” was encouraging its subscribers to circumvent Flava Works’ pay wall, “thus reducing Flava’s income,” myVidster supposedly was not increasing the amount of infringement; the court analogized the viewing of bookmarked videos to sneaking into a movie theater without paying to watch a copyrighted movie, which would not constitute copyright infringement by the theater patron. The court saw it this way even in light of section 512(d) of the Digital Millennium Copyright Act, which gives a safe harbor to internet service providers that refer or link users to an online location containing infringing material or infringing activity – but only if the service provider complies with certain requirements (such as having a policy that bans repeat infringers) and, upon obtaining knowledge of infringing material or activity, disables the links to that material or activity.
In this case, Flava Works had sent DMCA takedown notices to myVidster, informing it of links to infringing material. Flava Works contended that myVidster did not take appropriate steps in response to those notices. The court said that this was irrelevant “unless myVidster is contributing to infringement” – thereby begging the central question that was before the court. The court rejected the notion that myVidster was an infringer “at least in the form of copying or distributing copies of copyrighted work” (which, of course, is itself irrelevant because copying and distributing would be direct copyright infringement, not contributory infringement), which was the basis for the preliminary injunction and the safe harbor of the DMCA that the court was discussing.
The court concluded its thoughts on this section by stating that there was no evidence that myVidster was “encouraging” the people who infringe by uploading videos, “which would make [myVidster] a contributory infringer.” Thus, the Seventh Circuit both dramatically narrowed what constitutes contributory copyright infringement (one needs to “encourage” others to infringe – never mind if the person otherwise materially contributes to the infringement), and essentially read section 512(d) out of the DMCA. This confusion was exacerbated when the court, in response to amicus briefs filed by Google and Facebook, declared out of the blue that the law doesn’t recognize “secondary” copyright infringement – a somewhat frightening thought for a plaintiff in a case involving contributory and vicarious infringement.
There is much more in this opinion than I have the space to discuss, including a long discussion of whether myVidster violates Flava Works’ public performance right in its videos (the court concluded that it does not). I encourage you to read it and reach your own conclusions as to how broadly it sweeps. And, in fairness, the Seventh Circuit did recognize that Flava Works might still be able to show that myVidster is a contributory infringer on a more developed record. Nevertheless, the opinion’s loose and sometimes confused analysis of what can constitute contributory copyright infringement could have a very destabilizing effect on copyright protection for rights holders.
Mr. Borkowski is a partner at Freeman Freeman & Smiley LLP. He represents major entertainment and technology clients at the intersection of content creation and protection with technology, focusing on the impact of technology on traditional intellectual property rights and business models. Mr. Borkowski has handled the full continuum of intellectual property, technology, and entertainment litigation, as well as anti-piracy and rights enforcement, privacy, and counseling. He can be reached at email@example.com.