Website can use DMCA safe harbor for acts of its independent contractors

BWP Media USA, Inc v. Clarity Digital Group, LLC, No.
15-1154 (10th Cir. Apr. 25, 2016)  
 
BWP owns the copyrights to various celebrity photos, and its
business model appears to be lawsuit-based, at least in part.  It sued defendant (AXS) for infringing 75
photos on the Examiner.com website. 
BWP’s July 2013 letter notifying AXS of the alleged infringements (note:
not a DMCA notice) prompted AXS to remove the photos, as it told BWP, but BWP
sued anyway. The district court granted summary judgment based on AXS’s DMCA
safe harbor defense, and BWP appealed.
 
Examiner.com characterizes itself as a “dynamic
entertainment, news and  lifestyle
network that serves more than 20 million monthly readers across the U.S.  and around the world.” Independent  contractors, called “Examiners,” create its
content. Prospective examiners must fill out an application including a
proposed topic and a short writing 
sample. Examiner.com evaluates the writing sample and conducts a
background  check.  The contract between AXS and its Examiners
provides that they’re independent contractors and that copyright infringement
is prohibited.
 
BWP argued that, because of the contractual relationship
between AXS and the Examiners who posted the infringing photos, the photos
didn’t qualify as having been stored “at the direction of a user.”  BWP argued that Examiners weren’t users, and
that, even if they were, AXS directed them to post the infringing content.  The court of appeals concluded instead that
the DMCA provision should be construed as a whole, rather than by isolating
particular words.  “User” was
straightforward and unambiguous: for DMCA purposes, a “‘user’ describes a
person  or entity who avails itself of
the service provider’s system or network to store  material.”  
 
BWP, without legal authority, argued that “user” should exclude
an ISP’s owners, employees, and  agents, or
that it should exclude anyone who entered 
into a contract and received compensation from an ISP.  BWP contended that, otherwise, every ISP
would be protected from liability. The court of appeals disagreed.  Safe harbor protection was conditioned on
various factors, including user-directed storage, lack of actual or red flag
knowledge, and expeditiou action to remove or disable access to the  infringing material.
 
BWP further argued that Examiners were agents of AXS, not
“users.” There was no evidence supporting the agency argument, which was “contrary
to the language of the contract, our interpretation of the  term ‘user,’ and agency principles generally.”  A “user “is 
anyone who uses a website — no class of individuals is inherently
excluded.”  The contract made Examiners
independent contractors, and nothing in CCNV
v. Reid
counseled to the contrary; even if, against the evidence, Examiners
had apparent authority to act for AXS, that didn’t make them employees—even if
employees couldn’t also be “users” under §512.
 
Nor was the infringing material stored at the direction of
AXS.  Key to the question of who directed
the storage of the material was control. 
“[I]f the infringing content has merely gone through a screening or
automated process, the ISP will generally benefit from the safe  harbor’s protection.”  BWP argued that AXS directed Examiners to
post the infringing content by instructing them on the general topics to cover
and suggesting that Examiners include slide shows or pictures to accompany
articles. 
 
BWP, however, fails to explain how
this evidence crosses the chasm between 
encouraging the Examiners to post pictures with articles and
encouraging  Examiners to post infringing
content. Not only did AXS make clear copyright 
infringement was prohibited, it also provided Examiners with
licensed  photographs to accompany their
articles. No reasonable trier of fact could find  that the infringement was at the direction of
AXS.
 
Finally,  AXS did not
have actual or circumstantial knowledge of the 
copyright infringement.  Mere
knowledge that celebrity photos are typically protected by copyright was
insufficient. AXS encouraged the use of photos, but also provided Examiners
access to a photo bank of licensed images. 
“Prior  cases also clearly
establish that ‘merely hosting a category of copyrightable  content, such as music videos, with the
general knowledge that one’s services could be used to share infringing
material, is insufficient to meet the actual 
knowledge requirement under § 512(c)(1)(A)(i).’”
 
Agency principles couldn’t be used to impute Examiners’
knowledge to AXS; BWP didn’t raise this argument until the appeal.

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