The Ninth Circuit recently revisited the issue of the applicability of the safe harbor provision of the Digital Millenium Copyright Act (“DMCA”) in the case Ventura Content, Ltd., v. Motherless, Inc., et al. (decided March 14, 2018). The issue before the Court was whether the defendants had presented undisputed evidence that they fell within the protections of the DMCA’s safe harbor provision to allow for summary judgment in their favor.
Motherless is a website that allows users to upload photos and videos of a mainly pornographic nature. It has over 12.6 million pictures and video clips and in 2011, had approximately 750,000 active users. No one pays Motherless to view the content, but a “premium subscription” is available for users who want to avoid advertisements on the site. Motherless does not pay for content nor does it license any of the content that appears on its site. Approximately 85% of its revenue is derived from advertising.
In its early years, users who updated a large amount of content were awarded with “credits” that could be used to purchase items such as coffee mugs or t-shirts. Later, the credits could be exchanged for money of nominal value. The most prolific user who had uploaded over 300,000 videos received approximately $200 in exchange for his credits.
Although Motherless warns users that repeat infringers will have their access terminated, Motherless did not employ a written policy for determining when and how repeat infringers were to lose their access. The owner of Motherless testified, however, that he was solely responsible for determining whether to terminate a repeat infringer’s access and considered a number of factors in doing so. Between 2008 and 2011, he testified that he had terminated more than 33,000 user accounts of which approximately 1,300-2,000 were for repeat copyright infringement.
Ventura Content creates and distributes pornographic movies and alleged that 33 video clips on Motherless contained its copyrighted materials. None of the offending clips identified Ventura Content as the owner of the material although a few had watermarks referring to other aggregator websites.
Ventura Content did not provide a takedown notice to Motherless regarding the 33 clips nor did it avail itself of the software provided by Motherless to directly remove these video clips. Rather, the first notice it gave to Motherless of the offending materials was when it served it with its complaint for copyright infringement.
After being served with the complaint, the owner of Motherless requested that Ventura provide him with the URLs of the offending clips so that he could remove them. After his first request was ignored, he made a second request and then immediately took down the video clips after receiving the identifying URLs from Ventura.
Because Motherless had removed the offending clips, it rendered Ventura’s claim for an injunction moot. Nevertheless, Ventura continued to seek damages based on its claim of copyright infringement. Motherless (and its owner) moved for summary judgment arguing that the evidence demonstrated that they were covered by the DMCA’s safe harbor provision and thus, Ventura’s copyright infringement claim failed as a matter of law. The trial court agreed and granted summary judgment to Motherless. Ventura appealed to the Ninth Circuit.
The Ninth Circuit began its analysis by examining the DMCA’s safe harbor provisions. It recognized that the DMCA places the burden on the copyright owner of policing its copyrights. Essentially, to take advantage of the DMCA’s safe harbor provision, a service provider must (1) establish that it did not know of the infringement nor was the infringement apparent; (2) it must also take down or prevent access to infringing material as soon as it is put on notice; and (3) it cannot financially benefit directly from the infringing activity. Finally, the DMCA also requires that service providers had a policy to terminate users who repeatedly engaged in copyright infringement.
Before turning to these factors, the Ninth Circuit examined Ventura’s claim that Motherless (and not its users) had uploaded the offending clips and therefore was not able to take advantage of the safe harbor provision. Ventura argued that Motherless’s owner had initially uploaded 700,000 files from an old site and that the site’s website categorizes clips into the “most popular” and “most viewed” for its users.
The Ninth Circuit rejected these arguments finding that although the owner had done an initial upload, none of these files contained Ventura’s copyright material. The Ninth Circuit turned to its prior decision in UMG Recordings, Inc. v. Shelter Capital Partners, LLC (2013) to hold that the mere fact that Motherless performed some access facilitating processes to enhance the site for its users, this did not amount to having some control over what was uploaded. Rather, Motherless’s stated policy was “Anything legal stays.” Given that the users decided what to upload and not Motherless, the Court concluded that Motherless was still eligible for the DMCA’s safe harbor provision. The Ninth Circuit also noticed that this conclusion was consistent with similar rulings out of the Second, Fourth and Tenth Circuit Courts of Appeal.
Turning to the knowledge factor, Ventura argued that Motherless knew or should have known that its video clips were copyrighted and that the posting of them on Motherless constituted infringement. The Court rejected this argument by recognizing that only 4 of 33 clips had watermarks and that none of these identified Ventura as the copyright owner. Furthermore, the fact that these video clips may have been of a “high quality” would not necessarily have put Motherless on notice since many amateur content providers also produced “high quality” content.
The Ninth Circuit then turned to the issue of whether Motherless engaged in an expeditious take down of the offending materials. The Court found it significant that Ventura had not marked its material as having been copyrighted nor did it take advantage of the DMCA’s take down notice procedure. Rather, it chose to file a lawsuit and that upon the second request by Motherless, provided it with the URLs containing the offending materials. The Court found it also significant that once Motherless received the URL information, it took down the offending clips that same day. The Court found that this evidence demonstrated that Motherless had “respond[ed] expeditiously to remove” the offending material.
Ventura also argued that Motherless had the right and ability to control the materials because it received a direct financial benefit from the posting of this material. While the Court noted that theoretically Motherless had some right of control in that it could have taken down all of its content and shut down the website, this factor of the DMCA requires something more, i.e., “a service provider must be able to exert `substantial influence’ on its users activities.” The Ninth Circuit found it significant that Motherless did not tell its users what type of content to upload nor did it curate the uploaded content in any meaningful way. Further, it offered users that had the most popular or most viewed material credits of a nominal value, which would not incentivize the uploading of any copyright protected information. The Court also noted that Motherless did not advertise itself as a place to get pirated content and thus concluded that it did not financially benefit from its users infringing activity.
Finally, Ventura argued that Motherless was not entitled to safe harbor protection because it did not have a written policy detailing how it would identify and terminate the accounts of repeat infringers. The Ninth Circuit rejected this argument, finding that given its size, i.e., the owner and a part-time independent contractor, there was no need for more formal policies. Thus, the Ninth Circuit concluded that Motherless had established that it could avail itself of the safe harbor provision and affirmed summary judgment in its favor.
Circuit Judge Rawlinson disagreed with the majority and would have reversed the granting of summary judgment to Motherless. She found it significant that Motherless did not have a formal written policy as to how to identify and terminate the accounts of repeat infringers and thought that Ventura should have been allowed to proceed on its theory.
The Ventura/Motherless case is a reminder to those service providers that allow users to upload photographs and/or video clips to take affirmative steps and institute appropriate policies to police against infringing material. Otherwise, they may not be able to take advantage of the DMCA’s safe harbor provision when sued for copyright infringement.
James Kachmar is a shareholder in Weintraub Tobin Chediak Coleman Grodin’s litigation section. He represents corporate and individual clients in both state and federal courts in various business litigation matters, including trade secret misappropriation, unfair business competition, stockholder disputes, and intellectual property disputes. For additional articles on intellectual property issues, please visit Weintraub’s law blog at www.theiplawblog.com.