Ninth Circuit - Internet Protocol Address Subscriber Not Liable For Infringements By Others

The Ninth Circuit made it a lot tougher for copyright owners to sue internet protocol address subscribers for copyright infringements where the infringements were made by third parties using the subscriber's internet accounts.   Here, the defendant subscriber was not a regular occupant of an adult foster care home where the alleged infringement occurred.  Because the pleader did not identify the device causing the infringement and did not timely serve the likely infringer, the action was dismissed for failure of timely service under Rule 4(m) of the Federal Rules of Civil Procedure.   IP address owner held not to be a contributory infringer.

Cobbler Nevada, LLC v Gonzales, 901 F3d 1142, 1146-47 [9th Cir 2018]

Rule 4(m) of the Federal Rules of Civil Procedure requires timely service upon a defendant – ninety days unless good cause is shown to excuse the failure.^[1]   Although copyright owners can often trace infringement of copyrighted material to an IP address, it is not always easy to pinpoint the particular individual or device engaged in the infringement.^[2] Internet providers, such as Comcast or AT & T, can go so far as to identify the individual who is registered to a particular IP address (i.e., an account holder) and the physical address associated with the account, but that connection does not mean that the internet subscriber is also the infringer.^[3] Simply establishing an account does not mean the subscriber is accessing the internet, and multiple devices can access the internet under the same IP address. Identifying an infringer becomes even more difficult where numerous people live in and visit a facility that uses the same internet service.^[4] The Ninth Circuit upheld dismissal of a claim against an adult foster care home where the plaintiff could not pinpoint the individual infringer or the device being used.^[5] The dismissal was pursuant to Rule 4(m) of the Federal Rules of Civil Procedure that requires timely service upon a defendant.^[6]  The claims for direct infringement were dismissed without prejudice: the claims for contributory infringement were dismissed with prejudice.^[7] The Ninth Circuit noted: while we recognize this obstacle to naming the correct defendant, this complication does not change the plaintiff's burden to plead factual allegations that create a reasonable inference that the defendant is the infringer.  Noting that because the defendant was not a regular occupant of the facility or a likely infringer, the Ninth Circuit affirmed an award of attorneys fees in his favor.^[8]

---

[1] Fed.R.Civ.P. 4(m).

[2] Cobbler Nevada, LLC v Gonzales, 901 F3d 1142, 1146-47 [9th Cir 2018]

 

[3] Cobbler Nevada, LLC v Gonzales, 901 F3d 1142, 1146-47 [9th Cir 2018]

 

[4] Cobbler Nevada, LLC v Gonzales, 901 F3d 1142, 1146-47 [9th Cir 2018]

 

[5] Cobbler Nevada, LLC v Gonzales, 901 F3d 1142, 1146-47 [9th Cir 2018]

 

[6] Fed.R.Civ.P. 4(m); Cobbler Nevada, LLC v Gonzales, 901 F3d 1142, 1146 [9th Cir 2018]

 

[7] Cobbler Nevada, LLC v Gonzales, 901 F3d 1142, 1147-48 [9th Cir 2018]

[8] Cobbler Nevada, LLC v Gonzales, 901 F3d 1142, 1150 [9th Cir 2018]

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 Copyright law, fine art and navigating the courts. Attorney and AuthorCopyright Litigation Handbook (Thomson Reuters Westlaw 2018-2019) by Raymond J. Dowd
 

Ninth Circuit - No Vicarious Liability For Copyright Infringement of Photographs on Website

Atherton Wealth Advisors Website

In Erickson Productions, Inc. v. Kast, --- F.3d --- (9th Cir. 2019) the Ninth Circuit vacated a jury verdict of $450,000 for three photographs on Atherton Trust's website.   The Ninth Circuit: 1. vacated the verdict of vicarious liability; 2. upheld the verdict of contributory liability but vacated the "willfulness" finding that permitted the statutory damages to be enhanced from $30,000 per infringement to $150,000.

The Ninth Circuit addressed a question of first impression for it and any other circuit court:  is avoidance of licensing fees by unauthorized copying a "direct financial benefit" sufficient to sustain vicarious liability as a matter of law?   The Ninth Circuit answered "no".

Defendant Kast hired a website design company and oversaw its development of his website.  Three photos provided by the website design company were published without authority of the copyright holder, photographer Erickson.  Kast testified that he had no knowledge that the photographs were not licensed and the record supported his position that the website development company had agreed to provided licensed photographs to him.

Vicarious Liability for Copyright Infringement.   To prove vicarious liability, a plaintiff must demonstrate defendant 1. has the right and ability to supervise the infringing conduct and 2. a direct financial interest in the infringing activity.

Photographer Jim Erickson argued that Kast received three "direct" financial benefits from use of the unauthorized photos:  1. enhanced attractiveness of the website to draw visitors; 2. avoidance of licensing fees; and 3. Kast launched his website faster.

The Ninth Circuit rejected each of these rationales.  Importantly, the Ninth Circuit noted that if the direct infringer's avoiding license fees alone were sufficient to impose vicarious liability, the requirement of a "direct financial benefit" for vicarious liability would be rendered meaningless because direct infringers avoid license fees in every case that licenses are for sale.

Jury Instructions on Willfulness For Contributory Infringement Liability.   The Ninth Circuit upheld Kast's liability for contributory infringement.  A party engages in contributory copyright infringement when it 1. has knowledge of another's infringement and 2. either (a) materially contributes to or (b) induces that infringement.  Absent a finding of willfulness, the jury may award statutory damages in a sum of not less than $750 nor more than $30,000" per work.   However, where copyright infringement is "willful" Section 504 of the Copyright Act permits a court to increase the statutory damages award up to $150,000 per infringed work.

To prove willfulness under the Copyright Act, the plaintiff must show (1) that the defendant was actually aware of the infringing activity, or (2) that the defendant's actions were the result of reckless disregard for, or willful blindness to, the copyright holder's rights.

However, the jury had been instructed to find willfulness if the defendant "should have known that those acts infringed plaintiffs' copyrights".

The Ninth Circuit found the "should have known" language to be erroneous because it imposes liability for mere negligence, a less culpable state of mind than "willfulness".

I discuss vicarious and contributory infringement in Copyright Litigation Handbook (Thomson Reuters West 2018-2019) Chapter 7:  Drafting the Infringement Complaint.  Check out the table of contents here.





 www.dunnington.com
 Copyright law, fine art and navigating the courts. Attorney and AuthorCopyright Litigation Handbook (Thomson Reuters Westlaw 2018-2019) by Raymond J. Dowd