Thursday, May 26, 2011

Allegedly infringing video site cuts down TM, some copyright claims

Flava Works, Inc. v. Gunter, 2011 WL 1791557 (N.D. Ill.)

Flava Works produces adult entertainment, including video and photographs. Gunter owns, allegedly a social networking website through which site members can store and bookmark video files and post links to files on other websites. Another defendant, Voxel Dot Net, provided webhosting for myVidster, though something (possibly this lawsuit) led to the end of the relationship.

Flava Works alleged infringement of its registered copyrights and trademarks because members/users of myVidster, including John Doe defendants, uploaded its videos and images, or links thereto, to myVidster, without authorization. MyVidster encourages users to invite others to view videos and offers inexpensive storage space for videos. Flava Works argued that this “purposefully created a system that makes it more difficult for copyright owners to monitor the site for infringement.” Flava Works alleged that it sent Gunter and his webhosting companies DMCA takedown notices and identified alleged repeat infringers. It sent 7 DMCA notices between May and December 2010. Though there was no allegation of noncompliance with the DMCA, the website allegedly continued to be updated with more infringing material, and myVidster had no filters in place to prevent reposting and allegedly took no action to stop or ban repeat infringers.

Flava Works sued for direct, contributory, and vicarious copyright infringement, as well as for inducement, and trademark infringement/false designation of origin under the Lanham Act and the common law.

Gunter and another related defendant moved to dismiss.

The case law provided no support for direct copyright infringement based on these allegations. Allowing users to store files is not direct copying, which requires volitional conduct causing a copy to be made.

The contributory copyright infringement claim, however, survived. This requires pleading (1) direct infringement by a third party; (2) defendant’s actual or constructive knowledge of infringement; and (3) defendant’s material contribution. Defendants argued that an allegation that they received DMCA notices, without more, was insufficient to impute knowledge. The court assumed that this was true, but Flava Works alleged facts allowing a reasonable inference that defendants actually or constructively knew of copyright infringement on myVidster. Notification plus failure to act to prevent future infringing uses or willful blindness can be sufficient for contributory infringement. Seven notices over a seven-month period specified specific infringing files and users as well as specific repeat infringers, and Flava Works alleged failure to deal with repeat infringers and failure to implement filters to prevent future similar infringing content, which sufficed to allege knowledge.

As to material contribution, it was enough to allege that defendants provide a website that stores infringing material, allows backup copies to be made, and encourages sharing, with no action to filter infringing content or ban repeat infringers.

Flava Works fared less well on vicarious infringement. It failed to allege the right and ability to supervise myVidster users via the terms of service. And from the allegation that Gunter owned and operated myVidster, the court was unwilling to infer that defendants could block infringers’ access to the website or ability to post infringing materials. Right and ability to control requires more than mere ownership and operation, though it doesn’t require pervasive participation in the infringing activity either.

As to direct financial interest, the other element of vicarious infringement, Flava Works didn’t need to allege that customers subscribed to myVidster because of infringing material or cancelled their subscriptions when infringing material was no longer available. All it needed was the allegation that the availability of infringing material was a draw for customers. Flava Works failed to clear this low hurdle: “While the complaint does allege that that inexpensive storage space and the ability to share videos attracts customers to myVidster, it does not allege that the presence of the infringing material on the site enhances the site's attractiveness or draws customers.” This count was dismissed with leave to amend.

Inducement: Under Grokster, “one who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties.” “[M]ere knowledge of infringing potential or of actual infringing uses would not be enough ... to subject a distributor to liability,” nor would ordinary acts incident to product distribution, such as offering customers technical support; only “purposeful, culpable expression and conduct” counts. Flava Works pled a formulaic recitation of inducement, but no facts plausibly suggesting entitlement to relief on this theory. “It is not enough to allege that myVidster provides storage for video files and encourages sharing (or even that it also knew that the website could be used to infringe). No clear expression of an infringing purpose is alleged, and no active steps taken to foster infringement, such as advertising an infringing use or instructing how to engage in an infringing use, are alleged.”

Trademark/false designation of origin: Flava Works failed to allege that defendants used its marks in commerce. It alleged only that its copyrighted material posted to myVidster without authorization “often contains” its trademarks or trade dress and that defendants’ unauthorized distribution causes confusion about its origin. That’s not an allegation that defendants used plaintiff’s marks at all, or in commerce. (Dastar might merit a mention as much as use in commerce.)

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