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SDNY Grants Summary Judgment Motions of Photobucket.com and Kodak Defendants in DMCA Dispute

Thursday, January 12, 2012

Jessica McKinney | Bloomberg Law Wolk v. Kodak Imaging Network, Inc., No. 10-CV-04135, 2012 BL 842 (S.D.N.Y. Jan 3, 2012) In a case brought against the photo and video sharing site Photobucket.com, Inc. by an artist claiming that her copyrighted images were illegally copied, displayed, and modified by Photobucket users, the U.S. District Court for the Southern District of New York granted the summary judgment motions of Photobucket and defendants Kodak Imaging Network, Inc. and Eastman Kodak Company (collectively, the "Kodak Defendants"). Among other things, the court found that Photobucket qualified for safe harbor protection under Section 512(c) of the Digital Millennium Copyright Act ("DMCA"), that plaintiff in any event failed to produce sufficient evidence in support of her contributory and vicarious infringement claims against Photobucket, and that the Kodak Defendants did not directly infringe plaintiff's copyrighted images.

Alleged Infringement of Plaintiff's Images by Photobucket Users

Pro se plaintiff Sheila Wolk has been a professional artist for more than 40 years. After discovering that her copyrighted images were being infringed by users of the Photobucket site, who allegedly copied, modified, and displayed the images without Wolk's consent, Wolk notified Photobucket of the infringements via its online reporting system. Photobucket contended that it promptly removed the allegedly infringing images from its site upon receiving DMCA-compliant takedown notices (providing, among other things, the URLs which contain the material at issue), and for those notices that were not compliant, informed Wolk of such and instructed her on how to file a proper notice. Wolk filed suit against Photobucket and the Kodak Defendants in May 2010, alleging that 15 of her images were infringed by Photobucket and that the Kodak Defendants made products using those images pursuant to an agreement with Photobucket. Under the agreement, Photobucket users may order products from the Kodak Gallery, an online photography service operated by Kodak Imaging Network (a wholly-owned subsidiary of Eastman Kodak), that incorporate images obtained from Photobucket. Wolk then filed an amended complaint in July 2010 listing seven other images that were allegedly infringed. Wolk also sent additional takedown notices, as well as emails to Photobucket's counsel, detailing more than 800 URL-identified infringements. Photobucket asserted that it took down every image that was accompanied by a DMCA-compliant notice. In an earlier ruling in the case, the court denied Wolk's motion for a preliminary injunction, finding that Photobucket was entitled to safe harbor protection and that Wolk's prior DMCA-compliant notices were insufficient to provide Photobucket with actual or apparent knowledge of other present or future infringements. The court also determined that the relief requested by Wolk, namely, that Photobucket search for and remove infringing photographs without being provided with specific online locations of those infringements by Wolk, was not available under Sections 512(j)(1)(A)(i) or (iii) of the DMCA. For further analysis of the decision, see District Court Rules Prior Takedown Notices Insufficient to Give Service Provider Actual or Apparent Knowledge of Future Infringements,Bloomberg Law Reports® – Intellectual Property, Vol. 5, No. 14 (Apr. 4, 2011). The court now addressed the parties' various summary judgment motions.

Kodak Defendants Did Not Directly Infringe Plaintiff's Images

With respect to Wolk's motion for partial summary judgment against the Kodak Defendants, the key issue was whether the Kodak Defendants engaged in direct infringement. The court noted that in Cartoon Network LP v. CSC Holdings, Inc., 536 F.3d 121 (2d Cir. 2008), the Second Circuit clarified that volitional conduct is required for direct liability to attach. Specifically, "something more must be shown than mere ownership of a machine used by others to make illegal copies. There must be actual infringing conduct with a nexus sufficiently close and causal to the illegal copying that one could conclude that the machine owner himself trespassed on the exclusive domain of the copyright owner." Cartoon Network, 536 F.3d at 130. Wolk argued that the Kodak Defendants engaged in direct infringement by making multiple copies of her images and placing them onto various products, "thereby changing the Kodak Defendants' status from being 'passive providers of a space in which infringing activities happen to occur to active participants in the process of copyright infringement.'" Wolk at 39 (quoting Arista Records LLC v. Usenet.com, Inc., 633 F. Supp. 2d 124, 148 (S.D.N.Y. 2009)). The court, however, disagreed. It noted that in Cartoon Network, the Second Circuit held that "by selling access to a system that automatically produces copies on command, Cablevision more closely resembles a store proprietor who charges customers to use a photocopier on his premises and it seems incorrect to say, without more, that such a proprietor 'makes' any copies when his machines are actually operated by his customers." Cartoon Network, 536 F.3d at 132. In the instant case, it was undisputed that the activities at issue—i.e., the transfer of information regarding an ordered product to fulfillment vendors, the display of information on the Kodak Gallery site, and the copying of Photobucket images into product simulations—all occurred via automatic electronic processes without any human intervention. The court therefore held that the Kodak Defendants did not directly infringe Wolk's images because Wolk failed to prove volitional conduct and, accordingly, granted the Kodak Defendants' motion for summary judgment and denied Wolk's motion.

Photobucket Qualifies for DMCA Safe Harbor Protection

The court again determined that Photobucket was entitled to safe harbor protection under the DMCA, and consequently, that it could not be held liable for infringement. — Threshold Requirements Satisfied To qualify for the DMCA safe harbors, certain threshold requirements must first be satisfied. A party "(1) must be a 'service provider' as defined by the statute; (2) must have adopted and reasonably implemented a policy for the termination in appropriate circumstances of users who are repeat infringers; and (3) must not interfere with standard technical measures used by copyright owners to identify or protect copyrighted works." Wolk at 46 (citations omitted). The court found that Photobucket satisfied all three requirements. First, the court readily concluded that Photobucket was a "service provider" within the meaning of the DMCA, noting that similar photo and video sharing sites—such as Youtube.com and Veoh.com—have been deemed service providers. Second, the court found that Photobucket had adopted and reasonably implemented a repeat infringer termination policy. While Wolk argued that Photobucket did not enforce its policy, the court merely noted that Photobucket's policy was publicly available on its website and that Photobucket removed the infringing material identified in Wolk's takedown notices. The court also rejected Wolk's assertion that Photobucket's provision of photo-editing tools that could be used to modify copyright watermarks interfered with "standard technical measures." The court noted that only users, not Photobucket, would use such tools. Further, "Plaintiff does not suggest that Photobucket advises or encourages its users to use the photo-editing tools to circumvent the copyright. The fact that the watermarks appear suggests that Photobucket does, indeed, accommodate 'standard technical measures.'" Id. at 50. — Section 512(c) Safe Harbor Requirements Satisfied The court also concluded that Photobucket met all of the conditions for the Section 512(c) safe harbor, which applies to information residing on systems or networks at the direction of users. To be eligible for this safe harbor, a service provider must not have actual knowledge of infringement, must not be aware "of facts or circumstances from which infringing activity is apparent," and if it has actual knowledge or is aware of infringement, it must "act[] expeditiously to remove, or disable access to, the material." 17 U.S.C. § 512(c)(1)(A). In addition, the service provider must not "receive a financial benefit directly attributable to the infringing activity, in a case in which the service provider has the right and ability to control such activity," id. § 512(c)(1)(B), and upon receiving notice of infringement, must promptly remove or disable access to the allegedly infringing material, id. § 512(c)(1)(C). Finally, the service provider must designate an agent to receive takedown notices. Id. § 512(c)(2).

No Actual or Apparent Knowledge of Infringement

The court rejected Wolk's argument that Photobucket's receipt of her DMCA-compliant takedown notices gave Photobucket actual or apparent knowledge of any and all other infringements of the images identified in the notices. Citing Viacom Int'l Inc. v. YouTube, Inc., 718 F. Supp. 2d 514, 528 (S.D.N.Y. 2010), the court found that Photobucket could not be held liable "for its failure to remove images for which the Plaintiff failed to provide proper notice," i.e., notice which identifies the specific location of the alleged infringement. Wolk at 55. "Although Wolk advocates for a system where one notice of infringement would apply to all instances of that image appearing on the website," the court elaborated, "it would be irresponsible for Photobucket to assume infringement in the way the Plaintiff describes." Id. The court noted that accepting Wolk's argument could result in Photobucket removing images for which others may hold valid licenses. The court further noted that service providers such as Photobucket are not required to police their sites for infringement. See 17 U.S.C. § 512(m); Viacom, 718 F. Supp. 2d at 524. Because Photobucket acted expeditiously in removing the allegedly infringing material identified by Wolk in her takedown notices (even non-DMCA compliant notices), and otherwise lacked actual or apparent knowledge of infringement, the court found that Photobucket satisfied the conditions set forth in 17 U.S.C. § 512(c)(1)(A).

No Right and Ability to Control Infringement, or Financial Benefit

The court explained that the "right and ability to control" referenced in the DMCA "must take the form of prescreening content, rendering extensive advice to users regarding content[,] and editing user content," none of which Photobucket engaged in. Wolk at 58 (citing Corbis Corp. v. Amazon.com, Inc., 351 F. Supp. 2d 1090, 1110 (W.D. Wash. 2004)). The court also questioned the feasibility of such prescreening, noting that millions of images are uploaded onto Photobucket's site each day. In addition, the court found that Photobucket does not receive a direct financial benefit from the infringing activity via its profit-sharing relationship with the Kodak Defendants. There was no evidence that either Photobucket or the Kodak Defendants profited from specific infringements, or that Photobucket had any knowledge of which images users selected when ordering products from the Kodak Defendants. Thus, the court concluded that Photobucket satisfied the conditions set forth in 17 U.S.C. § 512(c)(1)(B).

Designated Agent

Photobucket did not list the name or phone number of its designated agent as part of the contact information provided on its website, but did include the address, email address, and fax number of the agent. The court found this information sufficient to satisfy the statute, which mandates that a service provider include "substantially the following information . . . the name, address, phone number, and electronic mail address of the agent." 17 U.S.C. § 512(c)(2)(A).

Photobucket Not Liable for Contributory or Vicarious Infringement

Finally, the court concluded that even without the safe harbor, Photobucket could not be held liable for contributory or vicarious infringement. As to the contributory infringement claim, "the evidence suggests that the Photobucket website was, at most, a means for unidentified users of the website to accomplish an infringing activity." Wolk at 66-67. The court noted that Wolk offered no evidence showing that Photobucket encouraged infringement or promoted the use of its service to infringe copyright. Further, "Plaintiff's attempt to establish knowledge using the notices the Plaintiff sent is unavailing because, as the Court noted in Viacom, 'knowledge' means 'actual or constructive knowledge of specific and identifiable infringements of individual items,' not 'a general awareness that there are infringements.'" Id. at 67 (quoting Viacom, 718 F. Supp. 2d at 525). The court likewise determined that Wolk offered no evidence supporting her vicarious infringement claim. Having found that Photobucket was entitled to safe harbor protection under the DMCA, that Wolk in any event failed to establish her contributory and vicarious infringement claims against Photobucket, and that Wolk failed to prove that the Kodak Defendants engaged in direct infringement, the court denied Wolk's summary judgment motions and granted the summary judgment motions of Photobucket and the Kodak Defendants. DisclaimerThis document and any discussions set forth herein are for informational purposes only, and should not be construed as legal advice, which has to be addressed to particular facts and circumstances involved in any given situation. Review or use of the document and any discussions does not create an attorney-client relationship with the author or publisher. To the extent that this document may contain suggested provisions, they will require modification to suit a particular transaction, jurisdiction or situation. Please consult with an attorney with the appropriate level of experience if you have any questions. Any tax information contained in the document or discussions is not intended to be used, and cannot be used, for purposes of avoiding penalties imposed under the United States Internal Revenue Code. Any opinions expressed are those of the author. The Bureau of National Affairs, Inc. and its affiliated entities do not take responsibility for the content in this document or discussions and do not make any representation or warranty as to their completeness or accuracy.©2014 The Bureau of National Affairs, Inc. All rights reserved. Bloomberg Law Reports ® is a registered trademark and service mark of The Bureau of National Affairs, Inc.

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