A Study in Counterfeiting: ISP Blocking Orders in the U.K.

by Christina Frangiosa

This is part two in a series. For other posts in this series, click here. 
  
In the past few months, there have been several public debates over whether ISPs could be – or should be – ordered to block access by any user in the United States to a website that is accused of copyright infringement (in this context, it’s generally referred to as “piracy,” although that term is not defined in the Copyright Act) or trademark counterfeiting (as that term is defined by 15 U.S.C. § 1116). This topic was considered by the Senate Judiciary Committee during its February 16, 2011 hearing on “Targeting Websites Dedicated to Stealing American IP,” including in testimony delivered by Thomas M. Dailey of Verizon. Mr. Dailey recommended that the ability to obtain a court order directing ISPs to prevent an IP address from resolving should be limited to actions undertaken by the Attorney General’s office, so that private litigants would not “drain” ISP resources. Testimony at 2.

Recall that the proposed Preventing Real Online Threats to Economic Creativity and Theft of Intellectual Property Act of 2011 (“PROTECT IP Act” or “PIPA”) (S. 968) and Stop Online Piracy Act (“SOPA”) (H.R. 3261) foundered upon a fairly widespread opposition launched in mid-January 2012 to certain terms believed to be in the bills, including provisions for DNS blocking. Interestingly, only the Attorney General had the right – in both of these bills – to seek a court order mandating an ISP to block certain websites (as well as against three other types of intermediaries: financial payment processors, search engines and Internet advertisers). Under both bills, private rights holders were restricted to seeking court orders requiring actions to be undertaken by payment processors and Internet advertisers alone.

As a result of dramatic public pressure, proponents of the bill removed the so-called “DNS blocking provisions” before final markup sessions had occurred. See e.g., Press Release, “Smith to Remove DNS Blocking from SOPA, Retains Strong Provisions to Protect American Technology and Consumers,” Jan. 13, 2012 (“After consultation with industry groups across the country, I feel we should remove Domain Name System blocking from the Stop Online Piracy Act so that the Committee can further examine the issues surrounding this provision. We will continue to look for ways to ensure that foreign websites cannot sell and distribute illegal content to U.S. consumers.”); see also Center for Democracy and Technology (“CDT”), “Copyright Bill Advances, But Draws Plenty of Criticism,” May 26, 2011; CDT, “The Open Internet Fights Back,” Jan. 16, 2012.

As a result, proposals to require ISPs to block content in U.S. civil actions – even with a court order in hand – have essentially become dormant.

Nonetheless, it’s an interesting exercise to explore what other jurisdictions have done in this regard.

Orders Requiring ISPs to Block Access to Sites Providing Infringing Content (UK)

For instance, at least three opinions issued in U.K. cases relatively recently required ISPs to block access to websites that facilitated file sharing or other infringement of copyrighted materials. They are:

* The Studios originally sought an order that said, “The Defendant shall prevent its services being used by users and operators of the website known as NEWZBIN and NEWZBIN2 to infringe copyright.” [¶ 11].
*The day before the hearing, the requested order was amended as follows:
“1. The Respondent shall adopt the following technology directed to the website known as Newzbin or Newzbin2 currently accessible at www.newzbin.com and its domains and sub domains. The technology to be adopted is:
(i) IP address blocking in respect of each and every IP address from which the said website operates or is available and which is notified in writing to the Respondent by the Applicants or their agents.
(ii) DPI based blocking utilising at least summary analysis in respect of each and every URL available at the said website and its domains and sub domains and which is notified in writing to the Respondent by the Applicants or their agents.
2. For the avoidance of doubt paragraph 1(i) and (ii) is complied with if the Respondent uses the system known as Cleanfeed and does not require the Respondent to adopt DPI based blocking utilising detailed analysis.
3. Liberty to the parties to apply on notice in the event of any material change of circumstances (including, for the avoidance of doubt, in respect of the costs, consequences for the parties, and effectiveness of the implementation of the above measures as time progresses).” [¶ 12]

 
* Ultimately, the Court agreed that a blocking order was warranted, but found, “As I think counsel for the Studios accepted, the drafting of paragraph 1 still leaves a certain amount to be desired; but, as counsel for BT accepted, it is now reasonably clear what it is that the Studios are asking the court to order BT to do.” [¶ 13]
* In its case before the England and Wales High Court, L’Oreal sought: “a ruling, first, that eBay and the individual defendants are liable for sales of 17 items made by those individuals through the website www.ebay.co.uk, L’Oréal claiming that those sales infringed the rights conferred on it by, inter alia, the figurative Community trade mark including the words ‘Amor Amor’ and the national word mark ‘Lancôme’.” [Case No. C-324/09 ¶34.]

* “Second, L’Oréal submits that eBay is liable for the use of L’Oréal trade marks where those marks are displayed on eBay’s website and where sponsored links triggered by the use of keywords corresponding to the trade marks are displayed on the websites of search engine operators, such as Google.” [Id. ¶ 38]

 
* With respect to ISPs, the Court reached the following conclusions:
139. First, it follows from Article 15(1) of Directive 2000/31, in conjunction with Article 2(3) of Directive 2004/48, that the measures required of the online service provider concerned cannot consist in an active monitoring of all the data of each of its customers in order to prevent any future infringement of intellectual property rights via that provider’s website. Furthermore, a general monitoring obligation would be incompatible with Article 3 of Directive 2004/48, which states that the measures referred to by the directive must be fair and proportionate and must not be excessively costly. 
140. Second, as is also clear from Article 3 of Directive 2004/48, the court issuing the injunction must ensure that the measures laid down do not create barriers to legitimate trade. That implies that, in a case such as that before the referring court, which concerns possible infringements of trade marks in the context of a service provided by the operator of an online marketplace, the injunction obtained against that operator cannot have as its object or effect a general and permanent prohibition on the selling, on that marketplace, of goods bearing those trade marks.

 
141. Despite the limitations described in the preceding paragraphs, injunctions which are both effective and proportionate may be issued against providers such as operators of online marketplaces. As the Advocate General stated at point 182 of his Opinion, if the operator of the online marketplace does not decide, on its own initiative, to suspend the perpetrator of the infringement of intellectual property rights in order to prevent further infringements of that kind by the same seller in respect of the same trade marks, it may be ordered, by means of an injunction, to do so. 
142. Furthermore, in order to ensure that there is a right to an effective remedy against persons who have used an online service to infringe intellectual property rights, the operator of an online marketplace may be ordered to take measures to make it easier to identify its customer-sellers. In that regard, as L’Oréal has rightly submitted in its written observations and as follows from Article 6 of Directive 2000/31, although it is certainly necessary to respect the protection of personal data, the fact remains that when the infringer is operating in the course of trade and not in a private matter, that person must be clearly identifiable.
* Finally, “The third sentence of Article 11 of Directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual property rights must be interpreted as requiring the Member States to ensure that the national courts with jurisdiction in relation to the protection of intellectual property rights are able to order the operator of an online marketplace to take measures which contribute, not only to bringing to an end infringements of those rights by users of that marketplace, but also to preventing further infringements of that kind. Those injunctions must be effective, proportionate, and dissuasive and must not create barriers to legitimate trade.” [¶ 145(7) emphasis added]. 
  • Dramatico Enter. Ltd v. British Sky Broad., [2012] EWHC 268 (Ch) (Eng. & Wales High Court (CH) Feb. 20, 2012) – concluding that both the users and operators of the Pirate Bay infringed the copyright owner’s rights [¶ 84]; also provides a summary of an expert opinion describing how BitTorrent works [¶¶ 19-20]; summarizes several orders requiring the URL blocking or “blackholing” of the infringing site [¶¶ 3-4]. 

Other Resources
U.S. Customs & Border Protection and U.S. Immigrations and Customs Enforcement, Report on 2011 Counterfeit Seizures, Jan. 12, 2012 (Press Release, Jan. 12, 2012):

“The growth of websites selling counterfeit goods directly to consumers is one reason why CBP and ICE have seen a significant increase in the number of seizures at mail and express courier facilities,” said Acting CBP Commissioner David V. Aguilar. “Although these websites may have low prices, what they do not tell consumers is that the true costs to our nation and consumers include lost jobs, stolen business profits, threats to our national security, and a serious risk of injury to consumers.”

European Commission, Report on EU Customs Enforcement of Intellectual Property Rights, Results at the EU Border, 2011 (released July 24, 2012) (press release) (facts and figures): This report provides summaries of relevant data about seizures by EU customs, broken down by member country or by types of goods, but also reaches conclusions about the impact and nature of the infringement. For instance, it explains, “Counterfeiters do not concern themselves with product development costs, garantees [sic] or advertising. Profit is maximised by the theft and copying of an original idea, often with cheaper materials. Nevertheless, IPR infringing goods are increasingly sold at a price similar to that of the original goods and effectively substitute them on the market.” [at pages 13-14.]

* The report also concludes that of the goods seized at the border, 97% of them (by quantity) infringed trademarks and 93.36% of them (by value) infringed trademarks. [at 18]

European Commission, The EU Single Market, Enforcement of Intellectual Property Rights – focusing on online piracy and counterfeiting.

EU Information Society Directive (2001/29/EC)

The European Observatory on Online Piracy and Counterfeiting, established in 2008.

Specific Disclaimer

 
Note that the author is not licensed to practice in the European Union or its member countries, and therefore does not purport to render a legal opinion about the application of these cases to specific facts. This analysis is provided merely as an example of restrictions on ISPs that courts have ordered with a stated purpose of combating online piracy or counterfeiting based on existing law.

Open Forum at ABA Annual Meeting on Online Piracy and Counterfeiting

by Christina Frangiosa

In August 2012, the Intellectual Property Law (IPL) Section of the American Bar Association (ABA) will be hosting an open forum during the ABA Annual Meeting in Chicago on online piracy and counterfeiting. I will be moderating one panel (on the scope and severity of the problem) and one of my co-chairs of the Joint Task Force on Online Piracy and Counterfeiting, Chris Katopis, will be moderating the other (essentially, on the U.S. government’s response and remedies). During these panels, and through the work of the Task Force, we are focusing on conduct by entities offshore – essentially foreign sites that currently are beyond U.S. jurisdiction, but who may be engaged in significant copyright piracy of U.S. works and/or trademark counterfeiting of U.S. trademarks.
 
More details about the panels can be found on the ABA’s Annual Meeting Site, and in particular, the Intellectual Property Law Section’s description of the IPL programs that will occur during the meeting.

This panel follows a similar panel that I moderated in March, during the IPL Section’s Annual Meeting in Washington, D.C. (page 9). We had excellent attendance and feedback after the program. I am hoping for a similar result from the Chicago panel discussion, and look forward to getting feedback and input from the attendees about these issues.

In the meantime, here are some governmental resources that identify some of the concerns, and the impacts on the U.S. economy of piracy & counterfeiting that originates outside our borders, but is directed to a U.S. audience:

I look forward to seeing you in August.

Court Certifies Certain Authors as a Class in Google Books Dispute

by Christina Frangiosa


On May 31, 2012, Circuit Judge Denny Chin (now sitting on the Second Circuit Court of Appeals) entered an order certifying a class of authors to proceed in the case as a class. The Authors Guild et al. v. Google, Inc., No. 05 Civ. 8136, slip op. (May 31, 2012). In that case, two motions were decided: the first was Google’s motion to dismiss the association plaintiffs (i.e., The Authors Guild) alleging that they lacked standing to sue. The second was a motion for class certification filed by three representatives (individual members of the association) so that the case could proceed as a class, and that individual class plaintiffs did not need to prove their cases individually. 

In both cases, Google’s argument was the same: that individualized analysis of its “fair use” defense was required, thus rendering the Authors Guild unable to participate, and the individual class members unable to proceed as a group, sharing common interests. In both respects, the court was unpersuaded by Google’s arguments, and ruled against Google.

Motion to Dismiss Authors Guild Claims, Arguing Lack of Standing

In the context of its motion to dismiss, the Court found that “the associations’ claims of copyright infringement and requests for injunctive relief will not require the participation of each individual association member.” Id. at 11. Indeed, the Guild asserted copyright claims on behalf of its members, alleging very broadly that “Google engaged, and continues to engage, in the wholesale copying of books (including an images contained therein) without the consent of the copyright holders, many of whom are association members.” Id. at 12. The Authors Guild only sought injunctive relief (in other words, stop the copying and republishing) and declaratory relief (in other words, for a “declaration” that Google’s activities were unlawful). It is not seeking monetary damages. Notably, “Google does not deny that it copied millions of books – original works – without the permission of the copyright holders. Furthermore, it has displayed snippets of text from these books as well as images contained in the books, without the copyright holders’ permission.”
Id. at 13 (emphasis added).

When it argued that individual participation by association members would be required to respond to Google’s fair use analysis, Google focused on the requirement to prove “the nature of the copyrighted work” and “the effect of the use upon the potential market for or value of the copyrighted work.” Id. at 15. Specifically, Google argued that the difference for fair use purposes between a non-fictional and a fictional work was critical, thus requiring individual proof of market impact. Id. The court was unpersuaded, concluding that it was possible to address these issues by grouping similar works together, thus creating subgroups. Id.

Importantly, the court noted that Google only objected to the Authors Guild’s participation in this case (which it originated seven years ago), was when it became apparent in 2011 that no settlement would be reached. Id. at 17.

The court’s most telling conclusion in this opinion is the following:

. . . [G]iven the sweeping and undiscriminating nature of Google’s unauthorized copying, it would be unjust to require that each affected association member litigate his claim individually. When Google copied works, it did not conduct an inquiry into the copyright ownership of each work; nor did it conduct an individualized evaluation as to whether posting “snippets” of a particular work would constitute “fair use.” It copied and made search results available en masse. Google cannot now turn the tables and ask the Court to require each copyright holder to come forward individually and assert rights in a separate action. Because Google treated the copyright holders as a group, the copyright holders should be able to litigate on a group basis.
 

Id. at 18 (emphasis added).

Motion for Class Certification

In similar fashion, the court discounted Google’s opposition to the motion for class certification filed by Authors Guild members seeking to participate in this case as representatives of a class. Id. at 18-25 (discussion of applicable precedent), 25-31 (application of precedent to the case at hand). Again Google argued that its fair use argument had to be considered as to each plaintiff, on an individual basis. It argued that “most [ ] class members perceive [Google’s copying of their work] as benefit.” Id. at 27. It also submitted the results of a survey it conducted in support of its argument that factual disputes among putative class members would make the class action process “not adequate” to handle this dispute, and therefore argued that class certification should be denied. Id.

This survey revealed that 58% of the authors surveyed (i.e., 500 authors) “approved” of Google’s scanning of their works for search purposes, and about 19% of those surveyed (about 170 authors) “feel that they benefit financially, or would benefit financially, from Google scanning their books and making snippets available in search.” Id.

The court did not discuss the basis for the survey, how the participants were selected, its statistical significance or what percentage of the total putative class was surveyed. Elsewhere in the opinion, however, the court reported the undisputed fact that Google has already scanned more than 12 million books. Id. at 2 (emphasis added). Leaving aside that many of these may be in the public domain, the court also noted that “millions of the books scanned by Google were still under copyright.”  Id. at 3 (emphasis added). Even if you assume that half of these books were written by authors who had written more than one book, 500 authors seems to be a very low sample on which to rely for a survey. (More details about the survey are likely continued in the declaration that Google submitted with the survey evidence, but I have not accessed it.)

Regardless, the court remained unpersuaded by Google’s survey evidence, calling it “without merit.” Pointedly, the court noted that Google had not identified any conflicts between the class members and the rest of the class and concluded that the fact that “some class members may prefer to leave the alleged violation of their rights unremedied is not as basis for finding the lead plaintiffs inadequate.” Id. 28. Indeed, any class member who feels that he or she does not want to participate in the class action may voluntarily exclude themselves by opting out.

Google’s final argument – that some of the publishing contracts which some of these authors may have signed create varying degrees and types of ownership – was similarly rejected. The court found that while these differences might exist, they did not predominate over the common issues shared by the putative class members. Id. at 31. In response to Google’s argument that the display of snippets of the copyrighted works were promotional use (a beneficial interest held by the publisher, not the author) would facilitate sales, the court noted the absence of any proof that such display actually facilitated sales and admonished, “while these authors may have authorized a publisher to promote their works, they have not authorized Google to do so.” Id.

Recommended Reading 

A Study in Counterfeiting Remedies – Denmark’s Approach

by Christina Frangiosa


This is the first in a series of articles on remedies considered for online counterfeiting and piracy, in light of the dismantling of the proposals set forth in the Protect IP Act (PIPA) and the Stop Online Piracy Act (SOPA) from earlier this year. For more on PIPA and SOPA, please see the prior posts on these topics.

The purpose of these articles is to explore potential ways to combat online counterfeiting and piracy, and in particular the type of counterfeiting and piracy that occurs overseas, but is directed at a U.S.-based audience. The most notable example in recent months is Megaupload, which has been taken down in a cooperative effort of seven countries. (For more on the Megaupload take-down, visit The Guardian (UK)’s Megaupload Page and the US Department of Justice’s news release announcing the indictment. For more about the U.S. Immigrations and Customs enforcement take-downs, see ICE’s news releases about its intellectual property enforcement efforts.)   

However, cooperative effort across borders is only possible with countries that share the U.S.’s protection of intellectual property rights. Not all countries do. So, what are trademark and copyright owners to do to protect their IP rights in the online world, where geographic borders mean very little?

This series will examine enforcement efforts in other countries as an illustration of possible enforcement mechanisms that might be available, depending on how new legislation on this topic might be written.

Danish Maritime & Commercial Court Decision

A few days ago, Norsker & Co. (a Danish law firm) posted an article about a recent case, Hublot SA Geneve v. Bronsztejin in the Maritime and Commercial Court (May 3, 2012). According to the article, Danish purchasers ordered counterfeit Hublot watches from a Chinese online service. They paid Dkr$2,250 (USD $2,664.41) for these five watches. When the watches arrived at Danish customs, they were seized, pending proof that they had been purchased for private use. The purchasers did not provide such proof and the counterfeits were destroyed. 

The court then punished the purchasers of these counterfeit watches, by assessing monetary fines and destroying the counterfeit watches. There does not appear to be any action taken against the sellers or any other entities in the distribution chain. The purchasers were required to pay the Danish Customs Office’s cost to destroy the counterfeit goods (Dkr2,500 = USD $438.34), damages for the trademark violation (presumably paid to the trademark holder) in the amount of Dkr5,000 (USD $ 859.49) and “costs” (presumably the court costs) in the amount of Dkr15,500 (USD $ 2,664.41). (Currency converter used here was accessed on May 22, 2012).

As a result, it appears that in Denmark, the courts have chosen to punish the purchasers of the counterfeit goods, and not the intermediaries in the distribution chain. The summary did not mention any other defendants – such as the payment processor who processed the credit card payment, or the shipping service that carried the goods across borders.

Future Articles

The articles to follow in this series will consider enforcement mechanisms imposed in other countries – and perhaps competing types of enforcement within the same jurisdiction – to see what other enforcement possibilities have been considered. Please note that I take no position on the effectiveness or fairness of any of these measures, but instead am collecting a laundry list of possible sanctions and targets of those sanctions for research purposes.

Second Circuit Partially Overturned Viacom vs. YouTube Case

by Christina Frangiosa

In an April 5, 2012 opinion, the Second Circuit concluded that the district court erred in part by granting summary judgment in YouTube’s favor in its August 10, 2010 judgment and remanded the case in part for further proceedings. Viacom Int’l et al. v. YouTube, Inc. et al., No. 10-3270, slip op. (2d Cir. Apr. 5, 2012).

The Second Circuit affirmed certain parts of the underlying opinion – particularly the district court’s conclusion that the DMCA’s § 512(c) safe harbor requires “knowledge or awareness of specific infringing activity” and its conclusion that three of YouTube’s four software functions at issue in this case qualified for the safe harbor – but vacated the opinion in at least one important way. Specifically, the Second Circuit reversed the district court’s interpretation of the “right and ability to control infringing activity” to require “item-specific” knowledge. It also remanded the case to the district court for further fact-finding on whether the fourth software function qualified for a safe harbor. Id. at 2.

In the underlying case, Viacom was joined by several other film studios, television networks, music publishers, and sports leagues in alleging direct and secondary copyright infringement “based on the public performance, display, and reproduction of approximately 79,000 audiovisual ‘clips'” that appeared on Youtube between 2005 and 2009. Id. at 8. Plaintiffs sought damages in the form of statutory damages under § 504(c) or, alternatively, actual damages – as well as declaratory and injunctive relief. Id. at 9.

After considering the arguments on appeal, the Second Circuit vacated the order granting summary judgment in YouTube’s favor because 1) an issue of fact existed whether YouTube had actual knowledge or awareness of specific infringing activity on its website (thus making summary judgment inappropriate), 2) the “right and ability to control” provision does not require “item specific knowledge” and 3) further fact-finding was required before a conclusion could reasonably be reached about whether YouTube’s fourth software process qualified for the safe harbor. Id. at 9.

The Court spent a fair amount of time discussing the evidence presented showing that YouTube officials may have had more than a general understanding that someone might post infringing material to their site. Id. at 19-22. Among other facts, the Court pointed to the following as persuasive that a jury could conclude that YouTube was on notice that infringing content probably existed on their site:





  • YouTube Founder, Jawed Karim, prepared a March 2006 report in which he explained that several “well-known shows” could still be found on YouTube. He stated, “although YouTube is not legally required to monitor content . . . and complies with DMCA takedown requests we would benefit from preemptively removing content that is blatantly illegal and likely to attract criticism.” Id. at 20-21. He added that a “more thorough analysis” was required before any content could be removed. Id. at 21.
  • Another YouTube founder, Chad Hurley, concluded in 2005 that certain videos containing the titles “budlight commercials” should be rejected as potentially infringing, but another co-founder, Steve Chen, asked “can we please leave these in a bit longer? Another week or two can’t hurt,” after which time, Karim replied that he “added back in all 28 bud videos.” Id.
  • Finally, the court described another 2005 email exchange in the following way: [Id.]
    • First, “Hurley urged his colleagues ‘to start being diligent about rejected copyrighted/inappropriate content,’ noting that ‘there is a cnn clip of the shuttle clip on the site today, if the boys from Turner would come to the site, they might be pissed?'”
    • Then, his colleagues responded: “but we should just keep that stuff on the site. I really don’t see what will happen. what? someone from cnn sees it? he happens to be someone with power? he happens to want to take it down right away. he gets in touch with cnn legal. 2 weeks later, we get a cease & desist letter. we take the video down.”
    • Finally, Karim agreed, stating “the CNN space shuttle clip, I like. we can remove it once we’re bigger and better known, but for now that clip is fine.”

Based on these and other similar facts, the Court found that plaintiffs had presented sufficient evidence for “a reasonable juror . . .[to] conclude that YouTube had actual knowledge of specific infringing activity, or was at least aware of facts or circumstances from which specific infringing activity was apparent.” Id. at 22. As a result, the grant of summary judgment in YouTube’s favor was simply “premature.” Id.

Willful Blindness
The Court also analyzed the issue of whether “willful blindness” was equivalent to actual knowledge for purposes of imposing liability for direct or vicarious liability – an issue that the Court labeled as “an issue of first impression.” Id. at 22-24. Relying on Tiffany (NJ) Inc. v. eBay, Inc., 600 F.3d 93, 109 (2d Cir. 2010), the Court explained that when a service provider “has reason to suspect that users of its service are infringing a protected mark, it may not shield itself from learning of the particular infringing transactions by looking the other way.” Viacom, No. 10-3270 at 23 (citing cases).

The Court further clarified that “willful blindness” could not be defined as “an affirmative duty to monitor.” Id. at 24.

The Court ultimately held that “the willful blindness doctrine may be applied, in appropriate circumstances, to demonstrate knowledge or awareness of specific instances of infringement under the DMCA.” Id. The Court did not reach the conclusion of whether YouTube actually had been willfully blind to this type of infringing behavior of its users, but instead only that willful blindness could serve as a basis for liability under the right conditions, and thus remanded the case to the district court for consideration of whether the defendants “made a deliberate attempt to avoid guilty knowledge.” Id. 

Right of Control

As the Court stated, the § 512(c) safe harbor provides that eligible service providers 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. at 24. The district court considered this argument only briefly, and concluded that this “right and ability to control” required item-specific knowledge. Id. (quoting 718 F. Supp. 2d at 527).

In the appeal, the Court rejected both of the competing interpretations suggested by the parties, concluding that the language neither: 1) requires the ISP to know of the particular infringing content before being able to control it (as proffered by defendants) – because such construction would render this provision (§ 512(c)(1)(B)) duplicative of § 512(c)(1)(A), a result which would be disfavored as a matter of statutory interpretation; nor 2) that this provision merely codifies the common law doctrine of vicarious copyright liability (as proffered by plaintiffs). In its analysis of the common law doctrine, the Court quipped, “Happily, the future of digital copyright law does not turn on the confused legislative history of the control provision.” Id. at 26.

The Court instead concluded that “the right and ability to control infringing activity under § 512(c)(1)(B) ‘requires something more than the ability to remove or block access to materials posted on a service provider’s website.'” Id. at 27 (quoting Capitol Records, Inc. v. MP3tunes, LLC, __ F. Supp. 2d __, 2011 WL 5104616, at *14 (S.D.N.Y. Oct. 25, 2011), among other cases).

The Court acknowledged that the “something more” still needed to be defined, although two cases had found specific activity that courts have concluded rose to a level sufficient to find “right and ability to control.” Id. at 28 (citing Perfect10, Inc. v. Cybernet Ventures, Inc., 213 F. Supp. 2d 1146 (C.D. Cal. 2002) and MGM Studios, Inc. v. Grokster, Ltd., 545 U.S. 913 (2005)). Rather than setting a specific definition in this opinion, the Court remanded this case to the district court to consider whether plaintiffs “adduced sufficient evidence to allow a reasonable jury to conclude” that YouTube met the “right and ability to control” test, and whether it received a financial benefit directly attributable to this activity. Id. at 28-29.

Summary
    
The Court held the following:

1) Knowledge or awareness of facts/circumstances that indicate specific and identifiable instances of infringement is required by § 512(c)(1)(A);

2) A reasonable jury could conclude that YouTube had knowledge or awareness with respect to a handful of specific clips; the case was remanded to determine whether YouTube had the requisite knowledge or awareness with respect to the clips actually at issue in this case;

3) The willful blindness doctrine can be applied, in appropriate circumstances, to demonstrate knowledge or awareness of specific instances of infringement; the case was remanded to determine whether the willful blindness doctrine was applicable here;

4) The district court erred by finding that the “right and ability to control” required item-specific knowledge of the infringing material; the case was remanded for further fact-finding on this issue;

And,

5) The district court was correct that three of the four software functions qualify for the safe harbor; the case was remanded for consideration of whether the fourth function so qualified.

Id. at 34-35. In connection with the remand, the Court left it to the district court’s discretion whether additional discovery would be required. The Court did not award reimbursement of costs to either party.