Two Years Later, Judge Finally Realizes That A CDN Provider Is Not Liable For Copyright Infringement On Websites

from the this-is-why-procedural-outs-are-important dept

More than two years ago we wrote about a truly bizarre ruling in a truly bizarre copyright lawsuit against Cloudflare. As you (perhaps?) know, Cloudflare is a popular CDN provider, helping websites (including Techdirt) provide better access to users while helping to mitigate things like denial of service attacks. In this case, the plaintiffs, Mon Cheri Bridals -- a maker of bridal dresses -- sued Cloudflare because websites out there were selling counterfeit dresses. If you know anything about copyright (and counterfeiting) law, you should be scratching your head. Counterfeiting is not about copyright. It's about trademark. But the dress company (for reasons I still don't understand), made the stretchiest of stretchy arguments to say that (1) the counterfeit sellers were posting images of the dresses, and (2) those images were protected by a copyright held by the dress maker, and (3) because the counterfeiting sites posting the allegedly copyright infringing photos used Cloudflare for CDN (not hosting) services, that somehow makes them contributory liable for the copyright infringement.

Even worse, the complaint itself was extremely confused about the DMCA and how it works with regards to the DMCA 512 safe harbors. Different companies are treated differently under 512, and Section (b) companies for "system caching" (which is what CDNs do) are treated differently under the law than Section (c) hosting companies. However, the whole "notice and takedown" aspect of the law only applies to Section (c) type companies. But the lawsuit simply ignored that and assumed that Cloudflare should be a (c) company, rather than a (b).

And, astoundingly, as we wrote about two years ago, the judge refused to dismiss the case, but let it move forward past the motion to dismiss stage -- meaning that it went through some very expensive discovery and other efforts before finally getting to the summary judgment stage, and now more than two years later, the judge granted dismissal on summary judgment. And, kinda like his refusal to dismiss, the opinion is kinda short and doesn't get into much in the way of detail. But at least this time it gets it right.

The plaintiffs have not presented evidence from which a jury could conclude that Cloudflare’s performance-improvement services materially contribute to copyright infringement. The plaintiffs’ only evidence of the effects of these services is promotional material from Cloudflare’s website touting the benefits of its services. These general statements do not speak to the effects of Cloudflare on the direct infringement at issue here. For example, the plaintiffs have not offered any evidence that faster load times (assuming they were faster) would be likely to lead to significantly more infringement than would occur without Cloudflare. Without such evidence, no reasonable jury could find that Cloudflare “significantly magnif[ies]” the underlying infringement. Amazon.com, Inc., 508 F.3d at 1172. Nor are Cloudflare’s services an “essential step in the infringement process.” Louis Vuitton Malletier, 658 F.3d at 944. If Cloudflare were to remove the infringing material from its cache, the copyrighted image would still be visible to the user; removing material from a cache without removing it from the hosting server would not prevent the direct infringement from occurring.

Cloudflare’s security services also do not materially contribute to infringement. From the perspective of a user accessing the infringing websites, these services make no difference. Cloudflare’s security services do impact the ability of third parties to identify a website’s hosting provider and the IP address of the server on which it resides. If Cloudflare’s provision of these services made it more difficult for a third party to report incidents of infringement to the web host as part of an effort to get the underlying content taken down, perhaps it could be liable for contributory infringement. But here, the parties agree that Cloudflare informs complainants of the identity of the host in response to receiving a copyright complaint, in addition to forwarding the complaint along to the host provider.

This is the correct ruling, but it should have come two years ago at the motion to dismiss stage.

Indeed, despite not being a Section 230 case, this is yet another example of why Section 230's procedural benefits are so important. Perhaps one reason why people don't get this is that they don't understand just how much more expensive a lawsuit gets after a motion to dismiss, but it's a massive shift. A motion to dismiss may run in the 100s of thousands dollars range (depending on a variety of factors). But if you get past that and have to go to discovery, you're now talking in the millions before you get a ruling on summary judgment. It's a big difference and a massive cost for companies (especially smaller ones). A cost that can completely destroy smaller companies -- for a lawsuit that had no chance at all from the beginning.

Filed Under: cdn, copyright, counterfeiting, dmca, dmca 512, safe harbors, summary judgment
Companies: cloudflare, mon cheri bridals

Righthaven Appeals The Idea That Using Entire Work Could Be Fair Use

from the and-then-cites-a-case-that-proves-it-wrong dept

Righthaven has finally gotten around to filing its official appeal in the case against the non-profit Center for Intercultural Organizing (CIO). If you don't recall, this was the case in which the judge ruled at the summary judgment stage in in favor of fair use, even though an entire article was used (the issue of Righthaven's standing concerning whether or not it actually held the copyrights in question was not raised in this case, since it was before the agreement between Stephens Media and Righthaven became public). The argument is embedded below, but Righthaven basically hits on two points:

1. The judge erred in ruling on fair use at this point in the process.
2. The judge's fair use analysis itself was wrong

The first argument may have some legs. It's unfortunate and stupid, but traditionally, fair use is only a "defense" that can be raised later in the process. Righthaven basically argues that this was too early in the process to determine fair use. This part of the argument could get interesting, because if the appeals court determines that the lower court was correct in its process, that could open the doors to courts dumping bogus lawsuits via a fair use claim much earlier in the process. That would certainly increase the power of fair use (if only slightly). That would be a good thing, but I'm not holding my breath.

The second argument focuses on the actual fair use analysis, and suggests that using an entire work cannot be considered fair use. It relies, almost entirely on the Worldwide Church of God case in which the appeals court ruled that a church was infringing on another church's book, by distributing the whole thing, despite it being a nonprofit. The two key issues here are whether or not the non-profit status matters, as well as whether or not it can still be fair use when the whole thing is used. The WCOG case said that the full use was not fair use and that even as a non-profit, since it was used for seeking donations, it worked against fair use.

While I have trouble with the reasoning in the WCOG case on many fronts, I'm not sure that it will help Righthaven all that much here. The distribution of the book in that case was much more closely tied to raising funds than a nonprofit posting a news article on its blog. Claiming otherwise is a stretch. As for the 100% use, Righthaven has very little argument here at all. Multiple courts have found that full item use can still be fair use... including in one of the cases Righthaven cites for its own argument, Hustler Magazine, Inc. v. Moral Majority, Inc.,. In fact, if you read that ruling, you'll see the court admitting that while it had suggested in the past that wholesale copying shouldn't be fair use, in this case it was reminded that "copying of an entire work does not preclude fair use." In other words, the very case Righthaven cites seems to argue against its own point here. But isn't that just like Righthaven?

Filed Under: appeals, fair use, nonprofit, summary judgment
Companies: cio, righthaven

What What (In The Butt)? What What (Fair Use Doesn't Need A Trial)?

from the well-that's-nice dept

Last year, we reported on the really bizarre lawsuit of video producers Brownmark Films suing South Park, Viacom and Paramount for parodying the bizarre hit viral video What What (In The Butt). You can see the original video below, followed by the South Park parody:

It's worth noting that the actual song had been licensed, and the "singer" Samwell was apparently paid. The lawsuit was over the copyright on the video itself. Back in July a court ruled for summary judgment against Brownmark, noting it was a pretty easy case based on parody grounds. We had meant to cover it at the time, and the ruling is somewhat amusing, as the judge can hardly resist noting the general oddity of the video and the case -- but things got busy and it slipped away.

So, thanks to Nate Anderson for pointing our attention to Duke University's Scholarly Communications Officer, Kevin Smith's post discussing an important point that many overlooked in covering the case: that "fair use" was determined without a trial. One of the many problems with a fair use "defense" is that it's still considered a "defense" to a claim of copyright infringement, rather than a right on its own. That means, most courts have felt that in order to determine fair use, you first have to go through a full trial, in which infringement is proven, and then fair use is brought forth as a defense.

But, in this case, the court skipped all that and said you can determine fair use at the summary judgment stage. That's important. As we've seen, even those who believe they have a strong fair use claim will often settle rather than fight, knowing that the cost of a trial is prohibitive.

What is significant here is that the judge made the fair use decision before there had been a trial. He examined the pleadings and found that everything he needed to make this easy call was already before him. Then he ruled favorably on a motion to dismiss the case on the basis of those pleadings (technically a �motion to dismiss for failure to state a claim�) and dismissed the case with prejudice (which means plaintiff cannot re-file it).

Librarians and other academics are often afraid to rely on fair use, even when there arguments would be strong, because of the expense of defending a lawsuit even when you win. Content companies often encourage that fear, reminding academics that fair use is a defense that can only be decided with certainty at a trial. While this case is a little bit unusual, it invites us, I think, to look at this �chilling effect� and perhaps lend it less credence.

In his ruling to dismiss, Judge Stadtmueller explicitly notes that �evaluating an affirmative defense, and indeed the �fair use� defense, at the pleadings stage is �irregular�.� But he thinks it is justified precisely because when the case for fair use is �obvious,� �the court can conclude that this dispute does not warrant �putting the defendant[s] through the expense of discovery�.� In other words, in straightforward cases, a fair use claim can be evaluated before there is a trial, explicitly to prevent the cost of litigation from itself becoming an obstacle to proper exercise of fair use.

Who knows if other judges will follow this lead -- and, again, this case may be seen as extreme because it's so obviously fair use. But it would be nice if judges were willing to rule on fair use upfront, rather than go through a protracted and expensive trial.

Filed Under: copyright, discovery, fair use, parody, south park, summary judgment, what what

Viacom: Court Should Grant Summary Judgment Over YouTube, But It's A Secret Why

from the um,-what? dept

The Viacom vs. Google/YouTube lawsuit has become something of a running joke in legal circles over the amount of time it's taken to run through the discovery process and actually get the lawsuit moving. However, people are now expecting the case to finally move forward. Both Google and Viacom have asked for summary judgment, claiming that there's enough evidence that a trial isn't needed. That's all to be expected. What's odd, though, is that Viacom's filing has pretty much the entire "background" section redacted. Check out page two on the document below: I'm trying to figure out what could possibly be so confidential as to require redacting in such a case. Maybe the details of why Viacom thinks Google can identify which clips are infringing when even Viacom couldn't properly identify infringing clips and included a bunch that it had put online itself. Because thinking that Google can figure out Viacom's intentions when even Viacom can't figure them out certainly seems like a pretty big mystery to me.

Filed Under: copyright, music, redacted, summary judgment
Companies: google, viacom, youtube