Diserio Martin O'Connor & Castiglioni LLP

Contributory Liability Possible for ISP’s Failure to Stop Future Acts of Copyright Infringement

June 17, 2011

Peer-to-peer and other forms of file sharing of copyrighted works have long occupied the darker corners of the internet.  Often times host websites which link to files shared by users have been made unwitting partners in the infringement of copyrighted material.  The enactment of the Digital Millennium Copyright Act (DMCA) in 1998 aimed to curtail this activity while also protecting host websites and other Internet Service Providers (ISPs) from liability for infringing content posted by users.  For every legitimate ISP that has no knowledge and no intention of becoming a de facto distributor of copyright infringing content, there are many more ISPs that turn a blind eye to potential infringement by using the safe harbor protections of the DMCA as both a sword and a shield from liability.

A plaintiff’s claim of contributory infringement was recently allowed to go forward in Flava Works, Inc. v. Gunter where the reasonable inference could be drawn that the defendant host website ISP was actually and constructively aware of copyright infringement occurring on its website.  Flava Works, Inc. v. Gunter, N.D. Ill., 1:10-cv-06517 (order dated 05/10/ 2011) (unpublished).  The U.S. District Court for the Northern District of Illinois denied the ISP’s motion to dismiss claims of contributory infringement.  The Court there found that ISPs have a duty not only to take down any infringing content they are specifically asked to remove in take down notices, but also other material on their site of which they are aware.  Very importantly, the Court also held that ISPs should also take appropriate steps to prevent acts of future infringement by users who are repeat offenders.  Section 512 of the DMCA provides ISPs with safe harbor protection for hosting potentially infringing content uploaded by third parties.  However, an ISP must take active steps to remove such content when it has actual and constructive knowledge that content, or an activity using the content on the site, is infringing copyrighted works.  ISPs with notice of the infringing content may be held liable for contributory infringement if they do not take the necessary steps to end the infringing activity.

In Flava Works, the Court reasoned that a reasonable inference could be drawn that the ISP actually and constructively knew of copyright infringement occurring on its website.  The knowledge element for contributory copyright infringement is said to be met in cases “where a party has been notified of specific infringing uses of its technology and fails to act to prevent future such infringing uses, or willfully blinds itself to such infringing uses.”  The Court cited the use of filters or user identifiers as potential steps the ISP could have taken to prevent future infringement.

Flava Works is the latest in a line of federal court rulings cracking down on providers knowingly or willfully turning a blind eye to infringement of copyrights and trademarks.  The Southern District of New York, in the Second Circuit, ruled similarly against a credit card processing company that provided services to a merchant selling counterfeit luxury goods; when the credit card processor continued to process transactions after notice of the infringing conduct, the court held it liable for contributory infringement.  Gucci America, Inc. v. Frontline Processing Corp., 721 F. Supp. 2d 228 (S.D.N.Y. 2010).  A line is being drawn by the courts; individuals or companies that turn a blind eye to trademark or copyright infringement occurring under their watch will not be allowed to simply plead ignorance and wash their hands of liability.  Rights holders who diligently and rightfully take the steps necessary to guard their intellectual property will be given the protections they are so entitled.

Please contact Matthew Wagner, head of our intellectual property group, if you have any questions or require more detailed information.