[NOTE—THIS DOCUMENT WAS SCANNED AND NOT PROOFED]

In The United States District Court
For The District Of Maryland

ALS Scan, Inc.

v.

Supernews, Inc.

Civil Action. JFM 99-2594

Memorandum

ALS Scan creates copyrighted adult erotic photographs to sell on CD-ROMs and display on its Web site for its paying subscribers. ALS Scan has brought suit for copyright infringement and common law unfair competition against RemarQ, a USENET service provider. ALS Scan’s claim is based upon the fact that RemarQ provides its subscribers with access to Internet newsgroups that allegedly contain infringing pictures. These photographs have been posted by ALS Scan subscribers who downloaded the copyrighted pictures from ALS Scan’s Web site or CD-ROMs. RemarQ has filed a motion to dismiss or for summary judgment. ALS Scan has also moved for summary judgment on the issue of liability. ALS Scan’s motion will be denied.

I.I.

The USENET is an international network of newsgroups, which are discussion forums for the exchange of ideas and information on the Internet. Newsgroups contain “articles” or “messages,” which can include text, photographs, video, and audio. Newsgroups can be posted or viewed by anyone with access to the USENET worldwide. They are organized by topic and contain uncensored, open discussions. No one entity or organization creates or maintains newsgroups. Individual users create them, and messages are forwarded automatically to all USENET servers throughout the world. The messages are temporarily stored on each receiving server, where they are available for review and response by individual users. Periodically messages are automatically purged from most systems to make room for new messages.

RemarQ is a USENET service provider whose services are used by approximately 2.5% of people posting articles on USENET newsgroups. Using either RemarQ’s free Web site or its subscriber USENET access service, persons can access over 30,000 newsgroups contained in RemarQ’s database, including the two about which ALS Scan complains. RemarQ does not create, control, monitor, regulate, or censor the content of any of the articles posted on the newsgroups. Hundreds of providers other than RemarQ also provide access to those same newsgroups.

ALS Scan alleges that some of its subscribers have downloaded its copyrighted pictures from its Web site or CD-ROMs and posted these pictures on articles located in two newsgroups, “alt.als” and “alt.pinaries.pictures.erotica.als.” After ALS Scan’s subscribers posted the photographs on the newsgroups, the pictures became publicly available over the Internet. ALS Scan wrote to RemarQ demanding that it eliminate the two newsgroups from its database. RemarQ refused to do so but stated that it would delete specific items from the newsgroups that ALS Scan identified as infringing its copyrights. ALS Scan then instituted this action, asserting that RemarQ is liable both for direct and contributory copyright infringement.[i]

II.II.

Two district courts have addressed the question whether Internet service providers, such as RemarQ, can be held liable for copyright infringement merely because they provide access to a newsgroup or web site. See Religious Technology Ctr. v. Netcom On-Line Communications Svscs., Inc., 907 F. Supp. 1361 (N.D. Cal. 1995); Nirobie-FL, Inc. v. Nat’l Ass’n of Fire & Equip. Distribs. and Northwest Nexus Inc., 983 F. Supp. 1167 (N.D. III. 1997). Both courts concluded that there is no such liability. Although technically the service provider copies material to which it provides access, the “act of designing or implementing a system that automatically and uniformly creates temporary copies of all data sent through it is not unlike that of the owner of a copying machine who lets the public make copies with it. Netcom, 907 F. Supp. at 1369. As the Netcom court further stated,

Where the infringing subscriber is clearly directly liable for the same act, it does not make sense to adopt a rule that could lead to the liability of countless parties whose role in the infringement is nothing more than setting up and operating a system that is necessary for the functioning of the Internet. Such a result is unnecessary as there is already a party directly liable for causing the copies to be made. Plaintiffs occasionally claim that they only seek to hold liable a party that refuses to delete infringing files after they have been warned. However, such liability cannot be based on a theory of direct infringement, where knowledge is irrelevant. The court does not find workable a theory of infringement that would hold the entire Internet liable for activities that cannot reasonably be deterred… Because the court cannot see any meaningful distinction (without regard to knowledge) between what Netcom did and what every other Usenet server does, the court find that Netcom cannot be held liable for direct infringement.

Id., at 1372. I fully agree with this reasoning.[ii]

In order to be liable for contributory copyright infringement, a defendant must have knowledge of the infringing activity. In October 1998 Congress passed Title II of the Digital Millennium Copyright Act (“DMCA”). The DMCA is intended to provide a uniform standard for courts to apply in determining whether a service provider had knowledge of the infringing activity. See Christian C.N. Bearns, A Copyright Dilemma Involving On Line Service Providers; Problem Solved…For Now, 51 Fed. Comm, L.J. 823, 845-46 (May 1999). The DMCA contains a notice provision that requires complaining parties to provide service providers with written notice of the alleged infringement in order to put the service provider on notice of the infringed works (or if multiple works are allegedly infringed, a representative sample), and (2) identification of the infringing work with sufficient detail to enable the service provider to locate and disable it. See 17 U.S.C. § 512(c)(3)(A).

ALS Scan did not provide RemarQ with such notice in this case. Indeed, the complaint it filed in this action did not specifically identify either the infringed works or the allegedly infringing works. Thus, ALS Scan has failed to meet the knowledge element of its claim.[iii][

A separate order effecting the rulings made in this memorandum is being entered herewith.

Date: February 28, 2000

J. Frederick Motz

United States District Judge

---

[i] In its complaint ALS Scan also asserted a claim for common law unfair competition. In its opposition to RemarQ’s motion to dismiss or for summary judgment, ALS Scan seeks to dismiss that claim without prejudice. The claim will be dismissed but the dismissal will be with prejudice. Under Federal Rule of Civil Procedure 41(a) a party may not voluntarily dismiss a claim without prejudice after its opponent has filed a motion for summary judgment. Here, since ALS Scan’s statutory copyright claim is “equivalent” to its common law claim, the latter is preempted. See 17 U.S.C. § 301(a); Wharton v. Columbia Pictures Indust., 907 F. Supp. 144, 145 (D. Md. 1995).

[ii] Of course, a person who actively participates in the process of copyright infringement, rather than simply providing Internet access, is liable for direct infringement. See, e.g., Playboy Enterprises, Inc. V. Russ Hardenburg, Inc., 982 F. Supp. 503, 512 (N.D. Ohio 1997); Playboy Enterprises, Inc. v. Webbworld, Inc., 968 F. Supp. 1171, 1175 (N.D. Tex. 1997).

[iii] If the DMCA had not established the requirements that notification of infringement must meet, ALS Scan’s argument might be more persuasive. In light of the names of the offending newsgroups – which closely parallel ALS Scan’s own name – and the history of infringing materials being placed on the newsgroups, it might seem reasonable to require a service provider to eliminate the newsgroups from its data base in order to prevent future infringements. On the other hand, requiring one service provider to eliminate the newsgroups would not take the infringing materials off the Internet and would, at the complaining party’s discretion, favor one service provider over another. In any even, the DMCA is clear in what it requires.