ROBERT HENDRICKSON, Plaintiff, v. EBAY INC., LUCKYBOY
ENTERTAINMENT, STEVEN REILLY, and DOES 1 through X, Defendants. and related
cases
Case No. CV 01-0495 RJK (RNBx) Consolidated with Case Nos.
CV 01-3412 RJK and CV 01-3412 RJK
UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF
CALIFORNIA
165 F. Supp. 2d 1082; 2001 U.S. Dist. LEXIS 14420; 60
U.S.P.Q.2D (BNA) 1335; Copy. L. Rep. (CCH) P28,313
September 4, 2001, Decided
September 4, 2001, Filed; September 6, 2001, Entered
DISPOSITION:
[**1] EBay Defendants' motion
for summary judgment on the copyright claims GRANTED. EBay and Richter's motion
for summary judgment on the Lanham Act claim GRANTED.
COUNSEL: ROBERT HENDRICKSON, plaintiff (01-CV-495), Pro se,
Woodland Hills, CA.
For EBAY INC, MARGARET C WHITMAN, MICHAEL - RICHTER,
defendants (01-CV-495): Jeffrey E Scott, Raymond B Kim, Greenberg Traurig,
Santa Monica, CA.
JUDGES: ROBERT J. KELLEHER, United States District Judge.
OPINIONBY: ROBERT J. KELLEHER
OPINION:
[*1083]
ORDER GRANTING DEFENDANTS EBAY INC., MARGARET C. WHITMAN AND
MICHAEL RICHTER'S MOTION FOR SUMMARY JUDGMENT OR, ALTERNATIVELY, MOTION FOR
PARTIAL SUMMARY JUDGMENT
This case involves a matter of first impression in the
federal courts: whether one of the "safe harbor" provisions of the
Digital Millennium Copyright Act ("DMCA") affords protection to the
operator of the popular Internet auction web service, www.ebay.com, when a
copyright owner seeks to hold the operator secondarily [*1084]
liable for copyright infringement by its sellers. On August 20, 2001,
the Court heard Defendants eBay, Inc. ("eBay"), Margaret Whitman and
Michael Richter's (collectively, the "eBay Defendants") motion for
summary judgment on the copyright and trademark [**2] claims in the
consolidated Hendrickson v. eBay, Inc. et al. cases. After the hearing, the
Court took the motion under submission. After considering the papers submitted
by the parties, the case file and oral argument, the Court hereby GRANTS the
motion.
I. FACTUAL BACKGROUND
eBay provides an Internet website service where over 25
million buyers and sellers of consumer goods and services have come together to
buy and sell items through either an auction or a fixed-price format. Pursuant
to their agreement with eBay, users set up user IDs or "screen names"
to conduct business on eBay's website in a semi-anonymous fashion. n1 Buyers
and sellers reveal their real identities to each other in private
communications to complete sales transactions.
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n1 This is akin to what users of CB radios do when they give
themselves a handle that identifies themselves over the radio waves. Some eBay
user IDs referenced in the records of this case include "emailtales"
and "luckyboyentertainment," and "vidjointyc."
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eBay's [**3] website allows sellers to post
"listings" (or advertisements) containing descriptions of items they
wish to offer for sale; and it allows buyers to bid for items they wish to buy.
People looking to buy items can either browse through eBay's 4,700 categories
of goods and services or search for items by typing words into eBay's search
engine. Every day, eBay users place on average over one million new listings on
eBay's website. At any given time, there are over six million listings on the
website. n2
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n2 In this case, eBay repeatedly characterizes its website
as merely an online venue that publishes "electronic classified ads."
(See, e.g., Motion at 3.) However, eBay's description grossly oversimplifies
the nature of eBay's business. A review of eBay's website shows eBay operates
far more than a sophisticated online classified service. (To the extent some of
the descriptions about eBay's website are not in the record, the Court takes
judicial notice of www.eBay.com and the information contained therein pursuant
to Federal Rule of Evidence 201.) Indeed, eBay's website is known first and
foremost as an Internet auction website. See, e.g., Leslie Walker, Ebay Goes
Off-Line To Train Its Next Block of Dealers, Wash. Post, Aug. 9, 2001,
available at 2001 WL 23185584 ("eBay, the giant Internet auction
house"); Pradnya Joshi & Charles V. Zehren, Bidders' Remorse Online
Auctions Now No. 1 Source of Internet Fraud, Newsday, Aug. 30, 2000, available
at 2000 WL 10031214 ("eBay, the world's largest online auction
service"). eBay's own website describes itself as "the world's largest
online marketplace." See "Overview" page, at
http://pages.ebay.com/community/aboutebay/overview/index.html. eBay
"enables trade on a local, national and international basis" and
"features a variety of . . . sites, categories and services that aim to
provide users with the necessary tools for efficient online trading in the
auction-style and fixed price formats." Id. eBay's Internet business
features elements of both traditional swap meets -- where sellers pay for use
of space to display their goods -- and traditional auction houses -- where
goods are sold via the highest bid process.
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On or about December 20, 2000, eBay received a "cease
and desist" letter from pro se Plaintiff Robert Hendrickson. The letter
advised eBay that Plaintiff dba Tobann International Pictures is the copyright
owner of the documentary "Manson." The letter also stated that
pirated copies of "Manson" in digital video disk ("DVD")
format were being offered for sale on eBay. However, the letter did not explain
which copies of "Manson" in DVD format were infringing copies; nor
did it fully describe Plaintiff's copyright interest. The letter demanded that
eBay cease and [*1085] desist "from any and all further
conduct considered an infringement(s) of [Plaintiff's] right" or else face
prosecution "to the fullest extend provided by law." (See Richter
Decl., Ex. C.)
Promptly after receiving this letter, eBay sent Plaintiff
e-mails asking for more detailed information concerning his copyright and the
alleged infringing items. (See id., Exs. D-G.) eBay advised Plaintiff that he
has to submit proper notice under the DMCA. For example, on December 20, 2000,
eBay sent the following e-mail to Plaintiff:
Recognizing that some posted items may infringe certain
intellectual property rights,
[**5] we have set up specific
procedures which enable verified rights owners to identify and request removal
of allegedly infringing auction listings. These procedures are intended to
substantially comply with the requirements of the [DMCA], 17 U.S.C. section
512. Click on the following link to access the [DMCA].
(Id., Ex. D.) In that e-mail, eBay also encouraged Plaintiff
to join its Verified Rights Owner ("VeRO") program, by submitting
eBay's Notice of Infringement form. n3 As eBay explained, some of the benefits
of the VeRO program include, among other things: (1) access to a customer
support group dedicated to servicing the VeRO participants; (2) dedicated
priority email queues for reporting alleged infringing activities; and (3)
ability to use a special feature called "Personal Shopper," which
allows users to conduct automatic searches for potentially infringing item.
(Id., Ex. D.)
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n3 eBay's Notice of Infringement form quotes the
notification provision of the DMCA, as set forth in 17 U.S.C. § 512(c)(3)(A).
(See Richter Decl., Ex. B.)
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On December 28, 2000, Defendant Richter, eBay's Intellectual
Property Counsel, followed up with another e-mail:
We have tried to contact you numerous times concerning your
letter dated December 14, 2000. [P] We would like to assist you in removing
items listed by third parties on our site which you claim infringe your rights.
However, in order to do so, we would need proper notice under the [DMCA].
Specifically, we would need you to, among other things, identify the exact
items n4 which you believe infringe your rights. In addition, we would need a
statement from you, under penalty of perjury, that you own (or are the agent of
the owner) the copyrights in the documentary. As you can understand, a
statement that we immediately CEASE and DESIST from any and all further conduct
considered an infringement(s) of my right granted under Copyright and other
laws of the land' gives us no indication of what your rights are, and gives us
no indication as to which items infringe such rights.
(Id., Ex. G.) Plaintiff refused to join eBay's VeRO program
and refused to fill out eBay's Notice of Infringement form. n5 Before filing suit,
Plaintiff never provided eBay the specific
[**7] item numbers that it
sought.
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n4 Each listing on eBay's website has its own item number.
n5 In his response to eBay's First Set of Requests for
Admissions, Plaintiff explained why he refused to join the VeRO program:
Knowing that EBAY's so called VeRO program is nothing more
than a wickedly concealed scheme to defraud unknowledgeable proprietors of
Copyrights, out of their LAWFUL rights, Plaintiff refuses to join in, become a
member of, participate in, act in concert with, be associated with, lend his
name to, or in any way, be a part of a scheme intended to deprive anyone of
their hard earned LAWFUL rights.
(Richter Decl., Ex. P at 2.)
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II. PROCEDURAL BACKGROUND
On January 17, 2001, Plaintiff filed the first of three
lawsuits against eBay. In CV 01-0495 ("Case No. 1"), Plaintiff sued
eBay and two eBay sellers, asserting a claim for copyright infringement. The
Complaint in Case No. 1 alleges, among other things, that eBay is liable for
the sale of unauthorized copies of the film "Manson" [**8]
by users on eBay's website.
On February 12, 2001, Plaintiff filed the second lawsuit. In
CV 01-1371 ("Case No. 2"), Plaintiff sued eBay, David Durham (another
third party seller) and Margaret C. Whitman ("Whitman"), eBay's
President and CEO. In this case, Plaintiff alleges that eBay and Whitman are
liable for copyright infringement because they allowed Defendant Durham to sell
unauthorized copies of the film "Manson" on or after January 17,
2001, the date Plaintiff filed Case No. 1.
On April 13, 2001, Plaintiff filed his third lawsuit against
eBay. In CV 01-3412 ("Case No. 3"), Plaintiff added several other
defendants, including eBay's Senior Intellectual Property Counsel, Michael
Richter ("Richter"). Plaintiff alleges, among other things, that eBay
and Richter are liable for copyright infringement because they wrongfully
continued to allow the sale of unauthorized copies of the film
"Manson" by eBay users after February 25, 2001, the date Plaintiff
commenced Case No. 2. In addition, Plaintiff alleges a Lanham Act claim and a state
claim for tortious interference with prospective economic advantage.
On April 30, 2001, the Court denied Plaintiff's motion for
preliminary injunction [**9] in Case No. 1. On the same day, the Court
granted eBay's motion to consolidate the three actions for all purposes. On
July 2, 2001, the Court issued an order granting, in part, the eBay Defendants'
first motion for summary judgment. The Court denied the eBay Defendants' motion
for summary judgment on the copyright claims without prejudice to its refiling.
However, the Court granted eBay and Richter's motion for summary adjudication
of the application of the Lanham Act's "innocent infringer"
provision. The Court also granted the motion for summary judgment on
Plaintiff's state claim on the ground that it is preempted by the Copyright
Act.
On July 27, 2001, the eBay Defendants filed the pending
motion for summary judgment. Plaintiff filed his opposition on August 6, 2001
and the eBay Defendants filed their reply on August 13, 2001.
III. DISCUSSION
A. Standard
Summary judgment is proper if "the pleadings,
depositions, answers to interrogatories, and admissions on file, together with
the affidavits, if any, show that there is no genuine issue as to any material
fact and that the moving party is entitled to judgment as a matter of
law." Fed. R. Civ. P. 56(c). A fact is material [**10] only if it is
relevant to a claim or defense and its existence might affect the suit's
outcome. See T.W. Elec. Serv., Inc. v. Pacific Elec. Contractors Assoc., 809
F.2d 626, 630 (9th Cir. 1987). A court may not, on a motion for summary
judgment, evaluate the credibility of the evidence submitted by the parties.
See Leslie v. Grupo ICA, 198 F.3d 1152, 1157-59 (9th Cir. 1999).
The moving party bears the burden of demonstrating the absence
of a genuine issue of material fact for trial. See Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 256, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). "The
burden on the moving party may be discharged by 'showing' -- that is, pointing
out to the district court -- that there is an absence of evidence to support
the nonmoving party's case." Celotex
[*1087] Corp. v. Catrett, 477
U.S. 317, 325, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986); see Musick v. Burke,
913 F.2d 1390, 1394 (9th Cir. 1990). To demonstrate that the non-moving party
lacks sufficient evidence to entitle it to judgment, the moving party must
affirmatively show the absence of such evidence in the record, either by
deposition [**11] testimony, the inadequacy of documentary
evidence or by any other form of admissible evidence. See Celotex, 477 U.S. at
322. The moving party has no burden to negate or disprove matters on which the
opponent will have the burden of proof at trial. See id. at 325.
A non-moving party's allegation that factual disputes
persist between the parties will not automatically defeat an otherwise properly
supported motion for summary judgment. See Fed. R. Civ. P. 56(e) (non-moving
party "may not rest upon the mere allegations or denials of the adverse
party's pleadings, but . . . must set forth specific facts showing that there
is a genuine issue for trial."). "[A] mere 'scintilla' of evidence
will be insufficient to defeat a properly supported motion for summary
judgment; instead, the nonmoving party must introduce some 'significant
probative evidence tending to support the complaint.'" Fazio v. City and
County of San Francisco, 125 F.3d 1328, 1331 (9th Cir. 1997), quoting Anderson,
477 U.S. at 249, 252. In judging evidence at the summary judgment stage, courts
must draw all reasonable inferences in favor of the party [**12]
against whom summary judgment is sought. See Matsushita Elec. Indus. Co.
v. Zenith Radio Corp., 475 U.S. 574, 587, 89 L. Ed. 2d 538, 106 S. Ct. 1348
(1986); Chaffin v. United States, 176 F.3d 1208, 1213 (9th Cir. 1999).
B. The Copyright Claims Against eBay
1. The Infringing Activity
Plaintiff alleges that eBay participated in and facilitated
the unlawful sale and distribution of pirated copies of "Manson" DVDs
by providing an online forum, tools and services to the third party sellers.
(See Opp. at 3; see also Complaint in Case No. 1, PP 18, 20, 21 & 30.)
Plaintiff does not allege that the advertisements that sellers posted on eBay's
website violate his copyright in "Manson." The type of secondary liability
that Plaintiff seeks to impose on the eBay Defendants is similar to the type of
secondary liability the Ninth Circuit allowed in Fonovisa, Inc. v. Cherry
Auction, Inc., 76 F.3d 259 (9th Cir. 1996). There, the court held that the
complaint stated causes of action for vicarious and contributory copyright
infringement against the operators of a traditional swap meet for sales of
counterfeit recordings by independent
[**13] vendors. n6 Thus, the
issue raised by Plaintiff's copyright claim is not whether eBay can be held
secondarily liable for "third party advertisements." (See Reply at
3.) Rather, the question is whether eBay can be held secondarily liable for
providing the type of selling platform/forum and services that it provided,
however limited or automated in nature, to sellers of counterfeit copies of the
film "Manson." Before the Court reaches the merits of [*1088]
that question, the Court must address a preliminary issue: whether the
DMCA shields eBay from liability for copyright infringement.
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n6 In April of this year, the Ninth Circuit in A & M
Records, Inc. v. Napster, Inc., 239 F.3d 1004 (9th Cir. 2001) extended
Fontovisa to the Internet context. Napster operates an Internet service that
facilitates the transmission and retention of digital audio files by its users.
The Ninth Circuit affirmed the district court's conclusion that the plaintiffs
-- record companies and music publishers -- have demonstrated a likelihood of
success on the merits of their contributory and vicarious copyright
infringement claims against Napster under the standards set forth in Fontovisa.
The Ninth Circuit declined to reach the question of whether the safe harbor
provisions of the DMCA applied, concluding that "this issue will be more
fully developed at trial." 239 F.3d at 1025.
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2. The DMCA
The DMCA "is designed to facilitate the robust development
and world-wide expansion of electronic commerce, communications, research,
development, and education." S. Rep. No. 105-190, at 1 (105th Congress, 2d
Session 1998). Title II of the DMCA, set forth in 17 U.S.C. § 512,
"protects qualifying Internet service providers from liability for all
monetary relief for direct, vicarious and contributory infringement." Id.
at 20. "Title II preserves strong incentives for service providers and
copyright owners to cooperate to detect and deal with copyright infringements
that take place in the digital networked environment." Id. at 40.
There is no dispute over whether eBay is an Internet
"service provider" within the meaning of Section 512. eBay clearly
meets the DMCA's broad definition of online "service provider."
See 17 U.S.C. § 512(k)(1)(B) ("the
term 'service provider' means a provider of online services or network access,
or the operator of facilities therefor").
To qualify for one of the safe harbor provisions, the
service provider's activities at issue must involve functions described in one
of four [**15] separate categories set forth in subsections
(a) through (d) of Section 512. See 17 U.S.C. § 512(n). eBay argues that it
qualifies for protection under the third and fourth categories. Because the
record establishes that eBay qualifies for protection under Section 512(c), the
Court need not address the applicability of Section 512(d).
3. Safe Harbor Under Section 512(c)
Subsection (c) limits liability for "infringement of
copyright by reason of the storage at the direction of a user of material that
resides on a system or network controlled or operated by or for the service
provider." 17 U.S.C. § 512(c) (emphasis added). This section applies where
a plaintiff seeks to hold an Internet service provider responsible for either
(1) infringing "material" stored and displayed on the service
provider's website or (2) infringing "activity using the material on the
[service provider's computer] system." 17 U.S.C. § 512(c)(1)(A)(i). Here,
because the focus of the copyright claims against eBay concerns infringing
activity -- the sale and distribution of pirated copies of "Manson"
-- using "materials"
[**16] posted eBay's website, Section
512(c) would provide eBay a safe harbor from liability if eBay meets the
conditions set forth therein.
Three requirements for safe harbor are delineated in Section
512(c)(1). First, the service provider must demonstrate that it does not have
actual knowledge that an activity using the material stored on its website is
infringing or an awareness of "facts or circumstances from which
infringing activity is apparent." 17 U.S.C. § 512(c)(1)(A)(i)-(ii).
Alternatively, the service provider must show that it expeditiously removed or
disabled access to the problematic material upon obtaining knowledge or
awareness of infringing activity. See 17 U.S.C. § 512(c)(1)(A)(iii). Second,
the service provider must show it "does not receive a financial benefit directly
attributable to the infringing activity" if the service provider has
"the right and ability to control such activity." 17 U.S.C. §
512(c)(1)(B). Third, the service provider must show that it responded
expeditiously to remove the material that is the subject of infringing activity
upon receiving notification of the claimed infringement [**17]
in the manner described in Section 512(c)(3). 17 U.S.C. § 512(c)(1)(C). [*1089]
a. The Third Prong of the Test: Notification of the Alleged
Infringing Activity
Under the third prong of the test, the service provider's
duty to act is triggered only upon receipt of proper notice. See id. Section
512(c)(3) sets forth the required elements for proper notification by copyright
holders. First, rights holders must provide written notification to the service
provider's designated agent. See 17 U.S.C. § 512(c)(3). In addition, the
notification must include "substantially" the following six elements:
(1) a physical or electronic signature of a person
authorized to act on behalf of the owner of an exclusive right that is
allegedly infringed;
(2) identification of the copyrighted work claimed to have
been infringed;
(3) identification of the material that is claimed to be
infringing or to be the subject of infringing activity and that is to be
removed or access to which is to be disabled, and information reasonably
sufficient to permit the service provider to locate the material;
(4) information reasonably sufficient [**18]
to permit the service provider to contact the complaining party;
(5) a statement that the complaining party has a good faith
belief that use of the material in the manner complained of is not authorized
by the copyright owner, its agent, or the law; and
(6) a statement that the information in the notification is
accurate, and under penalty of perjury, that the complaining party is
authorized to act on behalf of the copyright owner.
Id.
Preliminary, the Court rejects Plaintiff's argument that he
need not submit written notification in the manner described above (i.e.,
provide the notification referenced in the third prong of the safe harbor test)
as long as other facts show the service provider received actual or
constructive knowledge of infringing activity. (See Opp. at 8.) Plaintiff
refers to the first prong of the safe harbor test set forth in Section
512(c)(1)(ii) and (iii) in support of this argument. Plaintiff's argument has
no merit.
The DMCA expressly provides that if the copyright holder's
attempted notification fails to "comply substantially" with the
elements of notification described in subsection (c)(3), that notification
"shall not [**19] be considered" when evaluating whether
the service provider had actual or constructive knowledge of the infringing
activity under the first prong set forth in Section 512(c)(1). 17 U.S.C. §
512(c)(3)(B)(i) (emphasis added). Here, Plaintiff does not dispute that he has
not strictly complied with Section 512(c)(3). (See, e.g., Opp. at 8-9.) The
question is whether Plaintiff's imperfect attempts to give notice satisfy
Section 512(c)(3)'s "substantial[]" compliance requirement.
(1) No Statement Attesting to Good Faith And Accuracy of
Claim
Plaintiff's pre-suit "cease and desist" letter and
e-mails to eBay do not include several of the key elements for proper notice
required by Section 513(c)(3). (See Richter Decl., Exs. C, E, F, H & I.)
None of these writings includes a written statement under "penalty of
perjury" attesting to the fact "that the information in the
notification is accurate . . . [and] the complaining party is authorized to act
on behalf of the owner" of the copyright at issue. 17 U.S.C. §
512(c)(3)(A)(vi). Additionally, none of these writings includes a written
statement that Plaintiff "has a good
[**20] faith belief that use of
the material in the manner complained of is not authorized." 17 U.S.C. §
512(c)(3)(A)(v). The complete failure to include these key elements in his written
communications to eBay, even after eBay specifically asked [*1090]
for these items, renders Plaintiff's notification of claimed
infringement deficient under Section 512(c)(3).
(2) Inadequate Identification of Material Claimed to be the
Subject of Infringing Activity
Moreover, the record shows that Plaintiff failed to comply
substantially with the requirement that he provide eBay with sufficient
information to identify the various listings that purportedly offered pirated
copies of "Manson" for sale. See 17 U.S.C. § 512(c)(3)(A)(iii). It is
true that Plaintiff has informed eBay in writing that counterfeit copies of
"Manson" were being offered and sold on eBay's website. However, when
eBay requested that Plaintiff identify the alleged problematic listings by the
eBay item numbers, Plaintiff refused. (See, e.g., Kim Decl., Ex. P [Plaintiff's
Response to First Request for Admissions], RFA Nos. 21 and 22.) Plaintiff
contends that it is not his job to
[**21] do so once he has
notified eBay of the existence of infringing activity by eBay sellers. (See id.
at 3.)
The Court recognizes that there may be instances where a
copyright holder need not provide eBay with specific item numbers to satisfy
the identification requirement. For example, if a movie studio advised eBay
that all listings offering to sell a new movie (e.g., "Planet X,")
that has not yet been released in VHS or DVD format are unlawful, eBay could
easily search its website using the title "Planet X" and identify the
offensive listings. However, the record in this case indicates that specific
item numbers were necessary to enable eBay to identify problematic listings.
Plaintiff has never explained what distinguishes an
authorized copy of "Manson" from an unauthorized copy. Initially, in
his December 2000 cease and desist letter, Plaintiff only complained about
pirated copies of "Manson" in DVD format. (See Richter Decl., Ex. C.)
Plaintiff did not inform eBay that all DVD copies were unauthorized copies; he
merely asserted that pirated copies of "Manson" DVDs were being sold
on eBay. (See id.) Subsequently, Plaintiff sent an e-mail to eBay
complaining [**22] about a seller who was selling a pirated copy
of "Manson" in VHS format. (See id. at P 24 & Ex. I.) n7 But
Plaintiff's e-mail did not identify the basis for his claim that the seller was
selling a pirated copy of "Manson."
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n7 On January 4, 2001, Plaintiff sent eBay an e-mail
complaining about a seller named "vidjointnyc@hotmail.com" who was
"still selling pirated copies of my film MANSON in YOUR "Thieves
Market'." (See Richter Decl., Ex. I.) After receiving Plaintiff's e-mail,
eBay discovered that this seller had one active listing on eBay's website; that
listing offered "Charles Manson Family Footage VHS New!!" (See id. at
P 24 & Ex. J.) Nowhere in the listing did the seller state he was offering
a copy of a film entitled "Manson." (See id.) eBay removed the
listing at the risk of exposing itself to a lawsuit from the seller even though
up until that time Plaintiff had only complained about pirated DVDs, the seller
was clearly offering a VHS tape for sale, and the listing made no reference to
the title "Manson." (See id. at P 24 & n.1.)
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During oral argument, Plaintiff stated that he notified eBay
that all copies of "Manson" in DVD format are unauthorized. However,
the undisputed record in this case shows that Plaintiff did not provide this
notification in writing before filing suit. n8 A copyright holder must
comply [*1091] with the "written communication"
requirement. See 17 U.S.C. § 512(3)(A). The writing requirement is not one of
the elements listed under the substantial compliance category. See id.
Therefore, the Court disregards all evidence that purports to show Plaintiff
gave notice that all DVDs violate his copyright in "Manson." n9
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n8 Plaintiff contends that during a January 2001 telephone
conversation (shortly after he commenced suit), he told Richter that all copies
of "Manson" in DVD format infringe on his copyright because he has
never authorized the release of this movie on DVD. (Hendrickson Decl., P 11.)
There is a dispute in the record as to when Plaintiff orally advised eBay that
all copies of "Manson" in DVD format were unauthorized. (Compare id.
with Kim Decl., P 7.) However, the dispute over the dates is immaterial. It is
undisputed that Plaintiff has never provided this information in a written
communication to eBay as required by Section 512(c)(3). [**24]
n9 The Court notes that even though Plaintiff failed to
submit proper notice of his claim that all "Manson" in DVD format are
unauthorized, since March 2001, eBay has voluntarily searched its website on a
daily basis for all copies of "Manson" in DVD format, removed all
such listings and suspended repeat offenders. (See April 13, 2001 Declaration
of Michael Richter filed in support of the eBay Defendants' Opp. to Motion for
Prelim. Injunction, P 24.) eBay has represented to the Court that it plans to
continue to take such action during the pendency of this lawsuit. (See id.)
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With respect to "Manson" VHS tapes, Plaintiff has
admitted that authorized copies of "Manson" have been released in VHS
format. (See Hendrickson Decl., P 11 ("certain VHS tapes were infringing[]
because some of those had been authorized"; Kim Decl., P 7.) Therefore,
authorized copies of "Manson" in VHS format are available in the
marketplace. Plaintiff has offered no explanation to eBay or this Court as to
how eBay could determine which "Manson" VHS tapes being offered for
sale are unauthorized copies. n10
- - - - - - - - - - - - - - - - - -Footnotes- - - - - - - -
- - - - - - - - - -
n10 Plaintiff states that during a January 2001 telephone
conversation, he informed Richter that all VHS tapes labeled "new"
had to be counterfeit. (Hendrickson Decl., P 11.) Because Plaintiff did not
provide this information to eBay in writing, the Court need not consider the
deficient notice. Nevertheless, the Court notes that Plaintiff's contention
that all "new" VHS tapes must be counterfeit is wholly
unsubstantiated. Perhaps Plaintiff has not authorized the release of new VHS
copies in recent years. However, it is certainly possible that a seller
advertises a "Manson" VHS tape as "new" because the tape
remains sealed in its original package. Such a VHS tape could be an authorized
copy.
- - - - - - - - - - - - - - - - -End Footnotes- - - - - - -
- - - - - - - - - - [**25]
Plaintiff raises two more arguments in support of his claim
that he need not provide eBay with specific item numbers to satisfy the
"identification" requirement under the DMCA. Neither argument has
merit.
First, Plaintiff points out that he has sent an e-mail to
eBay identifying the eBay user IDs of four alleged infringers. Plaintiff
asserts that the identification of user names provides eBay with sufficient
information to locate the listings that offer pirated copies of "Manson."
(See Hendrickson Decl, P 9(b).) The e-mail in question, dated December 21,
2000, does not satisfy the DMCA's identification requirement. (See id., Ex. G.)
n11 The e-mail does not identify the listings that are claimed to be the
subject of infringing activity; it does not even describe the infringing
activity. Moreover, it contains none of the other requisite elements of a
proper notification under Section 512(c)(3)(A), e.g., a statement attesting to
the good faith and accuracy of the allegations.
- - - - - - - - - - - - - - - - - -Footnotes- - - - - - - -
- - - - - - - - - -
n11 The e-mail states:
Hi, Kai, this is Robert Hendrickson, the copyright owner of
the motion picture MANSON. Because of the copyright infringement activity
conducted by the following Ebay User Names: emailtales, luckyboyentertainment,
stoonod and vidjointnyc via your website, please email me any and ALL
information you have on these criminals. Thanks.
(Hendrickson Decl, Ex. G.)
- - - - - - - - - - - - - - - - -End Footnotes- - - - - - -
- - - - - - - - - - [**26]
Second, Plaintiff contends that eBay can identify listings
offering infringing copies of "Manson" for sale without particular
item numbers because eBay previously removed two listings even though Plaintiff
did not provide the item numbers. (See Hendrickson Decl., PP 7 & 10.) The
first [*1092] listing, item number 1401275408, was the one that offered a VHS
for sale by the seller "vidjointnyc@hotmail.com." (See id.; Richter
Decl., Ex. J.) As discussed above, eBay found and removed this listing after
Plaintiff sent an email complaining about this seller; this seller only had one
active advertisement at the time. (See Richter Decl., P 24.) At the time, eBay
had no evidence that seller vidjointnyc@hotmail.com was engaging in infringing
activity; eBay simply removed the listing out of an abundance of caution. (See
id.) With respect to the second listing, item number 525181519, the record is
not clear as to why eBay removed the listing. Plaintiff's only "evidence"
concerning this listing is a single page printout from some unidentified
Internet message board that contains a post submitted by an unknown user. (See
Hendrickson Decl., P 10 & Ex. J.) Plaintiff's evidence is inadmissable [**27]
and his conclusion is unsubstantiated.
In sum, the record in this case shows that proper
identification under Section 512(c)(3)(A)(iii) should include the specific item
numbers of the listings that are allegedly offering pirated copies of
"Manson" for sale. It is undisputed that Plaintiff refused to provide
specific item numbers of problematic listings before filing suit. n12
Accordingly, the Court holds that Plaintiff failed to comply substantially with
Section 512(c)(3)'s identification requirement. n13
- - - - - - - - - - - - - - - - - -Footnotes- - - - - - - -
- - - - - - - - - -
n12 Plaintiff provided eBay a list of specific eBay item
numbers of allegedly problematic listings on one occasion -- he identified them
in his March 5, 2001 written response to the eBay Defendants' request for
production of documents. This discovery response pre-dates the filing of Case
No. 3, To the extent Plaintiff contends this discovery response constitutes
sufficient notice of claims alleged in Case No. 3, the Court rejects
Plaintiff's contention. The response was not under oath, it does not attest to
a good faith belief that the items identified in the list are pirated copies of
"Manson," and it does not attest to the accuracy of the allegations.
Such a writing, without more, does not constitute adequate notice under Section
512(c)(3)(A). [**28]
n13 In light of the above ruling, the Court need not address
whether Plaintiff's notification satisfied the other elements set forth in
Section 512(c)(3)(A), e.g., whether Plaintiff notified eBay's "designated
agent." However, during the hearing on this motion, Plaintiff raised a new
argument involving the "designated agent" requirement. Plaintiff
argued, for the first time, that eBay should not be able to avail itself of the
protections of the DMCA because its website failed to identify a
"designated agent" until recently. Based on the comments made during
oral argument, the Court surmises that Plaintiff's contention is premised on
the belief that eBay cannot simply designate "VeRO Department" for the
submission of notices of infringement; rather, eBay must identify on its
website the name of an individual "agent." Because Plaintiff failed
to raise this argument in his papers and failed to submit evidence in support
of this argument, the Court declines to consider it. Nevertheless, the Court
notes that the record shows that at all relevant times, eBay advised Plaintiff
that the notices of infringement should be submitted to the attention of eBay's
"VeRO Program." In its emails to Plaintiff, eBay provided a hypertext
link to the notice of infringement form on eBay's website. That form identifies
the address and fax number for the VeRO Program. Nothing in the DMCA mandates
that service providers must designate the name of a person as opposed to a
specialized department to receive notifications of claimed infringement. See 17
U.S.C. § 512(c)(2).
- - - - - - - - - - - - - - - - -End Footnotes- - - - - - -
- - - - - - - - - - [**29]
Consequently, eBay did not have a duty to act under the
third prong of the safe harbor test. See 17 U.S.C. § 512(c)(1)(C). Thus, if
eBay establishes that it meets the remaining prongs of the safe harbor test,
eBay would be entitled to judgment in its favor on the copyright claims.
b. The First Prong of the Test: Actual or Constructive
Knowledge
Under the DMCA, a notification from a copyright owner that
fails to comply substantially with Sections 512(c)(3)(A)(ii), (iii) [*1093]
or (iv) "shall not be considered under [the first prong of the safe
harbor test] in determining whether a service provider has actual knowledge or
is aware of the facts or circumstances from which infringing activity is
apparent." See 17 U.S.C. § 512(c)(3)(B)(i) & (ii) (emphasis added). As
discussed above, Plaintiff's written notifications do not comply substantially
with Section (c)(3)(A)(ii)'s adequate identification requirement. Therefore,
the Court does not consider those notices when evaluating the actual or
constructive knowledge prong of the safe harbor test.
eBay's evidence shows that prior to this lawsuit, it did not
have actual or constructive [**30] knowledge that particular listings were
being used by particular sellers to sell pirated copies of "Manson."
The limited information that Plaintiff provided to eBay cannot, as a matter of
law, establish actual or constructive knowledge that particular listings were
involved in infringing activity. Accordingly, the Court holds that eBay has
satisfied the first prong of the safe harbor test under Section 512(c). See 17
U.S.C. § 512(c)(1)(A).
c. The Second Prong of the Test: Right and Ability to
Control Infringing Activity
To satisfy the second prong of the test, eBay must show that
it "does 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." 17 U.S.C. § 512(c)(1)(B) (emphasis
added). Because the undisputed facts establish that eBay does not have the right
and ability to control the infringing activity, the Court need not evaluate the
financial benefit element of this prong.
Plaintiff's only argument on the "ability to
control" issue centers on eBay's ability to remove infringing listings (1)
after [**31] it receives proper notification of infringing activity and (2)
upon detecting an "apparent" infringement on its own. n14 (See Opp.
at 7.) Plaintiff argues that the record shows eBay has the right and ability to
control the infringing activity because it has removed the listings for the
sale of various items in the past, including the listings offering pirated
copies of "Manson" (in response to Plaintiff's complaints).
Plaintiff's argument has no merit.
- - - - - - - - - - - - - - - - - -Footnotes- - - - - - - -
- - - - - - - - - -
n14 In December 2000, eBay voluntarily began searching its
website daily, on a limited basis, for listings that appear on their faces to
be infringing -- "apparent" infringements. (See Richter Decl., P 13.)
eBay conducts these searches using generic key words such as
"bootleg," "pirated," "counterfeit," and
"taped off TV" that may indicate potentially infringing activity. If
eBay's staff determines that a seller appears to be offering infringing goods
for sale, eBay would remove the listing from its website, notify the seller
that the listing has been removed, refund the fees paid for that listing and
review the seller's account for possible suspension. (See id.)
- - - - - - - - - - - - - - - - -End Footnotes- - - - - - -
- - - - - - - - - - [**32]
First, the "right and ability to control" the
infringing activity, as the concept is used in the DMCA, cannot simply mean the
ability of a service provider to remove or block access to materials posted on
its website or stored in its system. To hold otherwise would defeat the purpose
of the DMCA and render the statute internally inconsistent. The DMCA
specifically requires a service provider to remove or block access to materials
posted on its system when it receives notice of claimed infringement. See 17
U.S.C. §§ 512(c)(1)(C). The DMCA also provides that the limitations on
liability only apply to a service provider that has "adopted and
reasonably implemented . . . a policy that provides for the termination in appropriate
circumstances of [users] of the service provider's system or network who are
repeat infringers." See 17 U.S.C. § 512(i)(1)(A). Congress could not have
intended for [*1094] courts to hold that a service provider loses
immunity under the safe harbor provision of the DMCA because it engages in acts
that are specifically required by the DMCA.
Second, eBay's voluntary practice of engaging in limited
monitoring of its [**33] website for "apparent"
infringements under the VeRO program cannot, in and of itself, lead the Court
to conclude that eBay has the right and ability to control infringing activity
within the meaning of the DMCA. The legislative history shows that Congress did
not intend for companies such as eBay to be penalized when they engage in voluntary
efforts to combat piracy over the Internet:
This legislation is not intended to discourage the service
provider from monitoring its service for infringing material. Courts should not
conclude that the service provider loses eligibility for limitations on
liability under section 512 solely because it engaged in a monitoring program.
House Report 105-796 at 73 (Oct. 8, 1998).
Moreover, as Plaintiff acknowledges, the infringing
activities at issue are the sale and distribution of pirated copies of
"Manson" by various eBay sellers -- which are consummated
"offline" -- and not the display of any infringing material on eBay's
website. (Reply at 3.) Viewing the term "infringing activity" in this
context, the undisputed facts demonstrate that eBay does not have the right and
ability to control such activity.
Unlike a traditional auction [**34] house, eBay is not
actively involved in the listing, bidding, sale and delivery of any item
offered for sale on its website. eBay's evidence shows that it does not have
any control over the allegedly infringing items -- the pirated films. (See
Richter Decl., PP 7, 33 & 34.) The evidence also shows that eBay never has
possession of, or opportunity to inspect, such items because such items are
only in the possession of the seller. (See id.) When auctions end, eBay's
system automatically sends an email to the high bidder and the seller identifying
each other as such. (See id. at P 7.) After that, all arrangements to
consummate the transaction are made directly between the buyer and seller. (See
id.) eBay has no involvement in the final exchange and generally has no
knowledge whether a sale is actually completed (i.e., whether payment exchanges
hands and the goods are delivered). (See id.) If an item is sold, it passes
directly from the seller to the buyer without eBay's involvement. (See id.)
eBay makes money through the collection of an "insertion fee" for
each listing and a "final value fee" based on a percentage of the
highest bid amount at the end of the
[**35] auction. (See id. at P
8.)
Plaintiff offers no evidence that establishes the existence
of a triable issue of fact on the "ability to control the infringing
activity" issue. Accordingly, the Court hold that the record shows that
eBay does not have the right and ability to control the infringing activity at
issue.
Because eBay has established that it meets the test for safe
harbor under Section 512(c), eBay is entitled to summary judgment in its favor
on the copyright claims.
C. Plaintiff's Copyright Claims Against Richter and Whitman
The copyright claims against eBay's employees, Richter and
Whitman, are based solely on alleged acts and omissions committed in the course
and scope of their employment with eBay. Consequently, eBay's immunity from
liability for copyright infringement should also extend to Defendants Richter
and Whitman. To hold that the safe harbor provision of the DMCA protects the
company but not its employees for the same alleged bad acts [*1095]
would produce an absurd result. Congress could not have intended to
shift the target of infringement actions from the Internet service providers to
their employees when it enacted the safe harbor provisions. Accordingly, [**36]
the Court holds that Richter and Whitman are also entitled to summary
judgment in their favor.
D. Plaintiff's Lanham Act Claim Against eBay and Richter
In Case No. 3, Plaintiff alleges that eBay, Richter and over
a dozen third party sellers violated his rights under the Lanham Act, 15 U.S.C.
§ 1125. This claim is premised on a "printer-publisher" liability for
trademark/trade dress infringement. The Court recently held that eBay and
Defendant Richter would be "innocent infringers" within the meaning
of 15 U.S.C. § 1114(2) even if Plaintiff were to establish infringement. See
July 3, 2001 Order at 17. The Court reached this ruling in part because the
undisputed facts showed that eBay had no knowledge of a potential trade dress
violation before Plaintiff filed suit. See id. Because eBay and Richter are
"innocent infringers," Plaintiff's remedy is limited to an injunction
against the future publication or transmission of the infringing advertisements
on eBay's website. See 15 U.S.C. § 1114(2)(B).
Now, eBay argues that Plaintiff's need for such an
injunction has been obviated because eBay has
[**37] stopped running all the
advertisements claimed to be infringing and it has no intention of running the
identified advertisements in the future. See, e.g., Brown v. Armstrong, 957 F.
Supp. 1293, 1303 n.8 (D. Mass 1997) (Lanham Act false advertisement claim for
injunctive relief based on false statements in an infomercial was moot where
the infomercial had stopped running and there were no plans to air it in the
future); Stephen W. Boney Servs. Inc., 127 F.3d 821, 827 (9th Cir. 1997)
(grocery store operator's claim for declaratory judgment that it had priority
in use of trade name was moot where the competitor had announced that it would
rename its stores). eBay's evidence shows that it has removed from its website
the allegedly false and misleading advertisements identified by Plaintiff. (See
Richter Decl., PP 38-44.) Plaintiff has offered no evidence that contradicts
this showing.
Rather, Plaintiff argues that he is entitled to an
injunction that restrains eBay "from any further displaying and or
transmitting of any false and or misleading advertisements in connection with
the sale/distribution of 'counterfeit' MANSON DVD's via its websites. [**38]
" (Opp. at 11 (emphasis added).) In short, Plaintiff seeks an
injunction enjoining any and all false and/or misleading advertisements that
may be posted on eBay's website by users in the future, regardless of whether
they are the basis of this lawsuit and whether they have been identified by
Plaintiff.
No authority supports Plaintiff's position. Indeed, such an
injunction would effectively require eBay to monitor the millions of new
advertisements posted on its website each day and determine, on its own, which
of those advertisements infringe Plaintiff's Lanham Act rights. As the Court
previously noted, "no law currently imposes an affirmative duty on
companies such as eBay to engage in such monitoring." July 3, 2001 Order
at 15. Further, the Court's recent "innocent infringer" ruling was
premised on the Court's determination that eBay has no affirmative duty to
monitor its own website for potential trade dress violation and Plaintiff had
failed to put eBay on notice that particular advertisements violated his Lanham
Act rights before filing suit. The Court holds that Plaintiff is not entitled
to the remedy that he seeks. The undisputed facts show that Plaintiff's Lanham
Act claim [**39] for injunctive relief is moot. [*1096]
IV. DISPOSITION
Because no triable issues of material fact exist with
respect to the eBay Defendants' entitlement to immunity under the DMCA, the
Court hereby GRANTS the eBay Defendants' motion for summary judgment on the
copyright claims. Additionally, because the undisputed facts establish that
Plaintiff's Lanham Act claim is now moot, the Court hereby GRANTS eBay and
Richter's motion for summary judgment on the Lanham Act claim.
IT IS SO ORDERED.
DATED: September 4, 2001
ROBERT J. KELLEHER
United States District Judge