Advanced Copyright Issues on the Internet - Fenwick & West LLP

identified them “with sufficient specificity.” 1790 ALS Scan filed suit, alleging copyrightinfringement and violations of Title II of the DMCA. In response, RemarQ filed a motion todismiss the complaint or, in the alternative, for summary judgment, and attached affidavitsstating that it was prepared to remove articles posted in its newsgroups if the allegedly infringingarticles were specifically identified as required by the DMCA. The district court dismissed thecomplaint, ruling that RemarQ could not be liable for contributory infringement because ALSScan failed to comply with the notice requirements of Section 512(c)(3)(A) of the DMCA. 1791On appeal, ALS Scan contended that it “substantially” complied with the noticerequirements of the DMCA and that it therefore put RemarQ sufficiently on notice ofinfringement activities that RemarQ lost its immunity under the DMCA by failing to remove theinfringing material. RemarQ argued in response that it did not have knowledge of the infringingactivity as a matter of law because ALS Scan failed to identify the infringing works as requiredby the DMCA, and RemarQ was entitled to the safe harbor provisions of the DMCA. 1792The Fourth Circuit reversed on two grounds. First, the court noted that, in order to beentitled to the safe harbor of Section 512(c), an OSP must satisfy all three of the safe harborrequirements of Section 512(c)(1), specifically, that: (i) it has neither actual knowledge that itssystem contains infringing materials nor awareness of facts or circumstances from whichinfringement is apparent, or it has expeditiously removed or disabled access to infringingmaterial upon obtaining actual knowledge of infringement; (ii) it receives no financial benefitdirectly attributable to infringing activity; and (iii) it responded expeditiously to remove ordisable access to material claimed to be infringing after receiving notice from the copyrightholder conforming to the requirements of Section 512(c)(3). The Fourth Circuit held that “ashowing under the first prong – the lack of actual or constructive knowledge – is prior to andseparate from the showings that must be made under the second and third prongs.” 1793 TheFourth Circuit noted that, although it had treated RemarQ’s motion as a motion to dismiss, ratherthan as a motion for summary judgment, it had failed to take into account the allegation in thecomplaint that RemarQ had actual knowledge of the infringing nature of the two newsgroupseven before being contacted by ALS Scan. Although this allegation was denied by RemarQ, theFourth Circuit noted that the district court was required to accept the allegation as true forpurposes of testing the adequacy of the complaint under F.R.C.P. 12(b)(6). 1794Second, whether or not RemarQ’s motion was treated as one to dismiss or for summaryjudgment, the Fourth Circuit held that ALS Scan had substantially complied with the noticerequirement of the third prong. The district court had found that ALS Scan’s notice failed tocomply with two of the six requirements of notification – namely, that the notice include a list ofinfringing works on the RemarQ site and that the notice identify the infringing works in1790 Id. at 621.1791 Id.1792 Id. at 622.1793 Id. at 623.1794 Id.- 391 -