Advanced Copyright Issues on the Internet - Fenwick & West LLP

Turning first to the issue of knowledge, the court held that LoopNet did not haveknowledge of the alleged infringements prior to receiving notice from CoStar, based on the factsthat CoStar did not attach copyright notices to its photographs and LoopNet did not know whatrights CoStar may have granted in license agreements to users of its commercial real estatedatabase containing the photographs. 1833 Citing the Netcom case, the court ruled, “In the case ofa service provider, knowledge giving rise to liability only exists when there is no colorable claimof users’ noninfringement.” 1834 LoopNet could therefore not be charged with any form ofknowledge before receiving claims of infringement from CoStar. The central issue, then, waswhether LoopNet’s policies to deter infringement, remove infringing works, and prevent repeatinfringement were adequate both under the common law and for purposes of the DMCA safeharbor. 1835 In an important ruling, the court held that the parameters of the liability protectionprovided by the Section 512(c) safe harbor were “not contiguous with the bounds of liability forcontributory infringement.” 1836 This is contrary to the opposite conclusion reached by thedistrict court in an early decision in the Napster case, 1837 later reversed by the Ninth Circuit, 1838that the parameters for safe harbor liability protection and common law contributory liabilitywere contiguous, and the safe harbor could therefore not protect contributory infringers.The court then turned to a detailed analysis of whether CoStar was entitled to the benefitof the Section 512(c) safe harbor. As a threshold matter, the court held that the definition of“service provider” under Section 512(k)(1)(B) was broad and easily encompassed the type ofservice provided by LoopNet. 1839 The court also ruled that the safe harbor could not protectLoopNet for any alleged infringements taking place before December 8, 1999, the date thatLoopNet designated an agent to receive notifications of claimed infringement under the DMCA,as required by Section 512(c)(2) of the DMCA. 1840 The court then turned to an analysis ofseveral specific issues under the safe harbor.Storage at the Instance of the User. CoStar argued that the Section 512(c) safe harborshould not apply at all because the allegedly infringing photographs were uploaded to the siteonly after review and selection by LoopNet and so were not stored at the instance of LoopNet’susers. The court rejected this argument, reasoning that the photographs were uploaded at thevolition of the LoopNet users and that LoopNet subjected them only to a gateway screening1833 Id. at 698. The court further noted that the fact that CoStar’s employees were involved in manually examiningphotographs before they were posted on the site did not change the knowledge analysis. “LoopNet has peoplechecking photographs for purposes other than copyright infringement and CoStar’s own experts could notdistinguish between a CoStar and non-CoStar photograph upon inspection.” Id. at 700 n. 6.1834 Id. at 698. This is a rather high standard for knowledge for contributory infringement – it seems that in themany circumstances in which an OSP does not have any direct involvement with its users’ postings of materialson its site, the OSP will be unable to be certain that there is “no colorable claim” of its users’ noninfringement.1835 Id. at 698-99.1836 Id. at 699.1837 A&M Records, Inc. v. Napster, Inc., 114 F. Supp. 2d 896, 919 n. 24 (N.D. Cal. 2000).1838 A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1025 (9th Cir. 2001).1839 CoStar, 164 F. Supp. 2d at 701.1840 Id. at 697 & n.4.- 399 -