Advanced Copyright Issues on the Internet - Fenwick & West LLP

With respect to the issue of control, the court noted that CWIE’s right and ability tocontrol infringing activity was limited to disconnecting its webmasters’ access to CWIE’sservice. Citing the case of Perfect 10 v. Cybernet Ventures, Inc., 1911 the court ruled that the mereability to terminate services to a web site was not sufficient control for purposes of the Section512(C) safe harbor. Nor was the fact that CWIE reviewed its sites to look for blatantly illegaland criminal conduct sufficient to close the safe harbor, for the DMCA was intended toencourage OSPs to work with copyright owners to locate and stop infringing conduct.Accordingly, the court ruled that CWIE was entitled to summary judgment on the Section 512(c)safe harbor. 1912On appeal, the Ninth Circuit, for the reasons discussed above in Section III.C.5(b)(1)(i).dabove, agreed with the district court’s rulings that Perfect 10’s notices of infringement wereinsufficient to comply with the requirements of Section 512(c)(3) or to provide CWIE withknowledge or awareness within the standard of Section 512(c)(1)(A). 1913 The remainingquestion was therefore whether Perfect 10 had raised a genuine issue of material fact concerningwhether CWIE received a direct financial benefit from the infringing activity. 1914 The NinthCircuit held that “’direct financial benefit’ should be interpreted consistent with the similarlywordedcommon law standard for vicarious liability. … Thus, the relevant inquiry is ‘whetherthe infringing activity constitutes a draw for subscribers, not just an added benefit.’” 1915 Thecourt noted that Perfect 10 had alleged only that CWIE hosted websites for a fee, and suchallegation was insufficient to show that the infringing activity was a draw. The court also notedthat legislative history of Section 512 stated that receiving a one-time set-up fee and flat,periodic payments for service from a person engaging in infringing activities would notconstitute receiving a direct financial benefit. Accordingly, the court ruled that there was nogenuine issue that CWIE had received a direct financial benefit from infringing activity, andtherefore if on remand the district court were to find that CWIE had met the thresholdrequirements of Section 512(i), CWIE would be entitled to the Section 512(c) safe harbor. 1916i. Corbis Corp. v. Amazon.com, Inc. The opinion in thiscase contains a lengthy adjudication of the requirements of Section 512(i) as a predicate for theSection 512 safe harbors. Amazon hosted through its website a platform called “zShops,” whichallowed individuals and retailer vendors to showcase their products and sell them directly toonline consumers. A zShop vendor could include a product image in its sales listing in one oftwo ways – either by creating a link to an image stored on the vendor’s computer or server, or byuploading an image to one of Amazon’s servers for display in the listing. Amazon did not1911 213 F. Supp. 1146, 1181 (C.D. Cal. 2002).1912 Perfect 10, Inc. v. CCBill, 340 F. Supp. 2d at 1104-05.1913 Perfect 10, Inc. v. CCBill, 481 F.3d 751, 766 (9 th Cir.), cert. denied, 2007 U.S. LEXIS 12812 (2007).1914 Id.1915 Id. at 767 (quoting Ellison v. Robertson, 357 F.3d 1072, 1078-79 (9 th Cir. 2004)).1916 481 F.3d at 767.- 413 -