Advanced Copyright Issues on the Internet - Fenwick & West LLP

from websites and the initiation of the present lawsuit. The fact that Dieboldnever actually brought suit against any alleged infringer suggests strongly thatDiebold sought to use the DMCA’s safe harbor provisions – which were designedto protect ISPs, not copyright holders – as a sword to suppress publication ofembarrassing content rather than as a shield to protect its intellectual property. 2016Two weeks after the court rendered its judgment, Diebold agreed to settle the lawsuit bypaying $125,000 in damages and fees to the plaintiffs. 2017f. Perfect 10 v. CCBill. The facts of this case are setforth in Section III.C.5(b)(1)(i)d. above. In that case, the defendant Internet Key, an ageverification service for adult content websites, filed a motion for summary judgment under theSection 512(d) safe harbor. Perfect 10 argued that Internet Key was not entitled to the safeharbor because it was not an information location tool, it had actual knowledge of infringements,and it was aware of facts or circumstances from which infringing activity was apparent. 2018With respect to the issue of whether Internet Key was an information location tool, thecourt rejected Perfect 10’s argument that Section 512(d) is limited to OSPs like Google andYahoo! that provide links to millions of web sites and that do not have contractual relationshipswith their affiliate web sites. Instead, Section 512(d) refers to OSPs who refer or link users to anonline location containing infringing material or activity by using a directory, index, reference,point, hypertext link or the like. The court concluded that Internet Key’s sexkey.com web siteprovided that function and was therefore covered by Section 512(d). 2019With respect to the knowledge element, Perfect 10 argued that Internet Key should haveknown that there were copyright infringements on its clients’ web sites because of thedisclaimers on some of those web sites, which generally claimed that the copyrighted imageswere in the public domain or that the webmaster was posting the images for newsworthypurposes. The court ruled that these disclaimers were not sufficient to raise a “red flag” ofcopyright infringement, which is the standard of constructive knowledge under Sections 512(c)and 512(d). 20202016 Id. at 1204-05. The court also held that the plaintiff’s claim that Diebold, through its inappropriate use of theDMCA, had interfered with their contractual relations with their respective ISPs, was preempted. “Even if acopyright holder does not intend to cause anything other than the removal of allegedly infringing material,compliance with the DMCA’s procedures nonetheless may result in disruption of a contractual relationship: bysending a letter, the copyright holder can effectuate the disruption of ISP service to clients. If adherence to theDMCA’s provisions simultaneously subjects the copyright holder to state tort liability, there is an irreconcilableconflict between state and federal law. Id. at 1205-06.2017 “Diebold Settles Landmark DMCA Suit in Dispute Over Voting Machines,” IP Law Bulletin (Oct. 15, 2004),available as of Oct. 18, 2004 at www.iplawbulletin.com/cgi-bin/absolutenm/anmviewer.asp?a=2381&z=18.2018 Perfect 10, Inc. v. CCBill, 340 F. Supp. 2d 1077, 1097-98 (C.D. Cal. 2004).2019 Id.2020 Id. at 1098.- 437 -