Contributory Infringement Claims Proceed Against Internet Provider

UMG Recordings, Inc. v. RCN Telecom Servs., LLC, No. CV1917272MASZNQ, 2020 WL 5204067, at *3 (D.N.J. Aug. 31, 2020)

UMG Recordings brought contributory and vicarious copyright infringement actions against an internet provider (RCN) and its management company (Patriot) for enabling RCN subscribers to repeatedly download and share UMG copyrighted songs. RCN received more than five-million email notifications requesting that RCN warns its subscribers to stop and then cancels the subscribers that refused to stop. RCN made no meaningful changes to its policies and continued to cater all infringing subscribers. On August 31, 2020, a Federal Court in New Jersey denied RCN’s motion to dismiss and allowed Plaintiffs’ Contributory Infringement claim because Plaintiffs sufficiently plead both elements. 1) Knowledge: sufficient knowledge was inferred from the email notifications RCN received; and 2) Material Contribution: material contribution was inferred from RCN’s conduct to continue to provide its network to subscribers that were known repeat offenders. The court also allowed Plaintiffs’ vicarious liability claim because Plaintiffs successfully demonstrated RCN’s right and ability to supervise their subscribers, and RCN’s financial incentive to tolerate the infringing conduct of its subscribers. However, the court dismissed all claims against Patriot because Patriot’s role of providing management services to RCN did not sufficiently establish that Patriot had knowledge of the infringement notices that RCN received or that Patriot had knowledge of the infringement committed by RCN’s subscribers. Plaintiffs’ claims against RCN will proceed into the discovery stage of the lawsuit, while Plaintiffs’ claims are not allowed to continue against Patriot.

Vicarious Liability Claim Against Network Fails

UMG RECORDINGS, INC. V. BRIGHT HOUSE NETWORKS, LLC No. 8:19-CV-710-MSS-TGW, 2020 WL 3957675 (M.D. Fla. Jul. 8, 2020)

UMG Recordings brought a claim that Bright House Networks, LLC is vicariously liable for copyright infringement committed by its users. These users are claimed to have unlawfully downloaded and shared songs by UMG. Defendants argued that Plaintiffs did not adequately plead the two elements of vicarious liability and therefore, the court should dismiss the claims as a matter of law. The elements of vicarious liability are (1) the right and ability to supervise the infringing activity, and (2) a direct financial interest in the activity. The Court granted the Motion to Dismiss Plaintiffs’ First Amended Complaint as to the Claim for Vicarious Liability. The reasoning that the Court used was that Plaintiffs did not adequately allege that Defendants received a direct financial benefit from the activities of its users, which was enough reason to deny the vicarious liability claim.

No Case Or Controversy In ISP's Declaratory Judgment Suit of NonInfringement

Windstream Services v. BMG Rights Management, 16-cv-5015 (S.D.N.Y. Apr. 17, 2017).

Plaintiff, an internet service provider (ISP), brought an action seeking a declaratory judgment of non-infringement based upon the DMCA's safe-harbor provisions.  Defendant is a music publisher.  The Court granted the defendant's motion to dismiss for lack of subject matter jurisdiction, finding that plaintiff sought an unauthorized advisory opinion (and even if the Court had subject matter jurisdiction, it would exercise its discretion and decline to hear the action).  "[Plaintiff] seeks a blanket approval of its business model, without reference to any specific copyright held by BMG or any specific act of direct infringement by any [plaintiff] subscriber."  The Court observed that the Southern District of California had rejected a nearly identical lawsuit in Veoh v. UMG, 522 F. Supp. 2d 1265 (S.D. Cal. 2007).  The complaint was hypothetical in nature.  Having dismissed the declaratory judgment clai, the Court declined to exercise supplemental jurisdiction over plaintiff's state law claim.

DMCA Safe Harbor Applies To Pre-1972 Sound Recordings & Plaintiffs Have Burden Of Proving Red-Flag Knowledge; 2d Cir.

Capitol Records, LLC v. Vimeo, No. 14/1048 (2d Cir. June 16, 2016).

The Digital Millennium Copyright Act (DMCA) safe harbor (section 512 of the Copyright Act) applies to pre-1972 sound recordings and protects service providers from infringement liability under state copyright laws, holds the Second Circuit on an interlocutory appeal in a copyright infringement action brought by record labels against Vimeo.  Further, the Court held that the mere fact that a video contains all or virtually all of a “recognizable,” copyrighted sound recording and was viewed in some fashion by a service provider’s employee is insufficient to prove knowledge or red flag knowledge of infringement; and further that the record company plaintiffs' evidence was insufficient to support the imputation of knowledge to Vimeo through the theory of willful blindness.

On the safe harbor question, the Second Circuit found that "A literal and natural reading of the text of § 512(c) leads to the conclusion that its use of the phrase 'infringement of copyright' does include infringement of state laws of copyright. One who has been found liable for infringement of copyright under state laws has indisputably been found 'liable for infringement of copyright'.”  Further, "To construe § 512(c) as leaving service providers subject to liability under state copyright laws for postings by users of infringements of which the service providers were unaware would defeat the very purpose Congress sought to achieve in passing the statute."  Construing the safe harbor of § 512(c) as not granting protection to service providers from liability for state-law-based copyright infringements would substantially defeat the statute’s purposes.  Accordingly, the 2nd Circuit vacated the district court's grant of summary judgment to Plaintiffs as to the availability of the DMCA safe harbor to Vimeo in relation to liability for infringement of pre-1972 sound recordings. 

On the "red flag" part, the 2nd Circuit addressed the shifting burdens of proof (plaintiff has the burden of proving red flag knowledge) and held that "A copyright owner’s mere showing that a video posted by a user on the service provider’s site includes substantially all of a recording of recognizable copyrighted music, and that an employee of the service provider saw at least some part of the user’s material, is insufficient to sustain the copyright owner’s burden of proving that the service provider had either actual or red flag knowledge of the infringement."  The Court then addressed several reasons why.  Accordingly, the Court held that Vimeo was entitled to summary judgment on those videos as to the red flag knowledge issue, "unless plaintiffs can point to evidence sufficient to carry their burden of proving that Vimeo personnel either knew the video was infringing or knew facts making that conclusion obvious to an ordinary person who had no specialized knowledge of music or the laws of copyright."

Lastly, the Court rejected the Plaintiffs’ argument that the district court erred in its ruling in Vimeo’s favor as to the Plaintiffs’ reliance on the doctrine of willful blindness.

ISPs in UK Ordered To Block Access to BitTorrent Sites

EMI Records Ltd. v. British Sky Broadcasting Ltd., 2013 ILRC 1337 (High Ct. of Justice Chancery Div. 2013) [link].

The UK's main retail ISPs were ordered to take measures to block or impede their customers' access to three peer-to-peer file-sharing websites (KAT, H33T and Fenopy) due to infringement.  Plaintiffs were record companies.  The Court concluded: (i) that UK users of the websites who have accounts with the Defendants have infringed, and are continuing to infringe, the plaintiffs copyrights by copying the Claimants' sound recordings on a large scale; (ii) that users of the Websites infringe the plaintiffs' copyrights both by copying and by communication to the public; and (iii) the operators of the Websites infringe the plaintiffs' copyright.  The plaintiffs' application was granted.

MP3Tunes Decision on Counterclaims

Defendant's counterclaims Dismissed:

DMCA claim
New York's GBL 349 (re: consumer protection)
Common law unfair competition
California Business and Professional Code 17200

Defendant's counterclaims NOT dismissed:

Declaratory judgment claim that it is a service provider protected by the safe-harbor provision of 17 USC 512 (of the DMCA)

[No. 1:07-cv-09931-WHP-FM (Doc. 73 filed Mar. 4, 2009).]

Broadband Fee for Unlimited Downloads

Instead of fighting file-sharing, the local government of the Isle of Man announced a proposal this month that the 80,000 people who live on there would be able to download unlimited amounts of music — perhaps even from notorious peer-to-peer pirate sites. To make this possible, broadband subscribers would pay a nominal fee of as little as £1, or $1.38, a month to their Internet service providers.

[New York Times]

Improper Joinder of Doe Cases

From the Bloomberg IP Report, Vol.2, No. 2, p. 8-9 (Jan. 12, 2009)

District of Connecticut Finds Record Companies Improperly Joined Doe Defendants in Two Closely Related Peer-to-Peer File Sharing Cases

Synopsis: In two closely related actions, the U.S. District Court for the District of Connecticut determined that plaintiff record companies improperly joined doe defendants in copyright
infringement suits involving peer-to-peer file sharing. The court also held, however, that the record labels could immediately serve subpoenas on the Internet Service Providers (ISPs) to
determine the doe defendants’ identities.

Analysis of: Arista Records, LLC v. Does 1-4, No. 08-CV-01280, 2008 BL 273554 (D. Conn. Dec. 9, 2008); and Interscope Records v. Does 1-6, No. 08-CV-01284, 2008 BL 273554 (D. Conn. Dec. 9, 2008).

End of RIAA Litigation for Online File-Sharing?

"The recording industry plans to lay down its litigation offensive against music pirates in favor of a more PR-friendly, if not more effective, strategy. Instead of suing thousands of people for stealing tunes via the Internet, it will rely on the cooperation of Internet-service providers"

Article from the Wall Street Journal.

Nail and Mail - The Bronx

Warner Bros. Records Inc. v. Berry, No. 07 Civ. 1092-HB, 4/15/08 N.Y.L.J. "Decision of Interest" (S.D.N.Y. decided Apr. 9, 2008).

The court adopted Magistrate Judge's recommendation to deny Plaintiff's default judgment application and dismissed the case.

Plaintiff's alleged that Defendant used KaZaA to download, distribute and make available for distribution the copyrighted recordings of certain artists in violation of the Copyright Act. Over a year before filing the complaint, Plaintiffs served AOL (an ISP), which identified Defendant as the person responsible for the IP address that was using KaZaA. AOL provided Plaintiff's with an address for Defendant in the Bronx, NY. Plaintiffs then hired a process server, whose attempts at service were "unsuccessful"; thereafter, the process server affixed one copy on the property in the Bronx. and depositing a copy of the summons in a first class post paid envelope addressed to the same address.

However, the Court found that service on Defendant was defective and therefore dismissed the complaint. "Here, service was defective under the 'nail and mail' method [CPLR 308(4)] because Plaintiffs' process server both affixed and mailed the summons to Defendant's last known residence."

Though the mailing component of service by "affixing and mailing" may be to the defendant's last known residence, "the 'affixing' component must be to the door of the defendant's actual place of business, dwelling place or usual place of abode, and not to the defendant's last known residence. To blur the distinction between 'last known residence' and 'dwelling place' 'would diminish the likelihood that actual notice will be received by potential defendants.'"

However, the Court did not adopt the Magistrate Judge's recommendation that Plaintiffs be ordered to show cause they they did not violate FRCP 11(b). The Court found that "while Plaintiffs' lawyers should be faulted for failing to keep closer tabs on their process server and for failing to better supervise their paralegal, their actions do not rise to the level of a Rule 11(b) violation. Plaintiffs' lawyers might have been sloppy in their attempts to serve Defendant, but giving them as officers of the Court the benefit of the doubt, all their representations to this Court were...nor for the improper purpose of unnecessary delay."

'Monetizing the Anarchy'

The "idea is to collect a fee from internet service providers -- something like $5 per user per month -- and put it into a pool that would be used to compensate songwriters, performers, publishers and music labels".

In the end, won't such a surcharge ultimately be passed onto the end-user, i.e., all internet users are paying a $5/mo. fee to the record industry?

Doe No Mo'

A big day at the races for the RIAA, who have veered from their practice of filing copyright infringement suits against John Doe defendants by filing complaints against...wait for it... ACTUAL NAMED PLAINTIFFS!

A look inside the RIAA's allegations:

A third-party investigator retained by Plaintiffs, MediaSentry, Inc., identified an individual, later determined to be Defendant, using LimeWire on the P2P network Gnutella at IP address [xx.xx.xxx.xx] on [date] at [time] EDT distributing [number] audio files over the Internet. The Defendant was identified as the individual responsible for that IP address at that date and time.

After learning [Named Defendant]'s identity, Plaintiffs’ national counsel sent [Named Defendant] a letter advising her that copyright infringement had been detected and providing a telephone number and e-mail address that could be used to contact Plaintiffs’ representatives to try to resolve the matter before the commencement of litigation.

The parties were unable to resolve the matter, and Plaintiffs are therefore filing their Complaint against Defendant for copyright infringement.

What a breath of fresh air!

[See, e.g., Zomba Recording, LLC v. Cancino, No. 2:08-cv-00074 (S.D.Tex. complaint filed Mar. 12, 2008). As of this posting, OTCS counted no-less than 33 complaints filed in various federal courts by the RIAA against named defendants on March 11-12, 2008].

Big Day Out for the RIAA

With the numbers still being counted, it looks like February 21, 2008 was a big day for the RIAA, with the filing of between 28 and 34 separate John Doe law-suits in various federal courts.

Is the Shelf-Life of the DOE-Cases About to Expire?

Another cookie-cutter complaint, application and memorandum of law identical to dozens of DOE cases filed in the past month was filed this week in the District of D.C. (...yawn...).

[Capitol Records, Inc. et al. v. Does 1-9; filed 2/06/08 in D.D.C.; case no. 1:08-cv-00210-RMU]

However, with the RIAA receiving pressure from DOES, and the Electronic Frontier Foundation being granted leave to file an amicus brief in other cases, how much future does these form pleadings & motions have?

Similarly damaging to the RIAA's DOE cases is that they appear to be using an unlicensed private investigator, MediaSentry, to investigate unauthorized file-sharing and determine P2P user's ISPs. The legality of MediaSentry's actions, and the admissibility of any evidence obtained by them, is questionable, as recently recognized by the Hon. Judge Castel in the SDNY. (See e.g., N.Y. Gen. Business Law secs. 70, 71, and 83.)

Student Response to Ex Parte Discovery Request

The oft-venomous blog "Recording Industry vs. The People" links to this especially interesting memorandum of law in support of a John Doe (college student) defendant's motion to quash the ex parte subpoena issued by the RIAA to Boston University for the disclosure of student's names associated with IP addresses.

(See cases cited therein.)

DOES Anyone Care?

More. Copyright. Infringement. Actions. Various. Federal Courts.

IP Addresses. John Does. Major Labels.

Some (but not all): Ex parte. Discovery. College ISPs.

Who is Carlos Linares, upon whose application the ex parte applications for expedited discovery are based?

[Atlantic Recording Corporation et al v. Does 1-2; filed 1/31/08 in Calif. Southern District; case no. 3:2008cv00190.
Arista Records LLC et al v. Does 1 - 4; filed 1/31/08 in Georgia Northern District; case no. 1:2008cv00358.
BMG Music et al v. Does 1-19; filed 1/31/08 in Kentucky Western District; case no. 3:2008cv00070.
LaFace Records L L C et al v. Does; filed 1/31/ 08 in Louis. Western District; case no. 3:2008cv00137.
Arista Records LLC et al v. Does 1 - 3; filed 2/1/08 in Missouri Eastern District; case no. 4:2008cv00160.
BMG Music et al v. Does 1-6; filed 1/31/08 in Mississippi Northern District; case no. 1:2008cv000231.
CAPITOL RECORDS, INC. et al v. DOE # 1 et al; filed 2/1/08 in North Carolina Middle District; case no. 1:2008cv0008.
ZOMBA RECORDING LLC et al v. DOES 1-26; filed 2/1/08 in New Jersey, case no. 3:2008cv00566.
Zoomba Recording LLC et al v. Does 1-8; filed 1/31/08 in Ohio Southern District; case no. 3:2008cv00030.]

I Went to College - And Got Sued by the RIAA!

Another day at the races for the major labels, who yesterday (1/30) filed no less than 7 copyright infringement cases against "John Doe" defendants in various federal district courts.

Here's a highlight from Warner Bros. Records, Inc. v. Does 1-4 (1:08-cv-00120-RLY-TAB; filed 1/30/08 in the Southern District of Indiana):

"The true names and capacities of Defendants are unknown to Plaintiffs at this time. Each Defendant is known to Plaintiffs only by the Internet Protocol ("IP") address assigned to that Defendant by his or her ISP on the date and time of that Defendant's infringing activity...Plaintiffs believe that information obtained in discovery will lead to the identification of each Defendant's true name."

Continuing,

"Although Plaintiffs do not know the true names of Defendants, each Defendant is alleged to have committed violations of the same law (e.g., copyright law), by committing the same acts (e.g., the downloading and distribution of copyright sound recordings owned by Plaintiffs), and by using the same means (e.g., a file-sharing network) that each Defendant accessed via the same ISP. Accordingly, Plaintiffs' right to relief arises out of the same series of transactions or occurrences, and there are questions of law or fact common to all Defendants such that joinder is warranted and appropriate here."

Several queries: first, can plaintiffs allege facts as mere "e.g."s? Their description of the infringing acts is beyond general and vague! Second, when you have 15 or more plaintiffs, how much damages does each actually get? The sheer number of plaintiffs indicates that these suits are meant as a deterrent to on-line infringement, rather than as a means to redress actual injury.

But, the fun doesn't stop. Plaintiffs in the above case also filed an ex parte motion for leave to take immediate discovery on a third party ISP to determine the true identies of the Doe defendants.

"Plaintiffs intend to serve a [Federal Rule of Civil Procedure] Rule 45 subpoena on the ISP seeking documents that identify each Defendant's true name, current (and permanent) addresses and telephone numbers, e-mail addresses, and Media Access Control ("MAC") addresses. Without this information, Plaintiffs cannot identify the Doe Defendants or pursue their lawsuit to protect their copyrighted works from repeated infringement."

A glance at the attached "proposed order" shows that the ISP is Indiana University-Purdue University...so IU students, look out!

Also filed with the motion was a brief and affidavit, with attached exhibits of similar orders granted in other district courts. (S.D. Ind.; W.D.Wis.; N.D. Ill; N.D. Ind.; E.D. Wis; C.D. Ill.)

Faithful readers of OTCS, you guessed it. Virtually identical complaints, ex parte motions (and affidavits from the same individual, Carlos Linares) were filed in the other Doe cases: Elektra Enter. Group Inc. v. Does 1-11, (1:-08-cv-10140-NG; filed 1/30/08; D.Mass); Arista Records LLC v. Does 1-3 (1:08-cv-10139-NG; filed 1/30/08); Atlantic Recording Corp. v. Does 1-14 (1:08-cv-00028-JAW; filed 1/30/08; D.Maine); Arista Records LLC v. Does 1-36 (0:08-cv-00278-DWF-AJB; filed 1/30/08; D.Minn - 2d Div.); Arista Records LLC v. Does 1-5; 3:08-cv-00523-GEB-TJB; filed 1/30/08; order granting ex parte discovery on Princeton University 1/30/08; D.N.J); and Arista Records LLC v. Does 1-10 (5:08-cv-00108-NPM-GJD; filed 1/30/08; N.D.N.Y.; proposed order indicates discovery sought on Ithaca College).

I wonder how the clerks of each of the above courts would feel knowing plaintiffs are filing form-complaints and motions with the court? Are the district courts a processing center for the RIAA?

U2 Manager - Achtung Baby!

Rolling Stone reports that U2 manager Paul McGuinness "called for an end to illegal music downloading and placed much of the blame squarely at the feet of Internet service providers. He also called out record labels for their lack of foresight and governments for not holding ISPs responsible for what pumps through their wires."

Understandably, McGuiness wants to secure the financial future of the band. And yes, U2 should not only strive to be great at music, but also great at business too.

But, being great at business is not analogous to clinging to the old model of the music business. Adapt. Otherwise, you still haven't found what you're looking for.

Check Yo' Self

The New York Times reports a growth in 2007 of digital music sales, but "digital sales have yet to make up for the shortfall in sales of compact discs, and overall sales of recorded music fell about 10 percent last year".

The article also notes the International Federation of the Phonographic Industry's plan "to step up a campaign to hold Internet providers responsible for stopping piracy over their networks".

[Eric Pfanner, "Digital Music Sales Grow, but at Slower Rate", The New York Times, at World Business (Jan. 25. 2008)]

The Luck of Lucien

Yo, "-Tip", what's wrong with Snails?

Today, the French government signed an agreement with content industries and ISP providers, where a centralized authority will receive complaints from content owners and will send messages via ISPs to end users infringing copyright. (Financial Times article; New York Times Article.) Under the agreement, ISPs will issue warning messages to internet users allegedly downloading files illegally. If users ignore those messages, their accounts could be suspended or closed altogether.

According to French President Sarkozy, this is "the advent of a civilised internet". The roots of this groundbreaking effort are in the Olivennes Commission.

What does this mean for private enforcement of intellectual property rights, like the USA's "notice and take-down" requirements under the DMCA?