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IP/Entertainment Case Law Updates

Atlantic Recording Corporation, et al. v. Howell

The federal district court in Arizona denied the plaintiff record companies’ motion for summary judgment in this peer-to-peer file sharing copyright infringement case on several grounds. First, the court held that the plaintiffs failed to establish unlawful “distribution” under §106(3) of the Copyright Act. The plaintiffs argued that the defendant unlawfully distributed the copyrighted works by making them available through the Kazaa file-sharing network and because the plaintiff’s agent downloaded 12 of the copyrighted sound recordings from the defendant’s computer. However, the court said that merely making a copy “available” does not constitute “distribution,” disagreeing with two recent district court decisions that held otherwise. (See Universal City Studios Prods. LLP v. Bigwood, 441 F. Supp. 2d 185 (D. Me. 2006); Motown Record Co. v. DePietro, 2007 U.S. Dist. LEXIS 11626, 2007 WL 576284 (E.D. Pa. Feb. 16, 2007)). Instead, the court noted that “[t]he general rule, supported by the great weight of authority, is that ‘infringement of the distribution right requires an actual dissemination of either copies or phonorecords’” (citing National Car Rental Sys. v. Computer Associates International, Inc., 991 F.2d 426 (8th Cir. 1993); Perfect 10, Inc. v. Amazon.com, Inc., 487 F.3d 701 (9th Cir. 2007); London-Sire Records, Inc. v. Doe 1, No. 04 cv 12434-NG (D. Mass. March 31, 2008)).

The court also disagreed with the Fourth Circuit’s decision in Hotaling v. Church of Jesus Christ of Latter-Day Saints, 118 F.3d 199 (4th Cir. 1997), in which the Fourth Circuit said a library distributed unlawful copies when it listed the work in its index or catalog system, and made the works available to the borrowing or browsing public, noting that the Ninth Circuit has not applied Hotaling to impose direct liability on someone making unauthorized copies of copyrighted works available to the public through online file-sharing systems.

The district court explained that “evidence that a defendant made a copy of a work available to the public might, in conjunction with other circumstantial evidence, support an inference that the copy was likely transferred to a member of the public. On its own, however, it does not prove that the copy changed hands. It only shows that the defendant attempted to distribute the copy, and there is no basis for attempt liability in the statute, no matter how desirable such liability may be as a matter of policy.”

The court also rejected the plaintiffs’ efforts to equate the term “distribution” (which is not defined in the Copyright Act) with “publication,” which is defined in §101 as “the distribution of copies or phonorecords of a work to the public by sale or other transfer of ownership, or by rental, lease, or lending. The offering to distribute copies or phonorecords to a group of persons for purposes of further distribution, public performance, or public display, constitutes publication.” The court stated that the plain meaning of §106(3) “requires an identifiable copy of the work to change hands in one of the prescribed ways for there to be a distribution. It is untenable that the definition of a different word in a different section of the statute was meant to expand the meaning of ‘distribution’ and liability under §106(3) to include offers to distribute. Courts should not impute such an oblique method to Congress.”

The court also held that the plaintiffs failed to show that the defendant was responsible for the distribution of the copyrighted files. The defendant admitted that he created the Kazaa account and username that the plaintiffs identified, that he installed the Kazaa file-sharing program on the computer, and that he authorized certain non-sound recording files to be shared through Kazaa. However, he denied having placed the plaintiffs’ copyrighted sound recordings in the Kazaa shared folder or having otherwise authorized sharing of those files. According to the defendant, the Kazaa program was, without his authorization, granting public access to files on his computer that were not in the shared folder. He further denied that he originally downloaded the copyrighted sound recordings through Kazaa; instead, he claimed to own compact discs containing the sound recordings at issue and to have copied the recordings to his computer for personal use. The court concluded that there exist disputed facts regarding the defendant’s responsibility for sharing the files so summary judgment is not appropriate.

Finally, the court addressed the issue of direct and secondary liability for copyright infringement, suggesting that the defendant could be liable for contributory infringement but the plaintiffs failed to provide sufficient information about the architecture of the Kazaa program to determine whether the owner of a shared folder directly infringes the works or simply provides a third-party with access to make a copy, which might constitute contributory infringement.