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IP/Entertainment Case Law Updates

Gardner v. CafePress, Inc.

District court denies defendant website’s motion for summary judgment on plaintiff’s copyright infringement claim, finding that website was not entitled to safe-harbor defense under 17 U.S.C. § 512(c) because material issues of fact existed as to whether website was service provider, whether deletion of metadata interfered with standard technical measures and whether it directly benefited from the infringement.

Defendant CafePress operates a website that allows users to upload images for printing on products that others can purchase, such as T-shirts. While CafePress may remove images, it does not choose which images are uploaded. Rather, users direct the uploading of images, which are then stored on servers. The uploading process is automated, so no individual sees or approves images, and images may be automatically formatted to print properly. This automated process also deletes metadata regarding copyright information. Products are sold in three ways. First, they can be sold from a user’s virtual shop. Second, they can be sold in the CafePress Marketplace, over which CafePress has sole and absolute discretion to determine which products are sold, modify designs and determine price while paying only a commission to the user. Third, products can be sold through a “feed” to Amazon and eBay, which involves CafePress’s providing content to those websites.

Plaintiff alleged that CafePress infringed his copyright in an image titled “Alaska Wildlife” that was uploaded by one of CafePress’s users and printed on various products for sale. Plaintiff later identified three other images uploaded by a second user and printed on products for sale. CafePress sought summary judgment on plaintiff’s copyright claim, asserting the safe-harbor defense under 17 U.S.C. § 512(c). In the alternative, CafePress sought partial summary judgment on plaintiff’s claim for statutory damages and attorneys’ fees because plaintiff failed to register his copyrights before the alleged infringement commenced.

At the outset, the court explained that the safe-harbor defense requires three layers of analysis: (1) whether CafePress is a “service provider” under 17 U.S.C. § 512(k), (2) whether CafePress satisfies § 512(i)’s prerequisites, and (3) whether CafePress satisfies § 512(c)’s requirements.

First, for purposes of § 512(c), “service provider” is broadly defined as “a provider of online services or network access, or the operator of facilities therefor.” The court explained, however, that an online service that directly sells, rather than facilitates the sale of, products likely falls outside this definition. The court found that CafePress went beyond facilitating the sale of its users’ products by directly selling the products through the Marketplace, determining retail prices and paying users only a commission. Thus, the court declined to conclude, as a matter of law, that CafePress is a “service provider.”

Second, under § 512(i), a service provider must (1) adopt and reasonably implement a copyright infringement policy that provides for the termination of repeat infringers, and (2) accommodate and not interfere with “standard technical measures.” Plaintiff did not dispute the first prong. As to the second prong, the court explained that “standard technical measures” include technical measures that copyright owners use to identify or protect their works, that have been developed pursuant to a broad consensus of copyright owners and service providers, that are available to any person, and that do not impose substantial costs on service providers or burdens on their networks. Plaintiff argued that CafePress failed to meet this second prong because metadata is deleted when images are uploaded. CafePress argued that metadata is deleted as part of the automated process and that plaintiff had not offered any evidence that metadata had been developed as a copyright protection pursuant to a broad consensus of copyright owners and service providers. The court found that, at a minimum, plaintiff offered sufficient evidence to create a dispute of material fact as to whether the deletion of metadata constituted a failure to accommodate and/or interfere with standard technical measures, so as to preclude finding as a matter of law that CafePress satisfied the prerequisites of § 512(i).

Third, under §512(c), a service provider is not liable for copyright infringement when the service provider (1) does not have actual knowledge of infringement or facts making infringement apparent, (2) has the “right and ability to control” its users’ activity and does not receive a financial benefit directly attributable to the infringing activity, (3) responds expeditiously to remove and disable access to infringing material upon notice of infringement, and (4) has designated an agent to receive notices of infringement. Plaintiff did not dispute either of the last two prongs.

While plaintiff did not dispute that images are uploaded by and stored at the direction of users, he contended that CafePress is not entitled to the safe-harbor defense as to its non-storage-related activities. The court explained that the safe harbor may apply to activities beyond storage but found that CafePress’s Marketplace activities precluded summary judgment because CafePress’s policies on determining which images to sell and modify, setting prices, and choosing which products are fed to Amazon and eBay go beyond facilitating storage and access. Thus, the court concluded that it could not find that CafePress undertook these activities “by reason of” its users’ uploading the images.

Lastly, the court explained that a service provider receives a direct financial benefit when infringing activity constitutes a draw for users, not just an added benefit. Plaintiff offered no evidence that the alleged infringement was a draw for subscribers, and the court found that the evidence demonstrated that CafePress actually deterred infringement. However, because CafePress engaged in non-“service provider” activities through its Marketplace and “feeds,” the court could not conclude that it received no financial benefit from the allegedly infringing activities. Further, because CafePress was actively involved in listing and selling products offered in its Marketplace, the court could not conclude that it did not have the right and ability to control the allegedly infringing activity. CafePress’s failure to meet § 512(c)’s requirements, however, led the court to conclude that it was not entitled to summary judgment on plaintiff’s copyright claim.

Turning to CafePress’s request in the alternative for partial summary judgment on plaintiff’s entitlement to statutory damages and attorney fees, the court explained that a plaintiff is barred from statutory recovery for infringement of an unpublished work commenced before its registration or infringement commenced after its first publication but before registration. The court granted summary judgment to CafePress on plaintiff’s claim to statutory damages and attorney fees.

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