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IP/Entertainment Case Law Updates

SA Music LLC v. Apple, Inc.

In copyright lawsuit over third-party sales of pirated music on Apple’s iTunes Store, district court holds (1) Apple may be liable for merely making infringing recordings available for purchase on iTunes Store, (2) issue of whether Apple’s conduct was “volitional” under Copyright Act must go to jury, and (3) no reasonable jury could find that any infringing conduct by Apple was willful.

Plaintiffs, a collection of heirs and assignees of eminent songwriters Harold Arlen, Ray Henderson and Harry Warren, filed a copyright infringement action against Apple Inc. and an independent group of third-party distributors that plaintiffs alleged sold pirated sound recordings through Apple’s iTunes Store. Plaintiffs and Apple cross-moved for summary judgment on various liability issues. In particular, Apple argued that it was entitled to summary judgment on liability because “making available” the recordings containing plaintiffs’ musical compositions, as opposed to actually selling them, is not a cognizable theory of infringement under the Copyright Act. The parties also cross-moved for summary judgment on the issue of whether any infringement by Apple was willful, which would allow plaintiffs to seek heightened statutory damages. 

Plaintiffs argued that Apple infringed their copyrights in four ways: (1) reproducing the works by making copies of files on its servers, (2) distributing the works by making the recordings available for purchase on iTunes, (3) distributing the works through actual sales and (4) importation. Apple argued, and the district court ultimately agreed, that summary judgment was not warranted in light of genuine disputes about whether Apple’s conduct was “volitional” under the Copyright Act. Explaining that “volitional conduct” in the context of direct copyright infringement is akin to the requirement of proximate causation in tort, the court relied on Ninth Circuit precedent to hold that direct copyright liability for website owners requires their active involvement in the alleged infringement. Plaintiffs introduced no evidence that Apple, beyond passively hosting content uploaded by others, exercised control or discretion over the infringing content or itself instigated unlawful distribution. Thus, the court concluded, a jury must decide whether Apple engaged in volitional conduct supporting liability for copyright infringement.

The court also rejected Apple’s contention that plaintiffs’ “making available” theory of infringement is not cognizable under the Copyright Act. The court reviewed divided judicial precedent, as well as international treaties, legislative history and Copyright Office guidance, ultimately concluding that the exclusive right to distribute copyrighted works under Section 106 of the Copyright Act encompasses the right to make those works available for consumers to peruse and purchase from others. The court therefore permitted plaintiffs’ claims to proceed to a jury under a “making available” theory of liability.

On the issue of willfulness, the court granted summary judgment to Apple, holding that the iTunes Store operator had no actual knowledge of or reckless disregard for, and was not willfully blind to, the allegedly infringing activity. Relying heavily on the Ninth Circuit’s decision in VHT, Inc. v. Zillow Group, Inc., the court primarily based its decision on two undisputed facts—first, that Apple requires all users that upload recordings to the iTunes Store to contractually represent that they possess the necessary rights to do so, and second, that Apple maintains a notice-and-takedown procedure pursuant to the Digital Millennium Copyright Act (DMCA) to combat infringement. The court reasoned that Apple reasonably and in good faith relied on uploaders’ guarantees, precluding a finding of willfulness. Furthermore, Apple’s notice-and-takedown system demonstrated that Apple did not recklessly disregard the risk of hosting infringing content, and plaintiffs’ failure to avail themselves of that system before filing suit strongly indicated that Apple lacked actual knowledge. The court also rejected plaintiffs’ arguments that Apple should have known that these specific third-party distributors presented a higher risk, or that Apple could have done more to combat infringement generally, noting that such evidence demonstrates negligence at best—not the higher mental state required to show willfulness.

Summary prepared by Sarah Schacter and Jordan Meddy 

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