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IP/Entertainment Case Law Updates

Concord Music Group, Inc. v. X Corp.

District court dismisses music publishers’ claims against X Corp. for direct and vicarious copyright infringement related to unauthorized publication and distribution of copyrighted music on X (formerly known as Twitter) but allows partial claims for contributory infringement based on allegations of platform’s disparate and unequal discipline of its verified users and serial infringers.

Plaintiffs, a group of 17 music publishers, sued X Corp. for direct, contributory and vicarious infringement. Plaintiffs’ allegations stem from the growing use of X Corp.’s social media platform X (formerly known as Twitter) to publish multimedia content, including videos with copyrighted music. X Corp. moved to dismiss and contended that it could not be held liable for infringement under any of the three theories plaintiffs put forth. 

Instead of litigating whether X users sometimes engage in copyright infringement—a fact that neither party disputed—plaintiffs’ claims focused on the extent to which X Corp. encouraged or otherwise contributed to the infringement. First, plaintiffs argued that the social media platform’s inclusion of a “media” tab that directs users to seek out tweets including videos and sound recordings, many of which were not licensed by the artist or publisher, encouraged infringement. Second, plaintiffs alleged that X monetizes the infringement by surrounding the infringing tweets with “promoted” tweets or tweets by “verified” accounts, which users pay the platform to promote. Third, according to plaintiffs, X excessively delayed removing or disabling infringing content following notifications from the National Music Publishers’ Association regarding over 300,000 tweets that included infringing material. Finally, plaintiffs alleged that X uses its “suspension” power sparingly and that the platform is much less likely to suspend larger verified accounts because those accounts can generate more traffic and revenue. 

As to direct infringement, the court agreed with X Corp. that the infringement identified did not involve affirmative conduct by X Corp. or its employees in “transmitting” plaintiffs’ work, which is required for direct liability, and the court dismissed the claim. The court focused its analysis on the Copyright Act’s Transmit Clause and whether featuring this music or these performances on X constituted transmitting or performing the copyrighted work publicly. Regardless of the ultimate legality of the platform’s activity, the court found that X’s actions were “qualitatively distinct” from the kind of “transmission” the Copyright Act is designed to prevent. 

The court distinguished the present case from the Supreme Court’s 2014 decision in American Broadcasting Companies, Inc. v. Aereo, Inc., which held that a streaming service performed copyrighted works publicly when it caused its own antennas to receive broadcast television signals and transmit them to its own subscribers without authorization from the owners of the rights to the works being transmitted. Unlike the streaming service in Aereo, whose sole purpose was to transmit the subject content, X is a social media site with numerous other uses. Additionally, whereas in Aereo the defendant itself was responsible for redirecting the copyrighted works from their typical channels of distribution to the streaming service, the infringement and transmittal thereof on X was initiated by the third-party users, not X. The court also pointed to the distinction in copyright law between active participants in infringement and parties that “merely provide the means through which infringement is accomplished,” ultimately concluding that the latter are better suited for theories of secondary liability than for direct infringement. 

The court turned next to plaintiffs’ claims for contributory infringement. Although it rejected plaintiffs’ theory that X Corp. was contributorily liable for all the infringement on its platform because X Corp. enabled an infringement facilitation device, the court did not dismiss plaintiffs’ contributory infringement claims in their entirety. Instead, the court allowed certain of plaintiffs’ claims regarding three specific potentially unlawful practices to proceed. First, the court was particularly troubled by the allegations that X enforces its policies less stringently against individuals who pay for its “verified service” and noted that this selective enforcement could be characterized as fostering infringement. Second, the court explained that unreasonable delays in responding to takedown notices potentially amounted to “‘purposeful, culpable ... conduct’ intended to enable infringement.” Third, in the event that X withheld enforcement of its policies against “serial infringers” that “brazenly us[e] the platform as an infringement tool,” X Corp. could be held contributorily liable. 

Finally, the court dismissed plaintiffs’ vicarious infringement claim because X Corp. did not have the right or ability to supervise and control the infringing activities. The court agreed that plaintiffs failed to allege that X had the authority or ability to oversee users’ drafting of the infringing tweets or the ability to edit its users’ tweets in real time, or that X Corp. had the power to oversee users’ efforts to obtain authorization from copyright holders before tweeting. Additionally, X Corp.’s oversight over its users and platform did not convert a customer relationship into an agent or employee relationship. The court also discussed the “right to stop or limit” in the context of Sony Corp. of Am. v. Universal City Studios, Inc., finding that liability would not attach merely because X Corp. did not cease making its platform and services available to users that engaged in copyright infringement through the platform. Although the court ultimately dismissed plaintiffs’ vicarious infringement claim, it clarified that the dismissal would not bar plaintiffs from relying on the evidence they would offer of X Corp.’s control over its platform users as a means of supporting the contributory infringement claim. 

Summary prepared by Melanie Howard and Elena De Santis

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