BWP Media USA v. Clarity Digital Group , 820 F.3d 1175 ( 2016 )

FILED
United States Court of Appeals
Tenth Circuit
April 25, 2016
PUBLISH Elisabeth A. Shumaker
Clerk of Court
UNITED STATES COURT OF APPEALS
TENTH CIRCUIT
BWP MEDIA USA, INC., d/b/a
Pacific Coast News; NATIONAL
PHOTO GROUP, LLC,
Plaintiffs - Appellants,
v. No. 15-1154
CLARITY DIGITAL GROUP, LLC,
n/k/a AXS DIGITAL MEDIAL
GROUP, LLC,
Defendant - Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
(D.C. No. 14-CV-00467-PAB-KMT)
Craig B. Sanders (and Jonathan M Cader, with him on the briefs) of Sanders Law,
PLLC, Garden City, New York, for Plaintiffs - Appellants.
Steven D. Zansberg of Levine Sullivan Koch & Schulz, LLP, Denver, Colorado,
for Defendant - Appellee.
Before KELLY, MATHESON, and MORITZ, Circuit Judges.
KELLY, Circuit Judge.
Plaintiff-Appellant BWP Media USA, Inc. d/b/a Pacific Coast News and
National Photo Group, LLC (“BWP”) appeals from the district court’s summary
judgment in favor of Defendant-Appellee Clarity Digital Group, LLC n/k/a AXS
Digital Media Group, LLC (“AXS”). See BWP Media USA Inc. v. Clarity Dig.
Grp., LLC, No. 14-cv-00467-PAB-KMT, 2015 WL 1538366 (D. Colo. Mar. 31,
2015). BWP owns the rights to photographs of various celebrities. In February
2014, BWP filed a complaint alleging that AXS infringed its copyrights by
posting 75 of its photographs without permission on AXS’s website,
Examiner.com. 1 AXS asserted it was protected from liability by the safe harbor
provision of the Digital Millennium Copyright Act (“DMCA”) and moved for
summary judgment. The district court agreed. Exercising jurisdiction pursuant to
28 U.S.C. § 1291, we affirm.
Background
A. The DMCA
Recognizing the need “to update domestic copyright law for the digital
age,” Congress enacted the DMCA. Viacom Int’l, Inc. v. YouTube, Inc., 676
F.3d 19, 26 (2d Cir. 2012). Section 512 of the DMCA contains a safe harbor
provision protecting online and internet service providers (“ISPs”) from monetary
1
In response to a July 2013 letter by BWP notifying AXS of the copyright
violations, AXS promptly removed the photographs and notified BWP. J.A. 99.
-2-
liability, only allowing for limited injunctive relief, when copyright infringement
occurs through use of the service. 17 U.S.C. § 512(c). The safe harbor provision
is designed to “preserve[] strong incentives for service providers and copyright
owners to cooperate to detect and deal with copyright infringements,” while
simultaneously providing “greater certainty to service providers concerning their
legal exposure for infringements that may occur in the course of their activities.”
H.R. Rep. No. 105-551, pt. 2, at 49-50 (1998). To benefit from safe harbor
protection, the ISP must first show that the infringing content was stored “at the
direction of a user.” 17 U.S.C. § 512(c)(1). Once this is established, there are
numerous factors which must be satisfied to come within the protection of the
safe harbor. 2 Specific to this case, an ISP will not qualify for safe harbor
2
The statute provides:
(c) Information residing on systems or networks at direction of users. —
(1) In general.—A service provider shall not be liable for monetary
relief, or, except as provided in subsection (j), for injunctive or other
equitable relief, for infringement of copyright by reason of the
storage at the direction of a user of material that resides on a system
or network controlled or operated by or for the service provider, if
the service provider—
(A)(i) does not have actual knowledge that the material or an activity
using the material on the system or network is infringing;
(ii) in the absence of such actual knowledge, is not aware of
facts or circumstances from which infringing activity is apparent; or
(iii) upon obtaining such knowledge or awareness, acts
expeditiously to remove, or disable access to, the material;
-3-
protection if it had either actual knowledge of the infringement or knowledge of
facts or circumstances from which infringing activity is apparent. Id.§ 512(c)(1)(A)(i)-(ii). Additionally, if the ISP became aware of the infringement
and did not act expeditiously to remove or disable access to the content, it cannot
qualify for safe harbor protection. Id. § 512(c)(1)(A)(iii).
B. Infringing Activity on Examiner.com
Examiner.com characterizes itself as a “dynamic entertainment, news and
lifestyle network that serves more than 20 million monthly readers across the U.S.
and around the world.” About Us, Examiner.com (Mar. 18, 2016, 9:10AM),
http://www.examiner.com/About_Examiner. Rather than hiring a centralized
writing staff, the content generated on Examiner.com is created by independent
contractors, called “Examiners,” all over the world. To become an Examiner, the
writer must fill out an application including a proposed topic and a short writing
sample. Examiner.com evaluates the writing sample, conducts a background
check, and, assuming the application is approved, the Examiner enters into a
(B) does not receive a financial benefit directly attributable to the
infringing activity, in a case in which the service provider has the
right and ability to control such activity; and
(C) upon notification of claimed infringement as described in
paragraph (3), responds expeditiously to remove, or disable access
to, the material that is claimed to be infringing or to be the subject of
infringing activity.
17 U.S.C. § 512(c).
-4-
contract entitled the Independent Contractor and Agreement License with
Examiner.com. The contract expressly provides that: (1) Examiners are
independent contractors, not employees 3 and (2) copyright infringement is
prohibited. 4 Because it was a group of Examiners that posted the infringing
content on Examiner.com, AXS asserted it was protected under the DMCA’s safe
harbor provision.
On appeal, BWP argues that AXS should not be protected by § 512’s safe
harbor for two reasons. First, BWP argues AXS cannot get past the threshold
requirement that the infringing content be stored “at the direction of a user.” 17
U.S.C. § 512(c)(1). Specifically, BWP argues that: (1) Examiners are not “users,”
but (2) even if Examiners are “users,” AXS directed the Examiners to post the
infringing content. Second, BWP claims that even if AXS satisfies this threshold,
safe harbor protection does not apply because AXS had actual or circumstantial
knowledge of the infringement. Id. § 512(c)(1)(A)(i)-(ii). We review the district
court’s grant of summary judgment de novo. Timmons v. White, 314 F.3d 1229,
3
The contract states, “You will provide the Services hereunder as an
independent contractor and not as the agent, employee, legal representative,
partner, or joint venturer of Examiner.com.” J.A. 138.
4
The contract provides: (1) “You must have permission from the
owner/copyright holder of any content before including it on your Web Page,
unless it was provided by Examiner.com;” (2) “Do not include any copyrighted
material on our site (including text, photos, video, audio, or anything else)
without the permission of the owner;” and (3) “You also may not post any content
that infringes any . . . copyright.” J.A. 134; 141.
-5-
1232 (10th Cir. 2003). We reject each argument raised by BWP.
Discussion
A. Section 512’s threshold requirement, that the infringing content be
stored at the direction of a “user,” is satisfied.
The DMCA’s safe harbor requires that the infringing content be stored at
the direction of a “user.” BWP attempts to divide this requirement into two
distinct inquiries, asking who is a “user” and who directed the infringing content
to be stored. As explained below, the key to interpreting this requirement is not
to isolate certain words but rather, to take the provision as a whole, giving
meaning to each word in context.
1. The word “user” in the DMCA should be interpreted according to its
plain meaning.
We are often tasked with interpreting complex statutory language but, when
“the statutory language is clear, our analysis ends and we must apply its plain
meaning.” Thomas v. Metro. Life Ins. Co., 631 F.3d 1153, 1161 (10th Cir. 2011).
We need not torture “the language of the statute when a simple, straightforward
reading obviates the necessity of making such semantic contortions.” Equal
Emp’t Opportunity Comm’n v. Louisville N. R.R. Co., 505 F.2d 610, 619-20 (5th
Cir. 1974); see also Resolution Tr. Corp. v. Fed. Sav. and Loan Ins. Corp., 25
F.3d 1493, 1500 (10th Cir. 1994). The word “user” in the DMCA is
straightforward and unambiguous. Simply put, a “user” is “one that uses.”
-6-
Merriam-Webster’s Collegiate Dictionary 1297 (10th ed. 2001). In the DMCA
context, we agree with the district court that the term “‘user’ describes a person
or entity who avails itself of the service provider’s system or network to store
material.” BWP Media USA Inc., 2015 WL 1538366 at *6. We note that
opinions interpreting the DMCA’s safe harbor provisions have not exhaustively
defined the term, suggesting apparent clarity. See, e.g., UMG Recordings, Inc. v.
Shelter Capital Partners LLC, 718 F.3d 1006, 1015-20 (9th Cir. 2013); Viacom
Int’l, Inc., 676 F.3d at 38-40; Perfect 10, Inc. v. CCBill LLC, 488 F.3d 1102,
1117-18 (9th Cir. 2007).
In an effort to narrow the word “user,” BWP suggests the ordinary meaning
of the term would protect every ISP from liability for copyright infringement.
See Aplt. Br. at 17. BWP has offered several alternative definitions of “user” – at
one point suggesting “user” should exclude an ISP’s owners, employees, and
agents, at another point suggesting “user” should exclude anyone who entered
into a contract and received compensation from an ISP.
Putting aside, for a moment, that BWP offers no legal authority to support
either definition, we need not look far to reject the argument that a plain language
definition of “user” will protect every ISP from liability for copyright
infringement. 5 The term “user” cannot be read in isolation, it must be read in
5
BWP relies upon three cases ostensibly supporting its definition of “user”
as excluding employees, agents, or owners. But none of the cases analyze or
-7-
conjunction with the remainder of the safe harbor provision. See King v.
Burwell, 135 S. Ct. 2480, 2489 (2015). Safe harbor protection is conditioned on
various factors: An ISP will only qualify for safe harbor protection when it can
show, inter alia, that the content was stored at the direction of a “user,” that the
ISP had no actual knowledge of the infringement, that there were no surrounding
facts or circumstances making the infringement apparent, or that upon learning of
the infringement, the ISP acted expeditiously to remove or disable access to the
infringing material. See 17 U.S.C. § 512(c)(1)(A).
BWP also argues that Examiners are agents of AXS and therefore not
“users.” No evidence supports the notion that the Examiners are agents. Thus,
the argument is contrary to the language of the contract, our interpretation of the
term “user,” and agency principles generally. As previously stated, a “user” is
anyone who uses a website — no class of individuals is inherently excluded.
Moreover, the Examiners are not agents – the contract language explicitly
designates Examiners as independent contractors: “You will provide the Services
support the suggested definition of “users.” See UMG Recording, Inc. v. Escape
Media Grp., Inc., No. 11-civ-8407, 2014 WL 5089743 (S.D.N.Y. Sept. 29, 2014)
(safe harbor provision never discussed or raised as an affirmative defense);
Capitol Records, Inc. v. MP3tunes, LLC, 48 F. Supp. 3d 703, 714-18 (S.D.N.Y.
2014) (holding that when executives have actual knowledge of the specific
instances of infringement they lose the safe harbor protection); Capitol Records,
LLC v. Vimeo, LLC, 972 F. Supp. 2d 500, 518 (S.D.N.Y. 2013) (holding that the
determinative consideration was whether the infringing postings were made by
employees at the direction of their employer, not whether it was an employee who
had posted the infringing material).
-8-
hereunder as an independent contractor and not as the agent, employee, legal
representative, partner, or joint venturer of Examiner.com.” J.A. 138. We may
rightfully consider that language. United States v. New Mexico, 581 F.2d 803,
808 (10th Cir. 1978).
Finally, BWP argues that even if there is no actual agency relationship, the
Examiners had apparent authority and therefore should be considered employees
of AXS under Community for Creative Non-Violence v. Reid, 490 U.S. 730, 741
(1989). There are numerous reasons to reject this argument. First, evidentiary
insufficiency. As the district court noted, we lack evidence of an agency
relationship or any apparent authority. See Restatement (Third) of Agency § 3.03
cmt. b (Am. Law. Inst. (2015)) (“[A]n agent’s apparent authority originates with
expressive conduct by the principal toward a third party . . . [t]he fact that one
party performs a service that facilitates the other’s business does not constitute
such a manifestation.”).
Second, even if the Examiners have apparent authority, and they do not,
this does not equate to an employee-employer relationship under Reid. 490 U.S.
at 741. In Reid, the Supreme Court analyzed an oral agreement between two
parties and at one point in its analysis recognized that because “Congress
intended terms such as ‘employee,’ ‘employer,’ and ‘scope of employment’ to be
understood in light of agency law, we have relied on the general common law of
agency, rather than on the law of any particular State, to give meaning to these
-9-
terms.” Id. at 740. While BWP correctly identifies that Reid involves an analysis
of copyright law generally and that Reid dealt minimally with agency law issues,
nowhere in Reid is there anything to support the assertion that apparent authority
would automatically transform an agent into an employee. Aplt. Br. at 42.
Third, as previously discussed, simply because someone is an employee
does not automatically disqualify him as a “user” under § 512. Therefore, even if
we were to ignore the contract language and accept both of BWP’s flawed legal
assertions — AXS would still not be automatically disqualified from the safe
harbor.
2. The infringing material was not stored at the direction of AXS.
The key to limiting the safe harbor provision and preventing the creation of
the “lawless no-man’s-land,” Aplt. Br. at 17, is to look to the language
constraining the word “user.” The relevant question isn’t who is the “user,” but
rather, who directed the storage of the infringing content? See 17 U.S.C.
§ 512(c)(1). Key to this provision is control. There is no protection under § 512
when the infringing material is on the system or network as a result of the ISP’s
“own acts or decisions.” H.R. Rep. No. 105-551, pt.2, at 53 (1998). When an
ISP “actively encourag[es] infringement, by urging [its] users to both upload and
download particular copyrighted works,” it will not reap the benefits of § 512’s
safe harbor. Columbia Pictures Indus., Inc. v. Fung, 710 F.3d 1020, 1043 (9th
Cir. 2013). However, if the infringing content has merely gone through a
-10-
screening or automated process, the ISP will generally benefit from the safe
harbor’s protection. See, e.g., Shelter Capital Partners LLC, 718 F.3d at 1020;
IO Grp., Inc. v. Veoh Networks, Inc., 586 F. Supp. 2d 1132, 1146-48 (N.D. Cal.
2008); CoStar Grp., Inc. v. LoopNet, Inc., 164 F. Supp. 2d 688, 701-02 (D. Md.
2001), aff’d, 373 F.3d 544 (4th Cir. 2004).
BWP argues that even if Examiners are “users,” AXS cannot rely upon the
safe harbor because it directed the Examiners to post the infringing content.
According to BWP, AXS created this control by issuing instructions on the
general topics Examiners were to write about, actively soliciting new articles, and
suggesting that Examiners include slide shows or pictures to accompany articles.
BWP, however, fails to explain how this evidence crosses the chasm between
encouraging the Examiners to post pictures with articles and encouraging
Examiners to post infringing content. Not only did AXS make clear copyright
infringement was prohibited, it also provided Examiners with licensed
photographs to accompany their articles. No reasonable trier of fact could find
that the infringement was at the direction of AXS.
3. AXS did not have actual or circumstantial knowledge of the
copyright infringement and therefore, is not disqualified from safe
harbor protection.
Because AXS cleared the initial hurdle requiring the content be stored at
the direction of a “user,” the next step is to determine whether AXS has been
disqualified from the safe harbor by any of the subsequent provisions. Relevant
-11-
to this case, if the ISP has actual or circumstantial knowledge of the infringing
activity, it does not qualify for safe harbor protection. See 17 U.S.C.
§ 512(c)(1)(A)(i)-(ii).
a. AXS was not willfully blind to the infringement and therefore cannot
be said to have actual or circumstantial knowledge of the
infringement.
Because photographs of celebrities are typically protected by copyright and
AXS knew celebrity images were being posted on Examiner.com, BWP asserts
that AXS was willfully blind to the copyright infringement. BWP argues that “by
requiring Examiners to post (specific) content to the Website (periodically under
threat of termination), Defendant engages in precisely the kind of purposeful
conduct that brought about the infringement.” Aplt. Br. at 36. This statement is
contrary to both the evidence in the record and cases interpreting the DMCA. As
previously stated, there is nothing in the record showing that AXS encouraged the
Examiners to post infringing material. There is also nothing in the record
showing that AXS ignored signs or circumstances suggesting copyright
infringement was occurring on Examiner.com. Although BWP is correct in
stating AXS encouraged Examiners to incorporate photographs into articles, AXS
provided Examiners a legal means by which to accomplish this. Examiners have
access to a photo bank full of images for which AXS owns the licenses. Prior
cases also clearly establish that “merely hosting a category of copyrightable
content, such as music videos, with the general knowledge that one’s services
-12-
could be used to share infringing material, is insufficient to meet the actual
knowledge requirement under § 512(c)(1)(A)(i).” Shelter Capital Partners LLC,
718 F.3d at 1022-23 (“For the same reasons, we hold that [an ISP’s] general
knowledge that it hosted copyrightable material and that its services could be
used for infringement is insufficient to constitute a red flag.”).
b. Agency principles cannot be used to impute the Examiners’
knowledge to AXS.
In a final attempt to impose liability on AXS, BWP argues, for the first
time, that the safe harbor provision is inapplicable because agency principles
would impute the Examiner’s knowledge onto AXS, making it liable for their
actions. We require that “[f]or each issue raised on appeal, all briefs must cite
the precise reference in the record where the issue was raised and ruled on.” 10th
Cir. R. 28.2(C)(2). BWP’s briefs fail to show where the argument of imputed
knowledge was raised and ruled upon below and therefore, this argument is
waived. 6 See, e.g., ClearOne Commc’ns, Inc. v. Bowers, 651 F.3d 1200, 1213
(10th Cir. 2011).
AFFIRMED.
6
Moreover, despite BWP’s statement at oral argument that this issue was
fully briefed in a memorandum of law, our review of the record suggests
otherwise.
-13-