August 17, 2006
Can 512(f) Support an Injunction? Novotny v. Chapman
By Eric Goldman
Novotny v. Chapman, 2006 WL 2335598 (W.D. N.C. Aug. 9, 2006)
Chapman prepares a video showing how to cut women's hair. Novotny obtains a license to stream the video via the web. Later, Chapman has a change of heart and demands that Novotny stop streaming the video. Novotny refuses. Chapman then goes on a 512(c)(3) notice frenzy, sending takedown notices to Novotny's two Internet access providers, his payment service provider (PayPal) and, later, his streaming software provider (DivX). PayPal and one IAP cut off Novotny, so Novotny removed the video from his website. Novotny then turned around and sued Chapman seeking, among other things, a declaratory judgment of non-infringement and an injunction against Chapman sending more 512(c)(3) notices.
The court dismisses the injunction request easily, saying that there's no need for an injunction against further 512(c)(3) notices given that Novotny had already taken down the targeted file, which means that there is no reason why Chapman would continue to send 512(c)(3) notices. The judge appears to completely miss the point. A restriction on further 512(c)(3) notices would allow Novotny to restore the files without further fear of being cut off again. At this point, if Chapman can keep lobbing 512(c)(3) notices, Novotny can't restore the file--it would be futile, and it would jeopardize the distribution of any other content he might want to host at the same website.
However, I'm trying to find a legal basis that would support a court enjoining a putative copyright owner from continuing to issue 512(c)(3) notices. If the putative copyright owner lacks the right to send the notice, 17 USC 512(f) seems to directly apply. However, the statute is very explicit--it clearly says that if a person sends false notices, they are liable for the resulting damages. There's no reference to equitable relief, and the express reference to damages as the appropriate recourse seems to suggest that 512(f) could not support an injunction. So I can't find any statutory basis that authorizes a court to enjoin the issuance of 512(c)(3) notices. (Note that 512(j) expressly discusses injunctions, but this applies only to injunctions against service providers, not putative copyright owners.)
Despite 512(f)'s express limits on remedies, perhaps there is some other basis that enables courts to enjoin future 512(c)(3) notices. If not, maybe there should be as a way of giving content publishers more leverage than is provided by the relatively toothless 512(f) damages remedies. Based on the widespread abuses of 512(c)(3) taking place, it's become clear to me that putative defendants need stronger tools to go after over-zealous plaintiffs.
Three other observations about this matter:
* There's no reference that Novotny tried to use the 512(g) counter-notification procedures. This isn't surprising given the generally ineffectual nature of 512(g), but it does reinforce 512(g)'s deficiencies that Novotny sought judicial relief rather than the statutorily-provided extra-judicial recourse.
* Once again, 512(c)(3) notices are being sent to service providers who are not hosting content or providing bandwidth for the content's distribution--in this case, PayPal and DivX. I cannot construct a defensible theory under copyright law that would hold either PayPal or DivX liable for Novotny's infringement (compare the awful Perfect 10 v. Cybernet case with the Perfect 10 v. ccBill and Perfect 10 v. Visa cases), even with notice, yet PayPal went ahead and cut off Novotny (twice). (DivX didn't act because, by the time it got the notice, Novotny had already taken down the file). Clearly, putative copyright owners are using the 512 notification scheme to reach players far beyond those contemplated when the statute was enacted.
* In this matter, 512(c)(3) notices were used by a licensor in a commercial licensing dispute with a licensee. I'm sure this is not the first time that has happened, but I still think it is noteworthy. Typically, in commercial licensing disputes, a licensor has to go to court to force the licensee to stop, in which case a court evaluates the license terms. With 512(c)(3), the rules change in the online context--a licensor can get key service providers to "shun" the licensee and thereby enforce the license termination without a judicial interpretation of the license terms, subject only to the licensee's limited 512(f) recourse. This isn't news--we all know that 512(c) forces service providers to act as private judges, albeit one with massively skewed incentives to find for the plaintiff. Nevertheless, seeing 512 reach into private contractual arrangements still strikes me as interesting.
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A couple of comments:
1. Perhaps a straight defamation claim is the way to go. The person is sending out false statements of fact that are causing damage
2. Is there is prior restraint problem?
3. Wouldn't a declaratory ruling that the license is valid be sufficient to overcome any frivolous notices? An injunction might be preferred, but is it necessary?
Posted by: Michael Risch at August 17, 2006 04:42 PM
Perhaps you can't see the forest for the trees? A entity holding a valid license could pursue a claim for intentional interference with prospective business advantage or other related business torts against the copyright owner, obtain a judgment and possibly damages, and request a permanent injunction barring future interference, including unjustified 512(c)(3) notices. The 512(f) remedy is a post-hoc mechanism, and there is nothing to indicate that Congress intended it as an exclusive remedy that would preclude conventional remedies for subsequent activities that would violate a court order or injunction.
The plaintiff should have filed a declaratory judgment counterclaim to force the trial court to rule on the "moot" issue. You can learn valuable lessons from the procedural issues that are commonly raised in patent litigation and appeals.
Posted by: David Jaglowski at August 18, 2006 09:23 AM
Oops. I inadvertantly confused the plaintiff and the defendant, in spite of correctly calling the plaintiff the plaintiff. That does make the result rather inexplicable.
To the prior commenter: I suspect that 501(c)(3) notices would be considered to be commercial speech, if not an "act" rather than speech entirely. You should also consider that, barring appeal, the issue has been fully litigated with respect to the copyright owner.
Posted by: David Jaglowski at August 18, 2006 09:56 AM
Having finally had the opportunity to read the opinion in the case, I no longer think that the result is inexplicable.
You stated that the plaintiff sought a declaratory judgment of non-infringement and an injunction against Chapman. In fact, the court declined to issue a preliminary injunction, noting that "this injury is not likely to reoccur since the plaintiffs neither are posting the videos-at-issue on their website, nor have they cited any interest in re-posting these videos before the underlying legal issues are resolved." That seems perfectly reasonable, since the court has yet to fully consider the terms of the license, the defendant's alleged termination of the license, and the other substantive issues in the case.
I see nothing in the opinion that suggests that the court could not or would not issue an injunction if the plaintiffs prove their case.
Posted by: David Jaglowski at August 25, 2006 07:00 AM