512 Safe Harbor Applies to Content Submitted By Independent Contractors--BWP v. Examiner

512 Safe Harbor Applies to Content Submitted By Independent Contractors–BWP v. Examiner

Screen Shot 2016-05-04 at 9.34.37 AMBWP owns the rights to various celebrity photos. Examiner.com is a “entertainment, news and lifestyle network” that relies on content submitted by independent contractors confusingly called “examiners.” The Examiner’s written agreement specifies that “the examiners” are contractors, not employees. The agreements also require the contractors to obtain permission from the copyright owner before submitting content, or otherwise submit non-infringing content.

BWP asserted copyright claims based on the publication of 75 photos on the Examiner’s website. All of the photos at issue were submitted by contractors. The district court granted summary judgment in favor of the Examiner based on the DMCA’s safe harbor provisions.

Who is a “user”? On appeal, the Tenth Circuit looks to the key question of who constitutes a “user” for purposes of 512(c), the safe harbor provision for material stored “at the direction of a ‘user'”. The court looks to the dictionary and common sense definition of the term “user” and finds that a contractor can qualify as a user:

The word “user” in the DMCA is straightforward and unambiguous. Simply put, a “user” is “one that uses.” . . . 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.” . . . opinions interpreting the DMCA’s safe harbor provisions have not exhaustively defined the term, suggesting apparent clarity.

BWP argued alternately that “users” should exclude individuals receiving compensation as well as owners, employees, and agents. The court finds BWP’s payment-disqualification argument unworkable and in tension with the overall context of the safe harbor provision. The court also says that apparent authority, even if it existed, is insufficient to take the contractors out of the category of “users”.

The Infringing Material Was Not Stored at Examiner’s Direction: Another element of the safe harbor is that the material in question has to be stored “at the direction” of the user. Here, the court says the focus is on whether the intermediary “actively encouraged infringement”. BWP argued that Examiner’s suggestions as to content and instructions to the contractors demonstrated that the material was posted at Examiner’s direction (rather than the contractors’), but the court rejects this. The court says the question is whether the Examiner encouraged infringing content, and on this point, its contractual prohibition on infringing content controlled.

Did Examiner Have Actual or Circumstantial Knowledge?: A final element of the safe harbor is whether the intermediary had actual or circumstantial knowledge of the infringements. The court says that generalized knowledge of possibly infringing content is insufficient. The court also rejects BWP’s argument that agency principles impute knowledge to Examiner.

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This is a significant ruling. It’s an appellate opinion that delves into the contractor/employee distinction and determines that content posted by contractors can qualify for the safe harbor. (The discussion feels vaguely similar to the one under Section 230. See Eric’s post on Miller v. FedEx that canvasses the cases, including Delfino E. Agilent and the perhaps aberrational Lansing v. Southwest Airlines.) The court footnotes and distinguishes several rulings that all suggested a more narrow reading of the term “user”. The court does note that to the extent the contractors were employees, the result would have been different. Many litigants have realized with some pain (e.g., Grooveshark; Mp3.com) that they are responsible for content posted by their employees.

The court’s resolution of the other two safe harbor elements are intermediary-favorable, and they flow naturally from the conclusion that a contractor is a user. (Some may argue that the reasoning is circular; the court is trying to answer the question of whether the Examiner should be held liable based on contractor status and yet it relies on contractor status to find that Examiner satisfies aspects of the safe harbor.) BWP could have poked a hole in the safe harbor if it could have shown either that Examiner failed to terminate contractors who had been the repeated subject of takedown requests, or that Examiner was willfully blind to the fact that its contractors were posting infringing content. But BWP did not have evidence to support of either of these arguments, and instead it relied on a vague theory that Examiner encouraged infringing content.

This is a win that will be useful for the likes of media and content companies. It will likely be cited as one rationale for preferring sourcing content from contractors instead of employees. While classification of workers as contractors is not without risk (Uber and Lyft being the obvious examples of where such classification resulted in increased legal cost), the specter of copyright liability may be one additional reason for companies to take the contractor route.

Finally, as Eric notes, it’s interesting to see courts’ skepticism towards BWP. In that sense, maybe they are the latest iteration of Perfect 10?

Eric’s comments:

* BWP has been an active copyright litigant, and they are routinely bringing cases that raise secondary copyright infringement and 512 issues–with mixed success. We’ve blogged a few other BWP cases before (e.g., 1, 2). I wonder how this ruling may undermine BWP’s overall litigation campaign?

* This case stands pretty clearly for the proposition that even paid independent contractors can qualify as “users” for purposes of 512(c)’s application to “the storage at the direction of a user of material….” We haven’t seen many other cases interpreting who qualifies as a “user,” but this ruling opens the door for an expansive interpretation of the term. As Venkat notes, this inquiry parallels who is “another information content provider” for Section 230 purposes. In addition to the cases Venkat cites, this case reminded me of the cases asserting that moderators and super-users have agency status. The BWP ruling rejected a variety of agency-based arguments, much like those arguments frequently fail in Section 230 litigation. Nevertheless, because the definitions of agency are so plastic, agency-based arguments remain viable in both fields.

* The court puts some weight on the fact that the defendant told its contractors not to infringe (a fact also mentioned in the bonus track case discussed below). While we all know that such contractual provisions are self-serving, as well as meaningless unless the service actually tries to police them, judges seem quite interested in the provisions. For a while, cyberlawyers discouraged clients from including such provisions in user agreements because courts cited them (improperly IMO) as evidence of “right and ability to control” for vicarious copyright infringement purposes. However, at this point, it seems like these “don’t infringe” clauses are doing a lot of beneficial work for defendants; and courts are also favorably noting when these provisions are getting heightened notice (like pop-ups before submitting content that remind users not to infringe). If your user agreement doesn’t include a “don’t infringe” clause, you should add it pronto….and perhaps think of other opportune places to reiterate the “don’t infringe” message to users.

Eric’s bonus track: Another recent ruling highlights a perhaps surprising degree of judicial skepticism towards BWP’s legal posture. In BWP Media v. T&S Software (N.D. Tex. March 25, 2016), BWP sued the HairTalk forum for users submitting celebrity photos showing hair styles. HairTalk claimed to follow a notice-and-takedown system, but it made a potentially fatal mistake of not properly designating an agent for service of notice with the Copyright Office, so HairTalk categorically wasn’t eligible for 512. Nevertheless, HairTalk won on summary judgment. The direct copyright infringement claim failed because everyone agreed the photos at issue were posted by users, not HairTalk. (Cites to Hotfile and Netcom). The vicarious copyright infringement claim failed because the plaintiffs didn’t introduce sufficient evidence that HairTalk directly profited from the infringement. These rulings aren’t unprecedented, but especially in light of HairTalk’s lack of a 512 safety net, they are still noteworthy rulings for the defense.

Case citation: BWP Media USA, Inc. v. Clarity Digital Group, LLC, 2016 WL 1622399 (10th Cir. Apr. 25, 2016)

Related posts:

DMCA 512(c) Formalities Strike Again–BWP v. Hollywood Fan Sites

How The DMCA’s Online Copyright Safe Harbor Failed

Defendant Gets Attorneys’ Fees For ‘Frivolous’ DMCA Copyright Management Information Claim

More Evidence That Congress Misaligned the DMCA Online Copyright Safe Harbors–UMG v. Grooveshark (Forbes Cross-Post)

Dangerous Copyright Office Proposal to Undercut the DMCA Online Safe Harbors

Mixed DMCA Online Safe Harbor Ruling in Cloud-Based Music Locker Case–Capitol v. MP3Tunes

Photo Hosting Site Gets DMCA 512 Safe Harbor–Wolk v. Photobucket

Torrent Sites Induce Infringement and Lose DMCA Safe Harbor–Columbia v. Fung

Copyright Owner Enjoined from Sending DMCA Takedown Notices–Biosafe-One v. Hawks

DMCA Online Safe Harbor Empirical Study by Urban and Quilter

City of Heroes Lawsuit–New Ruling on False DMCA Takedown Notices

9th Circuit Sides With Fair Use in Dancing Baby Takedown Case

Two 512(f) Rulings Where The Litigants Dispute Copyright Ownership

Is Amazon Liable For IP Violations By Its Marketplace Vendors? (Forbes Cross-Post)

eBay Must Disclose User Identities In Response To 512(h) Subpoenas