Stock Music Library Wins DMCA Safe Harbor Defense–Hempton v. Pond5

Gordon Hempton, an “acoustic ecologist,” creates sound clips of nature. Pond5 runs a stock library–similar to an online marketplace–consisting of 20M content items, including music clips, uploaded by 58,000 registered users. “ckennedy342” is a Pond5 uploader who, it turns out, is a serial infringer from Pakistan who Pond5 had previously banned twice. Hempton and his legal counsel contacted Pond5 about allegedly infringing activity but did not send any 512(c)(3) takedown notices. When the takedown letter finally came, it demanded that Pond5 delete all of ckennedy342’s uploads. Even though the letter didn’t satisfy 512(c)(3), Pond5 complied the next day.

Hempton nevertheless sued Pond5 for copyright infringement, “claiming that: (1) 655 of his audio files were uploaded to the website; (2) 86 of those files were purchased by Pond5 customers; and (3) the 86 files were downloaded a total of 146 times.” The court grants Pond5 summary judgment on its 512(c) defense.

Like in the MP3Tunes case, the plaintiff zeroes in on the “terminate repeat infringer” prong. Hempton argues that Pond5 didn’t adequately disclose its policy because Pond5 only says it will terminate users for any violation of the user agreement and doesn’t use the words “repeat infringer.” The court says Pond5’s onsite disclosures are sufficient.

Hempton also argued that Pond5 didn’t adequate implement its policy because the Pakistani kept coming back. Pond5 successfully responds that it had received 20 DMCA notices from 2012-16 and honored all of them, and it removed the ckennedy342 account 1 day after Hempton’s takedown letter.

Hempton also claimed that Pond5 had red flags of infringement. In support of his argument, he showed that ckennedy342 used the same Pakistani IP addresses as the prior banned accounts; and had linked a Paypal account registered in the name of one of the suspended accounts. Pond5 replied that it didn’t do IP address checks at the relevant time period, hadn’t researched the prior accounts enough to determine the registrant was in Pakistan, and didn’t check PayPal account names. The court says this evidence of red flags is less than the evidence rejected in the Veoh case.

Hempton argued that Pond5 had a direct financial interest in the infringements, as evidenced by its 50% cut of licensing revenue. The court restates Hempton’s argument: “Plaintiff offers a reading of DMCA that simply collecting revenue from the sale of infringing content, without more, is sufficient to run afoul of the financial benefit prong.” The court rejects the argument because Pond5 didn’t try to profit from infringement:

there is no evidence that any customer has ever visited because it hosts infringing content, nor is there any evidence that Pond5 has ever promoted infringing content. Likewise, there is no evidence that Pond5 markets by pointing to infringing conduct, nor is there evidence that provides a significant source of infringing content in the marketplace. In short, there is a complete absence of any causal connection between any alleged financial benefit and any infringing activity.

This case is a fine example of how the DMCA online safe harbor still helps….sometimes. Pond5 might have been a slightly more complicated defendant because it takes a cut of its contributors’ sales, but otherwise, this was a textbook 512(c) case where the plaintiff never sent a proper takedown notice and still sued even though the defendant removed the infringing items within 1 day of a defective takedown notice. So let’s hear it for 512(c) still working for cases like this. Unfortunately, we’re seeing far too many other kinds of cases–and far too many cases where the cost of litigation is bankrupting defendants–to celebrate 512(c) as a robust safe harbor.

Case citation: Hempton v. Pond5, Inc., 2016 WL 6217113 (W.D. Wash. Oct. 25, 2016)

Another recent copyright case involving stock music: Leopona v. Cruz for President