IP Address Subscriber Isn’t Liable for Copyright Infringement by Users Sharing That IP Address–Cobbler v. Gonzales
Plaintiff owns copyrights to “The Cobbler” movie and is trying to enforce its rights via litigation in courts around the country. Eric previously blogged about another The Cobbler enforcement suit that didn’t turn out well for the plaintiff. In this case, Cobbler identified an IP address in Oregon associated with several downloads. Cobbler then filed a Doe complaint against the IP address. In discovery, Cobbler learned the IP address was registered to the operator of an adult foster care home. After speaking with the operator (Gonzales), Cobbler concluded that Gonzales was neither the “regular occupant . . . or the likely infringer.” The plaintiff nevertheless filed an amended complaint naming Gonzales as the sole defendant.
The district court dismissed the direct infringement claim without prejudice and dismissed the contributory infringement claim with prejudice. It gave Cobbler leave to amend to cure the deficiencies in its claim against Gonzales. Instead of amending, Cobbler re-filed its complaint without modification but named the IP address instead of Gonzales. The trial court issued a show cause order threatening to dismiss the claims for failure to cure the deficiencies and failure to identify an unknown party in a timely manner. Cobbler then voluntarily dismissed. Gonzales requested entry of judgment and fees, both of which the district court awarded.
On appeal, the 9th circuit affirmed dismissal of the claims on the merits. Alleging only that the IP address was associated with the infringements does not satisfy the bare minimum required to plead infringement. Cobbler was aware that its evidentiary support felt short, as it admitted that it did not obtain information sufficient to identify a specific person as an infringer.
The court also affirms dismissal on the claim for contributory infringement. The court says that being a subscriber does not fit neatly within the framework of prior infringement cases, with Grokster on one end, and Amazon on the other. Nevertheless, the court says similar principles apply, and there are two possible routes of liability. Liability can be found based on either:
- actively encouraging infringements through specific acts
- distributing a product that does not have substantial or commercially significant non-infringing uses
The second avenue is clearly not satisfied here. The court also concludes that there are insufficient allegations of specific acts that can be characterized as active encouragement or inducement. Gonzales did not do anything (beyond simply making available the home’s wireless network) to encourage or induce infringement. The court says that Cobbler’s position—that a subscriber has to secure their network or be held liable—would create a world none of us would want to see: where you couldn’t easily use wireless access when visiting a family member’s or friend’s house.
The court also affirms the $17k+ fee award against Cobbler. The district court has discretion to award fees, and the court properly held that Cobbler took a position that was “objectively unreasonable.” And as the district court found, awarding fees would deter future plaintiffs from “overaggressive pursuit of . . . infringers without a reasonable factual basis.”
Trolling often comes at a heavy price in the courts. It also requires a solid grasp of the procedural rules.
The court is rightly intolerant of Cobbler’s position, calling out by mere chronology Cobbler’s decision to name the operator of an adult foster care home after determining that he’s not the infringer. It’s tough to find a set of facts that would engender less sympathy for Cobbler. The court does not say where Cobbler’s admission that Gonzales is not the infringer came from, and I’ll admit I was curious.
While cases have rejected the theory that infringement through a shared IP address can create liability for the non-infringer who happens to be the subscriber, this is an emphatic ruling by an appeals court to this effect.
The court distinguishes other secondary liability scenarios noting in passing that the scenario here is different from Grokster and Amazon but it’s unclear whether an entirely different legal test applies. Amazon focused on whether the online service provider had knowledge of specific infringements and could have taken “simple measures” to disable the material in question. (The Perfect 10 v. Giganews case recently relied on the fact that the service provider there did not have simple measures available and thus could not be held liable.) In Cobbler, the court focuses instead on the fact that Gonzales did not take any steps to foster infringement and found his inaction alone cannot be sufficient. One way to distinguish this case from the online service provider cases is that it was not possible as a practical matter for Gonzales to locate and disable the infringing material.
It’s also worth reading this case alongside Cox v. BMG, where Cox recently won a new trial following a jury verdict in a case alleging derivative liability based on the acts of Cox’s subscribers. (The case has since settled. “Cox Settles Trailblazing Lawsuit That Demanded ISPs Get Tough on Piracy.”) Cox focused primarily on the level of mental fault necessary to find contributory liability and found negligence to be insufficient. Cox also argued that to the extent its technology was capable of substantial non-infringing uses, it could not be held liable under a contributory theory at all, but the court rejected this position.
The court’s affirmance of the fee award is also worth noting. Courts are increasingly willing to award fees to copyright defendants.
The court’s dismissal of the direct infringement claims is clean and decisive:
The direct infringement claim fails because Gonzales’s status as the registered subscriber of an infringing IP address, standing alone, does not create a reasonable inference that he is also the infringer. Because multiple devices and individuals may be able to connect via an IP address, simply identifying the IP subscriber solves only part of the puzzle. A plaintiff must allege something more to create a reasonable inference that a subscriber is also an infringer.
The court was absolutely correct to assess attorneys’ fees against the plaintiff. In our prior blog post on the Cobbler, the court denied the plaintiff its attorneys’ fees. As rulings like this hurt its profits substantially, I continue to wonder how the Cobbler’s enforcement actions can be profitable.
Case citation: Cobbler Nevada v. Gonzales, 2018 WL 4055766 (9th Cir. Aug. 27, 2018)
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