512(f) Doesn’t Restrict Competitive Gaming of Search Results–Source Capital v. Barrett Financial

November 30, 2023 · by · in Copyright, Derivative Liability, Search Engines

This case involves two “hard money lending” competitors, Source Capital and Barrett. Allegedly on behalf of Barrett, an SEO vendor sent DMCA takedown notices to Google, alleging that Source Capital had copied some of Barrett’s copyrighted material. Source Capital alleges that no copyright violation took place at all. Instead, Source Capital alleges the DMCA takedown notices were “knowingly false” and designed to kick Source Capital out of the Google search results during the high season. Google did in fact deindex key pages of Source Capital’s website, allegedly leading to a major reduction in its business. The court brushes aside of all of Source Capital’s claims.

Of particular note is that the 17 USC 512(f) claim fails for the standard reason that the 9th Circuit’s Rossi case imposes too high a scienter burden for the plaintiff to overcome:

the facts alleged in the FAC suggest that Search Control acted negligently and unreasonably when it sent the notices to Google…it is not enough under § 512(f) to show that the accusations were unfounded or even objectively unreasonable—actual, subjective knowledge of falsity is required.

Source Capital didn’t and couldn’t allege this level of scienter, so it’s an easy dismissal. But notice the implications: this means Barrett or its SEO vendor could have totally gamed the search results to thwart its rival and still walk away without consequence. As I’ve said far too many times, 512(f) doesn’t actually function as a check against takedown abuse.

It may or may not be related to this lawsuit, but Google recently sued “bad actors who set up dozens of Google accounts and used them to submit thousands of bogus copyright claims against their competitors. These fraudulent claims resulted in removal of over 100,000 businesses’ websites, costing them millions of dollars and thousands of hours in lost employee time.” It’s great to see Google affirmatively strike back against competitive gaming of its search results, but wouldn’t it be better if the DMCA and 512(f) were properly calibrated so that the legal incentives didn’t encourage and reward such competitive gaming?

Case Citation: Source Capital Funding Inc. v. Barrett Financial Group, LLC, 2023 WL 7552330 (D. Ariz. Nov. 14, 2023)

BONUS: Some other 2023 Quick Links About 512

* Cook v. Maximus International Specialists, 2023 WL 2603756 (S.D. Fla. March 23, 2023)

Plaintiff provides no argument or supporting legal authority suggesting that a Defendant who files a counter-notice pursuant to 17 U.S.C. § 512(g)(3)(D) waives formal service of process requirements. Although the counter-notice filed by Defendant stated that Defendant would accept service of process from Plaintiff, the counter-notice did not state that Defendant waived formal service requirements. And, emailing the Summons and Complaint to a defendant does not satisfy Rule 4’s requirements for proper service.

[Court still grants a TRO anyway…]

* DP Creations LLC v. Adolly.com, 2023 WL 5672170 (D. Utah Sept. 1, 2023). Interpreting what the word “found” means in 17 USC 512(g).

* In the Matter of Subpoena of Internet Subscribers of Cox Communications, LLC and Coxcom LLC, 2023 WL 6907124 (D. Hawai‘i Aug. 31, 2023):

the validity of a 512(h) subpoena depends on whether the copyright owner has provided the ISP with a 512(c)(3)(A) notice that meets all of the criteria set forth in each of the subparts 512(c)(3)(A), and any notice to an ISP concerning its activity as a mere conduit cannot satisfy subpart 512(c)(2)(A)(iii) because there is no infringing material to be removed or access to which can be disabled…. a 512(h) subpoena may not be issued to a conduit ISP for P2P file sharing infringement because a conduit ISP cannot comply with a 512(c)(3)(A) notice as there is no infringing material to be removed or to disable access to, and, further, the 512(c)(3)(A) notice provision was not intended to apply to ISPs acting as mere conduits.

Prior Posts on Section 512(f)

* 512(f) Once Again Ensnared in an Employment Ownership Dispute–Shande v. Zoox
* Surprise! Another 512(f) Claim Fails–Bored Ape Yacht Club v. Ripps
* You’re a Fool if You Think You Can Win a 512(f) Case–Security Police and Fire Professionals v. Maritas
* 512(f) Plaintiff Must Pay $91k to the Defense–Digital Marketing v. McCandless
* Anti-Circumvention Takedowns Aren’t Covered by 512(f)–Yout v. RIAA
* 11th Circuit UPHOLDS a 512(f) Plaintiff Win on Appeal–Alper Automotive v. Day to Day Imports
* Court Mistakenly Thinks Copyright Owners Have a Duty to Police Infringement–Sunny Factory v. Chen
* Another 512(f) Claim Fails–Moonbug v. Babybus
* A 512(f) Plaintiff Wins at Trial! 👀–Alper Automotive v. Day to Day Imports
* Satirical Depiction in YouTube Video Gets Rough Treatment in Court
* 512(f) Preempts Tortious Interference Claim–Copy Me That v. This Old Gal
* 512(f) Claim Against Robo-Notice Sender Can Proceed–Enttech v. Okularity
* Copyright Plaintiffs Can’t Figure Out What Copyrights They Own, Court Says ¯\_(ツ)_/¯
* A 512(f) Case Leads to a Rare Damages Award (on a Default Judgment)–California Beach v. Du
* 512(f) Claim Survives Motion to Dismiss–Brandyn Love v. Nuclear Blast America
* 512(f) Claim Fails in the 11th Circuit–Johnson v. New Destiny Christian Center
* Court Orders Rightsowner to Withdraw DMCA Takedown Notices Sent to Amazon–Beyond Blond v. Heldman
* Another 512(f) Claim Fails–Ningbo Mizhihe v Doe
* Video Excerpts Qualify as Fair Use (and Another 512(f) Claim Fails)–Hughes v. Benjamin
* How Have Section 512(f) Cases Fared Since 2017? (Spoiler: Not Well)
* Another Section 512(f) Case Fails–ISE v. Longarzo
* Another 512(f) Case Fails–Handshoe v. Perret
* A DMCA Section 512(f) Case Survives Dismissal–ISE v. Longarzo
* DMCA’s Unhelpful 512(f) Preempts Helpful State Law Claims–Stevens v. Vodka and Milk
* Section 512(f) Complaint Survives Motion to Dismiss–Johnson v. New Destiny Church
* ‘Reaction’ Video Protected By Fair Use–Hosseinzadeh v. Klein
* 9th Circuit Sides With Fair Use in Dancing Baby Takedown Case–Lenz v. Universal
* Two 512(f) Rulings Where The Litigants Dispute Copyright Ownership
* It Takes a Default Judgment to Win a 17 USC 512(f) Case–Automattic v. Steiner
* Vague Takedown Notice Targeting Facebook Page Results in Possible Liability–CrossFit v. Alvies
* Another 512(f) Claim Fails–Tuteur v. Crosley-Corcoran
* 17 USC 512(f) Is Dead–Lenz v. Universal Music
* 512(f) Plaintiff Can’t Get Discovery to Back Up His Allegations of Bogus Takedowns–Ouellette v. Viacom
* Updates on Transborder Copyright Enforcement Over “Grandma Got Run Over by a Reindeer”–Shropshire v. Canning
* 17 USC 512(f) Preempts State Law Claims Over Bogus Copyright Takedown Notices–Amaretto v. Ozimals
* 17 USC 512(f) Claim Against “Twilight” Studio Survives Motion to Dismiss–Smith v. Summit Entertainment
* Cease & Desist Letter to iTunes Isn’t Covered by 17 USC 512(f)–Red Rock v. UMG
* Copyright Takedown Notice Isn’t Actionable Unless There’s an Actual Takedown–Amaretto v. Ozimals
* Second Life Ordered to Stop Honoring a Copyright Owner’s Takedown Notices–Amaretto Ranch Breedables v. Ozimals
* Another Copyright Owner Sent a Defective Takedown Notice and Faced 512(f) Liability–Rosen v. HSI
* Furniture Retailer Enjoined from Sending eBay VeRO Notices–Design Furnishings v. Zen Path
* Disclosure of the Substance of Privileged Communications via Email, Blog, and Chat Results in Waiver — Lenz v. Universal
* YouTube Uploader Can’t Sue Sender of Mistaken Takedown Notice–Cabell v. Zimmerman
* Rare Ruling on Damages for Sending Bogus Copyright Takedown Notice–Lenz v. Universal
* 512(f) Claim Dismissed on Jurisdictional Grounds–Project DoD v. Federici
* Biosafe-One v. Hawks Dismissed
* Michael Savage Takedown Letter Might Violate 512(f)–Brave New Media v. Weiner
* Fair Use – It’s the Law (for what it’s worth)–Lenz v. Universal
* Copyright Owner Enjoined from Sending DMCA Takedown Notices–Biosafe-One v. Hawks
* New(ish) Report on 512 Takedown Notices
* Can 512(f) Support an Injunction? Novotny v. Chapman
* Allegedly Wrong VeRO Notice of Claimed Infringement Not Actionable–Dudnikov v. MGA Entertainment