PASADENA, Calif.—A federal appeals court on Friday affirmed a lower court’s summary judgment ruling in favor of data-center service Steadfast Networks LLC, which was sued by adult studio ALS Scan.
In the case, ALS Scan contended that the Chicago-based hosting provider should be held liable for alleged pirated adult content that was found on Imagebam.com. Steadfast argued that it did not manage or operate the Imagebam site, and that it only provided computer storage.
A majority panel for the 9th U.S. Circuit Court of Appeals, 2-1, wrote that merely hosting a pirate site does not make the hosting service liable for any copyright infringement actions the site may be guilty of.
Hearing the case de novo, the 9th Circuit panel said that the key issue on appeal was whether a data-center service provider has taken adequate “simple measures” to avoid contributory copyright infringement if it forwarded notices of such infringement to the hosting website — and every alleged infringed material was taken down.
“We are sympathetic to ALS Scan’s ‘whack-a-mole problem,’ but we are persuaded by the specific facts of this case that Steadfast’s ‘simple measures’ are enough,” the 9th Circuit wrote. “Further, ALS Scan apparently has not pursued other options that may ameliorate the whack-a-mole problem (e.g., taking action against Imagebam’s owner or the individuals uploading the unauthorized images).”
The 9th Circuit, in its unpublished decision, said that Steadfast forwarded each notice to Imagebam’s owner, and every infringing work was taken down.
“Steadfast did not operate, control, or manage any functions of Imagebam.com. It could not supervise, access, locate, or delete Imagebam accounts,” the 9th Circuit said. “It had no way of knowing, based on a URL hyperlink contained in the notices of copyright infringement, where the infringing works or the Imagebam accounts responsible for illegal uploads were located on Flixya’s servers. What measures were available to prevent further damage to ALS’s copyrighted images, Steadfast took.”
ALS Scan complained in its case that it is not enough to forward the infringement notices to Imagebam’s owner in light of the number of infringement notices that Steadfast has received. But the number of notices is legally irrelevant, the 9th Circuit said.
“To be liable for contributory copyright infringement, the knowledge required is more than a generalized knowledge by the carriers of the possibility of infringement because contributory liability [does] not automatically follow where the ‘system allows for the exchange of copyrighted material,” the appeals court said.
The lone panelist in dissent of the decision, Judge Richard Clifton, said that the reason the majority appears willing to give Steadfast “a free pass from liability for contributory copyright infringement” is its conclusion that “Steadfast has qualified for the protections provided in our cases for enterprises that provide Internet services.”
“The majority expresses sympathy for the “whack-a-mole” problem faced by ALS Scan, but that sympathy does not solve the problem,” Clifton wrote. “Where, as here, there are allegations that the volume and magnitude of previous infringements caused a defendant to know that such infringements would continue tomorrow, and the next day, and the day after that, I would send this claim to the jury.”
While affirming the district court’s grant of summary judgment in favor of Steadfast Networks, the 9th Circuit remanded the issue of attorneys fees back to the lower court.
“Exceptional circumstances are not a prerequisite to an award of attorneys fees under the Copyright Act,” the panel said. “The district court accurately discussed the various factors for awarding attorneys’ fees under the Copyright Act, but it also discussed whether there were ‘exceptional’ circumstances (which is required under the Lanham Act but not the Copyright Act).
“In light of this ambiguity in the record, we reverse and remand on the issue of attorneys’ fees.”
Pictured: Telecommunications equipment in one corner of a small data center. (Wikimedia Commons)
