NOT FOR PUBLICATION UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT ALS SCAN, INC., a Maryland corporation,

Plaintiff

- Appellant,

v. STEADFAST NETWORKS, LLC, a Delaware limited liability company,

Defendant

- Appellee. No. 18

- 55615 D.C. No. 2:16

- cv - 05051

- GW

- AFM
MEMORANDUM *

ALS SCAN, INC., a Maryland corporation,

Plaintiff

- Appellee,

v. STEADFAST NETWORKS, LLC, a Delaware limited liability company,

Defendant

- Appellant. No. 18

- 56173 D.C. No. 2:16

- cv - 05051

- GW

- AFM

Appeal from the United States District Court for the Central District of California George H. Wu, District Judge, Presiding Argued and Submitted January 24, 2020 Pasadena, California

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36

- 3. 

# FILED
JUL 17 2020 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS2

Before: CLIFTON and LEE, Circuit Judges, and BLOCK, * * District Judge. D i s s e n t b y J u d g e C L I F T O N The key issue on appeal is whether a data

- center service provider has taken adequate “simple mea sures” to avoid contributory copy right infringement if it forward ed notices of such infringement to the hosting website

— and every alleged infringed material wa s taken down. We affirm the district court’s grant of summary judgment in favor of Steadfast N etworks, LLC, the data

- center service provider , because it has taken sufficient “simple measures ” by forwarding the infringement notices . We, however, reverse the district court ’s denial of attorneys’ fees to Steadfast and remand. We have jurisdiction under 28 U.S.C. § 1291. We review de novo a grant of summary judgment, Branch Banking & Tr

. Co

. v. D.M.S.I., LLC , 871 F.3d 751, 759 (9th Cir. 2017), and we review a denial of an award for attorneys’ fees for abuse of discretion, Glaci er Films (USA), Inc. v. Turchin , 896 F.3d 1033, 1037

– 38 (9th Cir. 2018). 1. Background : At the center of these appeals is Imagebam.com, a website that hosts user

- uploaded content. That website has allegedly become a n unauthorized hub of copyrighted ad ult material , some of which w as created by ALS

** The Honorable Frederic Block, United States District Judge for the Eastern District of New York, sitting by designation.3

Scan, Inc , the plaintiff in this case. ALS sued Steadfast, a data

- center service provider that leases servers to its many customers, including Imagebam’s owner , so that they can host data on the Internet

. ALS sent multiple notices of copyright infringement to Steadfast about the images on Imagebam. When ever it received such a notice , Steadfast forwarded it to the designated agent for Imagebam. Every copyrighted image at issue was then removed by Imagebam. 2. Contributory copyright infringement: This court has held that a party may avoid liability for contributory copyright infringement if it takes “simple measures” to “prevent further damage to copyrighted works

. ” Perfect 10, Inc. v. Giganews, Inc. , 847 F.3d 657, 671 (9th Cir. 2017). In this case, Ste a dfast took those “simple measures” by forwarding ALS’ s notice s of infringement to the owners of Imagebam

. There is no dispute that the owner of Imagebam took down all the infringed materials. ALS disputes whether Steadfast in fact took any actions in response to its notices , but it fails to point to any evidence creat ing a genuine dispute of fact. ALS asserts that Steadfast’s corporate representative testified during his deposition that Steadfast did nothing in response to the notices

. In reality, Steadfast’s representative was asked whether Steadfast had followed up with the owner of Imagebam after forwarding the notices. Whether Steadfast followed up or not is irrelevant because it is undisputed that Steadfast forwarded the notices and the infringed images were4

taken down

. ALS complains 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 t he number of notices is legally irrelevant. 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 liabilit y [does] not automatically follow where the ‘system allows for the exchange of copyrighted material.’” Luvdarts, LLC v. AT & T Mobility, LLC , 710 F.3d 1068, 1072 (9th Cir. 2013) (quoting A&M Records, Inc. v. Napster, Inc. , 239 F.3d 1004, 1021 (9th Cir. 20 01))

. This court has emphasized that “‘actual knowledge of specific acts of infringement’ is required.” Id . (emphasis added) (quoting Napster , 239 F.3d at 1021)

. The number of notices that Steadfast previously received gives at most a general knowledge that infringement will likely occur again in the future; this does not give notice of any specific acts of infringement that are actually occurring. W e are sympathetic to ALS’s “whack

- a - mole problem,” but we are persuaded by the specific facts of this case that Steadfast’s “simple measures” are enough

. Steadfast forwarded each notice to Imagebam’s owner , and every infringing work was taken down. Nor is there evidence that Steadfast had any other simple measures at its disposal. Steadfast did not operate, control, or manage any functions of I magebam.com. It could not supervise, access, locate, or delete I magebam5

accounts. It had no way of knowing, based on a URL hyperlink contained in the notices of copyright infringement, where the infringing works or the I magebam accounts responsible for illegal uploads were located on Flixya’s servers. What

measures were ava ilable to prevent further damage to ALS’s copyrighted images, Steadfast took. See Perfect 10, Inc. , 847 F.3d at 671 (“Reviewing this issue de novo, we hold that there were no simple measures available that Giganews failed to take to remove Perfect 10’s wo rks from its servers.”). Further, ALS 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 )

. 3

. Contributory trademark infringement: Steadfast is also not liable for contributory trademark infringement. Steadfast can only be liable for contributory trademark infringement if it had “direct control and monitoring of the instrumentality used by [ the ] third party to infringe ” the marks at issue. Louis Vuitton Malletier, S.A. v. Akanoc Sols

. , Inc. , 658 F.3d 936, 942 (9th Cir. 2011) (internal quotation marks and alterations omitted). Here, there is no dispute that Steadfast did not operate or manage Imagebam or have access to individual users’ accounts or content. Steadfast thus could not have been “monitoring” the instrumentality used for trademark infringement. 3. Attorneys’ fees : This court explained in Historical Research v. Cabral that6

“‘exceptional circumstances’ are not a prerequisite to an award of attorneys fees” under the Copyright Act. 80 F.3d 377, 378

– 79 (9th Cir. 1996) (per curiam). T he district court accurately discussed the various factors for awarding attorneys’ fees und er 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. This court therefore AFFIR M S the district court’s entry of summary judgment in favor of Steadfast, but REVERSE S AND R E MAND S the district court’s denial of attorneys’ fees.Nos. 18-55615 a nd 18-56173, ALS Sc an, Inc . v . Ste adfast N e tw ork s, LLC C LIFTON, C irc uit Judge , disse nting: I re spe c tfully

disse nt. I would re ve rse the distric t c ourt’ s gra n t of sum m a ry judgm e nt on the c ontributory c opy right infringe m e nt c la i m . The m a jority disposition c orre c t ly

ide ntifie s , a t

2, the ke y

issue a s be i ng whe the r Ste a d fa st Ne t

works, LLC , took “ a de qua te ‘ sim ple m e a s ure s’ to a

v oid

c ontributory

c o py right infringe m e n t.” It c onc lude s tha t it did. B u t the c opy

right infringe m e nt did not stop, so how c o uld the m e a sure s ta k e n be de e m e d

“ a d e qua te ” ? The distric t c ourt he ld tha t “ a jury c o uld re a sona

bly c o nc lude tha

t Ste a dfa st

wa s a wa re of the wha c k-a -m ole proble m tha t [ALS] fa c e d.” It wa s ne c e ssa rily

a ppa re nt to Ste a dfa st tha

t c o py right infringe m e n t s would a lm ost c e rta inly c ontinue , give n the history

a lle ge d. Hundre ds of re pe a t infringe m e nts we re re porte d to Ste a dfa st. Ste a dfa st did not c onte nd (le t a l one pre se nt a

ny e vide n c e to support a

c onc lusion) tha

t the “ sim ple m e a sure s” it took did, in fa c t , “ pre ve nt future da m a ge to c o py righte d works,” the sta

nda rd purporte dly

a pplie d by the m a jority , a t 3 (quoting Pe rfe c t 10, Inc . v . Gigane w s, Inc

. , 847 F.3d 657, 671 (9th C ir. 2017)). The m a jority a ppe a rs to a c c e pt tha

t c opy right la w is powe rle ss to a ddre ss the wha c k-a -m ole proble m , but it should not be

. The m a j ority ’ s unsta

te d pre m ise

se e m s to be tha

t Ste a dfa st be a rs no re s ponsibility for infringe m e nts tha

t it is a wa re 

# FIL ED
JUL 17 2020 M OLLY C. DW Y E R, CLERK U. S. CO URT O F APPEALSa re l ike ly

to oc c ur in the future . I do not vie w the la w to be so fe e ble

. In Fonov isa, Inc . v . C

he rry Auc tion, Inc

. , 76 F.3d 259, 264 (9th C ir. 1996),

we a ddre sse d c opy

right infringe m e nt in the c onte xt of a swa p m e e t or fle a

m a rke t. W e he l d tha

t the ope ra t or of a

swa p m e e t c o uld be he ld lia

ble to the owne r of

c opy rights a nd tra de m a rks to m

usic re c ordings for c ontributory c opy right infringe m e nt for the sa le of c o unte rfe it re c o rdings by ve ndors a

t the swa p m e e t. The ope ra tor wa s a

w a re tha t ve ndors we re se lling c o unte rfe it re c ordings. W ha t

m a tte re d wa s not the ope ra tor’ s knowle dge of a n individua l sa le of a

spe c i fic

c ounte rfe it, but its a

wa re ne s s of the infringing pra c tic e . It ha d be e n inform e d by the l oc a l she riff of the pra c tic e a nd of the se iz u re s on m ore tha n one oc c a sion of thousa nds of infringing re c o rdings. Sim ila rly , Ste a dfa st c o uld be found in this c a se to ha ve ha d knowle d ge of the infringing pra c tic e a nd of the ne a r c e rta inty of future viola tions. The distric t c ourt c onc lude d a s m uc h. The re a son the m a

jority a ppe a rs willing to give

Ste a dfa st a

fre e pa ss from lia bility for c o ntributory

c opy right infringe m e nt is its c onc lusion tha t Ste a dfa st ha s qua lifie d for the prote c tions provide d in our c a se s for e nte rprise s tha t provide Inte rne t se rvic e s. Ste a dfa st is a host for Inte rne t site s. Spe c i fic a lly , we ha ve he ld tha t “ a c om pute r sy ste m

ope ra t or c a n be he ld c ontributorily lia ble if it ‘ ha s a c tua l knowle dge tha

t spe c ific infringing m a te ria l is a va ila ble using its sy ste m ,’ a nd c a n
2‘ t a ke sim

ple m e a sure s to pre ve nt furthe r da m a ge ’ to c opy righte d works, y e t

c ontinue s to provide a c c e ss to infringing works.” P e r fe c t 10, Inc . v . Amazon.c om, Inc

. , 508 F.3d 1146, 1172 (9th C ir. 2007) (c ita tions om i tte d), quote d in Pe rfe c t 10, Inc

. v . Gigane w

s, Inc

. , 847 F.3d 657, 671 (9th C ir. 2017). The m a jority a ppe a rs to inte rpre t tha

t sta n d a rd to re quire tha

t a n ope ra tor c a n be he ld lia

ble only if it “ c ontinue s to provide a c c e ss” to the v e ry same infringing works, but tha

t is not wha

t we sa id. To the c ontra

ry , the la ngua ge use d in our c a se s ha s be e n broa de r: “ c ontinue s to provide a c c e ss to infringing w o rk s .” Tha t fits Ste a dfa st. It c ontinue d to provide a c c e s s to infringing works. The y m ight ha ve be e n othe r

infringing works, but the y we re no le ss infringing, a nd a s note d a

bove , Ste a dfa st c ould be found to ha ve be e n a wa re tha t the future infringe m e nt would ha ppe n. This re a d i ng of our c a se la w a lso c om

ports with the

sc he m e of fe de ra l le gisla tion. Eve n c opy

right sta tute s inte nde d

to im m uniz e Inte rne t

se rvic e provide rs e xpre ssly c o nte m p la te lia bility for fa ilure to pre ve nt re p e a t infringe m e nts. The Digita l M ille nnium C opy right Ac t (DM C A) shie lds from lia bility only those s e rvic e provide rs who ha v e “ a dopte d a

nd re a sona

bly im ple m e nte d . . . a

polic y tha t provide s for the te rm ina t ion in a ppropria te

c irc um s ta nc e s of subsc ribe rs a

n d a c c ount holde rs of the se rvic e provide r’ s sy ste m

3or ne twork who a re re pe a t infringe rs.” 17 U.S.C . § 512(i)(1)(A). Se e also Ve ntura C onte nt, Ltd. v . Mothe rle

ss, Inc

. , 885 F.3d 597, 614 (9th C ir.), c e rt. de nie d , 139 S. C t. 419, 202 L. Ed. 2d 316 (2018) (“ Eve n if a we bsite de le te s infringing m a te ria l a s
soon a s it le a rns a

bout it, the

[DM C A] sa fe ha

rbor is una

va ila ble unle ss the site ha s

a polic y of e xc l u ding re pe a t infringe rs.” ); Viac om Int’l, Inc

. v . YouTube , Inc

. , 676 F.3d 19, 27 (2d C i r. 2012) (“ To qua lify for prote c tion unde r a

ny of the sa fe ha

rbors [of the DM C A] , a

pa rty m ust m e e t a se t

of thre shold c rite ria . . . inc luding the

a doption a

nd re a sona

b le im ple m e nta tion of a

‘ re pe a t infringe r’ polic y

tha t

‘ p rovide s for the te rm ina tion in a ppropria te c i rc um sta

nc e s of subsc ribe rs a

nd

a c c ount holde rs of the se rvic e provide r’ s sy s te m or ne twork.’ ” ). The DM C A sa fe ha rbor is una

va iling whe n, like the distric t judge he ld he re , a tria ble issue of fa c t

e xists a bout whe the r a

de fe n da n t ha s re a sona

bly im p le m e nte d a

re pe a t infringe r polic y . The m a jority e xpre sse s sy

m pa thy for the “ wha c k -a -m o le ” proble m fa c e d by ALS Sc a n, Inc ., but tha

t sy m pa thy doe s not solve

the proble m . W he re , a s he re , the re a re a lle ga tions tha

t the volum e a nd m a gnitude of pre v ious infringe m e n ts

c a use d a de fe nda nt to know tha

t suc h infringe m e nts would c ontinue tom o rrow, a nd the n e xt da

y , a nd the da y a fte r tha t, I would se nd this c la i m to the jury

. I re spe c tfully

disse nt.
4