Opinion ID: 626721
Heading Depth: 3
Heading Rank: 1

Heading: Right and Ability to Control Infringing Activity

Text: On appeal, the parties advocate two competing constructions of the right and ability to control infringing activity. 17 U.S.C. § 512(c)(1)(B). Because each is fatally flawed, we reject both proposed constructions in favor of a fact-based inquiry to be conducted in the first instance by the District Court. The first construction, pressed by the defendants, is the one adopted by the District Court, which held that the provider must know of the particular case before he can control it. Viacom, 718 F.Supp.2d at 527. The Ninth Circuit recently agreed, holding that until [the service provider] becomes aware of specific unauthorized material, it cannot exercise its `power or authority' over the specific infringing item. In practical terms, it does not have the kind of ability to control infringing activity the statute contemplates. UMG Recordings, Inc. v. Shelter Capital Partners LLC, 667 F.3d 1022, 1041 (9th Cir.2011). The trouble with this construction is that importing a specific knowledge requirement into § 512(c)(1)(B) renders the control provision duplicative of § 512(c)(1)(A). Any service provider that has item-specific knowledge of infringing activity and thereby obtains financial benefit would already be excluded from the safe harbor under § 512(c)(1)(A) for having specific knowledge of infringing material and failing to effect expeditious removal. No additional service provider would be excluded by § 512(c)(1)(B) that was not already excluded by § 512(c)(1)(A). Because statutory interpretations that render language superfluous are disfavored, Conn. ex rel. Blumenthal, 228 F.3d at 88, we reject the District Court's interpretation of the control provision. The second construction, urged by the plaintiffs, is that the control provision codifies the common law doctrine of vicarious copyright liability. The common law imposes liability for vicarious copyright infringement [w]hen the right and ability to supervise coalesce with an obvious and direct financial interest in the exploitation of copyrighted materialseven in the absence of actual knowledge that the copyright mono[poly] is being impaired. Shapiro, Bernstein & Co. v. H.L. Green Co., 316 F.2d 304, 307 (2d Cir.1963); cf. Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913, 930 n. 9, 125 S.Ct. 2764, 162 L.Ed.2d 781 (2005). To support their codification argument, the plaintiffs rely on a House Report relating to a preliminary version of the DMCA: The `right and ability to control' language ... codifies the second element of vicarious liability.... Subparagraph (B) is intended to preserve existing case law that examines all relevant aspects of the relationship between the primary and secondary infringer. H.R.Rep. No. 105-551(I), at 26 (1998). In response, YouTube notes that the codification reference was omitted from the committee reports describing the final legislation, and that Congress ultimately abandoned any attempt to embark[] upon a wholesale clarification of vicarious liability, electing instead to create a series of `safe harbors' for certain common activities of service providers. S.Rep. No. 105-190, at 19. Happily, the future of digital copyright law does not turn on the confused legislative history of the control provision. The general rule with respect to common law codification is that when Congress uses terms that have accumulated settled meaning under the common law, a court must infer, unless the statute otherwise dictates, that Congress means to incorporate the established meaning of those terms. Neder v. United States, 527 U.S. 1, 21, 119 S.Ct. 1827, 144 L.Ed.2d 35 (1999) (ellipsis and internal quotation marks omitted). Under the common law vicarious liability standard, `[t]he ability to block infringers' access to a particular environment for any reason whatsoever is evidence of the right and ability to supervise.' Arista Records LLC v. Usenet.com, Inc., 633 F.Supp.2d 124, 157 (S.D.N.Y. 2009) (alteration in original) (quoting A & M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1023 (9th Cir.2001)). To adopt that principle in the DMCA context, however, would render the statute internally inconsistent. Section 512(c) actually presumes that service providers have the ability to block ... access to infringing material. Id. at 157; see Shelter Capital, 667 F.3d at 1042-43. Indeed, a service provider who has knowledge or awareness of infringing material or who receives a takedown notice from a copyright holder is required to remove, or disable access to, the material in order to claim the benefit of the safe harbor. 17 U.S.C. § 512(c)(1)(A)(iii) & (C). But in taking such action, the service provider wouldin the plaintiffs' analysisbe admitting the right and ability to control the infringing material. Thus, the prerequisite to safe harbor protection under § 512(c)(1)(A)(iii) & (C) would at the same time be a disqualifier under § 512(c)(1)(B). Moreover, if Congress had intended § 512(c)(1)(B) to be coextensive with vicarious liability, the statute could have accomplished that result in a more direct manner. Shelter Capital, 667 F.3d at 1045. It is conceivable that Congress ... intended that [service providers] which receive a financial benefit directly attributable to the infringing activity would not, under any circumstances, be able to qualify for the subsection (c) safe harbor. But if that was indeed their intention, it would have been far simpler and much more straightforward to simply say as much. Id. (alteration in original) (quoting Ellison v. Robertson, 189 F.Supp.2d 1051, 1061 (C.D.Cal.2002), aff'd in part and rev'd in part on different grounds, 357 F.3d 1072 (9th Cir.2004)). In any event, the foregoing tensionelsewhere described as a predicament [11] and a catch22 [12] is sufficient to establish that the control provision dictates a departure from the common law vicarious liability standard, Neder, 527 U.S. at 21, 119 S.Ct. 1827. Accordingly, we conclude that the right and ability to control infringing activity under § 512(c)(1)(B) requires something more than the ability to remove or block access to materials posted on a service provider's website. MP3tunes, LLC, 821 F.Supp.2d at 645, 2011 WL 5104616, at ; accord Wolk v. Kodak Imaging Network, Inc., ___ F.Supp.2d ___, ___, 2012 WL 11270, at  (S.D.N.Y. Jan. 3, 2012); UMG II, 665 F.Supp.2d at 1114-15; Io Grp., Inc. v. Veoh Networks, Inc., 586 F.Supp.2d 1132, 1151 (N.D.Cal.2008); Corbis Corp. v. Amazon.com, Inc., 351 F.Supp.2d 1090, 1110 (W.D.Wash.2004), overruled on other grounds by Cosmetic Ideas, Inc. v. IAC/Interactivecorp., 606 F.3d 612 (9th Cir.2010). The remainingand more difficultquestion is how to define the something more that is required. To date, only one court has found that a service provider had the right and ability to control infringing activity under § 512(c)(1)(B). [13] In Perfect 10, Inc. v. Cybernet Ventures, Inc., 213 F.Supp.2d 1146 (C.D.Cal.2002), the court found control where the service provider instituted a monitoring program by which user websites received detailed instructions regard[ing] issues of layout, appearance, and content. Id. at 1173. The service provider also forbade certain types of content and refused access to users who failed to comply with its instructions. Id. Similarly, inducement of copyright infringement under Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913, 125 S.Ct. 2764, 162 L.Ed.2d 781 (2005), which premises liability on purposeful, culpable expression and conduct, id. at 937, 125 S.Ct. 2764, might also rise to the level of control under § 512(c)(1)(B). Both of these examples involve a service provider exerting substantial influence on the activities of users, without necessarilyor even frequentlyacquiring knowledge of specific infringing activity. In light of our holding that § 512(c)(1)(B) does not include a specific knowledge requirement, we think it prudent to remand to the District Court to consider in the first instance whether the plaintiffs have adduced sufficient evidence to allow a reasonable jury to conclude that YouTube had the right and ability to control the infringing activity and received a financial benefit directly attributable to that activity.