Court Opinion

ID: 3197381
Source: CourtListenerOpinion
Date Created: 2016-04-25 16:01:34.933832+00
Date Added: 2024-06-11T14:37:11.516427
License: Public Domain

FILED
                                                       United States Court of Appeals
                                                               Tenth Circuit

                                                              April 25, 2016
                                    PUBLISH                Elisabeth A. Shumaker
                                                               Clerk of Court
                   UNITED STATES COURT OF APPEALS

                                  TENTH CIRCUIT

 BWP MEDIA USA, INC., d/b/a
 Pacific Coast News; NATIONAL
 PHOTO GROUP, LLC,

       Plaintiffs - Appellants,

 v.                                                  No. 15-1154

 CLARITY DIGITAL GROUP, LLC,
 n/k/a AXS DIGITAL MEDIAL
 GROUP, LLC,

       Defendant - Appellee.

        APPEAL FROM THE UNITED STATES DISTRICT COURT
                FOR THE DISTRICT OF COLORADO
                 (D.C. No. 14-CV-00467-PAB-KMT)

Craig B. Sanders (and Jonathan M Cader, with him on the briefs) of Sanders Law,
PLLC, Garden City, New York, for Plaintiffs - Appellants.

Steven D. Zansberg of Levine Sullivan Koch & Schulz, LLP, Denver, Colorado,
for Defendant - Appellee.

Before KELLY, MATHESON, and MORITZ, Circuit Judges.

KELLY, Circuit Judge.
      Plaintiff-Appellant BWP Media USA, Inc. d/b/a Pacific Coast News and

National Photo Group, LLC (“BWP”) appeals from the district court’s summary

judgment in favor of Defendant-Appellee Clarity Digital Group, LLC n/k/a AXS

Digital Media Group, LLC (“AXS”). See BWP Media USA Inc. v. Clarity Dig.

Grp., LLC, No. 14-cv-00467-PAB-KMT, 2015 WL 1538366 (D. Colo. Mar. 31,

2015). BWP owns the rights to photographs of various celebrities. In February

2014, BWP filed a complaint alleging that AXS infringed its copyrights by

posting 75 of its photographs without permission on AXS’s website,

Examiner.com. 1 AXS asserted it was protected from liability by the safe harbor

provision of the Digital Millennium Copyright Act (“DMCA”) and moved for

summary judgment. The district court agreed. Exercising jurisdiction pursuant to

28 U.S.C. § 1291, we affirm.

                                  Background

      A.    The DMCA

      Recognizing the need “to update domestic copyright law for the digital

age,” Congress enacted the DMCA. Viacom Int’l, Inc. v. YouTube, Inc., 676

F.3d 19, 26 (2d Cir. 2012). Section 512 of the DMCA contains a safe harbor

provision protecting online and internet service providers (“ISPs”) from monetary

      1
         In response to a July 2013 letter by BWP notifying AXS of the copyright
violations, AXS promptly removed the photographs and notified BWP. J.A. 99.

                                       -2-
liability, only allowing for limited injunctive relief, when copyright infringement

occurs through use of the service. 17 U.S.C. § 512(c). The safe harbor provision

is designed to “preserve[] strong incentives for service providers and copyright

owners to cooperate to detect and deal with copyright infringements,” while

simultaneously providing “greater certainty to service providers concerning their

legal exposure for infringements that may occur in the course of their activities.”

H.R. Rep. No. 105-551, pt. 2, at 49-50 (1998). To benefit from safe harbor

protection, the ISP must first show that the infringing content was stored “at the

direction of a user.” 17 U.S.C. § 512(c)(1). Once this is established, there are

numerous factors which must be satisfied to come within the protection of the

safe harbor. 2 Specific to this case, an ISP will not qualify for safe harbor

      2
          The statute provides:

(c)   Information residing on systems or networks at direction of users. —
      (1) In general.—A service provider shall not be liable for monetary
      relief, or, except as provided in subsection (j), for injunctive or other
      equitable relief, for infringement of copyright by reason of the
      storage at the direction of a user of material that resides on a system
      or network controlled or operated by or for the service provider, if
      the service provider—

      (A)(i) does not have actual knowledge that the material or an activity
      using the material on the system or network is infringing;

             (ii) in the absence of such actual knowledge, is not aware of
      facts or circumstances from which infringing activity is apparent; or

            (iii) upon obtaining such knowledge or awareness, acts
      expeditiously to remove, or disable access to, the material;

                                         -3-
protection if it had either actual knowledge of the infringement or knowledge of

facts or circumstances from which infringing activity is apparent. Id.

§ 512(c)(1)(A)(i)-(ii). Additionally, if the ISP became aware of the infringement

and did not act expeditiously to remove or disable access to the content, it cannot

qualify for safe harbor protection. Id. § 512(c)(1)(A)(iii).

      B.     Infringing Activity on Examiner.com

      Examiner.com characterizes itself as a “dynamic entertainment, news and

lifestyle network that serves more than 20 million monthly readers across the U.S.

and around the world.” About Us, Examiner.com (Mar. 18, 2016, 9:10AM),

http://www.examiner.com/About_Examiner. Rather than hiring a centralized

writing staff, the content generated on Examiner.com is created by independent

contractors, called “Examiners,” all over the world. To become an Examiner, the

writer must fill out an application including a proposed topic and a short writing

sample. Examiner.com evaluates the writing sample, conducts a background

check, and, assuming the application is approved, the Examiner enters into a

      (B) does not receive a financial benefit directly attributable to the
      infringing activity, in a case in which the service provider has the
      right and ability to control such activity; and

      (C) upon notification of claimed infringement as described in
      paragraph (3), responds expeditiously to remove, or disable access
      to, the material that is claimed to be infringing or to be the subject of
      infringing activity.

17 U.S.C. § 512(c).

                                         -4-
contract entitled the Independent Contractor and Agreement License with

Examiner.com. The contract expressly provides that: (1) Examiners are

independent contractors, not employees 3 and (2) copyright infringement is

prohibited. 4 Because it was a group of Examiners that posted the infringing

content on Examiner.com, AXS asserted it was protected under the DMCA’s safe

harbor provision.

      On appeal, BWP argues that AXS should not be protected by § 512’s safe

harbor for two reasons. First, BWP argues AXS cannot get past the threshold

requirement that the infringing content be stored “at the direction of a user.” 17

U.S.C. § 512(c)(1). Specifically, BWP argues that: (1) Examiners are not “users,”

but (2) even if Examiners are “users,” AXS directed the Examiners to post the

infringing content. Second, BWP claims that even if AXS satisfies this threshold,

safe harbor protection does not apply because AXS had actual or circumstantial

knowledge of the infringement. Id. § 512(c)(1)(A)(i)-(ii). We review the district

court’s grant of summary judgment de novo. Timmons v. White, 314 F.3d 1229,

      3
        The contract states, “You will provide the Services hereunder as an
independent contractor and not as the agent, employee, legal representative,
partner, or joint venturer of Examiner.com.” J.A. 138.
      4
         The contract provides: (1) “You must have permission from the
owner/copyright holder of any content before including it on your Web Page,
unless it was provided by Examiner.com;” (2) “Do not include any copyrighted
material on our site (including text, photos, video, audio, or anything else)
without the permission of the owner;” and (3) “You also may not post any content
that infringes any . . . copyright.” J.A. 134; 141.

                                        -5-
1232 (10th Cir. 2003). We reject each argument raised by BWP.

                                    Discussion

      A. Section 512’s threshold requirement, that the infringing content be
      stored at the direction of a “user,” is satisfied.

      The DMCA’s safe harbor requires that the infringing content be stored at

the direction of a “user.” BWP attempts to divide this requirement into two

distinct inquiries, asking who is a “user” and who directed the infringing content

to be stored. As explained below, the key to interpreting this requirement is not

to isolate certain words but rather, to take the provision as a whole, giving

meaning to each word in context.

      1.     The word “user” in the DMCA should be interpreted according to its
             plain meaning.

      We are often tasked with interpreting complex statutory language but, when

“the statutory language is clear, our analysis ends and we must apply its plain

meaning.” Thomas v. Metro. Life Ins. Co., 631 F.3d 1153, 1161 (10th Cir. 2011).

We need not torture “the language of the statute when a simple, straightforward

reading obviates the necessity of making such semantic contortions.” Equal

Emp’t Opportunity Comm’n v. Louisville N. R.R. Co., 505 F.2d 610, 619-20 (5th

Cir. 1974); see also Resolution Tr. Corp. v. Fed. Sav. and Loan Ins. Corp., 25

F.3d 1493, 1500 (10th Cir. 1994). The word “user” in the DMCA is

straightforward and unambiguous. Simply put, a “user” is “one that uses.”

                                         -6-
Merriam-Webster’s Collegiate Dictionary 1297 (10th ed. 2001). In the DMCA

context, we agree with the district court that the term “‘user’ describes a person

or entity who avails itself of the service provider’s system or network to store

material.” BWP Media USA Inc., 2015 WL 1538366 at *6. We note that

opinions interpreting the DMCA’s safe harbor provisions have not exhaustively

defined the term, suggesting apparent clarity. See, e.g., UMG Recordings, Inc. v.

Shelter Capital Partners LLC, 718 F.3d 1006, 1015-20 (9th Cir. 2013); Viacom

Int’l, Inc., 676 F.3d at 38-40; Perfect 10, Inc. v. CCBill LLC, 488 F.3d 1102,

1117-18 (9th Cir. 2007).

      In an effort to narrow the word “user,” BWP suggests the ordinary meaning

of the term would protect every ISP from liability for copyright infringement.

See Aplt. Br. at 17. BWP has offered several alternative definitions of “user” – at

one point suggesting “user” should exclude an ISP’s owners, employees, and

agents, at another point suggesting “user” should exclude anyone who entered

into a contract and received compensation from an ISP.

      Putting aside, for a moment, that BWP offers no legal authority to support

either definition, we need not look far to reject the argument that a plain language

definition of “user” will protect every ISP from liability for copyright

infringement. 5 The term “user” cannot be read in isolation, it must be read in

      5
        BWP relies upon three cases ostensibly supporting its definition of “user”
as excluding employees, agents, or owners. But none of the cases analyze or

                                         -7-
conjunction with the remainder of the safe harbor provision. See King v.

Burwell, 135 S. Ct. 2480, 2489 (2015). Safe harbor protection is conditioned on

various factors: An ISP will only qualify for safe harbor protection when it can

show, inter alia, that the content was stored at the direction of a “user,” that the

ISP had no actual knowledge of the infringement, that there were no surrounding

facts or circumstances making the infringement apparent, or that upon learning of

the infringement, the ISP acted expeditiously to remove or disable access to the

infringing material. See 17 U.S.C. § 512(c)(1)(A).

      BWP also argues that Examiners are agents of AXS and therefore not

“users.” No evidence supports the notion that the Examiners are agents. Thus,

the argument is contrary to the language of the contract, our interpretation of the

term “user,” and agency principles generally. As previously stated, a “user” is

anyone who uses a website — no class of individuals is inherently excluded.

Moreover, the Examiners are not agents – the contract language explicitly

designates Examiners as independent contractors: “You will provide the Services

support the suggested definition of “users.” See UMG Recording, Inc. v. Escape
Media Grp., Inc., No. 11-civ-8407, 2014 WL 5089743 (S.D.N.Y. Sept. 29, 2014)
(safe harbor provision never discussed or raised as an affirmative defense);
Capitol Records, Inc. v. MP3tunes, LLC, 48 F. Supp. 3d 703, 714-18 (S.D.N.Y.
2014) (holding that when executives have actual knowledge of the specific
instances of infringement they lose the safe harbor protection); Capitol Records,
LLC v. Vimeo, LLC, 972 F. Supp. 2d 500, 518 (S.D.N.Y. 2013) (holding that the
determinative consideration was whether the infringing postings were made by
employees at the direction of their employer, not whether it was an employee who
had posted the infringing material).

                                          -8-
hereunder as an independent contractor and not as the agent, employee, legal

representative, partner, or joint venturer of Examiner.com.” J.A. 138. We may

rightfully consider that language. United States v. New Mexico, 581 F.2d 803,

808 (10th Cir. 1978).

      Finally, BWP argues that even if there is no actual agency relationship, the

Examiners had apparent authority and therefore should be considered employees

of AXS under Community for Creative Non-Violence v. Reid, 490 U.S. 730, 741

(1989). There are numerous reasons to reject this argument. First, evidentiary

insufficiency. As the district court noted, we lack evidence of an agency

relationship or any apparent authority. See Restatement (Third) of Agency § 3.03

cmt. b (Am. Law. Inst. (2015)) (“[A]n agent’s apparent authority originates with

expressive conduct by the principal toward a third party . . . [t]he fact that one

party performs a service that facilitates the other’s business does not constitute

such a manifestation.”).

      Second, even if the Examiners have apparent authority, and they do not,

this does not equate to an employee-employer relationship under Reid. 490 U.S.

at 741. In Reid, the Supreme Court analyzed an oral agreement between two

parties and at one point in its analysis recognized that because “Congress

intended terms such as ‘employee,’ ‘employer,’ and ‘scope of employment’ to be

understood in light of agency law, we have relied on the general common law of

agency, rather than on the law of any particular State, to give meaning to these

                                          -9-
terms.” Id. at 740. While BWP correctly identifies that Reid involves an analysis

of copyright law generally and that Reid dealt minimally with agency law issues,

nowhere in Reid is there anything to support the assertion that apparent authority

would automatically transform an agent into an employee. Aplt. Br. at 42.

      Third, as previously discussed, simply because someone is an employee

does not automatically disqualify him as a “user” under § 512. Therefore, even if

we were to ignore the contract language and accept both of BWP’s flawed legal

assertions — AXS would still not be automatically disqualified from the safe

harbor.

      2.     The infringing material was not stored at the direction of AXS.

      The key to limiting the safe harbor provision and preventing the creation of

the “lawless no-man’s-land,” Aplt. Br. at 17, is to look to the language

constraining the word “user.” The relevant question isn’t who is the “user,” but

rather, who directed the storage of the infringing content? See 17 U.S.C.

§ 512(c)(1). Key to this provision is control. There is no protection under § 512

when the infringing material is on the system or network as a result of the ISP’s

“own acts or decisions.” H.R. Rep. No. 105-551, pt.2, at 53 (1998). When an

ISP “actively encourag[es] infringement, by urging [its] users to both upload and

download particular copyrighted works,” it will not reap the benefits of § 512’s

safe harbor. Columbia Pictures Indus., Inc. v. Fung, 710 F.3d 1020, 1043 (9th

Cir. 2013). However, if the infringing content has merely gone through a

                                        -10-
screening or automated process, the ISP will generally benefit from the safe

harbor’s protection. See, e.g., Shelter Capital Partners LLC, 718 F.3d at 1020;

IO Grp., Inc. v. Veoh Networks, Inc., 586 F. Supp. 2d 1132, 1146-48 (N.D. Cal.

2008); CoStar Grp., Inc. v. LoopNet, Inc., 164 F. Supp. 2d 688, 701-02 (D. Md.

2001), aff’d, 373 F.3d 544 (4th Cir. 2004).

      BWP argues that even if Examiners are “users,” AXS cannot rely upon the

safe harbor because it directed the Examiners to post the infringing content.

According to BWP, AXS created this control by issuing instructions on the

general topics Examiners were to write about, actively soliciting new articles, and

suggesting that Examiners include slide shows or pictures to accompany articles.

BWP, however, fails to explain how this evidence crosses the chasm between

encouraging the Examiners to post pictures with articles and encouraging

Examiners to post infringing content. Not only did AXS make clear copyright

infringement was prohibited, it also provided Examiners with licensed

photographs to accompany their articles. No reasonable trier of fact could find

that the infringement was at the direction of AXS.

      3.     AXS did not have actual or circumstantial knowledge of the
             copyright infringement and therefore, is not disqualified from safe
             harbor protection.

      Because AXS cleared the initial hurdle requiring the content be stored at

the direction of a “user,” the next step is to determine whether AXS has been

disqualified from the safe harbor by any of the subsequent provisions. Relevant

                                        -11-
to this case, if the ISP has actual or circumstantial knowledge of the infringing

activity, it does not qualify for safe harbor protection. See 17 U.S.C.

§ 512(c)(1)(A)(i)-(ii).

      a.     AXS was not willfully blind to the infringement and therefore cannot
             be said to have actual or circumstantial knowledge of the
             infringement.

      Because photographs of celebrities are typically protected by copyright and

AXS knew celebrity images were being posted on Examiner.com, BWP asserts

that AXS was willfully blind to the copyright infringement. BWP argues that “by

requiring Examiners to post (specific) content to the Website (periodically under

threat of termination), Defendant engages in precisely the kind of purposeful

conduct that brought about the infringement.” Aplt. Br. at 36. This statement is

contrary to both the evidence in the record and cases interpreting the DMCA. As

previously stated, there is nothing in the record showing that AXS encouraged the

Examiners to post infringing material. There is also nothing in the record

showing that AXS ignored signs or circumstances suggesting copyright

infringement was occurring on Examiner.com. Although BWP is correct in

stating AXS encouraged Examiners to incorporate photographs into articles, AXS

provided Examiners a legal means by which to accomplish this. Examiners have

access to a photo bank full of images for which AXS owns the licenses. Prior

cases also clearly establish that “merely hosting a category of copyrightable

content, such as music videos, with the general knowledge that one’s services

                                        -12-
could be used to share infringing material, is insufficient to meet the actual

knowledge requirement under § 512(c)(1)(A)(i).” Shelter Capital Partners LLC,

718 F.3d at 1022-23 (“For the same reasons, we hold that [an ISP’s] general

knowledge that it hosted copyrightable material and that its services could be

used for infringement is insufficient to constitute a red flag.”).

      b.     Agency principles cannot be used to impute the Examiners’
             knowledge to AXS.

      In a final attempt to impose liability on AXS, BWP argues, for the first

time, that the safe harbor provision is inapplicable because agency principles

would impute the Examiner’s knowledge onto AXS, making it liable for their

actions. We require that “[f]or each issue raised on appeal, all briefs must cite

the precise reference in the record where the issue was raised and ruled on.” 10th

Cir. R. 28.2(C)(2). BWP’s briefs fail to show where the argument of imputed

knowledge was raised and ruled upon below and therefore, this argument is

waived. 6 See, e.g., ClearOne Commc’ns, Inc. v. Bowers, 651 F.3d 1200, 1213

(10th Cir. 2011).

      AFFIRMED.

      6
         Moreover, despite BWP’s statement at oral argument that this issue was
fully briefed in a memorandum of law, our review of the record suggests
otherwise.

                                         -13-