This Panel Opinion is a classic case of bad facts making bad law. Amicus Electronic Frontier Foundation does not file this brief to dispute the Court's factual conclusions regarding the conduct at issue in this case. However, the Panel Opinion went far beyond what was necessary to address that conduct. As a result, it has created new legal uncertainty for online service providers and their customers, undermining over a decade of legislation and jurisprudence designed to help reduce that uncertainty. A predictable legal environment has proven to be crucial not only the growth of the Internet generally, but the growth of innovative platforms for free expression, in particular. This case should not provide a vehicle to impede that development.

Most important, the Panel Opinion adopts a "loose causation theory" that disconnects the scope of inducement liability from the defendants' acts—raising the troubling possibility that a single inducing act (such as a message to one customer) could open the floodgates to liability for third-party infringement entirely unrelated to that act. The Opinion's loose causation theory conflicts with fundamental common law principles of proximate cause essential to both predictability and fairness. The Panel's decision to depart from those principles was apparently based on the unfounded assumption that the Supreme Court's decision in Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913 (2005) requires it. Not so. First, Grokster expressly recognized that secondary liability under copyright derives from common law principles. Second, given that Grokster's specific inducement standard was imported from patent law, it is more likely that the Court also intended to import the analytical framework patent law applies where, as here, a service is capable of both infringing and non-infringing uses.

There is a danger that this passage could be misconstrued to stand for a broader proposition that we do not believe the panel intended: that any time an online service provider is found to have exercised "substantial influence" over any user-submitted content on its service—no matter what that finding was based on—it thereby loses its DMCA safe harbor protections for all user-submitted content on the entire service. This is how some copyright plaintiffs have already tried to read the panel's ruling. In a recent submission to the Southern District of New York in the Viacom v. YouTube case, for example, the plaintiffs have asserted, citing the panel opinion, that this Court “made clear that where DMCA eligibility is unavailable due to the right and ability to control prong of the safe harbor, the DMCA defense is broadly lost as to all clips in suit.” Ltr. from Paul M. Smith to Hon. Louis L. Stanton at 2 (March 22, 2013) (attached as Ex. 1).

Imagine, for example, a video-hosting service that was otherwise eligible for the section 512(c) safe harbor, but that on one occasion commissioned a particular user to upload a video that, unbeknownst to the service, turned out to be infringing. A court might conclude that the service exerted a “substantial influence” over that instance of infringement and, if the service earned a direct financial benefit from it, there would be grounds for denying the safe harbor for a claim based on that video. But it would make no sense to thereby disqualify the service provider from DMCA protection across the board—even for countless other videos whose posting it did not control or from which it earned no benefit.

Likewise, consider a search engine eligible for protection under the section 512(d) safe harbor for linking to infringing material online. If one of the millions of links provided by the search engine pointed users to infringing material that had been authored by the search engine itself and that users were charged to view, a finding of control plus financial benefit might be warranted for that particular link. But, again, there would be no plausible basis for categorically depriving the service of the safe harbor for the millions of unrelated links it delivers to material that it does not control or financially benefit from.

Unlike patents, copyrights protect expression, not products or devices. Inducement liability is not limited, either logically or as articulated in Grokster III, to those who distribute a “device.” As a result, one can infringe a copyright through culpable actions resulting in the impermissible reproduction of copyrighted expression, whether those actions involve making available a device or product or providing some service used in accomplishing the infringement. For example, a retail copying service that accepts and copies copyrighted material for customers after broadly promoting its willingness to do so may be liable for the resulting infringement although it does not produce any copying machines or sell them; all it provides is the “service” of copying. Whether the service makes copies using machines of its own manufacture, machines it owns, or machines in someone else’s shop would not matter, as copyright liability depends on one’s purposeful involvement in the process of reproducing copyrighted material, not the precise nature of that involvement.

For a time, for example, isoHunt prominently featured a list of “Box Office Movies,” containing the 20 highest-grossing movies then playing in U.S. theaters. When a user clicked on a listed title, she would be invited to “upload [a] torrent” file for that movie. In other words, she would be asked to upload a file that, once downloaded by other users, would lead directly to their obtaining infringing content. Fung also posted numerous messages to the isoHunt forum requesting that users upload torrents for specific copyrighted films; in other posts, he provided links to torrent files for copyrighted movies, urging users to download them

Fung and amicus curiae Google argue that the acts of infringement must be caused by the manifestations of the distributor’s improper object—that is, by the inducing messages themselves. Columbia, on the other hand, maintains that it need only prove that the “acts of infringement by third parties” were caused by the product distributed or services provided.

We are mindful, however, of the potential severity of a loose causation theory for inducement liability. Under this theory of liability, the only causation requirement is that the product or service at issue was used to infringe the plaintiff’s copyrights. The possible reach of liability is enormous, particularly in the digital age.

Fung argues, on this basis, that some of the acts of infringement by third parties relied upon by the district court may not have involved his websites at all. He points out, for example, that by far the largest number of torrents tracked by the Torrentbox tracker are obtained from somewhere other than Torrentbox.com. If a user obtained a torrent from a source other than his websites, Fung maintains, he cannot be held liable for the infringement that resulted.

We do not decide the degree to which Fung can be held liable for having caused infringements by users of his sites or trackers. The only issue presently before us is the permanent injunction, which, as in Grokster III, does not in this case depend on the “exact calculation of infringing use[] as a basis for a claim of damages.” 545 U.S. at 941. We therefore need not further entertain Fung’s causation arguments at this time, but leave it to the district court to consider them, in light of the observations we have made, when it calculates damages.

The district court should not have rejected this safe harbor on the ground it did. Perfect 10, Inc. v. CCBill LLC, 488 F.3d 1102 (9th Cir. 2007), held that the § 512(a) safe harbor does not require that the service provider transmit or route infringing material, explaining that “[t]here is no requirement in the statute that the communications must themselves be infringing, and we see no reason to import such a requirement.” Id. at 1116; see also id. (“Service providers are immune for transmitting all digital online communications, not just those that directly infringe.”).

Under these circumstances, we hold the connection between the infringing activity and Fung’s income stream derived from advertising is sufficiently direct to meet the direct “financial benefit” prong of § 512(c)(1)(B). Fung promoted advertising by pointing to infringing activity; obtained advertising revenue that depended on the number of visitors to his sites; attracted primarily visitors who were seeking to engage in infringing activity, as that is mostly what occurred on his sites; and encouraged that infringing activity. Given this confluence of circumstances, Fung’s revenue stream was tied directly to the infringing activity involving his websites, both as to his ability to attract advertisers and as to the amount of revenue he received.

Beyond the specifically-named examples, no one reading this injunction can tell what it means for a term to be “widely known to be associated with copyright infringement.” We understand the desire to build flexibility into the injunction. But Rule 65(d), overall, prefers certainty to flexibility. Subsection (ii) of the injunction’s definition of “Infringement-Related Terms” therefore must be modified to state simply that the phrase includes specifically named terms.

Fung maintains, and we agree, that certain provisions of the injunction could be interpreted to prevent Fung from ever working for any technology company whose services others might use to infringe copyright, even if those other companies are not themselves liable for primary or secondary copyright infringement.... We agree that insofar as the injunction can be interpreted to prohibit Fung from seeking legitimate employment, it is more burdensome than necessary to provide Plaintiffs relief.

"I got it going, had downloads start from the US and Europe almost immediately, which made me a very happy guy," Taylor told TorrentFreak.

However, this enthusiasm faded quickly when he tried to access the torrent from a US connection a day later. Instead of a link to the torrent file the filmmaker was welcomed with the following message. “Torrent has been censored, as required by US court.”

Judges Fisher and Berzon had problems with that interpretation. Judge Fisher said that under vicarious liability principles, most commercial web sites would satisfy the “financial benefit” provision, and since in response to a takedown notice they could remove the content, that would satisfy Marenberg’s interpretation of the control provision. Both Judges Fisher and Berzon told Marenberg that under his interpretation, the safe harbor would therefore go away: Judge Berzon told Marenberg his view of the statute “kind of blown the whole thing up.”

One issue concerns how Fung should remove searches from his three search engines: Isohunt, Torrentbox and Podtropolis. The Motion Picture Association of America, which brought the case, has sent keyword searches it wants removed, like the number 10, Alice in Wonderland and Dracula, Rothken said.

"One person's copyrighted Wizard of Oz is another person's public domain work," Rothken said in a brief telephone interview Tuesday. He said the movie studios should provide URLs or hashes, which would positively identify which search link should be removed.

"The motion picture studios do not have a monopoly on names on things. That is where the injunction is violating the First Amendment," he said.

Second, given the way in which Defendants' system works, when Defendants' end-users download one of Plaintiffs' works, the end-users automatically and simultaneously further distribute the work to innumerable others as a required part of the download process; additionally, at the conclusion of the download, Defendants' end-users obtain an unprotected digital copy of Plaintiffs' work that those end-users can further distribute indefinitely at will.

It is axiomatic that the availability of free infringing copies of Plaintiffs' works through Defendants' websites irreparably undermines the growing legitimate market for consumers to purchase access to the same works.

Finally, the Court agrees that the public interest will be served with a permanent injunction, since it will protect Plaintiffs' copyrights against increased and unrestrained infringement.

Defendants shall be permanently enjoined from knowingly engaging in any of the following activities in connection with the Isohunt System or any Comparable System:

(a) hosting, indexing, linking to, or otherwise providing access to any Dot-torrent or similar files that correspond, point or lead to any of the Copyrighted Works;

(b) assisting with end-user reproductions or transmissions of any of the Copyrighted Works through a tracker server, or any other server or software that assists users in locating, identifying or obtaining files from other users offering any of the Copyrighted Works for transmission; or

(c) hosting or providing access to any of the Copyrighted Works.

"It is axiomatic that the availability of free infringing copies of plaintiffs' works through defendants' websites irreparably undermines the growing legitimate market for consumers to purchase access to the same works,"

"Morally, I'm a Christian. 'Thou shalt not steal.' But to me, even copyright infringement when it occurs may not necessarily be stealing."

"(copyright infringement) does not easily equate with theft, conversion, or fraud... The infringer invades a statutorily defined province guaranteed to the copyright holder alone. But he does not assume physical control over copyright; nor does he wholly deprive its owner of its use."