Important Appeals Court Ruling States Clearly That Merely Having An IP Address Is Insufficient For Infringement Claims

Copyright

from the a-good-ruling dept

Tons of copyright lawsuits (and even more copyright trolling shakedowns that never even reach court) are based on one single bit of data: the IP address. We’ve seen numerous district courts reject using a bare IP address as evidence of infringement, but now we have a very important (even if short and to the point) ruling in the 9th Circuit that could put a serious damper on copyright trolling.

In this copyright action, we consider whether a bare allegation that a defendant is the registered subscriber of an Internet Protocol (?IP?) address associated with infringing activity is sufficient to state a claim for direct or contributory infringement. We conclude that it is not.

The case involved well known copyright trolling lawyer Carl Crowell representing Cobbler Nevada LLC. As we discussed in our article on the district court decision, the actions in this case were particularly nefarious. Crowell quickly learned that the IP address in question belonged to an adult foster care home, but decided to go after the operator, Thomas Gonzales, even though he was aware that any of the many residents or staff may have actually been responsible for the infringement. Gonzales (reasonably) refused to just cough up the names and details of residents and staff without a court order, and Crowell’s response was just to go after Gonzales directly. But the facts of this case made it especially easy for the lower court to highlight how a mere IP address is not nearly enough to allege infringement.

The district court properly dismissed Cobbler Nevada?s claims. The direct infringement claim fails because Gonzales?s status as the registered subscriber of an infringing IP address, standing alone, does not create a reasonable inference that he is also the infringer. Because multiple devices and individuals may be able to connect via an IP address, simply identifying the IP subscriber solves only part of the puzzle. A plaintiff must allege something more to create a reasonable inference that a subscriber is also an infringer. Nor can Cobbler Nevada succeed on a contributory infringement theory because, without allegations of intentional encouragement or inducement of infringement, an individual?s failure to take affirmative steps to police his internet connection is insufficient to state a claim.

The direct infringement part is easy. Obviously, there’s no evidence presented with a single IP address that Gonzales was downloading, so it’s on its face ridiculous to claim to have evidence of direct infringement.

The only connection between Gonzales and the infringement was that he was the registered internet subscriber and that he was sent infringement notices. To establish a claim of copyright infringement, Cobbler Nevada ?must show that [it] owns the copyright and that the defendant himself violated one or more of the plaintiff?s exclusive rights under the Copyright Act.? Ellison v. Robertson, 357 F.3d 1072, 1076 (9th Cir. 2004). Cobbler Nevada has not done so.

The more important part here is the contributory infringement argument. Crowell/Cobbler claimed that Gonzales could be liable for contributory infringement for failing to lock down and police his internet connection. That’s a pretty big leap and the court is not impressed. It first highlights the ever important Betamax ruling that you can’t make a third party liable for infringement for distributing a product or service that is “widely used for legitimate, non-infringing purposes.” Internet access counts. It also points to the Grokster ruling, in which the Supreme Court said that “inducement” to infringe could be seen as contributory liability. But merely failing to police your internet connection is, in no way, inducement.

Cobbler Nevada?s complaint lacks any allegations that Gonzales ?actively encourage[ed] (or induc[ed]) infringement through specific acts.?… Nothing in Cobbler Nevada?s complaint alleges, or even suggests, that Gonzales actively induced or materially contributed to the infringement through ?purposeful, culpable expression and conduct.? … No allegations suggest that Gonzales made any ?clear expression? or took ?affirmative steps? to foster the infringement?Gonzales?s only action was his failure to ?secure, police and protect? the connection.

And, based on the Betamax test, Gonzales is in the clear as well:

Providing internet access can hardly be said to be distributing a product or service that is not ?capable of substantial? or ?commercially significant noninfringing uses.?

The court has some additional words on Crowell trying to push his theory of contributory liability:

We note that Cobbler Nevada?s theory both strays from precedent and effectively creates an affirmative duty for private internet subscribers to actively monitor their internet service for infringement. Imposing such a duty would put at risk any purchaser of internet service who shares access with a family member or roommate, or who is not technologically savvy enough to secure the connection to block access by a frugal neighbor. This situation hardly seems to be one of ?the circumstances in which it is just to hold one individual accountable for the actions of another.?

The court then upholds the lower court’s awarding of attorney’s fees to Gonzales, noting the “objective unreasonableness” of Cobbler’s arguments.

Specifically, the court flagged as unreasonable Cobbler Nevada?s decision to name Gonzales as the defendant, even after concluding that Gonzales was not ?a regular occupant of the residence or a likely infringer.? The court also considered deterrence: it reasoned that awarding fees would deter Cobbler Nevada from an ?overaggressive pursuit of alleged infringers without a reasonable factual basis? while encouraging defendants with valid defenses to defend their rights. See Fogerty, 510 U.S. at 534 n.19. The court?s rationale is in keeping with the purposes of the Copyright Act. See Kirtsaeng, 136 S. Ct. at 1988?89 (a district court ?may order fee-shifting . . . to deter . . . overaggressive assertions of copyright claims?).

Now, where this case may have a bigger impact is in lawsuits against ISPs for failing to police their networks. You may have heard of a few of these cases recently. Just last week Cox settled one of those cases, but it’s facing an even bigger one from all the major record labels.

But that case is not unlike this one, just on a different scale. In this case, Gonzales is the ISP, and got sued for failing to police his network, despite receiving many infringement notices. As the court makes clear, that does not make him liable for infringement. In the Cox case, it too is the ISP who was sued for failing to police its network, despite receiving many infringement notices (indeed, Cox did much more than Gonzales). So it would appear that we may have a bit of a circuit clash here, in which the 4th Circuit says that ISPs can be liable for infringement based solely on notices of evidence that is nothing more than IP addresses, while the 9th Circuit (correctly) understands the implications of such a ruling, even to the point of finding it “objectively unreasonable.”

Filed Under: 9th circuit, carl crowell, contributory infringement, copyright, copyright trolling, evidence, inducement, ip address