As Gary Fung is seeking a rehearing of the IsoHunt case in the 9th Circuit, two amicus briefs were filed yesterday. The first from the EFF and the second from Google. Neither brief suggests that Fung should get off as innocent, or that he did nothing wrong. Rather, both are worried about how the broad ruling by the court for the specific situation regarding Fung and IsoHunt will lead to further abuse by copyright holders and massive chilling effects on service providers. The EFF notes that while Fung/IsoHunt may have been bad actors, it appears that the court used this to go way overboard in creating new and dangerous standards for copyright.
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.
In particular, they're quite (reasonably) worried at the court's broad interpretation of causation here, in which the court suggests that the most minor example of inducement can lead to liability for all infringement, even if the site had nothing to do with it.
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.
Meanwhile, Google's focus is on the question of "financial benefit directly attributable" from infringing activities. The DMCA, of course, includes that as one of the prongs for testing whether or not a site gets safe harbor protections. Most courts have found that indirect profits don't make you lose safe harbors: i.e., if you're just making money on ads from a page that has infringing content, that's not "directly attributable". Most people recognize that for it to be "directly attributable" then it needs to be something like actually selling the infringing content, and the direct profits from that action need to be shown. Instead, copyright maximalists have tried to argue that if you have infringement on a site and some money is made (i.e., there are ads or affiliate links) then, that violates that prong of the test and you lose your safe harbors. Most courts have realized that's crazy. But the Fung ruling went very close to the maximalist view, and that (quite reasonably) has Google concerned. Specifically, it's concerned that the ruling could be read to mean that any "influence" a site has over content means it's liable for all of the content on the site:
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).
As Google right notes, this would lead to "absurd results."
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.
But, of course, that's crazy (even if it's exactly what many maximalists actually do seem to want). Hopefully, the court is willing to revisit these issues and recognize that its original ruling went overboard because of the situations in this case, and that could unfairly mess up other legitimate offerings.