Columbia v. Fung Summary Judgment Order
The court found Fung and his company liable under the inducement standard articulated by the Supreme Court in MGM v. Grokster (also presided over by Judge Wilson), finding that "evidence of Defendants' intent to induce infringement is overwhelming and beyond reasonable dispute." Such evidence included a "Box Office Movies" feature of the site; Fung's provision of "a link to a torrent file for the recent film Lord of the Rings: Return of the King on the Isohunt site" along with the statement "if you are curious, download this"; use of the word "warez" as a metatag; and pro-piracy statements such as "they accuse us for [sic] thieves, and they r [sic] right. Only we r [sic] ‘stealing’ from the lechers (them) and not the originators (artists)" and "Morally, I’m a Christian. 'Thou shalt not steal.' But to me, even copyright infringement when it occurs may not necessarily be stealing." Such statements, said the court, "provide probative evidence regarding Fung’s intent in creating the Defendant websites to aid others infringement." The court also cataloged extensive evidence that the site and its admins assisted users in copyright infringement, and implemented technical features that promote infringement. Lastly, the court noted that about 95% of works "shared" using Fung's sites were infringing, and that the defendants' "ostrich-like refusal to discover the extent to which its system was being used to infringe copyright is merely another piece of evidence” of Defendants’ purposeful, culpable conduct in inducing third party infringement. See In re Aimster Copyright Litig., 334 F.3d 643, 655 (7th Cir. 2003)."
Judge Wilson also soundly rejected Fung's DMCA safe harbor defense, and in the course broke some new ground. As far as I am aware, this is the first case to find that a DMCA safe harbor was unavailable because the defendants had "red flag" knowledge of its users' infringement. See 17 U.S.C. § 512(d)(1)(B) (no safe harbor where defendant is "aware of facts or circumstances from which infringing activity is apparent."). Explained the court:
There is a variety of other evidence of Defendants’ willful ignorance to ongoing infringement. Defendants designed their website to include lists such as "Top Searches," "Top 20 Movies," "Top 20 TV Shows," and "Box Office Movies," and Defendants designed these lists to automatically update to reflect user activities. These lists included numerous copyrighted works. (SUF ¶¶ 8-12, 47-55.) See Grokster V, 454 F. Supp. 2d at 992 ("it is common knowledge that most popular music and movies are copyrighted"). Thus, unless Defendants somehow refused to look at their own webpages, they invariably would have been known that (1) infringing material was likely to be available and (2) most of Defendants’ users were searching for and downloading infringing material.But perhaps the most significant ruling in the opinion was the court's holding that the DMCA's safe harbors are simply not available where inducement has been established:
[I]nducement liability and the Digital Millennium Copyright Act safe harbors are inherently contradictory. Inducement liability is based on active bad faith conduct aimed at promoting infringement; the statutory safe harbors are based on passive good faith conduct aimed at operating a legitimate internet business. Here, as discussed supra, Defendants are liable for inducement. There is no safe harbor for such conduct.As far as I'm aware, this is the first time a court has squarely ruled that there is no DMCA safe harbor from an inducement claim; as I noted, the court in the UMG v. Veoh case skirted this issue.
Next up: the remedy phase, where the court will consider damages and an injunction.
Lead attorney for the plaintiffs is Steve Fabrizio of Jenner & Block, who also won the TorrentSpy and Usenet.com cases. Ira Rothken, who came out on the losing end of the similar TorrentSpy case, represents Fung and Isohunt Web Technologies, Inc.
Disclosure: I worked on this case for plaintiff Twentieth Century Fox Film Corp. while previously employed there. My current employer, NBC Universal, Inc., is the parent of plaintiff Universal City Studios LLLP, though I have not worked on the case while at NBCU.