In a little-noticed case in San Diego, a federal court has declined to dismiss a copyright suit against Scribd.com filed by a financial writer whose books were uploaded to the document-storage site without permission. Scribd had moved to dismiss Larry Williams' entire complaint under Rule 12(b)(6), relying chiefly on the DMCA Section 512(c) safe harbor for "storage at the direction of a user." But, as I predicted, the court held that a ruling on the applicability of the safe harbors was not appropriate at the motion-to-dismiss stage, given the inherently fact-specific nature of the inquiry. Indeed, the major rulings on the scope of the Section 512(c) safe harbor -- Io v. Veoh, UMG v. Veoh, and Viacom v. YouTube -- all came in the context of summary judgment, after extensive discovery regarding the defendants' copyright compliance practices.
The court also made significant rulings about the adequacy of the complaint's allegations regarding direct, contributory, and vicarious infringement claims. The court -- which repeatedly criticized the poor quality of the complaint -- held that Williams did not adequately plead direct infringement under CoStar v. LoopNet's requirement of "volitional conduct"; alleging that the uploader was "friends" with Scribd's CEO didn't cut it. The court did, however, hold that Williams' complaint contained sufficient allegations of contributory and vicarious infringement to survive the 12(b)(6) motion.
So now discovery proceeds, and I'm sure a summary judgment motion will follow. Judge Burns' order contains multiple indications that he is likely to grant it.
Order on Motion to Dismiss in Williams v Scribd