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Full Opinion
FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
COLUMBIA PICTURES INDUSTRIES, No. 10-55946
INC.; DISNEY ENTERPRISES, INC.;
PARAMOUNT PICTURES D.C. No.
CORPORATION ; TRISTAR PICTURES, 2:06-cv-05578-
INC.; TWENTIETH CENTURY FOX SVW-JC
FILM CORPORATION ; UNIVERSAL
CITY STUDIOS LLLP; UNIVERSAL
CITY STUDIOS PRODUCTIONS, LLLP; OPINION
WARNER BROS ENTERTAINMENT ,
INC.,
Plaintiffs-Appellees,
v.
GARY FUNG ; ISOHUNT WEB
TECHNOLOGIES, INC.,
Defendants-Appellants.
Appeal from the United States District Court
for the Central District of California
Stephen V. Wilson, District Judge, Presiding
Argued May 6, 2011
Submitted March 21, 2013
Pasadena, California
Filed March 21, 2013
2 COLUMBIA PICTURES INDUSTRIES V . FUNG
Before: Harry Pregerson, Raymond C. Fisher, and
Marsha S. Berzon, Circuit Judges.
Opinion by Judge Berzon
SUMMARY*
Copyright
The panel affirmed in part and vacated in part the district
courtâs judgment in favor of film studios, which alleged that
the services offered and websites maintained by the
defendants induced third parties to download infringing
copies of the studiosâ copyrighted works.
Affirming the district courtâs summary judgment, the
panel held that under Metro-Goldwyn-Mayer Studios, Inc. v.
Grokster Ltd., 545 U.S. 913 (2005), the defendants were
liable for contributory copyright infringement on an
inducement theory because the plaintiffs established (1)
distribution of a device or product, (2) acts of infringement,
(3) an object of promoting the productâs use to infringe
copyright, and (4) causation in the defendantsâ use of the
peer-to-peer file sharing protocol known as BitTorrent.
The panel held that the defendants were not entitled to
protection from liability under any of the safe harbor
provisions of the Digital Millennium Copyright Act,
including safe harbors provided by 17 U.S.C. § 512(a), (c),
*
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
COLUMBIA PICTURES INDUSTRIES V . FUNG 3
and (d) for transitory digital network communications,
information residing on systems or networks at direction of
users, and information location tools. The panel nonetheless
rejected the argument that inducement liability is inherently
incompatible with protection under the safe harbors.
Reversing and modifying in part the district courtâs
permanent injunction, the panel held that certain provisions
of the injunction were too vague to meet the notice
requirements of Fed. R. Civ. P. 65(d), and certain provisions
were unduly burdensome.
COUNSEL
Ira P. Rothken, Esq. (argued), Robert L. Kovsky, Esq., and
Jared R. Smith, Esq. of Rothken Law Firm, Novato,
California, for Defendant-Appellants.
Paul M. Smith (argued), Steven B. Fabrizio, William M.
Hohengarten, Duane C. Pozza, Garret A. Levin, Caroline D.
Lopez, Jenner & Block LLP, Washington, D.C.; Karen R.
Thorland, Motion Picture Association of America, Inc.,
Sherman Oaks, California; Gianni P. Servodidio, Jenner &
Block LLP, New York, New York, for Plaintiffs-Appellees.
Andrew H. Schapiro, Mayer Brown LLP, New York, New
York, for amicus curiae Google, Inc.
4 COLUMBIA PICTURES INDUSTRIES V . FUNG
OPINION
BERZON, Circuit Judge:
This case is yet another concerning the application of
established intellectual property concepts to new
technologies. See, e.g., UMG Recordings, Inc. v. Shelter
Capital Partners, LLC, â F.3d â (9th Cir. 2013); Perfect
10, Inc. v. Visa Intâl Serv. Assân, 494 F.3d 788 (9th Cir.
2007); Viacom Intâl, Inc. v. YouTube, Inc., 676 F.3d 19 (2d
Cir. 2012). Various film studios alleged that the services
offered and websites maintained by Appellants Gary Fung
and his company, isoHunt Web Technologies, Inc.
(isohunt.com, torrentbox.com, podtropolis.com, and
ed2k-it.com, collectively referred to in this opinion as âFungâ
or the âFung sitesâ) induced third parties to download
infringing copies of the studiosâ copyrighted works.1 The
district court agreed, holding that the undisputed facts
establish that Fung is liable for contributory copyright
infringement. The district court also held as a matter of law
that Fung is not entitled to protection from damages liability
under any of the âsafe harborâ provisions of the Digital
Millennium Copyright Act (âDMCAâ), 17 U.S.C. § 512,
Congressâs foray into mediating the competing interests in
protecting intellectual property interests and in encouraging
creative development of devices for using the Internet to
make information available. By separate order, the district
court permanently enjoined Fung from engaging in a number
1
Plaintiffs-Appellees are: Columbia Pictures Industries, Inc.; Disney
Enterprises, Inc.; Paramount Pictures Corporation; Tristar Pictures, Inc.;
Twentieth Century Fox Film Corporation; Universal City Studios LLLP;
and W arner Bros. Entertainment, Inc.; collectively referred to as
âColumbia.â
COLUMBIA PICTURES INDUSTRIES V . FUNG 5
of activities that ostensibly facilitate the infringement of
Plaintiffsâ works.
Fung contests the copyright violation determination as
well as the determination of his ineligibility for safe harbor
protection under the DMCA. He also argues that the
injunction is punitive and unduly vague, violates his rights to
free speech, and exceeds the district courtâs jurisdiction by
requiring filtering of communications occurring outside of the
United States. We affirm on the liability issues but reverse in
part with regard to the injunctive relief granted.
TECHNOLOGICAL BACKGROUND
This case concerns a peer-to-peer file sharing protocol2
known as BitTorrent. We begin by providing basic
background information useful to understanding the role the
Fung sites play in copyright infringement.
I. Client-server vs. peer-to-peer networks
The traditional method of sharing content over a network
is the relatively straightforward client-server model. In a
client-server network, one or more central computers (called
âserversâ) store the information; upon request from a user (or
âclientâ), the server sends the requested information to the
client. In other words, the server supplies information
resources to clients, but the clients do not share any of their
resources with the server. Client-server networks tend to be
relatively secure, but they have a few drawbacks: if the server
goes down, the entire network fails; and if many clients make
2
A âprotocolâ is a set of rules used by computers to communicate with
each other over a network. Websterâs II Dictionary 571 (3d ed. 2005).
6 COLUMBIA PICTURES INDUSTRIES V . FUNG
requests at the same time, the server can become
overwhelmed, increasing the time it takes the server to fulfill
requests from clients. Client-server systems, moreover, tend
to be more expensive to set up and operate than other
systems. Websites work on a client-server model, with the
server storing the websiteâs content and delivering it to users
upon demand.
âPeer-to-peerâ (P2P) networking is a generic term used to
refer to several different types of technology that have one
thing in common: a decentralized infrastructure whereby each
participant in the network (typically called a âpeer,â but
sometimes called a ânodeâ) acts as both a supplier and
consumer of information resources. Although less secure,
P2P networks are generally more reliable than client-server
networks and do not suffer from the same bottleneck
problems. See generally Metro-Goldwyn-Mayer Studios, Inc.
v. Grokster, Ltd. (âGrokster IIIâ), 545 U.S. 913, 920 & n.1
(2005). These strengths make P2P networks ideally suited for
sharing large files, a feature that has led to their adoption by,
among others, those wanting access to pirated media,
including music, movies, and television shows. Id. But there
also are a great number of non-infringing uses for peer-to-
peer networks; copyright infringement is in no sense intrinsic
to the technology, any more than making unauthorized copies
of television shows was to the video tape recorder. Compare
A&M Records v. Napster, Inc., 239 F.3d 1004, 1021 (9th Cir.
2001) with Sony Corp. of Am. v. Universal City Studios, Inc.,
464 U.S. 417, 456 (1984).
II. Architecture of P2P networks
In a client-server network, clients can easily learn what
files the server has available for download, because the files
COLUMBIA PICTURES INDUSTRIES V . FUNG 7
are all in one central place. In a P2P network, in contrast,
there is no centralized file repository, so figuring out what
information other peers have available is more challenging.
The various P2P protocols permit indexing in different ways.
A. âPureâ P2P networks
In âpureâ P2P networks, a user wanting to find out which
peers have particular content available for download will send
out a search query to several of his neighbor peers. As those
neighbor peers receive the query, they send a response back
to the requesting user reporting whether they have any
content matching the search terms, and then pass the query on
to some of their neighbors, who repeat the same two steps;
this process is known as âflooding.â In large P2P networks,
the query does not get to every peer on the network, because
permitting that amount of signaling traffic would either
overwhelm the resources of the peers or use up all of the
networkâs bandwidth (or both). See Grokster III, 545 U.S. at
920 n.1. Therefore, the P2P protocol will usually specify that
queries should no longer be passed on after a certain amount
of time (the so-called âtime to liveâ) or after they have
already been passed on a certain number of times (the âhop
countâ). Once the querying user has the search results, he can
go directly to a peer that has the content desired to download
it.
This search method is an inefficient one for finding
content (especially rare content that only a few peers have),
and it causes a lot of signaling traffic on the network. The
most popular pure P2P protocol was Gnutella. Streamcast, a
Grokster defendant, used Gnutella to power its software
8 COLUMBIA PICTURES INDUSTRIES V . FUNG
application, Morpheus. See Grokster III, 545 U.S. at
921â22.3
B. âCentralizedâ P2P networks
âCentralizedâ P2P networks, by contrast, use a centralized
server to index the content available on all the peers: the user
sends the query to the indexing server, which tells the user
which peers have the content available for download. At the
same time the user tells the indexing server what files he has
available for others to download. Once the user makes
contact with the indexing server, he knows which specific
peers to contact for the content sought, which reduces search
time and signaling traffic as compared to a âpureâ P2P
protocol.
Although a centralized P2P network has similarities with
a client-server network, the key difference is that the indexing
server does not store or transfer the content. It just tells users
which other peers have the content they seek. In other words,
searching is centralized, but file transfers are peer-to-peer.
One consequent disadvantage of a centralized P2P network is
that it has a single point of potential failure: the indexing
server. If it fails, the entire system fails. Napster was a
centralized P2P network, see generally Napster, 239 F.3d at
1011â13, as, in part, is eDonkey, the technology upon which
one of the Fung sites, ed2k-it.com, is based.
3
Gnutella is still around, but it is now a âhybridâ system, a concept
discussed below. Cf. Grokster III, 545 U.S. at 921 n.3.
COLUMBIA PICTURES INDUSTRIES V . FUNG 9
C. Hybrid P2P networks
Finally, there are a number of hybrid protocols. The most
common type of hybrid systems use what are called
âsupernodes.â In these systems, each peer is called a ânode,â
and each node is assigned to one âsupernode.â A supernode
is a regular node that has been âpromoted,â usually because
it has more bandwith available, to perform certain tasks.
Each supernode indexes the content available on each of the
nodes attached to it, called its âdescendants.â When a node
sends out a search query, it goes just to the supernode to
which it is attached. The supernode responds to the query by
telling the node which of its descendant nodes has the desired
content. The supernode may also forward the query on to
other supernodes, which may or may not forward the query
on further, depending on the protocol. See generally
Grokster III, 545 U.S. at 921.
The use of supernodes is meant to broaden the search pool
as much as possible while limiting redundancy in the search.
As with centralized P2P systems, supernodes only handle
search queries, telling the nodes the addresses of the other
nodes that have the content sought; they are not ordinarily
involved in the actual file transfers themselves. Groksterâs
software application was based on a P2P protocol, FastTrack,
that uses supernodes. See Grokster III, 545 U.S. at 921.
III. BitTorrent protocol
The BitTorrent protocol, first released in 2001, is a further
variant on the P2P theme. BitTorrent is a hybrid protocol
with some key differences from âsupernodeâ systems. We
discuss those differences after first describing BitTorrentâs
distinguishing feature: how it facilitates file transfers.
10 COLUMBIA PICTURES INDUSTRIES V . FUNG
A. BitTorrent file transfers.
Traditionally, if a user wanted to download a file on a P2P
network, he would locate another peer with the desired file
and download the entire file from that peer. Alternatively, if
the download was interruptedâif, for example, the peer
sending the file signed offâthe user would find another peer
that had the file and resume the download from that peer.
The reliability and duration of the download depended on the
strength of the connection between those two peers.
Additionally, the number of peers sharing a particular file was
limited by the fact that a user could only begin sharing his
copy of the file with other peers once he had completed the
download.
With the BitTorrent protocol, however, the file is broken
up into lots of smaller âpieces,â each of which is usually
around 256 kilobytes (one-fourth of one megabyte) in size.
Whereas under the older protocols the user would download
the entire file in one large chunk from a single peer at a time,
BitTorrent permits users to download lots of different pieces
at the same time from different peers. Once a user has
downloaded all the pieces, the file is automatically
reassembled into its original form.
BitTorrent has several advantages over the traditional
downloading method. Because a user can download different
pieces of the file from many different peers at the same time,
downloading is much faster. Additionally, even before the
entire download is complete, a user can begin sharing the
pieces he has already downloaded with other peers, making
the process faster for others. Generally, at any given time,
each user is both downloading and uploading several different
pieces of a file from and to multiple other users; the
COLUMBIA PICTURES INDUSTRIES V . FUNG 11
collection of peers swapping pieces with each other is known
as a âswarm.â
B. BitTorrent architecture
To describe the structure of BitTorrent further, an
example is helpful. Let us suppose that an individual (the
âpublisherâ) decides to share via BitTorrent her copy of a
particular movie. The movie file, we shall assume, is quite
large, and is already on the publisherâs computer; the
publisher has also already downloaded and installed a
BitTorrent âclientâ program on her computer.4
To share her copy of the movie file, the publisher first
creates a very small file called a âtorrentâ or âdot-torrentâ
file, which has the file extension â.torrent.â The torrent file
is quite small, as it contains none of the actual content that
may be copyrighted but, instead, a minimal amount of vital
information: the size of the (separate) movie file being
shared; the number of âpiecesâ the movie file is broken into;
a cryptographic âhashâ5 that peers will use to authenticate the
downloaded file as a true and complete copy of the original;
4
The client program is the software application used to access the P2P
network. Unlike Grokster or Napster, which were âclosedâ systems that
permitted only authorized client programs to connect to their networks,
BitTorrent is an âopenâ system, permitting the use of any number of client
programs, nearly all of which are free. The Fung sites do not supply any
of the client programs necessary to use dot-torrent files to download the
copies of movies or other content files; users of the Fung sites have to
download such a program from elsewhere.
5
As Plaintiffsâ expert explained, âA hash is a unique digital identifier of
certain data. It is usually written as a forty-digit long hexadecimal
number, where each digit can be 0â9 or AâF.â See also Arista Records
LLC v. Lime Group LLC, 784 F. Supp. 2d 398, 423 n.21 (S.D.N.Y. 2011).
12 COLUMBIA PICTURES INDUSTRIES V . FUNG
and the address of one or more âtrackers.â Trackers,
discussed more below, serve many of the functions of an
indexing server; there are many different trackers, and they
typically are not connected or related to each other.6
Second, the publisher makes the torrent file available by
uploading it to one or more websites (âtorrent sitesâ) that
collect, organize, index, and host torrent files. Whereas
Napster and Grokster had search functionality built into their
client programs, the standard BitTorrent client program has
no such capability.7 BitTorrent users thus rely on torrent sites
to find and share torrent files. There is no central repository
of torrent files, but torrent sites strive to have the most
comprehensive torrent collection possible.
The Fung sites have two primary methods of acquiring
torrent files: soliciting them from users, who then upload the
files; and using several automated processes (called âbots,â
âcrawlers,â or âspidersâ) that collect torrent files from other
torrent sites. Because of this latter route, which other torrent
sites also routinely use, torrent sites tend to have largely
overlapping collections of torrents. According to a
declaration Fung signed in April 2008, there were then over
400 torrent sites. Because the torrent sites typically contain
only torrent files, no copyrighted material resides on these
sites.
6
In an April 2008 declaration, Fung averred that there are âclose to two
thousand different trackers run by various independent operators.â The
source of this statistic was not given.
7
A few BitTorrent client programs have begun to integrate search and
download processes in such a way that torrent sites become unnecessary,
but that fact is not germane to any issue in this case.
COLUMBIA PICTURES INDUSTRIES V . FUNG 13
Lastly, the publisher leaves her computer on and
connected to the Internet, with her BitTorrent program
running. The publisherâs job is essentially done; her
computer will continue to communicate with the tracker
assigned to the torrent file she uploaded, standing ready to
distribute the movie file (or, more accurately, parts thereof)
to others upon request.
A user seeking the uploaded movie now goes to the
torrent site to which the torrent file was uploaded and runs a
search for the movie. The search results then provide the
torrent file for the user to download. Once the user
downloads the torrent file and opens it with his BitTorrent
program, the program reads the torrent file, learns the address
of the tracker, and contacts it. The program then informs the
tracker that it is looking for the movie associated with the
downloaded torrent file and asks if there are any peers online
that have the movie available for download. Assuming that
publishers of that movie are online, the tracker will
communicate their address to the userâs BitTorrent program.
The userâs BitTorrent program will then contact the
publishersâ computers directly and begin downloading the
pieces of the movie. At this point, the various publishers are
known as âseeders,â and the downloading user a âleecher.â
Once the leecher has downloaded one or more pieces of the
movie, he, too, can be a seeder by sending other leechers the
pieces that he has downloaded.
A final few words on trackers. Although no content is
stored on or passes through trackers, they serve as a central
14 COLUMBIA PICTURES INDUSTRIES V . FUNG
hub of sorts, managing traffic for their associated torrents.8
The trackerâs primary purpose is to provide a list of peers that
have files available for download. Fung avers that this
function is the only one provided by his two trackers,
discussed below.
Because trackers are periodically unavailableâthey can
go offline for routine maintenance, reach capacity, be
shuttered by law enforcement, and so onâtorrent files will
often list addresses for more than one tracker. That way, if
the first (or âprimaryâ) tracker is down, the userâs client
program can proceed to contact the backup tracker(s).
IV. Fungâs role
Three of Fungâs websitesâisohunt.com (âisoHuntâ);
torrentbox.com (âTorrentboxâ), and podtropolis.com
(âPodtropolisâ)âare torrent sites. As described above, they
collect and organize torrent files and permit users to browse
in and search their collections. Searching is done via
keyword; users can also browse by category (movies,
television shows, music, etc.).9
8
According to the record in this case, it is also possible, although less
efficient, to distribute torrent files and to download their associated
content without a tracker, using a technology called DHT, or distributed
hash table.
9
As torrent files are added, isoHunt uses an automated process that
attempts to place the torrent file in the appropriate category by looking for
certain keywords. Torrent files with the keywords âDVDâ and âcam,â for
instanceâ the latter of which refers to a recording of a movie made with
a handheld camcorderâ would be categorized as movies.
COLUMBIA PICTURES INDUSTRIES V . FUNG 15
IsoHunt, however, which appears to be Fungâs âflagshipâ
site, goes a step beyond merely collecting and organizing
torrent files. Each time a torrent file is added to isoHunt, the
website automatically modifies the torrent file by adding
additional backup trackers to it. That way, if the primary
tracker is down, the usersâ BitTorrent client program will
contact the backup trackers, making it more likely that the
user will be successful in downloading the content sought. In
other words, isoHunt alters the torrent files it hosts, making
them more reliable than when they are uploaded to the site.
Torrentbox and Podtropolis, in addition to being torrent
sites, run associated trackers.10 Their collections of torrent
files appear to be fairly small. Every torrent file available on
Torrentbox and Podtropolis is tracked by the Torrentbox and
Podtropolis trackers, respectively, but the Torrentbox and
Podtropolis trackers are much busier than the Torrentbox and
Podtropolis websites. For example, a torrent file for the
movie âCasino Royaleâ was downloaded from
Torrentbox.com 50,000 times, but the Torrentbox tracker
registered approximately 1.5 million downloads of the movie.
This disparity indicates that users obtain the torrent files
10
Fungâs fourth website, ed2k-it.com (âEd2k-itâ), is similar to the
torrent sites, but works through technology called eDonkey. eDonkey is
mostly a centralized system like Napster, but eDonkey client
programsâincluding the popular eMuleâ can also search other peers
directly, as in a pure P2P network. For purposes of this case, however, the
distinctions between the technologies are irrelevant; as the district court
noted, Fung makes no argument that Ed2k-it should be treated differently
than the torrent sites. See Columbia Pictures Indus., Inc. v. Fung, No. CV
06-5578, 2009 W L 6355911, at *2 n.4 (C.D. Cal. Dec. 21, 2009).
16 COLUMBIA PICTURES INDUSTRIES V . FUNG
tracked by Torrentbox and Podtropolis from torrent sites
other than Torrentbox.com and Podtropolis.com. The
Torrentbox and Podtropolis websites both have continually-
updated lists of, inter alia, the âTop 20 TV Shows,â the âTop
20 Movies,â and the âTop 20 Most Active Torrents.â These
rankings are based on the number of seeders and leechers for
each particular torrent file, as measured by the Torrentbox
and Podtropolis trackers. IsoHunt does not run a tracker, so
it cannot measure how frequently the content associated with
each torrent file is downloaded; instead, it keeps a continually
updated list of the âTop Searches.â
IsoHunt also hosts an electronic message board, or
âforum,â where users can post comments, queries, and the
like. In addition to posting to the forum himself, Fung also
had some role in moderating posts to the forum.
PROCEDURAL HISTORY
This suit, against Fung and several John Does, originally
filed in the Southern District of New York, was transferred,
on Fungâs motion, to the Central District of California. See
Columbia Pictures Indus., Inc. v. Fung, 447 F. Supp. 2d 306
(S.D.N.Y. 2006). Columbia then filed an amended
complaint, alleging that Fung was liable for vicarious and
contributory copyright infringement, in violation of 17 U.S.C.
§ 106.
On Columbiaâs motion for summary judgment on
liability, the district court held Fung liable for contributory
infringement, for inducing others to infringe Plaintiffsâ
COLUMBIA PICTURES INDUSTRIES V . FUNG 17
copyrighted material.11 See Columbia Pictures Indus., Inc. v.
Fung, No. CV 06-5578, 2009 WL 6355911, at *15 (C.D. Cal.
Dec. 21, 2009). Although Fung sought protection in the
DMCA safe harbors for â[t]ransitory digital network
communications,â 17 U.S.C. § 512(a), â[i]nformation
residing on systems or networks at direction of users,â id.
§ 512(c), and â[i]nformation location tools,â id. § 512(d), the
district court concluded that none of the safe harbors were
applicable.
The district court later entered a permanent injunction that
prohibits, generally speaking, âknowingly engaging in any
activities having the object or effect of fostering infringement
of Plaintiffsâ Copyrighted Works, including without
limitation by engaging inâ certain specified activities. The
injunction applies to a âlist of titlesâ provided by Columbia.
With regard to the initial list of titles provided, Fung was
required to comply with the terms of the injunctionâmost
likely, though not necessarily, by implementing a filtering
deviceâwithin 14 calendar days. Columbia may supplement
the list âwithout restrictionâ; Fung must comply with the
terms of the injunction as to the new titles within 24 hours of
receiving any supplemented list. The injunction binds both
Isohunt Web Technologies, Inc., and Fung personally,
âwherever they may be found, including, without limitation,
in Canadaâ (where Fung is from).
11
In light of its holding on the inducement theory, the district court did
not evaluate whether Fung was liable under the âmaterial contributionâ
theory of contributory infringement, see Perfect 10, Inc. v. Amazon.com,
Inc., 508 F.3d 1146, 1170â72 (9th Cir. 2007), or as vicarious copyright
infringers, id. at 1173â75.
18 COLUMBIA PICTURES INDUSTRIES V . FUNG
The day after the injunction was entered, Columbia
served Fung with an initial list of over 23,000 titles of
copyrighted works. Many of the titles were or contained
generic terms, such as â10,â â21,â âCars,â âDave,â etc. Other
titles were identical or substantially similar to titles of works
in the public domain, including âJungle Bookâ and âMiracle
on 34th Street,â or to titles of works to which Columbia does
not own the copyrights. Citing those features of the initial
list, Fung protested that the permanent injunction was too
broad. In response, the district court modified the injunction
to require that Columbia provide additional information about
the listed copyrighted material, including the date the material
was issued or reissued and the type of media their copyright
covers (e.g., film or television show), so that Fung could
more readily identify the material. At the same time, the
court also admonished that Fungâs concerns were somewhat
overblown, as any technical or inadvertent violations would
not support a civil contempt finding if all reasonable steps to
comply with the injunction were taken.
Fung timely appealed, targeting both the liability
determination and the scope of the injunction.
DISCUSSION
As always, we review the district courtâs grant of
summary judgment de novo, Au-Tomotive Gold Inc. v.
Volkswagen of Am., Inc., 603 F.3d 1133, 1135 (9th Cir.
2010), and âmay affirm the district courtâs holding on any
ground raised below and fairly supported by the record,â
Proctor v. Vishay Intertechnology Inc., 584 F.3d 1208, 1226
(9th Cir. 2009). As to the permanent injunction, we review
the legal conclusions de novo, the factual findings for clear
error, and the decision to grant a permanent injunction, as
COLUMBIA PICTURES INDUSTRIES V . FUNG 19
well as its scope, for an abuse of discretion. See Lemons v.
Bradbury, 538 F.3d 1098, 1102 (9th Cir. 2008); Sandpiper
Vill. Condo. Assân v. Louisiana-Pacific Corp., 428 F.3d 831,
840 (9th Cir. 2005); Scott v. Pasadena Unified Sch. Dist.,
306 F.3d 646, 653 (9th Cir. 2002). To review for abuse of
discretion, âwe first look to whether the trial court identified
and applied the correct legal rule . . . [then] to whether the
trial courtâs resolution of the motion resulted from a factual
finding that was illogical, implausible, or without support in
inferences that may be drawn from the facts in the record.â
United States v. Hinkson, 585 F.3d 1247, 1263 (9th Cir. 2009)
(en banc).
I. Liability
A. Inducement liability under Grokster III
The âinducementâ theory, on which the district courtâs
liability holding was grounded, was spelled out in the Internet
technology context by the Supreme Court in Grokster III.
Considering how to apply copyright law to file sharing over
P2P networks, Grokster III addressed the circumstances in
which individuals and companies are secondarily liable for
the copyright infringement of others using the Internet to
download protected material.
Grokster IIIâs inducement holding is best understood by
first backtracking to Sony Corp. of America v. Universal City
Studios, Inc., 464 U.S. 417 (1984), the seminal Supreme
Court case concerning the use of new technologies to
reproduce copyrighted material. Sony considered whether
secondary liability for infringement could arise solely from
the distribution of a commercial product capable of copying
copyrighted materialâthere, the Betamax video tape
20 COLUMBIA PICTURES INDUSTRIES V . FUNG
recorder, made by Sony. Owners of copyrights to television
programs maintained that Sony could be liable for copyright
infringement when its customers used the Betamax to
unlawfully tape television shows. There was no evidence that
Sony sought to encourage copyright infringement through use
of the Betamax or had taken steps to profit from unlawful
taping. See id. at 437â38. Instead, the only conceivable basis
for secondary liability was distribution of the product âwith
constructive knowledge of the fact that [Sonyâs] customers
may use that equipment to make unauthorized copies of
copyrighted material.â Id. at 439.
Finding âno precedent in the law of copyright for the
imposition of vicarious liability on such a theory,â the Court
borrowed from the âclosest analogyâ it could find, patent
lawâs âstaple article of commerce doctrine.â Id. at 439â42.
Under that doctrine, distribution of a component part of a
patented device will not violate the patent if the component
is suitable for substantial non-infringing uses. See id. at 440;
35 U.S.C. § 271(c). As Sony explained, the staple article of
commerce doctrine balances competing interests,
a copyright holderâs legitimate demand for
effectiveânot merely symbolicâprotection
of the statutory monopoly, and the rights of
others freely to engage in substantially
unrelated areas of commerce. Accordingly,
the sale of copying equipment, like the sale of
other articles of commerce, does not
constitute contributory infringement if the
product is widely used for legitimate,
unobjectionable purposes. Indeed, it need
merely be capable of substantial noninfringing
uses.
COLUMBIA PICTURES INDUSTRIES V . FUNG 21
464 U.S. at 442. As the Betamax was âcapable of
commercially significant noninfringing uses,â the Court held
Sony not liable for contributory copyright infringement.12 Id.
The other major Supreme Court case addressing the mass
copying of copyrighted materialâthere, music and
filmsâthrough technological means, Grokster III, concerned
the use of software applications based on âpureâ and âhybridâ
P2P network protocols. The defendants, the providers of the
copying software to the public, argued for a contributory
liability approach similar to that adopted in Sony: as their
products were indisputably capable of substantial non-
infringing uses, they maintained, they could not be
secondarily liable based on their knowledge that their
products could be used to infringe copyrights. Instead, the
Grokster defendants suggested, they could be liable for
contributory infringement only if they had actual knowledge
of a specific infringement at a time when they were capable
of preventing it. Accepting this theory and recognizing that
there was no evidence regarding timely knowledge of specific
acts of infringement, the district court granted summary
judgment to the defendants, Metro-Goldwyn-Mayer Studios,
Inc. v. Grokster, Ltd. (âGrokster Iâ), 259 F. Supp. 2d 1029,
1046 (C.D. Cal. 2003), and we affirmed,
Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd.
(âGrokster IIâ), 380 F.3d 1154, 1167 (9th Cir. 2004).
12
Sony declined, however, to âgive precise content to the question of
how much use is commercially significant.â 464 U.S. at 442. The
majority opinion in Grokster III also refused âto add a more quantified
description of the point of balance between protection and commerce
when liability rests solely on distribution with knowledge that unlawful
use will occur,â 545 U.S. at 934, though two concurring opinions
discussed the issue at length, see id. at 941â49 (Ginsburg, J., concurring);
id. at 949â66 (Breyer, J., concurring).
22 COLUMBIA PICTURES INDUSTRIES V . FUNG
The Supreme Court did not see Sony as providing such
broad insulation from copyright liability. Rather, said the
Court, Sony
limits imputing culpable intent as a matter of
law from the characteristics or uses of a
distributed product. But nothing in Sony
requires courts to ignore evidence of intent if
there is such evidence, and the case was never
meant to foreclose rules of fault-based
liability derived from the common law.
Grokster III, 545 U.S. at 934â35 (emphasis added). The
âstaple article of commerce doctrineâ adopted in Sony,
Grokster III explained, âabsolves the equivocal conduct of
selling an item with substantial lawful as well as unlawful
uses, and limits liability to instances of more acute fault than
the mere understanding that some of oneâs products will be
misused.â Id. at 932â33 (emphasis added). âThus, where
evidence goes beyond a productâs characteristics or the
knowledge that it may be put to infringing uses, and shows
statements or actions directed to promoting infringement,
Sonyâs staple-article rule will not preclude liability.â Id. at
935.
Grokster III went on to enunciate the âinducement rule,â
also borrowed from patent law, providing that âone who
distributes a device with the object of promoting its use to
infringe copyright, as shown by clear expression or other
affirmative steps taken to foster infringement, is liable for the
resulting acts of infringement by third parties.â Id. at 936â37.
This inducement principle, as enunciated in Grokster III, has
four elements: (1) the distribution of a device or product, (2)
COLUMBIA PICTURES INDUSTRIES V . FUNG 23
acts of infringement, (3) an object of promoting its use to
infringe copyright, and (4) causation. See id.
i. Distribution of a âdeviceâ or âproductâ
In describing the inducement liability standard, Grokster
III phrased it as applying to one who distributes a âdevice,â
see id., although it also used the word âproduct,â seemingly
interchangeably, see id. at 934â37. The âdeviceâ or
âproductâ was the software developed and distributed by the
defendantsâfor Grokster, its eponymous software, based on
FastTrack technology; and for StreamCast, also a defendant
in Grokster, its software application, Morpheus, based on
Gnutella. See id. at 940 (describing the âdeviceâ as âthe
software in this caseâ).
The analogy between Grokster III and this case is not
perfect. Here, Fung did not develop and does not provide the
client programs used to download media products, nor did he
develop the BitTorrent protocol (which is maintained by non-
party BitTorrent, Inc., a privately-held company founded by
the creators of the protocol). Fung argues that because he did
not develop or distribute any âdeviceââthat is, the software
or technology used for downloadingâhe is not liable under
the inducement rule enunciated in Grokster III.
We cannot agree. 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 âdevice.â 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
24 COLUMBIA PICTURES INDUSTRIES V . FUNG
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 âserviceâ
of copying. Whether the service makes copies using
machines of its own manufacture, machines it owns, or
machines in someone elseâs shop would not matter, as
copyright liability depends on oneâs purposeful involvement
in the process of reproducing copyrighted material, not the
precise nature of that involvement.
Grokster III did phrase the rule it applied principally in
terms of a âdevice.â But that was because it was responding
to the main argument made by the defendants in that
caseâthat they were entitled to protection for commercial
products capable of significant non-infringing uses, just as
Sony was insulated from liability for infringing use of the
Betamax. See Grokster III, 545 U.S. at 931â34. When
explaining the rationale for permitting secondary
infringement liability, Grokster III used more general
language:
When a widely shared service or product is
used to commit infringement, it may be
impossible to enforce rights in the protected
work effectively against all direct infringers,
the only practical alternative being to go
against the distributor of the copying device
for secondary liability on a theory of
contributory or vicarious infringement.
Id. at 929â30 (emphases added); see also id. at 924
(describing Napster as a ânotorious file-sharing serviceâ); id.
COLUMBIA PICTURES INDUSTRIES V . FUNG 25
at 925 (describing one defendantâs efforts âto market its
service as the best Napster alternativeâ); id. at 937â38; id. at
939 (describing the import of defendantsâ âefforts to supply
services to former Napster usersâ).
Since Grokster III, we have not considered a claim of
inducement liability on facts closely comparable to those
here. But we have, in two cases, considered claims of
inducement liability against parties providing services as
opposed to products, without suggesting that the difference
matters. Perfect 10, Inc. v. Visa Intâl Serv. Assân, 494 F.3d
788, 800â02 (9th Cir. 2007); Perfect 10, Inc. v. Amazon.com,
Inc., 508 F.3d 1146, 1170 n.11 (9th Cir. 2007). The two
Perfect 10 cases confirm that, as one would expect, the
inducement copyright doctrine explicated in Grokster III
applies to services available on the Internet as well as to
devices or products.
We hold that Columbia has carried its burden on
summary judgment as to the first element of the Grokster III
test for inducement liability.
ii. Acts of infringement
To prove copyright infringement on an inducement
theory, Columbia also had to adduce âevidence of actual
infringement byâ users of Fungâs services. Grokster III,
545 U.S. at 940. This they have done.
Both uploading and downloading copyrighted material are
infringing acts. The former violates the copyright holderâs
right to distribution, the latter the right to reproduction.
See 17 U.S.C. § 106(1) & (3); Napster, 239 F.3d at 1014.
Based on statistical sampling, Columbiaâs expert averred that
26 COLUMBIA PICTURES INDUSTRIES V . FUNG
between 90 and 96% of the content associated with the torrent
files available on Fungâs websites are for âconfirmed or
highly likely copyright infringingâ material. Although Fung
takes issue with certain aspects of the expertâs methodology,
he does not attempt to rebut the factual assertion that his
services were widely used to infringe copyrights. Indeed,
even giving Fung the benefit of all doubts by tripling the
margins of error in the expertâs reports, Columbia would still
have such overwhelming evidence that any reasonable jury
would have to conclude that the vastly predominant use of
Fungâs services has been to infringe copyrights.
In sum, as in Grokster III, â[a]lthough an exact
calculation of infringing use, as a basis for a claim of
damages, is subject to dispute, there is no questionâ that
Plaintiffs have met their burden on summary judgment to
warrant equitable relief. Grokster III, 545 U.S. at 940â41.
iii. With the object of promoting its use to
infringe copyright
The third, usually dispositive, requirement for inducement
liability is that the âdeviceâ or service be distributed âwith the
object of promoting its use to infringe copyright, as shown by
clear expression or other affirmative steps taken to foster
infringement.â Id. at 936â37.
As an initial matter, Fung argues that this factor includes
two separate elementsâthe improper object and âclear
expression or other affirmative steps taken to foster
infringement.â Not so. â[C]lear expression or other
affirmative stepsâ is not a separate requirement, but, rather,
an explanation of how the improper object must be proven.
In other words, Grokster III requires a high degree of proof
COLUMBIA PICTURES INDUSTRIES V . FUNG 27
of the improper object. Confirming that understanding of the
âclear expressionâ phrase, Grokster III emphasized, right
after articulating the inducement factor, that the improper
object must be plain and must be affirmatively communicated
through words or actions:
We are, of course, mindful of the need to keep
from trenching on regular commerce or
discouraging the development of technologies
with lawful and unlawful potential.
Accordingly, just as Sony did not find
intentional inducement despite the knowledge
of the [Betamax] manufacturer that its device
could be used to infringe, mere knowledge of
infringing potential or of actual infringing
uses would not be enough here to subject a
distributor to liability. Nor would ordinary
acts incident to product distribution, such as
offering customers technical support or
product updates, support liability in
themselves. The inducement rule, instead,
premises liability on purposeful, culpable
expression and conduct, and thus does nothing
to compromise legitimate commerce or
discourage innovation having a lawful
promise.
Id. at 937 (citation omitted).
In Grokster III itself, the Court found ample evidence, of
several types, to support inducement liability. See id. at
937â40. First, Grokster III relied in part on advertisements
as proof of an impermissible, infringing purpose, noting that
â[t]he classic instance of inducement is by advertisement or
28 COLUMBIA PICTURES INDUSTRIES V . FUNG
solicitation that broadcasts a message designed to stimulate
others to commit violations.â Id. at 937. Both Grokster III
defendants had engaged in such affirmative solicitation,
advertising their software as an alternative to Napsterâwhich
notoriously facilitated wide-scale copyright infringementâat
a time when Napsterâs unlawful activities were about to be
shuttered. See id. at 937â38.
Second, Grokster III relied for proof of Groksterâs
infringing purpose on communications that, while not in haec
verba promoting infringing uses, provided information
affirmatively supporting such uses. â[B]oth companies,â
moreover, âcommunicated a clear message by responding
affirmatively to requests for help in locating and playing
copyrighted materials.â Id. at 938. Thus, Grokster included
as evidence of an infringing purpose an electronic newsletter
distributed by Grokster that linked to articles promoting
Groksterâs ability to access copyrighted music. See id. at
938.
A third category of âclear expressionâ recognized in
Grokster III as pertinent to proof of improper purpose was
explicit internal communication to that effect. As to one of
the defendants, Streamcast, âinternal communications,â
including proposed advertising designs, provided
âunequivocal indications of unlawful purpose.â Id. at 938.
The Court explained that â[w]hether the messages were
communicated [to potential customers] is not . . . the point
. . . . The function of the message in the theory of inducement
is to prove by a defendantâs own statements that his unlawful
purpose disqualifies him from claiming protection.â Id.
Thus, the Court went on, â[p]roving that a message was sent
out . . . is the preeminent but not exclusive way of showing
COLUMBIA PICTURES INDUSTRIES V . FUNG 29
that active steps were taken with the purpose of bringing
about infringing acts.â Id.
Grokster III also mentioned two sorts of âother
affirmative stepsâ as permissible evidence that support an
inference of an intent to induce infringement, while
cautioning that such sorts of circumstantial evidence would
not be independently sufficient. The first was that âneither
company attempted to develop filtering tools or other
mechanisms to diminish the infringing activity using their
software,â which the Court said âunderscore[d]â the
defendantsâ âintentional facilitation of their usersâ
infringement.â Id. at 939. The Court was careful to caution
that âin the absence of other evidence of intent, a court would
be unable to find contributory infringement liability merely
based on a failure to take affirmative steps to prevent
infringement.â Id. at 939 n.12.
Similarly, Grokster III pointed to the fact that the
defendants âmake money by selling advertising space, by
directing ads to the screens of computers employing their
software.â Id. at 940. Because âthe extent of the softwareâs
use determines the gain to the distributors, the commercial
sense of their enterprise turns on high-volume use, which the
record shows is infringing.â Id. Here again, however, â[t]his
evidence alone would not justify an inference of unlawful
intent.â Id.
Using these Grokster III evidentiary categories and
cautions as templates, we conclude that there is more than
enough unrebutted evidence in the summary judgment record
to prove that Fung offered his services with the object of
promoting their use to infringe copyrighted material. No
reasonable jury could find otherwise.
30 COLUMBIA PICTURES INDUSTRIES V . FUNG
As for the necessary âclear expression or other affirmative
stepsâ evidence indicative of unlawful intent, the most
important is Fungâs active encouragement of the uploading of
torrent files concerning copyrighted content. For a time, for
example, isoHunt prominently featured a list of âBox Office
Movies,â 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 âupload [a] torrentâ 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.13 Though not the
exclusive means of proving inducement, we have
characterized a distributorâs communication of an inducing
message to its users as âcrucialâ to establishing inducement
liability. See Visa, 494 F.3d at 801 (quoting Grokster III,
545 U.S. at 937). That crucial requirement was met here.
Like Groksterâs advertisementsâindeed, even more
soâFungâs posts were explicitly âdesigned to stimulate
13
In addition to statements made by Fung personally, the district court
relied on statements made by individuals who served as âmoderatorsâ of
the isoHunt forum, finding that there was an agency relationship between
those individuals and Fung. Fung maintains that he did not have the
requisite control over the moderators for an agency relationship to exist.
In light of the other evidence of unlawful intent, we need not and do not
rely on statements made by anyone other than Fung. Nor do we rely on
the generic organizational structure of Fungâs websitesâ i.e., that they
organized files in browsable categories or used an automated indexing
program that matched filenames with specific terms. These features as
used by Fung do not themselves send the type of inducing âmessageâ that
would be adequate to prove an unlawful intent. See Grokster III, 545 U.S.
at 937.
COLUMBIA PICTURES INDUSTRIES V . FUNG 31
others to commit [copyright] violations,â and so are highly
probative of an unlawful intent. Grokster III, 545 U.S. at
937.14
As in Grokster, moreover, Fung âcommunicated a clear
message by responding affirmatively to requests for help in
locating and playing copyrighted materials.â Id. at 938. The
record is replete with instances of Fung responding personally
to queries for assistance in: uploading torrent files
corresponding to obviously copyrighted material, finding
particular copyrighted movies and television shows, getting
pirated material to play properly, and burning the infringing
content onto DVDs for playback on televisions.
Two types of supporting evidence, insufficient in
themselvesâlike the similar evidence in Grokster
IIIâcorroborate the conclusion that Fung âacted with a
purpose to cause copyright violations by use ofâ their
services. Id. at 938. First, Fung took no steps âto develop
filtering tools or other mechanisms to diminish the infringing
activityâ by those using his services.15 Id. at 939. Second,
Fung generates revenue almost exclusively by selling
advertising space on his websites. The more users who visit
14
See infra pp. 34â35.
15
Fung did attempt to keep certain types of torrents off his websites.
First, because Fung is personally opposed to pornography, he took steps
to keep torrent files related to pornography out of his sitesâ collections.
Second, Fung attempted to remove torrent files that led to downloads of
fake or corrupted content files. These efforts were not directed at
âdiminish[ing] the infringing activityâ taking place, Grokster III, 545 U.S.
at 939, and so are not pertinent to the inducement inquiry (except to show
that Fung had the means to filter content on his websites when he chose
to do so).
32 COLUMBIA PICTURES INDUSTRIES V . FUNG
Fungâs websites and view the advertisements supplied by
Fungâs business partners, the greater the revenues to Fung.
Because âthe extent of the [servicesâ] use determines the gain
to [Fung], the commercial sense of [his] enterprise turns on
high-volume use, which the record shows is infringing.â Id.
at 940. Given both the clear expression and other affirmative
steps and the supporting evidence, Fungâs âunlawful
objective is unmistakable.â Id.
iv. Causation
Grokster III mentions causation only indirectly, by
speaking of âresulting acts of infringement by third parties.â
Id. at 937 (emphasis added).16 The parties here advance
competing interpretations of the causation requirement
adopted through that locution: Fung and amicus curiae
Google argue that the acts of infringement must be caused by
the manifestations of the distributorâs improper objectâthat
is, by the inducing messages themselves. Columbia, on the
other hand, maintains that it need only prove that the âacts of
infringement by third partiesâ were caused by the product
distributed or services provided.
We think Columbiaâs interpretation of Grokster III is the
better one. On that view, if one provides a service that could
be used to infringe copyrights, with the manifested intent that
the service actually be used in that manner, that person is
16
As a reminder, Grokster IIIâs articulation was that âone who
distributes a device with the object of promoting its use to infringe
copyright, as shown by clear expression or other affirmative steps taken
to foster infringement, is liable for the resulting acts of infringement by
third parties.â Id. at 936â37.
COLUMBIA PICTURES INDUSTRIES V . FUNG 33
liable for the infringement that occurs through the use of the
service. See id. at 937. As Grokster III explained:
It is not only that encouraging a particular
consumer to infringe a copyright can give rise
to secondary liability for the infringement that
results. Inducement liability goes beyond
that, and the distribution of a product can
itself give rise to liability where evidence
shows that the distributor intended and
encouraged the product to be used to infringe.
In such a case, the culpable act is not merely
the encouragement of infringement but also
the distribution of the tool intended for
infringing use.
Id. at 940 n.13; see also 3-12 Melville B. Nimmer & David
Nimmer, Nimmer on Copyright § 12.04[A][4][b] (Matthew
Bender, rev. 2010).
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 plaintiffâs
copyrights. The possible reach of liability is enormous,
particularly in the digital age.
Copyright law attempts to strike a balance amongst three
competing interests: those of the copyright holders in
benefitting from their labor; those of entrepreneurs in having
the latitude to invent new technologies without fear of being
held liable if their innovations are used by others in
unintended infringing ways; and those of the public in having
access both to entertainment options protected by copyright
34 COLUMBIA PICTURES INDUSTRIES V . FUNG
and to new technologies that enhance productivity and quality
of life. See generally Grokster III, 545 U.S. at 937; Sony,
464 U.S. at 428â32. Because copyright lawâs âultimate aim
is . . . to stimulate artistic creativity for the general public
good,â Sony, 464 U.S. at 432 (quoting Twentieth Century
Music Corp. v. Aiken, 422 U.S. 151, 156 (1975)), it is
important that we not permit inducement liabilityâs relatively
lax causation requirement to âenlarge the scope of
[copyrightâs] statutory monopolies to encompass control over
an article of commerceââsuch as technology capable of
substantial non-infringing usesââthat is not the subject of
copyright protection.â Sony, 464 U.S. at 421.
We emphasize a few points in this regard. First, as
previously discussed, proper proof of the defendantâs intent
that its product or service be used to infringe copyrights is
paramount. â[M]ere knowledge of infringing potential or of
actual infringing usesâ does not subject a product distributor
or service provider to liability. Grokster III, 545 U.S. at 937.
When dealing with corporate or entity defendants, moreover,
the relevant intent must be that of the entity itself, as defined
by traditional agency law principles; liability cannot be
premised on stray or unauthorized statements that cannot
fairly be imputed to the entity.17 See id. at 937 (discussing the
evidence that âStreamCast and Grokster,â each a corporate
entity, âcommunicated an inducing message to their software
usersâ).
Moreover, proving that an entity had an unlawful purpose
at a particular time in providing a product or service does not
17
There is no question in this case that Fung was authorized to and did
speak on behalf of the corporate defendant, isoHunt W eb Technologies,
Inc.
COLUMBIA PICTURES INDUSTRIES V . FUNG 35
infinitely expand its liability in either temporal direction. If
an entity begins providing a service with infringing potential
at time A, but does not appreciate that potential until later and
so does not develop and exhibit the requisite intent to support
inducement liability until time B, it would not be held liable
for the infringement that occurred between time A and B.
Relatedly, an individual or entityâs unlawful objective at time
B is not a virus that infects all future actions. People,
companies, and technologies must be allowed to rehabilitate,
so to speak, through actions actively discouraging the
infringing use of their product, lest the public be deprived of
the useful good or service they are still capable of producing.
See Grokster III, 545 U.S. at 937; Sony, 464 U.S. at 432.
We also note, as Fung points out, that Grokster III
seemingly presupposes a condition that is absent in this case:
that there is but a single producer of the âdeviceâ in question.
Only Sony sold the Betamax, and only Grokster and
Streamcast distributed their respective software applications.
Assessing causation was thus a straightforward task. In Sony,
for example, there was no question that some customers
would purchase and use the Betamax in ways that infringed
copyright. Thus, in a âbut-forâ sense, there was no question
that Sony caused whatever infringement resulted from the use
of Betamax sets; the Court nonetheless held Sony not liable
on the ground that even if Sony caused the infringement, it
was not at fault, with fault measured by Sonyâs intent. But as
Grokster III explained, ânothing in Sony requires courts to
ignore evidence of intent if there is such evidence, and the
case was never meant to foreclose rules of fault-based
liability.â 545 U.S. at 934. Grokster III thus held that where
there is sufficient evidence of faultâthat is, an unlawful
objectiveâdistributors are liable for causing the infringement
that resulted from use of their products. See id. at 940. In
36 COLUMBIA PICTURES INDUSTRIES V . FUNG
other words, Grokster III and Sony were able to assume
causation and assess liability (or not) based on fault. In the
present case, however, where other individuals and entities
provide services identical to those offered by Fung, causation,
even in the relatively loose sense we have delineated, cannot
be assumed, even though fault is unquestionably present.
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. Cf. Perfect 10,
Inc. v. Google, Inc., 653 F.3d 976, 982 (9th Cir. 2011)
(affirming the district courtâs denial of a preliminary
injunction based on Googleâs alleged direct copyright
infringement because the plaintiff, Perfect 10, failed to show
âa sufficient causal connection between irreparable harm to
[its] business and Googleâs operation of its search engineâ);
Visa, 494 F.3d at 796â802 (affirming the district courtâs
dismissal under Federal Rule of Civil Procedure 12(b)(6) in
part because the âcausal chainâ between defendant credit card
companiesâ services and infringing activity by Internet users
was too attenuated).
On the other hand, Fungâs services encompass more than
the provision of torrent files. Fungâs trackers manage traffic
for torrent files, obtained from Torrentbox and Podtropolis as
well as other torrent sites, which enables users to download
copyrighted content. If Plaintiffs can show a sufficient casual
connection between usersâ infringing activity and the use of
Fungâs trackers, the fact that torrent files were obtained from
COLUMBIA PICTURES INDUSTRIES V . FUNG 37
elsewhere may not relieve Fung of liability. See Grokster III,
545 U.S. at 940.
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 âexact calculation of infringing use[] as a basis
for a claim of damages.â 545 U.S. at 941. We therefore need
not further entertain Fungâs 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.
In sum, we affirm the district courtâs holding that
Columbia has carried its burden of proving, on the basis of
undisputed facts, Fungâs liability for inducing others to
infringe Columbiaâs copyrights.
B. DMCA Safe Harbors
Fung asserts affirmative defenses under three of the
DMCAâs safe harbor provisions, 17 U.S.C. § 512(a), (c), and
(d). Because the DMCA safe harbors are affirmative
defenses, Fung has the burden of establishing that he meets
the statutory requirements. See Balvage v. Ryderwood
Improvement and Serv. Assân, Inc., 642 F.3d 765, 776 (9th
Cir. 2011).
Columbia argues, and the district court agreed, that
inducement liability is inherently incompatible with
protection under the DMCA safe harbors. This court has
already rejected the notion that there can never be a DMCA
safe harbor defense to contributory copyright liability,
holding âthat . . . potential liability for contributory and
38 COLUMBIA PICTURES INDUSTRIES V . FUNG
vicarious infringement [does not] render[] the [DMCA]
inapplicable per se.â See A&M Records, Inc. v. Napster, Inc.,
239 F.3d 1004, 1025 (9th Cir. 2001). We note, in this
connection, that the DMCA does not in terms exempt from
protection any mode of copyright liability, including liability
under the doctrine of inducement. Moreover, the DMCAâs
legislative history confirms that Congress intended to provide
protection for at least some vicarious and contributory
infringement. See S. Rep. No. 105-190, 40 (1998); UMG
Recordings, Inc. v. Shelter Capital Partners, LLC, â F.3d â
(9th Cir. 2013) (noting that § 512(c) does not exclude from its
protection vicarious or contributory liability).
Nor is there any inherent incompatibility between
inducement liability and the requirements that apply to all of
the DMCA safe harbors. For example, a prerequisite for the
safe harbors is that the service provider implement a policy of
removing repeat infringers. See 17 U.S.C. § 512(i)(1)(A).
Although at first glance that requirement that might seem
impossible to establish where the requisites for inducing
infringement are met, see In re Aimster Copyright Litig.,
334 F.3d 643, 655 (7th Cir. 2003), on closer examination the
appearance of inherent incompatibility dissipates. In some
instances, for example, the Grokster standard for inducement
might be met even where a service provider has a policy of
removing proven repeat infringers. It is therefore conceivable
that a service provider liable for inducement could be entitled
to protection under the safe harbors.
In light of these considerations, we are not clairvoyant
enough to be sure that there are no instances in which a
defendant otherwise liable for contributory copyright
infringement could meet the prerequisites for one or more of
the DMCA safe harbors. We therefore think it best to
COLUMBIA PICTURES INDUSTRIES V . FUNG 39
conduct the two inquiries independentlyâ although, as will
appear, aspects of the inducing behavior that give rise to
liability are relevant to the operation of some of the DMCA
safe harbors and can, in some circumstances, preclude their
application.
i. âTransitory digital network communicationsâ
(17 U.S.C. § 512(a))
The first safe harbor at issue, which Fung asserts only as
to his trackers, provides as follows:
A service provider shall not be liable for
monetary relief, or, except as provided in
subsection (j), for injunctive or other equitable
relief, for infringement of copyright by reason
of the providerâs transmitting, routing, or
providing connections for, material through a
system or network controlled or operated by
or for the service provider, or by reason of the
intermediate and transient storage of that
material in the course of such transmitting,
routing, or providing connections, ifâ
(1) the transmission of the material was
initiated by or at the direction of a person
other than the service provider;
(2) the transmission, routing, provision of
connections, or storage is carried out through
an automatic technical process without
selection of the material by the service
provider;
40 COLUMBIA PICTURES INDUSTRIES V . FUNG
(3) the service provider does not select the
recipients of the material except as an
automatic response to the request of another
person;
(4) no copy of the material made by the
service provider in the course of such
intermediate or transient storage is maintained
on the system or network in a manner
ordinarily accessible to anyone other than
anticipated recipients, and no such copy is
maintained on the system or network in a
manner ordinarily accessible to such
anticipated recipients for a longer period than
is reasonably necessary for the transmission,
routing, or provision of connections; and
(5) the material is transmitted through the
system or network without modification of its
content.
17 U.S.C. § 512(a). For purposes of this safe harbor only,
âthe term âservice providerâ means an entity offering the
transmission, routing, or providing of connections for digital
online communications, between or among points specified
by a user, of material of the userâs choosing, without
modification to the content of the material as sent or
received.â 17 U.S.C. § 512(k)(1)(A). The district court
dismissed the application of this safe harbor in a footnote,
stating that it did not apply to Fung â[b]ecause infringing
materials do not pass through or reside on [Fungâs] system.â
The district court should not have rejected this safe harbor
on the ground it did. Perfect 10, Inc. v. CCBill LLC, 488 F.3d
COLUMBIA PICTURES INDUSTRIES V . FUNG 41
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 â[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.â Id. at 1116; see also id. (âService providers are
immune for transmitting all digital online communications,
not just those that directly infringe.â).
We could, perhaps, end our analysis of the § 512(a) safe
harbor there. The district court seemingly held Fung liable
for inducement based not on Fungâs trackersâ routing
services, but, instead, on the dot-torrent files Fung collects
and indexes. And it is not clear that Columbia is seeking to
establish liability based directly on the tracking functions of
Fungâs trackers.
It appears, however, that Fungâs trackers generate
information concerning the torrent files transmitted that Fung
then compiles and uses to induce further infringing use of his
websites and trackers. In that sense, the tracking function is
connected to the basis on which liability was sought and
found. Without determining whether that information-
generating use would itself affect the availability of the
§ 512(a) safe harbor, we hold that safe harbor not available
for Fungâs trackers on other grounds.
Unlike a P2P network like Napster, in which users select
particular files to download from particular users, Fungâs
trackers manage a âswarmâ of connections that source tiny
pieces of each file from numerous users; the user seeking to
download a file chooses only the file, not the particular users
who will provide it, and the tracker identifies the source
computers to the user seeking to download a work.
42 COLUMBIA PICTURES INDUSTRIES V . FUNG
Given these characteristics, Fungâs trackers do not fit the
definition of âservice providerâ that applies to this safe
harbor. The definition provides that a âservice providerâ
provides âconnections . . . between or among points specified
by a user.â 17 U.S.C. § 512(k)(1)(A) (emphasis added).
Here, it is Fungâs tracker that selects the âpointsâ to which a
userâs client will connect in order to download a file. The
tracker, not the requesting user, selects the publishers from
which chunks of data will be transmitted.
We have held that § 512(a) applies to service provides
who act only as âconduitsâ for the transmission of
information. UMG Recordings, â F.3d at â & n.10 (noting
that § 512(a) applies âwhere the service provider merely acts
as a conduit for infringing material without storing, caching,
or providing links to copyrighted materialâ (internal quotation
marks omitted)); Ellison v. Robertson, 357 F.3d 1072, 1081
(9th Cir. 2004) (discussing the definition of a âservice
providerâ for purposes of § 512(a)); H.R. Rep. 105-551(II),
63 (1998) (explaining that the § 512(a) safe harbor is limited
to service providers performing âconduit-only functionsâ).
Because they select which users will communicate with each
other, Fungâs trackers serve as more than âconduitsâ between
computer users. Fungâs trackers therefore are not âservice
providersâ for purposes of § 512(a), and are not eligible for
the § 512(a) safe harbor.
Fung asserts that these functions are âautomatic technical
processesâ that proceed âwithout selection of any material by
us.â Even so, for the tracker to be a âservice providerâ for
purposes of the § 512(a) safe harbor, the tracker, whether its
functions are automatic or not, must meet the special
definition of âservice providerâ applicable to this âconduitâ
safe harbor. If those functions go beyond those covered by
COLUMBIA PICTURES INDUSTRIES V . FUNG 43
that definition, then it does not matter whether they are
automatic or humanly controlled. See UMG, â F.3d at â;
Viacom Intâl, Inc. v. YouTube, Inc., 676 F.3d 19, 39 (2d Cir.
2012) (discussing ââconduit onlyâ functions under § 512(a)â);
In re Charter Commcâns, Inc., Subpoena Enforcement Matter,
393 F.3d 771, 775 (8th Cir. 2005) (noting that § 512(a)
âlimits the liability of [service providers] when they do
nothing more than transmit, route, or provide connections for
copyrighted materialâthat is, when the [provider] is a mere
conduit for the transmissionâ).
ii. âInformation residing on systems or networks at
direction of usersâ (17 U.S.C. § 512(c))
This safe harbor provides:
(1) In general. A service provider18 shall not
be liable for monetary relief, or, except as
provided in subsection (j), for injunctive or
other equitable relief, for infringement of
copyright by reason of the storage at the
direction of a user of material that resides on
a system or network controlled or operated by
or for the service provider, if the service
providerâ
18
17 U.S.C. § 512(k) defines âservice providerâ more broadly for
purposes of subsection (c) than it does for subsection (a). âAs used in []
section[s] other than subsection (a), the term âservice providerâ means a
provider of online services or network access, or the operator of facilities
therefor, and includes an entity described in subparagraph (A).â Id.
§ 512(k)(1)(B).
44 COLUMBIA PICTURES INDUSTRIES V . FUNG
(A) (i) does not have actual knowledge
that the material or an activity using the
material on the system or network is
infringing;
(ii) in the absence of such actual
knowledge, is not aware of facts or
circumstances from which infringing activity
is apparent; or
(iii) upon obtaining such knowledge or
awareness, acts expeditiously to remove, or
disable access to, the material;
(B) does not receive a financial benefit
directly attributable to the infringing activity,
in a case in which the service provider has the
right and ability to control such activity; and
(C) upon notification of claimed infringement
as described in paragraph (3), responds
expeditiously to remove, or disable access to,
the material that is claimed to be infringing or
to be the subject of infringing activity.
17 U.S.C. § 512(c).
The district court held that Fung is ineligible for this safe
harbor for the same reason it rejected the § 512(a) safe
harborâthat is, because the infringing material does not
actually reside on Fungâs servers. As with § 512(a), this
holding was in error. As CCBill emphasized, we will not
read requirements into the safe harbors that are not contained
in the text of the statute. See CCBill, 488 F.3d at 1116.
COLUMBIA PICTURES INDUSTRIES V . FUNG 45
Moreover, § 512(c) explicitly covers not just the storage of
infringing material, but also infringing âactivit[ies]â that
âus[e] the material [stored] on the system or network.â
17 U.S.C. § 512(c)(1)(A)(i). Here, as we have explained, the
infringing activity associated with Fungâthe peer-to-peer
transfer of pirated contentârelies upon torrents stored on
Fungâs websites. According to the record, sometimes those
torrents are uploaded by users of the sites, while other
torrents are collected for storage by Fungâs websites
themselves. The former situation would be at least facially
eligible for the safe harbor, assuming the other criteria are
met.
a. Actual and âRed Flagâ Knowledge
(512(c)(1)(A)(i)â(ii))
We nonetheless hold that Fung is not eligible for the
§ 512(c) safe harbor, on different grounds. The § 512(c) safe
harbor is available only if the service provider âdoes not have
actual knowledge that the material or an activity using the
material on the system or network is infringing,â 17 U.S.C.
§ 512(c)(1)(A)(i), or âis not aware of facts or circumstances
from which infringing activity is apparent,â id.
§ 512(c)(1)(A)(ii). In UMG Recordings, â F.3d at â, this
court endorsed the Second Circuitâs interpretation of
§ 512(c)(1)(A), that âthe actual knowledge provision turns on
whether the provider actually or âsubjectivelyâ knew of
specific infringement, while the red flag provision turns on
whether the provider was subjectively aware of facts that
would have made the specific infringement âobjectivelyâ
obvious to a reasonable person.â Viacom Intâl, Inc., 676 F.3d
at 31.
46 COLUMBIA PICTURES INDUSTRIES V . FUNG
Fung maintains that he lacked either type of knowledge,
because Columbia failed to provide statutorily compliant
notification of infringement. Under § 512(c)(3)(B),
notification of infringement that fails to comply with the
requirements set forth in § 512(c)(3)(A) âshall not be
considered . . . in determining whether a service provider has
actual knowledge or is aware of facts or circumstances from
which infringing activity is apparent.â 17 U.S.C.
§ 512(c)(3)(B)(i). And, as Fung points out, the district court
noted that there was at least a âtriable issue of fact as to the
adequacy of the statutory notice that Plaintiffs provided to
[Fung].â
We need not determine the adequacy of Columbiaâs
notification of claimed infringementâindeed, as the district
court held, it would not be appropriate to do so at this stage.
Fung had âred flagâ knowledge of a broad range of infringing
activity for reasons independent of any notifications from
Columbia, and therefore is ineligible for the § 512(c) safe
harbor.
As noted, the record is replete with instances of Fung
actively encouraging infringement, by urging his users to
both upload and download particular copyrighted works,
providing assistance to those seeking to watch copyrighted
films, and helping his users burn copyrighted material onto
DVDs. The material in question was sufficiently current and
well-known that it would have been objectively obvious to a
reasonable person that the material solicited and assisted was
both copyrighted and not licensed to random members of the
public, and that the induced use was therefore infringing.
Moreover, Fung does not dispute that he personally used the
isoHunt website to download infringing material. Thus,
while Fungâs inducing actions do not necessarily render him
COLUMBIA PICTURES INDUSTRIES V . FUNG 47
per se ineligible for protection under § 512(c),19 they are
relevant to our determination that Fung had âred flagâ
knowledge of infringement.
Fung introduced no contrary facts with regard to
identified torrents involved in these documented activities,
responding only with the generalized assertion that he âha[s]
a robust copyright compliance system.â But âconclusory
allegations, standing alone, are insufficient to prevent
summary judgment.â Newman v. County of Orange, 457 F.3d
991, 995 (9th Cir. 2006) (internal quotation marks and
citation omitted).20
As Fung has not carried his burden as the non-moving
party of demonstrating a genuine dispute as to the material
facts regarding his eligibility for the § 512(c) safe harbor, see
Newman, 457 F.3d at 995; see also Fed. R. Civ. P.
56(c)(1)(A), Columbia is entitled to summary judgment as to
this issue. Fed. R. Civ. P. 56(e)(3).
19
See supra pp. 37â39.
20
W e note that it is not clear from the language of § 512(c) or from the
pertinent case law, whether exclusion from the § 512(c) safe harbor
because of actual or âred flagâ knowledge of specific infringing activity
applies only with regard to liability for that infringing activity, or more
broadly. See Viacom Intâl, Inc., 676 F.3d at 31 (noting â[t]he limited body
of case law interpreting the knowledge provisions of the § 512(c) safe
harborâ). However, as we shall explain, that issue does not arise with
regard to the § 512(c)(1)(B), âfinancial benefit/right to controlâ safe
harbor. As we conclude that the § 512(c) safe harbor is not available to
Fung on that ground as well, we need not question whether actual or red
flag knowledge of specific infringing material or activity eliminates the
§ 512(c) safe harbor broadly, or only with respect to the known or
objectively apparent infringing activity.
48 COLUMBIA PICTURES INDUSTRIES V . FUNG
b. âFinancial benefitâ & âthe right and ability
to controlâ (§ 512(c)(1)(B))
Under § 512(c)(1)(B), a service provider loses protection
under the safe harbor if two conditions are met: (1) the
provider âreceive[s] a financial benefit directly attributable to
the infringing activityâ; and (2) the âservice provider has the
right and ability to control such activity.â 17 U.S.C.
§ 512(c)(1)(B). Fung meets both requirements and is
therefore ineligible for protection under the § 512(c) safe
harbor.
As to the first prong of § 512(c)(1)(B), we have held, in
the context of service providers who charge for their services,
that a service provider receives a direct financial benefit from
infringing activity where âthere is a causal relationship
between the infringing activity and any financial benefit a
defendant reaps, regardless of how substantial the benefit is
in proportion to a defendantâs overall profits.â Ellison,
357 F.3d at 1079; see also Napster, 239 F.3d at 1023; CCBill,
488 F.3d at 1117â18 (holding that the Ellison âdirect
financial benefitâ vicarious liability standard applies under
17 U.S.C. § 512(c)(1)(B)). Thus, where a service provider
obtains revenue from âsubscribers,â the relevant inquiry is
ââwhether the infringing activity constitutes a draw for
subscribers, not just an added benefit.ââ CCBill, 488 F.3d at
1117 (quoting Ellison, 357 F.3d at 1079).21
21
Our decisions interpreting the âfinancial benefitâ prong of
§ 512(c)(1)(B) derive almost entirely from our earlier decisions discussing
âdirect financial benefitsâ in the context of vicarious liability for copyright
infringement. Those cases also involved defendants who derived their
revenue from consumers. In particular, our decision in Fonovisa, Inc. v.
Cherry Auction, Inc., 76 F.3d 259, 263â64 (9th Cir. 1996), has been the
starting point for our subsequent § 512(c)(1)(B) decisions. In Fonovisa,
COLUMBIA PICTURES INDUSTRIES V . FUNG 49
At the same time, our opinions have not suggested that
the âfinancial benefitâ prong of § 512(c)(1)(B) is peripheral
or lacks teeth. Ellison ultimately concluded that the financial
benefit standard was not met, because there was inadequate
proof that âcustomers either subscribed because of the
available infringing material or cancelled subscriptions
because it was no longer available.â Ellison, 357 F.3d at
1079. And CCBill similarly found that evidence that the
service provider hosted, for a fee, websites that contain
infringing material inadequate to establish the requisite
financial benefit. In so holding, CCBill cited to DMCA
legislative history stating that a direct financial benefit cannot
be established showing that a service provider âreceive[d] a
one-time set-up fee and flat, periodic payments for service
from a person engaging in infringing activities.â 488 F.3d at
1118 (quoting H.R. Rep. 105-551(II), 54 (1998)).
Moreover, the structure of § 512(c)(1)(B) indicates that
the lack of direct financial benefit prong of the safe harbor
requirement is central, rather than peripheral. The statute sets
out as the requirement that the service provider ânot receive
a financial benefit directly attributable to the infringing
activity.â It then states the âright and ability to controlâ in a
dependent clause, describing a limitation on the financial
benefit requirement to certain circumstances. The
we held that swap meet operators âreap[ed] substantial financial benefits
from admission fees, concession stand sales and parking fees, all of which
flow[ed] directly from customers who want[ed] to buy the counterfeit
recordingsâ available at the swap meets. 76 F.3d at 263. In doing so, we
relied on district court decisions âimposing vicarious liability on the
operator[s] of [dance hall] business[es] where infringing performances
enhance[d] the attractiveness of the venue[s] to potential customers.â Id.
(citing Polygram Intâl Publâg, Inc. v. Nevada/TIG, Inc., 855 F. Supp.
1314, 1332 (D. Mass. 1994)).
50 COLUMBIA PICTURES INDUSTRIES V . FUNG
grammatical emphasis, then, is on the lack of direct financial
benefit requirement, with the right to control prong
secondary.
Against this background, we note that we have never
specified what constitutes a âfinancial benefit directly
attributable to the infringing activity,â 17 U.S.C.
§ 512(c)(1)(B) (emphasis added), where, as here, the service
providerâs revenue is derived from advertising, and not from
users. We do so now.
Here, the record shows that Fung generated revenue by
selling advertising space on his websites. The advertising
revenue depended on the number of users who viewed and
then clicked on the advertisements. Fung marketed
advertising to one advertiser by pointing to the âTV and
movies . . . at the top of the most frequently searched by our
viewers,â and provided another with a list of typical user
search queries, including popular movies and television
shows. In addition, there was a vast amount of infringing
material on his websitesâwhether 90-96% or somewhat
lessâsupporting an inference that Fungâs revenue stream is
predicated on the broad availability of infringing materials for
his users, thereby attracting advertisers. And, as we have
seen, Fung actively induced infringing activity on his sites.
Under these circumstances, we hold the connection
between the infringing activity and Fungâs income stream
derived from advertising is sufficiently direct to meet the
direct âfinancial benefitâ 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
COLUMBIA PICTURES INDUSTRIES V . FUNG 51
occurred on his sites; and encouraged that infringing activity.
Given this confluence of circumstances, Fungâs 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.
With respect to the second prong of § 512(c)(1)(B), we
recently explained in UMG that the âright and ability to
controlâ infringing activity involves âsomething moreâ than
âmerely having the general ability to locate infringing
material and terminate usersâ access.â UMG, â F.3d â.
Adopting the Second Circuitâs interpretation of
§ 512(c)(1)(B), we held that âin order to have the âright and
ability to control,â the service provider must [also] âexert[]
substantial influence on the activities of users.ââ Id. (quoting
Viacom Intâl, Inc., 676 F.3d at 38) (second alteration in
original). In doing so, we noted that ââ[s]ubstantial influenceâ
may include . . . purposeful conduct, as in Grokster.â Id. In
the absence of any evidence of inducement or any other
reason to suggest the defendant exerted substantial influence
over its usersâ activities, we concluded the defendant was not
ineligible for protection under this provision. Id.
Here, we are confronted with the opposite situation. Fung
unquestionably had the ability to locate infringing material
and terminate usersâ access. In addition to being able to
locate material identified in valid DMCA notices, Fung
organized torrent files on his sites using a program that
matches file names and content with specific search terms
describing material likely to be infringing, such as âscreenerâ
or âPPV.â And when users could not find certain material
likely to be infringing on his sites, Fung personally assisted
them in locating the files. Fung also personally removed
âfake[], infected, or otherwise bad or abusive torrentsâ in
52 COLUMBIA PICTURES INDUSTRIES V . FUNG
order to âprotect[] the integrity of [his websitesâ] search
index[es].â
Crucially, Fungâs ability to control infringing activity on
his websites went well beyond merely locating and
terminating usersâ access to infringing material. As noted,
there is overwhelming evidence that Fung engaged in
culpable, inducing activity like that in Grokster III. Although
Fungâs inducement actions do not categorically remove him
from protection under § 512(c), they demonstrate the
substantial influence Fung exerted over his usersâ infringing
activities, and thereby supply one essential component of the
financial benefit/right to control exception to the § 512(c)
safe harbor.
Because he meets both prongs of § 512(c)(1)(B), Fung is
not eligible for protection under the § 512(c) safe harbor.
We have no difficulty concluding that where the
§ 512(c)(1)(B) safe harbor requirements are not met, the
service provider loses protection with regard to any infringing
activity using the service. See supra note 20. As we held in
UMG, the § 512(c)(1)(B) âright and ability to controlâ
requirement does not depend only upon the ability to remove
known or apparent infringing material. â F.3d at â.
Instead, there must also be substantial influence on the
infringing activities of users, indicating that it is the overall
relationship between the service provider and infringing users
that matters. Also, to the degree this DMCA provision had its
origin in vicarious liability concepts, see CCBill 488 F.3d at
1117, those concepts rest on the overall relationship between
the defendant and the infringers, rather than on specific
instances of infringement. See Napster, 239 F.3d 1023â24
(discussing Napsterâs general ability to âcontrol[] and
COLUMBIA PICTURES INDUSTRIES V . FUNG 53
patrol[]â content on its system); id. at 1022 (noting that
â[v]icarious copyright liability is an âoutgrowthâ of
respondeat superiorâ (quoting Fonovisa, 76 F.3d at 262)).
The term âright and ability to control such activityâ so
reflects, as it emphasizes a general, structural relationship and
speaks of âsuch activity,â not any particular activity.
We therefore hold that because Fung does not meet the
requirements of § 512(c)(1)(B), he is outside of the § 512(c)
safe harbor with respect to all infringement activity on the
sites that are the subject of this suit.
iii. âInformation location toolsâ (17 U.S.C. § 512(d))
The last safe harbor Fung invokes provides:
A service provider shall not be liable for
monetary relief, or, except as provided in
subsection (j), for injunctive or other equitable
relief, for infringement of copyright by reason
of the provider referring or linking users to an
online location containing infringing material
or infringing activity, by using information
location tools, including a directory, index,
reference, pointer, or hypertext link, if the
service providerâ
(1) (A) does not have actual
knowledge that the material or activity
is infringing;
(B) in the absence of such
actual knowledge, is not aware of
54 COLUMBIA PICTURES INDUSTRIES V . FUNG
facts or circumstances from which
infringing activity is apparent; or
(C) upon obtaining such
knowledge or awareness, acts
expeditiously to remove, or disable
access to, the material;
(2) does not receive a financial benefit
directly attributable to the infringing
activity, in a case in which the service
provider has the right and ability to
control such activity; and
(3) upon notification of claimed
infringement as described in
s u b s e c t i o n (c)(3), res po n d s
expeditiously to remove, or disable
access to, the material that is claimed
to be infringing or to be the subject of
infringing activity, except that, for
purposes of this paragraph, the
information described in subsection
(c)(3)(A)(iii) shall be identification of
the reference or link, to material or
activity claimed to be infringing, that
is to be removed or access to which is
to be disabled, and information
reasonably sufficient to permit the
service provider to locate that
reference or link.
17 U.S.C. § 512(d).
COLUMBIA PICTURES INDUSTRIES V . FUNG 55
We affirm the grant of summary judgment to Columbia
on Fungâs claim to the § 512(d) safe harbor for the reasons
just discussed with regard to § 512(c): Fung was broadly
âaware of facts or circumstances from which infringing
activity [wa]s apparent.â 17 U.S.C. § 512(d)(1)(B).
Moreover, he received a direct financial benefit from that
infringing activity, and had the âright and ability to control
such activity.â Id. § 512(d)(2).
II. Injunction
Under 17 U.S.C. § 502(a), a district court is empowered
to grant a permanent injunction âas it may deem reasonable
to prevent or restrain infringement of a copyright.â Fung
does not challenge the issuance of injunctive relief generally,
only the scope of the injunction issued.
In particular, Fung argues that the permanent injunction
is vague and unduly burdensome.22 We consider each
argument in turn.
A. Vagueness
Rule 65(d) requires â[e]very order granting an injunctionâ
to âstate its terms specificallyâ and to âdescribe in reasonable
detailâand not by referring to the complaint or other
documentâthe act or acts restrained or required.â Fed. R.
22
Fung also maintains that the injunction is impermissibly
extraterritorial, but that argument is wrong as a matter of fact. The
injunction explicitly applies only to acts of infringement âthat take place
in the United States.â Fung also challenges the injunction in other
respects not discussed in the text. W e have considered them and find
them without merit.
56 COLUMBIA PICTURES INDUSTRIES V . FUNG
Civ. P. 65(d)(1)(B)â(C). ââ[O]ne basic principle built into
Rule 65 is that those against whom an injunction is issued
should receive fair and precisely drawn notice of what the
injunction actually prohibits.ââ Fortyune v. Am.
Multi-Cinema, Inc., 364 F.3d 1075, 1086â87 (9th Cir. 2004)
(quoting Union Pac. R.R. v. Mower, 219 F.3d 1069, 1077 (9th
Cir. 2000)). âThe Rule was designed to prevent uncertainty
and confusion on the part of those faced with injunctive
orders, and to avoid the possible founding of a contempt
citation on a decree too vague to be understood.â Id. (quoting
Schmidt v. Lessard, 414 U.S. 473, 476 (1974)). Generally
speaking, âan ordinary person reading the courtâs order
should be able to ascertain from the document itself exactly
what conduct is proscribed.â 11A Charles A. Wright et al.,
Federal Practice & Procedure § 2955 (2d ed.). Several
provisions of the permanent injunction fail to meet this
standard.
First, the injunctionâs definition of a key phrase,
âInfringement-Related Terms,â is too vague to provide the
notice required by Rule 65(d). The injunction prohibits Fung
from âincluding Infringement-Related Terms in metadata for
any webpagesâ; âcreating, maintaining or providing access to
browsable website categories of Dot-torrent or similar files
using or based on Infringement-Related Termsâ; and
âorganizing, harvesting or categorizing Dot-torrent or similar
files using or based on Infringement-Related Terms.â But
subsection (ii) of the definition of the phrase âInfringement-
Related Termsâ states that it includes âterms that are widely
known to be associated with copyright infringement (for
example âwarez,â âAxxo,â âJaybob,â âDVD Rips,â âCam,â
âTelesync,â âTelecine,â âScreener,â or âPPV.â).â Beyond the
specifically-named examples, no one reading this injunction
COLUMBIA PICTURES INDUSTRIES V . FUNG 57
can tell what it means for a term to be âwidely known to be
associated with copyright infringement.â
We understand the desire to build flexibility into the
injunction. But Rule 65(d), overall, prefers certainty to
flexibility. See Fortyune, 364 F.3d at 1086â87. Subsection
(ii) of the injunctionâs definition of âInfringement-Related
Termsâ therefore must be modified to state simply that the
phrase includes specifically named terms. Given that the
district court has jurisdiction to enforce the injunction,
Columbia can request modification in the future to add, upon
competent proof, specific other terms as well.
Other provisions suffer from similar problems. Paragraph
3(j) prohibits âsoliciting or targeting a user base generally
understood, in substantial part, to be engaging in infringement
of, or seeking to infringe, Plaintiffsâ Copyrighted Works.â
This language targets a Grokster-like situation, in which
Grokster sought to attract former Napster users. But the
language used is simply too imprecise, as the resort to the
term âgenerally understoodâ indicates. How is one to
determine what is âgenerally understoodââwhose knowledge
matters, and how widespread must the understanding be?
And what is a âuser base,â an undefined term? It is also
unclear whether the âin substantial partâ refers to the âuser
base,â the âgenerally understoodâ phrase, or the âengaging in
infringementâ phrase. Unless it can be rewritten to comply
with the requirements of Rule 65(d) for fair notice through
adequate specificity and detail, Paragraph 3(j) must be
excised. See Rule 65(d); Fortyune, 364 F.3d at 1086â87.
Similarly, paragraph 3(l) prohibits âindexing or providing
access to Dot-torrent or similar files harvested or collected
from well-known infringing source sites, such as âThe Pirate
58 COLUMBIA PICTURES INDUSTRIES V . FUNG
Bay.ââ Here again, Rule 65(d) requires more specificity.
Paragraph 3(l) must be amended to omit the vague words
âwell-known infringing source sites, such as,â and to specify
the particular infringing sites coveredâwith the caveat,
again, that Plaintiffs can seek to amend the list in the future.
Another provision of the injunction states that after
receiving a list of titles from the Plaintiffs, Fung is required
to have a mechanism in place to ensure that he is not
facilitating the infringement of those titles. Fung complains
that Plaintiffsâ lists of titles are error-filled and that Fung â[is]
compelled to locate and correct [the errors] under threat of
contempt proceedings.â Although the injunction is
reasonably clear in this regard, we clarify that Fung has no
burden to correct Plaintiffsâ errors.
B. Unduly burdensome
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. Fung argues that such a restriction would be
unduly burdensome.
ââ[I]njunctive relief should be no more burdensome to the
defendant than necessary to provide complete relief to the
plaintiffsâ before the court.â L.A. Haven Hospice, Inc. v.
Sebelius, 638 F.3d 644, 664 (9th Cir. 2011) (quoting Califano
v. Yamasaki, 442 U.S. 682, 702 (1979)). 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. Accordingly, the
COLUMBIA PICTURES INDUSTRIES V . FUNG 59
permanent injunction should be amended appropriately to
limit the employment prohibition. We leave the final
wording to the district court.
CONCLUSION
In sum, we affirm the district courtâs grant of summary
judgment to Plaintiffs on liability. We also affirm summary
judgment to Plaintiffs on Fungâs claims that he is entitled to
the safe harbors provided by 17 U.S.C. § 512(a), (c), and (d),
albeit on grounds different than those relied upon by the
district court. The permanent injunction is modified as noted
above. Costs are awarded to the Plaintiffs.
AFFIRMED IN PART, VACATED IN PART,
INJUNCTION MODIFIED IN PART.