BWP Media USA, Inc. v. Clarity Digital Grp., LLC

• Citation: 118 U.S.P.Q.2d 1433,820 F.3d 1175
• Decision Date: 25 April 2016
• Docket Number: No. 15–1154.,15–1154.
• Parties: BWP MEDIA USA, INC., d/b/a Pacific Coast News; National Photo Group, LLC, Plaintiffs–Appellants, v. CLARITY DIGITAL GROUP, LLC, n/k/a AXS Digital Medial Group, LLC, Defendant–Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

820 F.3d 1175

118 U.S.P.Q.2d 1433

BWP MEDIA USA, INC., d/b/a Pacific Coast News; National Photo Group, LLC, Plaintiffs–Appellants

v.CLARITY DIGITAL GROUP, LLC, n/k/a AXS Digital Medial Group, LLC, Defendant–Appellee.

No. 15–1154.

United States Court of Appeals, Tenth Circuit.

April 25, 2016.

Craig B. Sanders (and Jonathan M. Cader, with him on the briefs) of Sanders Law, PLLC, Garden City, NY, for Plaintiffs–Appellants.

Steven D. Zansberg of Levine Sullivan Koch & Schulz, LLP, Denver, CO, for Defendant–Appellee.

Before KELLY, MATHESON, and MORITZ, Circuit Judges.

KELLY, Circuit Judge.

Plaintiff–Appellant BWP Media USA, Inc. d/b/a Pacific Coast News and National Photo Group, LLC (“BWP”) appeals from the district court's summary judgment in favor of Defendant–Appellee Clarity Digital Group, LLC n/k/a AXS Digital Media Group, LLC (“AXS”). See BWP Media USA Inc. v. Clarity Dig. Grp., LLC, No. 14–cv–00467–PAB–KMT, 2015 WL 1538366 (D.Colo. Mar. 31, 2015). BWP owns the rights to photographs of various celebrities. In February 2014, BWP filed a complaint alleging that AXS infringed its copyrights by posting 75 of its photographs without permission on AXS's website, Examiner.com.¹ AXS asserted it was protected from liability by the safe harbor provision of the Digital Millennium Copyright Act (“DMCA”) and moved for summary judgment. The district court agreed. Exercising jurisdiction pursuant to 28 U.S.C. § 1291, we affirm.

Background

A. The DMCA

Recognizing the need “to update domestic copyright law for the digital age,” Congress enacted the DMCA. Viacom Int'l, Inc. v. YouTube, Inc., 676 F.3d 19, 26 (2d Cir.2012). Section 512 of the DMCA contains a safe harbor provision protecting online and internet service providers (“ISPs”) from monetary liability, only allowing for limited injunctive relief, when copyright infringement occurs through use of the service. 17 U.S.C. § 512(c). The safe harbor provision is designed to “preserve[ ] strong incentives for service providers and copyright owners to cooperate to detect and deal with copyright infringements,” while simultaneously providing “greater certainty to service providers concerning their legal exposure for infringements that may occur in the course of their activities.” H.R. Rep. No. 105–551, pt. 2, at 49–50 (1998). To benefit from safe harbor protection, the ISP must first show that the infringing content was stored “at the direction of a user.” 17 U.S.C. § 512(c)(1). Once this is established, there are numerous factors which must be satisfied to come within the protection of the safe harbor.² Specific to this case, an ISP will not qualify for safe harbor protection if it had either actual knowledge of the infringement or knowledge of facts or circumstances from which infringing activity is apparent. Id. § 512(c)(1)(A)(i)–(ii). Additionally, if the ISP became aware of the infringement and did not act expeditiously to remove or disable access to the content, it cannot qualify for safe harbor protection. Id. § 512(c)(1)(A)(iii).

B. Infringing Activity on Examiner.com

Examiner.com characterizes itself as a “dynamic entertainment, news and lifestyle network that serves more than 20 million monthly readers across the U.S. and around the world.” About Us, Examiner.com (Mar. 18, 2016, 9:10AM), http://www.examiner.com/About_Examiner. Rather than hiring a centralized writing staff, the content generated on Examiner.com is created by independent contractors, called “Examiners,” all over the world. To become an Examiner, the writer must fill out an application including a proposed topic and a short writing sample. Examiner.com evaluates the writing sample, conducts a background check, and, assuming the application is approved, the Examiner enters into a contract entitled the Independent Contractor and Agreement License with Examiner.com. The contract expressly provides that: (1) Examiners are independent contractors, not employees³ and (2) copyright infringement is prohibited.⁴ Because it was a group of Examiners that posted the infringing content on Examiner.com, AXS asserted it was protected under the DMCA's safe harbor provision.

On appeal, BWP argues that AXS should not be protected by § 512's safe harbor for two reasons. First, BWP argues AXS cannot get past the threshold requirement that the infringing content be stored “at the direction of a user.” 17 U.S.C. § 512(c)(1). Specifically, BWP argues that: (1) Examiners are not “users,” but (2) even if Examiners are “users,” AXS directed the Examiners to post the infringing content. Second, BWP claims that even if AXS satisfies this threshold, safe harbor protection does not apply because AXS had actual or circumstantial knowledge of the infringement. Id. § 512(c)(1)(A)(i)–(ii). We review the district court's grant of summary judgment de novo. Timmons v. White, 314 F.3d 1229, 1232 (10th Cir.2003). We reject each argument raised by BWP.

Discussion

A. Section 512's threshold requirement, that the infringing content be stored at the direction of a “user,” is satisfied.

The DMCA's safe harbor requires that the infringing content be stored at the direction of a “user.” BWP attempts to divide this requirement into two distinct inquiries, asking who is a “user” and who directed the infringing content to be stored. As explained below, the key to interpreting this requirement is not to isolate certain words but rather, to take the provision as a whole, giving meaning to each word in context.

1. The word “user” in the DMCA should be interpreted according to its plain meaning.

We are often tasked with interpreting complex statutory language but, when “the statutory language is clear, our analysis ends and we must apply its plain meaning.” Thomas v. Metro. Life Ins. Co., 631 F.3d 1153, 1161 (10th Cir.2011). We need not torture “the language of the statute when a simple, straightforward reading obviates the necessity of making such semantic contortions.” Equal Emp't Opportunity Comm'n v. Louisville N. R.R. Co., 505 F.2d 610, 619–20 (5th Cir.1974) ; see also Resolution Tr. Corp. v. Fed. Sav. and Loan Ins. Corp., 25 F.3d 1493, 1500 (10th Cir.1994). The word “user” in the DMCA is straightforward and unambiguous. Simply put, a “user” is “one that uses.” Merriam–Webster's Collegiate Dictionary 1297 (10th ed. 2001). In the DMCA context, we agree with the district court that the term “ ‘user’ describes a person or entity who avails itself of the service provider's system or network to store material.” BWP Media USA Inc., 2015 WL 1538366 at *6. We note that opinions interpreting the DMCA's safe harbor provisions have not exhaustively defined the term, suggesting apparent clarity. See, e.g., UMG Recordings, Inc. v. Shelter Capital Partners LLC, 718 F.3d 1006, 1015–20 (9th Cir.2013) ; Viacom Int'l, Inc., 676 F.3d at 38–40 ; Perfect 10, Inc. v. CCBill LLC, 488 F.3d 1102, 1117–18 (9th Cir.2007).

In an effort to narrow the word “user,” BWP suggests the ordinary meaning of the term would protect every ISP from liability for copyright infringement. See Aplt. Br. at 17. BWP has offered several alternative definitions of “user”—at one point suggesting “user” should exclude an ISP's owners, employees, and agents, at another point suggesting “user” should exclude anyone who entered into a contract and received compensation from an ISP.

Putting aside, for a moment, that BWP offers no legal authority to support either definition, we need not look far to reject the argument that a plain language definition of “user” will protect every ISP from liability for copyright infringement.⁵ The term “user” cannot be read in isolation, it must be read in conjunction with the remainder of the safe harbor provision. See King v. Burwell, ––– U.S. ––––, 135 S.Ct. 2480, 2489, 192 L.Ed.2d 483 (2015). Safe harbor protection is conditioned on various factors: An ISP will only qualify for safe harbor protection when it can show, inter alia, that the content was stored at the direction of a “user,” that the ISP had no actual knowledge of the infringement, that there were no surrounding facts or circumstances making the infringement apparent, or that upon learning of the infringement, the ISP acted expeditiously to remove or disable access to the infringing material. See 17 U.S.C. § 512(c)(1)(A).

BWP also argues that Examiners are agents of AXS and therefore not “users.” No evidence supports the notion that the Examiners are agents. Thus, the argument is contrary to the language of the contract, our interpretation of the term “user,” and agency principles generally. As previously stated, a “user” is anyone who uses a website—no class of individuals is inherently excluded. Moreover, the Examiners are not agents—the contract language explicitly designates Examiners as independent contractors: “You will provide the Services hereunder as an independent contractor and not as the agent, employee, legal representative, partner, or joint venturer of Examiner.com.” J.A. 138. We may rightfully consider that language. United States v. New Mexico, 581 F.2d 803, 808 (10th Cir.1978).

Finally, BWP argues that even if there is no actual agency relationship, the Examiners had apparent authority and therefore should be considered employees of AXS under Community for Creative Non–Violence v. Reid, 490 U.S. 730, 741, 109 S.Ct. 2166, 104 L.Ed.2d 811 (1989). There are numerous reasons to reject this argument. First, evidentiary insufficiency. As the district court noted, we lack evidence of an agency relationship or any apparent authority. See Restatement (Third) of Agency § 3.03 cmt. b (Am. Law. Inst. (2015)) (“[A]n agent's apparent authority originates with expressive conduct by the principal toward a third party ... [t]he fact that one party performs a service that facilitates the other's business does not constitute such a manifestation.”).

Second, even if the Examiners have apparent authority, and they do not, this does not equate to an employee-employer relationship under Reid. 490 U.S. at 741, 109 S.Ct....