Page 73 - A Study on the Role of UGC Platforms in Copyright Law：An Intermediary-oriented Approach

A Study on the Role of UGC Platforms in Copyright Law: Chapter 3 Copyright Rules for Online Intermediaries: From Safe Harbour to a New Intermediary Liability Scheme
An Intermediary-oriented Approach

Alternatively, some courts have emphasised the general, structural relationship between
60
the ISP and the infringing user, rather than any particular activity. Following this prong,
an ISP would not have the right and ability to control infringing activities unless it had
61
an overall relationship with the third party. The Ninth Circuit Court of Appeals even
complicated the situation by incorporating the intentional element that belongs to the
inducement liability branch. The Veoh decision held that ‘the right and ability to control’
was exhibited in (i) high levels of control over the activities of users, and (ii) the purposeful
63
62
conduct of the ISP. This two-prong approach has gained many followers.
The evolving case law has resulted in demanding criteria that establish ‘the right and
ability to control infringing activities’. To date, however, only three published cases have
recognised the defendant ISP’s right and ability to control infringing activity under 17 U.S.C.
64
§ 512(c)(1)(B). The first was Perfect 10 v. Cybernet Ventures on the ground that the ISP
had installed a monitoring programme through which the user ‘received detailed instructions
65
regard[ing] issues of layout, appearance and content’. The second was Columbia Pictures
v. Fung, in which the Ninth Circuit held the defendant ISP had the right and ability to control
infringing activities because it had ‘engaged in culpable, inducing activity’ by ‘organis[ing]
torrent files on his sites using a programme that matches file names and content with specific
search terms describing material likely to be infringing’ and ‘assisting users to find certain
66
material likely to be infringing’. The third, Greg Young Pub. v. Zazzle, recognised the
defendant ISP’s right and ability to control because it had ‘not only facilitated the sale of
products owned and marketed by third parties, but created the products [itself]’.
67
4) Direct financial benefits attributable to the infringing activity
Apart from ‘the right and ability to control infringing activities’, receiving a ‘financial
benefit directly attributable to the infringing activity’ is the other element establishing
68
vicarious liability. Because most ISPs are run by for-profit institutions, the crux of this
element is to distinguish between ‘direct financial benefits’ from the infringing material
and ordinary profits from providing a general service. Rather than defining ‘direct financial
benefits’, the congressional report merely offered an example of a direct benefit: payments

60 Columbia Pictures Industries, Inc. v. Fung, 710 F.3d 1020, 1046 (9 Cir. 2013).
th
61 Io Group, Inc. v. Veoh Networks, Inc., 586 F. Supp. 2d 1132, 1152 (N.D. Cal. 2008).
th
62 UMG Recs. v. Veoh Networks, 718 F.3d 1006, 1027 (9 Cir. 2013).
63 Viacom Int’l Inc v. YouTube, Inc., 940 F. Supp. 2d 110, 118 (S.D.N.Y. 2013); Steven M. Gardner, v. CafePress Inc. at 23 (Case
No. 3:13-cv-1108-GPC-JMA)2014; Rosen v. eBay, Inc. at 32, No. CV 13-6801 MWF (Ex) (C.D. Cal., Jan. 16, 2015).
64 I did a case study in LexisHK on the ‘US Federal & States Cases, Combined’ database with the search terms ‘atleast5(the
right and ability to control infringing activities) and atleast5(DMCA)’. <http://www-lexisnexis-com.eproxy.lib.hku.hk/ap/ui/
go.aspx/hk/lexis/default/api?ipf=t> (accessed by March 25, 2019).
65 Perfect 10, Inc. v. Cybernet Ventures, Inc., 213 F. Supp. 2d 1146, 1173 (C.D. Cal., April 22, 2002).
66 Columbia Pictures Industries, Inc. v. Fung, 710 F.3d 1020, 1046 (9 Cir. 2013).
th
67 Greg Young Publishing, Inc. v. Zazzle, Inc., at 21, 2017 WL 2729584 (C.D. Cal. May 1, 2017).
68 17 U.S. Code § 512 (c)(1)(B).

• 59 •