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In the first case of its kind, Hendrickson v. eBay, a federal judge in Los Angeles has held that the “Safe Harbor” provisions of the Digital Millennium Copyright Act (DMCA) protect eBay from secondary liability for copyright infringement by its sellers. While this ruling provides some comfort to auction sites, it is possible that a different result could be reached in other cases where the facts may not be so favorable. ABOUT EBAY EBay’s popular Web site provides a service where millions of buyers and sellers of goods and services interact online to buy and sell items in an auction or fixed-priced format. Users set up screen names so that they conduct their business on the site in a semi-anonymous manner. Ultimately, buyers and sellers disclose their true identities to each other in private communications as they complete their transactions. There are approximately 4,700 categories of goods and services that can be searched by using eBay’s search engine. Each day more than one million new listings appear on the eBay Web site, while at any point in time there are more than six million listings on the site. ALLEGED COPYRIGHT INFRINGEMENT In late 2000, Robert Hendrickson, who represented himself without an attorney, sent a “cease and desist” letter to eBay, claiming that pirated DVD formatted copies of a documentary film entitled “Manson” were being displayed for sale on the eBay Web site. Hendrickson, who claimed that his company, Tobann International Pictures, owned the copyright to “Manson,” asserted that such sale of the pirated films on eBay infringed his company’s copyright interest and demanded that eBay refrain from all further allegedly infringing conduct or face legal prosecution. However, Hendrickson did not clearly set forth his copyright interest, nor did he specify which copies of the documentary were infringing copies. EBay responded in part by seeking more information from Hendrickson and encouraging him to submit a Notice of Infringement form to the company. EBay also informed Hendrickson of its Verified Rights Owner (“VeRO”) program, which has various features, including dedicated priority e-mail queues for reporting alleged infringing activities and the ability to use a “Personal Shopper” feature that allows users to conduct automatic searches for potentially infringing items. Hendrickson refused eBay’s request that he join the VeRO program. Nor did he ever provide eBay with the specific item numbers eBay sought with respect to the alleged infringing copies of “Manson.” Instead, Hendrickson filed suit against eBay, alleging that the auction site was liable for copyright infringement because it wrongfully continued to allow the sale of unauthorized copies of the film “Manson.” EBay responded by filing a summary judgment motion in which the company argued that Hendrickson’s case was so lacking in merit that it was not worthy of proceeding to trial. THE LEGAL DECISION U.S. District Judge Robert Kelleher decided eBay’s summary judgment motion. He framed the legal issue before him as “whether eBay can be held secondarily liable for providing the type of selling platform/forum and services that it provided, however limited or automated in nature, to sellers of counterfeit copies of the film ‘Manson.’” In construing the DMCA and its Safe Harbor provisions, Judge Kelleher ruled in eBay’s favor, granting eBay’s summary judgment motion and gutting Hendrickson’s case. In reaching this result, Judge Kelleher cited a Senate Report finding that the DMCA “is designed to facilitate the robust development and world-wide expansion of electronic commerce, communications, research, development and education.” Judge Kelleher also noted that the DMCA Safe Harbor “protects qualifying Internet service providers from liability for all monetary relief for direct, vicarious and contributory infringement,” thus preserving “strong incentives for service providers and copyright owners to cooperate to detect and deal with copyright infringements that take place in the digital networked environment.” Judge Kelleher found that there was “no dispute” that eBay was a service provider within the meaning of the DMCA. He also found that eBay met the DMCA’s broad definition of an online service provider. Next, to qualify for the Safe Harbor, eBay needed to satisfy at least one of four requirements, and Judge Kelleher found that eBay satisfied one such requirement because the issue presented dealt with alleged infringing sale and distribution of pirated copies of a copyrighted work, and because eBay met satisfied certain other related conditions. For example, to qualify for the Safe Harbor in this context, eBay had as a condition a duty to act upon receipt of proper notice of alleged infringement. In this case, the judge concluded that eBay did not have a duty because the notice provided by Hendrickson was inadequate. Hendrickson failed to provide sufficient information identifying the alleged pirated copies and none of his communications stated under oath that the information he submitted was accurate, that he was authorized to act on behalf of the owner of copyright at issue, or that the use of the copyrighted work was not authorized. Moreover, Judge Kelleher determined that eBay’s limited voluntary monitoring of its Web site for infringement under the VeRO program did not constitute a right and ability to control the infringing activities under the DMCA. Indeed, the judge thought that a company such as eBay should not be “penalized” for engaging in voluntary efforts to “combat piracy over the Internet.” In addition, Judge Keller found that the infringing activities were the sale and distribution of pirated copies of “Manson” by eBay sellers offline, something over which eBay has no control. The display of infringing material on eBay’s Web site thus did not constitute an infringing activity. This particular ruling could have wider application in other cases. LOOKING AHEAD Good facts make good law, and bad facts make bad law. The Hendrickson v. eBaydecision involved a case with favorable facts for eBay. Perhaps this will be the first building block in a body of cases that solidify immunity of Internet service providers under the DMCA from copyright infringement claims. Time will tell. Eric J. Sinrod is a partner focusing on technology and litigation matters in the San Francisco office of Duane Morris, a national law firm. Mr. Sinrod’s Web site is sinrodlaw.com and he may be reached by e-mail at [email protected].

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