A federal court in Arizona dismissed copyright infringement claims in which the Ripoff Report — an online consumer complaint posting forum — contended that its competitor, ComplaintsBoard.com, “encourage[d] and permit consumers to post content that has been exclusively licensed to” the Ripoff Report’s owner (Xcentric Ventures, LLC v. Mediolex Ltd., No. 2:12-cv-00130 (D. Ariz. Oct. 24, 2012)).
Ripoff Report claimed that it owned the copyrights of all the consumer complaints posted on its website. Despite that exclusive arrangement, ComplaintsBoard.com purportedly encouraged and permitted users of its own website to plagiarize and republish those copyrighted reviews on ComplaintsBoard.com.
DMCA Safe Harbor Unavailable
On a motion to dismiss, the court rejected ComplaintsBoard.com’s argument that it was shielded from liability by the safe harbor provision of the Digital Millennium Copyright Act (DMCA), which provides that a service provider is immune from copyright infringement liability under certain circumstances.
The safe harbor applies only if the provider (1) did not have actual knowledge that the material on its network was infringing; (2) was unaware of facts or circumstances that would make the infringing activity apparent; and (3) upon obtaining knowledge or awareness of such infringing activity, acted expeditiously to remove or disable access to the copyrighted material (17 U.S.C. § 512(c)).
The court held that Ripoff Report’s allegation that ComplaintBoard.com actively encouraged the posting of infringing content “may be sufficient to preclude defendants from taking advantage of the DMCA’s safe harbor provisions.”
Inadequate Allegations of Secondary Copyright Infringement
Despite its ruling on the DMCA safe harbor provision, the court agreed with ComplaintsBoard.com that the allegations of Ripoff Report’s complaint did not state valid copyright infringement claims.
There evidently was no allegation that ComplaintsBoard.com directly infringed Ripoff Report’s copyrights. Instead, Ripoff Report claimed that its competitor was liable for secondary – contributory or vicarious – infringement.
Contributory copyright infringement
To state a claim for contributory copyright infringement, the claimant must show that the defendant “had knowledge of the infringing activity and induced, caused, or materially contributed to the infringing conduct of another”.
The court concluded that the complaint did not allege “any facts that would lead to a reasonable inference that defendants knew of their users’ republishing [plaintiff’s] copyrighted activity or that defendants had induced, caused, or materially contributed to such republication”.
The most damning fact alleged was that, “after it posted a review of a fictitious company on the Ripoff Report, [ComplaintsBoard.com] created a posting encouraging users to submit their own reviews of that fictitious company.”
According to the court, “This action, even taken as true, does not establish that Defendants intentionally encouraged users to copy reviews from the Ripoff Report onto ComplaintsBoard.com”.
At most, it establishes that defendants took cues from the Ripoff Report as to which companies it sought its users to review.” Therefore, the court determined that Ripoff Report had not adequately alleged contributory infringement.
Vicarious liability for copyright infringement
A court will impose vicarious liability for copyright infringement when “a defendant has the right and ability to supervise the infringing activity and also has a direct financial interest in such activities.” See A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1022 (9th Cir. 2001).
The court in the present case held that Ripoff Report’s allegation that ComplaintsBoard.com encouraged and permitted posting of copied items did not “plausibly support[ ] the element of Defendant’s “right and ability to supervise the infringing activity”. Accordingly, the court reasoned that Ripoff Report had not adequately alleged facts to justify imposing vicarious liability.