eBay – Attorney Evan Brown

June 10, 2015 Copyright, DMCA

Is a DMCA subpoena to identify unknown infringers valid if the infringement has ended?

The Digital Millennium Copyright Act (“DMCA”) is well-known for its notice and takedown provisions. But the DMCA provides a number of other interesting mechanisms, including a procedure for potential copyright plaintiffs to send subpoenas to online service providers to learn the identity of users who posted infringing content to that service. A recent case involving some subpoenas that a copyright owner sent to eBay examines the relationship between the notice and takedown procedures on one hand, and the subpoena mechanism on the other. The question before the court was whether a DMCA subpoena is valid if, by the time it is served on the online service provider, that online service provider has already removed or has disabled access to that content.

Section 512(h) (17 U.S.C. 512(h)) spells out the DMCA subpoena process, and how it relates to the notice and takedown provisions. An online service provider must act expeditiously to identify the user who uploaded infringing content “[u]pon receipt of the issued subpoena, either accompanying or subsequent to the receipt of a [takedown request].” That plain language seems straightforward — an online service provider has to provide the identifying information in response to any subpoena it receives either with or subsequent to a takedown notice.

But it was not so straightforward in a 2011 case, where some confusing facts made for some confusing law. In Maximized Living, Inc., v. Google, Inc., 2011 WL 6749017 (N.D. Cal. December 22, 2011), the copyright holder sent a subpoena to the online service provider after the copyright holder had sent a DMCA takedown notice. That would appear to comport with the statute — the subpoena came subsequent to the takedown notice. But the problem in that case was that the takedown notice was not valid. By the time it was sent, the alleged infringer had already removed the infringing content. From that, the Maximized Living case pronounced that “the subpoena power of §512(h) is limited to currently infringing activity and does not reach former infringing activity that has ceased and thus can no longer be removed or disabled.”

In the recent case of In re DMCA Subpoena to eBay, Inc., eBay, as the recipient of subpoenas to identify some of its users, picked up on the Maximized Living holding to argue that it did not have to answer the subpoenas because it had already taken down the offending content pursuant to previous takedown notices. Since the subpoenas did not relate to “currently infringing activity,” eBay argued à la Maximized Living, that the subpoenas had not been issued under §512(h)’s power and were therefore invalid.

The court rejected eBay’s argument. The key distinction in this case was that, unlike in Maximized Living, the takedown notices in this case, when they issued, related to content that was on the eBay servers at the time the takedown notices were issued. Granted, some of those takedown notices went all the way back to early 2012 (query whether the subpoena should be valid if it would only uncover the identity of an infringer for whom the 3-year copyright statute of limitations had passed; but that wasn’t before the court).

So to simply state the rule in this case — for a DMCA subpoena to be valid, it has to relate to a valid DMCA takedown notice. That DMCA takedown notice is not valid unless it was served at a time when infringing content resided on the service. An online service provider cannot avoid the obligation of responding to a subpoena by taking down the content, thereby causing there to be no “currently infringing activity”. Such a rule would, as the court observed, cause the online service provider’s safe harbor protection to also shield the alleged infringer from being identified. That would indeed be an odd application of the DMCA’s protection. The court in this case avoided that outcome.

In re DMCA Subpoena to eBay, Inc., 2015 WL 3555270 (S.D. Cal. June 5, 2015).

Evan Brown is a Chicago attorney helping clients in matters dealing with copyright, technology, the internet and new media. Call him at (630) 362-7237, send email to ebrown [at] internetcases dot com, or follow him on Twitter @internetcases

Photo courtesy of Flickr user Thomas Galvez under this Creative Commons license.

October 26, 2009 Contracts, Litigation

Court upholds eBay forum selection clause

Tricome v. Ebay, Inc., 2009 WL 3365873 (E.D. Pa. October 19, 2009)

Everyone who signs up to use eBay has to assent to the terms of eBay’s User Agreement. Among other things, the User Agreement contains a forum selection clause that states all disputes between the user and eBay must be brought to court in Santa Clara County, California.

After eBay terminated plaintiff Tricome’s account, Tricome sued eBay in federal court in Pennsylvania. eBay moved to dismiss or to at least transfer the case, arguing that the forum selection clause required it. The court agreed and transferred the case to the U.S. District Court for the Northern District of California.

Plaintiff had argued that the court should not enforce the forum selection clause because it was procedurally and perhaps substantively unconscionable. The court found the agreement not to be procedurally unconscionable because Plaintiff did not have to enter into the agreement in the first place — he only did it to increase his online business. Furthermore, eBay did not employ any high pressure tactics to get Plaintiff to accept the User Agreement. Moreover, eBay had a legitimate interest in not being forced to litigate disputes all around the country.

The court likewise found the User Agreement was not substantively unconscionable either. It would not “shock the conscience” for a person to hear that eBay — an international company — would undertake efforts to focus litigation it is involved with into a single jurisdiction. Furthermore, having the forum selection clause would conserve judicial and litigant resources, in that parties and the courts would know in advance where the appropriate place for disputes concerning eBay would be heard. Finally (and rehashing an earlier point regarding procedural unconscionability), Plaintiff had a meaningful choice — he could have decided not to do business on eBay in the first place.

Map photo courtesy Flickr user sidewalk flying under this Creative Commons license.

August 22, 2008 Personal Jurisdiction

Ninth Circuit: No personal jurisdiction over out of state eBay seller

Boschetto v. Hansing, — F.3d —, 2008 WL 3852676 (9th Cir. August 20, 2008)

Hansing, a resident of Wisconsin, offered a 1964 Ford Galaxie for sale on eBay. Boschetto, a California resident, was the winning bidder, and sent Hansing $34,106. He also arranged to have the car shipped from Wisconsin to California. After Boschetto found that the car didn’t meet the description in the eBay listing, he sued Hansing in California federal court, based on diversity subject matter jurisdiction. (Never mind how far below $75,000 the amount that was in controversy appears.)

Hansing moved to dismiss for lack of personal jurisdiction, and the court granted the motion. Boschetto sought review with the Ninth Circuit. On appeal, the court affirmed.

Single eBay transaction not enough

The question was whether this single transaction – enabled by eBay – constituted minimum contacts between Hansing and California to satisfy constitutional due process. A threshold question in that analysis was whether Hansing had purposely availed himself of the privileges of conducting activities in California, thereby invoking the benefits and protections of its laws.

The court answered the purposeful availment question in the negative. The single transaction did not create any ongoing obligations in California, nor did it result in substantial business being conducted by Hansing there. On this point, the court nodded to the oft-cited Burger King v. Rudzewicz case for its holding that a contract alone does not automatically establish minimum contacts in the plaintiff’s home forum. 471 U.S. at 478.

eBay as facilitator a “distraction” to the jurisdictional analysis

What makes this case worth noting (in light of the fact that personal jurisdiction cases can be pretty dull) is the court’s rejection of Boschetto’s argument that the eBay component of the deal defined the analysis. Boschetto had argued that the eBay listing would have been viewed by anyone in California, thus that functionality supported an exercise of personal jurisdiction.

But “the issue [was] not whether the court [had] personal jurisdiction over the intermediary eBay but whether it [had] personal jurisdiction over an individual who conducted business over eBay.” The court noted that in other Internet-related personal jurisdiction cases, like Cybersell, Inc. v. Cybersell, Inc., 130 F.3d 414 (9th Cir. 1997) and the famous case of Zippo Mfg. Co. v. Zippo Dot Com, 952 F.Supp. 1119 (W.D.Pa. 1997), the interactive nature of the websites had jurisdictional significance because they permitted the defendants to maintain ongoing contact with the forum.

An isolated sale on eBay, however, is different in nature. In this case, the court found that the eBay aspect was “a distraction from the core issue.” The use of eBay was to facilitate a one time contract that created no substantial connection with or ongoing obligations in the forum state.

This is not to say that the use of eBay could never give rise to personal jurisdiction outside a defendant’s home forum. A number of cases have so held. See, e.g., Dedvukaj v. Maloney. The court noted that where eBay is used as a means for establishing regular business with a remote forum, the traditional notions of fair play and substantial justice might provide for the exercise of personal jurisdiction. But this was not one of those cases.

(Photo of 1964 Galaxie courtesy of Flickr user Brain Toad Photography under a Creative Commons license.)

May 26, 2008 Contracts, DMCA

Resale on eBay o.k. under First Sale Doctrine?

Last week the U.S. District Court in Seattle denied Defendant Autodesk’s motion to dismiss Plaintiff Vernor’s case, and held that under the circumstances, the sale of AutoCAD on eBay was protected by the First Sale Doctrine.

Vernor makes a living reselling goods on eBay. He found himself in hot water after trying to sell four copies of Autodesk’s AutoCAD on eBay, and sought a declaratory judgment from the Court that he was entitled to sell these copies of AutoCAD.

In 2005, Vernor bought a copy of AutoCAD at a garage sale. He then listed it on an eBay auction. When Autodesk found out about Vernor’s eBay auction, it sent eBay a notice and takedown request alleging that copyright infringement would occur if Vernor were allowed to sell its product. Vernor filed a counter-notice claiming his proposed sale was lawful. eBay reinstated the auction, and the sale was completed. Fast forward to 2007 when Vernor bought four copies of AutoCAD for sale on eBay. He was able to sell three copies after going through similar notice and takedown / reply correspondence as in 2005. When he tried to sell the fourth copy, eBay suspended his account for one month for alleged “repeat infringement.” He sued for a declaration that his proposed sale was lawful, and that Autodesk’s actions were unfair competition.

Vernor acquired his copies of AutoCAD from CTA who had acquired them from Autodesk as part of a settlement. Each copy contained a Software License Agreement which contained a “nonexclusive, nontransferable license to use the enclosed program … [including prohibiting] transfer … to any other person without Autodesk’s prior written consent.”

Contrary to Autodesk’s assertion, the Court held that Vernor did make out a valid cause of action, and that there is an actual case / controversy between the parties per the Declaratory Judgment Act. Moreover, the Court also held that “If It Applies, the First Sale Doctrine Immunizes Mr. Vernor” since “[t]he first sale doctrine permits a person who owns a lawfully-made copy of a copyrighted work to sell or otherwise dispose of the copy.” The Court also cited with approval Quality King Distribs., Inc. v. L’Anza Research Int’l, Inc., 523 U.S. 135, 152 (1998) which noted that “[w]hen a copyright holder chooses to sell a copy of his work, however, he ‘exhaust[s] his exclusive statutory right to control its distribution’.” The Court noted by way of example that “the first sale doctrine permits a consumer who buys a lawfully made DVD …to resell the copy, but not to duplicate the copy.”

Autodesk claims (as would arguably all software companies) that since it licensed AutoCAD, there was no sale, and thus Vernor is not an “owner” and the First Sale Doctrine does not apply. The Court points out the key question: “whether Autodesk’s transfer of AutoCAD packages to CTA was a sale or a mere transfer of possession pursuant to a license.” If it was a sale, Autodesk would be limited to a breach of contract claim against CTA. The Court notes that there is no bright-line rule as to what constitutes a sale versus a transfer, but that “[i]n comparing the transactions found to be sales in Wise with those that were not, the critical factor is whether the transferee kept the copy acquired from the copyright holder.” (emphasis added). Thus in this case, since CTA, and subsequently Vernor kept the copies of AutoCAD, there was a sale. The Court noted in a footnote that: “[e]ven if Autodesk could revive its “exhausted” distribution rights by reclaiming title to software copies it sold, Autodesk did not reclaim title. It merely required CTA to destroy its copies.” This might mean that software vendors will amend license language to avoid this issue in the future, along with more aggressively policing possession of their software requiring licensees to return copies of software so as to avoid First Sale issues (or that they could provide limited-term renewable licenses which contain a DRM-type “auto-destroy” feature – similar to the way iTunes limits via license the number of machines its customers can upload a song to).

The Court does note a series of decisions which run counter to the reasoning in United States v. Wise, 550 F.2d 1180, 1187 (9th Cir. 1977), but ultimately follows Wise in finding that “the transfer of AutoCAD packages from Autodesk to CTA was a sale with contractual restrictions on use and transfer of the software. Mr. Vernor may thus invoke the first sale doctrine, and his resale of the AutoCAD packages is not a copyright violation.” The Court also notes that other jurisdictions may have reached a different conclusion. This case has important implications for consumers and the software industry, and given the noted Circuit split, might not ride off into the sunset just yet.

William Patry provides an informative commentary here.

Case is: CASE NO. C07-1189RAJ (U.S. Dist Court of Washington at Seattle)