Online Intentional Infringement Standard Clarified: Zazzle Jury Prize Reinstated | Proskauer – New media and technologies

Recently, the Ninth Circuit restored a jury verdict of $ 460,000 against print-on-demand site Zazzle, Inc. (“Zazzle”) for willful copyright infringement, putting one final word (possibly ) on a long-standing dispute that explored an important DMCA safe harbor. problems for print-on-demand online services. (Greg Young Publishing, Inc. v Zazzle, Inc., n ° 18-55522 (9e Cir. November 20, 2019) (unpublished). The Court of Appeal found that Zazzle’s anti-counterfeiting monitoring mechanisms were insufficient during the infringement period when a number of visual art works by plaintiff Greg Young Publishing, Inc. (“GYPI”) were brought to light. been uploaded by users to the Zazzle site without permission.

A brief account of how the case has progressed to this point is instructive. Zazzle is a service where users can upload images and purchase personalized consumer products that they want the image to appear on (eg, coffee mugs, t-shirts) or other products with uploaded images. by other designers. When ordering, these items are then produced and shipped by Zazzle. In a closely watched 2017 ruling, the lower court ruled on a summary judgment that Zazzle was not entitled to the §512 (c) DMCA Safe Harbor as it made and sold physical products bearing infringing images. (note: the court cleared Zazzle to assert the Safe Harbor defense with respect to infringing images uploaded to its site but never printed on physical products). This is one of the few cases that has revealed that online marketplaces that are actively involved in listing, pricing, selling, manufacturing and delivering items offered for sale by third party sellers may not be eligible for the DMCA Safe Harbor for infractions. elements because those activities may go beyond the site acting as a storage provider and give the site the “right and ability to control” the alleged infringing activity. By “creating” the products instead of just selling third-party products, print-on-demand sites can move beyond DMCA protection (in addition to the potential for trademark claims).

Following the May 2017 decision denying Zazzle’s DMCA Safe Harbor defense, in August 2017, the plaintiff obtained a jury verdict in the amount of $ 460,000 (for 35 willful breaches of 35 copyrighted works). by different copyright) and a permanent injunction (which the court subsequently overturned). In a post-trial decision, the lower court reduced the jury’s verdict to $ 351,000 due to insufficient evidence for the jury’s finding of intentional infringement. Under copyright law, in the absence of a finding of intentional infringement, copyright law limits statutory damages to a maximum of $ 30,000 per copyrighted work. copyright (17 USC § 504) and, as the lower court noted, to willfully infringe a copyright, the defendant must have had “actual knowledge of the infringement or acted with reckless disregard or willful blindness ”. Applying this standard, the lower court concluded that while Zazzle’s anti-counterfeiting system had problems effectively combating future infringements, such efforts at least showed that the site had not acted with reckless disregard of counterfeiting.

Last month, the Ninth Circuit restored the full jury verdict, ruling that an intentional offense “may be established by the conscious reliance of an offender in manifestly insufficient oversight mechanisms”:

“Zazzle never deviated or improved its monitoring system throughout the two-year period in question, despite repeated reviews of the ineffectiveness of this policy. Zazzle ‘knew he had to pay special attention to [Young’s] images ”, but never gave his content management team a catalog of those images provided by Young. Even after Young supplied the catalog, Zazzle continued to sell products bearing each of the works for which the jury found willful infringement. Zazzle also relied on a user certification process that it knew was producing false certifications and took no action to remove a user who had marketed more than 2,000 counterfeit products. A reasonable jury could find intention on this evidence. ” [citations omitted]

While a number of past cases have extended the DMCA to include online providers hosting allegedly infringing content, the Zazzle The case shows the particularly precarious position of print-on-demand sites that allow users to upload images, with the site creating physical products for sale. Care should be taken to structure the business process to increase the likelihood that the DMCA will apply. As these companies may not be able to avail themselves of the DMCA, however, care should also be taken to establish and maintain procedures to avoid finding an intentional violation. These sites should take time to reassess existing anti-counterfeiting programs (especially the procedures or technologies used to remove counterfeit material and the technical methods that attempt to prevent its downloading in the future). Overall, these sites need to make sure they have a well-managed content management team that can remove and help prevent counterfeit images from reappearing on display … to hopefully avoid a conclusion similar to that reached in the Zazzle litigation.

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About Jessica J. Bass

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