In Perfect 10, Inc. v. CCBill LLC and Cavecreek Wholesale Internet Exchange d/b/a CWIE LLC, No. 04-57143 (9th Cir., March 29, 2007) the Ninth Circuit allowed Perfect 10 to pursue copyright infringement claims against defendants, who provide web hosting and credit card billing services, arising out of the unauthorized posting on the web by their third party customers of “adult” images in which Perfect 10 holds copyrights. Questions of fact precluded a determination of whether defendants were immunized from monetary liability for such claims by the Digital Millennium Copyright Act (“DMCA”). The Court of Appeals held such immunity extends only to service providers who “reasonably implement” a policy for terminating those of their customers that repeatedly infringe copyrights. In considering this question, the Ninth Circuit held courts should consider not only the manner in which the defendants responded to “take down” infringement notices sent by the plaintiff copyright holder, here Perfect 10, but also the manner in which they responded to similar notices from third party copyright holders. It is evident Courts will consider not only policies concerning take down of infringing content but actual implementation of those policies under the safe harbor provisions of the DMCA.
The Ninth Circuit further held that defendants had no obligation to respond to the “take down” notices provided by Perfect 10, or take steps to prevent the infringing conduct alleged therein, due to Perfect 10’s failure to provide such notices under penalty of perjury. Nor, held the Ninth Circuit, were defendants obligated to take action against purported “red flag” sites defendants serviced. The DMCA does not impose on service providers the obligation to conduct an affirmative investigation into the bona fides of such sites. To qualify as a “red flag” site that imposes an obligation on a service provider to act, held the Ninth Circuit “it … need[s] to be apparent that the website instructed or enabled users to infringe another’s copyright.”