Digital publisher not liable for freelancers’ infringement – 10th Circuit

April 27, 2016

(Reuters) – The 10th U.S. Circuit Court of Appeals just widened the divide between old-school journalism outfits like Reuters and online “journalism” sites.

In a ruling Tuesday, the appellate court held that the parent company of Examiner.com, a self-described “dynamic entertainment, news and lifestyle network” is entitled to the safe harbor protection for Internet service providers in the Digital Millennium Copyright Act. According to Judges Paul Kelly, Scott Matheson and Nancy Moritz, Examiner.com is not responsible for copyright infringement if the independent contractors who supply the site’s content upload unauthorized material.

As Judge Kelly explained in the court’s opinion, Examiner.com doesn’t have a staff of journalists like ordinary news organizations. Instead, the site’s content comes from freelancers – independent contractors whom the site calls “Examiners.” Examiner.com loosely screens writing candidates, who, once accepted, are paid based on such factors as how often they post and how much traffic their articles attract.

In 2014, a photo agency that specializes in paparazzi pics, BWP Media, sued Examiner.com’s parent company for allegedly posting about 100 BWP celebrity photos without authorization. BWP’s lawyers at Sanders Law argued that the safe harbor for Internet service providers – which shields them from liability for unwittingly hosting infringing content stored “at the direction of a user” – is not supposed to apply to contractors like the Examiners, who are paid for providing content. The 25 Examiner.com writers who used unauthorized BWP photos were paid more than $400,000 between 2012 and 2014, according to BWP. They are not “users” as Congress intended the word to be defined, BWP said.

Examiner.com, represented by the media law experts at Levine Sullivan Koch & Schulz, said the photo agency was focusing on the wrong question. The real issue, according to Examiner.com, was whether the independent contractors were posting infringing content at their own direction or at the direction of the site. And according to the site, Examiners acted on their own initiative. Examiner.com explicitly prohibits copyright infringement and plagiarism in its contracts with content providers, the site said, and the site took down the supposedly infringing BWP photos as soon as it received notice.

The trial judge in the case, U.S. District Judge Philip Brimmer of Denver, agreed with Examiner.com both on the broad definition of who is a user for the purposes of the DMCA’s safe harbor and on whether the site or its contractors direct uploads. He granted summary judgment to Examiner.com’s parent.

Tuesday’s ruling by the 10th Circuit, which was first reported at the How Appealing blog, affirmed Judge Brimmer. “The relevant question isn’t who is the ‘user,’ but rather, who directed the storage of the infringing content,” wrote 10th Circuit Judge Kelly. “No reasonable trier of fact could find that the infringement was at the direction of” Examiner.com’s parent company.”

To recap: A purported news site that posts about 1,600 articles a day, supplied by minimally qualified writers paid in part for volume and click-worthiness, is immune from copyright infringement liability because it basically exercises no editorial oversight.

If you are a profit-minded digital publisher, there’s a business model here for you. Fire your employees and hire a bunch of “independent contractors” who upload content belonging to other people. As long as your contracts include infringement prohibitions and you respond to takedown notices, you’ve got nothing to lose under the 10th Circuit’s reasoning.

“A smart operator can structure the business so you can infringe for free,” said BWP’s lead lawyer, Craig Sanders, in an interview Wednesday. If Examiner.com had employed the posters who used BWP photos it would have been liable, Sanders said. Likewise if Examiner.com had been a print publication that used photos belonging to someone else. He contends the distinctions the 10th Circuit drew in construing the DMCA don’t make sense. (Sanders said he and his client haven’t decided what to do next.)

Steven Zansberg of Levine Sullivan, lead lawyer for Examiner.com’s parent company, sent me an email response to Sanders’ assertions. “Mr. Sanders’ view, like the meritless claims he presented in this suit, is without any basis in law or fact,” he wrote. “As the 10th Circuit’s ruling makes clear, to qualify for statutory immunity from copyright infringement claims premised on content posted by third party contributors, a website operator must fully comply with the DMCA’s notice-and-take-down regime, as (Examiner.com’s parent) did and does. Were Mr. Sanders’ literally unprecedented theory to become the law, huge swaths of the Internet would instantly go dark.”

The 10th Circuit seems to be the first appeals court directly to address whether the DCMA provides a safe harbor for digital publishers that post infringing content supplied by independent contractors. Levine Sullivan tried to argue there was nothing novel about BWP’s claims in a motion to recover Examiner.com’s legal fees, but the trial judge denied the motion because, he said, BWP had raised an issue of first impression.

Let’s hope first impressions are deceiving.

(This post has been updated to include comment from lead counsel for Examiner.com’s parent company.)

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