CoStar v. LoopNet
Encyclopedia
CoStar Group, Inc. v. LoopNet, Inc.
, 373 F.3d 544 (4th Cir. 2004), is a United States Court of Appeals for the Fourth Circuit
decision about whether LoopNet should be held directly liable for CoStar’s copyrighted photographs posted by LoopNet’s subscribers on LoopNet’s website. The majority of the court ruled that since LoopNet was an Internet service provider
("ISP") that automatically and passively stored material at the direction of users, LoopNet did not copy the material in violation of the Copyright Act. The majority of the court also held that the screening process by a LoopNet employee before the images were stored and displayed did not alter the passivity of LoopNet. Justice Gregory dissented
, stating that LoopNet had engaged in active, volitional conduct because of its screening process.
whose website allowed subscribers to post listings of commercial real estate on the Internet. LoopNet did not post real estate listings, but enabled users to post listings that contained text messages and photographs. When a photograph was uploaded into LoopNet's system by a subscriber, the photograph was not made public immediately. Instead, it was transferred to one of LoopNet's computers for review. A LoopNet employee reviewed the photograph to ensure that (1) it was an image of commercial real estate, and (2) it was not an obviously copyrighted image. CoStar claimed that by September 2001, it had found over 300 of its copyrighted images on LoopNet's website posted by LoopNet's subscribers. LoopNet had about 33,000 photographs posted by its subscribers at that time. LoopNet responded to takedown notices from Costar.
. The Netcom
case held that direct copyright infringement implied some element of volition or causation, which was lacking in automatic and passive ISPs. The district court held that LoopNet was such an automatic and passive ISP and therefore not liable for direct copyright infringement.
considered the Netcom
case and codified its principles in enacting the Digital Millennium Copyright Act
("DMCA"), the DMCA should supplant and preempt the Netcom
case as the only exemption from liability for direct copyright infringement for ISPs. CoStar argued that because LoopNet could not satisfy the conditions of the DMCA, LoopNet should be strictly liable for direct copyright infringement.
CoStar also argued that even if Netcom
s construction of copyright infringement liability for ISPs was still valid, LoopNet's acts were volitional and therefore LoopNet should be liable for direct copyright infringement because of its employee's screening process.
decision as "a particularly rational interpretation of § 106 [of the Copyright Act
]." The court reasoned that similar to a copying machine, an ISP who owned an electronic facility that responded automatically to users' input was not a direct infringer. The court also reasoned that temporary electronic copies made during the transmission were not "fixed" because such copies were used to automatically transmit users' material and they were not "of more than transitory duration."
In response to CoStar’s argument that the DMCA made the Netcom case irrelevant, the court held that the DMCA was not exclusive and that the Netcom case was still a valid precedent. The court first reasoned that the DMCA specifically provided that despite a failure to meet the safe-harbor conditions of § 512, an ISP was still entitled to all other arguments under the law. Second, the court reasoned that when Congress codified a common law
principle, the common law remained good law. Third, the court reasoned that legislative history suggested that Congress intended the DMCA's safe harbor for ISPs to be a floor, not a ceiling, of protection.
As for CoStar's argument that the screening process by a LoopNet employee rendered LoopNet liable for direct copyright infringement, the court held that this conduct did not add volition to LoopNet's involvement in storing the copy. The court reasoned that the employee's look was so cursory as to be insignificant, and if it had any significance, it only lessened the possibility of copyright infringement. LoopNet still lacked the necessary volition or causation for direct copyright infringement.
defense applied only to passive and auotmated ISPs, Judge Gregory concluded that the Netcom defense did not apply to LoopNet and the district court opinion should be reversed.
LoopNet
LoopNet is a public company based in San Francisco, California. Its primary business is to provide commercial real estate listings in the United States. LoopNet became a public company in spring of 2006...
, 373 F.3d 544 (4th Cir. 2004), is a United States Court of Appeals for the Fourth Circuit
United States Court of Appeals for the Fourth Circuit
The United States Court of Appeals for the Fourth Circuit is a federal court located in Richmond, Virginia, with appellate jurisdiction over the district courts in the following districts:*District of Maryland*Eastern District of North Carolina...
decision about whether LoopNet should be held directly liable for CoStar’s copyrighted photographs posted by LoopNet’s subscribers on LoopNet’s website. The majority of the court ruled that since LoopNet was an Internet service provider
Internet service provider
An Internet service provider is a company that provides access to the Internet. Access ISPs directly connect customers to the Internet using copper wires, wireless or fiber-optic connections. Hosting ISPs lease server space for smaller businesses and host other people servers...
("ISP") that automatically and passively stored material at the direction of users, LoopNet did not copy the material in violation of the Copyright Act. The majority of the court also held that the screening process by a LoopNet employee before the images were stored and displayed did not alter the passivity of LoopNet. Justice Gregory dissented
Dissenting opinion
A dissenting opinion is an opinion in a legal case written by one or more judges expressing disagreement with the majority opinion of the court which gives rise to its judgment....
, stating that LoopNet had engaged in active, volitional conduct because of its screening process.
Facts
CoStar was a provider of commercial real estate information. Its database included a large collection of photographs of commercial properties. LoopNet was an ISPInternet service provider
An Internet service provider is a company that provides access to the Internet. Access ISPs directly connect customers to the Internet using copper wires, wireless or fiber-optic connections. Hosting ISPs lease server space for smaller businesses and host other people servers...
whose website allowed subscribers to post listings of commercial real estate on the Internet. LoopNet did not post real estate listings, but enabled users to post listings that contained text messages and photographs. When a photograph was uploaded into LoopNet's system by a subscriber, the photograph was not made public immediately. Instead, it was transferred to one of LoopNet's computers for review. A LoopNet employee reviewed the photograph to ensure that (1) it was an image of commercial real estate, and (2) it was not an obviously copyrighted image. CoStar claimed that by September 2001, it had found over 300 of its copyrighted images on LoopNet's website posted by LoopNet's subscribers. LoopNet had about 33,000 photographs posted by its subscribers at that time. LoopNet responded to takedown notices from Costar.
Issue
On appeal, the parties disputed whether LoopNet should be liable for direct copyright infringement.District Court Opinion
The district court held that LoopNet was not liable for direct copyright infringement based on Religious Technology Center v. NetcomReligious Technology Center v. Netcom
Religious Technology Center v. Netcom On-Line Communication Services, Inc., 907 F. Supp. 1361 , is a U.S. district court case about whether the operator of a computer bulletin board service and Internet access provider that allows that BBS to reach the Internet should be liable for copyright...
. The Netcom
Religious Technology Center v. Netcom
Religious Technology Center v. Netcom On-Line Communication Services, Inc., 907 F. Supp. 1361 , is a U.S. district court case about whether the operator of a computer bulletin board service and Internet access provider that allows that BBS to reach the Internet should be liable for copyright...
case held that direct copyright infringement implied some element of volition or causation, which was lacking in automatic and passive ISPs. The district court held that LoopNet was such an automatic and passive ISP and therefore not liable for direct copyright infringement.
Arguments of CoStar
CoStar argued that since the United States CongressUnited States Congress
The United States Congress is the bicameral legislature of the federal government of the United States, consisting of the Senate and the House of Representatives. The Congress meets in the United States Capitol in Washington, D.C....
considered the Netcom
Religious Technology Center v. Netcom
Religious Technology Center v. Netcom On-Line Communication Services, Inc., 907 F. Supp. 1361 , is a U.S. district court case about whether the operator of a computer bulletin board service and Internet access provider that allows that BBS to reach the Internet should be liable for copyright...
case and codified its principles in enacting the Digital Millennium Copyright Act
Digital Millennium Copyright Act
The Digital Millennium Copyright Act is a United States copyright law that implements two 1996 treaties of the World Intellectual Property Organization . It criminalizes production and dissemination of technology, devices, or services intended to circumvent measures that control access to...
("DMCA"), the DMCA should supplant and preempt the Netcom
Religious Technology Center v. Netcom
Religious Technology Center v. Netcom On-Line Communication Services, Inc., 907 F. Supp. 1361 , is a U.S. district court case about whether the operator of a computer bulletin board service and Internet access provider that allows that BBS to reach the Internet should be liable for copyright...
case as the only exemption from liability for direct copyright infringement for ISPs. CoStar argued that because LoopNet could not satisfy the conditions of the DMCA, LoopNet should be strictly liable for direct copyright infringement.
CoStar also argued that even if Netcom
Religious Technology Center v. Netcom
Religious Technology Center v. Netcom On-Line Communication Services, Inc., 907 F. Supp. 1361 , is a U.S. district court case about whether the operator of a computer bulletin board service and Internet access provider that allows that BBS to reach the Internet should be liable for copyright...
s construction of copyright infringement liability for ISPs was still valid, LoopNet's acts were volitional and therefore LoopNet should be liable for direct copyright infringement because of its employee's screening process.
Holdings of Appellate Court
The appellate court supported the NetcomReligious Technology Center v. Netcom
Religious Technology Center v. Netcom On-Line Communication Services, Inc., 907 F. Supp. 1361 , is a U.S. district court case about whether the operator of a computer bulletin board service and Internet access provider that allows that BBS to reach the Internet should be liable for copyright...
decision as "a particularly rational interpretation of § 106 [of the Copyright Act
Copyright Act of 1976
The Copyright Act of 1976 is a United States copyright law and remains the primary basis of copyright law in the United States, as amended by several later enacted copyright provisions...
]." The court reasoned that similar to a copying machine, an ISP who owned an electronic facility that responded automatically to users' input was not a direct infringer. The court also reasoned that temporary electronic copies made during the transmission were not "fixed" because such copies were used to automatically transmit users' material and they were not "of more than transitory duration."
In response to CoStar’s argument that the DMCA made the Netcom case irrelevant, the court held that the DMCA was not exclusive and that the Netcom case was still a valid precedent. The court first reasoned that the DMCA specifically provided that despite a failure to meet the safe-harbor conditions of § 512, an ISP was still entitled to all other arguments under the law. Second, the court reasoned that when Congress codified a common law
Common law
Common law is law developed by judges through decisions of courts and similar tribunals rather than through legislative statutes or executive branch action...
principle, the common law remained good law. Third, the court reasoned that legislative history suggested that Congress intended the DMCA's safe harbor for ISPs to be a floor, not a ceiling, of protection.
As for CoStar's argument that the screening process by a LoopNet employee rendered LoopNet liable for direct copyright infringement, the court held that this conduct did not add volition to LoopNet's involvement in storing the copy. The court reasoned that the employee's look was so cursory as to be insignificant, and if it had any significance, it only lessened the possibility of copyright infringement. LoopNet still lacked the necessary volition or causation for direct copyright infringement.
Dissenting Opinion by Judge Gregory
Circuit Judge Gregory dissented with the majority opinion. Judge Gregory stated that LoopNet employees had made conscious choices to accept or reject the photographs. Therefore LoopNet had engaged in active, volitional conduct. Since the NetcomReligious Technology Center v. Netcom
Religious Technology Center v. Netcom On-Line Communication Services, Inc., 907 F. Supp. 1361 , is a U.S. district court case about whether the operator of a computer bulletin board service and Internet access provider that allows that BBS to reach the Internet should be liable for copyright...
defense applied only to passive and auotmated ISPs, Judge Gregory concluded that the Netcom defense did not apply to LoopNet and the district court opinion should be reversed.
See also
- Religious Technology Center v. Netcom On-Line Communication Services, Inc.Religious Technology Center v. NetcomReligious Technology Center v. Netcom On-Line Communication Services, Inc., 907 F. Supp. 1361 , is a U.S. district court case about whether the operator of a computer bulletin board service and Internet access provider that allows that BBS to reach the Internet should be liable for copyright...
, 907 F. Supp. 1361 (N.D. Cal. 1995). - Digital Millennium Copyright ActDigital Millennium Copyright ActThe Digital Millennium Copyright Act is a United States copyright law that implements two 1996 treaties of the World Intellectual Property Organization . It criminalizes production and dissemination of technology, devices, or services intended to circumvent measures that control access to...
- Online Copyright Infringement Liability Limitation ActOnline Copyright Infringement Liability Limitation ActThe Online Copyright Infringement Liability Limitation Act is United States federal law that creates a conditional safe harbor for online service providers and other Internet intermediaries by shielding them for their own acts of direct copyright infringement as well as...
- List of leading legal cases in copyright law
External links
- CoStar Group, Inc. v. LoopNet, Inc., 373 F.3d 544 (4th Cir. 2004).
- EFF page about this case