Copyright Law - Contributory Infringement - Seventh Circuit Holds That "Social Bookmarking" of Infringing Content Alone Is Insufficient to Support Grant of Preliminary Injunction

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Copyright owners, influenced by the proliferation of digital technologies and broadband Internet access, as well as by the impracticality and high cost of litigation, are increasingly forgoing claims against direct infringers to pursue contributory infringement claims against alleged "secondary" infringers. (1) Meanwhile, the public performance right conferred by the Copyright Act of 1976 (2) has emerged as an especially powerful tool for these copyright owners. (3) Recently, in Flava Works, Inc. v. Gunter, (4) the Seventh Circuit wrestled with the difficulty of evaluating the concepts of "contributory infringement" and "public performance" in an online environment. The panel vacated a preliminary injunction granted in favor of video-content producer Flava Works, Inc. (Flava), holding that Flava had failed to establish a substantial likelihood of success on the merits of its contributory infringement claim against myVidster, a "social bookmarking" website. In straying from the text of the Copyright Act in its analysis of the public performance right, the Seventh Circuit missed a valuable opportunity to address the evolving concepts of who should be considered a "performer" and when a "performance" occurs online.

Flava produces and distributes gay adult entertainment featuring black and Latino actors in several formats, including DVDs and streaming online video. (5) Defendant Marques Rondale Gunter created, owns, and operates the website myVidster.com, which permits individuals to direct others to online content by "bookmarking" such materials. (6) The bookmarked content is not hosted on myVidster's website, but instead transmitted directly from the server on which the video is stored to the viewer's computer, where the viewer watches it through a "frame" created around the content by myVidster. (7) Flava hosts its content behind a "pay wall" and first learned of myVidster when its customers voiced complaints about having to pay for its content, which was available for free via myVidster. (8) A subsequent search by Flava identified hundreds of Flava's copyrighted videos displayed on myVidster without Flava's permission. (9) Flava sent myVidster several "takedown" notices pursuant to section 512 of the Digital Millennium Copyright Act (10) (DMCA), with which myVidster complied infrequently. (11) In October 2010, Flava filed suit in the Northern District of Illinois and requested a preliminary injunction barring myVidster's posting of Flava's copyrighted materials. (12)

The district court granted Flava's motion for a preliminary injunction. (13) First, Judge Grady ruled that issuing a preliminary injunction was proper, (14) relying on a single factor -- the plaintiff's likelihood of success on its claim of contributory copyright infringement. (15) The court concluded that myVidster had failed to rebut the presumption of irreparable harm arising rom a showing of copyright infringement. (16) Second, the court rejected myVidster's claims that it qualified for protection under the DMCA's section 512(c) "safe harbor" provision. (17)

The Seventh Circuit vacated the order granting a preliminary injunction. (18) Writing for the panel, Judge Posner (19) concluded that the district court erred in making the preliminary injunction analysis contingent solely on the plaintiff's likelihood of success. (20) Judge Posner first observed that the district court's reasoning was based on a statement in Atari, Inc. v. North American Philips Consumer Electronics Corp. (21) that "irreparable [harm] may normally be presumed from a showing of copyright infringement." (22) Judge Posner then noted that the Supreme Court, in eBay Inc. v. MercExchange, L.L.C., (23) had rejected the validity of this presumption. (24) As a result, the panel held that the likelihood of success was only one of several factors the district judge should have considered in deciding whether to grant the preliminary injunction. (25) Finally, the panel held that there was insufficient evidence in the record to justify the grant of a preliminary injunction. …