Sometimes, in copyright circles, important cases and rulings have a way of avoiding the limelight. With all of the attention recently paid to the “Innocence of Muslims” ruling, a different lawsuit, possibly of greater importance, has gotten surprisingly little attention.
That lawsuit centers around the popular printing site CafePress and, specifically, whether or not the service qualifies as an online service provider that should receive protection under the Digital Millennium Copyright Act.
A recent ruling in that case, even if it is just a denial of a summary judgment, should give the entire industry pause to think just how solid its legal protections really are. The same can also be said for any other company that sells products uploaded by users, including self-publishers, many music sites and even some photo sharing sites.
So while this case hasn’t been capturing headlines so far, it might be time for it to start. Especially as conversations about the DMCA and reforming it are taking off.
Gardner v. CafePress: The Basics
Steven Gardner is a visual artist who focuses heavily on paintings of wildlife. He recently discovered that some of his works were available on CafePress to purchase on various types of products.
CafePress is a printing site that lets users upload images for the purpose of creating online stores to sell them. It lets users choose what products to sell and, when something is ordered, it prints and ships the product. CafePress then gives the uploader the difference between their price and the price the uploader charged, giving the uploader a chance to profit.
CafePress’ products include t-shirts, mugs, towels, cell phone cases, wall art and much more.
Though CafePress does have a means to report copyright infringement, and is known to quickly remove infringing works, Gardner instead filed suit, claiming that CafePress, due to its business model, was at least partially responsible for the infringement.
The DMCA, under its safe harbor provisions, protects web hosts and other online service providers from liability for copyright infringement committed by users on their services. For example, Tumblr is not held liable when a user uploads an infringing image.
However, that protection comes with a series of caveats, the biggest being that the host must work to expeditiously remove the infringing material when notified of infringement. The host must also have a policy to terminate repeat infringers, must not interfere with “standard technical measures” to identify or protect copyrighted works and must not profit directly from the infringement if they have the right and ability to control it.
CafePress recently sought to have the case dismissed on a summary judgment, saying that it qualified for protection under the DMCA. However, the court denied that request, instead saying that there were valid reasons to believe CafePress does not qualify for safe harbor protections and may be liable for these (and potentially countless other) infringements on its service.
The Reasoning Behind the CafePress Ruling
To be 100% clear, this is just a preliminary ruling and is by no means final. The burden of proof at the summary judgment stage is very high and it it is placed on the petitioner, in this case CafePress. To win the case, Gardner will still have to prove definitively that CafePress does not qualify for protection under the DMCA.
Still, the ruling does give a glimpse into the potential arguments and what the court is thinking. On that front, things are not looking good for CafePress in this area.
According to the court, there were several problems with CafePress’ argument that it is protected by the DMCA.
- Not a “Service Provider”: The court hinted that it could not say, at this stage, that CafePress is a “service provider” because it is not a neutral third party between buyers and sellers. Instead, it actively sets price, manufactures works and only pays users a commission of sales.
- Metadata Removal: The ruling also stated that CafePress’ removal of Metadata after an image is uploaded could be an example of “interfering with ‘standard technical measures'” that creators use to identify and protect copyrighted works, possibly opening it up to liability.
- Right and Ability to Control: CafePress’ terms of service says that works appear in its marketplace “in its sole and absolute discretion”, it has the ability to modify designs and chooses which products are sent to Amazon and Ebay through its feeds. As such, the court found that it likely had the right and ability to control the infringement, meaning that its direct profit from the infringement is yet another potential safe harbor issue.
What all of this added up to is that the court denied the motion of summary judgment on the safe harbor issue, saying that there was more than enough reason to think the plaintiff might prevail on these issues to put the matter before oral augments and, possibly, a trial.
However, CafePress did score a win on one key issue, statutory damages. The court did grant their motion for summary judgment there because Gardner did not register the copyright in his works until after the files had been uploaded to CafePress’ site. This means that Gardner is ineligible for statutory damages and attorneys fees, instead, he’s limited to actual damages, which, according to the ruling, is likely limited to about $6,320, the worth of all of the products sold.
Compare this to the potential $150,000 per infringement that would have been (theoretically) possible under statutory damages and it’s easy to see why this is a major victory for CafePress.
The DMCA and Self Publishing/Image Sharing
But while the statutory damages issue mains CafePress will likely emerge unscathed in this case, either by forcing a small settlement or making the suit financially impractical to pursue, the DMCA issues linger for CafePress and, considering another lawsuit has already been filed, CafePress should not celebrate its victory yet.
The court compared CafePress to Amazon and Ebay, two other marketplace sites that had previously been ruled to be protected by the DMCA (Note: the previously ruling dealt with Amazon Marketplace, not Amazon’s self-publishing platform). The previous rulings found that Amazon and Ebay were merely facilitators of the selling of goods, not direct sellers. However, since CafePress is involved in the manufacturing, marketing, pricing, etc. of its products, that it likely was a “direct seller” and their role went beyond being a “service provider”.
However, it’s easy to see how these arguments could also apply to other types of businesses. For example, self publishing sites like Lulu, CreateSpace, etc. After all, they are responsible for manufacturing works, they set prices and they pay their uploaders royalties, all the same as CafePress.
But an even larger potential issue is the metadata one. I’ve talked before how many image sharing site strip out EXIF metadata from photos. This ruling hints that, if such metadata is considered have been “developed pursuant to a broad consensus of copyright owners and service providers,” stripping it out, even through an automated means, could cause a service provider to lose DMCA safe harbor protection. This could impact a slew of sites, like Flickr and even Facebook, as they will have to adjust their practices to remain protected.
In short, the findings of this court have the potential to shake up a lot of industries and this case is definitely one that should be watched more closely by anyone interested in copyright matters.
In general, with the DMCA, the less involved a site or service provider is, the better off it is. CafePress, unfortunately for it, is very involved in the process. Not only taking a direct role in pricing and selecting content to promote, but actually manufacturing the works it sells.
Without Ebay, sellers would have to go to a flea market, without CafePress, its users would have nothing to sell.
All of the problems the court found with CafePress’ arguments make it seem unlikely that they will be able to convince this judge that they qualify for safe harbor protection. If that’s true, other companies that operate in a similar matter should be equally worried.
While this case will likely not be a long-term issue for CafePress due to the statutory damages issue, losing safe harbor protections means that other copyright holders, ones who did timely register their works, will be lining up to file suit and, given the nature of statutory damages, millions could easily be on the line.
The time for companies likes CafePress to rethink their copyright policies is now. This ruling, if upheld, could throw a major obstacle in the path of self-publishers, photo sharing sites and even companies like CDBaby, which manufactures CDs for musicians.
While things are far from certain right now as this is just a ruling denying a summary judgment, the indications are clear. If one waits for a more substantial ruling, it might be too late to take any needed action.
In the end, it’s hard to say what the impact of this will be. But given that many rightsholders have long complained about finding their work on sites like CafePress, a more cautious and aware self-publishing industry could benefit everyone, including the creators who do self-publish and have less competition from infringing works.