# Appendix — Perfect 10, Inc. v. CCBill LLC (No. 07-266) > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386009_1385%3A2 ## Record - **Collection:** Supreme Court brief - **Document type:** Appendix - **Published:** January 1, 2007 ## Text la APPENDIX A — OPINION OF THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT FILED MARCH 239, 2007 AMENDED MAY 31, 2007 UNITED STATES COURT OF APPEALS NINTH CIRCUIT Nos. 04-57143, 04-57207. PERFECT 10, INC., a California corporation, Plaintiff-Appellant, V. CCBILL LLC, a corporation; Cavecreek Wholesale Internet Exchange, a corporation d/b/a CWIE LLC, Defendants-Appellees, and Netpass Systems Inc., a corporation, Defendant. Perfect 10, Inc., a California corporation, Plaintiff-Appellee, 2a Appendix A CCBill LLC, a corporation; Cavecreek Wholesale Internet Exchange, a corporation d/b/a CWIE LLC, Defendants-Appellants, Netpass Systems Inc., a corporation, Defendant. Argued and Submitted Dec. 4, 2006. Filed March 29, 2007. Amended May 31, 2007. Appeal from the United States District Court for the Central District of California; Lourdes G. Baird, District Judge, Presiding. D.C. Nos. CV-02-07624-LGB, CV-02-07624- LGB. Before: STEPHEN REINHARDT, ALEX KOZINSKI, MILAN D. SMITH, JR., Circuit Judges. AMENDED OPINION MILAN D. SMITH, JR., Circuit Judge. Perfect 10, the publisher of an adult entertainment magazine and the owner of the subscription website perfect!O.com, alleges that CCBill and CWIE violated copyright, trademark, and state unfair competition, false advertising and right of publicity laws by providing services to websites that posted images stolen from Perfect 10's magazine and website. Perfect 10 appeals the district court's finding that CCBill and CWIE qualified for certain statutory safe harbors from copyright infringement liability under the 3a Appendix A Digital Millennium Copyright Act (“DMCA”), 17 U.S.C. § 512, and that CCBill and CWIE were immune from liability for state law unfair competition and false advertising claims based on the Communications Decency Act (“CDA”), 47 U.S.C. § 230(c)(1). CCBill and CWIE cross-appeal, arguing that the district court erred in holding that the CDA does not provide immunity against Perfect 10’s right of publicity claims and in denying their requests for costs and attorney's fees under the Copyright Act. We have jurisdiction pursuant to 28 U.S.C. § 1291. We affirm in part, reverse in part, and remand. BACKGROUND Perfect 10 is the publisher of the eponymous adult entertainment magazine and the owner of the website, perfectlO.com. Perfect10.com is a subscription site where consumers pay a membership fee in order to gain access to content on the website. Perfect 10 has created approximately 5,000 images of models for display in its website and magazine. Many of the models in these images have signed releases assigning their rights of publicity to Perfect 10. Perfect 10 also holds registered U.S. copyrights for these images and owns several related, registered trademark and service marks. CWIE provides webhosting and related Internet connectivity services to the owners of various websites. For a fee, CWIE provides “ping, power, and pipe,” services to their clients by ensuring the “box” or server is On, ensuring power is provided to the server and connecting the client's 4a Appendix A service or website to the Internet via a data center connection. CCBill allows consumers to use credit cards or checks to pay for subscriptions or memberships to e-commerce venues. Beginning August 10, 2001, Perfect 10 sent letters and emails to CCBill and CWIE stating that CCBill and CWIE clients were infringing Perfect 10 copyrights. Perfect 10 directed these communications to Thomas A. Fisher, the designated agent to receive notices of infringement. Fisher is also the Executive Vice-President of both CCBill and CWIE. Representatives of celebrities who are not parties to this lawsuit also sent notices of infringement to CCBill and CWIE. On September 30, 2002, Perfect 10 filed the present action alleging copyright and trademark violations, state law claims of violation of right of publicity, unfair competition, false and misleading advertising, as well as RICO claims. STANDARDS OF REVIEW We review a district court’s grant of summary judgment de novo. Rossi v. Motion Picture Ass'n of Am. Inc., 391 F.3d 1000, 1002 (9th Cir. 2004). “Viewing the evidence in the light most favorable to the nonmoving party, we must determine whether there are any genuine issues of material fact and whether the district court correctly applied the relevant substantive law.” Leever v. Carson City, 360 F.3d 1014, 1017 (9th Cir. 2004). The district court's interpretations of the Copyright Act are also reviewed de novo. Ellison v. Robertson, 357 F.3d 1072, 1076 (9th Cir. 2004). We review a district court’s decision to grant or deny attorney's fees under the Copyright Act for abuse of Sa Appendix A discretion. Columbia Pictures Television, Inc. vy. Krypton Broad. of Birmingham, Inc., 259 F.3d 1186, 1197 (9th Cir. 2001). DISCUSSION I. SECTION 512 SAFE HARBORS The DMCA established certain safe harbors to “provide protection from liability for: (1) transitory digital network communications; (2) system caching; (3) information residing On systems or networks at the direction of users; and (4) information location tools.” Ellison, 357 F.3d at 1076- 77 (citing 17 U.S.C. §§ 512(a)-(d)) (footnotes omitted). These safe harbors limit liability but “do not affect the question of ultimate liability under the various doctrines of direct, vicarious, and contributory liability,” Perfect /0, Inc. v. Cybernet Ventures, Inc., 213 F.Supp.2d 1146, 1174 (C.D.Cal.2002) (citing H.R. Rep. 105-551(11), at 50 (1998) (“H.R. Rep.”)),' and “nothing in the language of § 512 indicates that the limitation on liability described therein is exclusive.” CoStar Group, Inc. v. LoopNet, Inc., 373 F.3d 544, 552 (4th Cir. 2004). A. Reasonably Implemented Policy: § 512(i)(1)(A) To be eligible for any of the four safe harbors at $$ 512(a)-(d), a service provider must first meet the threshold 1. The relevant portions of H.R. Rep. 105-55!(11) (1998) and S. Rep. 105 190 (1998) are largely identical. We cite to H.R. Rep. for purposes of consistency. 6a Appendix A conditions set out in § 512(i), including the requirement that the service provider: [H]as adopted and reasonably implemented, and informs subscribers and account holders of the service provider’s system or network of, a policy that provides for the termination in appropriate circumstances of subscribers and account holders of the service provider’s system or network who are repeat infringers. Section 512(1)(1)(A); Ellison, 357 F.3d at 1080. The statute does not define “reasonably implemented.” We hold that a service provider “implements” a policy if it has a working notification system, a procedure for dealing with DMCA-compliant notifications, and if it does not actively prevent copyright owners from collecting information needed to issue such notifications. Ellison, 357 F.3d at 1080 (working notification system required); Corbis Corp. v. Amazon.com, Inc., 351 F.Supp.2d 1090, 1102-03 (W.D.Wash.2004) (must adopt procedure for dealing with notifications); /n re Aimster Copyright Litig., 252 F.Supp.2d 634, 659 (N.D.111.2002) (policy not implemented if service provider actively blocks collection of information). The Statute permits service providers to implement a variety of procedures, but an implementation is reasonable if, under “appropriate circumstances,” the service provider terminates users who repeatedly or blatantly infringe copyright. See 17 U.S.C. § 512(i); Corbis, 351 F.Supp.2d at 1102. 7a Appendix A 1. “Implementation” Perfect 10 argues that there is a genuine issue of material fact whether CCBiil and CWIE prevented the implementation of their policies by failing to keep track of repeatedly infringing webmasters. The district court found that there was not, and we agree. In Ellison, Stephen Robertson posted copies of Harlan Ellison’s copyrighted short stories on Internet newsgroups available through USENET servers. 357 F.3d at 1075. Ellison asserted that America Online, Inc. (“AOL”) had infringed his copyright by providing access to the USENET servers. Id. Based on evidence that AOL changed its contact email address for copyright infringement notices from copyright @ aol. com to aolcopyright@ aol. com in the fall of 1999, but neglected to register the change with the U.S. Copyright Office until April 2000, we held that the district court erred in concluding on summary judgment that AOL satisfied the requirements of § 512(i). /d. at 1077, Even though Ellison did not learn of the infringing activity until after AOL had notified the U.S. Copyright Office of the correct email address, we found that “AOL allowed notices of potential copyright infringement to fall into a vacuum and go unheeded; that fact is sufficient for a reasonable jury to conclude that AOL had not reasonably implemented tts policy against repeat infringers.” /d. at 1080. Similarly, the Aimster cases hold that a repeat infringer policy is not implemented under § 512(i)(1)(A) if the service provider prevents copyright holders from providing DMCA- compliant notifications. In Aimster, the district court held 8a Appendix A that Aimster did not reasonably implement its stated repeat infringer policy because “the encryption on Aimster renders it impossible to ascertain which users are transferring which files.” 252 F.Supp.2d at 659. The court found that “[a]dopting a repeat infringer policy and then purposely eviscerating any hope that such a policy could ever be carried out is not an ‘implementation’ as required by § 512(i).” Jd. The Seventh Circuit affirmed, finding that Aimster did not meet the requirement of § 512(i)(1)(A) because, in part, “by teaching its users how to encrypt their unlawful distribution of copyrighted materials [Aimster] disabled itself from doing anything to prevent infringement.” /n re Aimster Copyright Litig., 334 F.3d 643, 655 (7th Cir. 2003). Based on Ellison and the Aimster cases, a substantial failure to record webmasters associated with allegedly infringing websites may raise a genuine issue of material fact as to the implementation of the service provider’s repeat infringer policy. In this case, however, the record does not reflect such a failure. Perfect 10 references a single page from CCBill and CWIE’s “DMCA Log.” Although this page shows some empty fields in the spreadsheet column labeled “Webmasters [sic] Name,” Perfect 10°s conclusion that the DMCA Log thus “does not reflect any effort to track notices of infringements received by webmaster identity” is not supported by evidence in the record. The remainder of the DMCA Log indicates that the email address and/or name of the webmaster is routinely recorded in CCBill and CWIE’s DMCA Log. CCBill’s interrogatory responses dated December | 1, 2003 also contain a chart indicating that CCBill and CWIE largely kept track of the webmaster for each website. 9a Appendix A Unlike Ellison and Aimster, where the changed email address and the encryption system ensured that no information about the repeat infringer was collected, it is undisputed that CCBill and CWIE recorded most webmasters. The district court properly concluded that the DMCA Log does not raise a triable issue of fact that CCBill and CWIE did not implement a repeat infringer policy. 2. Reasonableness A service provider reasonably implements its repeat infringer policy if it terminates users when “appropriate.” See Corbis, 351 F.Supp.2d at 1104. Section 512(i) itself does not clarify when it is “appropriate” for service providers to act. It only requires that a service provider terminate users who are “repeat infringers.” To identify and terminate repeat infringers, a service provider need not affirmatively police its users for evidence of repeat infringement. Section 512(c) states that ““[a] service provider shall! not be liable for monetary relief” if it does not know of infringement. A service provider is also not liable under § 51 2(c) if it acts “expeditiously to remove, or disable access to, the material” when it (1) has actual knowledge, (2) is aware of facts or circumstances from which infringing activily is apparent, or (3) has received notification of claimed infringement meeting the requirements of § 512(c)(3). Were we to require service providers to terminate users under circumstances other than those specified in § 512(c), § S12(c)’s grant of immunity would be meaningless. This interpretation of the statute is supported by legislative history. 10a Appendix A See H.R. Rep., at 61 (Section 512(i) is not intended “to undermine the .. . knowledge standard of [§ 512](c).”). Perfect 10 claims that CCBill and CWIE unreasonably implemented their repeat infringer policies by tolerating flagrant and blatant copyright infringement by its users despite notice of infringement from Perfect 10, notice of infringement from copyright holders not a party to this litigation and “red flags” of copyright infringement. a. Perfect 10's Claimed Notice of Infringement Perfect 10 argues that CCBill and CWIE implemented their repeat infringer policy in an unreasonable manner because CCBill and CWIE received notices of infringement from Perfect 10, and yet the infringement identified in these notices continued. The district court found that Perfect 10 did not provide notice that substantially complied with the requirements of § 512(c)(3),? and thus did not raise a genuine 2. Section 512(c)(3) reads: (A) To be effective under this subsection, a notification of claimed infringement must be a_ written communication provided to the designated agent of a service provider that includes substantially the following: (1) A physical or electronic signature of a person authorized to act on behalf of the owner of an exclusive righi that is allegedly infringed. (ii) Identification of the copyrighted work claimed to have been infringed, or, if multiple copyrighted works (Cont'd) lla Appendix A issue of material fact as to whether CCBill and CWIE reasonably implemented their repeat infringer policy. We agree. Compliance is not “substantial” if the notice provided complies with only some of the requirements of § 512(c)(3)(A). Section 512(c)(3)(B)(ii) explains that a service provider will not be deemed to have notice of infringement when “the notification that is provided to the service provider’s designated agent fails to comply (Cont'd) at a single online site are covered by a single notification, a representative list of such works at that site. (iii) Identification of the material that is claimed to be infringing or to be the subject of infringing activity and that is to be removed or access to which is to be disabled, and information reasonably sufficient to permit the service provider to locate the material. (iv) Information reasonably sufficient to permit the service provider to contact the complaining party, such as an address, telephone number, and, if available, an electronic mail address at which the complaining party may be contacted. (v) A statement thai the complaining party has a good faith belief that use of the material in the manner complained of is not authorized by the copyright owner, its agent, or the law. (vi) A statement that the information in the notification is accurate, and under penalty of perjury, that the complaining party is authorized to act on behalf of the owner of an exclusive right that is allegedly infringed. 12a Appendix A substantially with all the provisions of subparagraph (A) but substantially complies with clauses (ii), (iii), and (iv) of subparagraph (A)” so long as the service provider responds to the inadequate notice and explains the requirements for substantial compliance. The statute thus signals that substantial compliance means substantial compliance with all of § 512(c)(3)’ s clauses, not just some of them. See H.R. Rep., at 56 (A communication substantially complies even if it contains technical errors such as misspellings or outdated information.). See also Recording Indus. Ass'n of Am., Inc. v. Verizon Internet Servs., Inc., 351 F.3d 1229, 1236 (D.C.Cir. 2003) (citing H.R. Rep., at 56). Perfect 10 claims that it met the requirements of § 512(c)(3) through a combination of three sets of documents. The first set of documents is a 22,185 page bates-stamped production on October 16, 2002 that includes pictures with URLs of Perfect 10 models allegedly posted on CCBill or CWIE client websites. The October 16, 2002 production did not contain a statement under penalty of perjury that the complaining party was authorized to act, as required by § 512(c)( 3 Aj(vi1). Phe second set of documents was also not sworn to, and consisted of a spreadsheet emailed to Fisher on July 14, 2003 identifying the Perfect 10 models in the October 16, 2002 production by bates number. On December 2, 2003, Perfect 10 completed interrogatory responses which were signed under penalty of perjury. These responses incorporated the July 14, 2003 spreadsheet by reference. 3. We do not read the Fourth Circuit's holding in ALS Scan, Inc. v. RemarQ Communities, Inc., 239 F.3d 619, 625 (4th Cir. 2001), as holding that only locatica information is required tor substantial compliance with the terms of § 512(c)(3). I3a Appendix A Taken individually, Perfect 10’s communications do not substantially comply with the requirements of § 512(c)(3). Each communication contains more than mere technical errors; often one or more of the required elements are entirely absent. See Perfect 10, Inc. v. CCBill, LLC, 340 F.Supp.2d 1077, 1100-01 (C.D.Cal.2004) (“Order”). In order to substantially comply with § 512(c)(3)’s requirements, a notification must do more than identify infringing files. The DMCA requires a complainant to declare, under penalty of perjury, that he is authorized to represent the copyright holder, and that he has a good-faith belief that the use is infringing. This requirement is not superfluous. Accusations of alleged infringement have drastic consequences: A user could have content removed, or may have his access terminated entirely. If the content infringes, justice has been done. But if it does not, speech protected under the First Amendment could be removed. We therefore do not require a service provider to Start potentially invasive proceedings if the complainant is unwilling to state under penalty of perjury that he is an authorized representative of the copyright owner, and that he has a good-faith belief that the material is unlicensed.’ Permitting a copyright holder to cobble together adequate notice from separately defective notices also unduly burdens service providers. Indeed, the text of § 512(c)(3) requires 4. Perfect 10's argument that its initial notice substantially complied with the DMCA’s notice requirements because Fisher, the recipient of that notice, admitted that he could have found the infringing photographs on the basis of the October 16, 2002, bates- stamped production, is thus beside the point. Without the predicate ceriification under penalty of perjury, Fisher would have had no reason to go looking for the photographs. l4a Appendix A that the notice be “a written communication.” (Emphasis added). Again, this requirement is not a mere technicality. It would have taken Fisher substantial time to piece together the relevant information for each instance of claimed infringement. To do so, Fisher would have to first find the relevant line in the spreadsheet indicating ownership information, then comb the 22,185 pages provided by Perfect 10 in order to find the appropriate image, and finally copy into a browser the location printed at the top of the page-a location which was, in some instances, truncated. The DMCA notification procedures place the burden of policing copyright infringement-identifying the potentially infringing material and adequately documenting infringement-squarely on the owners of the copyright. We decline to shift a substantial burden from the copyright owner to the provider; Perfect 10°s separate communications are inadequate. Since Perfect 10 did not provide effective notice, knowledge of infringement may not be imputed to CCBill or CWIE based on Perfect 10°s communications. Perfect 10’s attempted notice does not raise a genuine issue of material fact that CCBill and CWIE failed to reasonably implement a repeat infringer policy within the meaning of § 512(i)(1)(A). b. Non-Party Notices Perfect 10 also cites to notices of infringement by other copyright holders, and argues that CCBill and CWIE did not reasonably implement their repeat infringer policies because they continued to provide services for websites that infringed non-party copyrights. The district court expressly declined to consider evidence of notices provided by any party other 1Sa Appendix A than Perfect 10 on the basis that these notices were irrelevant to Perfect 10’s claims. We disagree. CCBill and CWIE’s actions towards copyright holders who are not a party to the litigation are relevant in determining whether CCBill and CWIE reasonably implemented their repeat infringer policy. Section 512(1)(1)(A) requires an assessment of the service provider's “policy,” not how the service provider treated a particular copyright holder. See Ellison, 357 F.3d at 1080 (AOL’s repeat infringer policy was not reasonably implemented because copyright holders other than Ellison could have attempted to notify AOL during the time that AOL’s email address was incorrectly listed.). Thus, CCBill and CWIE’s response to adequate non-party notifications is relevant in determining whether they reasonably implemented their policy against repeat infringers. A policy is unreasonable only if the service provider failed to respond when it had knowledge of the infringement. The district court in this case did not consider any evidence relating to copyright holders other than Perfect 10. We remand for determination of whether CCBill and/or CWIE implemented its repeat infringer policy in an unreasonable manner with respect to any copyright holder other than Perfect 10. c. Apparent Infringing Activity In importing the knowledge siandards of § 512(c) to the analysis of whether a service provider reasonably implemented its $ 512(i) repeat infringer policy, Congress l6a Appendix A also imported the “red flag” test of § 512(c){1)(A)(ii). Under this section, a service provider may iose immunity if it fails to take action with regard to infringing material when it is “aware of facts or circumstances from which infringing activity is apparent.” § 512(c)(1)(A)(ii). Notice that fails to substantially comply with § 512(c)(3), however, cannot be deemed to impart such awareness. §§ 512(c)(3)(B)(i) & (ii). Perfect 10 alleges that CCBill and CWIE were aware of a number of “red flags” that signaled apparent infringement. Because CWIE and CCBill provided services to “illegal.net” and “stolencelebritypics.com,” Perfect 10 argues that they must have been aware of apparent infringing activity. We disagree. When a website traffics in pictures that are titillating by nature, describing photographs as “illegal” or “stolen” may be an attempt to increase their salacious appeal, rather than an admission that the photographs are actually illegal or stolen. We do not place the burden of determining whether photographs are actually illegal on a service provider. Perfect 10 also argues that a disclaimer posted on illegal.net made it apparent that infringing activity had taken place. Perfect 10 alleges no facts showing that CWIE and CCBill were aware of that disclaimer, and, in any event, we disagree that the disclaimer made infringement apparent. The disclaimer in question stated: “The copyrights of these files remain the creator’s. I do not claim any rights to these files, other than the right to post them.” Contrary to Perfect 10’s assertion, this disclaimer is not a “red flag” of infringement. The disclaimer specifically states that the webmaster has the right to post the files. 17a Appendix A In addition, Perfect 10 argues that password-hacking websites, hosted by CWIE, also obviously infringe. While such sites may not directly infringe on anyone’s copyright, they may well contribute to such infringement. The software provided by Grokster in Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913, 125 S.Ct. 2764, 162 L.Ed.2d 781 (2005), also did not itself infringe, but did enable users to swap infringing files. Grokster held that “instructing [users] how to engage in an infringing use” could constitute contributory infringement. /d. at 936, 125 S.Ct. 2764. Similarly, providing passwords that enable users to illegally access websites with copyrighted content may well amount to contributory infringement. However, in order for a website to qualify as a “red flag” of infringement, it would need to be apparent that the website instructed or enabled users to infringe another’s copyright. See A & M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1013 n. 2 (9th Cir. 2001). We find that the burden of determining whether passwords on a website enabled infringement is not on the service provider. The website could be a hoax, or out of date. The owner of the protected content may have supplied the passwords as a short-term promotion, or as an attempt to collect information from unsuspecting users. The passwords might be provided to help users Maintain anonymity without infringing on copyright. There is simply no way for a service provider to conclude that the passwords enabled infringement without trying the passwords, and verifying that they enabled illegal access to copyrighted material. We impose no such investigative duties on service providers. Password-hacking websites are thus not per se “red flags” of infringement. 18a Appendix A Perfect 10 also alleges that “red flags” raised by third parties identified repeat infringers who were not terminated. Because the district court did not consider potential red flags raised by third parties, we remand to the district court to determine whether third-party notices made CCBill and CWIE aware that it provided services to repeat infringers, and if so, whether they responded appropriately. B. Standard Technical Measures: § 512(i)(1)(B) Under § 512(i)(1)(B), a service provider that interferes with “standard technical measures” is not entitled to the safe harbors at §§ 512(a)-(d). “Standard technical measures” refers to a narrow group of technology-based solutions to online copyright infringement: [T]he term “standard technical measures” means technical measures that are used by copyright owners to identify or protect copyrighted works and— (A) have been developed pursuant to a broad consensus of copyright owners and service providers in an open, fair, voluntary, multi- industry standards process; (B) are available to any person on reasonable and nondiscriminatory terms; and (C) do not impose substantial costs on service providers or substantial burdens on their systems or networks. 19a Appendix A § 512(i)(2). Perfect 10 argues that CCBill does not qualify for any safe harbor because it interfered with “standard technical measures” by blocking Perfect 10’s access to CCBill affiliated websites in order to prevent Perfect 10 from discovering whether those websites infringed Perfect 10 copyrights. There are two disputed facts here. We are unable to determine on this record whether accessing websites is a standard technical measure, which was “developed pursuant to a broad consensus of copyright owners and service providers in an open, fair, voluntary, multi-industry standards process.” § 512(1)(2)(A). We thus remand to the district court to determine whether access to a website is a “standard technical measure,” and if so, whether CCBill interfered with that access. If allowing access 1s a standard technical measure, CCBill claims it only blocked Perfect 10°s credit card because Perfect 10 had previously reversed charges for subscriptions; Perfect 10 insists it did so in order to prevent Perfect 10 from identifying infringing conient. If CCBill is correct, Perfect 10’s method of identifying infringement-forcing CCBill to pay the fines and fees associated with chargebacks- may well impose a substantial cost on CCBill. If not, CCBill may well have interfered with Perfect 10’s efforts to police the websites in question for possible infringements. Because there are disputed issues of material fact, we remand to the district court for a determination of whether CCBill’s refusal to process Perfect 10°s transactions interfered with a “standard technical measure” for identifying infringement. 20a Appendix A C. Transitory Digital Network Communications: § 512(a) Section 512(a) provides safe harbor for service providers who act as conduits for infringing content. In order to qualify for the safe harbor of § 512(a), a party must be a service provider under a more restrictive definition than applicable to the other safe harbors provided under § 512: As used in subsection (a), the term “service provider” means an entity offering the transmission, routing, or providing of connections for digital online communications, between or among points specified by a user, of material of the user’s choosing, without modification to the content of the material as sent or received. Section 512(k)(1)(A). The district court held that CCBill met the requirements of § 512(k)(1)(A) by “provid[ing] a connection to the material on its clients’ websites through a system which it operates in order to provide its clients with billing services.” Order at 1102. We reject Perfect 10's argument that CCBill is not eligible for immunity under § 512(a) because it does not itself transmit the infringing material. A service provider is “an entity offering the transmission, routing, or providing of connections for digital online communications.” § 512(k)(1)(A). There is no requirement in the statute that the communications must themselves be infringing, and we see no reason to import such a requirement. It would be perverse to hold a service provider immune for transmitting information that was infringing on its face, but find it contributorily liable for transmitting information that did not infringe. 2ia Appendix A Section 512(a) provides a broad grant of immunity to service providers whose connection with the material is transient. When an individual clicks on an Internet link, his computer sends a request for the information. The company receiving that request sends that request on to another computer, which sends it on to another. After a series of such transmissions, the request arrives at the computer that stores the information. The requested information is then returned in milliseconds, not necessarily along the same path. In passing the information along, each intervening computer makes a short-lived copy of the data. A short time later, the information is displayed on the user’s computer. Those intervening computers provide transient connections among users. The Internet as we know it simply cannot exist if those intervening computers must block indirectly infringing content. We read § 512(a)’s grant of immunity exactly as it is written: Service providers are immune for transmitting all digital online communications, not just those that directly infringe. CCBill transmits credit card information and proof of payment, both of which are “digital online communications.” However, we have little information as to how CCBill sends the payment it receives to its account holders. It is unclear whether such payment is a digital communication, transmitted without modification to the content of the material, or transmitted often enough that CCBill is only a transient holder. On the record before us, we cannot conclude that CCBill is a service provider under § 5] 2(a). Accordingly, we remand to the district court for further consideration the issue Of whether CCBill meets the requirements of § 51 2(a). 22a Appendix A D. Information Location Tools: § 512(d) After CCBill processes a consumer’s credit card and issues a password granting access to aclient website, CCBill displays a hyperlink so that the user may access the client website. CCBill argues that it falls under the safe harbor of § 512(d) by displaying this hyperlink at the conclusion of the consumer transaction. We disagree. Section 512(d) reads: A service provider shall not be liable for monetary relief, or, except as provided in subsection (j), for injunctive or other equitable relief, for infringement of copyright by reason of the provider referring or linking users to an online location containing infringing material or infringing activity, by using information location tools, including a directory, index, reference, pointer, or hypertext link. Even if the hyperlink provided by CCBill could be viewed as an “information location tool,” the majority of CCBill’s functions would remain outside of the safe harbor of § 512(d). Section 512(d) provides safe harbor only for “infringement of copyright by reason of the provider referring or linking users to an online location containing infringing material or infringing activity.” (Emphasis added). Perfect 10 does not claim that CCBill infringed its copyrights by providing a hyperlink; rather, Perfect 10 alleges infringement through CCBill’s performance of other business services for these websites. Even if CCBill’s provision of a hyperlink is immune under § 512(n), CCBill does not receive blanket immunity for its other services. 23a Appendix A E. Information Residing on Systems or Networks at the Direction of Users: § 512(c) Section 512(c) “limits the liability of qualifying service providers for claims of direct, vicarious, and contributory infringement for storage at the direction of a user of material that resides on a system or network controlled or operated by or for the service provider.” H.R. Rep., at 53. A service provider qualifies for safe harbor under § 512(c) if it meets the requirements of § 512(i) and: (A)(i) does not have actual knowledge that the material or an activity using the material on the system or network is infringing; (ii) in the absence of such actual knowledge, is not aware of facts or circumstances from which infringing activity is apparent; or (iii) upon obtaining such knowledge or awareness, acts expeditiously to remove, or disable access to, the material; (B) does not receive a financial benefit directly attributable to the infringing activity, in a case in which the service provider has the right and ability to control such activity, and (C) upon notification of claimed infringement as described in paragraph (3), responds expeditiously to remove, or disable access to, the material that is Claimed to be infringing or to be the subject of infringing activity. 24a Appendix A Section 512(c)(1). As discussed above, Perfect 10 did not provide CWIE with knowledge or awareness within the standard of § 512(c)(1)(A), and Perfect 10 did not provide notice that complies with the requirements of § 512(c)(3). The remaining question is whether Perfect 10 raises a genuine issue of material fact that CWIE does not qualify for safe harbor under § 512(c) because it fails to meet the requirements of § 512(c)(1)(B), namely, that a service provider not receive a direct financial benefit from the infringing activity if the service provider also has the right and ability to control the infringing activity. Based on the “well-established rule of construction that where Congress uses terms that have accumulated settled meaning under common law, a court must infer, unless the statute otherwise dictates, that Congress means to incorporate the established meaning of these terms,” Rossi, 391 F.3d at 1004 n. 4 (9th Cir. 2004) (quoting Neder v. United States, 527 U.S. 1, 21, 119 S.Ct. 1827, 144 L.Ed.2d 35 (1999)), we hold that “direct financial benefit” should be interpreted consistent with the similarly-worded common law standard for vicarious copyright liability. See, e.g., Ellison, 357 F.3d at 1078 (a vicariously liable copyright infringer “derive[s] a direct financial benefit from the infringement and hafs] the right and ability to supervise the infringing activity”). Thus, the relevant inquiry is “whether the infringing activity constitutes a draw for subscribers, not just an added benefit.” Id. at 1079. In Ellison, the court held that “no jury could reasonably conclude that AOL received a direct financial benefit from providing access to the infringing material” because “[{t]he record lacks evidence that AOL attracted or 25a Appendix A retained subscriptions because of the infringement or lost subscriptions because of AOL’s eventual obstruction of the infringement.” /d. In this case, Perfect 10 provides almost no evidence about the alleged direct financial benefit to CWIE. Perfect 10 only alleges that “CWIE ‘hosts’ websites for a fee.” This allegation is insufficient to show that the infringing activity was “a draw” as required by Ellison. 357 F.3d at 1079. Furthermore, the legislative history expressly states that “receiving a one-time set-up fee and flat, periodic payments for service from a person engaging in infringing activities would not constitute receiving a ‘financial benefit directly attributable to the infringing activity.” ” H.R. Rep., at 54. Perfect 10 has not raised a genuine issue of material fact that CWIE receives a direct financial benefit from infringing activity. Because CWIE does not receive a direct financial benefit. CWIE meets the requirements of § 512(c). If the district court finds that CWIE meets the threshold requirements of § 512(i), CWIE ts entitled to safe harbor under § 512(c). Il. COMMUNICATIONS DECENCY ACT The Communications Decency Act states that “[n]o provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider,” and expressly preempts any state law to the contrary. 47 U.S.C. $$ 230(c)(1), (e)(3). “The majority of federal circuits have interpreted the CDA to establish broad ‘federal immunity to 26a Appendix A any cause of action that would make service providers liable for information originating with a third-party user of the service.’ ” Almeida v. Amazon.com, Inc., 456 F.3d 1316, 1321 (11th Cir. 2006) (quoting Zeran v. America Online, Inc., 129 F.3d 327, 331 (4th Cir. 1997)); see also Carafano v. Metrosplash.com, Inc., 339 F.3d 1119, 1122 (9th Cir. 2003) (citing Batzel v. Smith, 333 F.3d 1018, 1026-27 (9th Cir. 2003)). The immunity created by § 230(c)(1) is limited by § 230(e)(2), which requires the court to “construe Section 230(c)(1) tm a manner that would neither ‘limit or expand any law pertaining to intellectual property.’ ” Gucci Am., Inc. v. Hall & Assocs., 135 F.Supp.2d 409, 413 (S.D.N.Y. 2001) (quoting § 230(e)(2)). As a result, the CDA does not clothe service providers in immunity from “law([s] pertaining to intellectual property.” See Almeida, 456 F.3d at 1322. The CDA does not contain an express definition of “intellectual property,” and there are many types of claims in both state and federal law which may-or may not-be characterized as “intellectual property” claims. While the scope of federal intellectual property law is relatively well- established, state laws protecting “intellectual property,” however defined, are by no means uniform. Such laws may bear various names, provide for varying causes of action and remedies, and have varying purposes and policy goals. Because material on a website may be viewed across the Internet, and thus in more than one state at a time, permitting the reach of any particular state’s definition of intellectual property to dictate the contours of this federal immunity would be contrary to Congress’s expressed goal of insulating 27a Appendix A the development of the Internet from the various state-law regimes. See 47 U.S.C. §§ 230(a) and (b); see also Batzel, 333 F.3d at 1027 (noting that “courts construing § 230 have recognized as critical in applying the statute the concern that lawsuits could threaten the ‘freedom of speech in the new and burgeoning Internet medium’ ” (quoting Zeran, 129 F.3d at 330)). In the absence of a definition from Congress, we construe the term “intellectual property” to mean “federal intellectual property.” ° Accordingly, CCBill and CWIE are 5. In its petition for rehearing, Perfect 10 claims that our decision on this point conflicts with Universal Communication Systems, Inc. v. Lycos, Inc., 478 F.3d 413 (1st Cir. 2007). But neither party in that case raised the question of whether state law counts as “intellectual property” for purposes of § 230 and the court seems to simply have assumed that it does. We thus create no conflict with Universal Communication. We note that Universal Communication demonstrates the difficulties inherent in allowing state laws to count as intellectual property for CDA purposes. In that case, the district court struggled with the question of whether the “trademark dilution” claim brought under Florida Law counted as intellectual property for purposes of the CDA, and concluded that it was more like a defamation claim than a trademark claim. /d. at 423 n. 7. Rather than decide how to draw the iine between defamation and trademark, the First Circuit held that “because of the serious First Amendment issues that would be raised” if Lycos were found liable, defendant had not violated the Florida statute. /d. at 423. The First Circuit was able to sidestep the question of what counted as intellectual property on First Amendment grounds. But we cannot do so here. States have any number of laws that could be characterized as intellectual property laws: trademark, untair (Cont'd) 28a Appendix A eligible for CDA immunity for all of the state claims raised by Perfect 10. lil. DIRECT COPYRIGHT INFRINGEMENT “Plaintiffs must satisfy two requirements to present a prima facie case of direct infringement: (1) they must show ownership of the allegedly infringed material and (2) they must demonstrate that the alleged infringers violate at least one exclusive right granted to copyright holders under 17 U.S.C. § 106.” Napster, 239 F.3d at 1013. Perfect 10 alleges that CCBill and CWIE directly infringed its copyrights through its website, hornybees.com. There is a genuine issue of material fact as to the relationship between CCBill/CWIE and hornybees.com. CCBill and CWIE state that hornybees.com is operated by an entity called “CCBucks,” and that CCBill and CWIE have no interest in hornybees.com. However, the hornybees.com (Cont'd) competition, dilution, right of publicity and trade defamation, to name just a few. Because such laws vary widely from state to state, no litigant will know if he ts entitled to immunity for a state claim until a court decides the legal issuc. And, of course, defendants that are otherwise entitled to CDA immunity will usually be subject to the law of numerous states. An entity otherwise entitled to § 230 immunity would thus be forced to bear the costs of litigation under a wide variety of state statutes that could arguably be classified as “intellectual property.” As a practical matter, inclusion of rights protected by state law within the “intellectual property” exemption would fatally undermine the broad grant of immunity provided by the CDA. 29a Appendix A website reads: “Brought to you by CCBill LLC and Cavecreek Web Hosting.” The record indicates that Cavecreek Web Hosting may be CWIE, and that CWIE may be the registrant of hornybees.com. Furthermore, the vice president of operations of both CCBill and CWIE lists CCBucks as being related to CWIE and CCBill. Perfect 10 has also raised a genuine issue of material fact that hornybees.com has infringed Perfect 10’s copyrights by posting pictures of a Perfect 10 model’s body with the head of a celebrity. The declaration provided by Perfect 10's founder and president asserting that the photo is that of a Perfect 10 model is sufficient evidence to raise a genuine issue of material fact. Because Perfect 10 has raised a triable issue whether CCBill and CWIE directly infringed Perfect 10 copyrights by operating hornybees.com, and because the district court did not address this issue in its order granting summary judgment in favor of Perfect 10, we remand this issue for a determination by the district court.® Iv. COSTS AND ATTORNEY’S FEES The Copyright Act of 1976 permits the district court to “award a reasonable attorney’s fee to the prevailing party as part of the costs.” 17 U.S.C. § 505. Fees are proper under this statute when cither successful prosecution or successful defense of the action furthers the purposes of the Copyright 6. If CCBill and CWIE operate hornybees.com, no immunity for infringement on that site is available under cither the DMCA or the CDA. 30a Appendix A Act. See Fantasy, Inc. v. Fogerty, 94 F.3d 553, 558 (9th Cir. 1996) (“[A] successful defense of a copyright infringement action may further the policies of the Copyright Act every bit as much as a successful prosecution of an infringement claim by the holder of a copyright.) (quoting Fogerty v. Fantasy, Inc., 510 U.S. 517, 527, 114S.Ct. 1023, 127 L.Ed.2d 455 (1994)). As such, prevailing defendants as well as prevailing plaintiffs are eligible for such an award, and the standards for evaluating whether an award is proper are the same regardless of which party prevails. Fogerty v. Fantasy, Inc., 510 U.S. 517, 534, 114 S.Ct. 1023, 127 L.Ed.2d 455 (1994). Thus, the awarding of attorney’s fees is a matter for the district court’s discretion. /d. To guide that discretion, the Supreme Court endorsed the non-exclusive list employed by the Third Circuit in Lieb v. Topstone Industries, Inc., 788 F.2d 151, 156 (1986) (the so-called “ Lieb factors”). Fogerty, 510 U.S. at 534 n. 19, 114 S.Ct. 1023. The list includes “frivolousness, motivation, objective unreasonableness (both in the factual and in the legal components of the case) and the need in particular circumstances to advance considerations of compensation and deterrence.” /d. The district court made clear in its order denying fees that it had weighed each of the Lieb factors and validly exercised its discretion to deny defendants’ fees. Defendants argue that the district judge inadequately considered these factors, that Perfect 10's litigation positions were frivolous and meritless, and that Perfect 10 is a serial filer of nuisance copyright claims. Because we reverse in part and remand a substantial portion of this case to the district court, there is 3la Appendix A ample support for the district court’s finding that Perfect 10's legal claims are not frivolous or objectively unreasonable. The district court reasonably found the evidence regarding Perfect 10’s motivation to be equivocal, and did not abuse its discretion in weighing the interests of compensation and deterrence and denying costs and attorney’s fees to defendants. CONCLUSION We remand to the district court for a determination of whether CCBill and CWIE reasonably implemented a policy under § 512(i)(1)(A) based on its treatment of non-party copyright holders. Because § 512(i)(1)(A) is a threshold determination, we remand the remaining issues under § 512 for further proceedings consistent with this opinion. We remand for further determination of whether hornybees.com is owned by CCBill or CWIE. and if so, whether CCBill or CWIE are directly liable under state or federal law for its operation. The district court’s decision regarding CDA immunity is affirmed as to the unfair competition and false advertising claims, and reversed as to the right of publicity claim. We affirm the district court's decision to deny an award of attorney's fees and costs to defendants. 32a Appendix A Each party shall bear its own costs on appeal. AFFIRMED IN PART, REVERSED IN PART, AND REMANDED 33a APPENDIX B — ORDER GRANTING, IN PART, AND DENYING, IN PART, DEFENDANTS’ MOTIONS FOR SUMMARY JUDGMENT OF THE UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA DATED JUNE 22, 2004 UNITED STATES DISTRICT COURT FOR THE C.D. OF CALIFORNIA No. CV 02-7624 LBG(SHx) PERFECT 10, INC., Plaintiff, v. CCBILL, LLC, et al., Defendants. ORDER GRANTING, IN PART, AND DENYING, IN PART, DEFENDANTS’ MOTIONS FOR SUMMARY JUDGMENT BAIRD, District Judge. I. INTRODUCTION Defendants Internet Billing Co., LLC (“IBill”), Internet Key, Inc. (“Internet Key”), Cavecreek Wholesale Internet Exchange (“CWIE”), and CCBill, LLC (“CCBill”) have filed the instant motions for partial summary judgment of Perfect 34a Appendix B 10, Inc.’s (“Perfect 10”) copyright, RICO, and state law claims based on safe harbors provided by the Digital Millennium Copyright Act (“DMCA”) and immunity provided by the Communications Decency Act (“CDA”). By this Order, the Court addresses the four motions for partial summary judgment. ' Il. FACTUAL AND PROCEDURAL HISTORY A. Factual History The facts are undisputed unless otherwise noted. 1. Perfect 10 Perfect 10 is the publisher of the adult entertainment magazine Perfect 10 and the owner of the website perfectlOcom See Il Zadeh Decl. at 4 2. Perfect 10 has created approximately 5,000 photographic images for display in its magazine and on its website. See id. at] 17. Perfect 10 holds registered U.S. copyrights for these images. See id.; see also Comp!. Exh. O (containing copies of the copyright registrations owned when the complaint was filed). In addition, Perfect 10 has several registered trademark/service marks. See Il Zadeh Decl. at { 18; see also Compl. Exh. P 1. The Court has devised the following citation nomenclature to distinguish the pleadings filed in support of the different motions: (1) all pleadings filed in support of Internet Key’s motion against Perfect 10 shall be preceded by an “I”; (2) all pleadings filed in support of IBill’s motion against Perfect 10 shall be preceded by an “II”; (3) all pleadings filed in support of CCBill’s and CWIE’s motions against Perfect 10 shall be preceded by an “UL” 35a Appendix B (containing copies of trademark registrations owned when the complaint was filed). Finally, Perfect 10 is the assignee of the rights of publicity of many models. See Il Zadeh Decl. at J 19-21. 2. IBill IBill is a company that processes payments for online merchants. II Zadeh Decl. at 4 22. IBill has nearly 5,000 clients with over 70,000 websites. II Smith Decl. at ¥ 4. All material selected and posted by IBill’s clients’ websites is selected and posted by !Bill’s clients. /d., | 7. [Bill can suspend or terminate its relationship with websites if it becomes aware that the website is violating IBill’s policies or state or federal law. /d., J 8. When IBill suspends or terminates a client, the contents of the clients’ website remains intact and unchanged. /d., {9 In addition, suspension or termination does not affect the ability of the website’s exisiilig customers (those who have already paid) to obtain access to the website. /d. Suspension or termination does, however, prevent the owner of the website from receiving new payments using [Bill's payment processing services. /d. 3. Internet Key Hank Freeman is the President of Internet Key. | Freeman Decl., | 1; [Cooper Decl., Exh. | (Freeman Depo.), at 15:10- 20.° Internet Key is an age verification system for adult 2. The deposition contains two different sets of page numbers. The Court will refer to the original deposition pages found on the bottom right-hand side of the pages, not the exhibit page numbers found at the bottom middle of the pages. 36a Appendix B content websites. I Freeman Decl., { 2. Starting in 1997, Internet Key has provided adult verification services, including providing links, to third-party adult content websites. /d. Currently, Internet Key verifies age and provides a link to approximately 30,000 third-party adult content websites that participate in the SexKey system (“Affiliated Websites”). Id. The Affiliated Websites are not owned by Internet Key although some are owned by employees of WCD Enterprises, another company that Freeman owns. /d., 4 4; | Cooper Decl., Exh. | (Freeman Depo.), at 119:1-5. A user (consumer) cannot access an Affiliated Website without proving he or she is of legal age. I Freeman Dec!., { 5. Internet Key provides each Affiliated Website with a site ID and an HTML code to place on their site. /d. When a new user clicks onto an Affiliated Website, a link that tracks the site ID automatically directs the user to sexkey.com for age verification. /d. The user is directed to Internet Key’s registration page, which contains Internet Key’s User Agreement. /d., 4 6. The User Agreement sets forth terms and conditions that a user must certify and agree in order to subscribe to a SexKey membership. /d. Once the user agrees to all the terms of the User Agreement by checking on a box that the user agrees, the user is provided a user password to access all of the Affiliated Websites in the SexKey system. id., 4 8. Internet Key does not store the content of the Affiliated Websites on its computer system. /d., ¥ 13. It only stores information related to the Affiliated Websites’ URLs, site descriptions and webmaster information. /d. Prior to January 22, 2004, the only website Internet Key owned was sexkey.com. /d., ¢ 12. On January 22, 2004, 37a Appendix B Internet Key started a new website called sksignature.com, which is part of the SexKey system. /d. Internet Key owns or leases all the content contained on sksignature.com. /d.° Internet Key also acts as a search engine (similar to Yahoo or Google) for free adult content on the Internet. | Freeman Decl., 4 4. Sometimes, when an Affiliated Website is accessed through SexKey, the words “sexkey.com” appear in the URL. 1 Zadeh Decl., | 65, Exh. 51. Internet Key did not adopt a DMCA policy until August 21, 2002. | Cooper Decl., ¥ 4, Exh. 2 at 27. 4. CWIE Thomas Fisher is the Executive Vice-President of CWIE. II] CWIE Fisher Decl., ¢ 1.4 CWIE is a provider of web hosting and related Internet connectivity services. /d., | 3. CWIE provides what is referenced within the industry as “ning, power, and pipe "/d. As a provider of Internet access. website hosting, and other Internet-related services, CWIE offers its clients, and their customers and users, the means to acquire and disseminate public, private, commercial, and non-commercial information. /d. “Ping, power, and pipe” refers respectively to ensuring the “box” or server is on, 3. Perfect 10 has not alleged any infringements on www.sksignature.com. /d. 4. Perfect 10 contends that CWIE and CCBill are both owned by CWIE Holdings, LLC. Il Zadeh Decl., { 233, Exh. 202. Perfect 10 has submitted a chart that it received from CCBill or CWIE that does not identify, in any manner, common corporate ownership. Therefore, this contention 1s not supported by the evidence presented. 38a Appendix B ensuring power is provided to the server, and connecting the client’s server or website to the Internet backbone via a data center connection. /d. CWIE’s clients are the creators and/or owners of the content they seek to present to consumers via their website. Id., 4 4. CWIE is not in the business of producing, designing, supervising or editing the content that appears on CWIE’s clients’ websites. Jd. CWIE adopted its repeat infringer policy in 1999. Id., J 11. CWIE’s termination policy states that: Engaging in any activity that infringes or misappropriates the intellectual property rights of others is prohibited. This includes copyrights, trademarks, service marks, trade secrets, software piracy, and patents held by individuals, corporations, or other entities. Engaging in activity that violates privacy, publicity, and other personal rights of others is likewise prohibited. CWIE is required by law to remove or block access to client content upon receipt of a proper notice of copyright infringement or other violations of the law. It is also CWIE’s policy to terminate the privileges of clients who commit repeat violations of copyright laws. [1f CWIE Fisher Decl., 4 9, Exh. A, at 1-2. 39a Appendix B 5. CCBill Thomas Fisher is the Executive Vice-President of CCBill. II] CCBill Fisher Decl., J 1. CCBill’s clients are the creators and/or owners of the content they seek to present to consumers via the Internet. /d., { 3. CCBill is not in the business of producing, designing, supervising or editing the content that appears on CCBill’s clients’ websites. Jd. CCBill provides a fully automated Internet service that enables consumers to use credit cards or checks to pay for subscriptions or memberships to e-commerce venues created and offered by CCBill’s clients. Jd. CCBill does not own or operate any site for which a subscription or membership is required. /d. As part of its services to its clients, CCBill provides an automated on-line accounting mechanism that clients may use to verify statistical and financial activities processed for them through CCBill’s on-line Internet automated transaction processing system. /d. Consumers who have juined a4 client’s venue may cancel their subscription via an email or telephone call directed to CCBIII. /d. CCBill has a repeat infringer policy, adopted in 1999, which states: As an ISP, CCBill follows the procedures prescribed by the Digital Millenium Copyright Act (DMCA) for notification, takedown, and counter- notification. If you believe that a CCBill client has something on a website that constitutes a [violation] of your copyrights, or if any of your other intellectual property rights [have been] violated, please provide the following information to CCBill’s Registered [DMCA Agent]. 40a Appendix B 1. Your electronic or physical signature. 2. A description of the copyrighted work and where the original work [is located]. 3. A description of where the infringement is located. 4. Your address, telephone number, and email address. 5. A statement by you that you have a good faith belief that the use is not authorized by the copyright owner, agent, or the law. 6. A statement by you, that under penalty of perjury, that the [above] is accurate and that you are the copyright owner or authorized [to act] on the owner's behalf. Please send all legal notices to... Id., 4 9, Exh. D. B. Procedural History Plaintiff Perfect 10 filed its Complaint against Defendants CCBill, IBill, Paycom Billing Services, Inc., IMA Enterprises, Inc., Clarence Coogan, U. Berger, Cybertech Communications, NV, Celebskank, Network Authentication Systems Corporation, CWIE, Netpass Systems, Inc., and 4la Appendix B Internet Key on September 30, 2002. The Complaint alleges the following claims against all of the Defendants Claim |: federal copyright infringement; Claim 2: federal trademark infringement; Claim 3: federal trademark disparagement; Claim 4: wrongful use of registered mark under California state law; Claim 5: violation of right of publicity under California state law; Claim 6: unfair competition under California Business & Professions Code §§ 17200 and under the Lanham Act § 43(a); Claim 7: false and misleading advertising pursuant to California Business & Professions Code §§ 17500 and the common law; Claim 8: RICO (investment of proceeds); and Claim 9: RICO (participation in criminal enterprise). S.e Compl. On October 16, 2003, the Court ordered the bifurcation of discovery in this case. See October 16, 2003 Minute Order. 42a Appendix B The first phase of discovery was to relate solely to the Defendants’ defenses to the claims under the CDA and the DMCA. /d. Phase I discovery was closed on January 16, 2003. See November 17, 2003 Minute Order, at 2. The parties have filed evidentiary objections in connection with the motions for summary judgment. The Court will only address the objections to the evidence that is relevant to the Court’s analysis. lil. LEGAL STANDARD Rule 56 of the Federal Rules of Civil Procedure provides that a court shal! grant a motion for summary judgment if “the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(c). Material facts are those that may affect the outcome of the case. Anderson vy. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A dispute as to a material fact is genuine if there ts sufficient evidence for a reasonable jury to return a verdict for the nonmoving party. /d. The party moving for summary judgment bears the initial burden of informing the district court of the basis of the summary judgment motion and of demonstrating the absence of a genuine issue of material fact for trial. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986): Katz v. Children’s Hosp. of Orange County, 28 F.3d 1520, 1534 (9th Cir. 1994). On an issue for which the 43a Appendix B nonmoving party has the burden of proof at trial, the moving party need only point out “that there is an absence of evidence to support the nonmoving party’s case.” Celotex, 477 US. at 325, 106 S.Ct. 2548. Once this initial burden is satisfied, the non-moving party is required to “go beyond the pleadings and by her own affidavits, or by the depositions, answers to interrogatories, and admissions on file, designate ‘specific facts’ showing that there is a genuine issue for trial.” Celotex, 477 U.S. at 324, 106 S.Ct. 2548 (internal quotations omitted); see also Nilsson, Robbins, Dalgarn, Berliner, Carson & Wurst v. Louisiana Hydrolec, 854 F.2d 1538, 1544 (9th Cir. 1988). Where the standard of proof at trial is preponderance of the evidence, the non-moving party’s evidence must be such that a “fair-minded jury could return a verdict for the [non-moving party} on the evidence presented.” Anderson, 477 U.S. at 252, 106 S.Ct. 2505. The court views all facts and draws all inferences therefrom in the light most favorable to the nonmoving party. United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 8 L.Ed.2d 176(1962). The Court must accept the plaintiff's view of all material disputed facts. Lalonde v. County of Riverside, 204 F.3d 947, 954 (2000). If, however, the nonmoving party's evidence is “merely colorable” or “not significantly probative,” summary judgment may be granted. Anderson, 477 U.S. at 249-50, 106 S.Ct. 2505. 44a Appendix B IV. ANALYSIS A. Digital Millennium Copyright Act “The DMCA was enacted both to preserve copyright enforcement on the Internet and to provide immunity to service providers from copyright infringement liability” for “passive,” “automatic” actions in which a service provider’s system engages through a technological process initiated by another without the knowledge of the service provider. H.R. Conf. Rep. No. 105-796, at 72 (1998), reprinted in 1998 U.S.C.C.A.N. 649; H.R.Rep. No. 105-551(1), at 11 (1998).” ALS Scan. Inc. v. RemarQ Cmtys., Inc., 239 F.3d 619, 625 (4th Cir. 2001). This immunity, however, is not presumptive, but granted only to “innocent” service providers who can prove they do not have actual or constructive knowledge of the infringement, as defined under any of the three prongs of 17 U.S.C. § 512(c)(1). Jd. The DMCA’s protection of an innocent service provider disappears at the moment the service provider loses its innocence, i.e., at the moment it becomes aware that a third party is using its system to infringe. /d. At that point, the Act shifts responsibility to the service provider t disab’e the infringing matter, preserving the strong incentives for service providers and copyright Owners to cooperate © detect and deal with copyright infringements that take place in the digital network environment. /d. (citations omitted). In the spirit of achieving a balance between the responsibilities of the service provider and the copyright owner, the DMCA requires that a copyright owner put the service provider on notice in a detailed manner but allows notice by means that comport with the prescribed format only “substantially,” rather than perfectly. /d. 45a Appendix B The Digital Millenium Copyright Act (“DMCA”) creates a “safe harbor” for internet service providers who satisfy the requirements of the statute-protecting them against suits for damages and most injunctive relief. See generally, 17 U.S.C. § 512. There are four separate safe harbors within § 512, each with its own separate requirements. See 17 U.S.C. § 512(a), (b),(c)(1),(d). However, a threshold requirement for any protection by the DMCA is satisfaction of the requirements in § 512(i). The section reads as follows: The limitations on liability established by this section shall apply to a service provider only if the service provider(A) has adopted and reasonably implemented, and informs subscribers and account holders of the service provider’s system or network of, a policy that provides for the termination in appropriate circumstances of subscribers and account holders of the service provider’s system or network who are repeat infringers; and (B) accommodates and does not interfere with standard technical measures. 17 U.S.C. § 512(i)(1)2° Unless this threshold requirement is met, further analysis of the specific safe harbors is not required. The Ninth Circuit has held that § 512(1)(1)(A) has three separate requirements. See Ellison vy. Robertson, 357 F.3d 1072, 1080 (9th Cir. 2004). Service providers must: (1) adopt a policy that provides for the termination of service access 5. There is no dispute between the parties that the Defendants fulfill the requirements of subsection (B). 46a Appendix B for repeat copyright infringers in appropriate circumstances; (2) implement that policy in a reasonable manner; and (3) inform their clients of the policy. /d. The courts have not defined what reasonable implementation of a repeat infringer policy entails. Since the purpose of the DMCA is to relieve internet service providers of the duty of patrolling the Internet for copyright infringements that are not immediately apparent or of which they have no actual knowledge, the DMCA requires that copyright owners inform internet service providers of infringements on the client websites of the internet service providers. See § 512(c)(1)(A) and § 512(c)(3). General or vague allegations of copyright infringements are not sufficient to place internet service providers on “notice” of potential copyright infringements. The DMCA provides requirements for proper noti:ication of possible copyright infringements in § 512(c)(3)(A). See § 512(c)(3)(A).° The 6. § 512(c)(3) states: (3) Elements of notification. (A) To be effective under this subsection, a notification of claimed infringement must be a _ written communication provided to the designated agent of a service provider that includes substantially the following: (i) A physical or electronic signature of a person authorized to act on behalf of the owner of an exclusive right that is allegedly intringed. (11) Identification of the copyrighted work claimed to have been infringed, or, if multiple copyrighted works (Cont'd) 47a Appendix B purpose behind the notice requirement under the DMCA is to provide the internet service provider with adequate information to find and examine the allegedly infringing material expeditiously. Hendrickson v. Amazon.Com. Inc., 298 F.Supp.2d 914, 917 (C.D.Cal.2003). “Under the DMCA, a notification from a copyright owner that fails to comply substantially with § 512(c)(3) ‘shall not be considered ... in determining whether a service provider has actual knowledge or is aware of the facts or circumstances from (Cont'd) at a single online site are covered by a single notification, a representative list of such works at that site. (iii) Identification of the material that is claimed to be infringing or to be the subject of infringing activity and that is to be removed or access to which is to be disabled, and information reasonably sufficient to permit the service provider to locate the material. (iv) Information reasonably sufficient to permit the service provider to contact the complaining party, such as an address, telephone number, and, if available, an electronic mail address at which the complaining party may be contacted. (v) A statement that the complaining party has a good faith belicf that use of the material in the manner complained of is not authorized by the copyright owner, its agent, or the law. (vi) A statement that the information tn the notification is accurate, and under penalty of perjury, that the complaining party is authorized to act on behalf of the owner of an exclusive right that is allegedly intringed. 48a Appendix B which infringing activity is apparent.” ” Hendrickson v. Amazon.Com. Inc., 298 F.Supp.2d 914, 917-18 (C.D.Cal.2003). In order for a notification to be “DMCA- compliant,” it should substantially fulfill the requirements of § 512(c)(3)(A). ALS Scan, Inc. v. RemarQ Communities, Inc., 239 F.3d 619, 625 (4th Cir. 2001).’ Absolute compliance is not required. /d. Therefore, an internet service provider who receives repeat notifications that substantially comply with the requirements of § 512(c)(3)(A) about one of its clients, but does not terminate its relationship with the client, has not reasonably implemented a repeat infringer policy. 1. iBill’s Motion for Summary Judgment on Perfect 10's Copyright Claim IBill argues that Perfect 10°s Claim 1 for copyright infringement is barred by § 512(a) of the DMCA. Perfect 10 opposes summary judgment because, among other reasons, it contends that [Bill has not met the requirements for terminating repeat infringers as required by § 512(i). 7. During oral argument, Perfect 10 argued that notifications of repeat infringers under § 512(i) did not have to meet the requirements of § 512(c)3)(A) based on Jn re Aimster Copyright Litigation, 252 F.Supp.2d 634, 659 (N.D.1N.2002). In Aimster, the district court found that the DMCA did not require that a copyright holder provide Aimster with the internet protocol address of the infringement on the Aimster system. /d. An internet protocol address is the numeric address given to servers and users connected to the Internet. The district court did not, however, hold that DMCA notifications under § 512(i) do not need to meet the requirements of § SI2(cM 3A). Therefore, Perfect 10°s reliance Aimster to support its argument is misplaced 49a Appendix B a. Threshold Requirements Under § 512(i) The crux of the dispute between Perfect 10 and IBill is whether the policy adopted by [Bill provided for termination of repeat infringers in appropriate circumstances and whether that policy was reasonably implemented.® i. Policy for Termination of Repeat Infringers IBill argues that its policy terminated repeat infringers in appropriate circumstances. IBill states that its policy is that when it receives a notice of copyright infringement that substantially complies with the requirements of the DMCA, IBill suspends payment processing services to that client. See Il De Vito Decl. at J 26. If IBill determines that it has received previous complaints about that client or the website, IBill terminates the account permanently. See id. Perfect 10 argues that IBill’s policy does not terminate repeat infringers in appropriate circumstances because it suspends services for particular websites without terminating the webmasters responsible for that material. Therefore, Perfect 10 argues that IBill’s policy does not provide for the termination of service access for repeat copyright infringers. Perfect 10 also argues that IBill has not reasonably implemented its policy because repeat infringers known to [Bill were not terminated. The focus of § 512(i) is on infringing users rather than on content. See Perfect 10 v. Cybernet Ventures, Inc., 213 %. There is no dispute between the parties that [Bill ts an internet service provider under the DMCA. There is also no dispute between the parties that IBill adopted its termination policy before the alleged infringements occurred. $0a Appendix B F.Supp 2d 1146, 1177 (C.D.Cal.2002); see also Costar Group, Inc. v. LoopNet, Inc., 164 F.Supp.2d 688, 704 (D.Md.2001), Therefore, an internet service provider that seeks to fall within the safe harbors provided by the DMCA, must adopt a policy that terminates the infringing user, not just the content. [Bill has submitted several versions of its infringement policy, the most recent of which states: IBill may, its discretion (sic), disable and/or terminate the accounts of any IBill client who is accused of infringing the rights of others. If you believe that your work has been copied in a way that constitutes copyright infringement, or your intellectual property rights have been otherwise violated, please provide IBill’s Copyright Agent the following information: 1. an electronic or physical signature of the person authorized to act on behalf of the owner of the copyright; 2. a description of the copyrighted work, and a description of where the work is located; 3. your address, telephone number, and email address; 4. a statement by you that you have a good faith belief that the use of the work is not authorized by the copyright owner, agent, or the law: Sla Appendix B 5. a statement by you, that under penalty of perjury, that the above information is accurate and that you are the copyright owner or authorized to act on the owners’s behalf. Please send such notice to... Il Devito Decl., Exh. B, at 40 (Copyright Policy, 12/9/03). The Court notes that this policy states that it will terminate or disable the accounts of IBill clients who are accused of infringing third-party copyrights. Therefore, there is no genuine issue of material fact that [Bill has adopted a policy that terminates repeat infringers in appropriate circumstances. ii. Reasonable Policy Implementation Perfect 10 contends that IBill has not reasonably implemented its policy. [Bill replies that its DMCA immunity cannot be defeated by individual instances of non- enforcement because Congress requires reasonable implementation of the policy rather than perfect implementation. IBill also argues that it had no legal obligation under § 512(i) unless the notices of infringement were substantially DMCA compliant. IBill is correct that Congress requires reasonable implementation of a repeat infringer policy rather than perfect implementation. See 17 U.S.C. § 512(1)(1)(A). During oral argument, Perfect 10 argued that there is a genuine issue of material fact that IBill does not reasonably implement its repeat infringer policy because IBill has failed to produce its DMCA-notice log. However, the DMCA does not require the internet service provider to keep a log of its notifications. IBill has submitted ~ 52a Appendix B the actual DMCA-notifications it has received which are sufficient to demonstrate that [Bill tracks its notifications. II DeVito Decl., Exhs. P-T. Perfect 10 has submitted notifications that Perfect 10 or its counsel sent to IBill of infringements of Perfect 10's copyrights. II Zadeh Decl., J 29, Exhs. 19-33. Exhibit 19 is an email dated August 24, 2001, sent from Perfect 10’s counsel to IBill, which identifies 12 websites that are IBill clients which Perfect 10 states have infringements of Perfect 10’s and third-party copyrights. II] Zadeh Decl., Exh. 19 at 204. The email only identifies the websites that contain the allegedly infringing material, it does not identify the URLs of the images nor does it identify which of Perfect 10’s images are being infringed. Under § 512(c)(3)(A)(il) and (iii), DMCA-compliant notification must identify the copyrighted work claimed to have been infringed and the material that is claimed to be infringing with “information reasonably sufficient to permit the service provider to locate the material.” This notification does not fulfill either of those requirements because it docs not identify Perfect 10’s images or give IBill sufficient information to locate the infringing inaierial. These websites may contain more than one hundred images at different URLs; it is Perfect 10°s responsibility, under the DMCA, to provide [Bill with enough information to allow IBill to locate the infringing material. The Court finds that the August 21, 2001 email does not substantially comply with the requirements of the DMCA and therefore, does not constitute proper notification under § 512(c)(3)(A). The next notification is an email from Norman Zadeh, the President of Perfect 10, dated August 28, 2001 which 53a Appendix B identifies a Perfect 10 copyrighted image that appeared on celebclub.com on August 19, 2001 by its URL, celebclub.com/parto/New/080301/Kovari-Kristina/nif. gif. II Zadeh Decl., Exh. 21 at 209. This email identifies one image by its URL in a manner that allows IBill to locate the infringing image. Although it does not comply with any of the other requirements of § 512(c)(3)(A), it does provide IBill with sufficient information to locate the allegedly infringing material and, as such, substantially fulfills the requirements of § 512(c)(3)(A). Exhibits 20 and 22-33 all suffer from the same deficiencies as Exhibit 19. They contain emails from Norman Zadeh to IBill that make general allegations of copyright infringement and do not provide the exact location of the infringing images and do not identify the Perfect 10 images that are being infringed. If Zadeh Decl., Exh. 20, 22-33. IBill notes this problem in one of its emails to Norman Zadeh which states: “The point I ain trying to make is that without an URL (www.***.com) I cannot attempt to figure out cach URL.” II Zadeh Decl., Exh. 29 at 220. Perfect 10 also argues that “[dJespite the fact that Perfect 10 complained to IBill about the website femalecelebrities.com on at least 7 separate occasions”, a Concordance electronic search of IBILL’s document production revealed only two documents containing the term “femalecelebrities.com.” Il Zadeh Decl., | 89. However, 9. Perfect 10 has also submitted a letter to IBII that accompanied a 22,000 page document production to IBill as notification. The letter is almost identical to the letters sent to Internet Key, CCBill, and CWIHE. The letter is discussed in Sections IIL A.2.b.t1, fnfra. 54a Appendix B Perfect 10 has not identified the DMCA-compliant notification that Perfect 10 sent to IBill notifying IBill of infringements on femalecelebrities.com. Therefore, the Court finds that this evidence is not probative of IBill’s failure to reasonably implement its repeat infringer policy. Therefore, Perfect 10 has only identified a single notification, the email dated August 28, 2001, that provides IBill with sufficient notification to locate an allegedly infringing image on the website celebclub.com. On August 27, 2001, IBill sent Perfect 10 an email stating that celebclub.com’s IBill account was suspended. II DeVito Decl., Exh. T at 186. In IBill’s interrogatory responses, IBill admitted that celebclub was a client of IBill as of September 30, 2003. I] Zadeh Decl., Exh. 16 at 169. Perfect 10 has not presented the Court with any evidence to demonstrate that the infringing image remained on celebclub.com after [Bill received the August 28, 2001 notification. The Court finds that, as to Perfect 10°s copyrights, Perfect 10 has not raised a genuine issue of material fact that [Bill did not reasonably implement its repeat infringer policy or that IBill has not met the threshold requirements in §$ 512¢i)."° 10. Pertect 10 has also submitted documents referring to alleged violations of the rights of publicity of celebrities on [Bill's clients’ websites and violations of third-party copyrights. IBill is asserting the safe harbor provision under § $1 2(a) as a defense to Perfect 10's Claim | for copyright infringement. Perfect 10°s Claim | for copyright infringement alleges violations of Perfect 10°s copyrights. Evidence of infringements of third-party copymghts and violations (Cont'd) 55a Appendix B b. Safe Harbor Under § 512(a) IBill argues that it falls within the safe harbor in § 512(a) which provides: a) Transitory digital network communications. A service provider shall not be liable for monetary relief, or, except as provided in subsection (j), for injunctive or other equitable relief, for infringement of copyright by reason of the provider’s transmitting, routing, or providing connections for, material through a system or network controlled or operated by or for the service provider, or by reason of the intermediate and transient storage of that material in the course of such transmitting, routing, or providing connections, if- (Cont'd) of the right of publicity are not relevant to Perfect 10°s claim for copyright infringement. During oral argument, Perfect 10 argued that notices of third- party copyrights should be considered by the Court in determining whether [Bill reasonably implements its termination policy. To support its argument, Perfect 10 relies on Ellison v. Robertson, 357 F.3d 1072, 1080 (9th Cir. 2004), which held that AOL had not reasonably implemented its termination policy because the email address of AOL's copyright agent was inactive and therefore, notifications of copyright infringement went unheeded. Ellison did not hold that notifications of third-party infringements should be considered in determining whether AOL had reasonably implemented its termination policy. Therefore, Perfect 10's reliance on Ellison is misplaced. 56a Appendix B (1) the transmission of the material was initiated by or at the direction of a person other than the service provider; (2) the transmission, routing, provision of connections, or storage is carried out through an automatic technical process without selection of the material by the service provider; (3) the service provider does not select the recipients of the material except as an automatic response to the request of another person; (4) no copy of the material made by the service provider in the course of such intermediate or transient storage is maintained on the system or network in a manner ordinarily accessible to anyone other than anticipated recipients, and no such copy is maintained on the system or network in a manner ordinarily accessible to such anticipated recipients for a longer period than is reasonably necessary for the transmission, routing, or provision of connections; and (5) the material is transmitted through the system or network without modification of its content. 17 U.S.C. § 512(a). Perfect 10 argues that IBill does not fall within the safe harbor provided in § 512(a) because it does not transmit the infringing material at issue in this case. Perfect 10 argues S7a Appendix B that § 512(a) only provides protection for internet service providers that transmit the allegedly infringing material, not other material, such as credit card information. Perfect 10 relies on Jn re Aimster Copyright Litigation, 252 F.Supp.2d 634, 659-660 (N.D.II!.2002), to support its argument. Perfect 10 relies on the section of § 512(a) that refers to the transmission of the material; it has failed, however, to address the section of § 512(a) which refers to the provision of a connection to the material. The section provides that “an internet service provider shall not be liable ... for infringement of copyright by reason of the provider’s ... providing connections for material through a system or network controlled or operated by or for the service provider, or...” § 512(a). IBill provides a connection to the material on its clients’ websites through a system which it operates in order to provide its clients with billing services. Perfect 10’s reliance on /n re Aimster Litigation is misplaced because that case dealt with the transmission of material, not the provision of a connection to the material. See In re Aimster Litigation, 252 F.Supp.2d at 659-660. The Court finds that there is no genuine issue of material fact that IBill has met the requirements of § 512(i) and § 512(a). Therefore, the Court grants IBill’s motion for summary judgment and finds that IBill is entitled to protection under the safe harbor provided in § 512(a). 58a Appendix B 2. Internet Key’s Motion for Summary Judgment on Perfect 10’s Copyright Claim Internet Key contends that it is entitled to summary judgment on Perfect 10’s Claim | for copyright infringement because the claim falls within the safe harbor provided by the DMCA under § 512(d). Perfect 10 counters that Internet Key does not fall within the safe harbors provided by the DMCA because Internet Key has not adopted and implemented a reasonable repeat infringer policy. As a preliminary matter, the Court notes that Perfect 10 has submitted evidence of infringements on Internet Key’s Affiliate Websites that were displayed on the Internet prior to August 21, 2002 when Internet Key implemented its DMCA policy. See, e.g., | Zadeh Decl., J 43, Exh. 33. Internet Key has not submitted a DMCA policy that was provided to its clients prior to August 2002 as required under § 512(i). Therefore, Internet Key has not met the threshold requirements of § 512(1) for the period before August 2002 and Perfect 10 may maintain its claim for copyright infringement that occurred prior to August 21, 2002. a. Direct Infringement Perfect 10 argues that Internet Key is not entitled to protection under the DMCA because it is a direct copyright infringer and therefore, not merely an internet service provider. Perfect 10°s basis for this argument ts that since some of the employees of WCD Enterprises, which is also owned by Freeman, own some of the Affiliate Websites, Internet Key is liable for the infringements on those websites. 59a Appendix B Perfect 10 relies on H.A.S. Loan Serv., Inc. v. McColgan, 21 Cal.2d 518, 523, 133 P.2d 391 (1943), to support its argument that a corporate entity cannot avoid liability when it splits its business functions with another related corporation and that Internet Key should be considered the alter ego of WCD Enterprises. An alter ego theory of liability would require Perfect 10 to demonstrate, as its prima facie case (1) that there is such unity of interest and ownership that the separate personalities of [two entities] no longer exist and (2) that failure to disregard [their separate identities] would result in fraud or injustice.” American Tel. & Telegraph Co. v. Compagnie Bruxelles Lambert, 94 F.3d 586, 591 (9th Cir. 1996). The fact that some of the Affiliate Websites are owned by the employees of a separate company which is owned by the President of Internet Key does not raise a genuine issue of material fact that there is such unity of interest and ownership that the separate personalities of Internet Key and WCD Enterprises no longer exist. Furthermore, Perfect 10 has not presented evidence that WCD Enterprises owns the Affiliate Websites, but that certain employees of WCD Enterprises own the Affiliate Websites. Even if Perfect 10 had raised a genuine issue of material fact that WCD Enterprises was the alter ego of Internet Key, Perfect 10 has not provided evidence that there is a unity of interest between WCD Enterprises’ employees and the company WCD Enterprises. Therefore, the Court finds this argument without merit. Perfect 10 also notes that sometimes, when an Affiliated Website is accessed through Sex Key, the words “sexkey.com” appear in the URL. I Zadeh Decl., 4 65, Exh. 51. However, Perfect 10 has not provided the Court with any precedent 60a Appendix B that this fact alone imparts direct infringer liability onto Internet Key without demonstrating that Internet Key or its employees actually engaged in the infringing conduct. Infringement occurs when a defendant violates one of the exclusive rights of the copyright holder. 17 U.S.C. § 501(a). A plaintiff can establish direct infringement by demonstrating that a defendant used the copies in any of the ways described under 17 U.S.C. § 106, which include: (1) reproduction of the copyrighted work, (2) preparation of derivative works based upon the copyrighted work, (3) distribution of copies of the copyrighted work to the public by sale or other transfer of ownership, or (4) display of the copyrighted work publicly. 17 U.S.C. § 106. In order to prevail, defendants must “actively engage in” and “directly cause” one of the activities recognized in the Copyright Act. See Perfect 10 v. Cybernet, 213 F.Supp.2d 1146, 1168 (C.D.Cal.2002) ( citing Religious Tech. Ctr. v. Netcom On-Line Communication Servs., Inc., 907 F.Supp. 1361 (N.D.Cal. 1995); Sega Enters., Ltd. v. MAPHIA, 948 F.Supp. 923, 931 (N.D.Cal. 1996); Playboy Enters., Inc. v. Russ Hardenburgh, Inc., 982 F.Supp. 503 (N.D.Ohio)). Without evidence that Internet Key actively engaged in or directly caused the alleged infringements, this argument is equally unavailing.'' 11. Perfect 10 also argues that Internet Key's website, sexkey.com, contains “infringements of celebrities.” | Zadeh Decl., q 13, Exh. 4. However, the printouts of sexkey.com do not contain a singie image of a celebrity but mercly list their names. /d. The Court fails to see how a list of names can constitute a copyright violation pursuant to 17 U.S.C. § 501(a). Therefore, the Court finds this argument without merit. 6la Appendix B b. Threshold Requirements Under § 512(i) Perfect 10 contends that Internet Key does not satisfy the threshold requirements under § 512(i). To reiterate, § 512(i) requires service providers to: (1) adopt a policy that provides for the termination of service access for repeat copyright infringers in appropriate circumstances; (2) implement that policy in a reasonable manner; and (3) inform their clients of the policy. See Ellison v. Robertson, 357 F.3d 1072, 1080 (9th Cir. 2004). Perfect 10 does not dispute that Internet Key informs the webmasters of its Affiliate Websites (“Affiliate Webmasters”) of its policy. Therefore, the two remaining issues before the Court are whether Internet Key has adopted a policy that provides for the termination of repeat infringers in appropriate circumstances and whether Internet Key implements that policy in a reasonable manner. i. Policy for Termination of Repeat Infringers Internet Key has submitted its copyright infringement policv. Dykeman Decl., 4 14, Exh. A. Perfect !0 argues that the policy fails on its face because “it is entirely possible for a website owned by a given webmaster to receive copyright infringement complaints week after week and nonetheless to remain part of SexKey, provided that Internet Key does not receive complaints about ... three different websites owned by the same webmaster.” I] Opp. at 10:17-21. Perfect 62a Appendix B 10 bases its argument on the section of Internet Key’s policy which refers to webmasters, which states: Banned Webmaster If a webmaster, identified by either the webmaster’s name, vendor ID or common* 1094 ownership entity, has had three (3) websites which have been denied participation in the SexKey program in accordance with this policy, that webmaster will be denied participation in its program of any webmaster or website in its discretion. Il Dykeman Decl., Exh. A at 11. However, the policy also states that for websites, if Internet Key receives DMCA- compliant notification, Internet Key will: * Act expeditiously to remove links to, or disable access, to the allegedly infringing material ¢ Take reasonable steps to promptly notify the accused subscriber that the Company has removed or disabled access to the allegedly infringing material. ¢ Forward a copy of the written notification to the accused subscriber, and inform the accused subscriber of counter notification procedures. 63a Appendix B Repeat Offenders The participation of any website deemed to be a repeat offender will be terminated. Banned Websites Pending receipt of a Counter Notification, © participation of the website subject to a Notification will be suspended. A website will be permanently prohibited from participating in the SexKey program upon receipt by the Company of a second Notification. Id. The policy provides that Internet Key will disable access to an Affiliate Website after it receives a single notification of an infringement. it also provides that it will permanently ban a webmaster from Internet Key after it has received three notifications regarding websites of any particular webmaster. Therefore, Perfect 10’s characterization of Internet Key’s policy is incorrect. Perfect 10 also argues that Internet Key has not adopted a reasonable termination policy because there is a discrepancy in the evidence regarding the identity of Internet Key’s copyright agent. Internet Key's termination policy, which is located on its website, sexkey.com, states that Lawrence Walters is Internet Key's copyright agent. | Dykeman Decl., Exh. A at 8-9. During his deposition, Freeman stated that Internet Key's copyright agent is the company CSC in Delaware. | Cooper Decl., Exh. | at 121. Perfect 10 argues that Internet Key changed its copyright agent and did not 64a Appendix B inform its subscribers of the change. However, Perfect 10 has not submitted any evidence that the copyright agent has changed or that notifications sent to Walters were not responded to by Internet Key. Internet Key may have more than one copyright agent or the company CSC may have hired Walters to be the individual copyright agent. Furthermore, every notification submitted as evidence in this case was addressed to Freeman, not Walters or CSC. Therefore, Internet Key likely has more than one individual who responds to notifications of copyright infringement. The Court finds, therefore, that Perfect 10 has failed to raise a genuine issue of material fact that Internet Key has not adopted a policy that terminates repeat infringers in appropriate circumstances."* ii. Reasonable Policy Implementation Perfect 10 contends that Internet Key received substantially-compliant DMCA notifications and that Internet Key did not disable access to the infringing websites.'* The 12. Perfect 10 may argue that the fact that it takes three notifications to terminate a webmaster is not sufficient under § 512(i). However, § 512(i) specifically states that the internet service provider must adopt a policy that terminates “repeat infringers.” In order for an infringer to be a “repeat” infringer, he or she must infringe at least twice. Therefore, the Court finds that Internet Key's policy of terminating a webmaster after 3 notifications is reasonable. 13. The Court notes that Internet Key is asserting the safe harbor provided under § 512d) which adopts the notification and take down procedures identified in § 512(c) 3A). H.R. Rep. 105-55 1(1D), WL at *57. 65a Appendix B parties dispute whether Perfect 10 provided Internet Key with DMCA-compliant notification of infringements. Since Internet Key’s DMCA policy was not adopted unti] August 21, 2002, the Court will only look at notifications that were received by Internet Key after August 21, 2002. Perfect 10 states that in its October 17, 2002 document production to Internet Key, Perfect 10 provided Internet Key with thousands of pages of printouts from SexKey affiliated websites which infringed either Perfect 10’s or celebrities’ rights. | Zadeh Decl., J 24, Exh. 14 (representative examples of the print-outs). Some of the print-outs contain the names of Perfect 10 models in the URLs. Jd. On March 13, 2002, Internet Key received a list of names of Perfect 10 models. I Freeman Decl., 35, Exh. D, at 29-34. Internet Key states that the October 17, 2002 document production contained 22, 185 pages of documents. I Reply, at 7:3-11; see also I Zadeh Decl., | 25, Exh. 15. Accompanying the production was a letter from Sean Morris of Arnold & Porter which states: With this letter | am sending you several boxes of documents that contain examples of the voluminous infringements on websites affiliated with Internet Key, Inc. (“SexKey”) and other defendants in this case. These documents should assist you in assessing the scope of the infringements at issue in the above-referenced lawsuit and the potential damages SexKey. ¢ The documents that accompany this letter represent examples of the infringements at issue 66a Appendix B in this case; these documents are not the only instances of wrongful conduct by the defendants. * The documents that accompany this letter contain examples of both (i) infringements of Perfect 10 material; and (ii) infringements of third-party copyrights and rights of publicity. These documents were collected from so-called “celebrity” sites, which are easily locatable and are comprised of images that clearly infringe the copyrights and publicity rights of Perfect 10 and others. ¢ The infringements of Perfect 10 material are readily identifiable, especially in connection with the information contained in the complaint, and all come from celebrity sites. ¢ To further aid you in your assessment of the potential damages your company faces in this case, we have often included a full-sized printout of the image that constitutes infringement of Perfect 10’s material. . . | Zadeh Decl., Exh. 15. Perfect 10 has also submitted evidence that despite its notification of these infringements, the websites that contained the images were still active in October 2003. I Zadeh Decl., ¥ 46, Exh. 35.'* For example, 14. Internet Key objects to portions of Exhibit 35 of Zadeh’s declaration because some of the pages were not produced until after January 16, 2004, the deadline for the completion of Phase I discovery in this matter. See Il Kearney Decl., 79 11-12. This objection is overruled. 67a Appendix B in October 2002, Perfect 10 produced an image of Perfect 10 model Genevieve Maylam printed from the website cpics.adultmasters.net. I Zadeh Decl., | 14, Exh. 14, at 40. In October 2003, the same image was still available on the same website. I Zadeh Decl., | 46, Exh. 35, at 1041. The issue before the Court, therefore, is whether the notice provided by Perfect 10 is substantially DMCA- compliant. If the notice is substantially DMCA-compliant, then Perfect 10 has raised a genuine issue of material fact that Internet Key has not reasonably implemented its termination policy. First, Internet Key objects to this evidence because it argues that post-litigation notices cannot be considered for purposes of the DMCA. To support its argument, Internet Key relies on Hendrickson v. Ebay, Inc., 165 F.Supp.2d 1082, 1092 n. 12(C.D.Cal.2001). However, in that case, the Court found that a discovery response by the plaintiff in that case was not DMCA-compliant because it was not under oath, did not attest to a good faith belief of the alleged infringements, and did not attest to the accuracy of the allegations. /d. The Court did not state that the discovery response was insufficient because it was provided after the complaint was filed. /d. Therefore, Internet Key’s reading of the case is incorrect. Under § $12(c)(3)(A)(it), DMCA-compliant notification requires that the accusing party identify the copyrighted work claimed to have been infringed, or, if multiple copyrighted works at a single online site are covered by a single notification, provide a representative list of such works at 68a Appendix B that site. The notification requirements also require that the notification contain a statement that the information in the notification is accurate, under penalty of perjury, that the complaining party is authorized to act on behalf of the owner of an exclusive right that is allegedly infringed. § 512(c)(3)(A)(vi). Perfect 10’s letter states that the document production contains infringements by Internet Key and the other defendants in this case of Perfect 10’s copyrights and the copyrights of third parties. However, the letter accompanying the document production does not identify wiich documents were found on Internet Key’s Affiliate Websites. The letter also does not contain a statement that the information in the notification is accurate. The letter also does not state that the author has a good faith belief that the information in the letter is accurate nor is there a declaration under penalty of perjury. The letter does state that the enlarged images are Perfect 10’s images and include the specific URLs of the images. Therefore the letter identifies which images are infringements of Perfect 10°s copyrights; however, the letter does not identify Perfect 10’s copyrights themselves, only the infringing images.'* Under § 512(c)(3)(A)(ii) & (iii), the notification is required to identify both the.copyrighted image and the infringing image. The purpose behind the notice requirement under the DMCA is to provide the internet service provider with adequate information to find and examine the allegedly infringing material expeditiously. Hendrickson vy. Amazon.Com, Inc., 298 F.Supp.2d 914, 917 (C.D.Cal.2003). Congress’ intent was that both the copyright owner and the [internet service provider] cooperate with each 1S. The Court also notes that many Perfect 10 models have appeared in a variety of non-Perfect 10 venues such as Playboy, Penthouse, and other websites. IHIf Spillane Reply Decl.. Exh. | at 4. 694 Appendix B other to detect and deal with copyright infringement that takes place on the Internet. /d. at 916-17. The Court finds that Perfect 10°s blanket statement that infringements of Perfect 10’s copyrights are contained within 22,000 pages of documents without identification of Perfect 10’s copyrights, without an identification of which documents were printed off of Internet Key’s Affiliate Websites, and without a statement that the notification is accurate does not constitute notice that is substantially compliant with the requirements of § 512(c)(3)(A). Perfect 10 has not iden ified any other DMCA-compliant notices sent to Internet Key after Internet Key instituted its repeat infringer policy to trigger the implementation of Internet Key’s policy. In the absence of evidence of DMCA-compliant notice, the Court finds that Perfect 10 has failed to raise a genuine issue of material fact that Internet Key failed to implement its termination policy in a reasonable manner. Therefore, there is no genuine issue of material fact that Internet Key has met the threshold requirements under § 512(1). c. Safe Harbor Under $$ 512(d) and 512(a)" Section 512(d) states: (d) Information location tools. A service provider shall not be liable for monetary relief, or, except 16. Internet Key did not raise the safe harbor under § 51 2(a) in its summary judgment motion. During oral argument. the Court invited Internet Key to submit supplemental briefing regarding § S12(a). Internet Key filed a supplemental brief on May 20, 2004. Pertect 10 tiled an opposition on May 27, 2004. 70a Appendix B as provided in subsection (j), for injunctive or other equitable relief, for infringement of copyright by reason of the provider referring or linking users to an online location containing infringing material or infringing activity, by using information location tools, including a directory, index, reference, pointer, or hypertext link, if the service provider— (1) (A) does not have actual knowledge that the material or activity is infringing; (B) in the absence of such actual knowledge, is not aware of facts or circumstances from which infringing activity is apparent; or (C) upon obtaining such knowledge or awareness, acts expeditiously to remove, or disable access to, the material; (2) does not receive a financial benefit directly attributable to the infringing activity, in a case in which the service provider has the right and ability to control such activity; and (3) upon notification of claimed infringement as described in subsection (c)(3), responds expeditiously to remove, or disable access to, the material that is claimed to be infringing or to be the subject of infringing activity, except that, for purposes of this paragraph, the information described in subsection (c)(3)(A)(ili) shall be Tla Appendix B identification of the reference or link, to material or activity claimed to be infringing, that is to be removed or access to which is to be disabled, and information reasonably sufficient to permit the service provider to locate that reference or link. 17 U.S.C. § 512(d). Perfect 10 contends that Internet Key does not fall within the safe harbor provided by § 512(d) because Internet Key (1) does not use an information location tool, (2) has actual knowledge of infringements, (2) is aware of facts or circumstances from which infringing activity is apparent. Perfect 10 argues that Internet Key does not use an information location tool as defined in § 512(d) because Internet Key is not like Yahoo! or Google which provide links to millions of websites with whom it has no relationship. Perfect 10 reasons that because Internet Key merely links to a relatively small universe of websites with whom it has in place contractual relationships and established review procedures, it is not entitled to protection under § 512(d). Section 512(d) does not state that the safe harbor is limited to internet service providers that provide links to millions of websites. Nor does § 512(d) state that the use of an information location tool is limited to internet service providers that do not have contractual relationships with their affiliate websites. Therefore, these arguments are without merit. Section 512(d) refers to service providers who refer or link users to an online location containing infringing material 72a Appendix B or infringing activity, by using information location tools, including a directory, index, reference, pointer, or hypertext link. § 512(d). Internet Key’s sexkey.com website provides that function and is therefore covered by § 512(d). Pursuant to § 512(d), the internet service provider must also (1) not be aware of facts or circumstances from which infringing activity is apparent and (2) not receive a financial benefit directly attributable to the infringing activity, in a case in which the service provider has the right and ability to control such activity. Perfect 10 argues that Internet Key fails both of these requirements. Perfect 10 argues that Internet Key should have known there were copyright infringements on its clients’ websites because of the disclaimers on some of those websites. The disclaimers gencrally claim that the copyrighted images are in the public domain or that the webmaster is posting the images for newsworthy purposes. I Zadeh Decl., Exh. 22. These disclaimers are not sufficient to raise a red flag of copyright infringement. Therefore, Perfect 10 has not demonstrated that Internet Key was aware of facts or circumstances from which infringing was apparent. The second requirement is that the internet service provider not receive a direct financial benefit directly attributable to the infringing activity when it has the right and ability to control such activity. A right and ability to control infringing activity, “as the concept is used in the DMCA, cannot simply mean the ability of a service provider to remove or block access to materials posted on its website or stored in its system.” Costar Group, Inc. v. Loopnet, Inc., 164 F.Supp.2d 688, 704 (D.Md.2001). Internet Key's right 73a Appendix B and ability to control infringing activity is limited to disconnecting the webmasters’ access to Internet Key’s service. That type of control is not sufficient, under the DMCA, to demonstrate a “right and ability to control” the infringing activity. As recognized in Perfect 10 v. Cybernet Ventures, Inc., 213 F.Supp.2d 1146, 1181 (C.D.Cal.2002), “closing the safe harbor based on the mere ability to exclude users from the system is inconsistent with the statutory scheme.” /d. Since Internet Key does not have a right and ability to control the infringing activity, the Court need not address whether Internet Key receives a direct financial benefit from the infringing conduct. Additionally, Internet Key serves another function. Namely, when a user goes to one of Internet Key’s Affiliate Websites, the user is directed to the Internet Key sign-up page for age verification purposes. I Freeman Decl., Tf 5-8. This function falls outside of the parameters of § 512(d) because Internet Key is not referring users to other websites through a directory, index, reference, pointer, or hypertext link. However, this function falls within the purview of § 512(a) which provides: a) Transitory digital network communications. A service provider shall not be liable for monetary relief, or, except as provided in subsection (j), for injunctive or other equitable relief, for infringement of copyright by reason of the provider's transmitting, routing, or providing connections for, material through a *1099 system or network controlled or operated by or for the service provider, or by reason of the intermediate 74a Appendix B and transient storage of that material in the course of such transmitting, routing, or providing connections, if- (1) the transmission of the material was initiated by or at the direction of a person other than the service provider; (2) the transmission, routing, provision of connections, or storage is carried out through an automatic technical process without selection of the material by the service provider; (3) the service provider does not select the recipients of the material except as an automatic response to the request of another person; (4) no copy of the material made by the servic provider in the course of such intermediate or transient storage is maintained on the system or network in a manner ordinarily accessible to anyone other than anticipated recipients, and no such copy is maintained on the system or network in a manner ordinarily accessible to such anticipated recipients for a longer period than is reasonably necessary for the transmission, routing, or provision of connections; and (5) the material is transmitted through the system or network without modification of its content. 75a Appendix B 17 U.S.C. § 512(a). The section provides that “an internet service provider shail not be liable .. . for infringement of copyright by reason of the provider’s ... providing connections for material through a system or network controlled or operated by or for the service provider, or...” § 512(a). Internet Key provides a connection to the material on its clients’ websites through a system which it operates in order to provide its clients with adult verification services. Therefore, Internet Key’s services fall within the purview of both §§ 512(a) and 512(d). The Court finds that there is no genuine issue of material fact that Internet Key is entitled to the safe harbors pursuant to §§ 512(a) and 512(d). Based on the foregoing, Internet Key’s motion for summary judgment for infringements after August 21, 2002 based on the safe harbors under § 512(d) and § 512(a) is granted. However, Internet Key’s motion for summary judgment on Perfect 10’s copyright infringement claim for infringements before August 21, 2002 is dented. 3. CWIE’'s and CCBill’s Motions for Summary Judgment on Perfect 10's Copyright Claim Since the parties address many of the issues regarding CWIE and CCBill together, the Court will address these Defendants together for issues where the evidence overlaps. CWIE and CCBill assert that they are entitled to summary judgment on Perfect 10°s Claim | for copyright infringement because they fall within the safe harbors provided by the DMCA under § 512. 76a Appendix B a. Threshold Requirements Under § 512(i) Perfect 10 argues that CWIE and CCBill do not reasonably implement their repeat infringer policies under § 512(i).'"’ Perfect 10 cites to CWIE and CCBill’s DMCA notice spreadsheet and argues that many of the webmaster names are not included in the spreadsheet. III Fisher Decl., Exh. C. Perfect 10 contends that CWIE and CCBill do not track the actual webmasters of the websites for which they receive notifications. The Court has reviewed the spreadsheet and finds that a few of the webmaster names are missing from notifications that were either resolved by the copyright owner and the webmaster or were not DMCA-compliant. The Court finds that the fact that a few of the webmaster names are missing from the spreadsheet in instances where the notice was deficient or the issue was resolved is not sufficient to raise a genuine issue of material fact that CWIE and CCBill do not reasonably implement their repeat infringer policies. Perfect 10 has submitted notifications of infringement of Perfect 10’s copyrights that it sent to CCBill and CWIE which it claims are DMCA-compliant. The first is a letter from Perfect 10°s counsel to Fisher dated August 10, 2001. Il! Zadeh Decl., Exh. 14. The letter identifies several websites which Perfect !0 claims contain infringements of Perfect 10’s 17. Perfect 10 does not assert other violations of § 512(i) against these Defendants. CWIE and CCBill adopted their policies in 1999. Since Perfect 10 does not allege any infringements that pre-date 1999, the Court finds that CWIE’s and CCBill’s repeat intringer policies were in place during the entire period of alleged infringements. 77a Appendix B copyrights. Jd. at 144. The letter only identifies the websites that contain the allegedly infringing material, it does not identify the URLs of the images nor does it identify which of Perfect 10’s images are being infringed. Under § 512(c)(3)(A)(ii) and (111), DMCA-compliant notification must identify the copyrighted work claimed to have been infringed and the material that is claimed to be infringing with “information reasonably sufficient to permit the service provider to locate the material.” This notification does not fulfill either of those requirements because it does not identify Perfect 10’s images or give CCBill and CWIE sufficient information to locate the infringing material. These websites may contain more than one hundred images at different URLs; it is Perfect 10’s responsibility, under the DMCA, to provide these Defendants with enough information to allow them to locate the infringing material. The Court finds that the August 10, 2001 letter does not substantially comply with the requirements of the DMCA and therefore, does not constitute proper notification under § 512(c)(3)(A)."* The next notification is an email Norman Zadch sent to Fisher on February 6, 2002 which identifies websites which contain images of celebrities but does not identify websites which contain Perfect 10’s copyrighted images. III Zadeh Decl., Exh. 17. Therefore, this email does not comply. The next notification is a letter from Perfect 10°s counsel dated March 12, 2002 which suffers from the same deficiency as Exhibit 14 above. II Zadeh Decl., Exh. 18. It does not 18. Perfect 10 also cites to Exhibit 16 of the Zadeh Declaration but it has failed to include it in the declaration. 78a Appendix B identify the allegedly infringing material with enough specificity to allow CCBill and CWIE to locate the information. Exhibit 20 (email dated March 28, 2002) also suffers from the same lack of specificity. Perfect 10 also identifies Exhibit I to the Complaint as notification of violations of Perfect 10’s copyrights. Exhibit I to the Complaint lists websites that Perfect 10 contends contain Perfect 10 infringements. See Compl., Exh. I. The Court finds that Exhibit I is not DMCA-compliant because it does not give the Defendants sufficient notification to allow them to locate the allegedly infringing material.'? Perfect 10 has also submitted its RICO Case Statement which Perfect iO produced to Defendants on December 19, 2002. HII] Zadeh Decl., Exh. 26 at 317-321. The RICO Case Statement does not identify the URLs of the allegedly infringing material or identify Perfect 10’s copyrighted images. /d. Therefore, this notification does not substantially comply with the requirements of § 512(c)(3)(A). Perfect 10 also identifies a July 14, 2003 email sent to Fisher which had attached to it an Excel spreadsheet which identifies websites and the names of Perfect 10 models who appear on those websites. Ill Zadeh Decl., Exh. 29. Perfect 10 argues that this spreadsheet contains the URLs of the infringing images, however, the Court is unable to locate a single URL that is the URL for the actual infringing image. 19. Perfect 10 has also submitted a letter dated October 16, 2002 that ts nearly identical to the letter sent to Internet Key that accompanied the same 22,000 page document production to all of the Defendants. II] Zadeh Deci., Exh. 25. See Section IV.2.b.11, supra, for a discussion of this letter. 79a Appendix B Id. Most of the URLs provided refer to the “members only” area of the website, not the URL of the specific image within the “members only” area of the website. /d. Again, this is not the type of notification contemplated by § 512(c)(3)(A).” Perfect 10 has also submitted several emails from Perfect 10 to CWIE regarding password hacking websites that provide passwords to Perfect 10°s website, perfectl0.com, hosted by CWIE. III Zadeh Decl., Exhs. 72, 75, 76, 77 & 78. Password hacking websites are free websites which post passwords to subscription websites. Perfect 10 argues that it provided DMCA-compliant notification regarding these websites and CWIE did not discontinue its hosting of these websites. However, Perfect 10 has not submitted any evidence that the use of the passwords on these websites actually resulted in the infringement of Perfect 10’s copyrights. Perfect 10 has submitted a print-out of its server log and Zadeh’s declaration which states that there were attempted accesses from crazypasses.com on September 18, 2002. Ill Zadeh Decl., ¢ 101, Exh. 88. However, attempted access to Perfect 10’s website is not sufficient to demonstrate copyright infringement which requires that the images on 20. During his deposition, Fisher was asked whether he could act on the information that was provided in the spreadsheet and responded “yes.” III Cooper Decl., Exh. 2 at 30:16-21. Perfect 10 argues that Fisher admitted that he had received DMCA-compliant notification based on this deposition testimony. However, Fisher did not State that the notification was DMCA-compliant or that the information allowed CCBill and CWIE to expeditiously locate the infringing material. Therefore, the Court finds Perfect 10’s argument without merit. 80a Appendix B Perfect 10’s website were actually copied onto the user’s computer when the user accessed the website. See 17 U.S.C. § 106. Therefore, Perfect 10’s has not demonstrated that CWIE’s hosting of these password hacking websites resulted in copyright infringement. Perfect 10 has not provided the Court with any substantially compliant DMCA-notifications that were sent to CCBill and CWIE. Perfect 10 may not make an end-run around the requirements of the DMCA by providing the Defendants with notification that does not substantially comply with the requirements of § 512(c)(3)(A). The Court finds that Perfect 10 has not raised a genuine issue of material fact that CCBill and CWIE did not reasonably implement their repeat infringer policies.”! b. Safe Harbor Under § 512(a) and CCBill CCBill argues that it falls within the safe harbor in § 512(a) which provides: a) Transitory digital network communications. A service provider shall not be liable for monetary relief, or, except as provided in subsection (j), for injunctive or o [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386009_1385%3A2. Public record. Not legal advice.