Oh Yes They Did! – Ninth Circuit Holds that Use of Moderators May Impact DMCA Safe Harbor Shield

April 20, 2017

In Mavrix Photographs, LLC v. LiveJournal, Inc., No. 14-56596 (9th Cir. 2017) the Ninth Circuit held that the use of moderators by social media website LiveJournal created a question of fact as to whether the Digital Millennium Copyright Act's (DMCA) safe harbor provision shields LiveJournal from copyright infringement.

LiveJournal hosts online user-generated communities where users not only create forums, but also generate their own rules for submitting and commenting on forum posts. LiveJournal has three levels of moderators, who monitor posts to assure compliance with forum rules.  LiveJournal follows the formal notice and takedown procedures of the DMCA when responding to allegations of copyright infringement. 

One of LiveJournal's most popular forums is Oh No They Didn’t (ONTD), a celebrity gossip forum and a subject of the litigation. In 2014, Mavrix, a photo-journalism company specializing in celebrity beach photos, filed a copyright infringement lawsuit against LiveJournal concerning twenty of its copyrighted photos posted on the ONTD forum.  Mavrix did not send DMCA takedown notices prior to filing its complaint.

While the district court found that LiveJournal should be shielded from copyright infringement liability by the DMCA’s safe harbor for “information residing on systems or networks at the direction of users,” the Ninth Circuit reversed that finding and sent the case back to the district court so that issues of fact could be decided by a jury.

The Ninth Circuit confirmed the elements of the DMCA’s safe harbor. To be shielded from copyright infringement liability, an internet service provider, such as LiveJournal, must show that: 1) infringing material was posted at the direction of the user; 2) the provider lacked actual or red flag knowledge of the infringing material; and 3) the provider did not financially benefit from infringements that it had the right and ability to control.

The appellate court applied common law agency principles to determine whether the infringing material was posted by LiveJournal through moderators acting as LiveJournal’s agents (as opposed to having been posted at the direction of the user). The Ninth Circuit found evidence of both actual and apparent authority sufficient to create a disputed issue of fact.  For example, LiveJournal gives moderators express directions about screening functions (including criteria for accepting or rejecting posts), relies on moderators as an integral part of its business model, and provides three different levels of authority (i.e., moderators review posts to ensure they contain celebrity gossip, and not pornography or harassment; maintainers delete posts and can remove moderators; and owners can remove maintainers).  LiveJournal also hired a paid moderator to oversee volunteer moderators, and further gave moderators express directions regarding which user-generated posts should be accepted or rejected.  The appellate court explained that, if the moderators did more than carry out activities “narrowly directed” towards enhancing the accessibility of the posts on the ONTD forum and are found to be LiveJournal’s agents, then material posted by moderators would not be “at the direction of the user” as required for the DMCA’s safe harbor.

While the Ninth Circuit based its decision on the factual dispute regarding the relationship between LiveJournal and its moderators, it also discussed other elements of the DMCA safe harbor. The Court explained that, the issue of whether a service provider had actual knowledge of infringement should not be limited to only considering whether the copyright holder notified the internet service provider of the infringement, but should also include any other evidence of the service provider’s subjective knowledge of the infringing nature of the posts.  Notably, the Ninth Circuit also found that Mavrix should have the opportunity to depose LiveJournal’s moderators to determine their subjective knowledge. 

The “right and ability to control” alleged infringement involves “something more than the ability to remove or block access to materials posted on a service provider's website.” In Marvix, the Ninth Circuit held that LiveJournal's rules instructing users on the substance and infringement of their posts, the screening for content and rejection of nearly two-thirds of submitted posts by LiveJournal moderators, LiveJournal’s maintenance of a list of sources that have complained about infringement from which users should not submit posts, and LiveJournal’s use of a tool to automatically block posts from one source, were sufficient to create a jury question on whether LiveJournal had the right and ability to control alleged infringement. 

It remains to be seen how internet service providers’ use of moderators by may be impacted by the Ninth Circuit’s opinion in Marvix.  If you would like to discuss how this decision may affect your business, please contact a member of Bryan Cave’s Intellectual Property Client Service Group.