US Court of Appeals Considers Copyright Infringement by Material in a Digital Locker

In October, in the case of Cheryl Smith v Barnesandnoble.com, LLC, the Second Circuit Court of Appeals for the Southern District of New York (SDNY) was faced with a matter that nearly provided direction on copyright infringement where work is stored on cloud servers. However, the infringement issue was evaded when the Court determined that the conduct in question had been authorized.

At issue was a sample of an e-book stored on the cloud-based server of American bookseller Barnes & Noble. The sample had been provided to Barnes & Noble by a distributor who had been authorized to give samples as part of a marketing effort to promote the author’s book.

The author terminated the Agreement with the distributor in 2011, after the sample had been provided. After this event, those customers who had already placed a copy of the sample in their ‘digital locker’ remained able to access it on Barnes & Noble cloud services. The plaintiff argued that this access constituted direct and contributory copyright infringement.

Last November, the US District Court (SDNY) decided that Barnes & Noble held no liability because a digital locker system “is widely used for legitimate, unobjectionable purposes.” That decision relied strongly of the holding of the US Supreme Court in Sony Corporation of America v Universal City Studios Inc, where the Court held that Betamax did not infringe copyright because uses for the standard could be made for both legal and illegal purposes.

Smith appealed the decision of the District Court to the Second Circuit. The Court found that a determination on the basis of copyright infringement was unnecessary as the Agreement between author and distributor enabled end-users acquiring the free sample to duplicate, share and reproduce the sample for non-commercial purposes.