US Court Affirms ISP not Liable for Passive Copying

The US Court of Appeals for the Fourth Circuit has ruled that an Internet Service Provider (ISP) does not copy material in direct contravention of the US Copyright Act (the Act) when it passively stores material at the direction of its users. The plaintiffs, CoStar Group Inc and CoStar Realty Information Inc, are providers of commercial real estate information. Some of the plaintiffs' copyright protected photographs appeared on web sites affiliated with the defendant ISP, Loopnet Inc (Loopnet), which operated a web site allowing subscribers, generally real estate brokers, to post real estate listings, including photos. Loopnet's terms and conditions of use prohibited the posting of photographs "without authorization". Any subscriber posting a photograph was required to warrant that the subscriber had "all necessary rights and authorizations" from the copyright owner. When a submitted photograph was transferred to the defendant's system for review, a Loopnet employee would then briefly examine the photo to ensure that it depicted commercial real estate and that there was no obvious evidence to suggest that copyright in the photo belonged to a third party. If the photo failed to meet either criteria, it would be deleted by the examining employee. Otherwise, the photograph would be accepted and then made available for viewing. The plaintiffs argued that Loopnet was guilty of direct infringement, but were unsuccessful both at trial and on appeal. The Court found that Loopnet's conduct was not "copying" under the Act because Loopnet lacked the volitional conduct – namely, the act constituting infringement – to become a direct infringer. Passively storing material at the direction of users to make the material available to other users does not contravene the Act, ruled the Court. In addition, the Court declined to characterize the defendant's manual review of the photographs or its involvement in storing the photographs as copying. Although an ISP could become liable indirectly if its involvement was sufficient to establish contributory or vicarious infringement under the Act, the Court held that the employee's review of the photograph in this case was so cursory and transitory as to be insignificant. To view the decision (CoStar Group v Loopnet, Inc), see: http://caselaw.lp.findlaw.com/data2/circs/4th/031911p.pdf. Summary by: Colin Adams