This case affirms summary judgment in favor of copyright defendant Giganews’s Usenet service, and upholds massive attorneys’ fees against a plaintiff that shaped US Intermediary Liability law: the adult magazine Perfect 10.
The court rejects a direct copyright liability claim, holding that Usenet lacked volition - and that the volition requirement for direct infringement remains intact after the Supreme Court’s ruling in Aereo. It also rejects a contributory liability claim, on the basis that defendant did not materially contribute to infringement. The court discusses the knowledge of specific material, rather than general knowledge of infringement, as it relates to the contributory liability test. It also rejects a claim of inducement liability under the US Supreme Court’s Grokster case.
Considering a vicarious copyright liability claim, the court clarifies the “direct financial benefit” element. Where plaintiffs allege that infringing works serve as a “draw” attracting users to the service, they must show that their own works in suit -- not infringing works generally -- played this role.
Finally, in assessing the award of attorneys’ fees, the court notes that both rulings in favor of defendants and rulings in favor of plaintiffs can “further the purpose” of copyright law.