and quoted from the Fourth Circuit’s decision in the ALS Scan case that the safe harbor
immunity is afforded “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). 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. At that point, the Act shifts responsibility to the service
provider to disable the infringing matter ...”^2316
The court then turned to the applicability of the safe harbors to each of the individual
defendants as follows:
IBill. The court first considered the adequacy of IBill’s policy to terminate repeat
infringers under Section 512(i). Under IBill’s policy, when it received a notice of infringement
that substantially complied with the DMCA requirements, it suspended payment processing
services to that client. If IBill determined that it had received previous complaints about that
client or the website, IBill terminated the account permanently. Perfect 10 argued that this
policy was inadequate because it suspended services for particular websites without terminating
the webmaster responsible for that material. The court rejected this argument, noting that the
focus of Section 512(i) is on infringing users rather than on content. The policy of disabling of
IBill clients accused of infringing third party copyrights was therefore adequate.^2317
Perfect 10 argued that IBill had not reasonably implemented its termination policy
because it had not kept a log of its notifications of infringement. The court held that the DMCA
does not require an OSP to keep a log of its notifications. Because IBill had kept the actual
DMCA notifications it had received, this was sufficient to demonstrate that it adequately tracked
its notifications.^2318 The court further held that many of the notifications Perfect 10 had sent to
IBill were inadequate to trigger a duty to act on them. Several such notices were emails from
Perfect 10’s counsel that identified several websites run by IBill’s clients that contained
allegedly infringing material, but did not identify the URLs of the infringing images nor identify
which of Perfect 10’s copyrighted images were being infringed. The court held that the failure to
identify the URLs or the copyrighted images made the notices inadequate. Another notice
identified the URL of an infringing image, although not the copyrighted work that it allegedly
infringed. The court ruled that, although the notice did not comply with all of the requirements
of Section 512(c)(3)(a), the supply of a URL was sufficiently substantial compliance to give rise
to a duty to act.^2319 Because IBill had acted on the single sufficient notice by suspending the
account of the website, the court concluded that IBill had reasonably implemented its repeat
infringer policy.^2320
(^2316) Id. at 1086 (citations omitted).
(^2317) Id. at 1088-89.
(^2318) Id. at 1089.
(^2319) Id. at 1089-90.
(^2320) Id. at 1090.