attributable to the infringing activity.’” S. Rep. 105-190, at 44. But “where the
value of the service lies in providing access to infringing material,” courts might
find such “one-time set-up and flat periodic” fees to constitute a direct financial
benefit. Id. at 44-45. Thus, the central question of the “direct financial benefit”
inquiry in this case is whether the infringing activity constitutes a draw for
subscribers, not just an added benefit.^2287The Ninth Circuit found that there was no evidence that AOL customers either subscribed
because of the available infringing material or canceled subscriptions because it was no longer
available. Accordingly, no jury could reasonably conclude that AOL received a direct financial
benefit from providing access to the infringing material, and the claim for vicarious liability
failed.^2288
The district court also ruled on an assertion by AOL of two of the DMCA safe harbors –
the Section 512(a) and the Section 512(c) safe harbors. The district court noted that as a
predicate for any of the safe harbors, AOL had to satisfy the requirement of Section 512(i) that it
have adopted and reasonably implemented, and informed its subscribers, of a policy for the
termination in appropriate circumstances of subscribers who are repeat infringers.^2289 Citing the
legislative history, the court ruled that Section 512(i) does not require OSPs to take affirmative
steps to investigate potential infringement and set up notification procedures in an attempt to
identify the responsible individuals committing infringement through the system. Rather, it was
sufficient to satisfy Section 512(i) that AOL’s terms of service, to which every AOL member had
to agree, included a notice that AOL members could not make unauthorized copies of content
protected by intellectual property rights and their accounts could be terminated for making such
unauthorized copies.^2290
The plaintiff challenged whether AOL had reasonably implemented its termination policy
by noting that no subscriber had ever been terminated from AOL as a repeat infringer and AOL
had not at the time of the infringement defined how many times a user had to be guilty of
infringement before being classified as a repeat infringer. The court rejected this challenge,
noting that Section 512(i) does not require AOL to actually terminate repeat infringers or even to
investigate infringement in order to determine if AOL users are behind it. “That is the province
of subsection (c), which provides detailed requirements related to notification of infringement
and the ISPS’ responsibility to investigate and, in some instances, delete or block access to
infringing material on their systems. Subsection (i) only requires AOL to put its users on notice
that they face a realistic threat of having their Internet access terminated if they repeatedly
(^2287) Id.
(^2288) Id.
(^2289) The court noted that such a policy must have been adopted, reasonably implemented and noticed to subscribers
at the time the allegedly infringing activity occurred. “Doing so after the infringing activity has already
occurred is insufficient if the ISP seeks a limitation of liability in connection with that infringing activity.”
Ellison v. Robertson, 189 F. Supp. 2d 1059, 1064 (C.D. Cal. 2002).
(^2290) Id. at 1064-65.