The court then turned to a detailed analysis of whether CoStar was entitled to the benefit
of the Section 512(c) safe harbor. As a threshold matter, the court held that the definition of
“service provider” under Section 512(k)(1)(B) was broad and easily encompassed the type of
service provided by LoopNet.^2445 The court also ruled that the safe harbor could not protect
LoopNet for any alleged infringements taking place before December 8, 1999, the date that
LoopNet designated an agent to receive notifications of claimed infringement under the DMCA,
as required by Section 512(c)(2) of the DMCA.^2446 The court then turned to an analysis of
several specific issues under the safe harbor.
Storage at the Instance of the User. CoStar argued that the Section 512(c) safe harbor
should not apply at all because the allegedly infringing photographs were uploaded to the site
only after review and selection by LoopNet and so were not stored at the instance of LoopNet’s
users. The court rejected this argument, reasoning that the photographs were uploaded at the
volition of the LoopNet users and that LoopNet subjected them only to a gateway screening
process, not a selection process. The court also held that the mere ability to remove or block
access to materials could not mean that those materials were not stored at the user’s discretion.
Noting that Section 512 mandates a “take down” procedure to qualify for the Section 512(c) safe
harbor, the court held that it would be internally illogical if the statute were construed to mean
that in order to get into the safe harbor, an OSP needed to lack control to remove or block
access.^2447
Knowledge for Purposes of the Safe Harbor. Turning to the issue of knowledge, the
court noted that three types of knowledge could take a service provider outside the safe harbor:
(i) actual knowledge; (2) awareness of facts raising a “red flag” that its users are infringing; and
(iii) notification from the copyright holder in compliance with the technical notice requirements
of Section 512(c)(3). The court noted that a service provider does not automatically lose the safe
harbor upon receiving notice, but the DMCA shifts responsibility to the service provider to
disable the infringing material.^2448 Specifically, “[i]f the service provider has actual knowledge
under § 512(c)(1)(A)(i) or ‘red flag’ knowledge under § 512(c)(1)(A)(ii), the ‘take down’
provisions of § 512(c)(1)(A)(iii) must be met to stay in the safe harbor. Alternatively, if it
receives notification of claimed infringement in accordance with § 512(c)(3), the ‘take down’
provisions of § 512(c)(1)(C) must be met.”^2449
Because LoopNet had not challenged the adequacy of notification it had received from
CoStar, the court turned to the adequacy of LoopNet’s removal policy. The court noted that
LoopNet had two responsibilities after receipt of notice from the copyright holder:^2450 First,
under Section 512(c)(1)(C), it must respond “expeditiously to remove, or disable access to, the
(^2445) CoStar, 164 F. Supp. 2d at 701.
(^2446) Id. at 697 & n.4.
(^2447) Id. at 701-02.
(^2448) Id. at 702.
(^2449) Id. at 702 n. 8.
(^2450) Id. at 703.