pendency of the proceedings, with no possibility of discontinuing such status after a time
interval.^2471
Subsequent to the district court’s rulings, the parties stipulated to the dismissal of all
claims except the district court’s summary judgment in favor of LoopNet on direct infringement,
and CoStar appealed.^2472 The Fourth Circuit’s rulings with respect to the issue of direct
infringement are discussed in Section II.A.4(i) above. With respect to the safe harbors, CoStar
argued on appeal that Congress intended the DMCA safe harbors to supplant the common law
immunity of the Netcom case, and LoopNet could therefore rely solely on the safe harbors for
immunity. The Fourth Circuit rejected this argument, noting that the statute expressly states in
Section 512(l) that the failure to qualify for limitation of liability under the safe harbors does not
bear adversely upon the consideration of other defenses, including a defense that conduct simply
does not constitute a prima facie case of infringement.^2473 The court also rejected CoStar’s
argument that, because Congress codified Netcom in the DMCA, it can be only to the DMCA
that a defendant can look for enforcement of the principles Netcom embodied. “When Congress
codifies a common-law principle, the common law remains not only good law, but a valuable
touchstone for interpreting the statute, unless Congress explicitly states that it intends to supplant
the common law.”^2474 The court found it clear that Congress intended the safe harbors to be a
floor, not a ceiling, of protection, and the common law principles of Netcom are therefore still
good law.^2475
Important Principles. The decisions by the district court and by the Fourth Circuit in the
CoStar case contain a number of important principles. First, some gateway screening of posted
material by an OSP will not necessarily establish sufficient knowledge or control over allegedly
infringing works to destroy the potential availability of the Section 512(c) safe harbor. Second,
consistent with the Ninth Circuit’s ruling in the Napster I case discussed in subsection (iv)
below, the boundaries of the contributory liability doctrine and the Section 512(c) safe harbor are
not contiguous – Section 512(c) can provide a safe harbor to activity that would otherwise be
infringing under the contributory liability doctrine. The CoStar case, however, reached an
opposite conclusion from the Ninth Circuit in the Napster I case, as well as the Aimster/Madster
and the Hendrickson v. Amazon.com cases discussed in Section III.C.6(b)(1)(i).c and Section
III.C.6(b)(1)(iii).g respectively, on the issue of whether the Section 512(c) safe harbor can shield
against vicarious liability (the CoStar case concluding no, the Napster I, Aimster/Madster, and
Hendrickson v. Amazon.com cases concluding potentially yes).
Third, consistent with the Hendrickson v. eBay case, the OSP’s mere ability to terminate
infringing users or activity will not of itself be sufficient to establish “control” of the infringing
activity for purposes of adjudicating the availability of the Section 512(c) defense. Fourth, the
(^2471) Id. at 717.
(^2472) CoStar Groups, Inc. v. LoopNet, Inc., 373 F.3d 544 (4th Cir. 2004).
(^2473) Id. at 552.
(^2474) Id. at 553 (emphasis in original).
(^2475) Id. at 555.