Wolk, an independent artist of fantasy images and sports art, licenses her images through an exclusive licensing agent. Some of the images can consume as much as a year of Wolk’s professional time to create and produce in final form. The sole source of income for Wolk is the sale or licensing of her art, and Wolk runs an online store that exclusively sells her art. Photobucket is a photo-sharing ISP that operates a website located at www.photobucket.com.
Photobucket is what is known as a “user-generated content” website, which provides an online platform for users to post material that the users themselves upload. Photobucket enables users who establish an account to upload digital photographs and videos so that they may be stored and viewed on the website. Each image or video is associated with a URL. Photobucket does not charge a fee to users to use its website, and Photobucket earns the majority of its income from advertising revenue. Kodak Gallery offers its customers the ability to upload their personal digital photographs, create and store albums to share with family and friends, and to order prints of and products containing their digital photographs.
Effective January 21, 2009, Photobucket and Kodak Imaging Network entered into an agreement, which allowed Photobucket users to print images obtained from Photobucket on products available through Kodak Gallery.
Wolk asserted that Photobucket and the Kodak Defendants have transformed her images without license or approval and have transferred her images to subcontractors who have produced products using her images without license or her approval. Photobucket stated that it did not transfer images, but rather allowed users to select images which were then automatically sent to Kodak Imaging Network, and Photobucket had no knowledge of the images selected and played no role in how the selected images were handled by the Kodak Defendants.
The count alleged that the Kodak Defendants, without authorisation or license, copied, distributed, produced and sold the Plaintiff’s work, and that the products the Kodak Defendants produced are in direct competition with products produced under license using Wolk’s images by Wolk’s licensees. As such, the Kodak Gallery and the Kodak Defendants directly interfered with the commercialisation of the Plaintiff’s images, damaged the Plaintiff in the amount of $1,500,000. The proposed amended complaint also requested an award of punitive damages in the amount of $6,000,000 for the unfair competition of Kodak Gallery and the Kodak Defendants.
The evidence the Kodak Defendants have offered, which Wolk has not rebutted, is that the transfer of information about an order from the Kodak Gallery website to the fulfillment vendor was done electronically through an automated computer system and that all of the information displayed on the Kodak Gallery website, including the simulation of products containing the Photobucket images, was done electronically. There is no dispute that any reproduction, display or transmission of the Plaintiff’s images by or through the Kodak Gallery website was an automated process with no human intervention by any employee of the Kodak Defendants.
Photobucket cannot be held liable for infringing upon Wolk’s copyrighted work because Photobucket falls within the DMCA’s “safe harbor”. Photobucket has adopted and reasonably implemented a policy for the termination in appropriate circumstances of users who are repeat infringers. Photobucket has developed a policy under which copyright holders can submit a take-down notice and that this policy was made available to the public on Photobucket’s website. When Photobucket received Wolk’s take-down notices, both those that included URLs as well as those that did not, Photobucket acted to remove the infringing material. There is no evidence that Photobucket had actual or constructive knowledge of the copyright infringement Wolk alleges.
While the Plaintiff argued that the editing software “interferes with standard technical measures,” it is not Photobucket, but rather users, who would use the editing tools to attempt to circumvent copyright protection measures that were already on the site. Accordingly, the editing tools Photobucket provides do not disqualify it from “safe harbor” eligibility.
While Wolk alleged that Photobucket received a financial benefit from infringements from a profit-sharing relationship with the Kodak Defendants, there is no evidence indicating that either the Kodak Defendants or Photobucket capitalised specifically because a given image a user selected to print was infringing. The Defendants’ profits were derived from the service they provided, not a particular infringement. Furthermore, Photobucket had no knowledge of which images users could select to send to the Kodak Defendants to be printed, and, as such, Photobucket had no ability to control whether users requested that infringing material be printed. There is also no evidence that Photobucket and the Kodak Defendants acted in concert to infringe upon the Plaintiff’s rights.