In MidlevelU, Inc. v. ACI Information Group, Case No. 20-10856 (11th Cir. Mar. 3, 2021) (Pryor, J.), the Eleventh Circuit Court of Appeals addressed copyright infringement issues involving Internet technology. The case originated in the Southern District Court of South Florida, a court which is likely to increasingly be the venue for “high tech” intellectual property cases as a result of the influx of technology companies to South Florida. The case is of interest because: 1) it involved an implied license defense in the context of RSS feeds; and 2) the issue as to whether non-registered works could be considered in determining statutory damages for registered works.
Case Background
MidlevelU published a free blog designed to attract potential customers in the midlevel healthcare market. MidlevelU made the full text of its blog articles (instead of only headlines and article summaries) available in an RSS feed. ACI is a content aggregator that subscribed to the blog’s RSS feed. ACI copied and published more than 800 entries from MidlevelU’s blog by including those articles in a curated index of abstracts and full-text articles of academic blogs. ACI had no license agreement with MidlevelU.
After discovering the ACI’s activities, MidlevelU registered 50 of its most recent articles for copyright protection with the US Copyright Office. Registration of a copyrighted work is a prerequisite for a commencing a copyright infringement lawsuit in all federal courts since the Supreme Court’s March 2019 holding in Fourth Estate Public Benefit Corp. v. Wall-Street.com. MidlevelU also sent ACI a cease-and-desist letter demanding that its content be removed from ACI’s index. ACI removed the content from the index and coded links to index entries for MidlevelU’s articles so that they would redirect to the MidlevelU’s website. Months later, MidlevelU discovered that, although its content was no longer available on the index website, it still appeared in the website repositories of university libraries. These entries credited ACI as the content’s publisher and directed visitors to view the blog’s full-text content in the “subscribers only” section of the blog aggregator’s (ACI’s) website.
MidlevelU sued ACI in the Southern District of Florida alleging copyright infringement of the registered articles. ACI asserted an implied-license defense. Under the implied license doctrine, the alleged infringer argues that he had permission to use the copyrighted material even though there is no clear contract; a license may be implied where a judge or jury believes that the opposing parties would have made a contract if they turned their minds to it. Copyright law has adopted a similar approach in terms of licenses to use a copyright work if it seems like the parties would have created a license under the circumstances. An implied license, if it exists, must, by definition, be non-exclusive because U.S. copyright law requires exclusive licenses to be in writing.
The 11th Circuit’s Holding
The Eleventh Circuit affirmed the district court’s grant of judgment as a matter of law against an alleged copyright infringer on its implied-license defense, finding that a blog operator’s publication of entire articles through a really simple syndication (RSS) feed does not give rise to an implied license without substantial evidence showing an intent to grant a license. The decision is of interest because of its a discussion of Latimer v. Roaring Toyz, Inc. , a 2010 decision by the 11th Circuit, which set forth a test for establishing implied licenses in work-for-hire situations. Relying on Latimer, the district court had concluded that ACI did not have an implied license.
The 11th Circuit found that the district court read Latimer too broadly by applying its holding outside of the work-for-hire context, but the Court nevertheless affirmed the district court’s decision because a jury could not have reasonably inferred from the evidence that the MidlevelU impliedly granted a license to ACI. The Court noted that it had never held that the Latimer test was the only way to prove an implied license. An implied license may arise from circumstances outside of work-for-hire situations: “Creating material at another’s request is not the essence of a license: an owner’s grant of permission to use the material is.”
ACI’s arguments to try and establish an implied license were found to be disingenuous because only when an owner clearly manifests consent to use copyrighted material is a non-exclusive implied license created. Citing Field v. Google, Inc., a 2006 Nevada district court which involved copyright infringement allegations in the search-engine web crawler context, ACI argued that an implied license arose because the MidlevelU did not code its website to tell aggregators such as itself not to copy or display its content. In other words, ACI blamed the blogger for not proactively warning aggregators to not copy or display content.
Without deciding whether Latimer was correctly decided, the 11th Circuit rejected ACI’s theory. The Court reasoned that although the ACI relied on a “web crawler” case, it failed to produce any evidence that it actually used a web crawler to collect the blog’s content. Rather, the evidence showed that ACI collected content by grabbing it through the blog’s RSS feeds. “Implied permission to enter through a front door (web crawler) does not also imply permission to enter through a back window (RSS feed).”
Similarly, the Court found that MidlevelU’s affirmative steps to disseminate the full text of its articles through its RSS feed—rather than only summaries or headlines—did not give rise to an implied license. ACI failed to introduce evidence of, for example, an industry practice that would allow a jury to infer that disseminating content through an RSS feed without restrictions implies permission to copy and publish that content on another website.
The only evidence before the jury related to personal use of RSS-distributed content. This evidence constituted testimony that MidlevelU set up its RSS feed to make its content easier for readers to access, and testimony that RSS is used as an alternative to a web browser to read content—i.e., an RSS feed stores the articles received from a website, and a human then reads the articles through an RSS reader. The Court rather sarcastically explained that “[i]mplied permission to enter the front door to shop (read content through an RSS reader for personal purposes) does not imply permission to enter and throw a party (sell computer-generated summaries paired with [software] showing the full-text content).”
The Court also found that the district court did not err by instructing the jury that it could consider unregistered articles in its calculation of statutory damages for the registered works; the district court did not abuse its discretion by denying the aggregator’s motion for a new trial on the basis of the jury’s statutory-damages award; the district court did not err by failing to consult with the register of copyrights about the alleged fraud on the copyright office; and aggregator is not entitled to judgment as a matter of law on its fair-use defense.
Regarding the statutory damages award which totaled over $200,000, the 11th Circuit emphasized that the hundreds of unregistered blogs could be used to support a finding of willful infringement. Regarding the court’s failure to consult with the register of copyrights, whether or not a district court must consult with the Register of Copyrights on a matter involving the defendant’s allegations of fraud on the copyright office, the process generally requires the district court to grant the defendant’s motion to submit the matter to the copyright office.
Finally, ACI’s actions over the years hardly constituted fair use. The Fair Use Doctrine authorizes the copying of both published and unpublished works without obtaining permission under the following “guideline” scenarios:
- Connection with criticism or comment on the work.
- In the course of news reporting.
- For teaching purposes.
- As part of scholarship or research activity.
Defendants in Internet Copyright Infringement cases often allege Fair Use as a defense as did ACI. Each situation is evaluated on a case-by-case basis. Here, the 11th Circuit stated that “[c]opying an entire work militates against Fair Use.” Substantial copying occurred because ACI provided substantive access to its subscribers to the full text-content of the plaintiff’s blogs through iFrames. MidlevelU at 29.
Comments
This case is a well-deserved win for the blogger. The courts will continue to tackle copyright infringement against the backdrop of Internet technology which makes copyright infringement easier than ever before. It is recommended that content creators register at least some of their works within 90 days of publication so that they will be the beneficiary of certain statutory benefits including statutory damages. Here, the plaintiff chose statutory damages in lieu of having to prove actual damages (which can be extremely difficult to do) because she had met the 90 day window. Otherwise, she would have had to prove her actual damages. We presume she was also awarded attorney fees and costs at least to some extent as the statute allows if the 90 day window is met. This decision also paves the way to use unregistered works to help establish a reasonable damages for infringement of registered works especially where the infringement was willful.
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