In Re: Aimster Copyright Litigation

Court of Appeals for the Seventh Circuit
334 F.3d 643, 67 U.S.P.Q. 2d (BNA) 1233, 2003 U.S. App. LEXIS 13229 (2003)

ELI5:

Rule of Law:

A service provider acts as a contributory copyright infringer when it facilitates infringement and cannot demonstrate actual, substantial non-infringing uses of its service, and it cannot avoid liability by utilizing encryption to remain willfully blind to the infringement.

Facts:

John Deep created and operated 'Aimster' (later Madster), a service that piggybacked on AOL's Instant Messaging system to allow users to exchange digital files.
To use the service, users downloaded Aimster's proprietary software, which allowed them to designate 'buddies' and swap files directly with those users when online.
Aimster's system utilized encryption software to encode the file transfers between users, preventing Deep from viewing the specific content of the transfers.
The service included a tutorial that used copyrighted music as the sole example of how to use the file-sharing features.
Deep offered a paid service called 'Club Aimster' that allowed users to download the top 40 popular music hits, which were invariably copyrighted, with a single click.
The recording industry plaintiffs notified Aimster that the system was being used for widespread copyright infringement.
Aimster provided no evidence that its system was actually used for legitimate purposes, such as exchanging business data or public domain works, despite claiming such uses were possible.

Procedural Posture:

Owners of copyrighted popular music filed multiple lawsuits against John Deep and his corporations.
The lawsuits were consolidated and transferred to the United States District Court for the Northern District of Illinois.
The District Court entered a broad preliminary injunction against Aimster, effectively shutting down the service.
Deep appealed the preliminary injunction to the United States Court of Appeals for the Seventh Circuit.

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Issue:

Is a file-sharing service provider liable for contributory copyright infringement when its system facilitates the mass transfer of copyrighted works, effectively invites infringement through tutorials and paid features, and utilizes encryption to prevent the provider from gaining specific knowledge of the illicit transfers?

Opinions:

Majority - Posner

Yes, a service provider is liable for contributory infringement where it invites infringement and fails to prove its system is actually used for non-infringing purposes. The court reasoned that the 'Sony' defense—which protects sellers of products capable of substantial non-infringing uses—does not apply merely because a system is theoretically capable of legal use; the defendant must show evidence of actual non-infringing use. Furthermore, the court held that Aimster's use of encryption did not shield it from the knowledge requirement of contributory infringement because 'willful blindness is knowledge.' Aimster actively encouraged infringement through its tutorials and 'Club Aimster' features and failed to show that eliminating the infringing uses would be disproportionately costly.

Analysis:

This decision is significant because it refines the Supreme Court's 'Sony Betamax' standard for the internet age. Judge Posner clarifies that the mere technical capability of a non-infringing use is insufficient to shield a service provider from liability; there must be evidence of actual, substantial non-infringing use. Additionally, the case firmly establishes that technology providers cannot use encryption as a tool for 'willful blindness' to escape liability. It places a burden on service providers to demonstrate that they cannot prevent infringement without destroying the legitimate value of their service.

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