Hosting Provider Steadfast Maintains DMCA Safe Harbor Defense For Trial

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A California District Court has denied ALS Scan's motion for summary judgment against hosting provider Steadfast. The latter is accused of contributory copyright infringement and failing to implement a repeat infringer policy as required by the DMCA. However, since both sides made valid arguments, the court will leave the ultimate decision up to the jury.

Two years ago, adult entertainment publisher ALS Scan dragged several third-party Internet services to court.

The company targeted several companies including CDN provider CloudFlare and the Chicago-based hosting company Steadfast, accusing them of copyright infringement because they offered services to pirate sites.

The case against Steadfast is getting close to trial and to start with an advantage, ALS Scan recently asked the court for partial summary judgment, determining that the hosting company contributed to copyright infringement and that it has no safe harbor protection.

ALS argued that Steadfast refused to shut down the servers of the image sharing platform Imagebam.com, which was operated by its client Flixya. ALS Scan described the site as a repeat offender, as it had been targeted with dozens of DMCA notices, and accused Steadfast of turning a blind eye to the situation.

Steadfast, for its part, fiercely denied the allegations. The hosting provider admitted that it leased servers to Flixya for ten years but said that it forwarded all notices to its client. The hosting company could not address individual infringements, other than shutting down the entire site, which would have been disproportionate in their view.

A few days ago California District Court Judge George Wu ruled on the matter, denying ALS’s motion for summary judgment.

Both sides made sensible arguments on the contributory infringement issue, but it is by no means undisputed that the hosting provider ‘contributed’ to the infringing activities. The court, therefore, left this question open for the jury to determine at trial.

“Ultimately, both sides have raised triable issues of fact with respect to material contribution. As a result, the Court would deny Plaintiff’s Motion,” Judge Wu writes.

ALS also sought summary judgment on the DMCA safe harbor protection issue, but the court denied this request as well. While it’s clear that the hosting company never terminated a customer for repeat infringements, it’s not clear whether it was ever in a situation where it needed to.

The DMCA requires Internet services to implement a meaningful repeat infringer policy, but in this case, Steadfast’s client Imagebam reportedly had a takedown policy of its own, which complicates the issue.

“While the fact Steadfast has never terminated one of its own customers for infringement is potentially damaging to its ability to fit the safe harbor, Plaintiff has not established that Steadfast faced a situation requiring it to terminate one of its users,” Judge Wu writes.

“Even in the present case it is unclear that Steadfast needed to terminate Flixya’s account given Flixya itself had a policy that was arguably successful at removing infringing images from imagebam.com.”

Judge Wu adds that safe harbor defenses are generally left to the jury, and this is what he decided as well.

As a result, ALS’s entire motion for summary judgment is denied. This is good news for Steadfast, who will have their safe harbor defense available at the upcoming trial. However, they will likely celebrate this win with caution, as the jury makes its ultimate decision.