Respondents.
`
`No. _________
`IN THE
`Supreme Court of the United States
`_______________
`PERFECT 10, INC.,
`
`v.
`GIGANEWS, INC., et al.,
`
`_______________
`On Petition For A Writ Of Certiorari
`To The United States Court Of Appeals
`For The Ninth Circuit
`_______________
`PETITION FOR A WRIT OF CERTIORARI
`_______________
`Lawrence S. Robbins
` Counsel of Record
`Gary A. Orseck
`Ariel N. Lavinbuk
`Kathleen Shen
`ROBBINS, RUSSELL, ENGLERT,
` ORSECK, UNTEREINER &
` SAUBER LLP
`1801 K Street, N.W.,
` Suite 411-L
`Washington, D.C. 20006
`(202) 775-4500
`lrobbins@robbinsrussell.com
`
`Counsel for Petitioner
`
`
`
`
`
`Petitioner,
`
`
`
`
`
`
`
`No. _________
`IN THE
`Supreme Court of the United States
`_______________
`PERFECT 10, INC.,
`
`v.
`GIGANEWS, INC., et al.,
`
`_______________
`On Petition For A Writ Of Certiorari
`To The United States Court Of Appeals
`For The Ninth Circuit
`_______________
`PETITION FOR A WRIT OF CERTIORARI
`_______________
`Lawrence S. Robbins
` Counsel of Record
`Gary A. Orseck
`Ariel N. Lavinbuk
`Kathleen Shen
`ROBBINS, RUSSELL, ENGLERT,
` ORSECK, UNTEREINER &
` SAUBER LLP
`1801 K Street, N.W.,
` Suite 411-L
`Washington, D.C. 20006
`(202) 775-4500
`lrobbins@robbinsrussell.com
`
`Counsel for Petitioner
`
`
`
`
`
`Petitioner,
`
`
`
`
`
`
`
`
`
`QUESTIONS PRESENTED
`The Copyright Act grants copyright owners cer-
`tain exclusive rights, including the rights to repro-
`duce, distribute, and publicly display their copy-
`righted works. See 17 U.S.C. § 106. Direct copyright
`infringement occurs when a plaintiff proves owner-
`ship of the work at issue, and violation of at least one
`of the rights established by 17 U.S.C. § 106. 17
`U.S.C. § 501(a). This Court has also recognized that
`a defendant may be vicariously liable for the direct
`infringement of another if that defendant “profit[s]
`from [such] direct infringement while declining to
`exercise a right to stop or limit it.” Metro-Goldwyn-
`Mayer Studios, Inc. v. Grokster, Ltd., 545 U.S. 913,
`930 (2005).
`This case presents two questions concerning lia-
`bility under the Copyright Act:
`1. Whether the Ninth Circuit correctly held—in
`conflict with the Second, Sixth, Seventh, and
`Eighth Circuits—that a defendant “profits
`from” direct infringement for purposes of
`vicarious copyright liability only if a plaintiff
`proves that its work, as opposed to the totality
`of
`the
`infringing
`content
`offered
`by
`defendants, was the reason customers were
`drawn to the defendant’s business.
`2. Whether the Ninth Circuit correctly held—
`contrary to the decisions of this Court—that a
`defendant does not engage in direct copyright
`infringement when it displays, reproduces, or
`distributes infringing material, so long as that
`conduct
`is
`accomplished
`through
`an
`automated process.
`
`
`
`ii
`
`PARTIES TO THE PROCEEDING
`In addition to the parties named in the caption,
`the following entity was a party to the proceeding
`before the United States Court of Appeals for the
`Ninth Circuit and may therefore be considered a
`respondent under this Court’s Rule 12.6: Livewire
`Services, Inc.
`
`
`
`iii
`
`RULE 29.6 STATEMENT
`Petitioner Perfect 10, Inc., has no parent corpora-
`tion, and no publicly held company that owns 10% or
`more of its stock.
`
`
`
`iv
`
`TABLE OF CONTENTS
`
`Page
`QUESTIONS PRESENTED ........................................ i
`PARTIES TO THE PROCEEDING ............................ ii
`RULE 29.6 STATEMENT .......................................... iii
`TABLE OF AUTHORITIES ....................................... vi
`OPINIONS BELOW .................................................... 1
`JURISDICTION .......................................................... 1
`STATUTORY PROVISIONS INVOLVED ................. 1
`STATEMENT .............................................................. 2
`A. Statutory Framework ........................... 5
`B. Factual Background ............................. 5
`C. Proceedings Below ................................ 8
`REASONS FOR GRANTING THE PETITION ....... 10
`I. The Ninth Circuit’s Requirements For
`Proving
`Vicarious
`Copyright
`Infringement Conflict With Those Of
`Other Circuits And Are Wrong .................... 10
`A. The Opinion Below Creates A
`Split Between The Ninth Circuit
`And Four Other Circuits .................... 11
`B. The Ninth Circuit’s Rule Is
`Wrong .................................................. 16
`
`
`
`v
`
`TABLE OF CONTENTS—Continued
`
`Page
`
`II. The Ninth
`Cramped
`Circuit’s
`Understanding Of Direct Copyright
`Infringement Is At Odds With This
`Court’s Precedents And Is Wrong ............... 20
`A. The Ninth Circuit’s View That
`Automated Conduct Can Never
`Be Sufficiently Volitional To
`Constitute Direct Infringement
`Cannot Be Reconciled With
`Aereo or Tasini .................................... 21
`B. The Ninth Circuit’s Rule Is
`Wrong .................................................. 28
`III. Both Questions Presented Are
`Recurring And Important ............................ 33
`CONCLUSION .......................................................... 37
`APPENDIX: Opinion of the United States
`Court of Appeals for the Ninth Circuit
`(January 23, 2017) .................................................... 1a
`
`
`
`
`
`vi
`
`TABLE OF AUTHORITIES
`
`Page(s)
`
`Cases
`American Broadcasting Companies, Inc. v.
`Aereo, Inc.,
`134 S. Ct. 2498 (2014) .................................... passim
`Arista Records LLC v. Usenet.com, Inc.,
`633 F. Supp. 2d 124 (S.D.N.Y. 2009) ................ 7, 34
`Broadcast Music, Inc. v. Blumonday, Inc.,
`No. CV-N-92-676-ECR, 1994 WL 259253
`(D. Nev. May 27, 1994) .......................................... 18
`Broadcast Music, Inc. v. Meadowlake, Ltd.,
`754 F.3d 353 (6th Cir. 2014) ........................... 13, 18
`Capitol Records, LLC v. ReDigi Inc.,
`934 F. Supp. 2d 640 (S.D.N.Y. 2013) .................... 31
`Dreamland Ball Room, Inc. v. Shapiro,
`Bernstein & Co.,
`36 F.2d 354 (7th Cir. 1929) ............................. 11, 12
`Ellison v. Robertson,
`357 F.3d 1072 (9th Cir. 2004) ................................. 6
`EMI Christian Music Group, Inc. v. MP3tunes,
`LLC,
`844 F.3d 79 (2d Cir. 2016) ..................................... 14
`Fox Broadcasting Co. v. Dish Network, LLC,
`747 F.3d 1060 (9th Cir. 2014) ............................... 22
`
`
`
`vii
`
`TABLE OF AUTHORITIES—Continued
`Page(s)
`
`Gershwin Publ’g Corp. v. Columbia Artists
`Mgmt., Inc.,
`443 F.2d 1159 (2d Cir. 1971) ................................. 14
`Gordon v. Nextel Comm’cns & Mullen
`Advertising, Inc.,
`345 F.3d 922 (6th Cir. 2006) ................................. 14
`Hemi Grp., LLC v. City of New York,
`559 U.S. 1 (2010) .................................................... 33
`Herbert v. Shanley Co.,
`242 U.S. 591 (1917) .................................... 12, 13, 17
`Holmes v. Sec. Inv’r Prot. Corp.,
`503 U.S. 258 (1992) ................................................ 33
`Lexmark Int’l, Inc. v. Static Control
`Components, Inc.,
`134 S. Ct. 1377 (2014) ............................................ 33
`Mackey v. Lanier Collection Agency &
`Serv., Inc.,
`486 U.S. 825 (1988) ................................................ 29
`Metro-Goldwyn-Mayer Studios, Inc. v.
`Grokster, Ltd.,
`545 U.S. 913 (2005) ........................................ passim
`New York Times Co. v. Tasini,
`533 U.S. 483 (2001) ................................ 4, 21, 26, 27
`
`
`
`viii
`
`TABLE OF AUTHORITIES—Continued
`Page(s)
`
`Perfect 10 v. Google, Inc.,
`416 F. Supp. 2d 828 (C.D. Cal. 2006) ...................... 6
`Polygram Int’l Publ’g, Inc. v. Nevada/
`TIG, Inc.,
`855 F. Supp. 1314 (D. Mass. 1994) ....................... 12
`RCA/Ariola International, Inc. v. Thomas &
`Grayston Co.,
`845 F.2d 773 (8th Cir. 1988) ................................. 15
`Shapiro, Bernstein & Co. v. H.L. Green Co.,
`316 F.2d 304 (2d Cir. 1963) ........................... passim
`Sony Corp. of Am. v. Universal City
`Studios, Inc.,
`464 U.S. 417, 433 (1984) .................................... 5, 17
`Spokeo, Inc. v. Robins,
`136 S. Ct. 1540 (2016) ............................................ 20
`United States v. Jicarilla Apache Nation,
`564 U.S. 162 (2011) ................................................ 29
`WNET, Thirteen v. Aereo,
`712 F.3d 676 (2d Cir. 2013) ................................... 36
`
`Statutes
`17 U.S.C. § 101 .......................................................... 26
`17 U.S.C. § 106 ............................................................ 2
`17 U.S.C. § 106(1) ........................................................ 5
`
`
`
`ix
`
`TABLE OF AUTHORITIES—Continued
`Page(s)
`17 U.S.C. § 106(3) .................................................. 5, 26
`17 U.S.C. § 106(5) ........................................................ 5
`17 U.S.C. § 501(a) .................................................... 2, 5
`17 U.S.C. § 512(a) ...................................................... 28
`17 U.S.C. § 512(b) ................................................ 28, 29
`17 U.S.C. § 512(b)(2)(E) ...................................... 29, 30
`17 U.S.C. § 512(c) ...................................................... 28
`17 U.S.C. § 512(c)(1)(C) ............................................. 30
`17 U.S.C. § 512(d) ...................................................... 28
`17 U.S.C. § 512(d)(3) ................................................. 30
`17 U.S.C. § 512(i) ................................................. 29, 30
`28 U.S.C. § 1254(1) ...................................................... 1
`
`Legislative History
`H.R. Rep. 94-1476 (1976), as reprinted in
`1976 U.S.C.C.A.N. 5659 ........................................ 17
`S. Rep. 105-190 (1998) ............................................... 17
`
`Other Authorities
`Black’s Law Dictionary (9th ed. 2009)...................... 31
`
`
`
`x
`
`TABLE OF AUTHORITIES—Continued
`Page(s)
`
`DRobert C. Denicola, Volition and Copyright
`Infringement,
`37 Cardozo L. Rev. 1259 (2016) ............................. 33
`MALiye Ma, et al., The Dual Impact of Movie
`Piracy on Box-Office Revenue: Cannibal-
`ization & Promotion (Feb. 2016) ........................... 35
`Mem. in Opp’n to Giganews’s Mot. for Partial
`Summ. J., Perfect 10, Inc. v. Giganews, Inc.,
`No. 11-cv-7098
`(C.D. Cal. Oct. 6, 2014) ...................................... 8, 34
`Merriam-Webster Dictionary .................................... 31
`N1M. Nimmer & D. Nimmer, Nimmer on
`Copyright (2016) .................................................... 32
`N2M. Nimmer & D. Nimmer, Nimmer on
`Copyright (2017) .................................................... 17
`PAW. Patry, Patry on Copyright § 21:62 (2017) ........... 18
`PDavid Price, Sizing the piracy universe,
`NetNames (Sept. 2013) .......................................... 35
`
`
`
`
`
`
`
`
`PETITION FOR A WRIT OF CERTIORARI
`
`OPINIONS BELOW
`The opinion of the court of appeals (App., infra,
`1a) is reported at 847 F.3d 657.
`JURISDICTION
`The judgment of the court of appeals was entered
`on May 2, 2017. On July 14, Justice Kennedy grant-
`ed Petitioner’s application to extend the time to file
`this petition until August 30. This Court’s jurisdic-
`tion is invoked under 28 U.S.C. § 1254(1).
`STATUTORY PROVISIONS INVOLVED
`The Copyright Act provides in pertinent part
`that:
`Subject to sections 107 through 122, the owner of
`copyright under this title has the exclusive rights to
`do and to authorize any of the following:
`(1) to reproduce the copyrighted work in copies or
`phonorecords;
`(2) to prepare derivative works based upon the
`copyrighted work;
`(3) to distribute copies or phonorecords of the cop-
`yrighted work to the public by sale or other
`transfer of ownership, or by rental, lease, or
`lending;
`(4) in the case of literary, musical, dramatic, and
`choreographic works, pantomimes, and motion
`pictures and other audiovisual works, to per-
`form the copyrighted work publicly;
`
`
`
`
`
`2
`
`(5) in the case of literary, musical, dramatic, and
`choreographic works, pantomimes, and picto-
`rial, graphic, or sculptural works, including
`the individual images of a motion picture or
`other audiovisual work, to display the copy-
`righted work publicly; and
`(6) in the case of sound recordings, to perform the
`copyrighted work publicly by means of a digi-
`tal audio transmission.
`17 U.S.C. § 106.
`The Copyright Act further provides in pertinent
`part that:
`Anyone who violates any of the exclusive rights of
`the copyright owner as provided by section[] 106 * * *
`is an infringer of the copyright.
`17 U.S.C. § 501(a).
`
`STATEMENT
`Respondents’ business model is simple: In ex-
`change for a monthly subscription fee, Giganews and
`Livewire give their customers access to the largest
`black market for copyrighted works in human histo-
`ry. Respondents provide to their customers more
`than 25,000 terabytes of content stored on Gi-
`ganews’s servers, the vast majority of which is copy-
`righted movies, music,
`images, and software—
`including 61,000 images belonging to Petitioner
`Perfect 10.1 To its customers, Respondents’ services
`are similar to subscription-based content businesses
`
`
`1 For context, a single terabyte equates to approximately 200
`full length movies; 17,000 hours of music; or 500,000 images.
`
`
`
`3
`
`
`such as Hulu, Netflix, and Spotify, insofar as they
`pay a fee to receive copyrighted works of their choice.
`But Respondents differ from those legitimate busi-
`nesses in one critical respect: Neither Giganews nor
`Livewire is licensed or otherwise authorized to
`distribute, reproduce or display any of the material
`from which they so handsomely profit.
`In the decision below, the Ninth Circuit effective-
`ly immunized Respondents’ staggering misappropri-
`ation of the creative efforts of others. In so doing, it
`discarded sensible, long-established principles of
`secondary copyright infringement that govern in
`other courts of appeals, and shielded broad swaths of
`infringing activity from direct liability for reasons
`that cannot be reconciled with this Court’s cases.
`Each of the two questions presented here is im-
`portant and recurring. And if left uncorrected, the
`Ninth Circuit’s flawed answers will insulate from
`liability the rampant online theft of copyrighted
`works created by artists of all stripes.
`The first question presented concerns what a
`plaintiff must prove to establish that a defendant
`profits from the direct infringement of another—one
`of the elements of vicarious copyright infringement
`articulated by this Court in Metro-Goldwyn-Mayer
`Studios, Inc. v. Grokster, Ltd., 545 U.S. 913, 930
`(2005). For nearly one hundred years, the uniform
`rule in the lower courts has been that a plaintiff
`satisfies this element if it demonstrates that custom-
`ers are drawn to a defendant’s business by infringing
`material generally, some of which includes plaintiff’s
`works. In the decision below, however, the Ninth
`Circuit held this to be insufficient and instead re-
`quired Petitioner to show that customers were drawn
`
`
`
`4
`
`
`to Respondents’ platform specifically to access Plain-
`tiffs’ works. Not only does such a rule have no basis
`in law, it perversely renders vicarious liability most
`difficult to prove against defendants, such as Re-
`spondents, that profit from massive infringement of
`many different types of works.
`The second question presented goes to the heart
`of direct copyright infringement in the digital age.
`According to the Ninth Circuit, any automated act—
`whether taken by a computer in response to a cus-
`tomer request or pursuant to the computer’s pre-
`programmed routines—cannot be the proximate
`cause of a direct infringement. The upshot here is
`that Respondents could not be considered direct
`infringers notwithstanding their deliberate design of
`a system that—for their own commercial benefit—
`systematically reproduces, distributes, and displays
`copyrighted works without authorization.
` This
`holding is in direct conflict with this Court’s deci-
`sions in American Broadcasting Companies, Inc. v.
`Aereo, Inc., 134 S. Ct. 2498 (2014), and New York
`Times Co. v. Tasini, 533 U.S. 483 (2001), and has no
`basis in the text or policies of, or common law princi-
`ples underlying, the Copyright Act.
`Each of the Ninth Circuit’s answers to the ques-
`tions presented is wrong when taken separately. But
`they are particularly troubling when considered
`together: By cutting off challenges to Respondents’
`activities as either direct or secondary infringement,
`the Ninth Circuit has left copyright holders with
`little recourse against the world’s most notorious
`copyright pirates.
`The Court should grant certiorari and reverse.
`
`
`
`
`
`5
`
`A. Statutory Framework
`The Copyright Act grants copyright owners cer-
`tain exclusive rights, among them the rights to
`reproduce, distribute, and publicly display their
`copyrighted works, and to authorize others to do the
`same. See 17 U.S.C. § 106(1), (3), (5). As this Court
`has explained, “‘[a]nyone who violates any of the
`exclusive rights of the copyright owner,’ that is,
`anyone who trespasses into his exclusive domain by
`using or authorizing the use of the copyrighted work
`in one of the * * * ways set forth in the statute, ‘is an
`infringer of the copyright.’” Sony Corp. of Am. v.
`Universal City Studios, Inc., 464 U.S. 417, 433 (1984)
`(quoting 17 U.S.C. § 501(a)).
`This Court has also recognized that a defendant
`may be indirectly, or secondarily, liable for the direct
`infringement of others. Relevant here, a defendant
`may be subject to vicarious liability when it “profit[s]
`from [another’s] direct infringement while declining
`to exercise a right to stop or limit it.” Grokster, 545
`U.S. at 930 & n.9. As this Court observed in Grok-
`ster, “[t]he argument for imposing indirect liability”
`is especially powerful when “the number of infring-
`ing” acts is high, as it may otherwise “be impossible
`to enforce rights in the protected work effectively
`against all direct infringers.” Id. at 929-930. In such
`cases, “the only practical alternative [is] to go
`against the distributor of the copying device for
`secondary liability on a theory of contributory or
`vicarious infringement.” Ibid.
`B. Factual Background
`Petitioner Perfect 10, Inc., is a publisher of imag-
`es of partly-clothed or unclothed women that, in the
`
`
`
`6
`
`
`words of the trial court, “consistently reflect profes-
`sional, skillful, and sometimes tasteful artistry.”
`Perfect 10 v. Google, Inc., 416 F. Supp. 2d 828, 849
`n.15 (C.D. Cal. 2006), partially reversed on other
`grounds, Perfect 10, Inc. v. Amazon.com, Inc., 508
`F.3d 1146 (9th Cir. 2007). Over the past two dec-
`ades, Perfect 10 has invested more than $50 million
`to create a library of approximately 70,000 such
`images. Because of massive and ongoing online
`copyright infringement, however, its annual sales
`revenue has plummeted from $1.8 million in 2000 to
`less than $40,000 in 2014. In 2007, Petitioner’s print
`magazine was forced to close. Petitioner continues to
`operate a website, where subscribers may view
`copyrighted images for a monthly fee.
`Respondent Giganews is a subscription-based
`Usenet operator, and Respondent Livewire is an
`affiliated company that provides its customers with
`access to content stored on Giganews servers.2 For a
`monthly fee, Respondents’ customers gain access to
`more than 25,000 terabytes of content stored on
`Giganews’s servers—virtually all of which consists of
`copyrighted materials. See Excerpts of Record,
`Volume 6, at 1350, Perfect 10, Inc. v. Giganews, Inc.,
`No. 15-55500 (9th Cir. 2015). It is undisputed that
`neither Giganews nor Livewire are licensed or oth-
`erwise authorized to reproduce, distribute, or display
`any of this copyrighted material. It is likewise not
`
`2 The Usenet (or “USENET”) is “an international collection of
`organizations and individuals (known as ‘peers’) whose comput-
`ers connect to one another and exchange messages posted by
`USENET users.” App., infra, 7a (quoting Ellison v. Robertson,
`357 F.3d 1072, 1074.n1 (9th Cir. 2004)).
`
`
`
`7
`
`
`disputed that rampant infringement—including of
`Perfect 10’s images in particular—occurs through
`and on Respondents’ servers.
`Giganews has managed to assemble its vast trove
`of pirated material through a combination of meth-
`ods. Like Napster and Grokster before them, Gi-
`ganews and Livewire enable customers to upload
`content, thus making those customers a major source
`of infringing content. But Giganews also collects
`infringing material on its own. It does so by selec-
`tively entering into “peering” arrangements with
`other infringing Usenet operators, pursuant to which
`Giganews copies some or all of those infringers’
`works to its own servers and, in return, distributes
`its own infringing content to them. The circum-
`stances under which Giganews enters into these
`peering arrangements with other infringers—and its
`decision to copy infringing material to and from
`them—are entirely under Giganews’s control; Re-
`spondents’ customers play no role in the process
`whatsoever. App., infra, 9a.
`Using Giganews’s “Mimo” newsreader, Respond-
`ents’ customers can search through, download, and
`display any item stored in Giganews’s massive
`collection of unlicensed copyrighted movies, televi-
`sion shows, music, software, books, magazines, and
`images—which includes nearly the entirety of Peti-
`tioner’s catalog. In practice, Respondents have
`“create[d] a user experience that substantially mim-
`ics the user experience of applications used on peer-
`to-peer file-sharing networks such as Napster.”
`Arista Records LLC v. Usenet.com, Inc., 633 F. Supp.
`2d 124, 130 (S.D.N.Y. 2009) (internal quotation
`marks omitted). Indeed, in the words of Respond-
`
`
`
`8
`
`
`ents’ own users, “99.9999% of [Giganews material] is
`copyright infringing content,” and “essentially all of
`[Giganews’s] subscribers are pirates.” Mem. in
`Opp’n to Giganews’s Mot. for Partial Summ. J., Ex.
`17 at 7, 27, Perfect 10, Inc. v. Giganews, Inc., No. 11-
`cv-7098 (C.D. Cal. Oct. 6, 2014), ECF No. 508.
`Seemingly the only constraint on customers’ piracy is
`the fee charged by Respondents. In order to down-
`load more material, customers must pay Respond-
`ents a higher monthly fee. More infringement thus
`means more profit for Respondents.
`C. Proceedings Below
`Petitioner filed this action for direct and indirect
`copyright infringement against both Respondents
`in 2011. Relevant here, Petitioner alleged that
`(1) Giganews violated its reproduction rights by
`copying unlicensed works to and from the computers
`of its subscribers and the servers of other Usenet
`operators; (2) Giganews and Livewire violated Peti-
`tioner’s distribution rights by distributing such
`infringing copies to their customers and other Usenet
`operators; and (3) Giganews violated Petitioner’s
`display rights by displaying copyrighted images
`through its proprietary Mimo reader. See Excerpts
`of Record, Volume 9, at 2119-2129 Perfect 10, Inc. v.
`Giganews, Inc., No. 15-55500 (9th Cir. 2015). Perfect
`10 further alleged that Giganews was vicariously
`liable for the infringement of its subscribers. See id.
`at 2132.3
`
`
`3 Perfect 10 also brought a claim for contributory infringement,
`which the Ninth Circuit rejected for failure to prove material
`contribution or inducement. See App., infra, 25a-30a. While
`
`
`
`
`
`
`9
`
`The district court dismissed the direct infringe-
`ment claims against Giganews at issue here on
`motions to dismiss. App., infra, 12a. Petitioner’s
`remaining claims—including the allegation that
`Livewire engaged in direct infringement and that
`Giganews was vicariously liable for the infringing
`acts of its customers—were dismissed on summary
`judgment. Ibid.
`The Ninth Circuit affirmed in all respects. It held
`that Petitioner’s claims for direct infringement failed
`because any reproduction, distribution, or public
`display of copyrighted images occurred “automatical-
`ly.” App., infra, 18a-24a. With respect to Petition-
`er’s claim that Giganews violated its exclusive distri-
`bution rights, for example, the Ninth Circuit rea-
`soned that the automated nature of Respondents’
`conduct fails the “volitional-conduct requirement,”
`which derives from the “basic requirement” that
`“direct liability * * * be premised on conduct that can
`reasonably be described as the direct cause of the
`infringement.” Id. at 15a.
`The Ninth Circuit also rejected Petitioner’s vicar-
`ious liability claim for failure to satisfy the profit or
`“direct financial benefit” element of that claim.
`According to the Ninth Circuit, this element could be
`satisfied only by evidence that subscribers were
`“drawn” to Giganews “because of the infringing
`Perfect 10 material at issue.” App., infra, 33a-34a.
`In reaching that conclusion, the Ninth Circuit reject-
`ed the proposition that profit could be shown by
`“evidence that customers were ‘drawn’ to Giganews
`
`Petitioner disagrees with that ruling as well, it is not at issue
`here.
`
`
`
`10
`
`
`to obtain access to infringing material in general.”
`Id. at 31a. So too did it hold insufficient evidence
`that customers “accessed copyrighted Perfect 10
`material,” in particular, “as ‘an added benefit’ to a
`subscription.” Id. at 34a. In the Ninth Circuit’s
`view, relying on such evidence as proof of profit
`would be “in significant tension with Article III’s
`standing requirement.” Id. at 33a.
`REASONS FOR GRANTING THE PETITION
`I. The Ninth Circuit’s Requirements For Prov-
`ing Vicarious Copyright Infringement Con-
`flict With Those Of Other Circuits And Are
`Wrong
`A defendant is vicariously liable for the copyright
`infringement of others if it (1) “profit[s] from [others’]
`direct
`infringement” while at the same time
`(2) “declining to exercise a right to stop or limit it.”
`Grokster, 545 U.S. at 930. The Ninth Circuit’s
`decision creates a circuit split regarding the first of
`those prongs—the requirement that the defendant
`profit from the infringement, which is sometimes
`referred to as the “direct financial benefit” or “direct
`benefit” requirement.
`In the decision below, the Ninth Circuit held that
`a copyright plaintiff can satisfy the direct benefit
`requirement only by proving that customers were
`drawn to the defendant’s business because of plain-
`tiff’s work in particular. Under this restrictive rule,
`evidence that customers were drawn to the defend-
`ant’s business by infringing content of which the
`plaintiff’s work is merely a part is insufficient—even
`if, once engaged with the defendant, a customer
`infringes the plaintiff’s work. In this latter circum-
`
`
`
`11
`
`
`stance, held the Ninth Circuit, the infringement of
`the plaintiff’s work is simply an “added benefit” to
`the customer, but not enough to give rise to vicarious
`liability. App., infra, 34a.
`By contrast, in the Second, Sixth, Seventh, and
`Eighth Circuits, evidence showing that a defendant
`profits from infringement is entirely sufficient to
`establish vicarious liability. While a plaintiff must,
`of course, demonstrate that its work was among
`those infringed, it is not required to prove that its
`work was the reason a customer patronized the
`defendant in the first place. The divide between this
`rule and the one adopted by the Ninth Circuit is deep
`and consequential, particularly for copyright owners
`seeking to hold brazen pirates vicariously liable for
`their customers’ infringement of millions of copy-
`righted works.
`A. The Opinion Below Creates A Split Be-
`tween The Ninth Circuit And Four Other
`Circuits
`1. When this Court articulated the requirements
`for vicarious copyright liability in Grokster, it did so
`by reference to a canonical set of so-called “dance-
`hall cases.” See 545 U.S. at 930 & n.9 (citing
`Shapiro, Bernstein & Co. v. H.L. Green Co., 316 F.2d
`304, 308 (2d Cir. 1963), and Dreamland Ball Room,
`Inc. v. Shapiro, Bernstein & Co., 36 F.2d 354, 355
`(7th Cir. 1929)). In those cases, courts confronted
`the question whether to hold dance-hall proprietors
`and restaurateurs
`liable for
`infringing musical
`performances conducted on their premises. A con-
`sensus soon emerged that proprietors could be held
`liable for such infringing performances so long as
`those activities “provide[d] the proprietor with a
`
`
`
`12
`
`
`source of customers and enhanced income.” H.L.
`Green, 316 F.2d at 307. Critically, courts held that
`such profit could be found even where the proprietor
`had no “knowledge of the compositions to be played
`or any control over their selection,” ibid., and thus
`had no ability to draw customers based on any
`specific act of infringement.
`In Dreamland Ball Room, for example, the Sev-
`enth Circuit readily concluded that dance-hall own-
`ers had profited from infringing performances in the
`absence of any showing that customers were drawn
`to the dance halls by the plaintiffs’ copyrighted
`works in particular. See 36 F.2d at 355. Nor could
`the court have made such a finding: As the Seventh
`Circuit observed, the dance-hall defendants did not
`“determine the musical selections to be rendered,”
`“direct the playing of any selection,” or even “know
`that any musical selection played by the orchestra
`was copyrighted” in the first place. Ibid. Ipso facto
`neither could prospective customers deciding wheth-
`er to patronize the dance halls know what specific
`music would be played.
`Rather than require proof that customers were
`drawn to the establishment by the prospect of hear-
`ing plaintiffs’ copyrighted works in particular, courts
`in these cases “determined that profit could be
`inferred from the very fact of playing music in a
`profit-making establishment.” Polygram Int’l Publ’g,
`Inc. v. Nevada/TIG, Inc., 855 F. Supp. 1314, 1325,
`1331-1332 (D. Mass. 1994). In Herbert v. Shanley
`Co., 242 U.S. 591 (1917), for example, this Court
`found that a restaurant profited from infringing
`musical performances even in the absence of a cover
`charge. As the Court pointedly noted, if the perfor-
`
`
`
`13
`
`
`mances were not somehow profitable to the restau-
`rant, they “would be given up.” Id. at 594-595.
`The dance-hall cases remain good law, and con-
`temporary courts confronting similar fact patterns
`have consistently sustained vicarious infringement
`claims where the evidence showed that customers
`were drawn to the defendant’s business by infringe-
`ment generally. To our knowledge, until the Ninth’s
`Circuit’s detour below, no court had ever required
`the plaintiff to prove that customers were drawn
`specifically by the infringement of plaintiff’s work.
`In Broadcast Music, Inc. v. Meadowlake, Ltd., 754
`F.3d 353 (2014) (Sutton, J.), for example, the Sixth
`Circuit considered whether the defendant, a restau-
`rant owner, was vicariously liable for infringing
`musical performances at his restaurant. As the
`Sixth Circuit recognized, the case fell “within the
`heartland of vicarious liability”: “Substitute ‘restau-
`rant that offers dancing’ for ‘dance hall,’ and you
`have this case.” Id. at 354-355. And as in the dance-
`hall cases, the Sixth Circuit readily concluded that
`the defendant had profited from the infringing
`performances on the ground that they generally
`“drew more customers to his restaurant.” Id. at 354.
`The Sixth Circuit did not require the plaintiff to
`prove that customers were drawn to the defendant’s
`business specifically by the infringement of the
`plaintiff’s songs. See ibid.
`2. These principles are not confined to the public
`performance context. Rather, they have long been
`applied in vicarious infringement cases, just like this
`one, that involve the alleged violation of the repro-
`duction, distribution, or public display rights by
`would-be pirates. See, e.g., H.L. Green, 316 F.2d at
`
`
`
`14
`
`
`307-308 (applying the principles developed in the
`dance-hall cases to hold a department store liable for
`infringing “bootleg” reproductions manufactured and
`sold by the “concessionaire” that operated its phono-
`graph records department).
`In EMI Christian Music Group, Inc. v. MP3tunes,
`LLC, 844 F.3d 79 (2016), for example, the Second
`Circuit considered an appeal of a jury verdict holding
`the defendant, an online music services provider,
`vicariously liable for the infringement of its sub-
`scribers, who could pay the defendant in order to
`store infringing copies of copyrighted songs in online
`storage “lockers.” Id. at 99. In affirming the vicari-
`ous infringement verdict, the Second Circuit ap-
`proved a jury instruction stating that a defendant
`profits from infringement “where infringing material
`acts as a ‘draw’ to attract subscribers to a defend-
`ant’s business, even if it is not the primary, or even a
`significant draw.” Ibid.
`The Second Circuit reasoned that “[a]n increase
`in subscribers or customers due to copyright in-
`fringement qualifies as an ‘obvious and direct finan-
`cial interest,’” ibid. (quoting H.L. Green, 316 F.2d at
`307), without requiring the
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