For those of us who like customized tchotchkes, CafePress is a marvel. You can take any photo or message you like, use the CafePress website to electronically slap it on a t-shirt (or keychain, iPhone case, etc.), and then order a non-electronic copy for yourself. Before you can say "7-10 business days," you are drinking your morning coffee from of a marginally humorous bespoke mug while wearing a baseball cap with a picture of your cat on it. Heaven.
Not only can you design your own products, but you can also sell them in your own virtual shop. Additionally, unless you opt out, CafePress will do some of the selling and marketing for you, by placing items in its "CafePress Marketplace" and giving you a royalty from its sales. In 2012, this business model led to about 4 million separate orders and net revenues of over $200 million.
With all of that uploading and selling, how does CafePress prevent its users from creating products with unauthorized copyrighted images? Like most other internet companies, it tries but isn't always successful. The more practical question is whether, under the Digital Millennium Copyright Act (DMCA), CafePress is liable for the copyright infringement that does occur.
It might be, said Judge Gonzalo P. Curiel of the Southern District of California in an opinion issued last month in Gardner v. CafePress. In that case, artist Steven Gardner claimed that internet users had illegally placed his copyrighted image, "Alaska Wildlife," on CafePress products. CafePress removed the offending items, but not before about $6,000 worth of products were sold. Gardner brought suit against CafePress for copyright infringement, and CafePress moved for summary judgment on the grounds that it was immune from liability under the DMCA safe harbor.
The Court's DMCA Analysis
Image from Plaintiff’s website at gardnergallery.com
The DMCA provides immunity from most copyright infringement actions to Internet Service Providers under certain conditions. Judge Curiel divided his analysis into three parts: (1) whether CafePress was a "service provider;" (2) whether CafePress' technology complied with the DMCA; and (3) whether CafePress had the right and ability to control its users' activity.
Service Provider: The Court observed that the term "service provider" extended beyond the mere provision of online access to include other activities, such as the electronic "facilitation" of online commercial interactions (Judge Curiel cited eBay as one example). However, the Court held that there was evidence in this case that CafePress may have crossed the line by setting the price for and then selling items in the CafePress Marketplace, and by paying users a royalty on those sales. Therefore, the Court could not hold as a matter of law that CafePress is a "service provider" under the statute.
CafePress Technology: Pursuant to 17 U.S.C § 512(i), a party seeking the protection of the DMCA must show that it "accommodates and does not interfere with standard technical measures" which "have been developed pursuant to a broad consensus of copyright holders to identify or protect copyrighted works." For example, you can't disable Digital Rights Management technology or advise users to conceal a work's copyright notice. Here, the process of uploading a photograph to CafePress automatically strips it of its metadata. Gardner argued that, because metadata can contain copyright information, the deletion of metadata constituted interference with a standard technical measure. CafePress countered that there was no evidence that it was "standard" to use metadata to contain copyright information, or that such use had achieved a "broad consensus." However, Judge Curiel found that this was a disputed issue which precluded summary judgment.
Right and Ability to Control. Finally, in order to qualify for protection under 17 U.S.C § 512(c), the DMCA safe harbor provision applicable to the storage of information by users, a party must show (among other things) that (a) the offending material was stored on its system "at the direction of a user;" (b) it did not have knowledge of the infringement; and (c) if it has the right and ability to control user activity, that it does not receive a financial benefit directly attributable to infringement. The Court held that there was no evidence that CafePress had knowledge of the infringement. However, CafePress had retained for itself the right to decide which images appeared on products in the CafePress Marketplace, and was actively involved in the sale and manufacture of those products. Therefore, the Court refused to hold as a matter of law that the offending images were stored on CafePress "at the direction of" users, or that CafePress did not have the right and ability to control the infringing activity.
Although Judge Curiel determined that CafePress may not be protected by the DMCA safe harbor, Gardner is probably not completely happy with the ruling either. The Court also held that Gardner was not eligible for statutory damages because he did not register his images prior to the infringement, and thus he is presumably limited to a substantially smaller measure of actual damages. The parties are scheduled to attend a mandatory settlement conference in April.
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