It's easy to have an Internet service provider take down a post by claiming that the post infringes a copyright. But doing so without a reasonable good faith belief that there is infringement creates exposure: The notice giver can be liable both for statutory and common law remedies.
MFB Fertility, a manufacturer of a fertility product – an ovulation test – sent Amazon a notice to take down a competitor's page, claiming copyright infringement. Amazon duly took down the competitor's page, allegedly causing the competitor to lose sales. The competitor, Action Care Mobile Vetinary Clinic, submitted a statutory counternotice, requiring Amazon to restore the page unless there was legal action by MFB. MFB did take legal action, suing Action Care in the United States District Court for the Northern District of Illinois for copyright and trademark infringement, and thereby causing Amazon again to take down Action Care's product listing.
Action Care counterclaimed for misrepresentation under the notice-and-take-down statute (17 USC §512(f)), for defamation, and for tortious interference with prospective business advantage.
The parties made cross-motions to dismiss: Action Care to dismiss MFB's copyright claim and MFB to dismiss all of Action Care's counterclaims. The notice giver, plaintiff MFB, found itself on the losing end.
First, the court dismissed MFB's copyright claim. The copyrighted works were instructions for product use, promotional material, and product warnings. Contrary to MFB's notice to Amazon, the court found no verbatim copying, or even "near-verbatim." What copying the court did find was only "fragments that are descriptive of its product" and text "compelled by the legislature" (referring to FDA labelling regulations).
Turning to the counterclaims, the court upheld Action Care's claim under 17 USC §512(f). To compel takedown, the notice giver must claim infringement and state that the notice giver has a good faith belief that the use of the material in the manner complained of is not authorized by the copyright owner. 17 USC §512 (c)(1)(C) and (c)(3)(A)(v)-(vi). The court compared MFB's statements to Amazon with the facts that were put before the court and found sufficient allegations in the counterclaim to put in issue MFB's reasonable good faith in issuing its takedown notice. MFB's notice to Amazon included the following statements:
They [Action Care] found a cheap Chinese manufacturer to copy our tests then usedallof our wording on the product page and product inserts. Copyrighted content: They copiedallof our FAQs and product description from this product page [] They also took wording from our FAQ on our website: https://proovtest.com/products/proov-test-strips including the "who might have a problem with ovulation, comment FAQ, when to test, and what is successful ovulation." (emphasis added)
The court contrasted MFB's repeated allegations of Action Care's taking "all" of various wordings with the court's finding that there was no verbatim copying at all, and said, with considerable understatement, "the fact that Action Care copied 'all' of MFB's materials is false as a matter of law, rendering Action Care's allegations [of a bad faith notice to Amazon] significantly more plausible" (emphasis added) than in another case in which the allegation of bad faith was insufficient. The court added that "willful blindness" would not meet §512's requirement of good faith.
Having found a wide gulf between the charges in MFB's takedown notice and actual fact, the court went on to sustain both of Action Care's defamation counterclaims and its interference with prospective business advantage counterclaim.
Action Care alleged defamation per se – that is, defamation where harm is presumed. MFB argued that the statements to Amazon were made in anticipation of litigation and were susceptible of an innocent meaning. The anticipation-of-litigation argument was based on another case, The Sunny Factory, LLC v. Chen, 2022 WL 742429 (N.D. Ill.), which opined that takedown notices were "absolutely privileged" because takedown notices might result in litigation (no such authority specifically on takedown notices was cited in The Sunny Factory). The court in MFB distinguished The Sunny Factory, mainly because the notices there were given by counsel and noted that a non-attorney defendant there suffered a default judgment for defamation. The court in MFB also concluded that MFB's notices were not susceptible of an innocent meaning, rejecting the argument that Action Care's name was not included in the notice. The court held that the only reasonable interpretation of the word "They" in MFB's notice in the context was Action Care.
Action Care also alleged defamation per quod – defamation requiring special damages. The court held Action Care's damages allegation sufficient because Action Care alleged the loss of ability to distribute products through Amazon and specifically the loss of sales of at least 174 units of product.
Action Care's counterclaim for tortious interference with business advantage was sustained based on Seventh Circuit precedent sustaining such claims for preventing product distribution through meritless copyright infringement claims made to a third party.
Sending a notice to an internet service provider to take down a website or web page can be a potent weapon and one of the few available against internet posters who are not subject to federal court jurisdiction. But takedown notices must be used responsibly, with a reasonable, good faith belief that an infringement is being committed.
The court in MFB specifically stated that a notice giver had to "proactively consider the potential that similarities in materials are unprotectable," citing a Ninth Circuit decision, Lenz v. Universal Music Corp., 815 F.3d 1145 (9th Cir. 2015). These considerations might include the various doctrines that chip away at copyright liability even where some degree of copying seems apparent, such as scenes a faire – matter that is customary or typical in the context, the merger doctrine, and the uncopyrightability of facts.
Caveat notice-giver!
Originally published June 11, 2024
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