PLAYBOY ENTERPRISES, INC.,
Plaintiff,
v.
RUSS HARDENBURGH, INC.,
Defendant.
No. 1:93 CV 0546.
Filed Nov. 25, 1997.
SAM H. BELL, District Judge.
ORDER:
This case raises the question of a computer bulletin board system operator’s liability for copyright and trademark infringement regarding information available to its customers through their home computers. Plaintiff Playboy Enterprises, Inc. (“PEI”) asks the court to find that Defendants Rusty-N-Edie’s, Inc. (“RNB”) and Russ Hardenburgh are liable for direct and/or contributory copyright infringement with respect to 412 graphic image files (“GIFs”) which were allegedly available to paying customers of Defendants’ bulletin board service (the “BBS”). These files, asserts PEI, contain illegal copies of adult photographs from PEI’s Playboy Magazine. PEI also claims that Defendants’ violated section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), by removing the name or trademark of PEI and distributing the photographs under other names for a profit. Defendants answer that there are genuine issues of material fact with respect to each of Plaintiff’s claims, precluding summary judgment.
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The court has considered the evidence and arguments of the parties, and is now prepared to offer its decision in this matter.
Plaintiff’s motion for summary judgment is granted with respect to its claims of direct and contributory copyright infringement against both RNE and Mr. Hardenburgh. Plaintiff’s motion is denied with respect to its Lanham Act claim, which claim shall be set forth for trial.
The court’s reasoning in this matter is set forth below.
Background
A computer bulletin board service (“BBS”) offers home computer owners a method for obtaining information from a central source by use of a modem.[1] Remote computers access the central service through telephone lines. Files of information are stored in the central system, and subscribers may either “download” information into their home units, or “upload” information from their home units into the central files. The owner of the service controls the terms by which remote computer owners will be able to access the system, and typically will control the conditions under which information may be downloaded or uploaded.
BBS owners often provide other services to subscribers, including electronic mail capabilities, “chat rooms” where many subscribers may communicate at once, and Internet access to the World Wide Web. Local bulletin board services such as the one in this case might be
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distinguished from massive on-line services such as America On-Line or Compuserve, which provide similar services to customers on a much larger scale.
Defendant RNE and its President, Russ Hardenburgh, began operating a local BBS out of Boardman, Ohio in the early days (relatively speaking) of this technology. In July of 1988, “Rusty-N-Edie’s BBS” became available to owners of home computers. (2nd Hardenburgh Aff. Para. 1.) For a fee, subscribers received access to certain files which were otherwise off limits to the general public, and had the right to download a set number of megabytes of electronic information from these files every week. (Hardenburgh dep. pp. 120-122.) The BBS also provided e-mail services, chat lines, advertisements for goods, computer technical assistance, and a “matchmaker” dating service. (2nd Hardenburgh Aff. Para. 3.)
By January of 1993, the central BBS had grown to 124 computers, with nearly 6000 subscribers. (2nd Hardenburgh Aff. Para. 6.) Approximately 105,000 to 110,000 files were available for downloading, nearly half of which were graphic image files, or “GIFs.” (Id.) A GIF is created by scanning a photograph to create digital data that can be run through a computer. GIFs from Rusty-N-Edie’s BBS could be downloaded by the customer to his or her home computer, and could be viewed only with the assistance of certain specialized software. (Id.) Approximately 40,000 of the GIFs available to subscribers at this time, Defendants admit, contained “adult” photographs. (1st Hardenburgh Aff. Para. 6.)
To increase its stockpile of available information, and thereby its attractiveness to new customers, Defendants provided an incentive to encourage subscribers to upload information onto the BBS. Subscribers were given a “credit” for each megabyte of electronic data that they uploaded onto the system. For each credit, the subscriber was entitled to download 1.5 extra
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megabytes of electronic information, in addition to the megabytes available under the normal terms of subscription. (Hardenburgh dep. p. 157.) According to Defendants, information uploaded onto the BBS went directly to an “upload file” where an RNE employee briefly checked the new files to ascertain whether they were “acceptable,” meaning, not pornographic, and not blatantly protected by copyright. (Hardenburgh dep. p. 138-142.)
PEI is understandably concerned that on-line systems can be used to transmit copies of its copyrighted photographs to people who have not themselves purchased Playboy Magazine. In the early 1990s, PEI employee Anne Steinfeldt was given the job of scanning on-line systems to determine whether such photographs were available to subscribers via their home computers. (2nd Steinfeldt Aff. Para. 1.) In November of 1992, Ms. Steinfeldt subscribed to Rusty-N-Edie’s BBS under the pseudonym “Bob Campbell.” (Id. at Para. 2.) She conducted key word searches in the files available on the BBS, and claims to have downloaded approximately 100 GIFs from the BBS which contained reproductions of PEI’s photographs. (Id. at Para. 5.) She transferred these files to floppy disks, and then delivered the disks to PEI photo-librarian Timothy Hawkins. (Hawkins Aff. Para.Para. 2, 3.) Mr. Hawkins states that he examined the files by displaying the images on his computer monitor and comparing those images with photographs from Playboy Magazine. (Id. at Para.Para. 3, 4.)
On March 11, 1993, PEI filed its original complaint against RNE and Mr. Hardenburgh in this court, alleging copyright and trademark infringement. (Docket # 1.) The case was assigned to District Judge Battisti. On January 7, 1994, PEI moved for summary judgment on its claims of copyright infringement with respect to 99 GIFs allegedly downloaded from the BBS by Ms. Steinfeldt and reviewed by Mr. Hawkins. (Docket # 28.) PEI listed the
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titles of the 99 GIFs at issue in its Exhibit A but only submitted ten actual copies of the allegedly infringing images. (Docket # 29.) PEI paired these ten reproductions of computer screens with ten virtually identical photographs from Playboy Magazine. (Id.) PEI also produced the certificates of copyright for each of the PEI photographs listed in its Exhibit A. (Id.) Based upon these submissions and the accompanying affidavits of its employees, PEI argued that Defendants could raise no genuine issue of material fact to dispute the assertion that all 99 GIFs had appeared on the BBS. (Id.) Defendants, PEI argued, were jointly and severally liable for copyright infringement as a matter of law.
On January 31, 1994, PEI moved for summary judgment on its Lanham Act unfair competition claim. (Docket # 33.) PEI argued that Defendants had falsely implied that they were the source of PEI’s images by adding text to PEI photographs that was not present originally, and by deleting text that was originally present. (Id.) PEI claimed that the words “Rusty-N-Edies” had been added to some of the photographs, along with the telephone number for one of Defendants’ BBS phone lines. (Docket # 34.) PEI provided one actual example of this activity. (Id.)
Defendants responded to PEI’s motions for summary judgment on February 24, 1994, arguing that there were genuine issues of material fact with respect to each of PEI’s claims. (Docket # 40.) Defendants argued that PEI’s submissions did not prove that the 99 GIFs listed in Exhibit A were actually present on the BBS. (Id.) Mr. Hardenburgh claimed that he had reviewed the floppy disks in question, and had found them to contain 85 GIFs, not 99. Only 82 of the files on the disks, he asserts, were even listed in Plaintiff’s Exhibit A, four of which were created or modified after Ms. Steinfeldt turned the disks over to Mr. Hawkins. (1st Hardenburgh
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Aff. Para. 5.) Defendants argued that these inconsistencies cast doubt on the credibility of PEI employees Steinfeldt and Hawkins, and precluded summary judgment in PEI’s favor. (Docket # 40.)
PEI replied to Defendants on June 10, 1994, and in doing so brought new evidence to light. (Docket # 46.) PEI explained to the court that on January 30, 1993 the Federal Bureau of Investigation had conducted an unrelated search of the Hardenburgh premises pursuant to a search warrant, and had seized Defendants’ BBS equipment. (Id.; 1st Hardenburgh Aff. Para. 2.) In connection with this search, the FBI had created computer tapes (the “FBI Tapes”) which contained all of the information present on the BBS at that time, including all GIFs available to subscribers for downloading. (1st Tesnakis Aff.) Both sides of the litigation, PEI explained, were in possession of copies of these tapes. (Gibson Aff. Para.Para. 4, 5, 6.) Having reviewed the tapes, PEI withdrew its motion for summary judgment with respect to 79 of the 99 GIFs originally at issue. PEI was apparently unable to confirm that these 79 GIFs were on the BBS at the time of the FBI search. (Docket # 46.) With respect to the other 20 GIFs, however, PEI asserted that the FBI Tapes conclusively established that these files were present on Defendants’ BBS on January 30, 1993, and that they directly infringed PEI’s copyrights. (Id.) PEI submitted copies of these 20 GIFs as extracted from the FBI Tapes, and also submitted the corresponding 20 photographs from Playboy Magazine. (Exhibit 2 to Tesnakis Aff.) PEI noted that it would continue to study the FBI Tapes to determine whether a future motion for summary judgment could be filed with respect to other files present on the BBS which may have infringed PEI’s copyrights. (Docket # 46.)
Defendants surreplied to Plaintiff’s answer on July 11, 1994. (Docket # 51.)
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Defendants implied that any PEI photographs which appeared on the BBS were placed there by RNE subscribers, not RNE employees. (Id.) Because Defendants had not themselves taken part in any infringing activity, they asserted, they could not have directly infringed PEI’s copyrights. (Id.)
On September 14, 1994, Magistrate Judge Bartunek issued a Report and Recommendation regarding PEI’s motions for summary judgment. (Docket # 60.) The Magistrate recommended that the court grant Plaintiff’s motion for summary judgment regarding Defendants’ liability for direct copyright infringement. (Id.) The Magistrate found that there was no dispute that PEI owned the copyrights in question and that the 20 GIFs at issue had, in fact, appeared on Defendants’ BBS. (Id.) Also, it was abundantly clear to the Magistrate that the GIFs produced by Plaintiff were copies of the 20 PEI photographs submitted into evidence. (Id.) As to Defendants’ claim that it was BBS subscribers who uploaded the information onto the system, the Magistrate felt that this argument was immaterial in relation to a finding of copyright infringement. (Id.)
With respect to any Lanham Act violations, alternatively, the Magistrate recommended that the court deny Plaintiff’s motion. (Id.) The Magistrate felt that in order to prevail on their Lanham Act claim, PEI would have to prove that it was Defendants, and not their subscribers, who engaged in activity which misled consumers about the source of the images. (Id.)
Both Plaintiff and Defendant filed objections to the Magistrate’s Report and Recommendation. (Docket #s 64, 66, 69.)
On November 1, 1994, following Judge Battisti’s death, the case was transferred
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to Senior Circuit Judge Krupansky. (Docket # 71.) Soon thereafter, on January 17, 1995, PEI filed its third motion for summary judgment. (Docket # 74.) As promised, PEI had scrutinized the FBI Tapes and announced that it was now prepared to prove that 392 additional GIFs containing copies of PEI photographs were present on Defendants’ BBS at the time of the FBI search. (Docket # 75.) PEI produced, for the court’s consideration, copies of each and every one of the GIFs at issue, in addition to the corresponding PEI photograph. (Exhibit D to 2nd Tesnakis Aff.) PEI also produced certificates of copyright for each photograph. (Exhibit B to 2nd Tesnakis Aff.) PEI repeated their claim that Defendants were liable for direct copyright infringement, but argued in addition that Defendants were liable for contributory copyright infringement. (Docket # 75.) PEI produced the deposition testimony of three RNE employees, each of whom stated that any GIFs which were uploaded onto the BBS were placed in an upload file, and were not released onto the system for subscribers until they were reviewed by RNE staff. (Hardenburgh dep., Little dep., McFarland dep.) Defendants responded, echoing many of the arguments they had made previously. (Docket # 88.) Defendants also argued that a finding of copyright infringement on the part of a computer bulletin board service would “halt the computer age at its inception” by overburdening BBS owners with the “impossible” task of screening their systems for any and all copyrighted material. (Id.) On March 1, 1996 the case was transferred here. (Docket # 104.)
The parties have offered numerous submissions and arguments in addition to those described above, some of which will be touched upon below. The question presented in this litigation, however, has remained fundamentally the same throughout. It is: has PEI produced sufficient evidence to warrant summary judgment on its claims of copyright and trademark infringement?
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