PASADENA, Calif. (CN) - Social media and blogging community LiveJournal must go to trial over allegations that it broke the law by posting copyrighted celebrity photos online, the Ninth Circuit ruled.
In a wide-ranging opinion issued Friday, a three-judge panel reversed a district court's finding that LiveJournal wasn't liable for copyright infringement under the Digital Millennium Copyright Act when its moderators posted the photos online.
"The district court erred in granting summary judgment to LiveJournal," wrote U.S. Circuit Judge Richard Paez for the panel. "Remand is warranted."
Paparazzi agency Mavrix Photographs, which sells celebrity photos to magazines, sued LiveJournal in April 2013 for posting 20 of its copyrighted photos to a celebrity gossip forum on LiveJournal's site. The forum was so popular that three years earlier, LiveJournal had decided to run ads on it to generate revenue.
The disputed photos include one showing singer Beyoncé looking pregnant, leading to speculation on LiveJournal that she was pregnant before she announced it.
Mavrix says that because its photos break celebrity news, posting these images online without permission undercuts its profits – magazines won't buy photos that have already been published.
Nonetheless, U.S. District Judge Cormac Carney ruled in favor of LiveJournal in the Central District of California in September 2014. Carney found that LiveJournal qualified for immunity under the Digital Millennium Copyright Act because its moderators posted the photos, not LiveJournal itself.
The Digital Millennium Copyright Act shields online platforms from liability when their users post copyrighted materials, among other things.
LiveJournal works with unpaid moderators, overseen by a LiveJournal employee, who screen material submitted by users before posting it. Material that is deemed harassing, pornographic or infringing is supposed to be blocked.
To qualify for DMCA immunity, LiveJournal must show that the disputed photos were posted by its moderators and not itself.
LiveJournal insists that the moderators acted without its direction. But Mavrix contends that LiveJournal gave them explicit instructions and authority to screen and post material.
The Ninth Circuit said it remains unclear whether the moderators acted on their own or on LiveJournal's behalf.
"Because the district court focused on the users' submission of Mavrix's photographs rather than on [LiveJournal's] posting of those photographs and rejected Mavrix's argument that unpaid moderators could be agents of LiveJournal, the district court erred in granting summary judgment to LiveJournal," Paez wrote in the court's 28-page decision. "Genuine issues of material fact exist as to whether the moderators were LiveJournal's agents."
Mavrix attorney Peter Afrasiabi with One LLP in Newport Beach expressed satisfaction with the court’s ruling.
"This decision will be a lifeline to content creators who are being destroyed by online mass infringement," he said in an email on Monday. "We look forward to trying this case before a jury and getting an appropriate monetary award."
The panel’s opinion also discussed the remaining eligibility requirements for immunity to guide the district court when the case goes back for reconsideration.
If LiveJournal can show that its moderators acted on their own, it must then show that it lacked actual or "red flag" knowledge of the infringements, and that it didn't benefit financially from them.
To assess whether LiveJournal had actual knowledge, a district court judge must consider both whether Mavrix had given notice of the infringement, and LiveJournal's "subjective knowledge" of the infringing posts, according to the panel.
To assess red-flag knowledge, a judge must determine whether it is "obvious" that photos stamped with a generic watermark or a watermark with Mavrix's web address are infringing, it said.
Finally, the panel vacated the district court's order denying discovery of the names of the moderators who approved the infringing posts.
Though Carney had ruled that the moderators had a constitutional right to anonymity, the panel held that whether the moderators acted on behalf of LiveJournal "should inform the district court’s analysis of whether Mavrix's need for discovery outweighs the moderators' interest in anonymous internet speech."
Senior Circuit Judge Harry Pregerson and Circuit Judge Morgan Christen also sat on the panel.
LiveJournal is represented by Wayne Barsky of Gibson Dunn & Cructher in Los Angeles. He could not immediately return a request for comment Monday.
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