Recently, Chief Judge Robert J. Conrad, Jr. and Magistrate Judge David Keesler of the U.S. District Court for the Western District of North Carolina issued one of the first opinions nationwide dismissing a claim for inducement of copyright infringement at the pleadings stage.

In Ark Promotions, Inc. v. Justin.tv Inc., et al., the court faced the increasingly common scenario of copyright infringement claims being brought against a website operator due to content uploaded to that website by a third party. Boxing promoter Ark Promotions asserted claims for inducement of copyright infringement against YouTube, Inc., and Justin.tv Inc., which operates a website that allows users to stream live video footage of lectures, performances, and other events. Ark Promotions claimed that third-party users had uploaded television footage of an Ark Promotions boxing event onto YouTube and streamed live television footage of the event onto the Justin.tv website, and that YouTube and Justin.tv had induced that infringement by creating their respective websites and, in Justin.tv's case, providing general instructions to users on how to upload videos.

Ark Promotions claimed that its theory was supported by the decision in MGM Studios, Inc. v. Grokster, Ltd., in which the U.S. Supreme Court described "inducement" liability as a form of secondary copyright infringement. The Grokster Court held that "one who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties." In so holding, the Supreme Court emphasized that inducement liability requires that the defendant had the specific objective of promoting or encouraging others to violate copyright and that "active steps were taken with the purpose of bringing about infringing acts."

Justin.tv and YouTube explained that under Grokster, an inducement claim must be supported by specific factual allegations to survive a motion to dismiss, not boilerplate assertions that the defendant "unlawfully induced the infringement." They argued further that allegations that a website operator induced infringement merely by providing content-neutral instructions on how to upload or stream video content do not satisfy the Supreme Court's requirement of showing that a defendant took "active steps [. . .] with the purpose of bringing about infringing acts."

Magistrate Judge Keesler and Judge Conrad (who adopted the Magistrate's recommendation) agreed, holding that "Plaintiff's one sentence allegation that 'Justin.tv provides detailed instructions on its website directing users how to stream live video over the Internet through the www.justin.tv website'" did not "adequately support a facially plausible claim that [it] is liable for inducement of copyright infringement." The court agreed with Justin.tv's position that "Plaintiff's allegation does no more than suggest that Justin.tv is providing instructions for use of its product for lawful purposes."

The court also dismissed claims brought by Ark Promotions against Justin.tv and YouTube under the Communications Act based on the same conduct. Following a recent decision in the similar case of Zuffa LLC v. Justin.tv Inc. (D. Nev.), the court held that uploading a copy of cable television footage over the Internet does not violate the Communications Act because the act regulates only "the interception of cable signals during their process of being transmitted or distributed," not "the operation of a website onto which third-party users may upload video clips that have already been transmitted or broadcasted."

The Ark Promotions decision provides guidance as to the types of allegations that a copyright plaintiff must plead to establish an inducement claim, and is one of the first instances in which a court has dismissed an inducement claim at the pleadings stage. The guidance it provides should help ease litigation burdens on online services that provide platforms allowing users to share content, provided that they do not take affirmative steps for the specific purpose of encouraging copyright infringement. The decision also adds to the growing body of legal authority holding that the Communications Act does not regulate the streaming of cable television footage on the Internet.

Wilson Sonsini Goodrich & Rosati represents both Justin.tv and YouTube in connection with the case, and continues to play a leading role in helping clients assess the application of copyright law to online services. For more information, please contact David H. Kramer, Maura L. Rees, Michael H. Rubin, or another member of the firm's intellectual property litigation practice.