IP Law Daily Amazon not liable for infringing work sold by third parties
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Thursday, August 17, 2017

Amazon not liable for infringing work sold by third parties

By Cheryl Beise, J.D.

An author failed to state claims for copyright infringement and false designation of origin under the Lanham Act against Amazon for allegedly storing infringing copies of the author’s book on its servers on behalf of third-party vendors, the federal district court in Philadelphia has held. The court also held that the author’s breach of contract claim was preempted by the Copyright Act and that his state law claims based on misappropriation of his likeness were barred by Section 230 of the Communications Decency Act. Amazon’s motion to dismiss the author’s claims was granted in its entirety (Parker v. Paypal, Inc., August 16, 2017, Alejandro, N.).

In 1998, Gordon Roy Parker (aka Ray Gordon, dba Snodgrass Publishing Group) obtained a copyright registration for his book titled "Outfoxing the Foxes: How to Seduce the Women of Your Dreams" ("Foxes"). Parker had entered into a contract with Amazon for the sale of "Foxes," in Amazon’s Kindle store, as a standalone book and as part of Parker’s Pickup Artist Library, which included six other works. After discovering that third parties were offering unauthorized copies of "Foxes" through Amazon’s Kindle store, Parker, appearing pro se, filed suit against Amazon.com, Inc., and Amazon Web Services, Inc. (together, "Amazon"); Paypal, Inc.; and several alleged direct infringers, including PUA Media Library, Inc., dba pualib.com; Payloadz, Inc.; Shannon Sofield; C2S, LLC; Custom CD, Inc.; and Rimage, Inc.

Before the court was Amazon’s motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) and Parker’s claims for direct, contributory, and vicarious copyright infringement; false designation of origin under the Lanham Act; misappropriation of likeness; breach of contract; and unjust enrichment. Amazon argued that Parker failed to state claims under the Copyright Act and Lanham Act, that his breach of contract claim was preempted by the Copyright Act, and that his remaining state law claims were barred by Section 230 of the Communications Decency Act (CDA).

Copyright infringement. Parker alleged that Amazon had committed direct and indirect copyright infringement by hosting the infringing work on their cloud servers on behalf of defendants Shannon Sofield and Payloadz, Inc.

The Third Circuit and other courts have held that merely hosting infringing content does not constitute direct copyright infringement, the court noted. In 2007, the Third Circuit affirmed the dismissal of similar copyright infringement claims that Parker had brought against Google (Parker v. Google, Inc., 242 F.App’x 833). While Amazon’s storage of Parker’s infringing work was less transitory than Google’s caching of websites in the earlier case, Amazon’s storage of electronic materials was "by its nature, passive conduct performed automatically at the instigation of others, and does not render Moving Defendants liable for any direct copyright infringement," the court said. Parker failed to state a claim for direct infringement.

Parker’s claims for contributory or vicarious copyright infringement failed because they were premised on conclusory allegations that were devoid of factual support for the proposition that Amazon had acted in concert with the alleged infringers, or that it had an "obvious and direct financial interest in the exploitation of copyrighted materials." Because Parker failed to state any claim for copyright infringement, the court did not reach Amazon’s safe harbor defense under the Digital Millennium Copyright Act.

False designation of origin/unfair competition. Parker’s Lanham Act Section 43(a) claim was based on Amazon’s purported aiding and abetting of defendant PUA Media’s alleged attempt to pass off "Foxes" as if it were written by a "C. Kellogg" and/or a "Hunting Fox." However, Parker did not cite, nor did the court find, any authority to support the finding that aiding and abetting liability applies to an unfair competition claim brought under the Lanham Act. Parker did not allege that Amazon was a moving force in replacing his name on the infringing work, or had otherwise actively participated in PUA Media’s infringing conduct.

Breach of contract. Parker alleged that he had contracted with Amazon to sell copies of "Foxes" on their Kindle stores and would remit 70 percent of the purchase price to Parker as a royalty. Parker argued that Amazon had breached the e-publishing contract by storing infringing copies of "Foxes" on its servers and allowing the distribution of that work. The court agreed with Amazon that Parker’s breach of contract claim was preempted by Section 301 of the Copyright Act because it was premised on the same conduct that gave rise to his copyright infringement claim.

Other state law claims. Parker claimed that Amazon had violated his right to publicity under California law and his right to privacy under Pennsylvania law because Amazon was vicariously liable for the misappropriation of his name and likeness in promoting the infringing versions of "Foxes." Parker also alleged that Amazon was unjustly enriched by the misuse of his name and likeness.

The court held that Parker’s state law claims were preempted by Section 230(c)(1) of the CDA, which provides that "[n]o provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider." It was undisputed that Amazon did not contribute to the creation of the allegedly infringing copies of "Foxes" offered by others. Indeed, Parker did not contest the applicability of Section 230, but instead raised unsupported and meritless arguments challenging the constitutionality of the statute.

The case is No. 2:16-cv-04786-NIQA.

Attorneys: Jonathan A. Talcott (Ballard Spahr LLP) for PayPal Inc. Gary Green (Sidkoff, Pincus & Green, PC) for PayLoadz, Inc. Evan R. Luce (Fox Rothschild LLP) for C2S LLC, d/b/a Click2Sell.eu and HostGator.com, LLC.

Companies: PayPal Inc.; PayLoadz, Inc.; C2S LLC, d/b/a Click2Sell.eu; HostGator.com, LLC

MainStory: TopStory Copyright PublicityRights TechnologyInternet Trademark PennsylvaniaNews

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