CafePress Cannot Beat Copyright Claim for Sale of Merchandise Created From User-Generated Content

Artist Steven Gardner was not pleased to find Cafe Press selling merchandise bearing four of his illustrations on www.cafepress.com, without his permission.  Gardner filed a copyright action against CafePress, and Cafe Press moved to dismiss, claiming that it was only acting at the direction of its users and could not be liable for direct infringement.  A district court in the Southern District of California denied the motion, determining that a genuine issue of material fact exists as to whether CafePress acted with the volition required to support such a claim.  Gardner v. CafePress Inc., Case No. 3:13-cv-1108-GPC-JLB (S.D. Cal. Dec. 4, 2014).

CafePress allows users to upload images to its site, select from its menu of novelty items, including  t-shirts and mugs, and CafePress handles the rest, including printing the image on the merchandise and shipping.   Users can also make their images available for third parties to purchase via various online marketplaces including CafePress’s own website, Amazon, and eBay.  In Gardner’s case, several CafePress users uploaded his images onto CafePress’s website and sold merchandise bearing images through CafePress’s platform and other websites, generating approximately $6,000 in revenue.  CafePress also ran advertisements featuring Gardner’s images.

In this action, the first two elements necessary to succeed in a claim for direct copyright infringement were undisputed:  ownership of the allegedly infringed material, and a violation of at least one exclusive right granted to copyright holders. The heart of the dispute was the third element:  volitional conduct by the Café Press.

The parties questioned whether volitional conduct is truly an element of direct copyright infringement in California.   The Court quickly puts this argument to rest, drawing the parties’ attention to the Ninth Circuit’s recent holding in Fox Broad. Co. v. Dish Network L.L.C., 747 F.3d 1060, 1067 (9th Cir. 2014), which held that liability for direct infringement requires a finding of some volitional conduct.  Notably, the Court explicitly reaffirmed Fox notwithstanding subsequent cases (namely, the Supreme Court’s recent Aereo decision) that overlooked it.

The Court proceeded to apply the element of volitional conduct to this case, but was unable to determine whether the facts measured up.  CafePress argued that it did not act with the requisite volition because, just like cases involving satellite and cable television providers, it is the individual CafePress users – the ones who uploaded the images and offered the items bearing the images available for sale – who are directly liable for infringement, not CafePress.  CafePress also attempted to rely on the immunities afforded to online service providers with respect to user-generated content under the Digital Millennium Copyright Act (DMCA).  On the other hand, Gardner argued that CafePress is akin to the copy shops that courts have held directly liable for the conduct of its customers in copying course packs and the like.

In this instance, Gardner’s case was allowed to proceed past summary judgment because the Court found that there were questions of fact as to whether CafePress’s conduct was sufficient to find liability.  The Court’s decision was influenced by the fact that CafePress’s service is not completely automated and a significant portion of the alleged infringing acts was done by CafePress employees.   In line with Gardner’s argument, the Court highlighted that, like the copy shop, “CafePress’s employees, not its customers, are the ones operating the machinery used by CafePress to create the allegedly infringing items.” While CafePress may act at the direction of its users initially, CafePress is the one actually making the merchandise.

In denying CafePress’s motion for summary judgment on the direct copyright infringement claim, the Court kept the question of CafePress’s direct liability alive for another day.  The decision hints at the Court’s willingness to chip away at protections afforded online service providers under the DMCA when the provider creates physical goods from user-generated content. This qualified immunity from monetary damages under the DMCA may be lost depending on the level of activity and involvement an online provider has in creating products with user-generated content.