Vondran Legal® - Case Brief: Online Policy Group v. Diebold, Inc.

Citation: Online Policy Group v. Diebold, Inc., 337 F. Supp. 2d 1195 (N.D. Cal. 2004)
Court: U.S. District Court for the Northern District of California
Judge: Jeremy Fogel
Date: September 30, 2004
Procedural posture: Cross-motions for summary judgment

Key principle

A copyright owner may be liable under §512(f) of the DMCA when it knowingly sends a materially false takedown notice—including where the targeted use is so clearly protected by fair use that no reasonable copyright owner acting in good faith could believe it is infringing.

Facts

Diebold manufactured electronic voting machines whose security and reliability had become matters of public controversy. An unknown person obtained an archive containing more than 13,000 internal Diebold emails. Some emails showed that Diebold employees had recognized problems with the voting machines.

Swarthmore students Nelson Pavlosky and Luke Smith posted the archive online. IndyMedia published an article criticizing Diebold and linked to the archive. Online Policy Group provided Internet services to IndyMedia, while Hurricane Electric served as OPG's upstream provider.

Diebold sent DMCA cease-and-desist or takedown notices to Swarthmore, OPG, Hurricane Electric, and other service providers, alleging copyright infringement. As a result:

• Swarthmore required the students to remove the archive.
• Hurricane warned OPG that its Internet access might be terminated if the IndyMedia link remained.
• OPG and the students sued Diebold.

Diebold later withdrew its notices and promised not to send further notices concerning the archive.

Claims

The plaintiffs sought:

1. Declaratory and injunctive relief;
2. Damages under 17 U.S.C. § 512(f) for knowing material misrepresentation;
3. Relief based on copyright misuse; and
4. Damages for intentional interference with contractual relations under California law.

Issues

1. Did publishing or linking to the Diebold emails constitute copyright infringement?
2. Did Diebold knowingly and materially misrepresent infringement in violation of § 512(f)?
3. Were the declaratory and injunctive claims moot?
4. Could plaintiffs also recover under California tort law?

Holding

Yes, Diebold violated § 512(f). The court granted summary judgment to the plaintiffs on that claim.

The court also held that:

• Publication of at least the emails addressing voting-machine problems was lawful fair use.
• The declaratory and injunctive claims were moot because Diebold withdrew its notices and promised not to issue more.
• The copyright-misuse claim was moot or unavailable as an affirmative damages claim.
• The state-law tortious-interference claim was preempted because Congress supplied a specific remedy for abusive DMCA notices in § 512(f). Full opinion

Court's reasoning

1. The publication was protected by fair use

The emails were used to inform the public about potential defects in voting machines—a matter implicating the integrity of elections. The use was noncommercial and transformative because the plaintiffs used the emails as evidence supporting public criticism, not as substitutes for Diebold products or to develop competing voting technology.

Diebold also failed to identify particular emails containing protectable expression or establish any legitimate market for the emails. Any harm resulting from customers learning about problems with Diebold's machines was not cognizable copyright-market harm.

The court therefore concluded that at least the emails discussing technical problems were clearly subject to fair use. Importantly, the court did not hold that every email in the archive was uncopyrightable or that every link to copyrighted content is necessarily lawful.

2. Diebold knowingly misrepresented infringement

Section 512(f) imposes liability on a person who “knowingly materially misrepresents” that material or activity is infringing.

The court defined “knowingly” to include circumstances in which the sender:

• Actually knew the representation was false;
• Should have known through reasonable care or diligence; or
• Would have had no substantial doubt had it acted in good faith.

A misrepresentation is “material” when it affects the service provider's response to the notice.

Applying that standard, the court held:

“No reasonable copyright holder could have believed that the portions of the email archive discussing possible technical problems with Diebold's voting machines were protected by copyright.”

Diebold intended its notices to stop publication, and they actually caused removal of material and precipitated litigation. The court characterized Diebold's conduct as using the DMCA “as a sword to suppress publication of embarrassing content rather than as a shield to protect its intellectual property.” Opinion and supporting filings

3. The notices caused actionable injury

The misrepresentations were material because Swarthmore removed the content in reliance on Diebold's notices. Section 512(f) authorized resulting damages, costs, and attorneys' fees. Although the summary-judgment order deferred calculation of monetary relief, the case reportedly concluded with Diebold paying approximately $125,000.

Rule of law

A § 512(f) plaintiff must establish:

1. A representation made through the DMCA process that material or activity was infringing;
2. A knowing misrepresentation;
3. Materiality—meaning that the misrepresentation affected the service provider's response;
4. Reliance by the service provider through removal or disabling of access; and
5. Resulting injury or damages.

Significance

Diebold is an early landmark decision imposing liability for abusive DMCA takedown demands. It stands for the proposition that the DMCA cannot properly be used as a private censorship mechanism to suppress embarrassing but lawful criticism.

Its practical lesson is narrower than “an incorrect takedown notice creates liability.” Section 512(f) requires a knowing, material misrepresentation, reliance, and resulting injury. Later Ninth Circuit authority—particularly Lenz v. Universal Music Corp., 815 F.3d 1145 (9th Cir. 2016)—further developed the requirement that a copyright owner consider fair use before sending a § 512(c) takedown notice.

If you are thinking of filing a DMCA bad faith takedown action, or need help defending against such claims, call us at (877) 276-5084 or fill out the contact form on the right side of this page.