Elsevier v. Chitika

Citation
Elsevier Ltd. v. Chitika, Inc., 2011 WL 6008975 (D. Mass. Dec. 2, 2011) (full-text).

Factual Background
Plaintiff Elsevier is a publishing corporation organized under the laws of England, with its headquarters in London. Plaintiff Wiley is a publishing corporation organized under the laws of New York, with its principal place of business in Hoboken, New Jersey.

Defendant Chitika is “a data analytics company in the business of on-line advertising” organized under the laws of Delaware, with its headquarters in Westborough, Massachusetts. Defendant Kapil Dev Saggi, a citizen and resident of India, operated the website www.pharmatext.org (the Pharmatext website).

On the homepage of the Pharmatext website, there were pictures of the front covers of various books available through the company. The website also listed different ways of finding links to such books and other supposedly free books. If a book was available through the website, a picture of the front cover of the book was available on the screen. By clicking on the hypertext link on the website, one would be linked to a page which made it possible to download the complete text of the book for free.

Plaintiffs state that since Pharmatext users for infringing copies did not pay anything for using the website, there was heavy-third party advertising through which Pharmatext earned an income. Plaintiffs believe that many of these third-party ads were placed on the website by defendant Chitika.

Plaintiffs were concerned that unauthorized copies of their books were available through the Pharmatext website. They subsequently asked David Burke, a resident of Massachusetts, to investigate the matter. In his investigation on or about August 1, 2010, Burke downloaded entire copies of plaintiffs’ books at no cost. The problem was that plaintiffs never authorized anyone to store their books online or to deliver copies as downloads to users of the Pharmatext website.

In January 2011, plaintiffs filed an action against defendants for copyright infringement alleging two counts, each for a specific book that was displayed on the Pharmatext website.

Plaintiffs allege that defendant Saggi is liable for direct infringement carried out via Pharmatext. They further allege that Chitika is liable for contributory infringement.

Trial Court Proceedings
On January 6, 2011, the court granted plaintiffs’ motion for a temporary restraining order after hearing an ex parte motion. Days later, the court held a hearing on plaintiff’s motion for a preliminary injunction. The court granted the motion for a preliminary injunction and ordered the disabling of the Pharmatext website.

Direct copyright infringement
Plaintiffs alleged that defendant Saggi is liable for direct copyright infringement carried out via Pharmatext. However, Chitika argues that plaintiffs have not made a viable claim for direct infringement, which is necessary to a claim for contributory infringement (their next claim).

The court denied the plaintiffs’ motion for direct infringement because of the geographic location of the illegal reproduction. The downloading of unauthorized copies of plaintiffs’ books does not constitute direct infringement occurring entirely within the United States.

Contributory copyright infringement
Chitika argues that even if plaintiffs could successfully claim direct infringement, they would fail on the claim that Chitika knowingly made any material contribution to the alleged infringement. Contributory infringement is only caused by intentionally inducing or encouraging direct infringement. One who does this with knowledge is liable.

Knowledge. Actual knowledge is not necessary. The defendant having reason to know that infringement is taking place is sufficient. It is also unnecessary for the defendant to be aware that the infringing activity violates the copyright laws.

Plaintiffs fail to show facts that Chitika was familiar with the content of the Pharmatext website, or knew that such content was infringing.

Materiality. Further, to be held liable for contributory infringement, one has to contribute materially, meaning whether the activity in question substantially assists the infringement.

Chitika argued that even if it were aware of the infringing content on the Pharmatext website, it still would not be contributorily liable because it did not materially contribute to any infringement.

Chitika’s motion for judgment on the pleadings was granted. The claims against Chitika were dismissed with prejudice.