OPG v. Diebold

Diebold, the controversial developer of direct-recording electronic voting systems, sent takedown notices to ISPs who hosted copies of a series of leaked internal memos documenting various flaws in the company’s e-voting systems. Non-profit ISP Online Policy Group (OPG) and two Swarthmore students sued Diebold. A Federal District Court judge ruled in favor of the ISP and students while granting summary judgment on the claim that Diebold violated 512(f) of the Digital Millennium Copyright Act (DMCA) by sending takedown notices while knowing that infringement has not actually occured. Online Policy Group v. Diebold, Inc..

Plaintiffs Smith, Pavlosky, and OPG … seek injunctive, declaratory, and monetary relief from this Court, alleging that Diebold’s claim of copyright infringement was based on knowing material misrepresentation and that Diebold interfered with Plaintiffs’ contractual relations with their respective ISPs. Plaintiffs seek a judicial declaration that publication of the email archive, hosting or providing colocation services to websites that link to allegedly infringing material, and providing internet services to others who host websites that link to allegedly infringing material are lawful activities. They request an injunction to prevent Defendants from threatening or bringing any lawsuit for copyright infringement with respect to the email archive arising from the publication, linking, or hosting services described in the complaint and a judgment barring Defendants from enforcing any copyright in the email archive unless and until Defendants’ alleged copyright misuse has ceased.

Because Diebold has “withdrawn and in the future will not send a cease and desist letter pursuant to the DMCA to any ISP concerning the email archive,” the plaintiffs’ claims for an injunction and declaratory relief are moot.
However, the court finds that Diebold misrepresented its claims of copyright infringement when sending the §512(f) notices to ISPs.

Publication is Fair Use

The court finds the publication of some of the contents in the email archive is lawful as fair use:

The email archive was posted or hyperlinked to for the purpose of informing the public about the problems associated with Diebold’s electronic voting machines. It is hard to imagine a subject the discussion of which could be more in the public interest. If Diebold’s machines in fact do tabulate voters’ preferences incorrectly, the very legitimacy of elections would be suspect. Moreover, Diebold has identified no specific commercial purpose or interest affected by publication of the email archive, and there is no evidence that such publication actually had or may have any affect on the putative market value, if any, of Diebold’s allegedly copyrighted material.

Plaintiffs’ and IndyMedia’s use was transformative: they used the email archive to support criticism that is in the public interest, not to develop electronic voting technology. Accordingly, there is no genuine issue of material fact that Diebold, through its use of the DMCA, sought to and did in fact suppress publication of content that is not subject to copyright protection.

§512(f) Standard

Plaintiffs suggest that a 512(f) action should require a “likelihood of success” standard of proof similar to the summary judgment standard while defendants sought a standard similar to Rule 11’s “frivolous.” The court rejects both of these approaches:

A requirement that a party have an objectively measured “likelihood of success on the merits” in order to assert claims of copyright infringement would impermissibly chill the rights of copyright owners. At the same time, in requiring a showing of “knowing material misrepresentation,” Congress explicitly adopted a standard different from that embodied in Rule 11, which contains a variety of other requirements that are not necessarily coextensive with those set forth in section 12(f). The Court concludes that the statutory language is sufficiently clear on its face and does not require importation of standards from other legal contexts. A party is liable if it “knowingly” and “materially” misrepresents that copyright infringement has occurred. “Knowingly” means that a party actually knew, should have known if it acted with reasonable care or diligence, or would have had no substantial doubt had it been acting in good faith, that it was making misrepresentations.

Tortious Interference with Contractual Relations

The court agrees with Diebold that the DMCA, as federal law, preempts the state law claim of tortious inteference with contractual relations.

Even if a copyright holder does not intend to cause anything other than the removal of allegedly infringing material, compliance with the DMCA’s procedures nonetheless may result in disruption of a contractual relationship: by sending a letter, the copyright holder can effectuate the disruption of ISP service to clients. If adherence to the DMCA’s provisions simultaneously subjects the copyright holder to state tort law liability, there is an irreconcilable conflict between state and federal law.


EFF: EFF Wins in Diebold Copyright Abuse Case: “In a landmark case, a California district court has determined that Diebold, Inc., a manufacturer of electronic voting machines, knowingly misrepresented that online commentators, including IndyMedia and two Swarthmore college students, had infringed the company’s copyrights. This makes the company the first to be held liable for violating section 512(f) of the Digital Millennium Copyright Act (DMCA), which makes it unlawful to use DMCA takedown threats when the copyright holder knows that infringement has not actually occured.”
Wendy Seltzer (EFF): Free Speech Vindicated in OPG v. Diebold: “Along with opening up the e-voting archives, I hope this decision will give new strength and new weapons to other online speakers and ISPs against the chill of aggressive, improper copyright claims.”
Jason Schultz (EFF): EFF wins Diebold DMCA case: “Bottom line: If you misuse DMCA take down notices, you can be liable for damages under section 512(f). How liable? That’s up next when we file our supplemental briefs. Copyright abusers beware!”
Joe Gratz: Victory in Diebold: “This is the first opinion I can think of that has found that a copyright holder “knowingly materially misrepresented” that a copyright was infringed when there was, in fact, copying of a copyrighted work, but the copying was obviously fair use. This requires copyright holders, for the first time, to go through some kind of low-level rational fair use analysis before sending a DMCA takedown notification.”
Free Culture: We won the Diebold case! “I definitely picked the wrong time to take a nap today.”
Wired News: Diebold Loses Key Copyright Case: “Students who sued Diebold Election Systems won their case against the voting machine maker on Thursday after a judge ruled that the company had misused the Digital Millennium Copyright Act and ordered the company to pay damages and fees. Lawyers for the students call the move a victory for free speech.” 
John Palfrey: Electronic voting and copyright?: “Most everyone who lived through the presidential election of 2000 would agree that it’s important to have public discussion about the integrity of voting systems in America. Most everyone, except Diebold. And Diebold sold electronic voting machines to at least 37 U.S. states in the last four years.”