In 2016, artist Kerne Erickson’s publisher, Grey Young Publishing (“GYP”) sued online retailer, Zazzle, for copyright infringement. GYP presented evidence that Zazzle users had designed and sometimes sold products such as t-shirts, posters, and postcards, featuring nearly 40 of Erickson’s paintings. Last week, the jury agreed and hit Zazzle with a $460,000 verdict.Zazzle is an online retailer where users can create, customize, and sell their own products. First, Zazzle “designers” upload images to Zazzle of their artwork, slogans, or designs. Once purchased, Zazzle’s automatic process prints the designer’s image on a blank product and then ships to the customer. The designer receives a royalty for each item sold featuring their work.
Although Zazzle’s user agreement requires that uploaded content be original and not violate the intellectual property rights of others, some designers attempt to steal the other’s artistic works, such as Erickson’s, to sell their products. Although Zazzle reviews tens of thousands of images to filter for potentially infringing material, sometimes products slip through the cracks.
Typically, the Digital Millennium Copyright Act’s safe harbor provision protects sites for the infringing content of their users, if they have certain takedown procedures in place. Since it would be impossible for many sites, like Youtube, to police all user-uploaded content, it would be unfair to make these sites liable for infringing material uploaded to their site.
However, the court in this case found that Zazzle did not qualify for DMCA safe harbor protection. Although the court determined that Zazzle was a qualified provider of online services that lacked knowledge of the infringement—in fact, GYP never sent a proper takedown notice to Zazzle, the court decided that Zazzle had “the right and ability to control the sale of infringing products.” This “right or ability to control” is typically found when a service provider “exerts substantial influence on the activities of users.” The court notes that, unlike Amazon or eBay, protected by the safe harbor provision, which allow users to select which products to sell, “Zazzle had the right and ability to control the types of products it produced”—even though these products feature the images selected to sell by Zazzle’s users. Further, it is not clear how controlling the types of products produced is a “substantial influence on the activities of users.” Finally, much of Zazzle’s “control” as described by the court, such as “possession of the products sold by its users” and “delivery of any item offered for sale on its website,” is also characteristic of Amazon’s fulfillment program in which Amazon stores, packs, ships, and provides customer service for users’ products.
The court goes on to suggest that Zazzle is protected for the user-uploaded images displayed on its website, but not for those same user-uploaded images once printed onto a physical product. Somehow, the same degree of “right or ability to control” that protects Zazzle for the uploaded images, is no longer enough once the images move automatically into production. It is unclear how Zazzle has more control over the uploading of an infringing image once it is produced. The court’s decision is internally inconsistent and creates a double standard that is problematic for all custom retailers that allow user-input.
Ultimately, the court’s hangup is that “Zazzle creates the product.” The court may have more neatly fit its analysis into the DMCA framework by determining that Zazzle was no longer functioning as a service provider in manufacturing and shipping the products. This may also be the case for Amazon in the future as it moves into brick-and-mortar stores and away from solely online services.