Columbia Pictures Industries, Inc. v. Fung

Columbia Pictures Industries, Inc. and other plaintiffs (collectively, Columbia) (plaintiffs) owned copyrights in the entertainment field. Carl Fung (defendant) maintained and operated websites (collectively, the Fung sites) using BitTorrent networks, an evolved form of the peer-to-peer networks exemplified by Napster and Grokster, which allowed users to download digital content from other network users, called peers, instead of directly from the provider’s site. Unlike earlier peer-to-peer networks, a BitTorrent network allowed users to download different pieces of a digital-content file simultaneously from many different peers, thereby increasing the speed of the file download. Each user completing such a download became a source for subsequent download requests. The Fung sites provided categories of downloadable files, such as “Top 20 Movies,” a category for which users could upload, via links supplied at the Fung sites, torrent files for the top 20 highest-grossing films then playing in the United States. Torrent files did not contain the actual digital content searched for; instead, they contained data used by a BitTorrent client program to retrieve content pieces from available peers at the time of a user’s download request. All items associated with the listed categories comprised copyrighted content. Columbia sued Fung for copyright infringement. Fung raised a safe-harbor defense under the Digital Millennium Copyright Act (DMCA). Columbia introduced evidence that: (1) 90 percent to 95 percent of content downloaded from the Fung sites was copyrighted; (2) approximately 25 percent of the Fung sites’ 10 million unique monthly users were based in the United States, translating to around 2.5 million United States citizens visiting the Fung sites each month; and (3) approximately 50 percent of Fung site downloads for which users’ IP addresses were made available were made from the United States. Columbia moved for summary judgment on three theories, including inducement liability for copyright infringement. Citing law requiring that an act of alleged infringement be completed within the United States to be actionable under the Copyright Act, Fung contended that Columbia was required to prove that both a file transferor and a file transferee were located in the United States.