Michael Rossi ran a website called Internet Movies.com. The website entreated visitors to join its service in order to download full length movies, including some movies that hadn’t yet been released. Viewing the website, it’s probably fair to say that the reasonable person would conclude that this is a pirate video site.
And that’s what the MPAA concluded when one of its vigilant monitors viewed the site. The MPAA reviewed the site, and then sent DMCA 512(c) take-down notices to both Rossi and his ISP. Rossi’s ISP told Rossi that in the face of a threat from the MPAA, they were going to take down the site.
Rossi immediately switched to another ISP. Thus, internetmovies.com was down for at least one second, plus potentially some indeterminate amount of time for some indeterminate number of users while the changed IP address propagated through the internet DNS servers.
However, it turned out that Rossi’s business plan was not what it seemed. Rather than taking subscription fees to hook up people to "full length movies", Rossi merely provided links to trailers of movies on other sites. Outraged that the MPAA would mess with his contractual relations with his ISP and cause his site to be down for at least a second, indignant that the MPAA would label him a copyright infringer, and distraught that he had been outraged and indignant, Rossi filed a lawsuit against the MPAA on four counts:
1. Interference with contractual relations
2. Interference with prospective economic advantage
3. Libel and defamation
4. Intentional infliction of emotional distress
The basis of Rossi’s claims is that if the MPAA had conducted a more thorough investigation, they would have realized that his site was a ripping off his subscribers, not MPAA members. The fact that the MPAA did not give their credit card number to Rossi to find out if his links were not as they purported was tantamount to negligence, bad faith and actionable tort.
The crux is an interpretation of the section 512(c)(3)(A)(5) term "good faith". An element of 1 and 2? Is that MPAA did not have a "good faith" belief that Rossi was committing copyright infringement.
"Good Faith Belief" under § 512(c)(3)(A)(v)
When you send out a DMCA take-down notice, one of the requirements is that you provide the following:
A statement that the complaining party has a good faith belief that the use of the material in the manner complained of is not authorized by…the law.
Note that this appears to be slightly different than section 512(f), which states that if you "knowingly make a material misrepresentation", then you are subject to attorneys fees.
The interplay between these two provisions becomes critical in understanding the misrepresentation cases. In this case, Rossi did not claim misrepresentation under section 512(f) like OPG did (which was decided two months before Rossi). Had Rossi attempted that, he probably would have failed because there is no way to read a duty to investigate into the 512(f) language. Consequently, like Arista before him, Rossi’s strategy was to claim that the MPAA did not meet their burden under (c)(3)(A)(5), and rather than use that as the basis for a claim under (f), he attempts to use it as a basis for state law claims.
Why did Arista and Rossi do this? Presumably because on the face of it, the "good faith belief" requirement seems easier to assert than the "knowingly and materially" requirement of (f).
In Diebold, the judge shut the door on this strategy, that the state law claims are pre-empted by the DMCA, and any claim for breach of (c)(3)(A)(5) needs to come under (f).
The subjective / objective exegesis
In Diebold, the defendants attempted to import the Rule 11 standard to (f) to stand for the proposition that as long as you didn’t act frivolously in filing the take-down, then you had not "knowingly and materially misrepresented". In this case, the plaintiff’s attempt to import the Rule 11 standard to (c)(3)(A)(5) to stand for the proposition that in order to have "a good faith belief" of infringement, the copyright owner is required to conduct a reasonable investigation into the allegedly offending website.
Rossi contends that the MPAA did not have sufficient information for form a "good faith belief" under § 512(c)(3)(A)(v) that Rossi was illegally infringing the MPAA’s copyrights.
Rossi’s interpretation of the "good faith belief" requirement would impose an objective standard of review for gauging the reasonableness of the MPAA’s conduct in notifying Rossi and his ISP of the allegedly infringing website.
MPAA – Alvarez:
MPAA counters that the "good faith belief" requirement is a subjective one, and imports standards from labor cases for the proposition that courts have traditionally interpreted "good faith" to encompass a subjective standard.
These cases demonstrate that the objective reasonableness standard is distinct from the subjective
good faith standard, and that Congress understands this distinction. When enacting the DMCA, Congress could have easily incorporated an objective standard of reasonableness. The fact that it did not do so indicates an intent to adhere to the subjective standard traditionally associated with a good faith requirement.
Reconciliation with Section 512(f)
In § 512(f), Congress included an expressly limited cause of action for improper infringement notifications, imposing liability only if the copyright owner’s notification is a knowing
misrepresentation. A copyright owner cannot be liable simply because an unknowing mistake is made, even if the copyright owner acted unreasonably in making the mistake. See § 512(f). Rather, there must be a demonstration of some actual knowledge of misrepresentation on the part of the copyright owner. Id.
 Juxtaposing the "good faith" proviso of the DMCA with the "knowing misrepresentation" provision of that same statute reveals an apparent statutory structure that predicated the
imposition of liability upon copyright owners only for knowing misrepresentations regarding allegedly infringing websites. Measuring compliance with a lesser "objective reasonableness" standard would be inconsistent with Congress’s apparent intent that the statute protect potential violators from subjectively improper actions by copyright owners.
Application of Standard to Rossi
Applying the subjective good faith standard of §512(c), Rossi failed to raise a genuine issue of material fact regarding MPAA’s violation of the DMCA. In reaching this conclusion, we examine: 1) the information residing on Rossi’s website, and 2) MPAA’s actions in response to the discovery of that information.
The representations on the website led the MPAA employee to conclude in good faith that motion pictures owned by MPAA members were available for immediate downloading from the website. 8 The unequivocal language used by Rossi not only suggests that conclusion, but virtually compels it. As the district court noted, "[t]here is little question that these statements strongly suggest, if not expressly state, that movies were available for downloading from the site." Rossi, 2003 WL at *3. In fact, Rossi even admitted that his own customers often believed that actual movies were available for downloading on his website.
 Accordingly, Rossi has failed to raise a triable issue of fact as to whether the MPAA complied with the notice and takedown procedures set forth in § 512 of the DMCA. Given
the explicit nature of the statements on Rossi’s website, the district court properly found that no issue of material fact existed as to MPAA’s "good faith belief" that Rossi’s website was infringing upon its copyrighted materials.