eBay wins Copyright Infringement Lawsuit.

In one of the first judicial decisions involving the Digital Millenium Copyright Act, a United States District Court in Los Angeles recently ruled that eBay, the on-line auction house, was not liable for copyright infringement for the auction and sale of what were determined to be pirated goods on its site.

The suit was brought by a film maker, Robert Hendrickson, alleging that bootleg copies of a movie he produced were sold on eBay.

Ebay argued that it acted solely as a digital clearinghouse between independent parties, and that its services were that of an internet service provider. Therefore, it claimed it was immune from liability under the DMCA. The Court agreed, holding that eBay had neither the ability nor any obligation to verify the "provenance" of each item sold through its internet service.

The Court distinguished between a traditional auction house, which is actively involved in the listing, bidding, sale and delivery of each item offered for sale, and eBay, which provides the platform only, and "all arrangements to consummate the transaction are made directly between the buyer and seller."

Finally, the Court noted that eBay has no involvement in the final exchange, and generally " has no knowledge of whether a sale is actually completed."

Ebay states that its policy is to remove any unauthorized items for sale, once it is informed of the problem, but that is has no obligation to do so, and in any event, it is not liable for any resulting infringement claims.

This Court agreed with eBay.