Friday’s Endnotes – 02/25/11

By , February 25, 2011.

Preliminary injunction against ivi TV — The online TV service thought it had discovered a loophole in the law, but the judge didn’t buy it. What jumped out at me was this bit from the section on irreparable harm: “In copyright cases, harm can often be irreparable either in light of possible market confusion, because it is ‘notoriously difficult’ to prove the loss of sales due to infringement, and because of loss of the First Amendment ‘right not to speak.'” The court cites to the 2nd Circuit’s decision in Salinger v. Colting (607 F.3d 68), which noted the First Amendment ‘right not to speak’ of a plaintiff in a copyright infringement suit as relevant to the “balance of hardships” step in deciding whether to issue a preliminary injunction. Said the 2nd, “‘[t]he loss of First Amendment freedoms,’ and hence infringement of the right not to speak, ‘for even minimal periods of time, unquestionably constitutes irreparable injury.'”

Google files amicus brief in Isohunt appeal — I don’t have much to say here, except, having gone back through some of the previous documents in the lawsuit against the torrent site, I discovered this little gem in Isohunt’s own appellate brief: “[Defendant Gary Fung] has never sought or received financial support, other than earnings from advertising, sales of T-shirts and donations from individuals.”

NARM 2011 Entertainment & Technology Law Conference Series — The National Association of Recording Merchandisers is presenting its annual conference series featuring “discussions, topics and speakers that intersect the technology, copyright, and entertainment law issues” at the forefront of the entertainment business. The conference will be held in New York City February 28th (this Monday), San Francisco March 30, and Los Angeles May 12.

Kevin Saunderson speaks out on sampling — Says the Detroit techno icon, “I have a huge affection for sampling, it’s how some of the most inspiring and ground breaking tracks of our times were created. We’ve pretty much all sampled records at some time, and cleared the sample so we can use it on our releases, but it is just not cool to take someone else’s music, create a big old loop of it and then put your name on it and try to have success entirely off the back of another artist’s efforts.”

The Motown Sound: In Performance at the White House — Airing March 1 on PBS. President Obama made some remarks at the concert regarding Motown founder Berry Gordy and the legacy of Motown Records:

Now, apparently Berry tried a lot of things before following his heart into music.  A high school dropout, he failed as a record store owner, competed as an amateur boxer, finally took a job earning $85 a week on the assembly line at the local Lincoln-Mercury plant.  And it was there, watching the bare metal frames transformed into gleaming automobiles, that Berry wondered why he couldn’t do the same thing with musicians, and help turn new talent into stars.

And before long, he quit his job at the plant, borrowed $800, and set up shop in a little house with a banner across the front that read “Hitsville, U.S.A.”  His family thought he was delusional.  (Laughter.)  But as Berry said, “People thought the Wright Brothers had a stupid idea, so I say, ‘Bring on the stupid ideas.’”

[…]

Along the way, songs like “Dancing in the Streets” and “What’s Going On” became the soundtrack of the civil rights era. Black artists began soaring to the top of the pop charts for the first time.  And at concerts in the South, Motown groups literally brought people together –- insisting that the ropes traditionally used to separate black and white audience members be taken down.

Golan v Holder

By , February 22, 2011.

A lawsuit filed a decade ago has made its way to the Supreme Court.

Plaintiffs for Golan v. Holder filed a petition for writ of cert to the Court back in October. Briefing for the cert stage was completed earlier this month, and the Center for Internet and Society has links to the petition, response, and amici briefs.

Despite its lengthy trip to the Supreme Court, including several trips back and forth between the District Court of Colorado and the 10th Circuit, Golan has flown somewhat under the radar.

I recently took the time to read through the opinions generated during Golan’s trek. There’s a lot of different things at play here: the Copyright Clause, the First Amendment, international treaties, the public domain. For my nonlegal readers, I also think this litigation is a good way to see the appellate process in action and how courts approach a constitutional analysis.

What follows is sort of a Cliffs Note version of the litigation.

The Beginning

To understand the how and why of the issues involved in Golan, a bit of background is necessary. The Berne Convention for the Protection of Literary and Artistic Works first came into force in 1887 between Belgium, France, Germany, Italy, Spain, Switzerland, Tunisia, and the UK. The international agreement set minimum levels of copyright protection that member parties must provide for, and, more importantly, requires that member parties treat copyrighted works of authors from other Berne members the same as copyrighted works of their own domestic authors.

In part to ensure that countries don’t benefit from waiting to sign up, Berne provides for retroactive application to existing works. Article 18(1) requires protection for other Berne member works in the new country which “have not fallen into the public domain in the country of origin through the expiry of the term of protection.”

The US did not join Berne until 1988. At the time, a number of foreign works that were still protected in their own country had fallen into the public domain in the US — some because they had failed to follow copyright formalities that had previously been required under US law (Berne prohibits parties from subjecting other member works to formalities), 1Article 5(2). some because the work’s subject matter had not been protected under US law (as was the case with sound recordings fixed before 1972). Congress, however, chose to ignore Article 18(1) when it implemented Berne, leaving these works in the public domain in violation of the treaty.

And they would have gotten away with it, too, if it wasn’t for that meddling TRIPS.

The Uruguay Round Agreements Act

The Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) was created during the Uruguay Round of GATT in 1994. The international agreement, administered by the newly created World Trade Organization, both incorporated Berne standards and set up an international dispute resolution panel to enforce compliance. The EU made it known that one of the first panels would be brought against the US for failing to comply with Article 18(1) when it joined Berne. 2William Patry, The Constitutionality of GATT Restoration, Patry Copyright Blog, May 25, 2005.

So § 514 of the Uruguay Round Agreement Act (URAA), the implementing legislation, was drafted to bring US law in line with its treaty obligations. The provisions restored copyright in any work that had fallen into the public domain in the US “for the remainder of the term of copyright that the work would have otherwise been granted in the United States if the work never entered the public domain in the United States.” The Act is limited to a work which is “not in the public domain in its source country through expiration of term of protection,” but “is in the public domain in the United States due to (i) noncompliance with formalities imposed at any time by United States copyright law, including failure of renewal, lack of proper notice, or failure to comply with any manufacturing requirements; (ii) lack of subject matter protection in the case of sound recordings fixed before February 15, 1972; or (iii) lack of national eligibility.” 3URAA § 514(h)(6); codified at 17 USC § 104A(h)(6). The Act also includes provisions for “reliance parties” — those who had made use of the works because they had fallen into the public domain and would be affected by the restoration of copyright protection on those works. These provisions, among other things, require the filing of a notice of intent to enforce copyright by the owner of a restored work and limit the liability of reliance parties who infringe on restored works.

Noted copyright scholar William Patry, who was copyright counsel to the House IP subcommittee at the time, provides insights into the drafting process of § 514 at The Constitutionality of GATT Restoration (with some more background at The Constitutionality of the Bootleg Statute). He notes:

I did not believe that the legislation provided a direct incentive for the creation of new works, nor that, divorced from the Berne obligation, restoration represented good policy. But honesty in treaty adherence is good policy, and retroactive protection for U.S. works overseas is of benefit to both U.S. copyright owners and to the system as a whole. I thought those two objectives sufficient, from a policy and constitutional standpoint. And I say this as someone who believes, more fervently than even Larry Lessig, that the “Promotion of the Progress of Science” language in Article I, section 8, clause 8 is a real substantive limitation on Congress’s power. But I also believe that one must look to the system as a whole to see whether there has been a benefit provided by legislation, and in the case of GATT restoration, I answer that question affirmatively.

Golan Challenges URAA

In the wake of URAA and the subsequent Copyright Term Extension Act of 1997 (CTEA), which which extended the term of copyright an additional 20 years on currently protected works, a number of reliance parties joined together to challenge the constitutionality of the acts. In 2001, a lawsuit was filed by Lawrence Golan, an orchestral director and conductor; SA Publishing, a distributor of orchestral recordings and sheet music; Festival Films, Timeless Films, both distributors of public domain films and television shows; and several other similar parties. (For simplicity purposes, I’ll be referring to all plaintiffs as “Golan” and § 514 of the URAA as just “URAA” for the rest of this article.)

All the parties involved had been performing, copying, or distributing works that had been in the public domain before URAA restored copyright protection in them. Now, they were faced with either paying royalties on the works, ceasing the use of them, or risking litigation.

Golan initially sought a declaration in the District Court of Colorado that the CTEA and URAA were unconstitutional under the Copyright Clause and that the URAA was a restriction of free speech under the First Amendment. The case was put on hold when the Supreme Court granted cert in Eldred v. Ashcroft to consider the constitutionality of the CTEA. After the Supreme Court decided that the CTEA was within Congress’s constitutional authority, the District Court went back to Golan.

On March 15, 2004, it ruled on the government’s motion to dismiss for failure to state a claim. 4Golan v. Ashcroft, 310 F.Supp.2d 1215. It held that Golan’s CTEA claim — that extending the copyright term runs afoul of the “limited times” prescription in the Copyright Clause — was foreclosed by Eldred. 5Said the Court in Eldred, “the Copyright Clause empowers Congress to determine the intellectual property regimes that, overall, in that body’s judgment, will serve the ends of the Clause.” The remaining URAA claims, however, were “legally cognizable”; while they may ultimately be unsuccessful, dismissal wasn’t warranted at this stage. Golan alleged that Congress couldn’t remove works once they entered the public domain since doing so wouldn’t “promote the progress” of the arts as the Copyright Clause was argued to require; that the URAA restricted speech, and because it “altered the traditional contours” of copyright law, it was subject to First Amendment scrutiny; and that the URAA was retroactive legislation that upset settled expectations in an arbitrary and irrational way, violating Golan’s substantive due process rights.

Golan I

Following the court’s denial of the motion to dismiss, both parties moved for summary judgment. A new opinion was issued on April 19, 2005, that ruled on these motions. 6Golan v. Gonzalez, No. 01-B-1854, 2005 WL 914754 (“Golan I”). At this juncture, the court had to answer three questions. First, does the Constitution give Congress the authority to enact the URAA, or does, as the plaintiffs argued, the Copyright Clause create an absolute bar against removing works from the public domain. Second, assuming Congress did have such authority, does the URAA advance a legitimate governmental interest in a rational way. Finally, assuming it does, does the URAA infringe on other constitutionally-protected rights, notably the right to free speech.

Congress does have the power to restore copyright to works in the public domain, said the court. It drew upon distinctions between copyright and patent law, historical practice, and, perhaps most relevant, wartime copyright acts from 1919 and 1941 that restored copyright in foreign works which had similarly fallen in the public domain. The court also launched into an interesting and rather extensive historical analysis of the common law rights of authors that is worth reading in and of itself.

The second question, does URAA have a rational basis, was an easy one to answer. Courts very rarely find legislation unconstitutional under this level of scrutiny, and this time was no different — the District Court concluded that Congress was “attempting to promote protection of American authors by ensuring compliance with the Berne Convention”, a goal rationally related to URAA.

The last question facing the court was whether the plaintiff’s “First Amendment speech rights are infringed by the burdens of complying with the copyright protections that [URAA] has restored to works that they once freely disseminated.” Judge Babcock dismissed this argument in one sentence, stating “I see no need to expand upon the settled rule that private censorship via copyright enforcement does not implicate First Amendment concerns.” 7J. Babcock cited Nihon Keizai Shimbun, Inc. v. Comline Bus. Data, Inc., 166 F.3d 65, 74 (2d Cir. 1999); Los Angeles News Service v. Tullo, 973 F.2d 791, 795 (9th Cir. 1992); SunTrust Bank v. Houghton Mifflin Co., 268 F.3d 1257, 1263-1264 (11th Cir. 2001), reh’g denied, 275 F.3d 58 (11th Cir. 2001); Eldred v. Reno, 239 F.3d at 375.

The court thus granted the government’s motion for summary judgment and denied Golan’s motion. Golan appealed to the 10th Circuit.

Golan II

Two years later, the 10th Circuit released its decision on the appeal. 8Golan v. Gonzalez, 501 F.3d 1179 (“Golan II”). Summary judgment decisions are reviewed by appellate courts de novo — literally, starting over — so the same questions are considered and analyzed anew.

The 10th Circuit begins with a succinct description of the constitutional limitations — including First Amendment limitations — on Congress’s authority to make copyright law in a post-Eldred world. With those principles established, it turned to the issues of the case.

First up, say hello to the CTEA again. Despite the dismissal of the CTEA claim three years prior due to the Supreme Court’s holding in Eldred, Golan attempted to try it again from a different tack. Eldred, the argument went, only said that Congress had the authority to extend existing copyright terms. But it didn’t decide whether the new length — “life-plus-70-years” — was constitutional in and of itself. Technically correct, but unavailing. “The rationale underlying Eldred compels us to conclude that the CTEA-imposed timespan passes constitutional muster,” said the court.

Like the District Court, the 10th Circuit found that URAA is within Congress’s authority under the Copyright Clause. Unlike the District Court, the 10th Circuit devoted considerable time to examining the First Amendment issues raised by URAA. Eldred had suggested that a law could only be subject to First Amendment scrutiny if it “altered the traditional contours of copyright.” The court picked apart what this means and concluded that URAA does alter the traditional contours of copyright.

Ok, so now what? While ordinarily one doesn’t have a first amendment right to infringe someone else’s expression, once a work moves into the public domain, and anyone is free to copy that expression, that copying is protected by the first amendment. Taking the work back out of the public domain interferes with those vested first amendment rights. The first amendment safeguards that are generally adequate to address free speech in copyright law — the idea-expression distinction and fair use — aren’t available here. Reliance parties want to use the entire expression of a restored work.

Identifying a free speech impingement is only the beginning of a court’s job. The 10th Circuit remanded to the District Court to complete the First Amendment analysis, concluding with instructions that should be familiar to anyone who has taken a bar exam:

In conducting its First Amendment analysis on remand, the district court should assess whether § 514 is content-based or content-neutral. Content-based restrictions on speech are those which “suppress, disadvantage, or impose differential burdens upon speech because of its content.” These restrictions “are subject to the most exacting scrutiny.” If § 514 is a content-based restriction, then the district court will need to consider whether the government’s interest in promulgating the legislation is truly “compelling” and whether the government might achieve the same ends through alternative means that have less of an effect on protected expression. By contrast, “[a] regulation that serves purposes unrelated to the content of expression is deemed neutral, even if it has an incidental effect on some speakers or messages but not others.” A content-neutral restriction must be “narrowly tailored to serve a significant governmental interest.”

Golan III

Golan went back down to the District Court, which released its opinion on April 3, 2009, on the motions filed for summary judgment in response to the Circuit Court’s holding. 9Golan v. Holder, 611 F.Supp.2d 1165 (“Golan III”). Both parties and Judge Babcock agreed URAA was a content-neutral regulation. But Judge Babcock held that URAA was not “narrowly tailored.” Congress could have given permanent protection to reliance parties rather than the temporary protection it did give them. Since the Berne Convention allows discretion in how member parties provide restoration, Congress could have done this while still complying with its legitimate international obligations. The court denied the government’s motion for summary judgment and granted the plaintiff’s motion.

Golan IV

Any questions about what the District Court’s decision that URAA was unconstitutional meant for the act disappeared when the 10th Circuit reversed the decision on appeal. 10Golan v. Holder, 609 F.3d 1076 (“Golan IV”). The court began by noting that this case involves foreign affairs policy choices by Congress and the Executive Branch, choices courts should accord special deference to.

With that in mind, the court placed great weight on the fact that Congress chose to limit the protection for reliance parties here in order to further the interests of US authors abroad. It noted that “Congress heard testimony from a number of witnesses that the United States’ position on the scope of copyright restoration — which necessarily includes the enforcement against reliance parties — was critical to the United States’ ability to obtain similar protections for American copyright holders.”

As for whether URAA was narrowly tailored to achieve this significant government interest, the court answered affirmatively. Narrow tailoring does not mean that a law must be the least restrictive method of advancing a government interest. The 10th Circuit was not even convinced that the District Court’s conclusion that URAA could have been drawn more narrowly — by expanding the rights of reliance partners — was less burdensome on speech interests; “the United States needed to impose the same burden on American reliance parties that it sought to impose on foreign reliance parties … [so] the benefit that the government sought to provide to American authors is congruent with the burden that Section 514 imposes on reliance parties.”

URAA represented a choice crafted by Congress to balance competing interests of US copyright holders and reliance parties, a policy choice best made by Congress and not the courts. The 10th Circuit concluded, “Plaintiffs may have preferred a different method of restoring copyrights in foreign works, but that is not what the Constitution requires; as long as the government has not burdened substantially more speech than necessary to further an important interest, the First Amendment does not permit us to second guess Congress’s legislative choice.”

Final Thoughts

While the story of Golan and the various opinions generated by the litigation over the last decade are interesting from an academic standpoint, the practical effects of the Supreme Court taking the case are elusive.

The Supreme Court rarely grants cert. I’m no expert in predicting Court decisions, but I don’t see many of the hallmarks of a case the Court would grant cert here. There’s no circuit split on the constitutionality of URAA. Two other Courts of Appeal heard constitutional challenges to the Act; both, like the 10th Circuit, upheld the Act. 11Kahle v. Gonzales, 487 F.3d 697 (9th Cir 2007); Luck’s Music Library v. Gonzales, 407 F.3d 1262 (DC Cir 2005). The 10th Circuit decision was unanimous, and it did not expand or add to the Supreme Court’s holding in Eldred. Given the deference accorded to Congress in the copyright realm by the Eldred court, and the amount of deference identified by the 10th Circuit that should be accorded to Congress’s crafting of URAA, it’s difficult to see the Supreme Court changing paths and second-guessing Congress’s policy choices here.

A Supreme Court decision either way would have little effect outside the parties to this case. URAA was passed to deal with the US joining the first major international copyright treaty. This type of situation will not come up again in the future.

So why push this case all the way to the Supreme Court in the first place?

Perhaps it’s a way to get the Court to say some nice things about the public domain. But despite the plaintiff’s framing of this case about the importance of the public domain in general, it’s not really about the public domain. While it’s not entirely settled that works which have entered the public domain because they’ve reached the end of the copyright term cannot be removed from the public domain, I think there’s very strong support for that idea in the law. But more importantly, I don’t think there’s any reason to think Congress would entertain the idea. It hasn’t for the past 200 years, and URAA, like the 1919 and 1941 restoration acts, only removed works that had l0st protection due to technical reasons because of exigent, specific, and unique circumstances.

Perhaps it is an attempt to gain a first amendment foothold in copyright law. 12See, for example, Golan v. Holder gets a second wind: “Lessig is understandably excited about this case. It relies on the little glimmer of hope that Justice Ginsburg planted in Eldred v. Ashcroft, that the First Amendment really does have something to say about what Congress can do when it tinkers with the Copyright Act, but not in most cases.” I talked about this increasing trend of “free speech opportunism” from academia and public interest groups in Copyright and Censorship. I think this argument is merely a “facade” (as the Eldred Court put it) to dress up what is ultimately a policy disagreement with Congress.

References

References
↑1 Article 5(2).
↑2 William Patry, The Constitutionality of GATT Restoration, Patry Copyright Blog, May 25, 2005.
↑3 URAA § 514(h)(6); codified at 17 USC § 104A(h)(6).
↑4 Golan v. Ashcroft, 310 F.Supp.2d 1215.
↑5 Said the Court in Eldred, “the Copyright Clause empowers Congress to determine the intellectual property regimes that, overall, in that body’s judgment, will serve the ends of the Clause.”
↑6 Golan v. Gonzalez, No. 01-B-1854, 2005 WL 914754 (“Golan I”).
↑7 J. Babcock cited Nihon Keizai Shimbun, Inc. v. Comline Bus. Data, Inc., 166 F.3d 65, 74 (2d Cir. 1999); Los Angeles News Service v. Tullo, 973 F.2d 791, 795 (9th Cir. 1992); SunTrust Bank v. Houghton Mifflin Co., 268 F.3d 1257, 1263-1264 (11th Cir. 2001), reh’g denied, 275 F.3d 58 (11th Cir. 2001); Eldred v. Reno, 239 F.3d at 375.
↑8 Golan v. Gonzalez, 501 F.3d 1179 (“Golan II”).
↑9 Golan v. Holder, 611 F.Supp.2d 1165 (“Golan III”).
↑10 Golan v. Holder, 609 F.3d 1076 (“Golan IV”).
↑11 Kahle v. Gonzales, 487 F.3d 697 (9th Cir 2007); Luck’s Music Library v. Gonzales, 407 F.3d 1262 (DC Cir 2005).
↑12 See, for example, Golan v. Holder gets a second wind: “Lessig is understandably excited about this case. It relies on the little glimmer of hope that Justice Ginsburg planted in Eldred v. Ashcroft, that the First Amendment really does have something to say about what Congress can do when it tinkers with the Copyright Act, but not in most cases.”

Friday’s Endnotes – 02/18/11

By , February 18, 2011.

I’ve decided to start doing a weekly wrap-up of items I’ve found interesting enough to share, a mix of old and new, legal and nonlegal, relating in some way to copyright and the content industries. Enjoy!

Would the Bard Have Survived the Web? — From Authors Guild president Scott Turow, executive director Paul Aiken, and Shakespeare professor James Shapiro comes this fascinating essay comparing the “cultural paywalls” of the outdoor playhouses to the “virtual paywalls” of copyright. It explains how commerce and stable property rights help the arts and entertainment flourish. Predictably, most copyright skeptics completely missed the point of the article.

Senate Judiciary Committee hearing on online piracy and counterfeiting — Scott Turow proves he’s been busy lately, testifying at the Committee’s hearing on a new version of COICA. Representatives of other stakeholders representing the “big 5” players in the internet ecosystem needed to effectively address online piracy — domain name registrars, hosting service providers, payment card processors, internet service providers, and online advertising providers — also testified. Well, four out of the five did at least.

In Defense of Copyright: Creativity, Record Labels, and the Future of Music — via Lon Sobel’s Entertainment Law Reporter, Brian Day looks at the role of copyright and record labels as digital technology continues to dramatically change the music business landscape in this great article from the upcoming issue of Seton Hall Journal of Sports and Entertainment Law.

Good news or bad? CDs still 74% of all album sales — Overall, still not good news for the music industry, as total album sales continue to slump. Still, an interesting statistic. If you spend enough time on hip, young blogs, you start to think the only places selling CDs are antique shops.

The Chicago Code — I checked out this out when it premiered last week because it was created by the Shield’s Shawn Ryan and haven’t been disappointed. Dubbed a “love letter to Chicago“, and shot primarily in the Windy City With Broad Shoulders And Lots of Other Nicknames, the series features great performances and terrific writing. Mondays on Fox, or online at Fox and Hulu.

Ingrid Michaelson — I had the pleasure of seeing the talented Ingrid perform last fall. Earlier this month, she had a dessert recipe in Parade Magazine (it was delicious). This past week, Hypebot presented a look at a promotion experiment that she used to help make her fall tour profitable. Ingrid also premiered a new(er) video for her latest tune, Parachute:

[youtube]jr4fPdIAtyU[/youtube]

Can Google Be Seized By ICE?

By , February 15, 2011.

Is Google in danger of being seized by ICE for facilitating copyright infringement?

It seems quite a few people have asked that question in the wake of ICE’s Operation in Our Sites, which seized the domain names of pirate sites last July, November, and, most recently, a few weeks ago.

John Moe, of American Public Media, asked Homeland Security Investigation Special Agent James Hayes that very question and posted the audio online.

The idea seems to be that most of the domains seized point to sites that link to infringing material rather than hosting it themselves. Google links to infringing material. Hence, Google is at risk for forfeiture.

In Super Bowl Seizures, I mentioned that facilitating property needs a substantial connection to the underlying crime to be subject to forfeiture under federal law but glossed over what that means. Today, I want to look at this standard in more detail and see what it means for Google.

The Forfeiture Standard

Federal law provides for the forfeiture of “any property used, or intended to be used, in any manner or part to commit or facilitate the commission of” copyright infringement. 118 USC § 2323(a). As noted in my previous post, this language is very broad: facilitation means the property need only make the commission of the crime “less difficult or ‘more or less free from hindrance'”, and the statute covers any property used in any manner or part. One could theoretically trace a “for want of a nail” line of all sorts of property that make a crime less difficult to commit.

However, courts have generally recognized that the connection between property and crime must be more than de minimis. In the language most often used by courts, the connection must, at a minimum, be more than “incidental” or “fortuitous.”

This broad language has been narrowed by the passing of the Civil Asset Forfeiture Reform Act of 2000, which added to the law language that says (emphasis added) “if the Government’s theory of forfeiture is that the property was used to commit or facilitate the commission of a criminal offense, or was involved in the commission of a criminal offense, the Government shall establish that there was a substantial connection between the property and the offense.” 218 USC § 983(c)(3). Congress intended the “substantial connection” language to require that the use of property to facilitate a crime is “significantly greater” than incidental or fortuitous. 3146 Congressional Record 5231 (2000).

On the other side of the spectrum, the forfeiture statute does not require that the facilitation of a prohibited activity is the principle use of the property. 4Bennis v. Michigan, 516 US 442, 450 (1996). Nor does it require that the property is indispensable to the commission of a prohibited activity. 5See, eg, US v. One Parcel of Real Estate Known as 916 Douglas Ave., Elgin, Ill., 903 F.2d 490, 493 (7th Cir. 1990).

The first big question is where to draw the line between substantial and insubstantial connections.

Incidental and Fortuitous versus Deliberate and Planned

The terms “incidental” and “fortuitous” are often contrasted with the terms “deliberate” and “planned” in forfeiture cases. 6Most often in Eighth Amendment challenges, though courts have used such terminology outside that context, e.g., US v. 475 Cottage Drive, 433 F.Supp.2d 647, 656 (MD NC 2006). A closer look at the meaning of these words may aid in understanding what kinds of property may be forfeited. From Merriam-Webster:

  • incidental – (1) being likely to ensue as a chance or minor consequence; (2) occurring merely by chance or without intention or calculation.
  • fortuitous – (1) occurring by chance; (2) coming or happening by a lucky chance.
  • deliberate – (1) characterized by or resulting from careful and thorough consideration; (2) characterized by awareness of the consequences; (3) slow, unhurried, and steady as though allowing time for decision on each individual action involved.
  • planned – (1) arranged the parts of; (2) devised or projected the realization or achievement of; (3) had in mind.

The Merriam-Webster’s Dictionary of Synonyms adds further shading to the meanings of these words. In its entry for “accidental, casual, fortuitous, contingent, incidental, adventitious,” the book notes:

The last five of these words are synonyms of accidental but not always of one another. Accidental denotes simply either happening by chance or not of the real or essential nature of a thing. Casual, fortuitous, and contingent come into comparison with accidental in the first of these senses; incidental and adventitious chiefly in the second sense. […] Fortuitous so strongly implies chance that it sometimes connotes the absence, or seeming absence, of a cause […] Incidental may or may not imply chance; it typically suggests a real and often a designed relationship, but one which is secondary and nonessential.

We also learn that “Deliberate implies full awareness of the nature of what one says or does and often a careful and unhurried calculation of the intended effect or of the probable consequences”, while “Plan, in its widest sense, regularly implies mental formulation of the method [of achieving a given end].”

Substantial Connection

These definitions are helpful, but not exactly enlightening. Now we know, for example, that the commission of criminal activity need not be the principle purpose of property for it to be subject to forfeiture, but it must be more than the secondary purpose of property. Let’s take a quick look at how the courts have dealt with these meanings.

On one hand, the Oklahoma Supreme Court held that marijuana residue found in a weapons safe was not enough to support forfeiture of the weapons for facilitating the possession of marijuana with intent to distribute — the presence of the marijuana was incidental and fortuitous. 7State ex rel. Redman v. $122.44, 231 P.3d 1150 (OK SCt. 2010). On the other hand, courts have found a substantial connection between houses and drug offenses when the houses were used to store narcotics or engage in narcotic transactions. 8For example, US v. Premises Known as 3639-2nd St., NE, 869 F.2d 1093 (8th Cir. 1989).

The Eighth Circuit held that there was not a substantial connection between a truck seen parked at property used to grow marijuana but used to transport roofing tile and the facilitation of the marijuana cultivation — the connection was “simply too tenuous and far removed to support its forfeiture.” 9US v. One 1976 Ford F-150 Pick-Up VIN F14YUB03797, 769 F.2d 525 (8th Cir. 1985). The government was unable to provide any evidence that the truck was ever used to transport marijuana or even seed, fertilizer, or other supplies used to cultivate the plants.

But the same circuit held that there was a substantial connection between the commission of child pornography offenses and the home of where the offender committed the crime. Said the court:

The house enabled Hull to establish a hardwired connection to the Internet, which allowed him to distribute the contraband. It also provided a secure place to store the images that he later distributed. Use of a computer in the privacy of the residence, rather than in a library, coffee shop, or senior center, made it easier for Hull to conceal his crimes from public scrutiny. Hull posits that he could just as easily have used a motel room, but use of the residence avoided rental costs and the attention that would be attracted by frequent visits to local motels. 10US v. Hull, 606 F.3d 524, 527-28 (8th Cir. 2010).

If anything is clear, it’s that the standard for forfeiture, even with a “substantial connection” requirement, is still relatively low. But that raises the second question: to what extent should property owners be at risk of forfeiture for the actions of third parties?

Ownership and the Outer Bounds of Forfeiture

Who owns the property is irrelevant in forfeiture cases. In fact, prior to CAFRA, which added an “innocent owner” defense to all federal forfeiture statutes, the fact that an owner was unaware that his property was used to facilitate a criminal offense had been “uniformly rejected as a defense” in a long line of cases. 11Bennis at 449, quoting Calero-Toledo v. Pearson Yacht Leasing Co., 416 US 663 (1974). For some of the earliest cases, see US v. Brig Malek Adhel, 43 US 210 (1844): “the acts of the master and crew, in cases of this sort, bind the interest of the owner of the ship, whether he be innocent or guilty; and he impliedly submits to whatever the law denounces as a forfeiture attached to the ship by reason of their unlawful or wanton wrongs”.

The problem that should be apparent is whether this principle has an outer bound. Forfeiture has been sought, after all, to varying degrees of success against multi-unit apartment buildings where a number of tenants had sold and used drugs, motels which were the site of numerous drug transactions, and businesses that had problems with customers using and selling drugs.

Courts have hypothesized about the outer bound. “It is said that a Pullman sleeper can be forfeited if a bottle of illicit liquor be taken upon it by a passenger, and that an ocean steamer can be condemned to confiscation if a package of like liquor be innocently received and transported by it,” said the Supreme Court in 1921. 12JW Goldsmith, Jr.-Grant Co. v. US, 254 US 505. Perhaps surprisingly though, such a situation has never reached a court. “When such an application shall be made it will be time enough to pronounce upon it,” continued the Court, a statement reiterated in 1996. 13Bennis at 450-51.

Since courts have not addressed the issue, it’s necessary to explore these outer bounds on our own. Two principles emerge. First, while ownership of facilitating property is irrelevant, some privity between the owner and the offender must exist. Courts have upheld forfeiture where property owners have leased, lent, or otherwise allowed the offender possession, but forfeiture of property that had been stolen or wrongfully acquired would probably not be allowed. 14I say probably because, like the Pullman sleeper and ocean steamer hypothetical, this principle has not been reached by courts but only implied. See Calero-Toledo at 689, which also cites Peisch v. Ware, 4 Cranch 347, 364 (1808); JW Goldsmith at 512; US v. One Ford Coupe Automobile, 272 US 321, 333 (1926); and Van Oster v. Kansas, 273 US 465, 467 (1926). Second, despite the many times courts have said the culpability of the owner in the underlying crime is irrelevant for in rem forfeiture, the culpability of the owner — based on similar principles in tort law — would play a role in the outer bounds of what facilitating property may properly be forfeited. This culpability would play a role in separating the Calero yachts from the ocean steamers, the Bennis automobiles from the Pullman sleepers, and the Torrent-finder domain names from the Google domain names.

The Deterrent Function of Forfeiture

It may be helpful at this point to revisit the purposes of forfeiture. Stefan D. Casella explains:

Forfeiture is also used to abate nuisances and to take the instrumentalities of crime out of circulation. For example, if drug dealers are using a “crack house” to sell drugs to children as they pass by on the way to school, the building is a danger to the health and safety of the neighborhood. Under the forfeiture laws, we can shut it down. If a boat or truck is being used to smuggle illegal aliens across the border, we can forfeit the vessel or vehicle to prevent its use time and again for the same purpose. The same is true for an airplane used to fly cocaine from Peru into Southern California, or a printing press used to mint phony $100 bills.

The idea that an instrumentality — a thing — can be treated as an offender and properly confiscated by the state as a way of preventing, deterring, or punishing crime is an ancient one, stretching at least as far back as biblical times: “if an ox gore a man or a woman to death, the ox shall be surely stoned, and its flesh shall not be eaten,” reads Exodus 21:28.

At the same time, worry over the harshness that may result from forfeiture is almost inherent. Forfeiture has “repeatedly been called a hard law” wrote Edward Shippen in a 1787 court case, a call that has continued to be repeated since then by courts, commentators, scholars, and even Congress. The harshness arises in part because of the necessities of law enforcement and the difficulties in enforcing certain laws. 15See, e.g., JW Goldsmith at 510-11. Shippen identifies one of the difficulties as the “devices of ingenious men,” making forfeiture laws “necessary.” “If the end can be accomplished without infringing the private rights of the subject, it is so much the better; but, at all events, the exigencies of government must be satisfied.” The Supreme Court said much the same in 1844:

It is not an uncommon course in the admiralty, acting under the law of nations, to treat the vessel in which or by which, or by the master or crew thereof, a wrong or offence has been done as the offender, without any regard whatsoever to the personal misconduct or responsibility of the owner thereof. And this is done from the necessity of the case, as the only adequate means of suppressing the offence or wrong, or insuring an indemnity to the injured party. 16Brig Malek Adhel at 233.

Third Party Liability and Its Limits

The deterrent function is defeated if “ingenious men” can evade forfeiture by simply divorcing ownership of property from its use. At the same time, the irrelevance of ownership to forfeiture places responsibility on property owners to ensure the things they own are not used to cause harm. “In breaches of revenue provisions some forms of property are facilities, and therefore it may be said, that Congress interposes the care and responsibility of their owners in aid of the prohibitions of the law and its punitive provisions, by ascribing to the property a certain personality, a power of complicity and guilt in the wrong,” said the Supreme Court on one occasion. 17JW Goldsmith at 510 On another, it observed that “to the extent that such forfeiture provisions are applied to lessors, bailors, or secured creditors who are innocent of any wrongdoing, confiscation may have the desirable effect of inducing them to exercise greater care in transferring possession of their property.” 18Calero at 687-88

In fact, imposing increased responsibility on a third party to deter the wrongs of another is a common feature of the law, and there are many examples in other areas of the law that parallel what we see in forfeiture cases. 19Bennis at 452, “This deterrent mechanism is hardly unique to forfeiture. For instance, because Michigan also deters dangerous driving by making a motor vehicle owner liable for the negligent operation of the vehicle by a driver who had the owner’s consent to use it, petitioner was also potentially liable for her husband’s use of the car in violation of Michigan negligence law”; Van Oster at 467, “It is not unknown or indeed uncommon for the law to visit upon the owner of property the unpleasant consequences of the unauthorized action of one to whom he has entrusted it. Much of the jurisdiction in admiralty, so much of the statute and common law of liens as enables a mere bailee to subject the bailed property to a lien, the power of a vendor of chattels in possession to sell and convey good title to a stranger, are familiar examples. They have their counterpart in legislation imposing liability on owners of vehicles for the negligent operation by those entrusted with their use, regardless of a master-servant relation”; Phile v. Anna, 1 Dall. 197 (1787), “It must certainly affect every humane man to fee the innocent suffer; but in society this is not strange or uncommon; and the distinction may properly be taken between criminal and civil cases. The law never punishes any man criminally but for his own act, yet it frequently punishes him in his pocket, for the act of another. Thus, if a wife commits an offence, the husband is not liable to the penalties; but if she obtains the property of another by any means not felonious, he must make the payment and amends. There are a variety of other instances, in which men are responsible for one another, in consequence of their connection in society.” In copyright law, obviously, third parties may be liable for aiding, benefiting from, or inducing infringement. Automobile owners may be liable for the negligent use of their car by someone who has borrowed it.

Wal-Mart is no stranger to the extent to which the law will hold a third party responsible for acts of another. According to the Wal-Mart Litigation Project, the company has been held liable for the injuries of a man shot by an unknown assailant in the parking lot, the injuries of a man shot by a child playing with a BB gun in the store, and the wrongful death of a man shot with ammunition bought at a store by minors because an employee failed to check ID. (I realize lawsuits like this often face heavy criticism; I point them out not to suggest they are or aren’t reasonable or logical but merely to describe the extent of third party liability as it currently exists.)

But there is a limit on how far this liability can be extended in forfeiture cases. This limit was recognized over 200 years ago by the Supreme Court when it said that “a forfeiture can only be applied to those cases in which the means that are prescribed for the prevention of a forfeiture may be employed.” 20Peisch at 363. The limit was restated by the Court recently when, after a survey of cases throughout history, noted that “In none of these cases did the Court apply the guilty property fiction to justify forfeiture when the owner had done all that reasonably could be expected to prevent the unlawful use of his property.” 21Austin v. US, 509 US 602, 616 (1993).

Courts have applied this “all reasonable means” standard in a subjective way: what is reasonable from the perspective of the owner in his specific circumstances, not what a judge would consider reasonable. “A property owner is not required to take heroic or vigilante measures to rid his or her property” of illegal activity. 22US v. Lavaland Annex, 256 F.3d 949, 954 (10th Cir. 2001); US v. 710 Main Street, 753 F.Supp 121, 125 (SDNY 1990). But the owner must do something, and at least one court has held that being aware of suspicious facts regarding the use of property triggers the duty to act. 23See US v. 2011 Calumet, 699 F.Supp 108, 110 (1988).

Comparisons to Tort Law

The duties of owners in the forfeiture context share some similarities to legal duties in tort law, but they are not an exact match. Perhaps this is due to the historically limited and specialized role of forfeiture. The closest analogue may be the tort of public nuisance, and in fact many state laws providing for forfeiture have been characterized as public nuisance laws. 24See Bennis, Michigan statute declared any vehicle used for prostitution is a public nuisance and subject to abatement; C.J. Hendry Co. v. Moore, 318 US 133 (1943), “Section 845 of the California Fish and Game Code declares that a net used in violation of the provisions of the Code is a public nuisance and makes it the duty of any arresting officer to seize the net and report its seizure to the commission”; Van Oster, “The Kansas statute … declares that an automobile or other vehicle used in the state in the transportation of intoxicating liquor is a common nuisance and establishes a procedure followed in this case for its forfeiture and sale”; Lawton v. Steele, 152 US 133 (1894), New York act declares that “any net, etc., maintained in violation of any law for the protection of fisheries, is to be treated as a public nuisance, ‘and may be abated and summarily destroyed by any person'”. Like forfeiture, public nuisance has largely been defined through statute (although, unlike forfeiture, public nuisance also exists under common law), used to effectively address quasi-criminal activities where traditional criminal processes are ineffective. Prior to the introduction of zoning law, public nuisance laws were the only real way for towns and cities to regulate “less-desirable” businesses. And, like forfeiture, whether something is considered a public nuisance hinges more on the offense of property rather than any culpability of the owner.

And, like forfeiture cases, the outer bounds of what constitutes a public nuisance under a specific statute remains largely unexplored, especially when the property in question is engaged in legitimate business but happens to also be the site of targeted activity.

At best, we have a sort of “shoot from the hip” approach to deciding between actionable nuisances and facilitating property and legitimate businesses and uses of property. The parallel can be seen by comparing HSI Special Agent James Hayes’ response to the question of whether Google can be seized and the Washington Supreme Court’s decision in State ex rel Carroll v. Gatter. 25260 P.2d 360 (1953).

Hayes gave a decidedly nontechnical and nonlegal answer to the question. He noted that the federal government was only interested in targeting sites that haven’t done “due diligence” to ensure that they aren’t linking to infringing content. Their interest was limited only to those sites where piracy was the “main premise of doing business.” The Washington Supreme Court similarly gave a muddy, gut-feeling analysis in its decision. The court was faced with the question of whether the state could properly declare and abate the Oxford Hotel in Seattle as a public nuisance targeting places used for “purposes of lewdness, assignation, or prostitution.” The hotel had been the site of several acts of prostitution (some aided by bellmen employed by the hotel). However, the court noted that the intent of the law was to target places one would find in “red light districts”, and the Oxford Hotel had “a reputation for being a decent, orderly, respectable hotel in the community.”

Can Google Be Seized Or Not

I apologize if this discussion has not been particularly illuminating. Despite the long history of forfeiture, questions about its edges and outer bounds have not been thoroughly fleshed out. With that said, I’d like to offer my two cents on whether Google is at risk for having its domain name seized.

First, I don’t think there is a substantial connection between the Google domain name and links to infringing content that may appear in search results. Google’s search engine is designed to return results from as much of the web as it can scan, whether these results are links to html pages, documents, video, or audio, etc. Any links to infringing content appear only to the extent they exist. Displaying these links is only incidental to Google’s service.

The same can not be said for a site like Torrent-finder, one of the domain names seized by ICE. A site like this searches only public torrent trackers and returns results consisting solely of torrent files. When 90-99% of such files are infringing, the connection between a site like that and piracy can hardly be called incidental. 26Research by the Internet Commerce Security Laboratory at the University of Ballarat has found that 89.9 percent of torrents infringe copyright; BitTorrent census: about 99% of files copyright infringing. It is exceedingly difficult to argue that the designer of such a site didn’t have the unauthorized distribution of copyrighted works in mind when planning a site like that.

Google also has a continuing obligation, like any search engine, to remove links when it becomes aware that the content they link to is infringing. Although some would argue that Google could do a better job at this, few would say it’s not doing “due diligence” to limit the availability of links to infringing content. But again, when a site is returning only results consisting of an almost complete majority of infringing content, a much higher level of due diligence is required to remain legitimate. Simply responding to DMCA takedown notices as they arrive when faced with such widespread, apparent infringement is not enough to qualify such a service for safe harbor; this “head in the sand” approach is also not enough to immunize such a site from forfeiture.

Google, then, is in the same category of the hypothetical Pullman sleeper and cruise ship, beyond the outer bounds of forfeiture.

The bottom line is that debate over whether Google can be forfeited or not is largely academic. The government has limited resources and is not interested in going after legitimate businesses that do their due diligence and engage in reasonable measures to ensure their property isn’t used for criminal offenses. There are unfortunately plenty of pirate sites to keep ICE busy.

References

References
↑1 18 USC § 2323(a).
↑2 18 USC § 983(c)(3).
↑3 146 Congressional Record 5231 (2000).
↑4 Bennis v. Michigan, 516 US 442, 450 (1996).
↑5 See, eg, US v. One Parcel of Real Estate Known as 916 Douglas Ave., Elgin, Ill., 903 F.2d 490, 493 (7th Cir. 1990).
↑6 Most often in Eighth Amendment challenges, though courts have used such terminology outside that context, e.g., US v. 475 Cottage Drive, 433 F.Supp.2d 647, 656 (MD NC 2006).
↑7 State ex rel. Redman v. $122.44, 231 P.3d 1150 (OK SCt. 2010).
↑8 For example, US v. Premises Known as 3639-2nd St., NE, 869 F.2d 1093 (8th Cir. 1989).
↑9 US v. One 1976 Ford F-150 Pick-Up VIN F14YUB03797, 769 F.2d 525 (8th Cir. 1985).
↑10 US v. Hull, 606 F.3d 524, 527-28 (8th Cir. 2010).
↑11 Bennis at 449, quoting Calero-Toledo v. Pearson Yacht Leasing Co., 416 US 663 (1974). For some of the earliest cases, see US v. Brig Malek Adhel, 43 US 210 (1844): “the acts of the master and crew, in cases of this sort, bind the interest of the owner of the ship, whether he be innocent or guilty; and he impliedly submits to whatever the law denounces as a forfeiture attached to the ship by reason of their unlawful or wanton wrongs”.
↑12 JW Goldsmith, Jr.-Grant Co. v. US, 254 US 505.
↑13 Bennis at 450-51.
↑14 I say probably because, like the Pullman sleeper and ocean steamer hypothetical, this principle has not been reached by courts but only implied. See Calero-Toledo at 689, which also cites Peisch v. Ware, 4 Cranch 347, 364 (1808); JW Goldsmith at 512; US v. One Ford Coupe Automobile, 272 US 321, 333 (1926); and Van Oster v. Kansas, 273 US 465, 467 (1926).
↑15 See, e.g., JW Goldsmith at 510-11.
↑16 Brig Malek Adhel at 233.
↑17 JW Goldsmith at 510
↑18 Calero at 687-88
↑19 Bennis at 452, “This deterrent mechanism is hardly unique to forfeiture. For instance, because Michigan also deters dangerous driving by making a motor vehicle owner liable for the negligent operation of the vehicle by a driver who had the owner’s consent to use it, petitioner was also potentially liable for her husband’s use of the car in violation of Michigan negligence law”; Van Oster at 467, “It is not unknown or indeed uncommon for the law to visit upon the owner of property the unpleasant consequences of the unauthorized action of one to whom he has entrusted it. Much of the jurisdiction in admiralty, so much of the statute and common law of liens as enables a mere bailee to subject the bailed property to a lien, the power of a vendor of chattels in possession to sell and convey good title to a stranger, are familiar examples. They have their counterpart in legislation imposing liability on owners of vehicles for the negligent operation by those entrusted with their use, regardless of a master-servant relation”; Phile v. Anna, 1 Dall. 197 (1787), “It must certainly affect every humane man to fee the innocent suffer; but in society this is not strange or uncommon; and the distinction may properly be taken between criminal and civil cases. The law never punishes any man criminally but for his own act, yet it frequently punishes him in his pocket, for the act of another. Thus, if a wife commits an offence, the husband is not liable to the penalties; but if she obtains the property of another by any means not felonious, he must make the payment and amends. There are a variety of other instances, in which men are responsible for one another, in consequence of their connection in society.”
↑20 Peisch at 363.
↑21 Austin v. US, 509 US 602, 616 (1993).
↑22 US v. Lavaland Annex, 256 F.3d 949, 954 (10th Cir. 2001); US v. 710 Main Street, 753 F.Supp 121, 125 (SDNY 1990).
↑23 See US v. 2011 Calumet, 699 F.Supp 108, 110 (1988).
↑24 See Bennis, Michigan statute declared any vehicle used for prostitution is a public nuisance and subject to abatement; C.J. Hendry Co. v. Moore, 318 US 133 (1943), “Section 845 of the California Fish and Game Code declares that a net used in violation of the provisions of the Code is a public nuisance and makes it the duty of any arresting officer to seize the net and report its seizure to the commission”; Van Oster, “The Kansas statute … declares that an automobile or other vehicle used in the state in the transportation of intoxicating liquor is a common nuisance and establishes a procedure followed in this case for its forfeiture and sale”; Lawton v. Steele, 152 US 133 (1894), New York act declares that “any net, etc., maintained in violation of any law for the protection of fisheries, is to be treated as a public nuisance, ‘and may be abated and summarily destroyed by any person'”.
↑25 260 P.2d 360 (1953).
↑26 Research by the Internet Commerce Security Laboratory at the University of Ballarat has found that 89.9 percent of torrents infringe copyright; BitTorrent census: about 99% of files copyright infringing.

The Reverse Class Action Lawsuit: Challenges of Enforcing Copyright Online

By , February 10, 2011.

The latest technique to appear in the struggle against online infringement is the “reverse class-action” lawsuit.

Earlier this month, OpenMind Solutions, a producer of adult films, filed suit against a defendant class consisting of all persons “engaged in copyright infringement activity via BitTorrent file sharing protocol during relevant time period” of its films.

A class action is “lawsuit by representation.” In some situations, the amount of individual parties is so large that joining them all together would prove highly unworkable, and the factual and legal issues are so similar that having individual lawsuits for each party would be a waste of time and resources. So the law allows these individuals to join as a class, with a representative party to do the litigating and the ultimate judgment (or settlement) being binding on all parties. This conserves scarce judicial resources and allows parties to have their day in court when damages in the aggregate are large but individual damages are too small for a lawsuit to make sense.

Most commonly, the class in a class action is a group of plaintiffs suing an individual defendant. Chances are, you’ve already been part of one of these class actions — maybe you’ve gotten a letter notifying you of a lawsuit involving all customers of company x who purchased product y in the last year followed a few months later by some gift certificate or coupon when a settlement was reached.

The Defendant Class Action

Class actions have been around for centuries. Susan T. Spence notes that litigation by representatives of certain groups (villages and parishes) was “well established in England by the 12th century.” 1For more on the history and origins of class action lawsuits, ClassActionBlawg has a nice collection of links at http://classactionblawg.com/2008/06/02/did-you-ever-wonder-where-class-actions-came-from/ In the US, the basis of the modern class action is found in Rule 23 of the Federal Rules of Civil Procedure, which provides requirements for when “one or more members of a class may sue or be sued as representative parties on behalf of all members,” and states have similar provisions.

While plaintiff classes are by far the most common, you’ll note that the language of Rule 23 provides for both plaintiff and defendant classes (“sue or be sued“). In the 16th, 17th, and 18th centuries, defendant classes were as typical as plaintiff classes. 2Vince Morabito, Defendant Class Actions and the Right to Opt Out: Lessons for Canada from the United States, 14 Duke Law Journal of Comparative & International Law 197, 203 (2004). Today, though rare, defendant classes still show up. 3For example, see Kerney v. Fort Griffin Fandangle Ass’n, 624 F.2d 717 (5th Circ. 1980); In re Broadway Funding Corp., 66 BR 1005 (Bankr. EDNY 1986); and also Tilley v. TJX Cos., 345 F.3d 34 (1st Cir. 2003), a copyright infringement case against a defendant class where, though the court vacated the class certification, noted that since it was “cognizant of the idiosyncratic circumstances that would seem in some ways to make class certification an attractive device in cases such as Tilley’s (in which a single copyright holder seeks to prevent continued infringement on the part of many defendants who sell identical articles),” it left the “district court free, on remand, to explore whether some suitable basis for class certification in fact exists.”

Although OpenMind’s lawsuit marks the first time a defendant class action has been brought against individual downloaders, the idea has been tossed around for some time. One of the earliest papers I’ve seen is a 2001 paper by a law student written during the litigation against Napster but before the RIAA’s lawsuits against individual downloaders. Who’s Walking the Plank: The Recording Industry’s Fight to Stop Music Piracy, by James Dye, also suggests the idea. 46 Pittsburgh Journal of Technology Law & Policy 5 (2005). Interestingly, more than one scholar has suggested the certification of defendant classes in online infringement cases as a way to better protect the defendants. 5Johnathan Reich, The Class Defense: Why Dispersed Intellectual Property Defendants Need Procedural Protections, 9 Duke Law & Technology Review (2010); Assaf Hamdani & Alon Klement, The Class Defense (2004).

Strategies for Enforcing Copyright Online

Pros and cons of OpenMind’s strategy aside, the story highlights the difficulties creators have in protecting their rights online. From Napster to Hotfile, industry groups have gone after intermediaries, but this is time-consuming, expensive, and there’s no shortage of newcomers to fill the void for every infringing site successfully shut down.

The RIAA’s efforts against individual downloaders was a mixed success — raising awareness that unauthorized downloading is illegal but having little long-term effect on piracy. After it ended the strategy in 2008, independent and individual creators have taken up suing individuals, though many are running into roadblocks in court and certainly not winning any PR points.

The DMCA takedown procedure offers creators one method for removing unauthorized content without having to go to court. However, creators of all stripes — from individual film-makers like Ellen Seidler all the way up to companies like Viacom — will tell you that the process is time-consuming and there’s simply too much infringing content available online. DMCA takedowns also only work for companies who act legally responsible — the internet has plenty of “catch me if you can” services that disregard notices.

One of the goals of the DMCA was to create incentives for content creators and service providers who benefit from that content to work together voluntarily in order to address infringement. 6See Senate floor debate on Conference Report on H.R. 2281, the Digital Millennium Copyright Act (Oct. 8, 1998), Sen. Leahy remarks: “This title is intended to preserve incentives for online service providers and copyright owners to cooperate to detect and address copyright infringements that occur in the digital networked environment.” When the RIAA ended individual lawsuits, it announced that it would shift its focus to exactly that. Other countries have put the force of law behind this strategy, typically through some form of “graduated response.” France’s HADOPI law is perhaps the most famous and began sending out notices of infringement to ISP customers last fall. The UK’s Digital Economy Act calls for similar requirements to limit internet access for repeat infringers, though implementation has been delayed.

Other new approaches are being tried out as we speak. In the US, of course, domain names of a number of sites facilitating infringement have been seized over the past several months. A new version of the Combating Online Infringement and Counterfeits Act is expected to be introduced this session, which would tie additional legal requirements for advertisers and financial transaction services to cut off business with seized sites. Other countries are exploring similar legislation. 7For example, Spain and the UK.

And in the past week, Intellectual Property Enforcement Coordinator Victoria Espinel released her annual report which disclosed that a number of legislative proposals for enforcing copyright online will soon be sent to Congress. The report was followed up with an executive order establishing two new interagency intellectual property enforcement committees.

Why Online Enforcement is Important

The goal of all of this is not to eliminate or stop piracy. The goal is to deter it — to secure to creators the ability to make their investments of time, energy, and money pay off. The goal is to give content industries and legitimate intermediaries the time needed to develop and grow sustainable online business models that ensure high-quality works continue to be made.

Some say the only response to piracy is to do nothing. Creators should be happy absorbing all the costs of creating while everyone else shares in the benefits. Unlike every other job on the planet, the people who create the books, movies, music, etc., that add to our knowledge and enrich our lives are not entitled to expect compensation.

The “content fire sale” that results from online piracy may benefit consumers in the short term — who doesn’t want something for nothing — and pirate sites — seized domain Torrent Finder made $15,000 in one year from advertising for giving other people’s content away — but a fire sale is not a sustainable model. The next generation of creators, and the progress of the arts, can best be promoted by ensuring that exclusive rights continue to be secured. The future will likely see the use of more new enforcement strategies.

References

References
↑1 For more on the history and origins of class action lawsuits, ClassActionBlawg has a nice collection of links at http://classactionblawg.com/2008/06/02/did-you-ever-wonder-where-class-actions-came-from/
↑2 Vince Morabito, Defendant Class Actions and the Right to Opt Out: Lessons for Canada from the United States, 14 Duke Law Journal of Comparative & International Law 197, 203 (2004).
↑3 For example, see Kerney v. Fort Griffin Fandangle Ass’n, 624 F.2d 717 (5th Circ. 1980); In re Broadway Funding Corp., 66 BR 1005 (Bankr. EDNY 1986); and also Tilley v. TJX Cos., 345 F.3d 34 (1st Cir. 2003), a copyright infringement case against a defendant class where, though the court vacated the class certification, noted that since it was “cognizant of the idiosyncratic circumstances that would seem in some ways to make class certification an attractive device in cases such as Tilley’s (in which a single copyright holder seeks to prevent continued infringement on the part of many defendants who sell identical articles),” it left the “district court free, on remand, to explore whether some suitable basis for class certification in fact exists.”
↑4 6 Pittsburgh Journal of Technology Law & Policy 5 (2005).
↑5 Johnathan Reich, The Class Defense: Why Dispersed Intellectual Property Defendants Need Procedural Protections, 9 Duke Law & Technology Review (2010); Assaf Hamdani & Alon Klement, The Class Defense (2004).
↑6 See Senate floor debate on Conference Report on H.R. 2281, the Digital Millennium Copyright Act (Oct. 8, 1998), Sen. Leahy remarks: “This title is intended to preserve incentives for online service providers and copyright owners to cooperate to detect and address copyright infringements that occur in the digital networked environment.”
↑7 For example, Spain and the UK.

Super Bowl Seizures

By , February 04, 2011.

ICE is back at it, seizing the domain names of 10 sites allegedly involved in streaming live sports online — a week before the Super Bowl.

One of the sites involved in this latest round of seizures has previously been successful against charges of copyright infringement in a Spanish court, leading to many questions about the process. How can these sites be liable if they don’t host content? What about court precedent concerning vicarious or contributory liability? And what about DMCA safe harbors?

These are fair questions, but they reveal a misunderstanding of what is going on. To understand why, we need to take a quick look at the difference between proceedings in personam and proceedings in rem.

In personam proceedings are cases against a person (or a legal entity like a corporation) and can be civil or criminal in nature. In rem proceedings are against property (and generally considered civil in nature, even when initiated by the government). In personam proceedings are by far the most common and most familar cases. But while in rem proceedings, particularly civil forfeiture proceedings, are not well-known, they do have a long history. Colonial courts were exercising in rem jurisdiction in forfeiture cases long before the Constitution was adopted, and the First Congress passed laws providing for forfeiture for customs offenses. 1See Austin v. US, 509 US 602 (1993) and US v. Parcel of Rumson, NJ, Land, 507 US 111 (1993).

In the copyright world, individuals or entities can personally be sued or charged with direct infringement if they reproduce, distribute, publicly display or perform, or make a derivative work without permission. They can also be held liable for indirect infringement if they themselves haven’t directly infringed but aided, benefited from, or induced a direct infringer. In the US, you also have DMCA safe harbors that may limit indirect liability for certain online service providers.

Things change when we start talking about in rem proceedings. Property itself can’t be “guilty” or “liable.” 2Although you sometimes hear in rem proceedings described as operating under the legal fiction that property itself is culpable. It also can’t be indirectly liable, and it certainly couldn’t qualify for DMCA safe harbors — how would a domain name expeditiously remove infringing material after receiving a notice?

Instead, forfeiture of property through in rem proceedings is typically based on the property being either contraband (the property itself is illegal), the proceeds (“fruits”) of criminal activity, or the tools and instrumentalities used to commit criminal activity. Note that these are independent of ownership. A car used to transport narcotics across state lines may be forfeited regardless of whether the owner of the car is involved or not (though federal law does provide for an “innocent owner” defense in civil forfeiture proceedings). The relevant relationship is between the property and the underlying criminal activity. That is, the question is not whether the site itself is directly or indirectly liable for copyright infringement, as it would be had the site owner been sued in civil court.

I’ve previously written about other aspects of these domain name seizures, but today I wanted to focus solely on this distinction. Let’s start by taking a look at the law that forms the basis of ICE’s actions.

Forfeiture Under 18 US § 2323

These seizures were made pursuant to 18 USC § 2323, which provides for civil and criminal forfeiture of property in copyright infringement cases. The statute reads:

(a) Civil Forfeiture.—

(1) Property subject to forfeiture.— The following property is subject to forfeiture to the United States Government:

(A) Any article, the making or trafficking of which is, prohibited under section 506 of title 17, or section 2318, 2319, 2319A, 2319B, or 2320, or chapter 90 section 2318, 2319, 2319A, 2319B, or 2320, or chapter 90, of this title.

(B) Any property used, or intended to be used, in any manner or part to commit or facilitate the commission of an offense referred to in subparagraph (A).

(C) Any property constituting or derived from any proceeds obtained directly or indirectly as a result of the commission of an offense referred to in subparagraph (A).

The domain names here have been seized as property used to commit or facilitate the commission of copyright infringement, so we’ll be specifically looking at § 2323(a)(1)(B).

Domain Names Are Property

The first question we have to ask is whether a domain name itself can be considered “property” under this statute. The answer is most likely yes. Congress has explicitly established domain names as property in other contexts, most notably the Anticybersquatting Consumer Protection Act. 315 § USC 1125(d)(2)(A).

Perhaps the best explanation of domain names as property comes from the Ninth Circuit, in Kremen v. Cohen. 4337 F.3d 1024 (9th Cir. 2003). The court was tasked with determining whether the Kremen had a valid conversion claim against Cohen after Cohen conned a domain name registry into transferring “sex.com” over to him. Since conversion requires the wrongful disposition of a property right, the court’s first question was whether there exists a property right in domain names.

We often think of “property” narrowly — as tangibles like your house or your car. But property, as the Ninth Circuit noted, is a “broad concept that includes ‘every intangible benefit and prerogative susceptible of possession or disposition.'” 5Citing Downing v. Mun. Court, 88 Cal.App.2d 345, 350 (Cali Ct of Appeals 1948). Semantically, you could argue that just about anything counts as “property” under that definition, so we need some way of deciding what is considered property in legal contexts, especially when we talk about intangibles like domain names.

In Kremen, the court made use of a three-part test for determining whether a particular thing can be considered property in the legal sense:

  1. There must be an interest capable of precise definition
  2. It must be capable of exclusive possession or control
  3. The putative owner must have established a legitimate claim to exclusivity

Domain names satisfy all three parts, the court concluded. In addition, other courts in the past have ordered the forfeiture of domain names as part of sentencing in criminal copyright infringement cases: two examples of this are here and here. Property subject to criminal forfeiture (for copyright infringement) is the same as property subject to civil forfeiture. 618 USC § 2323(b)(1).

Facilitation

Since domain names are considered property for forfeiture purposes, the next step is determining whether they can be used to commit or facilitate the commission of copyright infringement.

“Facilitation” when used in forfeiture statutes generally means any activity that makes the underlying criminal activity “less difficult or ‘more or less free from obstruction or hindrance.'” 7US v. Premises Known as 3639-2nd St, NE, 869 F.2d 1093 (8th Cir. 1989). Going back to § 2323(a)(1)(B), you’ll note that its coverage is very broad; it applies to any property used in any manner or part to facilitate the commission of a crime. Indeed, prior to 2000, many courts have read forfeiture statutes with similar “any manner or part” language very broadly — upholding the forfeiture of houses where a single drug transaction took place, for example.

That changed with the passage of the Civil Asset Forfeiture Reform Act of 2000, which provided that in all civil forfeiture statutes, “if the Government’s theory of forfeiture is that the property was used to commit or facilitate the commission of a criminal offense, or was involved in the commission of a criminal offense, the Government shall establish that there was a substantial connection between the property and the offense.” 818 USC § 983(c)(3). This language “is intended to require that facilitating property have a connection to the underlying crime significantly greater than ‘incidental or fortuitous.'” 9146 Congressional Record 5231 (2000). And while the relationship between forfeiture law and the Eighth Amendment is beyond the scope of this post, I did want to note that the Constitutional prohibition against excessive fines places additional limitations on what can be forfeited. 10Austin v. US, 509 US 602 (1993).

Putting it All Together

With all the domain names seized, there was an alleged underlying criminal offense — the unauthorized transmission of live sports events, or unauthorized streaming of movies, or unauthorized reproduction of music. It is irrelevant whether the offense was occurring on the site the domain name pointed to or somewhere else. Maybe some of these sites would be found liable if sued in civil court, maybe some wouldn’t. We’re concerned only with whether or not there is a substantial connection between the domain name and said underlying criminal offense.

The answer to that question would come down to the specific facts of each site. It’s certainly less difficult to visit a site by domain name rather than IP address. And, as the owner of the seized Torrent-Finder domain name points out, sites like these typically rely on SEO to drive attract traffic and sell ads. If the site owner is using SEO to attract visitors looking for infringing content, then the connection between the domain name and the offense is more than just incidental and fortuitous. But is it significantly more? Again, that probably depends on the design of the site. The more a site is dedicated to infringing activities and the more a site attempts to profit from infringing activities, the greater the likelihood of a substantial connection.

What you can’t do, however, is look to existing court decisions involving direct or indirect liability for infringement: in rem forfeiture and in personam liability are two different questions.

References

References
↑1 See Austin v. US, 509 US 602 (1993) and US v. Parcel of Rumson, NJ, Land, 507 US 111 (1993).
↑2 Although you sometimes hear in rem proceedings described as operating under the legal fiction that property itself is culpable.
↑3 15 § USC 1125(d)(2)(A).
↑4 337 F.3d 1024 (9th Cir. 2003).
↑5 Citing Downing v. Mun. Court, 88 Cal.App.2d 345, 350 (Cali Ct of Appeals 1948).
↑6 18 USC § 2323(b)(1).
↑7 US v. Premises Known as 3639-2nd St, NE, 869 F.2d 1093 (8th Cir. 1989).
↑8 18 USC § 983(c)(3).
↑9 146 Congressional Record 5231 (2000).
↑10 Austin v. US, 509 US 602 (1993).