Make money online by selling pirated content? These sites do — File lockers and linking sites on their own are difficult to hold liable for the rampant infringement they facilitate. But together? “The combination of these two types of sites is like a one-two punch resulting in a knockout. They are both essential for one another to function in such a profitable manner, and man, oh, man, do they ever make a lot of money doing what they do.”

Gone Elvis Production Diary, Part 2 — The Copyright Alliance has been following indie filmmaker David Newhoff as he works on his latest project. In this part, they talk primarily about funding and costs. “So, without paying any fees for labor, equipment, or locations, my 30-minute short cost a little more than $8,000 to get in the can. And that was a four-day shoot with a very small cast and crew. If gone Elvis makes money and I want to repay those who worked on it, I’ll have about a $30,000 check to write. So, the next time you hear ‘feature film made for $5,000,’ take it with a healthy dollop of salt — and tequila!”

Why 2011 Is the Year Digital Music Broke, by the Numbers — Billboard’s Glen Peoples notes several reasons: digital sales are up substantially from last year, streaming services like Pandora and Spotify have had good years, music startups like have shown early promise.

The Sims Social Facebook game promotes questionable blogging ethics — You can get 5 points if you “Steal pictures from other websites to make your blog look professional.” Wait, what?

Students shouldn’t download music illegally— Another great article from the younger generation. Like previous articles from the Harvard Crimson and the Arbiter Online, The Rocky Mountain Collegian, the student newspaper of Colorado State University, points out that there’s nothing hip about stealing music. “Now you might think you are taking money from powerful record companies, which take advantage of artists –– and this is kind of true. “Think about a young band that just got signed by a record label. If all of the band’s fans steal the album and its record sales tank, what incentive does the company have to keep a contract with the band? Do yourself a favor, support bands (especially local ones). Support the failing music industry. Support our failing economy, and don’t steal music.”

A2IM Call To Action:  Write Congress, Help Get PROTECT IP Passed — The American Association of Independent Music calls on independent musicians and labels to add their voices of support for rogue sites legislation.

7 Things I Wish I Knew about Content Theft 10 Years Ago — PlagiarismToday’s Jonathan Bailey shares the lessons he’s learned over the past decade from blogging and consulting with others to detect and stop online content theft. Very good info.

Copyright Office Rulemaking on Designation of DMCA Agents — The US Copyright Office is seeking comments to upgrade its system for keeping track of registered DMCA agents. It is specifically looking to migrate from its current paper system to an online system; it is also looking for input on how to make the system more up-to-date and efficient.

Will Google Submit “The Power of Google Adsense” to Voluntary Oversight? — Probably not, but they should, writes Chris Castle. “Not because of the moral hazard—because of the criminal hazard.  This is the group that failed seven different sting operations by the Department of Justice.  This is the group that does business with rogue sites and suckles pirates around the world.”

This Week in Law — Every Friday at 2pm, host Denise Howell talks with special guests on news and developments in the world of law and tech (the shows are archived for later viewing as well). I will be one of those guests next week, October 7th. Tune in to see why I have the perfect voice for blogging.

Rep. Jared Polis thinks something must be done about copyright.

The freshman second-term Colorado Congressman, who sold his online greeting card company to Excite@Home for $780 million in 1999, introduced legislation on September 14th that seeks to simplify copyright law regarding sound recordings made before 1972.

H.R.2933 — The Sound Recording Simplification Act — is short, consisting of its title and two lines. All it does is delete 17 USC § 301(c). In a statement announcing the bill, Polis explained:

The variation in protection from state to state hinders the ability to have a consistent business approach regarding rights ownership. The scope of protection and what would constitute acceptable use are inconsistent due to the lack of detailed precedent. Additionally, state law does not have provisions that account for modern technology, such as streaming music websites, and songs as data are increasingly easy to transmit.

But upon closer look, Polis’s bill would fail completely to address these issues. At best, it would change nothing. At worst, it would lead to more uncertainty rather than less, and give rise to a host of unforseen consequences.

Federal and state protection for sound recordings

Recorded music consists of two distinct copyrighted works: the underlying musical composition and the sound recording of that composition. US copyright law has expressly provided protection for musical compositions since 1831, but it wasn’t until 1972 that protection was extended to sound recordings. 1The New York Court of Appeals provides an impressively thorough history of sound recordings, copyright, and preemption — beginning in 15th century England — in Capitol Records v. Naxos, 830 NE 2d 250 (2005). Note, however, that federal copyright protection did not retroactively extend to sound recordings made before the passage of the 1972 legislation.

Though the federal government did not protect sound recording copyrights before 1972, states did. By the early 70s, roughly half of state legislatures had adopted criminal provisions aimed at curbing music piracy.

Prior to the Copyright Act of 1976, the federal government and the states concurrently exercised copyright power — for all types of works, not just sound recordings. 2See Goldstein v. California, 412 US 546, 560 (1973). That all changed with the passage of the 1976 Act. Congress gave the federal government exclusive authority over copyright; “all legal or equitable rights that are equivalent to any of the exclusive rights within the general scope of copyright” under any state’s statutes or common law are preempted by US copyright law. 317 USC § 301(a).

Preemption and pre-1972 sound recordings

But a problem was anticipated: what would become of sound recordings made before 1972?

One way to interpret the preemption provision would be that it had no effect on pre-1972 sound recordings. Since they weren’t covered under the scope of federal protection, state laws protecting them weren’t preempted.

But the provision could be interpreted another way. In a 1975 hearing concerning the revisions that would lead to the 1976 Act, the Department of Justice raised concerns about this possibility:

This language could be read as abrogating the anti-piracy laws now existing in 29 states relating to pre-February 15, 1972, sound recordings on the grounds that these statutes proscribe activities violating rights equivalent to * * * the exclusive rights within the general scope of copyright. * * *” Certainly such a result cannot have been intended for it would likely effect the immediate resurgence of piracy of pre-February 15, 1972, sound recordings.

In other words, a court could strike down state piracy laws if it interpreted the statute this way, putting every sound recording made before 1972 into the public domain.

So Congress added § 301(c) to make it absolutely clear that this is not what it intended. At the same time, it recognized that state piracy laws did not provide protection for only a “limited time” as federal copyright law did — sound recordings gave perpetual protection. So it also put in a sunset provision to the clause, 75 years from the first day sound recordings were covered under federal law (the Copyright Term Extension Act increased that time by 20 years). 4H.R. Rep. No. 94-1476, pg 133.

Today, §301(c) provides that:

With respect to sound recordings fixed before February 15, 1972, any rights or remedies under the common law or statutes of any State shall not be annulled or limited by this title until February 15, 2067. The preemptive provisions of subsection (a) shall apply to any such rights and remedies pertaining to any cause of action arising from undertakings commenced on and after February 15, 2067. Notwithstanding the provisions of section 303, no sound recording fixed before February 15, 1972, shall be subject to copyright under this title before, on, or after February 15, 2067.

This is the provision that Polis’s bill would delete. The only thing this would accomplish is reinstating the uncertainty that led to its addition 35 years ago. It would not bring pre-1972 sound recordings under federal copyright protection. And, if the DOJ’s original concerns are unfounded and courts interpret the statute to mean that state piracy laws aimed at pre-1972 sound recordings are not preempted, than Polis just gave those recordings perpetual protection.

I highly doubt Rep. Polis is looking to extend copyright protection forever.

Haste makes waste

In Polis’s rush to do something about pre-1972 sound recordings, he not only ends up doing nothing, he steamrolls over the legitimate concerns of those working on solutions.

In 2009, hearing concerns that current law addressing pre-1972 recordings can cause problems, Congress directed the US Copyright Office to conduct a study on the “desirability of and means for” bringing those recordings under federal copyright law. It specifically asked the Office to look at “the effect of federal coverage on the preservation of such sound recordings, the effect on public access to those recordings, and the economic impact of federal coverage on rights holders.”

The Copyright Office began seeking input for its study last November. 5Federal Copyright Protection of Sound Recordings Fixed Before February 15, 1972, Notice of Inquiry, 75 F.R. 67777 (Nov. 3, 2010). In this first round of comment seeking, it raised thirty potential questions about implementing federal protection for these recordings.

The questions cover preservation and access issues; economic issues, especially relating to value of recordings and ownership of rights concerns; and implementation issues, like term length and due process concerns.

To give just a few examples, the Copyright Office asks:

4. Would bringing pre-1972 sound recordings under Federal law—without amending the current exceptions—affect the ability of such institutions to provide access to those recordings? Would it improve the ability of libraries and archives to make these works available to researchers and scholars; and if so, in what way? What about educational institutions, museums, and other cultural institutions?

16. Under Federal law the owner of the sound recording will generally be, in the first instance, the performer(s) whose performance is recorded, the producer of the recording, or both. Do State laws attribute ownership differently? If so, might that lead to complications?

23. If the requirements of due process make necessary some minimum period of protection, are there exceptions that might be adopted to make those recordings that have no commercial value available for use sooner?

27. Could the incorporation of pre-1972 sound recordings potentially affect in any way the rights in the underlying works (such as musical works); and if so, in what way?

Polis’s bill addresses none of these questions. To his credit, this is quite an accomplishment — copyright legislation that everyone, from rightsholders, to downstream copyright users, to libraries, museums, and educational institutions, would agree is a bad idea.

I’m left scratching my head over how Rep. Polis can think expedience is better than comprehensive study for finding solutions, or how one can craft legislation that is so bad that it not only doesn’t solve whatever problem you’re trying to fix, it actually makes those problems worse.

Perhaps this is just business as usual for Polis, because a similar thing happened a few years ago with Colorado’s Amendment 41. The ballot measure, which Polis helped sponsor and back in 2006, was ostensibly targeted at curbing lobbyist influence, but ended up making “scholarships for children of public employees and performance awards for employees” illegal. 6John Straayer, Direct Democracy’s Disaster, National Conference of State Legislatures Magazine (March 2007). It led to a fire-fighters association indicating that it “might have to close its foundation, which had made scholarships available for fire-fighters’ children and provided funeral assistance for fire-fighters’ survivors.” When these problems became apparent, Polis and the amendment’s other sponsors said that “they didn’t really mean what it said.”

In the same way, the Sound Recording Simplification Act doesn’t mean what Polis thinks it means.

References   [ + ]

1. The New York Court of Appeals provides an impressively thorough history of sound recordings, copyright, and preemption — beginning in 15th century England — in Capitol Records v. Naxos, 830 NE 2d 250 (2005).
2. See Goldstein v. California, 412 US 546, 560 (1973).
3. 17 USC § 301(a).
4. H.R. Rep. No. 94-1476, pg 133.
5. Federal Copyright Protection of Sound Recordings Fixed Before February 15, 1972, Notice of Inquiry, 75 F.R. 67777 (Nov. 3, 2010).
6. John Straayer, Direct Democracy’s Disaster, National Conference of State Legislatures Magazine (March 2007).

Techdirt points to a report that Facebook currently hosts 4% of every photograph ever taken in history. Whether that’s an accurate number or not, the social media giant does host a huge amount of photos on its servers. Masnick uses this story to question copyright:

What is the real purpose of copyright? Is it only to incentivize professional content creation, or to incentivize content creation overall? Given the stated purpose is to “promote the progress,” and to provide the public with more content, I would argue the goal is to promote more overall content, and it seems that technology is doing a much better job of that than copyright.

There’s a couple of points here I want to talk about later, but first is this undercurrent that runs through many criticisms of copyright — that of valuing amateur content over professional content.

Yes, copyright incentivizes professional content creation — it is an economic incentive to invest money in the production of creative output. There is a moral rights aspect to copyright — explicit in many civil law nations, implicit in many common law nations — but the incentive aspect of copyright is primarily economic.

Critics of copyright law occassionally advance arguments attacking the incentive given by copyright as unnecessary or outdated. This one in particular goes something like this: we have no need for copyright anymore because amateur creators don’t need copyright’s incentive to create and amateur creativity is better than professional creativity.

This notion isn’t unique to Masnick. Sci-fi writer Cory Doctorow shares this view. In the Guardian last November, he writes, “I mean, I love sitting in an air-conditioned cave watching Bruce Willis beat up a fighter jet with his bare hands as much as the next guy, but if I have to choose between that and all of YouTube, well, sorry Bruce.”

Swedish politician Rick Falkvinge is even more blunt, who, though he doesn’t get around to defining what he means by “new” types of culture, can’t wait for “old” types of culture to die out:

I’m going go out on a limb here and say, that even if it is true that movies can’t be made the same way with the Internet and our civil liberties both in existence, then maybe it’s just the natural progression of culture.

[…] After all, we have previously had operettes, ballets, and concerts as the high points of culture in the past. Even radio theaters (and famous ones). Nobody is particularly concerned that those expressions have had their peak and that society has moved on to new expressions of culture. There is no inherent value in writing today’s forms of culture into law and preventing the changes we’ve always had.

You’ll even find such ideas coming from more scholarly sources. The Social Science Research Council’s Media Piracy in Emerging Economies report adopts this idea and wraps it up in more academic language:

[W]e take seriously the possibility that the consumer surplus from piracy might be more productive, socially valuable, and/or job creating than additional investment in the software and media sectors. We think this likelihood increases in markets for entertainment goods, which contribute to growth but add little to productivity.

Promoting the Progress

“To promote the progress of useful arts, is the interest and policy of every enlightened government.” 1Grant v. Raymond, 31 US 218, 241 (1832).

In the US, the end goal of copyright law is promoting the progress of the useful arts and sciences. A private right is secured as an incentive for creating and disseminating works for the public benefit.

Usually when we talk about “amateur creativity” and copyright, we’re talking about cultural works that are made for many of the same reasons as professional works but without the commercial aspect — videos, music, and writing created by hobbyists or striving professionals. But some of those making the argument that amateur creativity makes copyright obsolete sweep in not only this type of creativity but all noncommercial creative acts.

Snapshots, home videos, and status updates are great ways to communicate and express ourselves, but these can hardly be considered contributing to the promotion of the progress of the useful arts and sciences. Where is the public benefit in a stranger’s vacation pics? (Never mind that, unless you’re friends with all these people, you likely can’t see most of them.)

I wonder sometimes about those who don’t see the value of art and entertainment made by someone who got paid for it. It’s stunning that they can’t see the value of these novels, or these films, or these albums, or these photographs. 2I chose these lists only as representative examples of works held in high regard. Obviously there are problems with ‘best of’ lists of this sort. To dismiss these works and countless others like them as mere “entertainment” that is “unproductive” is an incredibly narrow viewpoint.

What’s equally stunning is the view that the measure of progress when it comes to copyright law should be based solely on numbers — quantity over quality. Ten photos are better than one, no matter what.

Come on.

Faza, at the Cynical Musician, addressed this topic last year in a post on Graphomania. And the late Barbara Ringer had this to say:

I agree that the copyright law should encourage widespread dissemination of works of the mind. But it seems to me that, in the long pull, it is more important for a particular generation to produce a handful of great creative works than to shower its schoolchildren with unauthorized photocopies or to hold the cost of a jukebox play down to a dime, if that is what it is these days.

Copyright protection

But suppose we ignore all this and decide to weaken copyright protection since the incentive is not needed anymore — problems would still remain. While the type of amateur creativity discussed above doesn’t rely on copyright’s incentive, it still benefits from the protection copyright law affords. A lot of attention is focused on end-user piracy of works from larger entities, but larger entities can infringe on individuals’ works.

Certainly, this type of infringement happens now. Look at the flurry of controversy that stemmed from news that photo service Twitpic claimed copyright on users’ images, allowing it to distribute those images to its company partners. This is far from an isolated incident — in 2007, the family of a 16 year-old girl took Virgin Australia to court for using a photo of her, uploaded to Flickr under a Creative Commons license, in an ad campaign (the case was dismissed for lack of jurisdiction). And even the aforementioned Doctorow has publicly railed against the unauthorized use of one of his wife’s photos by a newspaper.

Without copyright protection, companies would have free rein to behave like this. There’s nothing magical about copyright protection that makes it only limit the ability of consumers getting free movies.

Development of creative tools

Technology is suggested by Masnick as a better mechanism for promoting creativity than copyright protection. It’s true that people today have access to a vast array of cheap and portable tools to record and produce high quality audio and visual content (though no technology has yet made it easier to learn how to tell a story or convey an emotion). But this idea that technology has rendered copyright obsolete begs the question that a functioning market for professional content had nothing to do with the development of that technology.

Would there be technological tools that help amateurs create — especially free or cheap tools like GIMP, Blender, and Reaper — without their commercial precursors? These tools required investment and development, and that came largely from their use in professional contexts — decades of improvement fueled by a need for this technology and enabled by the money to meet that need. Invention, after all, doesn’t occur in a vaccuum.

No doubt this technology would have developed without copyright and a market for professionally produced content. But it certainly wouldn’t have developed at the rate it had — the tools that are available today would likely be decades away in such a world.

This ties into the benefit of copyright protection and its economic rationale. I think even copyright’s critics would agree that the ability to create movies and music from a home computer is a good thing. And, while I’m unaware of any research quantifying the effect of a market for professional content on the development of the technology used to create that content, I think it’s safe to say that it does have an effect, and probably not an insignificant one. We, as a society, generally want to encourage those things that bring about good results. Viewed this way, copyright makes sense from a public interest and economic perspective.

The “progress” of destroying markets

The biggest problem with attacking copyright by placing amateur content on a higher pedestal than professional content is that it sets up a false dichotomy. When did this become an either/or choice?

Amateur creativity thrives regardless of the copyright incentive. In fact, it’s an essential part of any culture with professional creators: almost without exception, every one of those professional creators has started out as an amateur. What Masnick, Doctorow, Falkvinge, and others are saying is that society would be better off with only amateur content rather than the combination of amateur and professional content.

That doesn’t sound like progress to me.

References   [ + ]

1. Grant v. Raymond, 31 US 218, 241 (1832).
2. I chose these lists only as representative examples of works held in high regard. Obviously there are problems with ‘best of’ lists of this sort.

Free speech shouldn’t be a shield for online thieves — Mike McCurry and Mark McKinnon, co-chairmen of Arts+Labs, pen this must read editorial about free speech and copyright. “We are not lukewarm First Amendment advocates. One of us went to jail to protect freedom of the press and the other routinely had to defend this freedom to belligerent skeptics on the White House staff.  But we believe it is a misuse of the First Amendment to shield rogue websites whose main purpose is distributing illegal copies of intellectual property.”

Chamber leads push for copyright enforcement bill — The US Chamber of Commerce spearheaded a coalition of 359 businesses and organizations in support of rogue sites legislation, sending a letter to US Congress members on Thursday. In other news, Sen. Ron Wyden continues his curious remarks that this bill will damage “innovation.”

Free as in speech… — Rob Levine points to a recent interview he did with Scottish novelist Ewan Morrison where he discusses some of the interesting political questions surrounding copyright, technology, and free culture. He highlights some of the “intellectual inconsistencies” in copyright critics’ positions — he only scratches the surface though, as you can easily find other examples of these types of inconsistencies.

Portland, Oregon Reports Jobs Boost — Portland is currently home to several television and film productions, including one of my faves, TNT’s Leverage. Portland mayor Sam Adams recently published a letter to local residents detailing the economic impact filming has on the city: for example, “In 2009, the Portland metropolitan region alone saw $52 million in direct spending through local film productions, totaling a $102 million economic impact for the year.”

95% of BitTorrent files infringe copyrights according to AFACT — A new report from the Australian Federation Against Copyright Theft is consistent with other reports in showing that nearly all BitTorrent files are unauthorized copies of films, television shows, and music.

File-sharing protest bomb threat video lands teenager in court — An 18 year-old New Zealander finds himself in trouble with the law after his threats in connection with the country’s recent graduated response legislation. Talk about your disproportionate responses.

Policing the digital storage landscape — Should provisions to address the rampant infringement taking place on cyberlockers be added to rogue sites legislation currently being considered by Congress? Content providers and the US Copyright Office think so.

Copyright terrm success for artists and record companies — Dominic McGonigal explains the EU’s recent directive to increase the term of copyright protection on sound recordings from 50 to 70 years. “Without this change, [thousands of] musicians were facing reducing royalties each year as recordings go out of copyright. For record companies, this potentially increases the value of their back catalogue, allowing more investment in new artists.”

Call for papers: 2012 Cardozo Arts & Entertainment Law Journal Symposium — The working title of the symposium is “Examining and Overcoming Enforcement Issues in Copyright Law”: “The Symposium is an opportunity for academics, practitioners, consultants, and students to exchange ideas related to the protection of intellectual property in the Digital Age, from the perspective of enforcement, as well as self-policing and cooperative agreements. Topics might include examinations of the PROTECT IP Act of 2011, the America Invents Act, Content ID and similar technologies, and the recent cooperative agreement between ISPs and content owners.”


Puerto 80 Projects has filed its opening brief in its appeal of the Southern District Court of New York’s denial of its petition to release its Rojadirecta domain names — which had been seized by ICE as property used to facilitate criminal copyright infringement — prior to the completion of the civil forfeiture proceeding. It separately has a motion to dismiss before the court in that proceeding, which I wrote about last week.

[scribd id=65234499 key=key-hnwm3e62c0jf8z4t7e7 mode=list]

Puerto 80 spends considerable time explaining why prior restraints are bad and what procedures are required under the Constitution. This point is indisputable and uncontroversial — preventing prior restraints is considered the “chief purpose” of the First Amendment. 1Near v. Minnesota, 283 US 697, 713 (1931). But what they don’t do is spend much time explaining why this particular seizure is a prior restraint.

In fact, they don’t explain why at all — they just flat-out state, “The government’s ex parte seizure of Puerto 80’s domain name constituted a prior restraint on speech.” Later, they repeat, “The government’s seizure of the subject domain names constitutes an unlawful prior restraint on speech that suppresses Puerto 80’s users’ and readers’ protected First Amendment activities.”

But calling something a prior restraint doesn’t make it a prior restraint. As the Supreme Court pointed out over 50 years ago, “The phrase ‘prior restraint’ is not a self-wielding sword.” 2Kingsley Books v. Brown, 354 US 436, 441 (1957).

The Defining Characteristics of a Prior Restraint

Ironically, Puerto 80 cites to Alexander v. US to support its first statement that this seizure is a prior restraint. It quotes the Court’s statement that “Temporary restraining orders and permanent injunctions — i.e., court orders that actually forbid speech activities — are classic examples of prior restraints.” But that doesn’t mean all restraining orders or injunctions are prior restraints — like the forfeiture of Alexander’s bookstores in this case, which the Supreme Court held constitutional.

More importantly, the Court later notes the reason to be careful with the “prior restraint” label. It said, “Because we have interpreted the First Amendment as providing greater protection from prior restraints than from subsequent punishments, see it is important for us to delineate with some precision the defining characteristics of a prior restraint.”

The second case Puerto 80 cites to for its self-defining statement provides a clue as to one of these defining characteristics: “An order that prohibits the utterance or publication of particular information or commentary imposes a ‘prior restraint’ on speech” (Emphasis added).

A prior restraint does not refer to any and all suppression of First Amendment activities; the suppression must reference specific subject matter or viewpoint. Although the Supreme Court has never fully defined “prior restraint”, it has been clear that only content-based injunctions can constitute prior restraints. 3DVD Copy Control Ass’n v. Bunner, 75 P.3d 1 (Cali Sup. 2003), citing Thomas v. Chicago Park Dist., 534 US 316 (2002).

For Puerto 80 to succeed in its prior restraint argument, then, it must show that this seizure was content-based. But how can this be? The First Amendment activities that it claims were suppressed revolve around the “forum discussions on the and sites”, which included “political discussions, commentary, and criticism by the site’s users.”  Surely Puerto 80 isn’t claiming that the government seized the domain names because of the content of those discussions — that it perhaps wanted to restrain certain opinions about baseball games.

Now, if the government did want to suppress a site because of the message it conveyed and used the Copyright Act — or any other generally applicable statute — as a pretext, then that likely would be an impermissible prior restraint. But no one is seriously suggesting that anything of that sort has occurred here.

The only way this seizure could be characterized as a prior restraint is if Puerto 80 can convince the court that the restraint of the copyright-protected material on the site is content-based. It attempts to do so, in an argument confined to a footnote. The only legal support for its claim comes from a law review article — co-written by Mark Lemley, one of the attorneys for Puerto 80.

The article hardly counts as legal support: it makes the argument that copyright injunctions should be treated more as prior restraints because currently, and historically, they have not. Indeed, preliminary injunctions in copyright are common, as are pretrial seizures of infringing materials and tools.

Admittedly, the seizure of a domain name to be forfeited as property facilitating copyright infringement is only a recent development. But Puerto 80 makes no attempt to distinguish this action from other copyright injunctions and sanctions.

Prior Restraint in Napster

Puerto 80’s argument is reminiscent of the prior restraint argument made by Napster.

Like Puerto 80, Napster stood in the shoes of its users and argued against a proposed preliminary injunction because it “would silence the entire Napster community, violating not only Napster’s free speech rights, but those of its users as well.” This injunction would be “particularly egregious because it would silence the Napster community in advance of any ruling by the Court confirming that Napster’s directory is protected by the First Amendment. Courts have uniformly viewed any injunction that could act as a prior restraint on free speech as presumptively invalid.”

The District Court disagreed with Napster — noting that in the realm of copyright injunctions, “free speech concerns ‘are protected by and coextensive with the fair use doctrine.'” The court addressed the injunction’s reach to non-infringing portions of Napster’s service, like its message boards and chat rooms. Napster could continue to operate those with the injunction, but

In the event that Napster, Inc. cannot separate the infringing and non-infringing aspects of its service, its First Amendment argument still fails. Courts will not sustain a First Amendment challenge where the defendant entraps itself in an “all-or-nothing predicament.” Even if it is technologically impossible for Napster, Inc. to offer such functions as its directory without facilitating infringement, the court still must take action to protect plaintiffs’ copyrights.

Napster appealed the grant of the preliminary injunction to the Ninth Circuit on a number of grounds, among them its continued belief that the injunction was an impermissible prior restraint. The court, however, recognized this as a frivolous argument, saying only that it would “briefly address Napster’s First Amendment argument so that it is not reasserted on remand.”

We note that First Amendment concerns in copyright are allayed by the presence of the fair use doctrine. There was a preliminary determination here that Napster users are not fair users. Uses of copyrighted material that are not fair uses are rightfully enjoined. 4A&M Records v. Napster, 239 F.3d 1004, 1028 (9th Cir. 2001).

Copyright and First Amendment Challenges

The fact that the domain name seizure isn’t a prior restraint doesn’t mean there’s no First Amendment issue. The Supreme Court has said that “content-neutral time, place, and manner restrictions can be applied in such a manner as to stifle free expression” 5Thomas v. Chicago Park at 323. and also that criminal and civil sanctions having some incidental effect on First Amendment activities are subject to First Amendment scrutiny “where it was conduct with a significant expressive element that drew the legal remedy in the first place … or where a statute based on a nonexpressive activity has the inevitable effect of singling out those engaged in expressive activity.” 6Alexander v. US at 557, quoting Arcara v. Cloud Books, 478 US 697, 706-07 (1986). But these are distinct arguments that Puerto 80 does not raise in its opening brief.

Nevertheless, it should be remembered that there’s good reason why prior restraint is rarely found in cases involving copyright. Copyright is “the engine of free expression”, and infringement causes harm to a copyright holder’s free speech rights. 7See Salinger v. Colting, 607 F.3d 68, 81 (2nd Cir. 2010); Speech interests of creators; and The chilling effect of copyright infringement. What’s more, copyright has “built-in free speech safeguards” that reduce the need for relying on First Amendment doctrines like prior restraint.

We’ve even seen courts explicitly resolve infringement cases on fair use grounds which had earlier been resolved on First Amendment grounds. In Triangle Publications v. Knight-Ridder Newspapers, the appellate court began, “For years, Courts and commentators have recognized a potential conflict between copyright and the First Amendment. However, until the District Court’s opinion in the case now before us, no Court had ever held that a copyright suit could be defeated by a First Amendment defense. We affirm the result reached by the District Court, but disagree with the Court’s rationale. Contrary to the District Court, we hold that fair use constitutes a valid defense to the copyright infringement suit involved in this case.” 8Compare this to Suntrust Bank v. Houghton Mifflin, 252 F.3d 1165 (11th Cir. 2001), where the court vacated a preliminary injunction against the author of The Wind Done Gone, a parody of Gone With the Wind. Although it used the term “prior restraint” in its opinion, the injunction was vacated since the defendant’s strong fair use defense made it unlikely the plaintiff would succeed on the merits of the case.

In most cases concerning infringement, free speech is raised only as a “self-wielding sword” — “the last refuge of an infringing scoundrel”. 9L. Ray Patterson, Free Speech, Copyright, and Fair Use, 40 Vanderbilt Law Review 1, 36 n.110 (1987). When a case doesn’t involve some question of legitimate appropriation of a copyrighted work, “few courts” allow defendants “to hide behind the first amendment.” 10Sid & Marty Krofft TV v. McDonalds, 562 F.2d 1157, 1170-71 (9th Cir. 1977). Based on the court filings so far, it’s my opinion that there’s no legitimate appropriation here, only a web site that seems keen on raising every defense it can to avoid responsibility for facilitating infringement.

CAMP Conference is scheduled for October 3rd; the reply brief from the US is due November 15th.


References   [ + ]

1. Near v. Minnesota, 283 US 697, 713 (1931).
2. Kingsley Books v. Brown, 354 US 436, 441 (1957).
3. DVD Copy Control Ass’n v. Bunner, 75 P.3d 1 (Cali Sup. 2003), citing Thomas v. Chicago Park Dist., 534 US 316 (2002).
4. A&M Records v. Napster, 239 F.3d 1004, 1028 (9th Cir. 2001).
5. Thomas v. Chicago Park at 323.
6. Alexander v. US at 557, quoting Arcara v. Cloud Books, 478 US 697, 706-07 (1986).
7. See Salinger v. Colting, 607 F.3d 68, 81 (2nd Cir. 2010); Speech interests of creators; and The chilling effect of copyright infringement.
8. Compare this to Suntrust Bank v. Houghton Mifflin, 252 F.3d 1165 (11th Cir. 2001), where the court vacated a preliminary injunction against the author of The Wind Done Gone, a parody of Gone With the Wind. Although it used the term “prior restraint” in its opinion, the injunction was vacated since the defendant’s strong fair use defense made it unlikely the plaintiff would succeed on the merits of the case.
9. L. Ray Patterson, Free Speech, Copyright, and Fair Use, 40 Vanderbilt Law Review 1, 36 n.110 (1987).
10. Sid & Marty Krofft TV v. McDonalds, 562 F.2d 1157, 1170-71 (9th Cir. 1977).

It’s not about the money.

Friday’s First Circuit opinion in Sony BMG v. Tenenbaum is about a lot of things, but what it’s not about — and what will nevertheless get the most attention — is the $675,000 a jury awarded against Joel Tenenbaum for downloading and distributing 30 songs, which the District Court reduced to $67,500, and which the appellate court reinstated.

It’s a lot of money, of course. I think it’s highly unlikely any of the jurors who awarded the damages really expect Tenenbaum to be able to pay it all in a lifetime, and certainly Sony and the other record labels aren’t expecting to receive a check for anywhere near that amount.

Instead, this case has taken on constitutional dimensions, concerning due process, the right to a jury trial, and the boundaries and roles of different institutions — courts, juries, and Congress — in our legal system.

It’s about whether disagreement over the effects of laws can justify bypassing bedrock legal principles — whether we can sacrifice the processes that make democracy work for expediency.

In that respect, the First Circuit should be commended for saying “no”.

This is an interesting decision and worth a read. There’s quite a bit inside it, more than I’ll cover in this post.

What’s most interesting about this case is that the one line by the court that has been noted by those disappointed in the decision as the one positive 1See the EFF, Techdirt, and Ars Technica. may not be as positive as they believe. In the opinion, the court says, “We comment that this case raises concerns about application of the Copyright Act which Congress may wish to examine.” The court is not so much talking to Congress as it is to the lower court. It’s saying, in essence, if you don’t like the results of the Copyright Act’s statutory damages, take it up with Congress, because it’s highly unlikely that we will find a constitutional limitation in cases like this.

Joel Tenenbaum and Jammie Thomas-Rasset

Because Tenenbaum is very similar to Capitol Records v. Thomas-Rasset, the only other major label end user downloading case to make it to trial, it can be easy to confuse the two. To recap:

In Thomas-Rasset, the judge reduced the jury’s award of $1.92 million through the common law process of remittitur. The record labels opted for a new trial, solely on damages, instead of accepting the remitted amount. 2The Seventh Amendment right to a jury trial requires that plaintiffs be given this choice. After a new jury awarded $1.5 million against Thomas-Rasset, the court reduced the award on constitutional grounds, ruling that the award violated due process under the standard set by the Supreme Court in St. Louis IM & S v. Williams.

In Tenenbaum, after the jury returned a verdict of $675,000, the court, noting that the record labels had not accepted the remitted award in Thomas-Rasset, skipped straight to the constitutional ground. As in Thomas-Rasset, the court reduced the award on due process grounds, but unlike Thomas-Rasset, it used a different standard, one developed to address punitive damages (which generally aren’t set by statute) and set out in BMW v. Gore.

The decision

The main holding in this case is fairly narrow. The First Circuit held that the District Court erred when it skipped over the question of remittitur and reduced the damages on constitutional grounds. It reversed the reduction in damages and remanded to the lower court to reconsider the remittitur question.

But the court ruled on a number of other issues brought by Tenenbaum. It held that the Copyright Act is not unconstitutional after the Supreme Court decision in Feltner v. Columbia Pictures Television, so-called “consumer copying” is not exempt from damages, and statutory damages are available without a showing of actual harm.

The harm of P2P piracy

The First Circuit begins by describing how P2P piracy has effected the recording industry. It notes that record labels have never granted blanket licenses for uploading music files to the Internet for public consumption. “Such a license,” said the court, “would deprive the companies of their source of income and profits and essentially drive them out of business.” But the development of digital audio and P2P made such uploading easy and commonplace.

The proliferation of [P2P] networks from 1999 onward and the piracy they enable has had a significant negative impact on the recording industry. Between 1999 and 2008, the recording industry as a whole suffered a fifty percent drop in both sales and revenues, a figure plaintiffs attribute to the rise of illegal downloading. This reduction in revenues has, in turn, diminished recording companies’ capacities to pursue, develop and market new recording artists. It also affected the companies’ employees. The loss in revenues has resulted in a significant loss of industry jobs. Sony BMG Music Entertainment and Warner Music Group, for example, each have suffered a fifty percent reduction in workforce since 2000.

The court then traced the history of the record labels’ response to P2P piracy, beginning with consumer education and legal actions against P2P services and leading to its campaign against individual infringers, including Joel Tenenbaum.

Tenenbaum’s Conduct

The First Circuit devotes over 8 pages in the 65 page opinion to describing Tenenbaum’s actions that led to the trial. The portrait they paint is one of an avid “file-sharer” who downloaded and distributed music continuously for nearly a decade. The court said that “Over the duration of Tenenbaum’s conduct, he intentionally downloaded thousands of songs to his own computers from other network users. He also purposefully made thousands of songs available to other network users.” It also observed that “Tenenbaum regularly looked at the traffic tab, and he admitted it ‘definitely wasn’t uncommon’ for other users to be downloading materials from his computer.”

The court notes too the warnings Tenenbaum received that his conduct was illegal: from his father, his mother, his college, his ISP, and finally from the record labels themselves. Up until the trial, Tenenbaum denied he did anything wrong, shifting the blame to seemingly any individual he could think of. According to the court, “These individuals included a foster child living in his family’s home, burglars who had broken into the home, his family’s house guest, and his own sisters.”

It wasn’t until asked at trial that Tenenbaum finally admitted responsibility for his conduct.

All of Tenenbaum’s arguments rejected

Next the court rejected three of Tenenbaum’s arguments raised on appeal.

The first is that the Supreme Court decision in Feltner rendered the Copyright Act’s statutory damage provisions unconstitutional. Although the court found that Tenenbaum waived this argument because he didn’t clearly make it in the district court, it nevertheless found it wrong. Feltner held that, although the statutory damages provision only refers to “the court”, statutory damages must be determined by a jury (unless a jury trial is not requested by the plaintiff). Tenenbaum’s argument was a stretch — I won’t spend any time on this, so you can read the opinion if you want to see the details.

Next, Tenenbaum argues that the statutory damages provision doesn’t apply to “consumer copiers.” Again, although the court found this argument waived, it took the time to explain why it was wrong.

We start with the inaccuracy of the labels that Tenenbaum’s argument uses. Tenenbaum is not a “consumer-copier,” a term he never clearly defines. He is not a consumer whose infringement was merely that he failed to pay for copies of music recordings which he downloaded for his own personal use. Rather, he widely and repeatedly copied works belonging to Sony and then illegally distributed those works to others, who also did not pay Sony. Further, he received, in turn, other copyrighted works for which he did not pay. Nor can Tenenbaum assert that his was merely a “noncommercial” use and distribution of copyrighted works as those terms are used elsewhere in the Act. His use and distribution was for private gain and involved repeated and exploitative copying.

But even if the court did agree that Tenenbaum was engaged in “consumer copying” it wouldn’t have mattered. The language of the Copyright Act is crystal clear: the distinctions or exceptions that Tenenbaum asks the court to read into the law simply don’t exist. The court continued:

Asking us to ignore the text and the plain meaning of the statute, Tenenbaum argues Congress was unaware that suits like this could be brought and so could not have intended the statute to apply here. The argument is wrong both on the law and on the facts.

The First Circuit observed that Congress “specifically acknowledged that consumer-based noncommercial use of copyrighted materials constituted actionable copyright infringement” when it increased the amounts available under the statutory damage provisions in 1999. Two years before that, it amended the Copyright Act to impose criminal liability even when the infringement is noncommercial. And the fact that the record labels’ pursuit of end-user infringers cuts against Tenenbaum’s argument rather than supporting it:

Even if we assume that copyright owners have historically chosen first to litigate against the providers of new technologies of reproduction and dissemination rather than the users of those new technologies, that may best be explained by the owners using a cost benefit analysis, and says nothing about Congressional intent. Historically, the costs of prosecuting infringement actions against individual users could be thought by owners to have exceeded the benefits. That the copyright owners have turned to litigation against individual infringers only underscores that the balance of the copyright holder’s cost-benefit analysis has been altered as peer-to-peer networks and digital media become more prevalent.

The Circuit also rejected Tenenbaum’s argument that there must be some relation between statutory damages and actual harm. It points to the language of the Copyright Act, which allows a copyright holder to elect to receive statutory damages instead of actual damages — language that the Supreme Court has affirmed means statutory damages are available as an alternative remedy from actual damages, “[e]ven for uninjurious and unprofitable invasions of copyright.” Besides that, Sony had provided “extensive testimony” of the harm caused by Tenenbaum’s conduct during trial.

Finally, Tenenbaum raised a number of arguments that the jury instructions were in error. Even though all but one of these arguments were not preserved for appeal, the First Circuit nevertheless took the time to explain why they are wrong.

Doctrine of Constitutional Avoidance

The First Circuit next held that the district court erred when it bypassed the issue of common law remittitur and reduced the jury verdict on due process grounds. This is the most important portion of the decision in Tenenbaum, and it sheds some light on the future of not only this case, but also Thomas-Rasset.

The court declined to adhere to the doctrine of constitutional avoidance on the ground that it felt resolution of a constitutional due process question was inevitable in the case before it. A decision on a constitutional due process question was not necessary, was not inevitable, had considerable impermissible consequences, and contravened the rule of constitutional avoidance. That rule had more than its usual import in this case because there were a number of difficult constitutional issues which should have been avoided but were engaged.

The court notes two of those issues: first, the proper standard for measuring the due process limitations on awards of statutory damages, and second, whether reducing statutory damages in this fashion, without allowing plaintiffs the option of accepting them or seeking a new trial, violates the Seventh Amendment.

The doctrine of constitutional avoidance, where courts must avoid reaching a constitutional question if it can decide an issue on nonconstitutional grounds, seems counterintuitive to many people at first glance. The Constitution is the “supreme law of the land”, 3US Constitution, Article VI. after all — if something violates the Constitution, why wouldn’t we want judges to put a stop to it?

The answer to that is in the Constitution itself. The power of the Judicial branch is not unlimited — Article III provides that courts may only hear “cases or controversies” and not render advisory opinions. The Constitution also provides for separation of powers. Congress is vested with the power to make laws, and a court that is too active in its efforts to rule laws unconstitutional is essentially encroaching on this power.

From this foundation, along with principles of judicial restraint, the doctrine of constitutional avoidance has developed. Though it is a long-standing doctrine, it received its most famous elaboration by Supreme Court Justice Brandeis in his concurrance to Ashwander v. Tennessee Valley Authority.

Gore vs. Williams

But while the First Circuit declined to rule on the proper standard for analyzing statutory damage awards, it did hint that it is leaning more toward Williams than Gore.

First, it noted that the presumptive standard for statutory damages is Williams and questioned whether courts would have “leeway and reason” to bypass this standard and apply a different one. 4The court hypothesized that this different standard could be “the Gore standard, some combination of Williams and Gore, or some other standard”.

Second, it questioned the applicability of Gore to copyright statutory damages. These damages serve different purposes than punitive damages. In addition, both Gore and Williams involved review of state-authorized awards, not one set by Congress pursuant to one of its specifically enumerated powers.

Finally, Williams remains good precedent, and the Supreme Court has never suggested Gore should extend to constitutional review of statutory damages. The First Circuit rounds out its skepticism by observing that the concerns which led to the standard in Gore aren’t present in a statutory damage context, and the only other circuit court to address an issue like this declined to apply Gore and instead applied Williams. 5That case is Zomba Enterprises v. Panorama Records, 491 F.3d 574 (6th Cir. 2007).

While not overtly endorsing the Williams standard, this decision hints that, should the First Circuit confront this issue in the future, it will go down that road. And, based on its comment noting “concerns about application of the Copyright Act which Congress may wish to examine”, the circuit court judges suggest they are inclined to think such a verdict would survive a due process challenge under Williams.

This saga is far from over — it remains to be seen if the parties settle or continue the litigation, and it remains to be seen how the district court responds if they do continue. The Thomas-Rasset appeal is also waiting in the wings, with the record labels’ opening brief due October 13th.

References   [ + ]

1. See the EFF, Techdirt, and Ars Technica.
2. The Seventh Amendment right to a jury trial requires that plaintiffs be given this choice.
3. US Constitution, Article VI.
4. The court hypothesized that this different standard could be “the Gore standard, some combination of Williams and Gore, or some other standard”.
5. That case is Zomba Enterprises v. Panorama Records, 491 F.3d 574 (6th Cir. 2007).

Senate Judiciary Committee report on PROTECT IP, July 22, 2011:

The Committee notes that protecting intellectual property in the form of copyrighted material is not only important to our economy and jobs, but is also important for advancing the goals of the First Amendment. The United States Supreme Court has long held that copyright protection advances the goals of the First Amendment by “supply[ing] the economic incentive to create and disseminate ideas.” The “clause [of the Constitution] empowering Congress to grant patents and copyrights is [based] in the conviction that encouragement of individual effort by personal gain is the best way to advance public welfare through the talents of authors and inventors in ‘Science and useful Arts.'”

Further, Justice O’Connor wrote that copyright law is the very “engine of free expression.” It exists not to prevent free speech, but to promote it. Justice O’Connor went on to recall that “freedom of thought and expression ‘includes both the right to speak freely and the right to refrain from speaking at all.'” As rogue Internet sites evade U.S. intellectual property laws, they not only cause economic harm, but they trample on these First Amendment values.

UK Culture Secretary calls for boldness in dealing with online piracy — Barry Sookman reports on the speech given by UK Culture Secretary Jeremy Hunt to the Royal Television Society on September 14, 2011. The talk deals broadly with UK communications policy, but does address the problem of unlawfully distributed content online. Just a taste: “John Stuart Mill defined liberty as the freedom to do anything provided it does not impinge on the freedom of others. Unlawfully distributing copyrighted material is theft – and a direct assault on the freedoms and rights of creators of content to be rewarded fairly for their efforts. Fundamental to our concept of both freedom and the law is that it should apply to everyone without fear or favour. This means it must apply equally in the virtual world as in the physical world.”

Do it, or we’ll do it for you: Jeremy Hunt and Ed Vaizey stand up for human rights of UK artists — Chris Castle also comments on Hunt’s recent remarks, paying specific attention to the relationship between Google and Prime Minister David Cameron.

Study: 92% of music fans still prefer ownership — Digital Music News highlights a recent study by eMusic, administered by Insight Research Group that found this and other interesting statistics concerning consumer attitudes toward digital music, streaming services, and buying habits.

If free culture is going to be so great, why are bullies in charge of it? — John Degen looks at the far-too-common backlash that creators and creator advocates get from free culture advocates when they say something provocative like people should get paid for their work. Good article, but this comment from Degen, FTW: “it’s always been easy to NOT make a living at being a professional artist. The free culture movement is just making it easier.”

Found one! We re-unite an author with an “orphaned work” — On Monday, the Authors Guild and others filed suit against five universities and the HathiTrust for plans to release digital scans of “orphan works”, books that are still under copyright protection but where the rights-holder is unable to be found. In this blog post, the Authors Guild finds one of the authors on the list of orphan works the trust plans to release after a few minutes on Google.

Entrepreneurs Demonstrate It Is Time To Act On The Protect Ip Act — The Copyright Alliance looks at last week’s letter from tech entrepreneurs against the proposed rogue sites legislation. “By rehashing generations old history and repeating myths and misstatements about the bill, the main thing the signatories have shown is that there is nothing new they can bring to the debate, and that it is time for Congress to act on the legislation.”

The Supreme Court of Canada Copyright Tariff Pentalogy — The Supreme Court of Canada, which historically has heard copyright cases relatively infrequently, is set to hear five cases December 6-7. James Gannon presents a summary of the cases, all involving judicial review of Copyright Board decisions on collective licensing.

With Great Power Comes No Responsibility — Rob Levine questions Google’s apparent position that it has absolutely no responsibility when its services are used, exactly the way they were designed to be used, for illegal purposes. “On a literal level, the company abides by its public relations mantra, ‘Don’t Be Evil.’ But that’s only because it prefers to outsource bad behavior in a way that enables it to make money and still abide by the letter of the law. ”

Backstage helps out on September 11th — Last week, many US bloggers shared there thoughts on the 10th anniversary of the 9/11 attacks. Here, Eric Hart (my brother) looks at how NYC theater professionals and IATSE members pitched in to assist with rescue efforts and the aftermath.

Turntable comes clean about funding. Next up: label deals, more users — Some more updates on the much-buzzed new music service. I previously wrote about and licensing; here, Peter Kafka reports that “Basically they’re gunning for a hybrid license which would have them paying more per stream than Pandora does, but less than a full-fledged, on-demand interactive service like Spotify ponies up.”

Tenenbaum: an alternative view — An older article, but with the Tenenbaum appeal currently awaiting decision and the Thomas-Rasset appeal to begin briefing in October, I thought it would be of interest. Both appeals concern what, if any, due process (Fifth Amendment) limitations are placed on a jury award of statutory damages. But here, attorney Emily Maruja Bass asks a different question: does the reduction of the jury’s award violate the Seventh Amendment rights of the plaintiffs? With great analysis, Bass presents a persuasive argument that it might.

Puerto 80 Projects, the owner of the Rojadirecta domain names seized by the US earlier this year, is currently awaiting the Southern District of New York’s ruling on its motion to dismiss. I took a look at its memorandum of law in support of the motion a few weeks ago. On August 26th, the US filed its own memo in response to the motion, and on September 2nd, Puerto 80 filed its reply to the US response, embedded below.

Separately, Puerto 80 has appealed the court’s earlier denial of its petition for pretrial release of the domain names under 18 USC § 983(f). The Second Circuit granted its request for an expedited appeal. Puerto 80’s appellate brief is due tomorrow.

Puerto 80’s reply memorandum:

[scribd id=63825861 key=key-1rncb6dg5nwje0ntnytg mode=list]

Puerto 80 sets the tone of its entire memo from the very start:

The government’s view of its powers under the civil forfeiture law, articulated for the first time in its opposition to Puerto 80’s motion to dismiss, is breathtaking. In the government’s view, it doesn’t need to allege that Puerto 80 violated any law, or even engaged in any civil wrong, in order to seize and shut down its Internet domain name. As long as the government thinks that someone, somewhere in the world, is engaged in copyright infringement, it believes it is entitled to seize any asset that might be connected to that infringement, whether or not the owner engaged in any wrongdoing, and whether or not that asset in fact “facilitated” the commission of any crime. And it further believes it is entitled to seize Internet domain names and shut down protected speech without ever having to prove that the speech was, in fact, unlawful, much less that the owner of the asset was responsible for any crime.

On the government’s view of its powers, it is entitled to seize the Google, Bing, or Yahoo web site, because someone, somewhere, has used those sites’ search engines to find infringing content. It is entitled to seize Verizon’s telephone network for the same reason. It is entitled to seize the power company, since numerous crimes are “facilitated” by the use of electricity. And the only reason the government lost the Pentagon Papers case, New York Times Co. v. United States, 403 U.S. 713 (1971), is that it asserted the wrong statute. Had the government simply seized the New York Times’ printing presses, pointing out that they were being used to “facilitate” the disclosure of government secrets, it would have been able to block the disclosure of Daniel Ellsberg’s secrets.

This cannot be the law. The government’s effort to disaggregate seizure from any allegation of wrongdoing on the part of the property owner flies in the face of the purpose and history of the civil forfeiture statute. It is inconsistent with the way the statute itself is drafted. And it is unconstitutional.

There’s a couple of interesting statements made here that I want to look at.

“The government’s effort to disaggregate seizure from any allegation of wrongdoing on the part of the property owner flies in the face of the purpose and history of the civil forfeiture statute.”

I’m not sure what history Puerto 80 is referring to. Contrary to its assertions, civil forfeiture quite clearly and plainly does not require wrongdoing on the part of the property owner and has not required wrongdoing throughout its history.

In Bennis v. Michigan, the Supreme Court said “a long and unbroken line of cases holds that an owner’s interest in property may be forfeited by reason of the use to which the property is put even though the owner did not know that it was to be put to such use.” It then laid out this long and unbroken line of cases, beginning in 1827 with The Palmyra, which held that it is the thing that is the offender in an in rem forfeiture proceeding. Subsequent cases include:

  • Harmony v. United States, 2 How. 210, 234 (1844): “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.”
  • Dobbins’s Distillery v. United States, 96 U. S. 395, 401 (1878): “Cases often arise where the property of the owner is forfeited on account of the fraud, neglect, or misconduct of those intrusted with its possession, care, and custody, even when the owner is otherwise without fault . . . and it has always been held . . . that the acts of [the possessors] bind the interest of the owner . . . whether he be innocent or guilty.”
  • J. W. Goldsmith, Jr.-Grant Co. v. United States, 254 U. S. 505 (1921): “It is the illegal use that is the material consideration, it is that which works the forfeiture, the guilt or innocence of its owner being accidental.”
  • Van Oster v. Kansas, 272 U. S. 465 (1926): “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.”
  • Calero-Toledo v. Pearson Yacht Leasing Co., 416 U. S. 663 (1974): “the innocence of the owner of property subject to forfeiture has almost uniformly been rejected as a defense.”

After reviewing the solid precedent, and noting the punitive and deterrent functions of forfeiture, the Bennis court concluded, as it “concluded 75 years ago, that the cases authorizing actions of the kind at issue are ‘too firmly fixed in the punitive and remedial jurisprudence of the country to be now displaced.'”

Justice Thomas, in his concurrence to Bennis, could very well have been addressing Puerto 80 here when he noted that “One unaware of the history of forfeiture laws and 200 years of this Court’s precedent regarding such laws might well assume that such a scheme is lawless.”

Whether or not Puerto 80 is aware of the history of civil forfeiture law, it is still difficult to see how it can claim that forfeiture without an allegation of wrongdoing on the part of the property owner is “inconsistent with the way the statute itself is drafted.” The statute makes no reference to the culpability of the property owner. All that is required for property to be subjected to forfeiture is that it is “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).”

What’s more, 18 USC § 983 provides for an “innocent owner” defense — precluding the forfeiture of any property where the owner “did not know of the conduct giving rise to forfeiture; or upon learning of the conduct giving rise to the forfeiture, did all that reasonably could be expected under the circumstances to terminate such use of the property” — in any proceeding arising from a federal civil forfeiture statute. If forfeiture required wrongdoing on the part of the property owner, there would be no need to provide a specific defense for innocent property owners.

“On the government’s view of its powers, it is entitled to seize the Google, Bing, or Yahoo web site, because someone, somewhere, has used those sites’ search engines to find infringing content. It is entitled to seize Verizon’s telephone network for the same reason. It is entitled to seize the power company, since numerous crimes are “facilitated” by the use of electricity.”

The slippery slope argument Puerto 80 raises is one courts have heard before — and rejected. Said the Supreme Court in 1921:

The changes are rung on the contention, and illustrations are given of what is possible under the law if the contention be rejected. 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. Whether the indicated possibilities under the law are justified we are not called upon to consider. It has been in existence since 1866, and has not yet received such amplitude of application. When such application shall be made it will be time enough to pronounce upon it. 1JW Goldsmith-Grant v. US, 254 US 505, 512 (1921).

And again in 1996:

The dissent also suggests that The Palmyra line of cases “would justify the confiscation of an ocean liner just because one of its passengers sinned while on board.” None of our cases have held that an ocean liner may be confiscated because of the activities of one passenger. We said in Goldsmith-Grant, and we repeat here, that “[w]hen such application shall be made it will be time enough to pronounce upon it.” 2Bennis v. Michigan, 516 US 442, 450-51 (1996).

If Puerto 80 is concerned that this statute could be used to seize “Google, Bing, or Yahoo”, then it should call upon Congress to change the language accordingly. But a court is primarily concerned with the case in front of it, not some hypothetical worst-case scenario. And it’s worth pointing out that despite Puerto 80’s dire warnings, as well as those considered in the cases above, no court has yet to confront such a situation.

“And the only reason the government lost the Pentagon Papers case, New York Times Co. v. United States, 403 U.S. 713 (1971), is that it asserted the wrong statute. Had the government simply seized the New York Times’ printing presses, pointing out that they were being used to “facilitate” the disclosure of government secrets, it would have been able to block the disclosure of Daniel Ellsberg’s secrets.”

This is just a silly argument. Forfeiture of facilitating property can only occur pursuant to statute. The government couldn’t have asserted such a statute that Puerto 80 insinuates since there was no statute in 1971, nor now, that provided for the forfeiture of property that facilitates the disclosure of government secrets. Such an argument, laden with emotion but based on a faulty premise, might play well to the Techdirt crowd, but might not play as well to a judge.

“The Complaint fails to plead the elements of criminal copyright infringement by Puerto 80 or any other actor.”

For all its tough talk, Puerto 80 does very little to actually make its case.

To succeed in a forfeiture action under 18 USC § 2323, the government must prove by a preponderance of the evidence, that (1) the property was used to commit or facilitate the commission of criminal copyright infringement, and (2) there was a “substantial connection” between the property and the offense. The US does not have to show evidence of a particular illegal act. 3In re Seizure of all funds, 68 F.3d 577, 580 (2nd Cir. 1995), citing Marine Midland Bank, N.A. v. United States, 11 F.3d 1119, 1124 (2d Cir.1993); United States v. Ten Thousand Seven Hundred Dollars and No Cents in US Currency, 258 F. 3d 215 (3rd Cir. 2001); United States v. US Currency in Amount of $150,660, 980 F.2d 1200, 1205 (8th Cir. 1992); United States v. $250,000 in United States Currency, 808 F.2d 895, 899-900 (1st Cir.1987); United States v. $4,250,000, 762 F.2d 895, 903-04 (11th Cir.1985). And it may use circumstantial evidence to show the nexus between the property and the predicate act giving rise to forfeiture.

That’s the ultimate burden the US has to meet for property to be forfeited. At this stage in the game, the US need only “state sufficiently detailed facts to support a reasonable belief” that it will be able to meet this burden, 4FRCP, Supplemental Rules G(2). and “state the circumstances from which the claim arises with such particularity that the defendant or claimant will be able, without moving for a more definite statement, to commence an investigation of the facts and to frame a responsive pleading.” 5FRCP, Supplemental Rules E(2)(a).

In other words, the US doesn’t have to prove its case in the forfeiture complaint. It may even, in fact, “use evidence gathered after the filing of a complaint” to meet its ultimate burden.” 618 USC § 983(c)(2). Puerto 80 provides very little support for its argument that the forfeiture complaint is deficient in this regard — the first memorandum supporting its motion to dismiss focused on arguing that the site isn’t personally liable for criminal copyright infringement, and this memo primarily argues that the scope of the §2323 is simply too broad.

No word yet on when Judge Crotty is set to rule on Puerto 80’s motion.

References   [ + ]

1. JW Goldsmith-Grant v. US, 254 US 505, 512 (1921).
2. Bennis v. Michigan, 516 US 442, 450-51 (1996).
3. In re Seizure of all funds, 68 F.3d 577, 580 (2nd Cir. 1995), citing Marine Midland Bank, N.A. v. United States, 11 F.3d 1119, 1124 (2d Cir.1993); United States v. Ten Thousand Seven Hundred Dollars and No Cents in US Currency, 258 F. 3d 215 (3rd Cir. 2001); United States v. US Currency in Amount of $150,660, 980 F.2d 1200, 1205 (8th Cir. 1992); United States v. $250,000 in United States Currency, 808 F.2d 895, 899-900 (1st Cir.1987); United States v. $4,250,000, 762 F.2d 895, 903-04 (11th Cir.1985).
4. FRCP, Supplemental Rules G(2).
5. FRCP, Supplemental Rules E(2)(a).
6. 18 USC § 983(c)(2).

Last May, the Senate Judiciary Committee unanimously approved the PROTECT IP Act, which aims to reduce the ability for sites dedicated to infringement to profit from piracy. Now that Congress is back in session, House Judiciary chairman Lamar Smith plans to introduce a House version of the bill.

In July, the Senate Judiciary Committee released its report on the proposed legislation. The report includes the bill’s background and legislative history to date, as well as a section-by-section summary and other housekeeping bits.

What’s notable about PROTECT IP is how broad the support for it is. On the political front, the support is bi-partisan and from every level of government, from local to state to federal.

The bill was originally sponsored by  Patrick Leahy (D-VT), Chuck Grassley (R-IA), Orrin Hatch (R-UT), Christopher Coons (D-DE), Chuck Schumer (D-NY), Sheldon Whitehouse (D-RI), Lindsey Graham (R-SC), Richard Blumenthal (D-CT), Dianne Feinstein (D-CA), Al Franken (D-MN) and Herb Kohl (D-WI).

Since being introduced, it has attracted co-sponsorship from Senators Lamar Alexander (R-TN), Kelly Ayotte (R-NH), Michael Bennet (D-CO), Roy Blunt (R-MO), John Boozman (R-AR), Benjamin Cardin (D-MD), Thad Cochran (R-MS), Bob Corker (R-TN), Richard Durbin (D-IL), Kristen Gillibrand (D-NY), Kay Hagan (D-NC), Amy Klobuchar (D-MN), Joseph Lieberman (I-CT), John McCain (R-AZ), Marco Rubio (R-FL), Jeanne Shaheen (D-NH), and Tom Udall (D-NM).

Private sector support is broad as well; individuals, labor unions, small businesses and large, trade associations, and other organizations have added their voice — including creators and producers in every medium and subject matter covered by copyright.

I’ve put together a list of many of the statements and editorials showing support for PROTECT IP. It’s comprehensive, though I know it’s not complete. And while I certainly want to show the breadth of support for rogue sites legislation, I also think it will be handy for future reference. Many thanks to the MPAA blog for reporting on many of these and providing copies of the letters.

The 2011 Music-Sales Boost, By the Numbers — Billboard reports some good news: music sales are up in 2011. Nielsen presented the numbers at a NARM-sponsored webinar and looked at possible causes. One of them: the shutdown of LimeWire late last year. “The spike in sales was immediate, noticeable and lasting.”

Great Digital Expectations — The Economist surveys the rapidly-changing publishing industry. This year, for the first time, e-book sales overtook adult hardcover sales. And shuttering physical book stores — long the primary promotional channel for publishers — cast a gloom over the industry.

Visual Cues Impact Judgment of Piano Performances — Very interesting article about recent research that shows that what we see effects what we hear. “Despite the fact the soundtracks were identical, ‘Nearly all participants identified differences between the pairs of video recordings,’ the researchers report. Duplicating the results of the 1990 study, the ‘performances’ by the male pianists were perceived as more precise, while the female pianist’s ‘performance’ of Chopin was judged as more dramatic.”

Tunes on the Tube, What Does it all Mean? — “Have you noticed how much more music is on television today?” asks the RIAA’s Mitch Glazier. From shows like The Voice, Glee, and Dancing With the Stars to the record-high ratings for music award shows, the common theme seems to be “fans’ healthy appetite for music discovery and their desire to be blown away by a voice, a song, a talent.”

Copyright law puts brakes on Internet traffic — After New Zealand’s recent graduated response laws went into effect, ISPs have reported that international P2P traffic has dropped by as much as 10% before a single warning notice had even been sent.

Tech Execs Should Read the PROTECT IP Act Before Attacking It — The MPAA responds to yesterday’s letter from tech company bosses opposing the PROTECT IP Act. It notes specifically that the definition of infringing sites is anything but “vague” and the “burdens for smaller tech companies” are largely imaginary.

Still a Long Way to Go for Anti-Counterfeiting Trade Agreement — The ACTA largely dropped from the news once negotiations wrapped up last year, but it is open for signature until May 2013. IP Watch takes a look at where that process is at and some of the issues that have cropped up.

In the Courts

To the extent that Perfect 10 can be read to stand for the proposition that inline linking can never cause a display of images or videos that would give rise to a claim of direct copyright infringement, we respectfully disagree. In our view, a website’s servers need not actually store a copy of a work in order to “display” it. The fact that the majority of the videos displayed on myVidster reside on a third-party server does not mean that myVidster users are not causing a “display” to be made by bookmarking those videos. The display of a video on myVidster can be initiated by going to a myVidster URL and clicking “play”; that is the point of bookmarking videos on myVidster—a user can navigate to a collection of myVidster videos and does not have to go to each separate source site to view them.

FLAVA WORKS, INC. v. Gunter, No. 10 C 6517, Memorandum Order (N.D.Illinois September 1, 2011)