Eat less, exercise more.

This simple advice is, barring medical problems, at the heart of any weight loss plan for the 75 million self-identified dieters in the US.1 Yet the US weight loss market is valued at over $60 billion a year, filled with a constant stream of fad diets, “miracle” foods, and dubious supplements, as many search in vain for a magic bullet.

The same is true when dealing with expressive works like music, movies, and books. Many search in vain for a magic bullet to ensuring a vibrant creative ecosystem online, but more and more the key boils down to simple advice: Make piracy harder, make legal options easier.

Carnegie-Mellon economist Michael D. Smith describes this in a recent article on Digitopoly, Anti-piracy regulation and competing with free. The article is a response to an earlier op-ed piece by Nick Bilton at the New York Times, Internet Pirates Will Always Win. Smith took issue with the defeatist attitude that Bilton adopted concerning making piracy harder.

In short, Bilton’s arguments don’t mesh with reality. Smith points to his own research on price differentiation that  “found that while Amazon’s prices were well above the lowest price online, they still retained a dominant share of the market in head-to-head competition with much lower priced alternatives from online retailers like altbookstore, booksnow, and musicboulevard.” Smith goes on to explain:

What does this have to do with anti-piracy regulation? Possibly quite a lot if one views “competing with free” as simply a special case of price competition. Imagine competition in the digital media space where the media companies and their online distribution partners play the role of Amazon, and where pirate sites play the role of lower priced alternatives from the likes of altbookstore. The twist on this example is that while Amazon could only control the differentiation of their own offerings, media companies can use anti-piracy regulation to impact the differentiation of their pirate competitors’ offerings as well. Thus, media companies can use iTunes and Hulu to improve the convenience, quality, and reliability of their paid products, while also using anti-piracy regulation to reduce the convenience, quality, and reliability of the free pirate competition.

Smith points to empirical evidence that this is indeed what happens when anti-piracy regulations are adopted. Smith’s takeaway is that they “don’t have to be perfectly effective to get the job done. In that way, anti-piracy interventions may be less like ‘Whac-A-Mole,’ and more like horseshoes where you can score points just by getting sufficiently close to the target.”

But attitudes like Bilton’s persist.

One strand of thought seems to embrace the idea that antipiracy efforts are all or nothing. You have folks like angry sci-fi author Cory Doctorow pounding on the podium that efforts to make piracy harder are just the first step in a “war on general computing.”

You have Pirate Party founder Rick Falkvinge saying, with a straight face and clenched fist, “The only way to even try to limit file sharing is to introduce surveillance of everybody’s private communication. There is no way to separate private messages from copyrighted material without opening the messages and checking the contents. Gone is the postal secret, the right to communicate in private with your lawyer or your web-cam flirt, or your whistle-blower protection if you want to give a sensitive story to a journalist.”2

And a recent documentary from al-Jazeera claims that debates over copyright are “about centralized control versus ‘the ability to share information across the world without traditional boundries or regulations’” and recent legislation was “not about pirated entertainment but how do we live in the digital age and who gets to decide what we do.”

This line of thinking is, to put it bluntly, insane. It would be like saying the only way to stop tax fraud would be to allow government access to everybody’s bank accounts, or the only way to prevent speeding would be to require that speedometers broadcast data to the feds. No one seriously contemplates these solutions, and we somehow manage to enforce these laws without 100% compliance. The same is true with copyright.

On the flip side, legal options need to be more easier. Here, the failure of creators to adopt legal alternatives has been overstated.

Just yesterday, the MPAA noted “there are more legitimate avenues available today to watch movies and TV shows online than ever before: Hulu, HBO Go, Vudu, Crackle, UltraViolet, Epix, MUBI, Netflix, Amazon – and that just scratches the surface.” The RIAA reported in its recent IPEC comment that there are currently over 2,000 digital services offering access to consumers to over 20 million music recordings, a number that is growing. Countless other opportunities exist for emerging and indie musicians, authors, and filmmakers online. And the infrastructure continues to develop — for example, this past May, the RIAA, NMPA, and DiMA rolled out five new licenses that provide a “one-stop shop” for new online music distribution services.

Access to music, films, TV shows, books, and other works has never been easier or cheaper. Ever.

But, just like “eat more, exercise less”, “make piracy harder, make legal options easier” goes hand in hand; neither one is sufficient on its own. Legitimate options are better for the public in the long run, but they need a fair marketplace in order to thrive.

Footnotes

  1. See Caroline Scott-Thomas, Advice to Eat Less, Exercise More Still Trumps Diet Products for Weight Loss, Study Finds, April 16, 2012; Heidi Grant Halvorson, 5 Habits of Highly Successful Dieters, CNN, Mar. 19, 2012: “Eat less, exercise more. That’s the recipe for losing weight, and we all know it by heart”; Kristen Philipkoski, Stop Complicating a Simple Obesity Solution: Eat Less, Exercise More, Gizmodo, Mar. 8, 2012. []
  2. This argument is quite common. New America Foundation’s James Losey wrote in Slate last year, “If the United States decides that copyright infringement must be stopped at any cost, the required censorship regime will depend on ever more invasive practices, such as monitoring users’ personal Web traffic.” []

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On Friday, the Florida Southern District Court held a hearing on several dispositive motions in litigation between film studios and popular file-locker Hotfile.

Major film studios — including Disney, 20th Century Fox, Universal City, Columbia Pictures, and Warner Bros. — sued Hotfile in February 2011 for copyright infringement and secondary copyright infringement. The studios also brought a claim against Hotfile’s owner and operator, Anton Titov, for personal liability. In July, the court dismissed the claim for direct copyright infringement but allowed the claims for inducement, contributory infringement, and vicarious liability to go forward. Hotfile raised a number of defenses in its answer to the complaint, notably that it is protected by the DMCA safe harbor, and also brought a counterclaim against Warner Bros., alleging the film studio had made material misrepresentations in thousands of DMCA takedown notices it had sent to Hotfile. Both parties moved for summary judgment earlier this year.1

Though this is not the first infringement suit against file-lockers — Hotfile itself has been sued several times2 — it is notable for being one of the first suits initiated by major film studios against a popular file-locker. If the case progresses, it may prove influential in shaping copyright law online.

The claims of the studios are similar to claims in other copyright cases involving online service providers. It is alleged that Hotfile engaged in massive, commercial infringement by actively facilitating the reproduction and distribution of unauthorized TV shows and movies through its service. The studios point to Hotfile’s “affiliate program” that pays users for uploading popular files with the most downloads. Hotfile also operates a referral program that generates income for third-party sites that link to Hotfile content, the result of which, the studios allege, “is that Hotfile effectively partners, and acts in concert, with a vast array of pirate link sites and other affiliates to advertise and promote the infringing content on Hotfile’s servers.” Finally, like Megaupload, Hotfile is alleged to stymie takedowns of infringing content by making multiple copies of every file uploaded, each with a separate link. As the studios state:

Defendants protest that Hotfile is not like Napster, Grokster, Limewire, and other notorious infringers. But the differences make Hotfile’s infringement more egregious, not less. No earlier pirate services had the temerity actually to pay its users to upload infringing content. Hotfile does. Hotfile’s own economist acknowledges that Hotfile’s practice of paying uploaders (Hotfile’s so-called “Affiliates”) based on how many times their files are downloaded induces the uploading of “popular” (i.e., infringing) content. Additionally, unlike previous adjudicated infringers, which facilitated access to content stored on users’ computers, Hotfile itself physically stores all the infringing content on its own servers, giving it an unprecedented ability to stop the infringement – an ability Hotfile chooses not to exercise. Finally, Hotfile’s business model is indistinguishable from that of the website Megaupload, which recently was indicted criminally for engaging in the very same conduct as Hotfile. Defendants even admit that they formed Hotfile “to compete with” Megaupload.

The motions

On motion for summary judgment, the studios argue that Hotfile is ineligible for safe harbor protection because it failed to reasonably implement a repeat infringer policy, it failed to comply with the DMCA agent designation requirements, it had disqualifying knowledge — including actual knowledge of specific infringing files, “red flag” knowledge, and willful blindness — and it induced infringement.

On the first point, the studios note that Hotfile had the ability to track the number of takedown notices that individual users were responsible for (“strikes”), but it took no steps to terminate repeat infringers — a number of individual uploaders had accumulated over three hundred strikes without being terminated. The studios also note that over half of all downloads on Hotfile come from files uploaded by users with three or more strikes.

The last point, concerning the lack of knowledge requirement for safe harbor protection, has been the subject of recent court decisions in Viacom v. YouTube, from the Second Circuit, and UMG v. Veoh, from the Ninth.3 It appears that this is the first time a court in the Eleventh Circuit has been confronted with interpreting these provisions of the DMCA. This portion of the DMCA states that a service provider is only eligible for safe harbor protection if it “does not have actual knowledge that the material or an activity using the material on the system or network is infringing,” or “in the absence of such actual knowledge, is not aware of facts or circumstances from which infringing activity is apparent.” The above cases focused primarily on the scope of the latter, so-called “red flag” knowledge.

Here, the studios point to several “red flags” that should have made Hotfile aware of infringement: over 90% of downloads were infringing, the operators received a “constant stream of communications” from users who said they were downloading infringing works, thousands of linking sites associated with Hotfile contained terms like “pirate” or “warez” that indicated obvious infringement, and, perhaps most brazenly, Hotfile’s tutorials for using its service used names and titles of copyrighted works as examples.

But the court may not need to dive into the scope of “red flag” awareness just yet; the studios have also provided evidence that Hotfile had actual knowledge of specific infringing works.

Without the safe harbor, the studios argue that Hotfile is liable for contributory copyright infringement, vicarious liability, and inducement. These arguments are fairly straight-forward applications of these doctrines of secondary liability. For contributory infringement, Hotfile provided the “site and facilities” for infringement and had reason to know about such infringement. For vicarious liability, Hotfile financially benefited from infringement through its premium subscriptions while declining its ability to stop or limit infringment.

The inducement claim — “active steps . . . taken to encourage direct infringement” — tracks the Supreme Court’s Grokster opinion and “parallels the pattern of prior adjudicated infringers,” according to the studios. They allege that Hotfile’s unlawful objective is apparent from its Affilliate program, which pays users to upload popular, and predictably copyrighted, files. Hotfile also directly targets a user base of infringers, refuses to terminate repeat infringers, is overwhelmingly used only for infringement, and depends on infringement for its business model. Finally, the defendants have helped users to infringe, have impeded efforts by copyright holders to mitigate infringement, and have refused to even consider technology that could be used to prevent infringement.

Hotfile’s response to the studios’ motion for summary judgment essentially refutes their characterization of the facts — it didn’t induce infringement, it did reasonably implement a repeat infringer policy, etc.4 To be sure, the court must sift through a lot of facts to resolve the issues raised on these motions. To succeed at the summary judgment stage, a party must show that, when all the facts are viewed in the light most favorable to the opposing party, no genuine issue of material facts exist, and the moving party is entitled to judgment as a matter of law on the issues it raises in its motion. With such complex legal issues, and thousands of pages of evidence already in front of it, the court here has its work cut out for it.

Other issues to watch

In the meantime, there are a few other legal issues raised in this litigation that are worth watching.

First, does inducement disqualify a service provider from DMCA safe harbor protection? A number of other courts have taken this position.5 The language and legislative history of the statute certainly seem to suggest that active conduct to encourage infringement is incompatible with a safe harbor for passive conduct, but courts in the Eleventh Circuit have yet to weigh in on the issue, as far as I can tell.

Next, what is the role of willful blindness in the knowledge prong of the DMCA safe harbor? The studios make the claim that Hotfile acted with willful blindness, effectively admitting “that they sought to blind themselves to the infringement all around them as much as possible.” Willful blindness, defined by the Supreme Court as taking “deliberate actions to avoid confirming a high probability of wrongdoing,” has long been considered a form of knowledge. The twist is that the DMCA provides that safe harbor protection does not require “a service provider monitoring its service or affirmatively seeking facts indicating infringing activity, except to the extent consistent with a standard technical measure complying with the provisions of subsection (i).” The Second Circuit in Viacom v. YouTube confronted this question and concluded that the DMCA “limits—but does not abrogate— the doctrine” of willful blindness, and it “may be applied, in appropriate circumstances, to demonstrate knowledge or awareness of specific instances of infringement under the DMCA.”

Finally, on a bit of a side note, the movie studios also argue that Hotfile is ineligible for the 512(c) safe harbor — which limits remedies “for infringement of copyright by reason of the storage at the direction of a user” — because Hotfile’s service was not used primarily for “storage.” They note that a significant portion of registered users on the site only use it to download, not upload, files. More to the point, Hotfile routinely deletes files that have never been downloaded — the “antithesis” of storage, as the studios put it. I don’t recall seeing this argument raised before in another case, so it will be interesting to see how the court approaches it.

A trial is currently scheduled for early November, but it shouldn’t be a surprise if the court’s eventual decision on these motions is appealed to the Eleventh Circuit, delaying trial.

Footnotes

  1. The studios also seek to strike portions of testimony from several of Hotfile’s expert witnesses and defendant Anton Titov. []
  2. Once by Perfect10 and twice by Liberty Media Holdings. []
  3. Note that the 9th Circuit ordered more briefing in Veoh this past June, following the decision in Viacom. Thus, the decision may yet be amended; the court also has a petition for rehearing on the case pending. []
  4. Hotfile has also moved for partial summary judgment on the claim that it is protected by the DMCA safe harbor for any infringement that occurred after February 11, 2011 — ten days after it was sued by the studios. []
  5. See Viacom v YouTube, 676 F.3d 19, 38 (2nd Cir. 2012) (“inducement of copyright infringement … which ‘premises liability on purposeful, culpable expression and conduct,’ … might also rise to the level of control under § 512(c)(1)(B)”); Columbia Pictures v Fung, cv 06-5578-SVW, Order Granting Plaintiffs’ Motion for Summary Judgment on Liability (CD Cali. 2009) (“inducement liability and the Digital Millennium Copyright Act safe harbors are inherently contradictory”); Arista Records v Usenet.com, 633 F. Supp. 2d 124, 142 SDNY 2009 (if defendants “encouraged or fostered such infringement, they would be ineligible for the DMCA’s safe harbor provisions”). []

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August 17, 2012 · · Comments Off

Understanding the New Google “Pirate Penalty” — Last Friday, in welcome news, the search behemoth announced it would be incorporating legitimate DMCA takedown notices into its search ranking. PlagiarismToday’s Jonathan Bailey has an in-depth look at what the change means, followed up with 10 Questions Answered about Google’s New “Pirate Penalty.” Interestingly, Bailey notes that the change will mostly fall “on the shoulders of various file sharing sites”: the first non-filesharing site on Google’s transparency report is ranked all the way at number 170 in terms of takedown notices received.

Business Matters: Teens Listen to Music Most on YouTube, Pay for Music More Than Other Age Groups, Nielsen Study Says — Billboard notes that a newly released Nielsen study shows that “the average teen has more normal listening and discovery characteristics than one might expect given the hyperbole easily found in today’s media.” Half of all teens surveyed still listen to CDs, compared to 64% who listen on YouTube: a difference, but not as much as one might think.

BMW slams ad machine in reverse, screeches out of pirate den — Andrew Orlowski at The Register reports on BMW’s response to its ads showing up on filesharing sites after it was brought to the company’s attention by the Trichordist blog. “The car maker, which posted revenues of €68bn in 2011 – making it more than twice the size of Google – has promised to review how it promotes itself on the internet after the Trichordist blog noticed the German giant was touting its flash motors on pirate music sites.”

Dear American Express: Stop advertising on sites that illegally exploit my music — And speaking of the Trichordist, this week David Lowery calls attention to the financial services company for the same issue. “This isn’t abstract to me–this page is a link to an illegal download of one of my songs. You should also note some of the other ‘suggested’ searches on this same site are for some pretty nasty stuff.  I don’t like having my brand seen in these places and I’m sure you don’t either.”

Does the DMCA’s Safe Harbor Apply to Pre-1972 Sound Recordings? — Natalie Nichol of the Citizen Media Law Project examines the thorny issue, the subject of two recent court cases. Both courts resolved that it does, though both were lower court decisions. The US Copyright Office disagrees with the reasoning of the decisions (and as a matter of statutory interpretation, I believe the Copyright Office makes the stronger case) and an appeal of one of the decisions is possible, so for now the application of the DMCA to pre-1972 sound recordings remains unresolved.

Collins’ Crypt: How JAWS Spawned TWO Sub-Genres — Finally, I hope everyone enjoyed a blessed and prosperous Shark Week. In honor of the holiday, here is an interesting look at how the 1975 film inspired entire subgenres to follow in its footsteps.

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Today’s guest post comes from Copyhype contributor Devlin Hartline.

Judge Posner’s opinion for the Seventh Circuit in Flava Works, Inc. v. Gunter has caused quite a bit of confusion, to say the least. As Terry Hart mentioned in his post last Monday, the headlines “showcase some of the shortcomings consistently seen in legal reporting.” That’s the diplomatic way of saying that the reporting from the “usual suspects” is bogus and misleading.

Here’s a further sampling of the cheerful headlines:

And my personal favorite:

That, of course, isn’t quite what Judge Posner said.

See if you can spot the syllogistic fallacy:

Major premise: Users embedded infringing videos on the myVidster website.

Minor premise: Judge Posner, confined to the particular facts of the partially-developed record before him (including the fact that there was no evidence that myVidster had encouraged or induced anyone to upload, embed, or stream any infringing videos) and limited by the particular arguments raised by the plaintiff (which only argued non-inducement contributory infringement), found that plaintiff Flava Works was not likely to be successful on the merits of its contributory infringement claim against myVidster for the user-embedded infringing videos.

Conclusion: All embedded infringing videos are totally legal. Hooray!

I’m still shaking my head.

Just because Judge Posner did not find infringement by myVidster for the particular embedded infringing videos at issue in the appeal, it doesn’t follow that all embedded infringing videos are therefore legal. That’s like saying that since a jury acquits one defendant in a prosecution for a shooting death, then all shootings that result in death must be legal.

One must separate out the general statements of law made by the court from the application of the law to the particular facts of the case. And with this opinion, that’s not the easiest thing to do—the opinion leaves much to be desired as far as clarifying exactly what the liabilities are for embedded infringing videos.

Nonetheless, I created tables of the potential liabilities identified by Judge Posner for uploading and streaming infringing videos and posted it to Scribd. Seeing it in tabular form, for me anyway, is quite helpful, and I welcome readers to see what I came up with (and to disagree in the comments if you read the case differently).

With amici like these…

The amicus brief filed in the Seventh Circuit by Google and Facebook, purporting to be in support of neither party (although Judge Posner wisely notes that the brief is “friendly to myVidster”), says it all:

II. Linking can potentially be contributory or vicarious copyright infringement under some circumstances.

To say that linking can never be direct copyright infringement is not to say that linking can never lead to copyright liability of any sort. Copyright law has well-developed doctrines of secondary liability—contributory infringement and vicarious infringement—which can hold liable a culpable party when that party has not, himself, done an act which directly infringes one of the exclusive rights. The specific requirements of these doctrines may be inquired into in the context of linking in the same way that they are applied to any other activity. ***

Thus, holding that myVidster is not a direct infringer—or that its users are not direct infringers—will not leave Flava Works without a path to a possible remedy. If Flava Works can show that myVidster or its users had knowledge of infringement and that their activities were intended to materially contribute to that infringement, myVidster or its users could potentially be liable as contributory infringers. If Flava Works can show that myVidster or its users had the right and ability to supervise the particular infringing performances and also had a direct financial interest in those performances, myVidster or its users could potentially be liable as vicarious infringers.

Brief of Amici Curiae Google Inc. and Facebook, Inc. in Support of Neither Party at 16-17, Flava Works, Inc. v. Gunter, No. 11-3190, 2012 WL 3124826 (7th Cir. Aug. 2, 2012) (emphasis added).

So even Google and Facebook agree that the user-embedded infringing videos on myVidster potentially make it liable for copyright infringement. Though, in their opinion, myVidster could only be liable as a contributory or vicarious infringer, and not as a direct infringer.

Suffice it to say that those claiming that sites hosting user-embedded infringing videos can never be liable for copyright infringement are just plain wrong. The fact that Google and Facebook admit as much should tell you how settled the principle is—few have more to lose on that score. If anyone were to deny it, it’d be them.

A linking site like myVidster can be liable as a secondary infringer, i.e., for contributory infringement (which includes inducement, as per Grokster) or for vicarious infringement. Such sites are not always liable, nor are they always free from liability. What matters is the role that the site plays in the underlying infringement, and that analysis must be done on a case-by-case basis as it is fact-intensive.

A bundle of rights

So what did Judge Posner actually say?

Recall that copyright is actually a bundle of rights:

§ 106. Exclusive rights in copyrighted works

Subject to sections 107 through 122, the owner of copyright under this title has the exclusive rights to do and to authorize any of the following:

(1) to reproduce the copyrighted work in copies or phonorecords;

(2) to prepare derivative works based upon the copyrighted work;

(3) to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending;

(4) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and motion pictures and other audiovisual works, to perform the copyrighted work publicly;

(5) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and pictorial, graphic, or sculptural works, including the individual images of a motion picture or other audiovisual work, to display the copyrighted work publicly; and

(6) in the case of sound recordings, to perform the copyrighted work publicly by means of a digital audio transmission.

17 U.S.C.A. § 106 (West 2012).

So there are actually six different copyright rights: (1) reproduction, (2) derivation, (3) distribution, (4) public performance, (5) public display, and (6) public performance (for digital audio transmissions of sound recordings). When we say that a certain act does or does not violate someone’s copyright rights, we have to be careful to say which right in particular we’re talking about. The same act can violate one right but not another; in fact, this is almost always the case.

Turning to the opinion, Judge Posner states:

Is myVidster therefore a contributory infringer if a visitor to its website bookmarks the video and later someone clicks on the bookmark and views the video? myVidster is not just adding a frame around the video screen that the visitor is watching. Like a telephone exchange connecting two telephones, it is providing a connection between the server that hosts the video and the computer of myVidster’s visitor. But as long as the visitor makes no copy of the copyrighted video that he is watching, he is not violating the copyright owner’s exclusive right, conferred by the Copyright Act, “to reproduce the copyrighted work in copies” and “distribute copies … of the copyrighted work to the public.” 17 U.S.C. §§ 106(1), (3). ***

As the record stands (a vital qualification, given that the appeal is from the grant of a preliminary injunction and may therefore be incomplete), myVidster is not an infringer, at least in the form of copying or distributing copies of copyrighted work. The infringers are the uploaders of copyrighted work. There is no evidence that myVidster is encouraging them, which would make it a contributory infringer.

Flava Works, Inc. v. Gunter, No. 11-3190, 2012 WL 3124826, *3-4 (7th Cir. Aug. 2, 2012) (emphasis added).

Take a moment to parse what Judge Posner actually said. Here, he’s talking only about the reproduction and distribution rights, numbers (1) and (3) in Section 106. He is not talking about the public performance right, number (4) in Section 106, or any of the other three copyright rights.

Judge Posner says that the party that uploaded the infringing video to the internet is an infringer since that party actually caused a copy to be made. And if myVidster encouraged or induced that party to upload the infringing video, it would be a contributory infringer to that infringement. But users of myVidster who thereafter merely stream that infringing video are not infringers of the reproduction or distribution rights since they have made no copies.

This is important: Judge Posner did not say that streaming infringing videos is legal (it’s not). He did not say that streaming infringing videos does not violate the public performance right (it does). He said that users who stream embedded infringing videos on the myVidster website do not violate the reproduction or distribution rights of the copyright holder. And since that streaming does not violate those two rights, by extension, myVidster is not a contributory infringer for facilitating that specific noninfringing conduct.

It should be noted that whether a streamer actually makes a copy is actually a debatable point, as Terry Hart points out in his post. The record in this case did not disclose whether copies were actually made when someone streamed an embedded infringing video using the myVidster website. Had the record indicated otherwise, it’s likely that the court would have reached a different conclusion on this point.

The public performance right

Judge Posner, like amici Google and Facebook, acknowledges that streaming an infringing video violates the public performance right. And if a website like myVidster significantly encourages or induces that infringement, it could be liable as a contributory infringer.

The opinion is a little confusing on this point, because Judge Posner provides two different interpretations of what it takes to violate the public performance right. The first interpretation is that merely making an infringing video available via a link is by itself direct infringement, while the second interpretation requires that someone have actually used the link to stream the infringing video before there is an infringement.

Either way, it’s clear that the second interpretation swallows the first; there is no doubt that streaming an infringing video is a violation of the public performance right. Judge Posner does not decide the issue of whether merely making the video available via a link suffices, but as Barry Sookman points out, there is reason to think that it does.

Judge Posner continues:

But if the public performance is the transmission of the video when the visitor to myVidster’s website clicks on the video’s thumbnail (the second interpretation) and viewing begins, there is an argument that even though the video uploader is responsible for the transmitting and not myVidster, myVidster is assisting the transmission by providing the link between the uploader and the viewer, and is thus facilitating public performance. ***

In contrast, Flava’s pirated videos are not sold, and there isn’t even admissible evidence that they’re actually being accessed via myVidster, rather than via other websites, and if they are not, myVidster is not contributing to their performance.

Id. at *8 (emphasis added).

Did you catch what Judge Posner said there? There was no admissible evidence that anyone had actually streamed one of plaintiff Flava Works’ videos using the myVidster website. And so, as with the reproduction and distribution rights discussed above, myVidster cannot be a contributory infringer unless it has actually facilitated infringing conduct.

Nor was there any evidence that myVidster had encouraged or induced anyone to embed infringing videos. So even if merely making an infringing video available via a link is itself direct infringement, myVidster would not be liable for that infringement either—not unless there was evidence that it had played a role in encouraging or inducing the person that posted the link.

Note what Judge Posner didn’t say. He did not say that there was no infringement because streaming an infringing video is not an infringement of the public performance right. He said that myVidster was not an infringer because there was no evidence that it had encouraged or induced anyone to embed an infringing video and there was no evidence that anyone actually used the myVidster website to stream an infringing video.

As I said above, whether or not a linking website like myVidster is liable for infringement must be determined on a case-by-case basis because it is a fact-intensive inquiry. Change the facts and the answer likely changes too.

The “Server Test”

I don’t think anyone else has reported as much, but I think that Judge Posner did in fact adopt the “server test” for the public performance right in the Seventh Circuit.

The “server test” comes from the district court in Perfect 10 v. Google, Inc.:

Under the server test, someone could create a website entitled “Infringing Content For All!” with thousands of in-line links to images on other websites that serve infringing content. That website, however, would be immune from claims of direct infringement because it does not actually serve the images. [footnote 10: That website, however, might still be held liable for secondary infringement.] ***

The Court concludes that in determining whether Google’s lower frames are a “display” of infringing material, the most appropriate test is also the most straightforward: the website on which content is stored and by which it is served directly to a user, not the website that in-line links to it, is the website that “displays” the content. Thus, the Court adopts the server test, for several reasons.

Perfect 10 v. Google, Inc., 416 F.Supp.2d 828, 839-43 (C.D. Cal. 2006) (emphasis added).

The Ninth Circuit, in Perfect 10 v. Amazon.com, Inc., affirmed in part and reversed in part, adopting the “server test” circuit-wide in the process:

In considering whether Perfect 10 made a prima facie case of violation of its display right, the district court reasoned that a computer owner that stores an image as electronic information and serves that electronic information directly to the user (“i.e., physically sending ones and zeroes over the [I]nternet to the user’s browser”) is displaying the electronic information in violation of a copyright holder’s exclusive display right. Conversely, the owner of a computer that does not store and serve the electronic information to a user is not displaying that information, even if such owner in-line links to or frames the electronic information. The district court referred to this test as the “server test.”

Applying the server test, the district court concluded that Perfect 10 was likely to succeed in its claim that Google’s thumbnails constituted direct infringement but was unlikely to succeed in its claim that Google’s in-line linking to full-size infringing images constituted a direct infringement. As explained below, because this analysis comports with the language of the Copyright Act, we agree with the district court’s resolution of both these issues.

Perfect 10, Inc. v. Amazon.com, Inc., 508 F.3d 1146, 1159-60 (9th Cir. 2007) (internal citations omitted) (emphasis added).

The “server test” is simple. The website server that actually sends out the infringing ones-and-zeroes is the one that directly violates the public display right, number (5) in Section 106. Another website that merely links to the infringing content does not directly violate the public display right—it can indirectly violate that right, therefore making it a contributory or vicarious infringer, but it doesn’t directly infringe that right.

It’s important to note that the “server test” argument is not over whether a linking website can be an infringer. It can. The argument is over whether that website is a direct or an indirect infringer. The “server test” says that, at worst, a website that links to infringing material is a contributory or vicarious infringer—still subject to the full range of remedies provided by the Copyright Act, mind you. In a sense, the argument is over whether they’re the bank robber or the getaway driver—it’s difficult to see how it really matters since both are liable for the robbery.

The only difference I can think of (and I haven’t directly researched the point) is that of knowledge: Direct infringers are liable for infringement whether they know of it or not, since direct infringement is a strict liability tort. Contributory infringers, on the other hand, must have knowledge, either actual or implied, of the infringement before any liability attaches.

Given the DMCA safe harbors (that absolve a linking website of most liability so long as it doesn’t have actual or implied knowledge of the underlying infringement) and the Netcom line of cases (that absolve a linking website of liability absent volitional conduct on its part to cause the infringement), it’s hard to see how it really matters. Whether direct or indirect liability is at stake, a linking site is not going to be liable unless it knows of and by its action (or inaction) causes the infringement.

In Flava Works Inc. v. Gunter, the district court below rejected the “server test” argument for the public performance right, number (4) in Section 106:

We decline to apply Perfect 10 to this case. The Ninth Circuit’s decision is not binding on this court; moreover, it is highly fact-specific and distinguishable. Defendants assert that the cases involve “essentially the same technology.” Both cases may involve inline linking, but the processes are quite different. The relevant comparison is between the conduct of Google and the conduct of myVidster’s users, not between Google and myVidster. In response to a search query, Google’s image search engine uses an automated process to display search results through inline linking. In contrast, myVidster’s users do not employ any sort of automation to determine which videos they bookmark; rather, they personally select and submit videos for inline linking/embedding on myVidster. (And many of those hand-picked videos are infringing.) Google’s use of inline linking is neutral to the content of the images; that of myVidster’s users is not.

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-cv-06517, 2011 WL 3876910, *3-4 (N.D. Ill. Sept. 1, 2011) (emphasis added).

On appeal, Judge Posner disagrees:

By listing plays and giving the name and address of the theaters where they are being performed, the New Yorker is not performing them. It is not “transmitting or communicating” them.

Is myVidster doing anything different? To call the provision of contact information transmission or communication and thus make myVidster a direct infringer would blur the distinction between direct and contributory infringement and by doing so make the provider of such information an infringer even if he didn’t know that the work to which he was directing a visitor to his website was copyrighted. Then he would have to search for a safe harbor in the Digital Millennium Copyright Act. myVidster doesn’t touch the data stream, which flows directly from one computer to another, neither being owned or operated by myVidster.

Flava Works, Inc. v. Gunter, No. 11-3190, 2012 WL 3124826, *7-8 (7th Cir. Aug. 2, 2012) (internal citations omitted) (emphasis added).

It’s subtle. Judge Posner doesn’t come right out and say that he’s adopting the “server test” for the public performance right in the Seventh Circuit. But the opinion makes clear that he thinks that holding myVidster liable as a direct infringer goes too far since that would mean holding it liable even if it had no knowledge of the underlying infringement and even though the ones-and-zeroes didn’t actually cross its server.

Thus, similar to the Ninth Circuit in Perfect 10, which found that linking to infringing images only creates indirect liability for infringement of the display right, number (5) in Section 106, the Seventh Circuit here found that myVidster, which links to infringing videos, could only be liable as an indirect infringer of the public performance right, number (4) in Section 106. In other words, both courts found that linking cannot give rise to direct liability for infringement.

Again, given the DMCA safe harbors and the Netcom line of cases, I’m not convinced that Judge Posner’s concern about strict liability is merited—it’s not like every linking site will be directly liable for every link it provides to infringing material. The safe harbors still protect it and there has to be volitional conduct on its part in providing the links. It’s clear though that Judge Posner thinks myVidster’s connection to the underlying infringement is too remote to hold it liable as a direct infringer because the ones-and-zeroes don’t cross its server.

Personally (and similar to the district court below), I think the “server test” elevates form over function, and the better view is that a link to an infringing video directly causes a public performance to occur when clicked—that is its very purpose. Whether or not the ones-and-zeroes cross the server providing the link misses the point: It’s a necessary link in the chain, without which, there would not be the particular infringement.

It will be interesting to see how other circuits address the issue when so confronted.

Follow me on Twitter: @devlinhartline

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This is actually a few days late — I first began Copyhype on August 8, 2010, meaning it has just marked its second year, though it seems like just yesterday.

The second year has been even more exciting than the first. Readership has nearly doubled. I was very honored that this site was named one of the ABA Journal’s top 100 legal blogs in 2011. Citations to articles have also begun cropping up in published and forthcoming law review articles — though I’m still looking forward to being cited in a court opinion.

Much of the past winter was dominated, of course, by the now-dead Stop Online Piracy Act. I was somewhat amused that this site made it onto a list of organizations supporting the bill that circulated heavily around the internet — I even got a handful of emails from people claiming they would no longer buy my products and/or services if I didn’t withdraw support.

It’s always interesting to see which articles have ended up being the most viewed; there are always a few surprises. These are the most popular posts written during the past year:

  1. Hey, What happened to Wikipedia? An introduction to SOPA — other popular SOPA posts include Dispatches from the SOPAcolypse, Why I support the Stop Online Piracy Act, Stop Online Piracy Act walkthrough, and How the Stop Online Piracy Act will hit what it aims at
  2. Justin Bieber is not going to jail
  3. Was Hollywood built on piracy?
  4. More evidence for copyright protection
  5. What is technology?
  6. The ‘copyright infringement isn’t theft’ trope
  7. Who cares what Jefferson thought about copyright?
  8. Megaupload and the DMCA
  9. Copyright and web fonts: Santorum web developer sued for typeface infringement
  10. Copyright and the First Amendment: the unexplored, unbroken historical practice, part 4 — for whatever reason, this was notably more popular than part 1, part 2, part 3, and part 5.

I want to say thanks to all my readers for continuing to stop by here, and to everyone who has shared their thoughts in the comments. If you’re new to the site, remember you can subscribe for updates by RSS or email, follow me on Twitter, or “like” my Facebook page.

Copyhype’s third year promises to be even more exciting. I will be launching a new look in the upcoming weeks. Nothing too dramatically different — just a little fresh paint that will be more readable, faster loading, and responsive — so the page should look relatively the same whether you’re on a smartphone, a tablet, or a regular computer.

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Copyright law in recent decades has seen a number of shaky claims and arguments grow in popularity. These arguments are often based on faulty logic, historical revisionism, or erroneous facts. Nevertheless, they have a surface appeal that aids in their dissemination. The result is a rather well-developed copyright “mythology” which presents a mistaken view of copyright’s history, its goals, and its effects.

Below is a collection of seven law review articles that critically examine many of these myths, correcting the distortions caused by, in the words of one of the authors, the “scholarly house of mirrors” that increasingly permeates discussions of copyright. I’ve cited to or discussed most of these articles on this site before, but I think they all deserve a special mention on their own. Enjoy!

The Mythology of the Public Domain: Exploring the Myths Behind Attacks on the Duration of Copyright Protection

Link. Scott M. Martin, 36 Loyola L.A. Law Review 253 (2002).

This article was written before the US Supreme Court upheld Congress’s authority to extend the term of copyright protection in Eldred v. Ashcroft, and many of the arguments have been vindicated by that decision. But Martin debunks other common myths surrounding copyright duration that are still around today, including “Congress ran rampant by granting term extensions, enacting eleven extensions in just forty years, and must be stopped by the courts”, “copyright good, public domain better”, “extensions of the term of copyright protection are an affront to, and an impingement on, First Amendment rights”, and “the Sonny Bono Copyright Term Extension Act of 1998 was the worst kind of special-interest legislation engineered by Disney to satisfy its insatiable corporate greed.” The last one especially skewers the premises of those who refer to the CTEA as the “Mickey Mouse Protection Act.”

The Progress of Knowledge: A Reexamination of the Fundamental Principles of American Copyright Law

Link. David A. Householder, 14 Loyola L.A. Entertainment Law Review 1  (1993).

Householder embarks here on a “systematic reevaluation of the basic policy and principles of American copyright law by returning to the source of such law, the Copyright Clause of the United States Constitution.” The article shines a light on “a number of concepts that, through ritualistic incantation have attained the unfortunate status of basic tenets of copyright law, even though they have little if any relevance to the basic purposes of American copyright law.” Since i predates even the NII White Paper, the concepts could be considered the “old guard” of copyright critiques; they include: “1. A copyright is a monopoly; 2. Copyright is intended to motivate creativity; 3. Copyright law makes reward to the owner a secondary consideration; 4. The public interest is served primarily by the limited duration of copyright; and 5. The public interest competes with the interests of individual authors.”

Reason or Madness: A Defense of Copyright’s Growing Pains

Link. Marc H. Greenberg, 7 John Marshall Review of Intellectual Property Law 1 (2007)

Greenberg takes on seven of the leading arguments against existing copyright law in this post-Eldred article.

a. Argument One: The expansion of copyright protection has been driven by media conglomerates, who have received from the legislature an allocation of entitlements, to the significant detriment of individuals and the public at large.

b. Argument Two: Copyright’s principal purpose is to provide economic benefits to owners—this property right should not trump the First Amendment rights of users.

c. Argument Three: Changes in the scope and term of copyright law since the 1970 Nimmer article, as well as the nature of digital technology and the greater ease achieved in copying content, render Nimmer’s immunity doctrine out of date and in need of change.

d. Argument Four: Since copyright deals with content, the law should be subject to a strict scrutiny analysis as to its impact on First Amendment rights, and under such scrutiny, it clearly violates the First Amendment rights of users.

e. Argument Five: Some form of compulsory licensing for all copyrighted works should be sufficient to address the concerns of owners, which after all are principally economic in nature.

f. Argument Six: Free speech rights include the right to use the words or other expression of another in expressing your own point of view.

g. Argument Seven: The idea/expression doctrine and the fair use doctrine have become too rife with uncertainty to afford meaningful protection to users

Copyright and Incomplete Historiographies – of Piracy, Propertization, and Thomas Jefferson

Link. Justin Hughes, 79 Southern California Law Review 993 (2006)

Meanwhile, Justin Hughes reaches back to the dawn of US copyright law to see how closely it matches the version of history frequently used by copyright scholars. He concludes that “historical claims frequently made in arguments about the propertization of copyright are incomplete,” and specifically focuses on three common examples: “the newness of the word ‘piracy,’ Thomas Jefferson’s views on intellectual property, and the history of the phrase ‘intellectual property.’” Hughes other work, which goes into more detail surrounding historical and other aspects of copyright law, is worth checking out.

Economists’ Topsy-Turvy View of Piracy

Link. Stan Liebowitz, 2 Review of Economic Research on Copyright Issues 5 (2005)

Recent scholarship on the effects of piracy have retreated from the traditional view that unauthorized copying always harms copyright holders. Liebowitz notes that in some situations, there is no harm — his own earlier work even demonstrated this. But the exceptions today have seemed to swallow the rule, resulting in economic literature on piracy that is “badly out of kilter” and tends to embrace views that are “more traditionally known as a breakdown in civilization.” Liebowitz uses this article to set the record straight and provide “a more balanced and nuanced view of copying.”

Remix Without Romance

Link. Thomas W. Joo, 44 Connecticut Law Review 415 (2011)

Joo devotes his article, featured previously on this site, to only two myths, but these are two myths that serve a central role in what could be called “free culture”, and thus deserving of thorough treatment. The first is that copyright law stifles “recoding and remixing” — Joo focuses specifically on the practice of digital sampling in music. The second is that if this were true, copyright law should adapt, because “by enabling more people to participate in culture, remixing and recoding supposedly enhance ‘semiotic democracy’ and mitigate the dominance of the media industry.” As Joo explains, if the goal is to facilitate “semiotic democracy,” than weakening copyright law to allow more remixing is the wrong way to reach that goal, since doing so would only tend to reinforce dominant cultural expression.

Constructing Copyright’s Mythology

Link. Thomas Nachbar, The Green Bag, Vol. 6 (2002)

Last, but not least, is the briefest article of the seven, and perhaps the most readable for non-lawyers. Written while Eldred v. Ashcroft was pending in the Supreme Court, Nachbar dismantles the historical claims made by those arguing in favor of striking down the Copyright Term Extension Act on constitutional grounds. He explains that these claims — for example, that copyright was designed solely as an incentive to create works, or that it was originally intended to limit the power of publishers — amount to little more than mythology. Nachbar concludes by noting the dangers of relying on such historical myths to shape copyright policy today.

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August 10, 2012 · · Comments Off

The time has gone by for urging the old and stale idea that authors should be satisfied with fame, and not permitted to entertain any sordid motives. The desire to acquire property is no sordid stimulus. Property is the basis of civilization. The acquisition of property raises the lower classes. The diffusion of property humbles the upper. Those laws which most sacredly guarantee and most rigidly enforce the right which a man has to the fruits of his labour, are not merely incentives to industry—they are the surest bulwarks of freedom.

—”Veto”, Correspondence, The Plaindealer, vol. 1, pg. 122 (Dec. 3, 1836).

Behind the music: This column might be ending, but the fight continues — Thank you, Helienne Lindvall, for four years of fearless reporting on the ever-changing music industry landscape. Lindvall is ending her column at the Guardian, but, as she notes, “the fight continues.” Chris Castle offers a great sendoff for Helienne Lindvall’s Excellent Column.

The Naked and the TED — Evgeny Morozov writes one of the most scathing, comprehensive critiques of the type of thinking that springs forth from Silicon Valley and permeates the internet. ‎”But perhaps this is what the Hybrid Age is all about: marketing masquerading as theory, charlatans masquerading as philosophers, a New Age cult masquerading as a university, business masquerading as redemption, slogans masquerading as truths.”

A2IM Files Comments To Obama Administration Regarding New Joint Strategic Plan on Intellectual Property Enforcement — The American Association of Independent Music has posted its comments on intellectual property enforcement, requested by Victoria Espinel, the US Intellectual Property Enforcement Coordinator. A2IM lays out what it feels should be the top 3 priorities in intellectual property enforcement.

About.com and the Slow Decline of Content Farms — Jonathan Bailey reports, “It’s an amazing thought to realize that Google is powerful enough to sustain entire economies, in particular with companies and individuals not directly involved with it, but that’s exactly what the content farm economy is: An economy of Google. Basically, content farms work by putting out as much content as possible on high-searched-for terms in hopes that Google will drive large amounts of traffic to them. Spammers do this by either scraping or generating content to fool the search engines but content farms do it by paying an army of authors to do it by hand.”

Understanding Flava Works v myVidster: does inline linking infringe copyright? — Barry Sookman takes an in-depth look at the Flava Works decision. Worth the read especially for the comparison between the decision and similar decisions in jurisdictions outside the US.

Will Aereo’s Internet Streaming Service Survive Second Circuit Review? — Internet service Aereo, a cable company in all but name, recently survived a motion for preliminary injunction in federal court. With an appeal on that ruling pending, attorney Andrew Berger looks at the lower court’s decision and examines Aereo’s chances at the Second Circuit.

The Deceptive Politics of Piracy — Scott Cleland takes issue with New York Times technology columnist Nick Bilton’s article, “Internet pirates will always win.” Says Cleland, “Mr. Bilton is not the first, and won’t be the last, columnist to buy into the piracy lobby’s deceptive political narrative that fighting piracy is akin to a futile game of Whac-a-mole, so content creators should just unilaterally surrender the concept of market pricing of their content going forward and offer it free to the public on the Internet or at a minimal price that Internet pirates judge is ‘fair.’”

BMW’s Response to Ads for Its Brands on Pirate Sites — Kudos to automaker BMW for taking action after it was pointed out that ads for their products were being served on sites with infringing content. And kudos to readers of the Trichordist for bringing this issue to their attention. BMW has “not only stopped the ads from being served on the particular site in question but the incident triggered a complete audit of BMW’s digital buying practices.  This includes a review of their current agreements with all of their partner ad networks, as well as a review of their current verification provider (Double Verify in this case).”

Google records show book scanning was aimed at Amazon — There seems to be a collective blindness toward tech companies in the tech press — with all this talk of “openness” and “sharing”, very little attention is paid to the fact that these companies pursue these policies because they are for-profit entities acting in their own best interests. Case in point: internal Google documents revealed through its litigation with the Authors Guild over its book-scanning project reveal that one of its motivations for making the decision to scan over 20 million books was that “we want web searchers interested in book content to come to Google not Amazon.”

New Congressional Report: IP Theft Is Hurting American Industries and Innovation — Says the MPAA, “A new report from the Congressional Joint Economic Committee this week sheds some light on the increase in intellectual property theft in recent years and underscores the damage it’s doing to businesses all across the US economy. Noting the many negative consequences of intellectual property theft on American industries, the report summarizes that, ‘Foreign infringement of intellectual property harms businesses by raising their costs, lowering revenue, and eroding profits.’”

Zoe Keating posts her online sales and streaming data — Musician Zoe Keating has made publicly available a Google Doc that breaks down her music-related earnings. Music Ally also links to an analysis of the report from the Atlantic. An interesting inside look at how one musician makes her living in the online economy.

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On Friday, the Cynical Musician posted an article titled Demystifying Creativity, in which he asks the question, “What is creativity?” It’s an interesting post, worth a read, and it got me thinking.

I find myself in agreement with much of what Faza says, but I wanted to look at the question through the lens of copyright law. To do so, I’ll eventually get to The Hunger Games. But first, I’d like to look at the concept of “genius.”

Genius and Generation

Copyright, at its dawn in the US, was often spoken of in terms of “genius.” In March 1783, the US Continental Congress appointed a committee to “consider the most proper means of cherishing genius and useful arts through the United States by securing to authors or publishers of new books their property in such works.”1 In May, the committee issued its report, stating that it was “persuaded that nothing is more properly a man’s own than the fruit of his study, and that the protection and security of literary property would greatly tend to encourage genius.”2 The pre-constitutional state copyright statutes of Connecticut, Georgia, and New Hampshire were titled Acts “for the encouragement of literature and genius.” The acts of New York and North Carolina both adopted the Continental Congress’s language that securing the rights of literary property would encourage genius and “persons of learning and genius”. During the ratification of the Constitution, future Supreme Court Justice James Iredell also referred to the Copyright Clause as an encouragement to genius.3

Nowadays, we often think of a “genius” as someone with exceptional intelligence. But at the time, the term was broader: “a man endowed with superior faculties; mental power or faculties; disposition of nature by which any one is qualified for some peculiar employment.”4 The word comes from the Latin genius, an aspect of ancient Roman religion. It was used both to describe the “guardian deity or spirit which watches over each person from birth”5 and the “rational soul of every one.”6

The latin term itself is derived from the Proto-Indo-European root “*gen-”, meaning “to produce” or “to beget”, and it shares a common heritage with words like “generate”. I mention this because it is interesting how the purpose of copyright, to encourage genius, and the scope of copyright, protection over what a creator generates, share an etymological relationship.

Genius and Copyright

Interesting because the exclusive rights only extend to what an author personally creates. “The sine qua non of copyright is originality.”7

To qualify for copyright protection, a work must be original to the author. Original, as the term is used in copyright, means only that the work was independently created by the author (as opposed to copied from other works), and that it possesses at least some minimal degree of creativity. …

Originality is a constitutional requirement. The source of Congress’ power to enact copyright laws is Article I, § 8, cl. 8, of the Constitution, which authorizes Congress to “secur[e] for limited Times to Authors . . . the exclusive Right to their respective Writings.” In two decisions from the late 19th century—The Trade-Mark Cases, 100 U. S. 82 (1879); and Burrow-Giles Lithographic Co. v. Sarony, 111 U. S. 53 (1884)—this Court defined the crucial terms “authors” and “writings.” In so doing, the Court made it unmistakably clear that these terms presuppose a degree of originality.

In The Trade-Mark Cases, the Court addressed the constitutional scope of “writings.” For a particular work to be classified “under the head of writings of authors,” the Court determined, “originality is required.” The Court explained that originality requires independent creation plus a modicum of creativity: “[W]hile the word writings may be liberally construed, as it has been, to include original designs for engraving, prints, &c., it is only such as are original, and are founded in the creative powers of the mind. The writings which are to be protected are the fruits of intellectual labor, embodied in the form of books, prints, engravings, and the like.”

In Burrow-Giles, the Court distilled the same requirement from the Constitution’s use of the word “authors.” The Court defined “author,” in a constitutional sense, to mean “he to whom anything owes its origin; originator; maker.”8

The idea/expression distinction is derived from this same reasoning. Facts and ideas do not owe their origin to any individual.

The author of a book comes to the great ocean of human thought which belongs to all; he dips up a portion of the brine, evaporates it, causes it to crystallize, purifies the crystals from unpleasant ingredients, and presents it in a new form, a form by which it is made his own. He enters the great forest of ideas, which is common ground, hews down trees, shapes them into articles of furniture, or builds a house with them, and he who takes from him that furniture is a thief, and he who breaks into that house is a burglar. The author clothes ideas in words of his own selection, forms the words into sentences of his own construction, gives the ideas his own arrangement, combines and illustrates them in his own manner, and in this state they are his own, made so by his labor, skill and invention, and they belong as properly to him as the product of salt-works on the edge of the sea belongs to the manufacturer.9

“No Man Writes Exclusively”

Above, we see recognition of the fact that creators always build on the works of the past. No creator creates in isolation, but instead “stands on the shoulders of giants.” And progress in the arts and sciences is made by encouraging genius: the originality that a creator generates.

Justice Story said as much in 1845:

In truth, in literature, in science and in art, there are, and can be, few, if any, things, which, in an abstract sense, are strictly new and original throughout. Every book in literature, science and art, borrows, and must necessarily borrow, and use much which was well known and used before. No man creates a new language for himself, at least if he be a wise man, in writing a book. He contents himself with the use of language already known and used and understood by others. No man writes exclusively from his own thoughts, unaided and uninstructed by the thoughts of others. The thoughts of every man are, more or less, a combination of what other men have thought and expressed, although they may be modified, exalted, or improved by his own genius or reflection. If no book could be the subject of copy-right which was not new and original in the elements of which it is composed, there could be no ground for any copy-right in modern times, and we should be obliged to ascend very high, even in antiquity, to find a work entitled to such eminence. Virgil borrowed much from Homer; Bacon drew from earlier as well as contemporary minds; Coke exhausted all the known learning of his profession; and even Shakespeare and Milton, so justly and proudly our boast as the brightest originals would be found to have gathered much from the abundant stores of current knowledge and classical studies in their days. [Emphasis added.]10

Even classical fair use can be said to embrace these ideas. “From the infancy of copyright protection, some opportunity for fair use of copyrighted materials has been thought necessary to fulfill copyright’s very purpose, “[t]o promote the Progress of Science and useful Arts.”11

[T]he author’s consent to a reasonable use of his copyrighted works ha[d] always been implied by the courts as a necessary incident of the constitutional policy of promoting the progress of science and the useful arts, since a prohibition of such use would inhibit subsequent writers from attempting to improve upon prior works and thus . . . frustrate the very ends sought to be attained.12

It’s a misnomer, then, to claim that the idea that “everything is a remix” somehow negates the basis for copyright.

But there are those who do indeed claim that the idea that creativity is built on the past is foreign to a legal framework that protects specific expression. There are those who say copyright “stifles” creativity, or those who say, “our system of law doesn’t acknowledge the derivative nature of creativity”, or academics who quote Michel Foulcault and speak of the notion of “Romantic authorship” — even though the cumulative nature of creativity is baked into copyright law.

The Genius of The Hunger Games

With that, let’s turn to The Hunger Games as an example.

Suzanne Collins’ hit trilogy (and now feature film) tells the tale of a dystopian future where children are forced to battle to the death. Since it was published, a few have compared it to the 2000 Japanese film Battle Royale, about a dystopian future where children are forced to battle to the death. Some have even asked if the former was a rip-off of the latter. Collins, however, has said in interviews that she had never watched Battle Royale before writing her books,13 and aside from the central conceit, both stories differ substantially.

In other interviews, though, Collins admits that she had drawn inspiration from another, existing story: the ancient Greek myth of Theseus and the Minotaur. Says Collins, “In her own way, Katniss [the heroine of The Hunger Games] is a futuristic Theseus.” And in its own way, Hunger Games is a “remix” of the ancient Greek myth.

But would it be copyright infringement? Obviously, the myth of Theseus was written thousands of years before copyright even existed, but let’s say it wasn’t. And obviously, as with most myths, there is no single, definative version of the story, but let’s say there was (for example, Plutarch’s version, 75 A.D., trans. John Dryden). Even then, there wouldn’t be any verbatim copying between the two. And you’d be hard-pressed to make the case for nonliteral substantial similarity between the stories.14 Though the two may share some plot elements and stock characters, the differences far surpass any similarities.

The Hunger Games, in other words, though it builds on existing works, is decidedly original in the copyright sense; it is a product of Collins’ genius in the classical sense.

Footnotes

  1. 24 Journals of the Continental Congress 180. []
  2. 24 Journals of the Continental Congress 326. []
  3. Answers to Mr. Mason’s Objections to the New Constitution Recommended by the Late Convention at Philadelphia, in Pamphlets on the Constitution of the United States, pg. 361 (1788). []
  4. Thomas Sheridan, A General Dictionary of the English Language (1780). []
  5. Genius“, Online Etymology Dictionary. []
  6. St. Augustine, City of God, VII.13 (trans. Marcus Dods, 1887). []
  7. Feist Publications, Inc. v. Rural Telephone Service Co., 499 US 340, 345 (1991). []
  8. Id. at 345-46. []
  9. Speech of William Cullen Bryant, International Copyright: Meeting of Authors and Publishers, at the rooms of the New York Historical Society, pg. 14 (1868). []
  10. Emerson v. Davies, 8 F.Cas. 615 (D. Mass. 1845). []
  11. Campbell v. Acuff-Rose Music, 510 US 569, 575 (1994). []
  12. Harper & Row, Publishers v. Nation Enterprises, 471 US 539, 549 (1985), quoting H. Ball, Law of Copyright and Literary Property 260 (1944). []
  13. In order to copy a work, one must have seen the work. In a copyright infringement case, access to the work is one of the elements the plaintiff must prove, see, e.g., Ferguson v. National Broadcasting, 584 F.2d 111 (5th Cir. 1978). []
  14. As the Second Circuit has stated, substantial similarity “requires that the copying [be] quantitatively and qualitatively sufficient to support the legal conclusion that infringement (actionable copying) has occurred. The qualitative component concerns the copying of expression, rather than ideas [, facts, works in the public domain, or any other non-protectable elements]…. The quantitative component generally concerns the amount of the copyrighted work that is copied.” Castle Rock Entertainment v. Carol Publishing Group, 150 F.3d 132, 138 (1998), quoting Ringgold v. Black Entertainment Television, Inc., 126 F.3d 70, 75 (2d Cir. 1997). []

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The headlines heralding a Seventh Circuit decision in Flava Works v. Gunter, written by Judge Richard Posner, one of the most widely cited judges and legal scholars, showcase some of the shortcomings consistently seen in legal reporting. They range from slightly incorrect — Embedding copyrighted video is not infringement, rules Posner — to wildly inaccurate — Embedding copyright-infringing video is not a crime, court rules — to facepalm-inducing absurdity — Embed all the Pirated Video You Want Because It’s Totally Legal.

The appellate court, however, did no such thing. What it did do was vacate a preliminary injunction against video bookmarking site myVidster because the district court had applied the wrong standard.

Flava Works is a NSFW producer of videos. myVidster is a social video bookmarking service. myVidster users can “bookmark” videos found around the web, and myVidster uses embed codes to allow users to view the videos through their myVidster account in the future. Flava Works sued myVidster for copyright and trademark infringement in October 2010, alleging that several of its videos had been posted on myVidster without authorization.

Flava Works moved for a preliminary injunction against myVidster, and on July 27, 2011, the district court granted the injunction, concluding that “(1) plaintiff is likely to succeed on the merits of its contributory infringement claim; (2) unless a preliminary injunction issues, plaintiff will suffer irreparable harm to its business; (3) the balance of harms favors plaintiff; and (4) the public interest favors granting a preliminary injunction.” myVidster appealed the preliminary injunction to the Seventh Circuit. I previously covered the district court’s opinion and the issues raised on the appeal here.

The appeal drew the attention of Google, Facebook, and the MPAA because of the issues it raised, and these parties filed amici briefs, drawing attention to what had up til then been a relatively obscure copyright lawsuit. But few of the issues raised in the appeal were addressed by the Seventh Circuit, including the central issue of whether or not the Circuit should adopt the Ninth Circuit’s “server test” for analyzing a service provider’s liability for public performance and, if so, whether the “server test” even applies to the public performance right.

So what did the Seventh Circuit do here?

The eBay Standard

Perhaps the key holding in this decision was the application of the standard set out by the Supreme Court in eBay v. MercExchange in 2006. There, the Court reversed the Federal Circuit’s application of its “general rule that courts will issue permanent injunctions against patent infringement absent exceptional circumstances” and held that plaintiffs seeking permanent injunctions in patent infringement cases must satisfy a four-factored test:

(1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction.

The Seventh Circuit held that the district court erred by not considering all four factors. But, while it’s true the district court said, “as a practical matter, the analysis boils down to a single factor—the plaintiff’s likelihood of success,” it isn’t true that the other factors weren’t considered. Immediately before this statement, the district court said:

To determine whether a preliminary injunction is warranted, we engage in a two-phase analysis:

As a threshold matter, a party seeking a preliminary injunction must demonstrate (1) some likelihood of succeeding on the merits, and (2) that it has “no adequate remedy at law” and will suffer “irreparable harm” if preliminary relief is denied. If the moving party cannot establish either of these prerequisites, a court’s inquiry is over and the injunction must be denied. If, however, the moving party clears both thresholds, the court must then consider: (3) the irreparable harm the non-moving party will suffer if preliminary relief is granted, balancing that harm against the irreparable harm to the moving party if relief is denied; and (4) the public interest, meaning the consequences of granting or denying the injunction to non-parties.

“Irreparable injury may normally be presumed from a showing of copyright infringement.” As for the third factor, “courts typically fail to invoke this standard in copyright cases” because if it were applicable, “a knowing infringer would be permitted to construct its business around its infringement.” Similarly, the fourth factor requires little discussion because there is a strong public policy interest in protecting copyrights. [Citations removed.]

And, as noted earlier, the district court recited the four eBay factors when it reached its conclusion.

The Seventh Circuit took issue primarily with the presumption of irreparable harm that results from a facial showing of copyright infringement, stating that the Supreme Court’s decision in eBay “made clear that there is no such presumption.”

For decades prior to eBay, many courts, including courts in the Seventh Circuit, presumed irreparable harm for a preliminary injunction when plaintiffs could show the facial elements of copyright infringement.1 But since eBay, there has been debate over whether this presumption in copyright cases has survived.

With this decision, the Seventh Circuit joins the Second,2 Fourth,3 Ninth,4 and Eleventh Circuits5 in saying it does not. The Seventh Circuit specifically notes the Second Circuit’s decision in Salinger v. Colting and the Ninth Circuit’s decision in Flexible Lifeline Systems v. Precision Lift as particularly persuasive, and both provide far more discussion regarding their conclusion on how eBay abrogated copyright law’s traditional presumptions in preliminary injunction motions.

The effect, in theory, is that preliminary injunctions for copyright infringement would be granted less often. Plaintiffs would need to demonstrate more fully irreparable harm without relying on presumptions. Courts would need to consider more fully the balance of hardships and public interest without relying on categorical rules. For an insightful take on the consequences of the eBay decision, read law professors Mark Gergen, John Golden, and Henry Smith’s The Supreme Court’s Accidental Revolution? The Test for Permanent Injunctions. They criticize eBay‘s reliance on “traditional principles” of equity for actually being a sharp divergence from such traditional principles. The authors note, “Equity’s traditional, structured sets of presumptions and safety valves—the true ‘well-established principles of equity’—are well designed to solve the problems stressed by the equitable tradition while at the same time minimizing harms from vagueness and ex post discretion.’”

What else did the court hold?

From here, the Seventh Circuit begins a meandering discussion that is peppered with speculation, obtuse analogies, and musings on copyright law. Some of it is entertaining, much of it is perhaps dicta.6

The ruling is, after all, a review of the district court’s grant of a preliminary injunction. The Seventh Circuit confines itself to a discussion of whether or not the plaintiff demonstrated a likelihood of success on the merits. This is necessarily both a cursory and speculative analysis — a motion for preliminary injunction occurs before all the facts and arguments are fully developed.7 From a practical standpoint, the success or failure of a preliminary injunction often has an effect on lawsuits since it gives the prevailing party more leverage in settlement negotiations, but from a legal standpoint, a court’s conclusions at this stage have no dispositive effect.

More importantly, here the plaintiff had only sought a preliminary injunction based on the myVidster’s alleged contributory copyright infringement. Flava Works’ complaint, however, alleges six other causes of action, including direct copyright infringement, vicarious liability, and inducement. In other words, any suggestion that specific features of myVidster or similar services were declared “legal” by the Seventh Circuit are incorrect.

myVidster Does not Contribute to Unauthorized Copying

With that in mind, Judge Posner suggests that myVidster is not likely to contribute to the copying and distribution of Flava Works’ videos. Posner implies that myVidster could be liable for inducement if it invites users to upload or bookmark Flava Works’ videos, but, though Flava Works alleges inducement in its complaint, it did not seek the preliminary injunction on this ground. Not discussed is whether myVidster could be held vicariously liable for infringement — if it benefitted financially from infringement that it had a right and ability to control — a claim that, again, was alleged in the complaint but not argued for in the injunction.

There’s another caveat to Posner’s conclusion. He notes:

But as long as the visitor makes no copy of the copyrighted video that he is watching, he is not violating the copyright owner’s exclusive right, conferred by the Copyright Act, “to reproduce the copyrighted work in copies” and “distribute copies . . . of the copyrighted work to the public.”  His bypassing Flava’s pay wall by viewing the uploaded copy is equivalent to stealing a copyrighted book from a bookstore and reading it. That is a bad thing to do (in either case) but it is not copyright infringement. The infringer is the customer of Flava who copied Flava’s copyrighted video by uploading it to the Internet.

But it is not a foregone conclusion that the viewer of streaming video hasn’t made a copy. Streaming and downloading are technically the same — both involve the reproduction of the work onto the user’s computer, it’s just that with streaming, the copy is typically stored temporarily in an unintuitive location.8 The Copyright Act defines a “copy” as a material object “in which a work is fixed”, which, in turn, means “sufficiently permanent or stable to permit it to be perceived, reproduced, or otherwise communicated for a period of more than transitory duration. A work consisting of sounds, images, or both, that are being transmitted, is “fixed” for purposes of this title if a fixation of the work is being made simultaneously with its transmission.”9 This language suggests a strong argument that a visitor to a site providing streaming video makes a copy of the video he watches.10

Are embedded videos a “public performance”?

As the Seventh Circuit notes, the conclusion that myVidster did not infringe or contribute to infringement of the reproduction and distribution rights of Flava Works doesn’t end the analysis, since copyright owners also have the exclusive right to publicly perform their works.

The Copyright Act defines, separately, “public” and “performance”:

To “perform” a work means to recite, render, play, dance, or act it, either directly or by means of any device or process or, in the case of a motion picture or other audiovisual work, to show its images in any sequence or to make the sounds accompanying it audible.

[…]

To perform or display a work “publicly” means—

(1)to perform or display it at a place open to the public or at any place where a substantial number of persons outside of a normal circle of a family and its social acquaintances is gathered; or

(2)to transmit or otherwise communicate a performance or display of the work to a place specified by clause (1) or to the public, by means of any device or process, whether the members of the public capable of receiving the performance or display receive it in the same place or in separate places and at the same time or at different times.

Judge Posner makes a common mistake by bootstrapping the definition of what makes a performance “public” into a definition of what a “performance” is in the first place. This mistake is the same one relied on by ASCAP when it argued that a download of a digital file containing a musical composition constituted a public performance of that composition. The Second Circuit explicitly rejected this argument in 2010 and noted the mistake:

ASCAP argues that downloads fall under clause (2) of this definition because downloads “transmit or otherwise communicate a performance,” namely the initial or underlying performance of the copyrighted work, to the public. We find this argument unavailing. The definition of “publicly” simply defines the circumstances under which a performance will be considered public; it does not define the meaning of “performance.”11

What, if any, legal holdings could be gleaned from the portion of the opinion that follows this erroneous interpretation could only add to confusion over the contours of the public performance right.

In the end, this is an odd opinion, and it remains to be seen what effect, if any, it will have. In the meantime, litigation at the district court continues between Flava Works and Gunter, as well as newly-added (as of May) defendants, the alleged domain name server and website host for myVidster.

Footnotes

  1. See, for example, the case cited in the opinion, Atari v. North American, 672 F.2d 607, 620 (7th Circuit 1982). []
  2. Salinger v. Colting, 607 F.3d 68 (2010). []
  3. Bethesda Softworks v. Interplay Entertainment Corp. (2011). []
  4. Flexible Lifeline Systems v. Precision Lift, 654F.3d 989 (2011). []
  5. Peter Letterese & Associates v. World Inst. of Scientology, 533 F.3d 1287 (2008). []
  6. Since the Circuit Court ruled that the district court erred by not applying the eBay standard, its analysis of the plaintiff’s likelihood of success on the merits is seemingly irrelevant. Likelihood of success on the merits is not a threshold question for a grant of a preliminary injunction; even after eBay, courts have continued to apply a “sliding scale” to their analyses, where a stronger public interest present or a stronger hardship faced by a defendant requires a stronger showing of likelihood of success on the merits, and vice versa. This type of situation would tend to suggest dicta rather than holding. See Michael Abramowicz & Maxwell Stearns, Defining Dicta, 57 Stanford Law Review 953 (2005). []
  7. Smyth ex rel. Smyth v. Rivero, 282 F.3d 268, 276 (4th Cir. 2002). []
  8. See Cory Doctorow, Streaming Will Never Stop Downloading, The Guardian (Dec. 8, 2009). []
  9. 17 USC § 101. []
  10. See, MAI Systems v. Peak Computer, 991 F.2d 511 (9th Cir. 1993), holding that loading copyrighted software into RAM creates a “copy” in violation of the Copyright Act. But see Cartoon Network v. CSC Holdings, 536 F.3d 121 (2nd Cir. 2008) and CoStar Group v. LoopNet, 373 F.3d 544 (4th Cir. 2004), which both held intermediaries not liable for copying under the Copyright Act because the copying was transitory in duration. []
  11. US v. ASCAP, 627 F.3d 64, 73 (2010). []

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Google and Facebook’s new tactic in the tech wars — It’s a pretty shady tactic.

Copyright and the Little Guy Part 2 – Copyright and Competition Redux — A great follow up from the Cynical Musician on why, contrary to some assertions, copyright is in fact more important to individuals and SME’s than large corporations.

Amazon decides it actually does need licenses for music — Kudos to Amazon for securing licenses that will allow some pretty cool (and legal) features for its cloud storage services. According to Ars Technica, “Amazon’s new scan-and-match service copies customer’s iTunes and Windows Media Player music libraries and matches songs to those in Amazon’s own library of 20 million songs, populating your cloud player so you can listen anywhere. ‘All matched songs–even music purchased from iTunes or ripped from CDs–are instantly made available in Cloud Player and are upgraded for free to high-quality 256 Kbps audio,’ an Amazon press release wrote.”

Craigslist’s Big Bluff — The popular online classifieds site changed its TOS to require users to grant an exclusive license in their postings to the site, in part to assist in recent efforts to combat third-party sites from using its listings. GigaOM speaks to IP prof Richard Gold, who doesn’t believe the move stands on solid legal ground.

Flava Works v. Gunter — The Seventh Circuit vacates a preliminary injunction against social bookmarking site myVidster. I’ll have a longer writeup on this decision next week, but for now, any thoughts?

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