Skeptics of copyright are generally not too fond of “gatekeepers.”

Prior to the widescale adoption of the internet, these “gatekeepers”, the typical narrative goes, controlled what the masses read, watched, and listened to, reinforcing a dominant culture and creating the concept of media “consumers.” But the networked, one-to-one nature of the internet challenged this one-to-many model. It allowed creators to bypass “gatekeepers” and connect directly with fans, supporting more diverse and decentralized culture.

To many proponents of this view, current copyright law facilitates the former, broadcast model. Legal professor Guy Pessach thinks this is wrong.

In his forthcoming article, Deconstructing Disintermediation — A Skeptical Copyright Perspective, Pessach examines the effects that disintermediation has had in the copyright realm and comes to the conclusion that it has decreased cultural diversity, decentralization, and artist welfare.

Deconstructing Disintermediation

As Pessach notes, the conventional wisdom of disintermediation and copyright has been championed by many over the past decade, including academics like Jessica Litman, Neil Netanel, William Fisher, and Yochai Benkler. The basic premise is that copyright law has evolved to primarily benefit corporate media at the expense of users and individual creators. This system is criticized for undermining cultural diversity, making amateur and “civic-engaged activity” that involves the use of copyrighted cultural materials more difficult, and eroding the ability of creators to get a fair return for their work.

By focusing on cutting out the middleman, copyright law reformers hope to decrease corporate media’s influence on culture and make it easier for creators to reach audiences and for readers to enjoy a more diverse range of creative works. This would be achieved in part by enhancing existing provisions in copyright law like termination and work-for-hire rules to be more favorable to creators and in part by shielding some peer-to-peer activities from infringement liability and broadening safe harbors for online intermediaries.

Pessach is skeptical of this argument, and his article advances this skepticism on three grounds. First, the new intermediaries, like YouTube and Facebook, are not as different from traditional media as disintermediation proponents might think and may, in fact, be worse in many ways. As Pessach notes, “the creative destruction of traditional corporate media and its replacement by mega networked intermediaries may generate realms that are more concentrated, homogeneous and exploitive of creators.” Related to this is Pessach’s next argument that as new intermediaries gain power over audiences, the preservation of “traditional” media may have an increasingly important role mitigating that dominance. Finally, Pessach shows that incorporating disintermediation provisions in copyright law tends to have the opposite effect than intended, resulting more often in centralization of media, less cultural diversity, and less leverage for creators.

In short, argues Pessach, when you recognize that copyright law regulates power relationships between different actors in creative markets, you recognize that “extreme concentration of media power could derive not only from excessive copyright protection, but also from excessive ability to freely utilize content.” Pessach concludes,

Once this aspect is acknowledged, a novel and hidden role of copyright law is unveiled. Copyright law is a dynamic mechanism for regulating power relationships in media and information markets. It does so both by acknowledging copyright protection and by exempting from copyright liability. Hence, under certain economic and social conditions, copyright protection may have a legitimate role in mitigating media and market powers of copyrightless intermediaries that leverage copyright exemptions and limitations as their gateway to control over audience attention.

Money for Nothing

Pessach next turns to exploring these ideas in greater detail. First up: the nature of the new intermediaries. Pessach writes that

the bargaining position of originating authors and creators, versus a handful of Internet intermediaries, may be weaker than it was for traditional distributors and corporate media. The more concentrated the layer of effective networked distribution is, the weaker the bargaining position and economic welfare of authors and creators becomes. Seemingly, the Internet and networked communication platforms provide almost an unlimited range of distribution platforms. Nevertheless, if one adds the parameter of effective audience attention and the ability to effectively reach audiences, in realms of information overflow, reality appears different.

YouTube is used as a case study here. The sheer size and popularity of the site makes it a must for video creators to distribute their content online. But YouTube invests very little in producing the works available on its site 1Pessach states that “YouTube does not finance or invest in the production of the content,” though in the past year, the site has begun at least advancing ad revenues for some original production. and only pays about 5% in ad revenues to creators.

When compared to traditional creative industries, this state of affairs does not seem encouraging. For example, within the audio-visual creative industries, the guilds’ collective agreements between authors, directors and performers, on the one hand, and motion picture/television studios, on the other, seem to provide authors, creators and performers with financial conditions that are much better than the YouTube scenario, particularly because the financial investment and risk are born entirely by corporate media. As for the music industry, indeed, there are many reports and evidence regarding the imbalanced allocation of revenues between most artists and record companies. However, even in this regard, revenues from the “bad” old record company seem higher than the new digital distribution system. If one takes into account elements such as advances, coverage of production costs and even percentages of revenue share, the new boss might be worse than the old bad boss at the end of the day. 2Pessach cites here to David Lowery’s seminal article, Meet the New Boss, Worse than the Old Boss.

Other examples of how the new intermediaries have not resulted in better conditions for authors and creators. Pessach cites to the purchase of the Huffington Post by AOL in 2011 by $300 million, value created by its thousands of unpaid bloggers who received no benefit from the sale as well as the Instagram flap earlier this year. Both cases demonstrate the enormous bargaining and negotiating power new intermediaries have over authors and creators.

Be Sure to Drink Your Ovaltine

In addition to reintermediation of expressive works, Pessach examines the monetization of these works online. Advertising has become the dominant method of monetization for online works, further exacerbating the negative effects to creators and culture. Pessach explains that an ad based model places emphasis on creating the most popular content in order to attract the most “eyeballs.” “Traditional” media has relied in part on advertising, of course, but disintermediation offers a more extreme version of this model. The former found the pressure to deliver eyeballs on the traditional intermediary. But the latter places that pressure on the creator himself. Pessach says the difference is that “as opposed to corporate media, individual creators and authors lack the financial resources required to spread risks between different types of cultural products or seek and develop other distribution platforms.”

Thus, Pessach concludes, disintermediation has not improved creators’ welfare, it has not increased cultural diversity, and it has amplified media concentration. One of the takeaways from this conclusion is that the internet has made “corporate” media more relevant, not less. Pessach notes the many essential roles that record labels, movie studios, book publishers, broadcasters and other traditional media have as social networks, search engines, and user-generated content platforms increase their dominance. First, their size puts them in a better negotiating position against digital distribution channels, getting, in many cases, a better “deal” for the creators of works in their portfolio than individual creators could likely get on their own. Second, these institutions carry “a cultural legacy of commitment to the creative industries”, which Pessach says is “currently absent in the commitments and cultural DNA of networked intermediaries.” Finally, the financial investment, risk allocating, and filtering functions of these companies help facilitate a broad range of cultural production that is highly unlikely to appear in a disintermediated digital environment.

Disintermediation and Copyright

So what does this all of this have to do with copyright?

To answer this question, Pessach next discusses two “themes” that have emerged from efforts to increase disintermediation through copyright law. The irony is that the actual effect appears to be contrary to the purported goals.

The first of these relates to the protection of online service providers through DMCA safe harbors, most notably the § 512(c) safe harbor for user-uploaded material. Part of the hope of this safe harbor was to support the development of new, decentralized distribution platforms. Reality tells a different story, which Pessach demonstrates by using the example of YouTube once again:

The dominant and unprecedented market and power position that YouTube has managed to obtain is… mostly due to § 512(c)’s safe harbor regime. It is the safe harbor regime that enabled the hosting and public provision of endless amounts of popular copyrighted cultural materials, and it is this ability that made the platform so dominant in terms of its market share. The growing popularity of the platform was largely based on its ability to cover entire portfolios of content (“full repertoire”) under one umbrella and highly demanded (copyrighted) content. The ability to do so without any need to obtain ex-ante authorizations from copyright owners and with the safe harbor’s limited legal risk is what facilitated the economic and cultural conditions for the current market domination of YouTube, particularly due to elements of network economics. Practically, the fact that under § 512(c)’s safe harbor regime, YouTube was obliged to remove (ex-post) infringing materials, based on a takedown notice by copyright owners, was not a real obstacle in establishing the platform’s dominance. By itself, such an obligation did not prevent the rapid growth in the platform’s popularity and the immense portfolio of popular copyrighted content that it hosted.

Once this dominant market position was achieved, however, it was also the stage to move toward business models, which are based on collaboration and revenue-sharing with creators and rights owners, only now from a completely different negotiation (or one may say, coercive) position. At this stage, authors, creators and rights owners were faced with a highly dominant and popular intermediary, which attracts a significant portion of audience attention and which is already partially shielded from legal liability for the hosting of their materials. Under such conditions, YouTube’s ability to launder its content activities under its own terms was considerable. Authors, creators and performers have very few options other than agreeing to YouTube’s terms and conditions or vanishing from audiences’ awareness.

The second theme Pessach looks at are proposals to vest more rights, particularly initial ownership rights, in creators. Though at times inelegantly phrased, the argument here is essentially that a focus on initial ownership rights takes the focus off the more important mechanisms that can provide meaningful bargaining power to decentralized and diffused creators. One self-published author is going to get whatever deal Amazon gives her, but a publisher that can negotiate on behalf of many authors could get a better deal.

The entire article is worth a read. Though astute observers may not find much surprising within, Pessach does an admirable job tying together various themes — “maybe the internet only wants one of everything”, the continuing importance of “traditional” intermediaries, the sharp decrease in creator welfare caused by disintermediation — and adds to a growing academic literature that highlights the flaws in the arguments of copyright’s skeptics. 3See, for example, Randolph May & Seth Cooper, The Constitutional Foundations of Intellectual Property, 8 Perspectives from FSF Scholars, Free State Foundation (May 10, 2013); Ronald Cass & Keith Hylton, Laws of Creation: Property Rights in the World of Ideas (Harvard Univ. Press 2012); Thomas Joo, Remix Without Romance, 44 Conn. L. Rev. 415 (2011); Marc H. Greenberg, Reason or Madness: A Defense of Copyright’s Growing Pains, 7 John Marshall Review of Intellectual Property Law 1 (2007); Justin Hughes, Copyright and Incomplete Historiographies – of Piracy, Propertization, and Thomas Jefferson, 79 Southern California Law Review 993 (2006); Stan Liebowitz, Economists’ Topsy-Turvy View of Piracy, 2 Review of Economic Research on Copyright Issues 5 (2005); Thomas Nachbar, Constructing Copyright’s Mythology, The Green Bag, Vol. 6 (2002). It is tragic that the erosion of creators’ rights has had the opposite effect than those responsible had intended. Disintermediation has benefitted few but a handful of giant internet firms. Hopefully, Pessach’s article shines a light on the fact that meaningful copyright protection remains just as vital to the public interest, if not more so, in the digital age.

References   [ + ]

1. Pessach states that “YouTube does not finance or invest in the production of the content,” though in the past year, the site has begun at least advancing ad revenues for some original production.
2. Pessach cites here to David Lowery’s seminal article, Meet the New Boss, Worse than the Old Boss.
3. See, for example, Randolph May & Seth Cooper, The Constitutional Foundations of Intellectual Property, 8 Perspectives from FSF Scholars, Free State Foundation (May 10, 2013); Ronald Cass & Keith Hylton, Laws of Creation: Property Rights in the World of Ideas (Harvard Univ. Press 2012); Thomas Joo, Remix Without Romance, 44 Conn. L. Rev. 415 (2011); Marc H. Greenberg, Reason or Madness: A Defense of Copyright’s Growing Pains, 7 John Marshall Review of Intellectual Property Law 1 (2007); Justin Hughes, Copyright and Incomplete Historiographies – of Piracy, Propertization, and Thomas Jefferson, 79 Southern California Law Review 993 (2006); Stan Liebowitz, Economists’ Topsy-Turvy View of Piracy, 2 Review of Economic Research on Copyright Issues 5 (2005); Thomas Nachbar, Constructing Copyright’s Mythology, The Green Bag, Vol. 6 (2002).

This week in D.C. was the World Creators Summit, two days of discussion and debate about the challenges and opportunities facing creators around the globe. Reports on each of the panels (with video slowly being added) is available at Especially check out the events I covered as an official blogger: Visions for the future – creators in a digital age, Can photographers get fair deals?, Orphan works – balancing access and creators’ rights, Piracy – the vision of a creator, The U.S. agenda – the perspective from the creators, and Re-connecting with the digital narrative.

Uncertainty, Copyright and Courage — One of the highlights of the Summit was this early morning keynote by songwriter and ASCAP President Paul Williams. Worth reading in its entirety.

In the digital economy, we’ll soon all be working for free – and I refuse — “For what is being eroded is not only actual wages but also the very idea that work must be paid for. Huge profits are being made from these so-called opportunities for our youth. But they are, in fact, the exploitation of insecurity. This is not about being anti-technology. It is about being pro-human.”

When did cover songs become annoying marketing ploys? — Thanks to concerns about the market power of the Æolian Company (remember them?), U.S. law provides a compulsory license for covering songs, permission from the copyright holder is not required. Many performers provide their own unique interpretation of other’s songs, but as Slate reports, there is a vibrant industry of mostly legal knockoff recordings that aim to mimic popular versions of songs as closely as possible in order to free-ride off their success. These copycats clutter streaming services — Slate reports there are over 600 non-Adele versions of Skyfall available on Spotify — and dupe music listeners.

Time for Silicon Valley to grow up and take responsibility for their online advertising business model — Is whitelisting the way to go for brands who don’t want to see their ads show up on scammy, porn-y, pirate-y websites? The Trichordist argues it is. “Blacklist systems too often put the burden on the victims or advocates for the victims while enabling brand advertising and Madison Ave/Silicon Valley profits at the expenses of others. Whitelist systems put the burden on those reaping the benefits: Brands, Madison Ave. Silicon Valley and Publishers. This is the ethical model.”

People Still Pirated Arrested Development Because People Pirate — It’s a common refrain. “People only turn to unauthorized sources of entertainment when authorized sources are unavailable.” But as Gizmodo points out, Netflix, which unveiled exclusive new episodes of cult phenomenon Arrested Development this weekend, was available in 4 of the top 5 countries in terms of Arrested Development piracy.

National Federation of the Blind, MPAA join forces to back book treaty — Despite efforts by copyright skeptics to derail an international treaty focused on making works more accessible to the visually impaired in order to erode copyright protections, the MPAA and the National Federation of the Blind announced yesterday that they are working together to make sure the treaty moves forward.

Google cashes in on hate videos: Internet giant puts ads alongside thousands of terror rants on YouTube — The Daily Mail reports, “Google is profiting from adverts which appear alongside vile terror videos on YouTube, it emerged last night. The Mail has found adverts for reputable companies on videos of Al Qaeda fanatics calling for jihad.”

Exclusive: Pandora Paywall Pays Off, Research Shows — Internet radio service Pandora capped the number of hours available to its free subscribers and the number of paying subscribers… increased? Good news for Pandora, though the result might cut into its argument that it needs Congress to cut the government-set license rates it pays to sound recording owners in order to remain profitable.

Did Boing Boing’s Cory Doctorow Even Read the IP Commission Report? — Cory Doctorow is the worst thing to happen to Boing Boing.

Why 3D Printing Is Overhyped (I Should Know, I Do It For a Living) — For some reason, hyping 3D printing (and its projected effects on intellectual property law) has become something of a cottage industry online. Nick Allen, founder of 3D printing company 3D Print UK, says don’t believe the hype.

Yes, Silicon Valley, You Are as Exactly as Vain as They Say — “Tech’s greed is a generally thoughtless one, the greed of children who don’t realize that by hoarding toys, the rest of the class gets less—the greed that sees itself as progress, as a thrill, never as greed at all.”

Live: Google, David Lowery and the BPI talk ad-funded piracy — Musically reports on a recent panel discussion featuring David Lowery, Theo Bertrand (UK policy manager at Google), Alexandra Scott (public policy manager at the Internet Advertising Bureau in the UK), and James Barton (artist manager at The Blue Team) on the subject of brand sponsored piracy. Some provocative remarks from Google’s Betrand, including this one: “It does seem to me to be an entirely sensible way to tackle piracy… most people doing piracy are not some guy in his bedroom altruistically sharing music with his friends. It’s people making money out of piracy, and it’s big business: some of these sites have 2m visitors regularly, and they’re not doing a bad business from advertising.”

Supreme Court Won’t Hear Challenge on Copyright Royalty BoardTwo weeks ago, I noted that SCOTUSBlog had named Intercollegiate Broadcasting System v. Copyright Royalty Board, a case involving the appointment of Copyright Royalty Judges in charge of setting royalty rates for a number of compulsory licenses, including webcasting licenses, as its petition of the day. But this week, the Court denied the cert petition, leaving the DC Circuit Court’s decision to stand.

Copyright Implications of Yahoo Buying Tumblr — PlagiarismToday’s Jonathan Bailey examines the copyright issues raised by Yahoo’s purchase of Tumblr earlier this week. The move won’t result in any drastic changes, though Bailey does point out “the consolidation should still give us all pause to worry. Every time we agree to a TOS, we’re giving away a license to our work and as those rights become more and more centralized, that gives companies an amazing amount of power not just in terms of what they know about us, but also what they can use that we create.”

Larry Page wants you to stop worrying and let him fix the world — Ars Technica profiles the growing desire to influence public policy displayed by Google co-founder Larry Page at a recent event. “But there’s more to debate over issues like health care data and immigration and consumer privacy than people not ‘getting it.’ And I’m not sure anyone would really be happy in a world that’s a mash-up of Ayn Rand’s Atlas Shrugged and Cory Doctorow’s Down and Out in the Magic Kingdom—except maybe Larry Page and the tech startup execs who want to emulate him.”

Debunking the “Stifling Innovation” Myth: The Music Business’s Successful Transition to Digital — A brief but thorough response in this month’s Wisconsin Law Review Online responding to an earlier law review article that repeats the tired claim that copyright stifles innovation.

Copyright Principles & Consensus? — Blistering and brilliant observations of last week’s copyright review hearing from David Newhoff. “So one can sit in tech-industry funded ivory towers and ruminate over the proposition that a novel by Steven Millhauser is of equal value to the random bits of personal detritus shared on social media, but if we consider for a moment that copyright ought to be amended based on this childishly whimsical proposition, then we might as well start burning the libraries this afternoon.”

Hey Derek…the Tech Industry is a “Special Interest” too! — Vox Indie’s Ellen Seidler looks at tech’s latest poster boy Derek Khanna and his response to last week’s copyright hearings. Seidler asks Khanna to “please remember that artists ARE innovators and that the tech industry represents a big ‘special interest.’ Next time hearings are held in Washington let’s hope that a diversity of creator’s voices is heard rather than a panel of legal theorists.”

Trichordist Bookshelf – Essential Reading for Artists Rights — The Trichordist highlights a handful of must-reads, many of which I’ve heartily endorsed on this site.

Last Thursday, the House Judiciary Committee Subcommittee on Courts, Intellectual Property, and the Internet held a hearing called “A Case Study for Consensus Building: The Copyright Principles Project.” The hearing is the first in an expected series of hearings that will take place in the upcoming months aimed at a comprehensive review of U.S. copyright law.

Rep. Goodlatte, the House Judiciary Committee Chairman, chose the topic of the first hearing not to endorse the substance of recommendations of the Copyright Principles Project, but to set the tone for a process that is hoped to be characterized by civil discourse between those who hold diverse views rather than rhetoric and “sharp elbows.” In his opening statement, Chairman Goodlatte elaborated on his motivation for the hearings:

We should not be in a rush to focus on specific issues without first recognizing the fundamentals of copyright and the social and economic benefits that copyright brings to our economy. It is my intention to conduct this broad overview by hearing from everyone interested in copyright law as we begin by holding hearings on important fundamentals before we begin to look at more specific issues.

There are numerous questions that will be raised by interested parties during this review. I have several myself including:

How do we measure the success of copyright and what metrics are used?

How do we ensure that everyone’s voice is heard?

How is copyright working for individual artists?

How is copyright working for our nation’s economy?

These are only a few of the issues we will be looking into. This review of copyright law will not be a quick process simply because the issues are so numerous. However, we must undertake this review to ensure that copyright law continues to incentivize creativity and innovation in the digital age.

It’s an ambitious agenda even if it doesn’t make it to a point where legislation is contemplated. But fortunately, Congress does not have to reinvent the wheel when it comes to copyright review.

There already exists a large body of literature that pokes and prods at copyright law, asking many of the same questions that Rep. Goodlatte posed. Some of it sheds light on how current copyright law came to be shaped as it is, some of it identifies what issues recur most often or have proven most challenging. Together, this literature can prove valuable to Congress as it embarks on its own copyright review.

I want to highlight some of the literature I’m talking about. One can step way back and look at the very broad strokes of copyright law. Here you might focus on its philosophical underpinnings or justifications. You can also zoom in and examine individual doctrines and issues very closely. There are many books, articles, and papers that take both these perspectives. But one can also take a mid-level view of the copyright law as a cohesive whole and how it functions as a statute. This is, it would appear, the approach taken so far by the Subcommittee. And so this is the type of existing works I want to look at.

First, obviously, is the Copyright Principles Project itself, released in 2010. The Project describes a set of broad principles that copyright law should adhere to and than analyzes current law to see how aligned it is with those principles. It then offers a series of recommendations to revise copyright law. Thursday’s hearings did not focus so much on the substance of the Project but on its process itself, and the remarks from Subcommittee members suggested that here it fell short. Concerns over the lack of creators’ input during the project were raised several times during the hearing. Along with that, witness and Project participant Jon Baumgarten pointed out that while there was civil discourse during the process, very little actual consensus was reached in the end.

During the hearing, several references were made to the European Copyright Code, a publication of the Wittem Project. Sponsored in part by the Dutch Government, the European Copyright Code was drafted by a group of copyright scholars with the aim of providing a “model law” of sorts to facilitate future harmonization or unification in European copyright law. The Code was repeatedly referred to for its accomplishment of fitting a copyright law in less than 20 pages. While it did so by leaving out major components of a copyright law — most notably, it does not address infringement or remedies — it is still much shorter than the current U.S. Copyright Act. And although, like the Copyright Principles Project, the European Copyright Code was drafted by academics, its aim was descriptive rather than normative, so it may serve as a useful starting point when looking at how other countries approach copyright law.

Domestic Resources

For U.S. law specifically, one natural starting point is the U.S. Copyright Office, which, as the primary policy advisor for Congress, regularly engages in studying the U.S. Copyright Act. It was, after all, Register of Copyrights Maria Pallante who inspired Goodlatte to conduct the review with her earlier testimony on the Next Great Copyright Act. The Copyright Office has a number of reports that it has completed since the 1976 Copyright Act. Indeed, Pallante references a few in her Next Great Copyright Act article under the heading “Preparatory Work”. These include, to name a few, reports on digital first sale, orphan works, and statutory license for cable and satellite retransmission, as well as pending reports on resale royalties for visual artists, and solutions for enforcing small copyright claims.

The 1976 Copyright Act itself has produced volumes of legislative history (Subcommittee co-chair Rep. Marino could be seen paging through one such volume during Thursday’s hearings). But in terms of systematic and comprehensive discussion of copyright law and doctrines, nothing really compares to the series of copyright law revision studies prepared by the U.S. Copyright Office during this process. Although each tackles a specific area, the 34 studies together cover a range of issues that, for the most part, remain relevant today. Each not only provides a thorough historical background, but delves into many of the challenges and sticking points, surveying the diversity of opinions, highlighting the critical questions, and analyzing the different approaches. Drafts of each reports were submitted to an advisory panel of experts appointed by the Librarian of Congress; the comments and responses of panel members are also included in the reports, providing even more insights.

Although there hasn’t been a general revision since the 1976 Copyright Act was enacted, the 1997 Digital Millennium Copyright Act brought fairly substantial changes to the law, including many of the more contentious provisions today. The DMCA could be traced back to work done by the Working Group on Intellectual Property Rights in the National Information Infrastructure (NII). The NII grew out of the High Performance Computing Act of 1991 and laid a lot of the groundwork for the modern internet. In 1995, the Working Group released a report on Intellectual Property and the National Information Infrastructure. The report examined thoroughly current copyright law and doctrine, with an eye toward how that law would operate online, concluding with a set of recommendations for modernizing the law where necessary. The usefulness here is seeing the thought process behind the DMCA — where, for example, is it outdated because predictions it was based on failed to pan out and where has it fallen short despite accurate foresight because it hasn’t been implemented or interpreted properly.

Foreign and International Resources

A number of countries outside the U.S. have (or currently are) engaged in similar copyright reviews. Many of these reviews have resulted in comprehensive reports that could provide guidance and illumination on many copyright issues.

In the UK, for example, an independent review of copyright law was commissioned by Prime Minister David Cameron. The review, by Cardiff University professor Ian Hargreaves, was released in May 2011, and contains extensive findings, as well as ten recommendations for modernizing that country’s copyright law.

Australia has similarly engaged in a review of its copyright law. The Australian Law Review Commission, an independent statutory body that was established to conduct reviews of Australian law and offer recommendations, is currently in the midst of a review of copyright law. Last August, it released an issues paper on Copyright and the Digital Economy, identifying a number of questions it wished to examine and soliciting comments on the questions. Its final report is scheduled to be released November 2013.

In the international realm, nothing compares to the Berne Convention for the Protection of Literary and Artistic Works both in breadth (it is currently joined by 165 parties) and in vintage (it was first implemented in 1886). WIPO, which administers the treaty, has previously published a guide to the Berne Convention. Although the guide may be outdated in places (it was written over three decades ago), it remains essential reading for anyone engaged in copyright review. The guide explains each of the treaty’s provisions, along with its “nature, aims, and scope.” If one is looking for international norms in copyright law, this is a good place to start.

This is far from an exhaustive list of literature relating to copyright review, but it does provide an adequate foundation before one begins jumping into specific issues.

The Constitutional Foundations of Intellectual Property Law — Randolph May and Seth Cooper of the Free State Foundation look at some of the philosophical underpinnings that drove the inclusion of copyright and patent protection into the United States Constitution. According to May and Cooper, the origin of the right is explicitly Lockean, while the protection of the right is explicitly Madisonian. An engaging and enlightening read.

Where to Watch — A new site that lists authorized online services where you can watch movies and television.

America’s New Oligarchs— and Silicon Valley’s Shady 1 Percenter — Joel Kotkin of the Daily Beast pens a devastating critique of the new tech giants and the economic and cultural effects they are inflicting, yet at the same time enjoying immense popularity among the public. A must read, with Kotkin concluding that “today’s new autocrats seek not only market control but the right to sell access to our most private details, and employ that technology to elect candidates who will do their bidding. Their claque in the media may allow them to market their ascendency as “progressive” and even liberating, but the new world being ushered into existence by the new oligarchs promises to be neither of those things.”

Watch Paul Williams Open up about Working with Daft Punk — Songwriter, and ASCAP CEO, Paul Williams is always fascinating to watch, especially when he is talking about the craft of writing songs. Here he discusses his collaboration with Daft Punk on the song Touch off their new album Random Access Memories.

Petition of the Day: Intercollegiate Broadcasting System v. Copyright Royalty Board — SCOTUSBlog this week named the appeal in Intercollegiate Broadcasting System as its petition of the day. As you may remember, Intercollegiate appealed a ratesetting determination to federal court a while back, adding a claim that the Copyright Royalty Judges were unconstitutionally appointed. Last year, the DC Circuit held that they were, but remedied this defect by nullifying the limitations on the Librarian of Congress’s removal authority for Royalty Judges. Intercollegiate has appealed, arguing that this remedy was insufficient to cure the constitutional defect.

When Freedom of Expression and Copyright Meet — The Afro-IP blog takes a closer look at a report called The Right to Share, released a month ago by an organization called Article 19. In it, the organization purports to examine the interaction between copyright law and freedom of expression, though the Afro-IP author “found some of it a bit hard to swallow.” She looks in more detail at particular areas of the report, noting especially that it heavily relies on US and UK based law and principles, to the detriment of more Continental and African based views.

The Dollars and Sense of Intellectual Property — Adam Mossoff has a much better review than the one I wrote earlier this week about Laws of Creation: Property Rights in the World of Ideas.

How Chairman Goodlatte Could Stop the Ennui of Learned Helplessness — Yesterday, of course, was the first in a series of comprehensive hearings on copyright law, which I’ll be writing about sometime next week here. But until then, Chris Castle shares his thoughts on how one of the ideas bandied about, a copyright small claims court, may be useful in helping small and independent creators by making the DMCA takedown procedure more effective in accomplishing its original goal of minimizing the harm of online piracy.

Zechariah Chafee, a godfather of 20th century legal philosophy, wrote an influential article on copyright law in the early twentieth century. 1Reflections on the Law of Copyright, 45 Columbia Law Review 503 (1945). At that time, technology was exploding: for the first time in history, it was not only possible to record sound and images, but to transmit them across vast distances instantaneously.

The law of copyright struggled to keep up with this technological advancement. In the 1950s, Congress began a comprehensive revision process. As it stretched into its second decade, former U.S. Register of Copyrights Barbara Ringer shared her thoughts on the process in her 1974 essay, The Demonology of Copyright (PDF). Ringer called back to Chafee’s article, adding her own lessons won from experience about what copyright law should look like:

In his 1945 article, Chafee suggested six ideals to which a copyright statute should aspire: 1) complete coverage ; 2) unified protection, enabling the author to control all the channels through which the work reaches the public; 3) international protection, with no discrimination against foreign authors ; 4) protection that does not go substantially beyond the purposes it seeks to serve; 5) protection that is not so broad as to stifle independent creation by others ; and 6) legal rules that are convenient to handle.

There is a seventh goal, which Chafee could not have been as aware of in 1945 as he would be today, and which in fact may be the most important copyright goal of all. It can he stated very simply: a substantial increase in the rights of the author, considered not as a copyright owner but as a separate creative individual. It involves recognition that committees don’t create works and corporations don’t create works, and machines don’t create works. If, for the sake of convenience of companies or societies or governments, the copyright law forces individual authors back into a collective straitjacket or makes them into human writing machines, it will indeed have become a tool of the devil.

A case study for consensus building

Today, the House Judiciary Committee Subcommittee on Courts, Intellectual Property and the Internet will hold a hearing titled, “A Case Study for Consensus Building: The Copyright Principles Project.” The hearing is the first in a planned series that will take place over the next several months aimed at a comprehensive review of U.S. copyright law.

Testifying at the hearing will be Copyright Principles Project convenor Pamela Samuelson (University of California at Berkeley Law School), as well as Project participants Jon Baumgarten (former General Counsel of the U.S. Copyright Office), Laura Gasaway (University of North Carolina Law School), Daniel Gervais (Vanderbilt Law School Intellectual Property Program), and Jule Sigall (Assistant General Counsel for Copyright at Microsoft).

The goal of the hearing appears to be on setting the tone for how Congress discusses copyright issues in a post-SOPA world, and it looks as though it will do so in two ways. First, it will begin by identifying overarching principles that should guide copyright law. And second, it will look specifically at the Copyright Principles Project as a case study for building consensus in an area of law that can sometimes generate a good deal of contention.

The Copyright Principles Project (PDF of report) began in 2007 with participants who included copyright law scholars, private practioners, and lawyers from broader industry firms. It concluded with a broad set of principles as well as a number of recommendations for bringing copyright law more in line with those principles. At the highest level, the Project participants wrote:

A well-functioning copyright law carefully balances the interests of the public in access to expressive works and the sound advancement of knowledge and technology, on the one hand, with the interests of copyright owners in being compensated for uses of their works and deterring infringers from making market-harmful appropriations of their works, on the other. Copyright law should enable the formation of well-functioning markets for creative and informative works that yield benefits for all stakeholders.

Agreeing on principles

The Copyright Principles Project suggests that consensus in the copyright realm is possible. And by leading with the Project as a case study in building consensus, the Subcommittee is sending a signal about how important consensus will be to the future of copyright policy. The Project participants testifying at the hearing should be able to provide the Subcommittee with valuable insights into how it can build its own consensus as it seeks to review copyright law to find out how well it is working.

Many of the Project’s broader points echo what Chafee wrote and Ringer endorsed half a century ago. At the same time, other contemporary scholars have offered their own principles to guide policy makers in ensuring that copyright law works for all.

In Justifying Intellectual Property, legal scholar Robert Merges argues in favor of foundational pluralism — a fancy way of saying that while we may disagree about the deeper principles of copyright (Is it utilitarian? Is it a natural right?) we can reach consensus on midlevel principles that guide how the law is shaped and applied.

Merges then offers his own principles that complement those identified in the Copyright Principles Project. He specifically identifies four midlevel principles in his theory of IP law: (1) efficiency (in the economic sense), (2) nonremoval (“information and ideas in the public domain must not be taken away or privatized”), (3) proportionality (“the scope of a property right ought to be commensurate with the magnitude of the contribution underlying the right”), and (4) dignity (“works covered by IP rights reflect and embody personal attributes of individual creators, therefore justifying special protection for some aspects of creative works”). You can see how readily these principles overlap and augment those other sets already discussed.

Keeping the Creator in Copyright Review

Of course, just as Ringer was concerned forty years ago that individual creators were in danger of being left behind, there is concern that the Copyright Principles Project had not heard from these voices. While it’s true that among the Project participants were private practitioners who have experience dealing with creators when something goes wrong, their perspective only tells a small part of the story of how copyright impacts creators.

In its positive sense, copyright provides the framework that encourages the creation and commercialization of expressive works that advance society at its highest level. To ask whether copyright is working, then, depends not only on whether it provides appropriate judicial remedies for infringement, but whether it is effective on a day-to-day basis. To answer that question, it is imperative that Congress has input from those in the trenches. Creators are engaged in copyright law decisions every day, both when they are creating — where is the line between permitted copying and misappropriation? What is fair use? — and when they are disseminating their works to the public — whether on their own or through various intermediaries.

U.S. Register of Copyrights Maria Pallante noted in her remarks about the Next Great Copyright Act (PDF) that “readability” should also be among the goals of any copyright law discussion. As more and more are affected by copyright laws, it’s important that one should not need “an army of lawyers to understand the basic precepts of the law.” The ideal copyright law will reflect artist and creator concerns in a clear and understandable way. It should not only spell out their rights, but provide meaningful protection of those rights — not only against infringers but also against those who would take advantage of them.

David Lowery spoke about this in a recent Politico op-ed:

Creators are the most affected by the “Project’s” many proposed changes to copyright law. But creators were apparently not even considered as eligible to participate in discussions with these elites.

Any number of creators (including me) would have been glad to hash out ideas for reforms. Ideas we get from on-the-ground practical experience. Experience you won’t find in the ivory towers of academia or corporate corner offices.

As technology makes it easier for all of us to participate in our culture as creators, it is even more important than ever to heed Ringer’s admonition that artists and authors are recognized not only as copyright holders but as separate individual creators. Any review of copyright law should keep that principle in mind above all. It is my hope that the Subcommittee uses the Copyright Principles Project as the title of the hearing suggests: as a case study for building its own consensus de novo — one that includes creators front and center — for reviewing copyright.

References   [ + ]

1. Reflections on the Law of Copyright, 45 Columbia Law Review 503 (1945).

Laws of Creation: Property Rights in the World of Ideas

Are copyright protections anti-consumer and anti-innovation? And is copyright law currently broken?

No, say legal scholars Ronald A. Cass (Dean Emeritus, Boston University School of Law, and President, Cass & Associates, PC) and Keith N. Hylton (Honorable Paul J. Liacos Professor of Law at Boston University School of Law). And the steady drumbeat of opinions saying otherwise — especially from academia — led the two to offer a defense of intellectual property and its legal framework.

In their new book, Laws of Creation: Property Rights in the World of Ideas, Cass and Hylton provide an overview of the economic foundations of intellectual property. In doing so, they reject the “zero-sum” approach to IP law that has steadily gained acceptance by scholars — where any gain to rights holders is seen as a loss to downstream users and the public. The two instead look at intellectual property in the same way as any other property rights. Generally speaking, these rights “make society better off by increasing incentives to find or create property, to preserve and promote property, and to allocate its uses wisely.”

Their approach is explicitly utilitarian. So long as the dynamic benefits of intellectual property protection outweigh the static costs incurred, such protection is beneficial to society. Cass and Hylton conclude that current IP law succeeds in this regard.

The bulk of the book is a theoretical analysis of these static and dynamic effects of the four major areas of intellectual property law: patent, trade secrets, copyright, and trademark. Two chapters are devoted to examining issues at the intersection of intellectual property regimes and tensions between intellectual property law and antitrust law.

Cass and Hylton conclude with a discussion examing their motivations for writing the book, namely, the “need to regain a more balanced and reasonable perspective on the way our laws treat the world of ideas.” As noted above, the book challenges the “zero sum” view of IP that has increasingly found favor among academics. This has led to a skepticism about IP rights. One need only spend a few minutes online to realize that this skepticism has spilled out of the academy and permeates many discussions of technology and media issues. The authors speculate about some of the possible causes for this view gaining ground in recent decades, but ultimately their book is most useful to counter the erroneous zero sum approach.

Critics might point out that the book has little to say that is negative of intellectual property rights. Surely the authors are looking through rose colored glasses! But Cass and Hylton are careful to point out that their discussion does not imply that each aspect of IP law is unimpeachable. And the book intentionally takes a birds-eye view of policy, meaning that there is little attention devoted to specific issues or concerns. IP, like any other area of the law, can always benefit from tweaking and improvement, but it is not as irredeemably broken as its critics make it out to be. This approach makes the book especially timely as Congress looks to begin a comprehensive review of the Copyright Act.

The book would seem to be most valuable to law students and those looking for an introduction to intellectual property law. Legal practitioners and others with a working knowledge of copyright may not find anything particularly novel between the covers of Laws of Creation; while the book is a straightforward and commonsense look at IP, much of it may be familiar territory. But the fact that its reasonable and rational approach is so contrary to much modern IP scholarship makes it worth a read and a space on any intellectual property wonk’s bookshelf.

Rhapsody adds liner notes, but how detailed is the information it holds? — As Helienne Lindvall points out, this is a welcome announcement, as the scores of individuals who lend their talents to the production of recorded music deserve recognition. The problem? Rhapsody will likely need to add this information itself, as it is not readily available.

New ways to support great content on YouTube — The long-awaited announcement from YouTube about paid subscription channels. “Starting today, we’re launching a pilot program for a small group of partners that will offer paid channels on YouTube with subscription fees starting at $0.99 per month. Every channel has a 14-day free trial, and many offer discounted yearly rates. For example, Sesame Street will be offering full episodes on their paid channel when it launches. And UFC fans can see classic fights, like a full version of their first event from UFC’s new channel.”

Permission, Privacy and Piracy: Where Creators and Consumers Meet — The Trichordist examines the intersection between privacy and piracy: “How are privacy and piracy related? It’s simple, both privacy and piracy revolve around how we view the importance of the individuals right to grant consent. An individual should have the right to grant the specific permissions to access information about us and how that information can be used.”

Kim Dotcom’s Truth = Nothing but Lies — Indie filmmaker Ellen Seidler takes on Kim Dotcom and his recent “white paper” defending Megaupload. Says Seidler, “Kim Dotcom is not Robin Hood and he’s not a hero. He’s a (wealthy) thief who, thanks to technical know-how and a black market business acumen, was able to exploit the work of content creators across the globe for his own, personal gain. Dotcom’s lies cloaked as ‘truth’ may gain him sympathy from his acolytes, but it won’t change the fact that stealing from others isn’t sharing, it’s theft.”

Why is Video Piracy Still Called A “Censorship” Problem? — “When we talk about video piracy, we’re talking about accessing someone’s creative property for free. It is true that you cannot copyright ideas but once those ideas are set down and given life as a recording, book, film, etc. they become the creator’s intellectual property. One may have issues with how long the protection should last, but that protection serves several important purposes: 1) It compensates the content providers and enables them to make a living; 2) It encourages people to continue producing content in hopes that they will be able to make a living.”

In a new “white paper” released today, Kim Dotcom’s lawyers come to the surprising conclusion that Kim Dotcom is not guilty.

Shocking, right?

Taking your case to the court of public opinion could be a sign that your case in a court of law is not going well. But ever since the US government charged Kim Dotcom, 6 other defendants, and 2 companies, including Megaupload, for charges relating to massive copyright infringement in January 2012, Dotcom has been on a full court press to convince the public that multi-millionaries (like him) should be allowed to rip off working class creators (like Ellen Seidler). 1A study released in March demonstrated that the Megaupload shutdown caused a 6-10% increase in digital film revenues, revenues that not only help fund the continued creation of films but also that directly go to union members in the form of residuals. The latest move is the “white paper”, titled Megaupload, the Copyright Lobby, and the Future of Digital Rights (with the self-aggrandizing subtitle, “The United States vs. You (and Kim Dotcom)”). Part of this public relations campaign has involved an attempt to characterize Dotcom as some kind of hacker hero — the white paper places Dotcom in the same pantheon as Steve Jobs and Steve Wozniak. Really? Kim Dotcom is to hacking what the 1995 movie Hackers is to hacking.

And the conspiracy theories described in this white paper seem one relic shy of a Dan Brown novel. 2Even Techdirt describes them as a “massive exaggeration.”

But what about the legal arguments presented in the paper?

The citations to case law may lead the casual reader to the conclusion that there are valid legal arguments within the paper. But for the most part, the arguments are legal sleight of hand, a series of court quotes that, while true, are inapplicable and immaterial to the point being argued. There is little here that Dotcom hasn’t argued in public or in court (unsuccessfully, so far) before.

No Criminal Liability for Secondary Copyright Infringement

The basic premise of this argument is that in the civil context, liability for indirect infringement derives from the common law, not the Copyright Act. Since criminal law as a rule derives entirely from statute, there can be no criminal liability for indirect infringement.

This argument is a red herring.

First, Dotcom and the Megaupload defendants simply are not being charged under any of the tort-based indirect liability standards — which include contributory infringement, vicarious liability, and inducement. They are being charged with direct infringement, aiding and abetting infringement, and conspiracy to commit infringement. 3See Superseding Indictment. The latter two could be considered forms of secondary liability, but they are criminal, not tort forms, and they are provided for by statute.

Next, the white paper wholly skips over the fact that Dotcom has been charged with two counts of direct criminal copyright infringement. Among the allegations supporting these charges is at least one instance where one of the defendants himself uploaded an infringing copy of a film that had not been commercially released yet to Megaupload. 4Superseding Indictment, pg. 44.

But the indictment also alleges multiple instances where copyrighted works were made available to the public through the Megaupload sites. Many courts, and the leading copyright treatise, view making a work available to the public as an infringement of the distribution right. 5See Nimmer Changes his Tune: “Making Available” is Distribution.

Also conveniently left out of the white paper is that a federal court has already stated, in a separate, civil lawsuit, that Megaupload exercises the requisite volition to be held liable for direct infringement. In Perfect 10 v. Megaupload, the Southern District Court of California said:

Drawing all reasonable inferences in Perfect 10’s favor, Megaupload serves as more than a passive conduit, and more than a mere “file storage” company: it has created distinct websites, presumably in an effort to streamline users’ access to different types of media (e.g.,,; it encourages and, in some cases pays, its users to upload vast amounts of popular media through its Rewards Programs; it disseminates URLs for various files throughout the internet; it provides payouts to affiliate websites who maintain a catalogue of all available files; and last, at a minimum, it is plausibly aware of the ongoing, rampant infringement taking place on its websites. Taken together, Perfect 10 has adequately alleged Megaupload has engaged in volitional conduct sufficient to hold it liable for direct infringement. [Emphasis added].

(The lawsuit settled before proceeding much further.)

Substantial Non-Infringing Uses

The White Paper next argues that “the U.S. government cannot even argue that the conduct of Megaupload and its executives gives rise to civil liability for secondary infringement, much less criminal liability” under the Supreme Court’s 1984 holding in Sony Corp v. Universal City Studios. The problem with this argument is that it has thoroughly and repeatedly been rejected by courts in cases involving similar services.

The Ninth Circuit rejected it in 2001. 6A & M Records v. Napster, 239 F. 3d 1004, 1020; “Napster claims that it is nevertheless protected from contributory liability by the teaching of Sony Corp. v. Universal City Studios, Inc. We disagree. We observe that Napster’s actual, specific knowledge of direct infringement renders Sony‘s holding of limited assistance to Napster.” The Seventh Circuit rejected it in 2003. 7In re Aimster Copyright Litigation, 334 F. 3d 643, 651; “We also do not buy Aimster’s argument that since the Supreme Court distinguished, in the long passage from the Sony opinion that we quoted earlier, between actual and potential noninfringing uses, all Aimster has to show in order to escape liability for contributory infringement is that its file-sharing system could be used in noninfringing ways, which obviously it could be. Were that the law, the seller of a product or service used solely to facilitate copyright infringement, though it was capable in principle of noninfringing uses, would be immune from liability for contributory infringement. That would be an extreme result, and one not envisaged by the Sony majority.” And, most importantly, the Supreme Court rejected it in 2005. In MGM v. Grokster, Justice Souter explained, “Sony‘s rule limits imputing culpable intent as a matter of law from the characteristics or uses of a distributed product. But nothing in Sony requires courts to ignore evidence of intent if there is such evidence, and the case was never meant to foreclose rules of fault-based liability derived from the common law.”

Other courts have pointed out that Sony only applies if you’re focusing on liability for the design of a product rather than conduct 8Perfect 10 v. Amazon, 508 F. 3d 1146, 1171 (9th Cir. 2007). or if there is no continuing relationship between the maker of a product and the user. 9CoStar Group v. Loopnet, 164 F. Supp. 2d 688, 697 (D. Md. 2001). But whatever the case, the fact remains that courts have consistently found Sony inapplicable to online service providers like Megaupload for over a decade. It’s telling that this was the strongest argument the white paper could muster.

Rewards Program Not a Contributor to Infringement

Next, the white paper says that the argument that its rewards program encouraged or contributed to infringement is a “glaring falsehood.” Megaupload claims that its program that paid uploaders depending on the popularity of the files they uploaded didn’t encourage infringement because someone’s family photos could just as likely be as popular as a copy of the latest blockbuster film. That’s silly.

More to the point, Megaupload’s rewards program was previously found to support a contributory infringement claim. Again, from Perfect 10:

Tellingly, in its motion to dismiss, Megaupload does not dispute Perfect 10’s allegation that it induces, causes, or materially contributes to infringing conduct. Nor could it, given the allegations that Megaupload encourages, and in some cases, pays its users to upload vast amounts of popular media through its Rewards Programs, disseminates URLs that provide access to such media, and has provided payouts to affiliates who catalogue the URLs for all available media.

Safe Harbor and Beyond

The white paper finally argues that Megaupload should not be liable for the massive infringement it caused and contributed to because it is eligible for safe harbor under the DMCA. That begs the question that DMCA safe harbors are even available for criminal defendants — I’ve written previously that the language of the statute doesn’t support such a conclusion. What’s more, even in the unlikely case a court finds that safe harbors are available in the criminal context, it is difficult to see the service being able to show it complied with the statute’s requirements that protect good-faith, passive service providers. 10See, for example, Megaupload, the DMCA and Lockers in General; Megaupload’s DMCA Shell Games; Why Megaupload Doesn’t Have a DMCA Shelter.

Procedural Arguments

The white paper next turns from making substantive arguments to procedural arguments. It argues that “U.S. federal court lacks jurisdiction over Megaupload” because it “is a wholly foreign corporation; it is not incorporated in the United States, and it has no agents or offices in the United States.” Chief among the support for this argument is that the U.S. cannot serve Megaupload under Rule 4 of the Federal Rules of Criminal Procedure.

Note how this argument begins with such a broad statement about a lack of jurisdiction but ends up being really about a minor procedural point. Note too that this argument has no impact on the case against Kim Dotcom himself, his holding company, or any of the other personal defendants. This argument only involves the corporate entity of Megaupload Limited. So the suggestion that we should be concerned about some breach of the rule of law is a bit disingenuous. The dismissal of charges against Megaupload would have little effect on the case against the other defendants except that it might free up assets to pay for the defendants’ attorneys (and even that is not a foregone conclusion).

Last July, I briefly looked at this argument; its substance has evolved very little since then. Megaupload essentially takes the position that corporations who operate within the United States and violate U.S. laws should get a free pass so long as they don’t have a mailbox in the U.S. Note that this argument isn’t limited to criminal copyright laws — corporations would be able to commit financial crimes, environmental crimes, fraud, and more with impunity. This result defies common sense and the rule of law — I’d imagine quite a few people would disagree with Megaupload’s argument that corporations deserve a free pass from obeying the law.

The court rejected this argument last October, stating that even if Megaupload doesn’t have a “last known address” within the district or a “principal place of business” within the U.S., there are several alternatives available to the U.S. to perfect service. In its most recent filing, the U.S. notes additional alternatives available to serve Megaupload, a company that leased thousands of servers in the United States to operate a service that allegedly violated U.S. laws within the U.S. harming U.S. creators, regardless of where Kim Dotcom picks up his mail. 11The U.S. says in its May 2nd filing “As discussed in prior pleadings, Defendant Megaupload has had at least two addresses within the Eastern District of Virginia — a constructive address at the Commonwealth of Virginia’s State Corporation Commission and an address at the Carpathia datacenter where the company maintained its U.S.-based nerve center.”

This hasn’t prevented Megaupload from continuing to make the argument in court, despite the fact that less than two months ago, a court in the very same district rejected the idea that the mailing requirement in Rule 4 is a jurisdictional requirement. 12United States v. Kolon Industries, 2013 WL 682896, *5–6 (ED Va. Feb. 22, 2013). So now Megaupload persists in making the argument in its white paper here.

The remaining claims made in the white paper follow the same pattern as those discussed above, full of red herrings, already rejected arguments, and faulty logic. No doubt that matters little to those who worship Dotcom as a hero, buying completely into his celebrity-esque posturing.

References   [ + ]

1. A study released in March demonstrated that the Megaupload shutdown caused a 6-10% increase in digital film revenues, revenues that not only help fund the continued creation of films but also that directly go to union members in the form of residuals.
2. Even Techdirt describes them as a “massive exaggeration.”
3. See Superseding Indictment.
4. Superseding Indictment, pg. 44.
5. See Nimmer Changes his Tune: “Making Available” is Distribution.
6. A & M Records v. Napster, 239 F. 3d 1004, 1020; “Napster claims that it is nevertheless protected from contributory liability by the teaching of Sony Corp. v. Universal City Studios, Inc. We disagree. We observe that Napster’s actual, specific knowledge of direct infringement renders Sony‘s holding of limited assistance to Napster.”
7. In re Aimster Copyright Litigation, 334 F. 3d 643, 651; “We also do not buy Aimster’s argument that since the Supreme Court distinguished, in the long passage from the Sony opinion that we quoted earlier, between actual and potential noninfringing uses, all Aimster has to show in order to escape liability for contributory infringement is that its file-sharing system could be used in noninfringing ways, which obviously it could be. Were that the law, the seller of a product or service used solely to facilitate copyright infringement, though it was capable in principle of noninfringing uses, would be immune from liability for contributory infringement. That would be an extreme result, and one not envisaged by the Sony majority.”
8. Perfect 10 v. Amazon, 508 F. 3d 1146, 1171 (9th Cir. 2007).
9. CoStar Group v. Loopnet, 164 F. Supp. 2d 688, 697 (D. Md. 2001).
10. See, for example, Megaupload, the DMCA and Lockers in General; Megaupload’s DMCA Shell Games; Why Megaupload Doesn’t Have a DMCA Shelter.
11. The U.S. says in its May 2nd filing “As discussed in prior pleadings, Defendant Megaupload has had at least two addresses within the Eastern District of Virginia — a constructive address at the Commonwealth of Virginia’s State Corporation Commission and an address at the Carpathia datacenter where the company maintained its U.S.-based nerve center.”
12. United States v. Kolon Industries, 2013 WL 682896, *5–6 (ED Va. Feb. 22, 2013).