Nearly four years ago, the US Justice Department indicted Kim Dotcom (née Kim Schmidt)—along with six other individuals and two corporations—on a number of charges related to the operation of Megaupload and alleged “massive worldwide online piracy.” 1Researchers found that “the shutdown of Megaupload and its associated sites caused digital revenues for three major motion picture studios to increase by 6.5-8.5%.”

Since then, Dotcom has consistently questioned the charges, claiming not innocence but a lack of legal basis for the charges themselves—that is, that his conduct in creating and operating Megaupload does not make him criminally liable for copyright infringement and related charges. His defense team even took the highly unusual step of publishing a “white paper” that explores its arguments against the criminal charges. 2I wrote previously about the arguments raised in the white paper here.

Despite this insistence of legality, Dotcom’s defense has repeatedly delayed an actual trial with procedural challenge after procedural challenge. This week, despite those efforts, his extradition hearing has begun and is expected to last four weeks.

But that still doesn’t mean Dotcom is confident his legal claims will hold up in court. In fact, his legal team has enlisted the aid of presidential candidate Lawrence Lessig to support their case. Lessig recently filed an expert opinion in the extradition hearing to support the argument “that the Superseding Indictment and Record of the Case filed by the DOJ do not meet the requirements necessary to support a prima facie case that would be recognized by United States federal law and subject to the US-NZ Extradition Treaty.”

There are a couple things worth highlighting about Lessig’s declaration.

Lessig, of course, has become a popular figure in the copyright world for his work in addressing how the law should work in a networked, digital world. However, his track record in accurately describing how the law actually works has been less than stellar.

This is not the first time he has appeared in litigation as an expert witness—he appeared in the godfather of online copyright cases, A&M Records v. Napster. In his expert declaration for Napster, Lessig argued in part that in evaluating whether the service enabled infringement, a court should look at whether it has “potential for substantial noninfringing purposes.” He concluded that Napster was capable of “vast” noninfringing uses, including “the sharing of non-copyrighted music, the sharing of copyrighted music that had been authorized for sharing (for example, for purposes of sampling), and the sharing of other non-copyrighted content on the net in a peer-to-peer manner.” Lessig added that, by passing the Audio Home Recording Act, Congress expressly left “private, noncommercial home recording unregulated by copyright law.”

None of these arguments were successful in the Ninth Circuit. 3A & M Records, Inc. v. Napster, Inc., 239 F.3d 1004 (9th Cir. 2001). The court did note it was bound by Sony‘s holding regarding substantial noninfringing purposes and would not “impute the requisite level of knowledge to Napster merely because peer-to-peer file sharing technology may be used to infringe plaintiffs’ copyrights” However, the court explained “Napster’s actual, specific knowledge of direct infringement renders Sony‘s holding of limited assistance to Napster. We are compelled to make a clear distinction between the architecture of the Napster system and Napster’s conduct in relation to the operational capacity of the system.”

The Ninth Circuit also rejected the argument that “that MP3 file exchange is the type of ‘noncommercial use’ protected from infringement actions by” the Audio Home Recording Act, holding that the plain language made the statute irrelevant to the issues at hand.

Lessig also spent a considerable amount of time and energy during the 2000s arguing that the Copyright Term Extension Act, as regarding the term extension of existing copyrights, violated the Copyright Clause of the Constitution. This litigation went all the way up to the Supreme Court, which rejected Lessig’s arguments unequivocally in Eldred v. Ashcroft. 4537 US 186 (2003). In doing so, the Court concluded its opinion by saying, “Beneath the facade of their inventive constitutional interpretation, petitioners forcefully urge that Congress pursued very bad policy in prescribing the CTEA’s long terms. The wisdom of Congress’ action, however, is not within our province to second-guess.”

Given this track record, it might be said that Dotcom is more interested in making a statement than beating the charges.

The second thing about Lessig’s declaration that jumps out is an apparent contradiction between Lessig and Dotcom’s defense team regarding the applicability of the DMCA safe harbors to Megaupload.

In the white paper, Dotcom’s defense team says

Even if the U.S. government’s wishful expansion of the criminal copyright law into the realm of secondary infringement were tenable (which it is not), Megaupload is shielded from criminal liability by specific “safe harbor” provisions in the Digital Millennium Copyright Act (DMCA), included in the law to protect companies like Megaupload that make efforts to remove infringing material in response to “take-down” notices issued by copyright holders

But in his declaration, Lessig asserts “The DMCA is only a defense in the civil context”. The reversal is notable.

I do think Lessig is correct here. As I wrote in 2012 following the indictment,

Though [the DMCA] references only “infringement of copyright” — which could include both criminal and civil infringement — it merely shields service providers from “liab[ility] for monetary relief, or [in some circumstances] injunctive or other equitable relief.” This is civil lawsuit language — criminal defendants are punished with fines, not liable for monetary relief.

In addition, criminal liability would seem to preclude safe harbor protection solely as a matter of common sense. Criminal copyright infringement requires willful infringement. The DMCA safe harbor only protects service providers from liability for passive infringement. If the evidence shows that a defendant was willfully infringing copyrighted works beyond a reasonable doubt, it doesn’t seem possible that that same defendant could ever meet the requirements for safe harbor protection under the statute.

Nevertheless, for Lessig to contradict a point the defense has been asserting for three years cannot be welcome news for Dotcom.

References   [ + ]

1. Researchers found that “the shutdown of Megaupload and its associated sites caused digital revenues for three major motion picture studios to increase by 6.5-8.5%.”
2. I wrote previously about the arguments raised in the white paper here.
3. A & M Records, Inc. v. Napster, Inc., 239 F.3d 1004 (9th Cir. 2001).
4. 537 US 186 (2003).

The Flux Capacitor and the Copyright Office — “American businesses and consumers deserve a Copyright Office that is suited to the modern era and the future.  Last weeks’ outage is yet more evidence that the Copyright Office needs authority over its own systems to make that happen.  And we hope Congress gives this the attention it deserves.”

Ninth Circuit Gets Fair Use Wrong to the Detriment of Creators — To reach its conclusion that fair use is a right, the Ninth Circuit selectively quotes an Eleventh Circuit decision to make it sound like there is support for that position, when in fact, the Eleventh Circuit is saying the opposite. Stunning.

Priest on Market-Pressure Based Enforcement of Global Copyright — A new article from Univ. of Oregon Law School professor Eric Priest “proposes a framework for evaluating and improving market-pressure strategies aimed at redressing copyright infringement in markets where enforcement is lacking.”

Full of Schmidt — “…it turns out the demagogues of Silicon Valley are themselves inveterate elitists who slyly and consistently employ populist rhetoric for their own profit-hungry purposes. They elevate the quantitative formulations of Big Data into unalloyed truth, conveniently overlooking the helplessness of quantity alone to identify quality (nowhere in the history of humanity have we ever seen sheer numbers equate with human value), and also conveniently overlooking the subjectivity that will always embed itself into algorithmic selection, because (hey, how about that!) algorithms are at some point in the process created and overseen by human beings and will ever more reflect subjectivity even when posing as immutably objective.”

MPA Reveals 500+ Instances of Pirate Site Blocking in Europe — That’s a lot of broken internets.

“We Own You” – Confessions of an Anonymous Free to Play Producer — “Every time you play a free to play game, you just build this giant online database of who you are, who your friends are and what you like and don’t like. This data is sold, bought and traded between large companies I have worked for. You want to put a stop to this? Stop playing free games. Buy a game for 4.99 or 9.99. We don’t want to be making games like this, and we don’t want another meeting about retention, cohorts or churn.”

Three Quasi-Fallacies in the Conventional Understanding of Intellectual Property — In this forthcoming article, Jonathan Barnett argues that, contrary to the prevailing IP skepticism in academia, “reducing IP rights can increase costs for users while raising entry barriers for firms that adopt weakly integrated and other unbundled business models for implementing the innovation and commercialization process. The result is perverse: weaker IP rights raise entry costs, increase concentration and ultimately raise prices, limit output or otherwise distort innovation investments.”

If You Don’t Click on This Story, I Don’t Get Paid — A thought-provoking look at freelance writing in 2015. “’The people who make money off the internet are Facebook, Google, and Twitter and their billionaire executives,’ David Samuels, a contributing editor at Harper’s and frequent contributor to the New Yorker, said. ‘They are fantastically rich because they ate this whole world. Everybody in this world of internet publications is essentially providing content for them one way or another for free. If that’s your job, you’re very very nervous every day about the one little misstep that’s completely meaningless to Facebook, Google, or Twitter but might be the difference between life and death for you and for your publication.'”

How Unethical Hosts Fake DMCA Compliance — Jonathan Bailey has a practical guide for dealing with sites using tactics to make it seem like they are complying with DMCA notices without actually removing infringing material.

Recorded Music is the MOST Valuable — David Newhoff has a fascinating piece on the importance of recorded music and how the public loses out if artists are told to stick to live performances because the market for recorded music has eroded. “When recorded works themselves cease to be a commodity (i.e. they’re made for the purpose of selling something else), they cease to be the basis for investment, and this can limit the range of creators’ options to collaborate and produce a richer universe of sounds.”

On Sunday, September 6, US Copyright Office systems, including its electronic registration system, came back online. The systems had been down for over a week, having failed to come back online after being shut down for routine maintenance by the Library of Congress.

The Washington Post reported on Thursday, six days into the nine day outage, that the outage “cost[] the office an estimated $650,000 in lost fees and caus[ed] headaches for approximately 12,000 customers.” The final numbers are higher.

Unfortunately for the Copyright Office and its constituents, this outage was beyond its control. “The Copyright Office does not have its own Information Technology (IT) infrastructure,” said Keith Kupferschmid during a House Judiciary Committee hearing on the functions and resources of the Office earlier this year. “[I]t uses the network, servers, telecommunications, security and all other IT operations controlled and managed by the Library of Congress.” 1The Copyright Office: Its Functions and Resources Hearing Before the H. Comm. on the Judiciary, 114th Cong. (2015) (statement of Keith Kupferschmid, General Counsel and Senior Vice President, Intellectual Property Software & Information Industry Association). This outage underscores the critical need to give the US Copyright Office the tools and resources it needs in order to function efficiently and effectively in the twenty-first century.

The first step in that process is giving the Office greater autonomy over its own functions and resources. Maintaining Library authority over the US Copyright Office creates a number of structural barriers to modernization, with little concomitant benefit. Indeed, there is very little logic regarding the housing of the Copyright Office within the Library in the first place. This wasn’t the result of any deliberative process at all, but rather through the ambition of Librarian of Congress Ainsworth Spofford, who served in that position 1864-1897.

Building a Library

This story begins with legal deposit—that is, a legal requirement to submit a copy of a published work to a specified institution. As a 1960 Copyright Office study explains:

The deposit of copies of copyrighted works serves two purposes: to identify the copyrighted work in connection with copyright registration, and to provide copies for the use of the Library of Congress. The deposit of copies for the first purpose has been an integral part of the U.S. copyright system since its beginning in 1790. Deposit for the Library of Congress was inaugurated in 1846. Before 1870. the deposit for each purpose was made separately. Since the administration of the registry system was placed in the Library of Congress in 1870, a single deposit has served both purposes. 2Elizabeth K. Dunne, Deposit of Copyrighted Works, Copyright Law Revision Study No. 20 (1960).

It was this centralization in 1870 which would eventually lead to the creation of the US Copyright Office. Spofford was a huge proponent of deposit as a mechanism for Library acquisitions. To that end, he sought throughout his tenure as Librarian to increase the effectiveness of deposit by, for example, introducing legal penalties for failure to deposit works. But, as historian John Y. Cole has explained, this was still insufficient to Spofford.

He found that even with the “utmost diligence” it was impossible to obtain all the copyrighted publications, since he was forced to pursue delinquent publishers and authors through the 44 U.S. district courts where the original copyright registrations were still being made.

The entire system needed changing, and Spofford proposed to eliminate the district courts and the Patent Office from the copyright system altogether by centralizing all registration and deposit activities at the Library of Congress. According to his plan, both deposit copies-the copy for legal record and the copy for library use-would be sent directly to the Library of Congress. The Librarian would be responsible for registration and for keeping the copies deposited as legal evidence separate from the general collection. 3John Y. Cole, Of Copyright, Men & a National Library, Library of Congress (1995) (originally published in 28 Quarterly Journal of the Library of Congress, 1971.

Spofford was, according to Cole, “a skillful politician”, and he shepherded his plan from idea to legislative reality in little over a year. 4Id. But his success was double-edged. Cole writes that centralization “created serious problems. Spofford was overwhelmed by the unceasing flow of deposits into his cramped Library. He cried to Congress for help almost immediately.” But the new arrangement only drew more and more works to the Library. “In 1875 Spofford warned Congress that its Librarian would soon be presiding over the ‘greatest chaos in America,’ and by 1877 more than 70,000 books were ‘piled on the floor in all directions.'” Too many books might seem a nice problem for a library to have. But Cole notes several problems that weighed down the benefits. “The most serious problem was the chaotic condition of the deposits themselves. Virtually inaccessible without the aid of Librarian Spofford’s remarkable memory, the accumulated wealth of the collections was not fully appreciated until they were transferred into the new building and cleaned, sorted, examined, and counted.” Consequently, many deposits were also damaged or lost before becoming available to the public. (Or stolen from Spofford’s office.)

Spofford made his case to Congress for a separate building to house the Library. Congress concurred, and on November 1, 1897, the Thomas Jefferson building opened its doors to the public. That same year, Congress also established a separate Copyright Department within the Library of Congress, headed by a Register of Copyrights, to administer registration and deposits. The first Register, Thorvald Solberg, was ambitious, and almost immediately transformed the office from a ministerial department to an expert agency. Under his leadership, the office “served as substantive experts within the U.S. government, provided policy advice to Congress, and represented the United States at international meetings,” a role the Office continues to this day. 5Maria Pallante, The Next Great Copyright Act, 36 Columbia Journal of Law & the Arts 315, 316 (2013).

Distinct Missions

So from its beginning, the Copyright Office has had a distinct mission from the Library of Congress. Aside from legal deposit (which doesn’t necessitate having the Copyright Office under the authority of the Library of Congress), there is little benefit to either institution from the historic arrangement, a point the recent outage demonstrates well, and one supported by two recent GAO reports on the Library of Congress and the Copyright Office.

By law, the Office must perform a number of functions. Among these, it must be able to “receive and examine copyright registration applications, collect and maintain deposited copies of copyrighted works as necessary to support the production of ‘facsimile reproductions’ and retention of works up to 120 years, produce certificates of registration and certified copies of applications, and maintain records of the transfer of copyright ownership.” 6GAO Copyright Office Report at 7. These functions rely heavily (if not entirely) on technology. The Library of Congress, in contrast, deploys information technology for a different set of purposes, such as “bibliographic cataloging and electronic archiving of important historical works.” 7The Copyright Office: Its Functions and Resources Hearing Before the H. Comm. on the Judiciary, 114th Cong. (2015) (statement of Robert Brauneis, Professor, George Washington University Law School).

The Library and the Copyright Office also have different administrative needs. Unlike Library actions, actions taken by the Register to implement the Copyright Act are subject to the Administrative Procedure Act. 8GAO Copyright Office Report at 8. This means, among other things, that copyright records are governed by the Freedom of Information Act and the Privacy Act. 9Id. The result, as the GAO concluded, is that legal requirements “requirements necessitate actions by the Copyright Office that differ from otherwise-standard Library processes.” 10GAO Copyright Office Report at 8-9. Add to this the different data retention and security requirements of a library and a registration system.

It doesn’t appear that either department realizes any synergies from this arrangement. Indeed, it seems as though it may be that having the two systems integrated is worse than having the two separate. In its report, the GAO noted a number of “duplicative or overlapping efforts” between the two systems, “for example, the Copyright Office provides Internet management and desktop support services, which overlap similar services by ITS.” 11GAO Copyright Office Report at 22.

In addition, the GAO’s audit of the Library of Congress’s own IT found significant weaknesses in strategic planning, governance and investment management,  information security and privacy, service management, and leadership. Addressing these will take considerable time and attention. Under the current structure, that could mean continued delays in modernizing Copyright Office systes.

The conclusion to be drawn from this discussion seems unavoidable, and best stated by Register Pallante in testimony to the House Judiciary Committee earlier this year. “The mission of the Copyright Office is fundamentally different from the mission of the Library, and I believe that the Copyright Office must have its own CIO, technology staff, and management autonomy, including the ability to implement IT investment and planning practices that focus not on agency-wide goals but on its own specific mission.”

This recent outage demonstrates that at the very minimum, Congress should address the acute technological and administrative challenges facing the Office by giving it the autonomy and resources it needs, without further delay.

References   [ + ]

1. The Copyright Office: Its Functions and Resources Hearing Before the H. Comm. on the Judiciary, 114th Cong. (2015) (statement of Keith Kupferschmid, General Counsel and Senior Vice President, Intellectual Property Software & Information Industry Association).
2. Elizabeth K. Dunne, Deposit of Copyrighted Works, Copyright Law Revision Study No. 20 (1960).
3. John Y. Cole, Of Copyright, Men & a National Library, Library of Congress (1995) (originally published in 28 Quarterly Journal of the Library of Congress, 1971.
4. Id.
5. Maria Pallante, The Next Great Copyright Act, 36 Columbia Journal of Law & the Arts 315, 316 (2013).
6. GAO Copyright Office Report at 7.
7. The Copyright Office: Its Functions and Resources Hearing Before the H. Comm. on the Judiciary, 114th Cong. (2015) (statement of Robert Brauneis, Professor, George Washington University Law School).
8. GAO Copyright Office Report at 8.
9. Id.
10. GAO Copyright Office Report at 8-9.
11. GAO Copyright Office Report at 22.

Copyright Office’s online registration hasn’t worked for almost a week — The Copyright Office was created as a department of the Library of Congress in 1897. This latest technical malfunction demonstrates why that arrangement doesn’t best serve the needs of the public.

You can’t make “Game of Thrones” on a YouTube budget: Why “it’s the best of times and the worst of times” for prestige TV — Scott Timberg interviews Rob Levine on the current television renaissance. “All of this sounds abstract, but the ability of networks to fund ambitious shows – most of them with very high production costs – has to do not just with a creative revolution, but an economic one. People pay for television in a way they rarely do for other forms of culture, and when they stop, so will the flow of great programming.”

Rain is sizzling bacon, cars are lions roaring: the art of sound in movies — A fantastic profile of Skip Lievsay, a master at the craft of sound design for films. “Lievsay is not a household name, but he is famous among people who are. His expertise, fittingly, is what can’t be seen – sound, yes, but also everything else that sound is to the human mind: the way we orient ourselves in relation to spaces, to time, to each other; the way we communicate when language fails; the way our ears know, precognitively, when the dark room has someone lurking in it or when a stranger will be kind. He orchestrates the levels of human perception that most people either fail to examine or lack the ability to notice at all. His job is to make you feel things without ever knowing he was there.”

‘Sample amnesty’ will let artists keep royalties if they declare material lifted from other musicians — “Rather than chase down and sue musicians who have taken its music without permission, EMI is offering an amnesty. From Tuesday, anyone who has sampled the catalogue without getting the sample cleared will be able to come forward, declare it, and agree a legitimate release for the recording. The ‘sample amnesty’, believed to be the first of its kind, will run for 6 months, has been approved by Sony/ATV Music Publishing, which owns EMI Music Publishing and is itself co-owned by the Michael Jackson Estate.”

The MovieTube Litigation Part I: Who Needs SOPA? — Devlin Hartline takes a look at Federal Rules of Civil Procedure 65(d)(2) and its application to third party service providers who aid and abet online piracy.

Many new top-level domains have become Internet’s “bad neighborhoods” — “There were many who warned that the Internet Corporation for Assigned Names and Numbers’ (ICANN) decision to allow a host of new commercial generic top-level Internet domains was going to create a huge opportunity for Internet scammers and hackers. The approval of top-level domains (TLDs) beyond those assigned to countries and generic ones such as .com, .org, and .net created an opportunity, some in the security industry warned, for criminals to set up “look-alike” domains in the new namespace that aped legitimate sites already registered in .com or elsewhere. Well, the warnings were spot-on.”

The digital environment has created something approaching a monopoly for digital entrepreneurs and technology corporations, at the expense of those who create works. The distribution of intellectual and creative content puts billions into hands of digital entrepreneurs while most artists and creators can no longer benefit economically from their work. This is not fair, and it is not what copyright, which is recognized as a human right under Article 27 of the United Nations Universal Declaration of Human Rights, was intended to achieve.

Krisellen Maloney & Janice T. Pilch, Comments of Rutgers University Libraries in Response to Notice of Inquiry Concerning Copyright Protection for Certain Visual Works, July 23, 2015. 1All comments available here.

Is Amazon Creating a Cultural Monopoly? — A group of authors has asked the Department of Justice to investigate the online retailer, arguing that its practices “squeeze publishers, which makes them more risk-averse in deciding which books to publish. As a result, they claim, publishers have been ‘dropping some midlist authors and not publishing certain riskier books, effectively silencing many voices.’ And this is bad not only for the non-famous writers who go unpublished, but for their would-be readers, who are denied the ability to hear those voices.”

Are Creators Really Thriving in the Digital Age? Doesn’t Look Like It — There were a number of pieces responding to a New York Times Magazine article claiming that a “creative apocalypse” had been predicted following Napster, but that, in fact, things were never better for creators. Here’s Rob Levine’s take.

A visual journey through the most loved and hated TV series finales — Or, more precisely, how much did the IMDB rating of a series finale differ from the average IMDB rating of all its episodes? Still, an interesting chart.

Creative Destruction and Disruptive Creation — “Content creators have always leveraged technology to tell better stories. Indeed, the history of Hollywood is perhaps best described as ‘disruptive creation.'”

The Most Popular YouTube Videos of All Time — Look at all that user-generated content.

References   [ + ]

How Google Could Rig the 2016 Election — Say the authors, “Our new research leaves little doubt about whether Google has the ability to control voters. In laboratory and online experiments conducted in the United States, we were able to boost the proportion of people who favored any candidate by between 37 and 63 percent after just one search session. The impact of viewing biased rankings repeatedly over a period of weeks or months would undoubtedly be larger.”

The Bizarre History of ‘All Rights Reserved’ — Ever wonder where it comes from? And if you’re a creator, do you need it? Jonathan Bailey looks at the origins of the phrase.

Google found its own Java libraries “half-ass at best”, needed “another half of an ass”, took Oracle’s APIs — Florian Mueller highlights a humorous bit of evidence in the long running litigation between Oracle and Google.

20th Century Props reopens amid production rebound in L.A. — “20th Century Props stunned the industry in 2009 when it closed its North Hollywood business amid mounting losses that it blamed on the flight of production from L.A. Several L.A. prop houses have closed or laid off employees in recent years as more business left the state. But owner Harvey Schwartz has decided to reopen at a new location in Van Nuys, citing an upswing in production in Southern California that has renewed demand for props used on film and TV shows. Newly expanded film tax credits have enticed four out-of-state TV shows to L.A. The California Film Commission on Tuesday announced that eight studio films also had been selected for tax breaks. ‘Business seems to be coming to town, so it’s looking good in Los Angeles these days,’ Schwartz said.”

The Next Great Copyright Office — Josh Simmons (Kirkland & Ellis) looks at the current copyright review process, how it compares to the 1976 revision process, and pays particular attention to the issue of Copyright Office modernization.

Creators, Innovators, and Appropriation Mechanisms — “O’Connor explains that tech innovators can ‘freely advocate for copyright reform that would weaken copyright enforcement for content owners without much risk that any changes would hurt their own appropriation mechanisms.’ Even if their efforts successfully weaken some of their own IP rights, such as copyright protections for their source codes, they have a panoply of other appropriation mechanisms that they can rely on instead, such as patents, trade secrets, contracts, and the like. Importantly, the same does not hold true for the many content creators that have only their copyrights to protect them.”

Police anti-piracy operation cuts advertising on illegal sites by 70% — A measure of success in the UK: “The Police Intellectual Property Crime Unit said there has been a 73% decrease in advertising from the UK’s top spending companies appearing on illegal websites since it launched a crackdown in 2013. For the last two years, the PIPCU has been running Operation Creative, with the backing of the ad industry and trade bodies representing the film, music, TV and publishing industry, to try to stop the flow of ad funds which are one of the main generators of profits for illegal sites.”

ICANN Should Curb Anonymous Domain Name Abuses — Daniel Castro: “One requirement for registering any website domain name is that the domain owner must provide its contact information. This information is placed into WHOIS, a public, online database. Some website owners choose to use a privacy and proxy service, which submits contact information for the service provider and is then responsible for relaying any inquiries to the actual registrant. Unfortunately, not all privacy and proxy services fulfill their duties, creating a serious problem for law enforcement agencies. For example, FTC Commissioner Julie Brill has noted ‘…even ICANN recognizes that the system is flawed, often allowing bad actors to hide behind incomplete, inaccurate, or proxy information.'”

If Your Instagram #Selfies Aren’t Private, This Site Might Sell Them To Total Strangers — With no pretense of any “transformative purpose.” The article quotes an Instagram rep firmly taking no position, saying, “you can draw your own conclusions about whether this violates our policies.”

Attention recent law school grads interested in copyright: be sure to check out the following opportunities: the Copyright Alliance is looking for a legal fellow, the Center for Protection of IP at George Mason Law is looking for an IP research fellow, and the Copyright Office is seeking candidates for its Barbara Ringer Honors Fellowship.

Music Artists Take on the Business, Calling for Change — “Public relations missteps in the early 2000s kept many musicians from speaking out about economic issues, artists and executives said. Those include the music industry’s lawsuits against thousands of fans for online file-sharing, and the pillorying that the band Metallica received after it sued Napster for copyright infringement. But the shift toward streaming in recent years has prompted many musicians to investigate the changes in the business and comment online. Among them are independents like David Lowery of the band Cracker; Zoë Keating, a cellist who has documented her online royalties; and Blake Morgan, a singer-songwriter who owns a small record company and started an online campaign, #IRespectMusic, to draw attention to the issue.”

WATCH: A Passionate, Well-Reasoned Defense Of CGI — A great video that looks at the craft of computer-generated effects in filmmaking, and why they are not necessarily inferior to practical effects.

If You’re Reading This, the Internet Ain’t Broke — Creative Future’s Ruth Vitale addresses EFF’s bizarre defense of pirate site MovieTube. “Many of us in the creative community wonder why the Electronic Frontier Foundation goes to such great lengths over and over again to defend the actions of criminals who make it even harder to make a living doing what we love – telling stories and creating new worlds that audiences love. I have a number of friends and colleagues who work in entertainment and they are supportive of other EFF initiatives that are aimed at real harms, but they scratch their heads at its defend-piracy-at-all-costs posture.”

The Knights Who Say SOPA — Also check out David Newhoff’s take on the same. “For all the attorneys on staff at the EFF, they rarely seem to produce an even-toned, nuanced analysis for public consumption regarding cases of this nature. I guess it’s just easier to be The Knights Who Say SOPA. Maybe if somebody brings them a nice shrubbery, they’ll knock it off.”

Making Copyright Work for Creative Upstarts — “Creative Upstarts is a fascinating look into the world of creative upstarts. With their interests and the interests of the larger copyright ecosystem in mind, Pager skillfully traverses our complicated copyright regime and identifies ample opportunities to improve copyright protections for creative upstarts. The twenty-first century is a digital age, and creators and innovators have the technological ability to produce creative works right on their laptops. Pager’s hope is the Copyright Act will be updated to address the realities of this modern world for creative upstarts.”

The problem of online piracy remains acute, and enforcement is particularly challenging against for-profit operations which often operate anonymously and off-shore. 1See generally, Good Money Gone Bad, Digital Citizens Alliance (Feb. 2014). Even if a particular site can be successfully shut down, a new version can appear in a different location, sometimes within hours.

MovieTube is a particularly brazen example of such an operation. The MovieTube sites openly admit that “many movies we linked are pirated movies” but “Luckily we are not a US company so we do not need to respect US laws.” The operators exert full control over the sites—the complaint alleges, “All content streamed from the MovieTube Websites is selected, aggregated, organized, streamed and made available for viewing by the MovieTube Websites’ operators—Defendants—only.” Defendants market their sites heavily and profit off them through online advertising.

The major motion picture studios sued the MovieTube websites—consisting of a network of at least 29 different sites—on July 24, 2015 for direct and secondary copyright infringement, federal trademark infringement, and unfair competition and false designation of origin. The studios sought, among other remedies, injunctive relief against the MovieTube websites, as well as an order that “(i) registries and registrars disable the domains to the MovieTube Websites and (ii) third-party service providers cease providing services to the MovieTube Websites and Defendants in relation to the Infringing Copies.” Injunctive relief against third-party services that facilitate the operation of infringing sites gives effect to the legal judgment of the court while minimizing the “whac-a-mole” problem discussed above.

While this approach is relatively new in the context of online piracy, it is based on established and long-standing legal provisions and principles.

Active Concert or Participation

The Copyright Act provides copyright owners with a number of remedies they can seek against infringers, including common remedies such as damages and injunctions. Specifically, 17 USC § 502(a) provides that a court may “grant temporary and final injunctions on such terms as it may deem reasonable to prevent or restrain infringement of a copyright.”

Temporary injunctions—which includes both temporary restraining orders and preliminary injunctions in federal courts—are granted before judgment on the merits of a case, and their purpose is to preserve the status quo during litigation and prevent irreparable harm to a party’s rights before final judgment. 2Sierra On-Line, Inc. v. Phoenix Software, Inc., 739 F. 2d 1415, 1422 (9th Cir. 1984).

A court will grant a preliminary injunction if a plaintiff has demonstrated a likelihood of success on the merits, irreparable harm in the absence of an injunction, a balance of equities in her favor, and consistency with the public interest. 3Winter v. Natural Resources Defense Council, Inc., 129 S. Ct. 365, 374 (2008). Courts also require plaintiffs to post a bond when seeking a preliminary injunction. 4FRCP 65(c). The bond ensures that defendants are covered for any harm incurred in the event that an injunction is erroneously granted. 5Thomas Patterson, Litigation: The bond requirement for preliminary injunctions, Inside Counsel, September 5, 2013.

Under the Federal Rules of Civil Procedure, an injunction binds “(A) the parties; (B) the parties’ officers, agents, servants, employees, and attorneys; and (C) other persons who are in active concert or participation with anyone described in … [](A) or (B).” The Supreme Court has explained that this rule (present in substantially the same form since the Rules were first promulgated in 1938) “is derived from the common-law doctrine that a decree of injunction not only binds the parties defendant but also those identified with them in interest, in ‘privity’ with them, represented by them or subject to their control. In essence it is that defendants may not nullify a decree by carrying out prohibited acts through aiders and abettors, although they were not parties to the original proceeding.” 6Regal Knitwear Co. v. NLRB, 324 US 9, 14 (1945).

In recent years, a number of companies have relied on serving injunctions on aiders and abettors of infringing sites given the difficulty of hailing the operators of such sites into court and the ease with which they can evade judgment. The practice has become routine for sites involving counterfeit goods and trademark infringement. 7See, e.g., Belstaff Group SA v. Doe, Temporary Restraining Order No. 15-cv-2242 (S.D.N.Y. Apr. 8, 2015); Richemont Int’l SA v. Xiao, Temporary Restraining Order, No. 13-cv-9071 (S.D.N.Y. Dec. 23, 2013); Tory Burch LLC v. Doe, No. 12 C 7163 (N.D. Ill. Oct. 2, 2012); Richemont Int’l SA v. Chen, Temporary Restraining Order, No. 12-cv-6689 (S.D.N.Y. Sept. 4, 2012); Burberry v. Doe, No. 12 Civ. 0479 (TPG) (S.D.N.Y. May 15, 2012); Hermès v. Doe, No. 12 Civ. 1623 (DLC) (S.D.N.Y. Apr. 30, 2012); The North Face Apparel Corp. v. Fujian Sharing Imp. & Exp. Ltd. Co., No. 10 Civ. 1640 (AKH) (SDNY June 24, 2011); The Nat’l Football League v. Chen, Temporary Restraining Order, No. 11-Civ-0344 (WHP) (S.D.N.Y. Jan. 19, 2011). More recently, courts have granted similar injunctions in cases involving copyright infringement. For example, in May, ABS-CBN, a media and entertainment company in the Philippines, sued a network of pirate sites that were alleged to provide unauthorized, on-demand streaming of its television shows and films. The court granted an injunction against the sites, and ordered domain name registrars used by the sites to transfer registration to ABS-CBN and privacy protection services used by the sites to disclose the identity of the defendants. Similar injunctions have been granted on a number of other occasions. 8Arista Records, LLC v. Tkach, Memorandum & Order, 15-CV-3701 (SDNY June 3, 2015); Showtime Networks, Inc. v. Doe 1, Temporary Restraining Order and Order to Show Cause, No. 15-CV-3147 (CD Cal. April 30, 2015); Warner Bros. Ent., Inc., v. Doe, Preliminary Injunction Order, No. 14-CV-3492 (SDNY May 29, 2014); AACS-LA v. Shen, Order, No. 14-CV-1112 (SDNY Mar. 4, 2014).

Active concert or participation is a fact-specific inquiry. “In order to show that a non-party ‘aided and abetted’ a party subject to the decree,” say courts, “the plaintiff must show that the non-party had actual knowledge of the judicial decree and violated it, and that the challenged action was taken for the benefit of, or to assist, a party subject to the decree.” 9Adcor Indus., Inc. v. BEVCORP, LLC, 411 F. Supp. 2d 778, 796 (ND Ohio 2005).

Upon notice of an injunction, a non-party can challenge the order in court. A non-party who does not comply with an injunction after having been served notice can be the subject of a contempt proceeding. Here, the non-party can also raise the argument that it is not in active concert or participation with the defendant.

CloudFlare and Grooveshark

One can see this process in action in recent litigation involving Grooveshark and CloudFlare. 10Arista Records, LLC v Vita Tkach, Memorandum & Order, 15-CV-3701 (SDNY June 3, 2015).

Following a finding that music streaming site Grooveshark was liable for copyright infringement, and a permanent injunction against the site’s operators, a “copycat” version of Grooveshark appeared online. The plaintiff record labels immediately sought a temporary restraining order against the operators of the copycat and “any persons acting in concert or participation with them or third parties providing services used in connection with Defendants’ operations.” The plaintiffs served notice of the TRO on Namecheap, a domain name registrar that defendants registered their domains with. Namecheap complied with the order, and defendants subsequently registered new domain names through a new registrar, Dynadot. Dynadot complied with the order after it was served notice. Defendants then registered another domain name with a registrar in Switzerland. Plaintiffs consequently turned their attention to CloudFlare, “an internet service provider that provides authoritative domain name system servers for its customers as a means of providing content delivery network and reverse-proxy services.” CloudFlare’s services had been used by each of the copycat domain names discussed above.

Plaintiffs then requested a court order requiring CloudFlare to comply with the TRO. Cloudflare argued that it is not in active concert or participation with the defendants and “should not be bound by the injunction because its service is ‘passive’ and not necessary for the operation of the Grooveshark sites.” The court rejected both of CloudFlare’s arguments. Cloudflare had knowledge of the TRO and subsequently permitted its services to be used for one of the copycat domain names. This conduct, said the court, “benefits Defendants and quite fundamentally assists them in violating the injunction because, without it, users would not be able to connect to Defendants’ site unless they knew the specific IP address for the site.” The court also said that it is not required to show that CloudFlare is necessary for the operation of Defendants’ site, only that it is in active concert or participation with Defendants.

Due Process

Civil litigation, of course, accords full due process to parties. But it’s important to note that binding nonparties to injunctions, as described above, is also fully consonant with due process. As the First Circuit has explained:

[T]he adjudicative framework surrounding contempt proceedings fully protects nonparties’ constitutional rights. If contempt proceedings are in fact undertaken, the forum court will resolve the fact-specific question of whether the cited nonparty was in active concert or participation with the named defendant. If so, the named defendant will be deemed the nonparty’s agent, and the nonparty’s right to due process will have been satisfied vicariously. If, however, the party prosecuting the contempt proceeding fails to show active concert or participation, a finding of contempt will not lie.

We explain briefly why, in either of these events, due process is not at risk. Contempt proceedings operate to ensure that nonparties have had their day in court. In order to hold a nonparty in contempt, a court first must determine that she was in active concert or participation with the party specifically enjoined (typically, the named defendant). This means, of course, that the nonparty must be legally identified with that defendant, or, at least, deemed to have aided and abetted that defendant in the enjoined conduct. The existence of such a linkage makes it fair to bind the nonparty, even if she has not had a separate opportunity to contest the original injunction, because her close alliance with the enjoined defendant adequately assures that her interests were sufficiently represented.

The coin, however, has a flip side. A nonparty who has acted independently of the enjoined defendant will not be bound by the injunction, and, if she has had no opportunity to contest its validity, cannot be found in contempt without a separate adjudication. This tried and true dichotomy safeguards the rights of those who truly are strangers to an injunctive decree. It does not offend due process. 11Microsystems Software v. Scandinavia Online AB, 226 F. 3d 35, 42-43 (1st Cir. 2000).

In short, the process involves a court determining that the defendant in question is likely infringing copyright after hearing from both parties. If so, it may grant a preliminary injunction. The plaintiff serves notice of the injunction on a service provider, which requires them to stop facilitating the conduct of a party that a court has determined breaks the law (and in most instances violates the service provider’s own terms of service). A service provider who receives notice can challenge the order in court.

The court has ordered defendants here to show cause why a preliminary injunction should not issue by tomorrow, August 7.

References   [ + ]

1. See generally, Good Money Gone Bad, Digital Citizens Alliance (Feb. 2014).
2. Sierra On-Line, Inc. v. Phoenix Software, Inc., 739 F. 2d 1415, 1422 (9th Cir. 1984).
3. Winter v. Natural Resources Defense Council, Inc., 129 S. Ct. 365, 374 (2008).
4. FRCP 65(c).
5. Thomas Patterson, Litigation: The bond requirement for preliminary injunctions, Inside Counsel, September 5, 2013.
6. Regal Knitwear Co. v. NLRB, 324 US 9, 14 (1945).
7. See, e.g., Belstaff Group SA v. Doe, Temporary Restraining Order No. 15-cv-2242 (S.D.N.Y. Apr. 8, 2015); Richemont Int’l SA v. Xiao, Temporary Restraining Order, No. 13-cv-9071 (S.D.N.Y. Dec. 23, 2013); Tory Burch LLC v. Doe, No. 12 C 7163 (N.D. Ill. Oct. 2, 2012); Richemont Int’l SA v. Chen, Temporary Restraining Order, No. 12-cv-6689 (S.D.N.Y. Sept. 4, 2012); Burberry v. Doe, No. 12 Civ. 0479 (TPG) (S.D.N.Y. May 15, 2012); Hermès v. Doe, No. 12 Civ. 1623 (DLC) (S.D.N.Y. Apr. 30, 2012); The North Face Apparel Corp. v. Fujian Sharing Imp. & Exp. Ltd. Co., No. 10 Civ. 1640 (AKH) (SDNY June 24, 2011); The Nat’l Football League v. Chen, Temporary Restraining Order, No. 11-Civ-0344 (WHP) (S.D.N.Y. Jan. 19, 2011).
8. Arista Records, LLC v. Tkach, Memorandum & Order, 15-CV-3701 (SDNY June 3, 2015); Showtime Networks, Inc. v. Doe 1, Temporary Restraining Order and Order to Show Cause, No. 15-CV-3147 (CD Cal. April 30, 2015); Warner Bros. Ent., Inc., v. Doe, Preliminary Injunction Order, No. 14-CV-3492 (SDNY May 29, 2014); AACS-LA v. Shen, Order, No. 14-CV-1112 (SDNY Mar. 4, 2014).
9. Adcor Indus., Inc. v. BEVCORP, LLC, 411 F. Supp. 2d 778, 796 (ND Ohio 2005).
10. Arista Records, LLC v Vita Tkach, Memorandum & Order, 15-CV-3701 (SDNY June 3, 2015).
11. Microsystems Software v. Scandinavia Online AB, 226 F. 3d 35, 42-43 (1st Cir. 2000).