Friday’s Endnotes – 05/17/13

May 17, 2013 · · Write a comment

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—Fwd.us 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.

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Do Kim Dotcom’s lawyers think he’s guilty? The answer may shock you.

May 08, 2013 · · 4 comments

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).1 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.2

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.3 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.4

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.5

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., megaporn.com, megavideo.com); 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 2001.6 The Seventh Circuit rejected it in 2003.7 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 conduct8 or if there is no continuing relationship between the maker of a product and the user.9 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.10

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.11

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.12 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.

Footnotes

  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). [↩]
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Friday Endnotes – 03/15/13

March 15, 2013 · · 1 comment

Explanation of Megaupload Study (or: Econometrics 101) — Brett Danaher, who, along with Michael D. Smith, co-authored the recent study showing the shut down of Megaupload caused a 6-10% rise in digital film sales, explains the study’s methodology in plain English. A thoroughly useful article that should be pointed to by those who criticize the work (apparently without reading the study). As Danaher notes, “The most common critique in comments on blogs and news articles is that ‘sales were increasing anyway because of (digital growth) (new digital channels) (blockbusters released in January) (insert your favorite reason you think sales would have grown here).’ I suppose people think that as economists we would not have thought of this.”

Unlocking Cell Phones Shouldn’t Dismantle Copyright Laws — I have an article over at IP Watchdog this week about recent developments regarding the petition to reverse the decision not to grant a DMCA exemption for unlocking cell phones. Proponents behind the petition are set to get exactly what they asked for but are now complaining that it’s not enough.

Meet the men who spy on women through their webcams — One of the creepiest articles I’ve read in recent memory. Made worse by the fact (not noted in this article until the last page) that the same technology has begun to be used by repressive governments to spy on dissidents.

Derek Khanna & Co. Continue Attack on Artists Rights at SXSWi Panel — The Trichordist reports on another unbalanced panel about copyright, this one at SXSW. Panelists, including Cheezburger CEO Ben Huh, were advocating “permissionless innovation” — that weird new tech buzzword that ignores the fact that things like “permission” and “consent” and “agreement” are at the foundation of any free society. But the ultimate irony, as Tricordist points out, is that for many features of the Cheezburger network of sites, like its API, one can use them only after getting, well, permission.

Word ‘Innovate’ Said 650,000 Times At SXSW So Far — Speaking of SXSW and buzzwords, the Onion nails it.

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Copyhype: A look ahead to 2013

January 02, 2013 · · Comments Off

Welcome back! I hope all my readers have had a wonderful holiday season and a happy new year. Now that the holidays are over, Copyhype is back to its regularly scheduled programming. I wanted to start things off with a quick look back at 2012 and a quick look forward at 2013.

The following were the most read Copyhype stories during 2012:

Hey, what happened to Wikipedia? (An intro to SOPA)

Was Hollywood built on piracy?

7 mythbusting copyright law articles

Though not the most popular, I personally enjoyed writing the following posts in 2012 and don’t mind highlighting them once more:

The genius of the Hunger Games

Myths from the birth of US copyright part 1 and part 2

Finally, a special shout out to my guest contributors, and some of their wonderful posts, including:

Devlin Hartline’s Nimmer changes his tune: ‘Making available’ is distribution

And Chris Ruen’s The Net Fail Part 1 and Part 2.

A Preview of 2013

The next year already promises plenty of legal and legislative developments in copyright law, a few of which I want to highlight.

The Supreme Court will release its opinion in first sale case Kirtsaeng v John Wiley. I’ve written about Kirtsaeng before, see also More on Kirtsaeng v John Wiley, What Kirtsaeng Won’t Answer, The United States “Odd” Kirtsaeng Argument, and Overturn Quality King? The Court is likely to release its opinion sometime between February and June.

The popular SCOTUSBlog does not include any other copyright-related petitions on its petitions to watch list (the list has a strong track record of selecting which petitions are granted by the Court), but there are several copyright petitions I’ll be keeping an eye on, including the one in Jammie Thomas-Rasset v Capitol Records, dealing with due process review of statutory damages, and Library of Congress v Intercollegiate Broadcasting System, which involved an Appointments Clause challenge to Copyright Royalty Judges (though a cert petition there has not been filed yet). Check out my most recent posts on these lawsuits: End of the Road for Jammie Thomas-Rasset? and Copyright Royalty Board Unconstitutional.

In the lower courts, a group of cases involving broadcast television retransmission and the impact of the Second Circuit’s 2008 Cablevision decision are wending their way through the judicial system. Leading the pack is Aereo, where oral arguments were heard in front of the Second Circuit late last November for an appeal of the district court’s denial of a preliminary injunction, meaning a decision could come later this year. See Aereo takes its tiny antennas to Opposite Town. And just last week, on the west coast, a federal district court came to the opposite conclusion and granted a preliminary injunction against FilmOn, a similar service.

Meanwhile, a set of cases against Dish Networks relating to its Autohop service are in their early stages. The furthest along involves Fox, which a few weeks ago appealed the denial of a preliminary injunction by a New York district court. I wrote a background on these cases at Skipping commercials isn’t infringement, but copying is.

A lawsuit against YouTube for widespread infringement during its early days is back at the district court level, after the Second Circuit ruled on a number of DMCA issues this past April. Most recently, YouTube moved for summary judgment against the various plaintiffs.

Little has been said about Hotfile so far, but developments should be expected this year in the lawsuit filed by major motion picture studios against the filelocker. A ruling on dispositive motions is currently pending in a Florida district court, and a trial date is tentatively scheduled for March. See Copyright Liability for Filelockers: Disney v Hotfile.

On the criminal side, expect slow movement on the US case against Kim Dotcom and Megaupload. An extradition hearing has recently been pushed back to no earlier than August 2013. My last post on this topic came last July in a Megaupload Megaupdate. Be sure to check out TorrentFreak for breaking coverage of every single thing Dotcom tweets.

In Congress, it would appear that the major issue this next year will be royalty rates for webcasting. The next ratesetting proceeding at the Copyright Royalty Board, to set rates for 2015-2020, is fast approaching. Last fall, Pandora backed the Internet Radio Fairness Act, which, among other things, would have changed the standard used by the Board to set rates. At a hearing in November, the House Judiciary Committee appeared skeptical of the bill’s approach, but also expressed a desire to take a broader look at the issue of digital performance of sound recording royalties, seemingly frustrated that the compulsory licensing scheme has required so much legislative attention over the past decade. Some members of the Committee also hinted that the issue of a broader public performance right for sound recording owners was on the table, something that has eluded such copyright owners for decades. See A Brief History of Webcaster Royalties for more background.

What else can we expect from Congress? There have been rumblings of a renewed push for orphan works legislation, and recent events from several conservative-leaning institutions hint at increased attention toward general copyright reform — aided by current European Commission efforts to modernize copyright law.

Much more is obviously in store for the upcoming year. Don’t forget that you can subscribe to Copyhype’s RSS Feed, sign up for email updates, follow me on Twitter, or Like me on Facebook. Here’s to 2013!

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Friday’s Endnotes – 10/05/12

October 05, 2012 · · 2 comments

YouTube revamps content ID, defaults to DMCA in case of unresolved disputes — Leading the news this week is Google’s decision to add some flexibility to its Content ID appeals process. According to Google, “When the user files an appeal, a content owner has two options: release the claim or file a formal DMCA notification.” It remains to be seen what the effect of this move will be, but, just for the record, Jonathan Bailey called it.

New paper on ISP liability: how to reconcile US and EU approaches? — The 1709 Blog points to an informative new paper comparing the US’s DMCA and the EU’s E-commerce Directive, both of which set up rules controlling liability for online service providers.

The Internet: Now just another special interest — Behind the shiny new Internet Association is the same old lobbying, as Lydia DePillis of The New Republic reports.

Internet Astroturf 3.0 — Scott Cleland offers a who’s who of groups “united in the common belief that users and groups of any kind should not have to pay, or ask for permission, to use others’ intellectual property online, because permission and payment to use intellectual property limits the sharing, creativity and innovation of others.”

Amanda Palmer’s Accidental Experiment with Real Communism — The New Yorker’s perspective on recent events involving Palmer. “Ideally, you don’t even know you are working at all. You think you are keeping up with friends, or networking, or saving the world. Or jamming with the band. And you are. But you are also laboring for someone else’s benefit without getting paid. And this, it turns out, was exactly Amanda Palmer’s hustle.”

HSI seizes 686 websites selling counterfeit medicine to unsuspecting consumers — The US ICE’s Homeland Security Investigations announced this week the seizure of nearly seven hundred domain names connected with the online illicit sale of fake drugs. The seizures are part of a larger global effort which so far has resulted in 79 arrests, the seizure of 3.7 million doses of counterfeit drugs, and the takedown of approximately 18,000 websites. No word yet on how much this will break the internet.

Protecting Creative and Intellectual Property on the Internet — Independent filmmaker Adam Lipsius recounts his experience with online piracy and the challenges it poses to similar creators. He ends by noting, “it is respect for all craftsmen and conjurers and job creators — and the expectation that society will protect their ability to profit legitimately from their work — that’s at stake when setting the balance on copyright protection in our digital era.”

NYC 2012 Conference: Keynote Speaker; Registration Open! — Bill Rosenblatt announces some of the panels and speakers who have been confirmed for the December 5th conference in NYC, and the event sounds promising. Registration is now open and discounted before November 1.

 

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Friday’s Endnotes – 09/28/12

September 28, 2012 · · Comments Off

Is it time to repair the DMCA? — That’s the question posed by Jonathan Bailey, who notes, as does a recent Trichordist piece, how far from the original intent of the 1998 law we’ve come. Bailey suggests five ways to repair the DMCA: 1) Improve transparency, 2) Reward sites that are proactive, 3) Punish sites that do less, 4) Get more serious about bad takedown notices, and 5) Streamline the sending and processing of notices.

Digitalmusic.org launches music API directory — Digitalmusic.org, the digital wing of the National Association of Recording Merchandisers, recently launched an API directory as part of its suite of developer services that “was created to help address the issue of connecting developers with the quality content providers and services that can be the building blocks of their business.” The organization has been hard at work helping aspiring entrepreneurs build successful digital music-related services; this October it is also hosting an Entertainment Startup Academy in Washington, D.C

How much do artists make on YouTube — Over at Vox Indie, Ellen Seidler, points to a recent NPR story examining how much the video site compensates musicians. Notes Seidler, “Bottom line, musicians and filmmakers whose work is routinely uploaded to YouTube without permission can make some money from it. Time for Google to tell us exactly how much they are making. Anything less than full transparency is unacceptable.”

Justin Timberlake, Myspace owners discuss new relaunch — The internet was abuzz earlier this week after Myspace teased a completely new look and site in a video. Here, the site’s owners, including investor Timberlake, discuss the reboot of the once popular social networking site. While many are wondering whether a new UI and features will save the site, it should be noted that Myspace has already been quietly rebuilding; back in February, it announced that it was adding around 40,000 new users a day

The Tech World Gets a New Trade Association, Or “How to Read a DC Press Release” — With the official launch of the Internet Association this week, Bytegeist’s Jane Hamsher takes a closer look at the official announcement. Hamsher notes, “Nobody asked the rather obvious question: why an industry that spent $129 million on lobbying in 2011 needs yet another lobbing shop, especially when the Net Coalition already exists.”

Kickstarter Will Not Save Artists From the Entertainment Industry’s Shackles — A provocative article from Evgeny Morozov that looks at a recent academic study about the effect the fundraising site has had on the culture industry, particularly documentary filmmaking. According to the study’s author, campaign and issue-driven films are more likely to find success through this method of funding than other types of films, while films that involve significant legal risks (“an undercover investigation of the oil industry”, to use Morozov’s example) are less likely to be made through crowdfunding.

Maybe the Internet only wants one of everything — “How many search engines are there? For most of us, there’s only one — and it makes major news headlines even for putting a cute design on its logo.  How many general-purpose social networks do you use? Probably just one — or maybe you use them both, because technically, they actually do different things. Where do you crowdfund something? Duh. Where do you buy physical and now many digital objects? Mostly from here.”

.

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Twitter’s Potential Secondary Liability

September 20, 2012 · · 5 comments

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

Last week, Seattle-based photographer Christopher Boffoli sued Twitter in the U.S. District Court for the Western District of Washington for contributory copyright infringement. Boffoli is well-known for his “Disparity Series,” which according to the complaint is “a series of art photographs featuring miniature figures in whimsical poses on fruit.” Seattle Magazine has a brief article about the series. Boffoli’s case was also a topic of discussion on the most recent episode of “This Week in Law” (where Terry Hart was a guest).

In the complaint, Boffoli alleges that Twitter users uploaded several of his copyrighted photographs without license or permission and then linked to them in various tweets. Some images were hosted on Twitter’s own servers, while others were hosted on servers operated by third-parties. Boffoli claims that even though he sent four DMCA takedown notices to Twitter’s registered agent for receiving such notices, none of the hosted links or images were removed.

As such, Boffoli alleges that Twitter is liable for willful contributory infringement because (1) it had actual knowledge of infringement provided by his DMCA takedown notices, and (2) it materially contributed to the underlying infringements by Twitter’s users.

Ars Technica and Techdirt ran articles about the lawsuit last week. Both pointed out that Twitter’s failure to respond to the DMCA takedown notices doesn’t necessarily mean that the service provider is liable for infringement. That much is true, but it was also suggested in both articles that Twitter wasn’t likely to be liable for infringement despite its failure to remove the links and images complained of. It’s that notion that I’ll examine more closely.

DMCA Notice-and-Takedown

The DMCA1 notice-and-takedown provisions are no doubt familiar. Title II of the DMCA, titled the “Online Copyright Infringement Liability Limitation Act,” created Section 5122 of the Copyright Act—what people often are referring to when they talk about the “DMCA,” even though it’s only one part. It’s here that the notice-and-takedown provisions are found. The idea is simple: A copyright owner who finds infringing material on a service provider’s system sends notice to the service provider who then takes it down.

The “DMCA did not simply rewrite copyright law for the on-line world,” but rather, “it crafted a number of safe harbors which insulate ISPs from most liability should they be accused of violating traditional copyright law.”3 The DMCA uses a classic carrot-and-stick approach to get service providers to play along. The carrot of limited liability within the safe harbors is enforced by the stick of full liability without. This “preserves strong incentives for service providers and copyright owners to cooperate to detect and deal with copyright infringements that take place in the digital networked environment.”4

When a third-party user stores material on a service provider’s system, the provider’s potential copyright liability is greatly reduced if it “responds expeditiously to remove, or disable access to,” the material upon notice that it “is claimed to be infringing or to be the subject of infringing activity.”5 Thus, to moor in the safe harbors, a service provider must quickly take down allegedly infringing material when notified. Once in the safe harbors, a service provider is only potentially liable for limited injunctive relief—it’s not potentially liable for monetary relief as it would be otherwise.

A common misperception is in thinking that a service provider that qualifies for the safe harbors cannot be liable for infringement. The DMCA itself is irrelevant to determining whether the service provider is an infringer. The safe harbors limit liability, but they “do not affect the question of ultimate liability under the various doctrines of direct, vicarious, and contributory” infringement.6 After it’s determined that a service provider is an infringer in the first place, the safe harbors can be used to assess the extent of the liability. Although as a practical matter, courts usually start with the analysis of the safe harbors first.7

Nor does the fact that a service provider fails to qualify for the safe harbors necessarily mean that it is liable for infringement. Such a service provider “is still entitled to all other arguments under the law—whether by way of an affirmative defense or through an argument that conduct simply does not constitute a prima facie case of infringement under the Copyright Act.”8 This make sense because the material complained of may not even be infringing or the service provider may qualify for some defense. Just because its liability isn’t limited by the safe harbors, it doesn’t mean that the service provider is liable in the first place.

Immunity under the safe harbors is not presumptive, and it’s only granted to service providers who do not have knowledge, either actual or constructive, of infringement. The “DMCA’s protection of an innocent service provider disappears at the moment the service provider loses its innocence, i.e., at the moment it becomes aware that a third party is using its system to infringe.”9 One common way to alert a service provider of infringement is via a takedown notice, which is effective only if it “includes substantially” certain elements listed in the statute.10

Contributory Infringement

With “roots in the tort-law concepts of enterprise liability and imputed intent,” contributory infringement is a type of secondary copyright liability.11 It follows from the common law doctrine that “one who knowingly participates in or furthers a tortious act is jointly and severally liable with the prime tortfeasor,” a concept that applies in copyright law as it does in numerous other areas of the law.12 Put simply, contributory infringement is the idea that a person who contributes to the infringement of another is held liable for the infringement they helped to bring about.

The courts have formulated different tests for contributory infringement, but they all share the same basic elements. The test in the Ninth Circuit, where Boffoli filed his suit against Twitter, is simple: “one contributorily infringes when he (1) has knowledge of another’s infringement and (2) either (a) materially contributes to or (b) induces that infringement.”13 Inducement infringement, identified by the Supreme Court in the Grokster opinion,14 is not at issue here. Boffoli is claiming traditional contributory infringement, which has two elements: (1) knowledge, and (2) material contribution.

As to the knowledge element, contributory infringement “requires that the secondary infringer know or have reason to know of direct infringement.”15 In other words, either actual or constructive knowledge will suffice. It’s not enough that a service provider merely supplies the means of accomplishing infringement.16 Instead, there must be knowledge of “specific information which identifies infringing activity” before liability attaches.17 This makes sense because without specific knowledge, a service provider wouldn’t know what items to remove to avoid liability.

The relationship between knowledge and intent should also be noted. An explicit finding of intent is not “necessary to support liability for contributory copyright infringement.”18 Under the “rules of fault-based liability derived from the common law,”19 the “intention to cause the natural and probable consequences” of one’s conduct may be imputed.20 It’s not mandatory to find that a service provider actually intended to contribute to the underlying infringement. Instead, a “knowing failure to prevent infringing actions” can be the basis for imposing contributory liability.21

Generally speaking, the material contribution element “turns on whether the activity in question substantially assists direct infringement.”22 In the internet context, the Ninth Circuit last year held that there “is no question that providing direct infringers with server space satisfies” this standard because it is “an essential step in the infringement process.”23 The alleged material contribution must have a direct connection to the infringement such that it assists or enables internet users to locate infringing content.24

In the famous Napster case, the Ninth Circuit held that “if a computer system operator learns of specific infringing material available on his system and fails to purge such material from the system, the operator knows of and contributes to direct infringement.”25 The appellate court concluded that “Napster materially contributes to the infringing activity,” since without its help, “Napster users could not find and download the music they want” as easily.26 To impose contributory liability, it was enough that “Napster provides the site and facilities for direct infringement.”27

Similarly, the Ninth Circuit in Perfect 10 stated that “a computer system operator can be held contributorily liable if it has actual knowledge that specific infringing material is available using its system and can take simple measures to prevent further damage to copyrighted works yet continues to provide access to infringing works.”28 The court of appeals held that “Google could be held contributorily liable if it had knowledge that infringing . . . images were available using its search engine, could take simple measures to prevent further damage to [plaintiff’s] copyrighted works, and failed to take such steps.”29

Putting it all together, I think Boffoli has a good chance of success on the merits of his claim. If he sent DMCA takedown notices to Twitter that complied substantially with the elements listed in the statute, then Twitter will have lost its innocence and will be deemed to have knowledge of the infringement (should there actually be any). Once knowledge is established, Twitter’s intent to cause the infringement will be imputed. And as to material contribution, Twitter is assisting and enabling its users to find the infringing content it provides on its system.

This is similar to the situation in Napster, where the Ninth Circuit held that Napster could be liable as a contributory infringer for failing to remove material it knew to be infringing. This is also similar to the circumstances in Perfect 10, where the Ninth Circuit held that Google could be liable as a contributory infringer for failing to remove links to infringing images once alerted to their presence. Here, Twitter is failing to remove both links and images.

That said, it’s kind of hard to understand why Twitter hasn’t removed the links and images Boffoli complained of. Perhaps there’s more going on here than meets the eye, but under the allegations in the complaint, it seems to me that Twitter could be contributorily liable for whatever infringement is taking place of Boffoli’s copyrighted images.

Follow me on Twitter: @devlinhartline

Footnotes

  1. Digital Millennium Copyright Act, Pub.L. No. 105-304, 112 Stat. 2860 (1998) (codified as amended in scattered sections of 17 U.S.C. and at 28 U.S.C. § 4001). [↩]
  2. 17 U.S.C.A. § 512 (West 2012); Section 512 codified the principles developed by the district court in Religious Tech. Ctr. v. Netcom On-Line Commc’n Services, Inc., 907 F.Supp. 1361 (N.D. Cal. 1995). [↩]
  3. Ellison v. Robertson, 189 F.Supp.2d 1051, 1061 (C.D. Cal. 2002). [↩]
  4. H.R. Conf. Rep. 105-796, 72 (1998). [↩]
  5. See 17 U.S.C.A. § 512(c)(1)(C) (West 2012) (“A service provider shall not be liable for monetary relief, or, except as provided in subsection (j), for injunctive or other equitable relief, for infringement of copyright by reason of the storage at the direction of a user of material that resides on a system or network controlled or operated by or for the service provider, if the service provider– *** upon notification of claimed infringement as described in paragraph (3), responds expeditiously to remove, or disable access to, the material that is claimed to be infringing or to be the subject of infringing activity.”). [↩]
  6. Perfect 10, Inc. v. Cybernet Ventures, Inc., 213 F.Supp.2d 1146, 1174 (C.D. Cal. 2002). [↩]
  7. See, e.g., Costar Group Inc. v. Loopnet, Inc., 164 F.Supp.2d 688, 699 (D. Md. 2001) (“The existence of the safe harbor convolutes the analysis of copyright infringement which, theoretically, should proceed in a straight line. Ideally, CoStar would have to make a prima facie showing that LoopNet was liable of contributory infringement and then the court would turn to the question of whether the “safe harbor” provided a defense. However, because the parameters of the liability protection provided by the “safe harbor” are not contiguous with the bounds of liability for contributory infringement, the analysis may proceed more efficiently if issues are decided a bit out of order. On summary judgment, it is often appropriate for a court to decide issues out of the traditional order because a dispute of fact is only material if it can affect the outcome of a proceeding. Anderson, 477 U.S. at 248, 106 S.Ct. 2505. Thus, to the extent, if at all, that LoopNet is entitled to summary judgment in its safe harbor defense, all other issues concerning damages liability for contributory infringement would be rendered immaterial.”). [↩]
  8. CoStar Group, Inc. v. LoopNet, Inc., 373 F.3d 544, 552 (4th Cir. 2004). [↩]
  9. ALS Scan, Inc. v. RemarQ Communities, Inc., 239 F.3d 619, 625 (4th Cir. 2001). [↩]
  10. 17 U.S.C.A. § 512(c)(3)(A) (West 2012) (“To be effective under this subsection, a notification of claimed infringement must be a written communication provided to the designated agent of a service provider that includes substantially the following: (i) A physical or electronic signature of a person authorized to act on behalf of the owner of an exclusive right that is allegedly infringed. (ii) Identification of the copyrighted work claimed to have been infringed, or, if multiple copyrighted works at a single online site are covered by a single notification, a representative list of such works at that site. (iii) Identification of the material that is claimed to be infringing or to be the subject of infringing activity and that is to be removed or access to which is to be disabled, and information reasonably sufficient to permit the service provider to locate the material. (iv) Information reasonably sufficient to permit the service provider to contact the complaining party, such as an address, telephone number, and, if available, an electronic mail address at which the complaining party may be contacted. (v) A statement that the complaining party has a good faith belief that use of the material in the manner complained of is not authorized by the copyright owner, its agent, or the law. (vi) A statement that the information in the notification is accurate, and under penalty of perjury, that the complaining party is authorized to act on behalf of the owner of an exclusive right that is allegedly infringed.”). [↩]
  11. Perfect 10, Inc. v. Visa Int’l Serv. Ass’n, 494 F.3d 788, 795 (9th Cir. 2007). [↩]
  12. 1 Niel Boorstyn, Boorstyn On Copyright § 10.06[2], at 10-21 (1994). [↩]
  13. Perfect 10, 494 F.3d at 795; it should be noted too that contributory infringement requires direct infringement to have occurred before liability attaches; see 1 Goldstein, Copyright: Principles, Law and Practice § 6.1, at 705 (1989) (“It is definitional that, for a defendant to be held contributorily . . . liable, a direct infringement must have occurred.”). [↩]
  14. Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913 (2005) (the Court held that “one who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties.”). [↩]
  15. A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1020 (9th Cir. 2001). [↩]
  16. See, e.g., Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417, 436 (1984). [↩]
  17. Napster, 239 F.3d at 1021. [↩]
  18. Louis Vuitton Malletier, S.A. v. Akanoc Solutions, Inc., 658 F.3d 936, 943 (9th Cir. 2011). [↩]
  19. Grokster, 545 U.S. at 934-35. [↩]
  20. DeVoto v. Pac. Fid. Life Ins. Co., 618 F.2d 1340, 1347 (9th Cir. 1980); see also Restatement (Second) of Torts § 8A (1965) (“All consequences which the actor desires to bring about are intended, as the word is used in this Restatement. Intent is not, however, limited to consequences which are desired. If the actor knows that the consequences are certain, or substantially certain, to result from his act, and still goes ahead, he is treated by the law as if he had in fact desired to produce the result.”). [↩]
  21. Perfect 10, Inc. v. Amazon.com, Inc., 508 F.3d 1146, 1172 (9th Cir. 2007). [↩]
  22. Louis Vuitton, 658 F.3d at 943 (internal quotations omitted). [↩]
  23. Id. (internal quotations omitted). [↩]
  24. Perfect 10, 494 F.3d at 797. [↩]
  25. Napster, 239 F.3d at 1021. [↩]
  26. Id. at 1022. [↩]
  27. Id. [↩]
  28. Perfect 10, 508 F.3d at 1172 (internal quotations and citations omitted). [↩]
  29. Id. [↩]
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Friday’s Endnotes – 09/14/12

September 14, 2012 · · 3 comments

Eroding the Pull of Piracy-A Bilateral Approach — Be sure to check out filmmaker Ellen Seidler’s newly launched blog, Vox Indie, featuring “commentary, memes & more from creative culture.” Here, Seidler notes recent news that offer “compelling evidence that ongoing efforts to fight online piracy should include a bilateral effort to alter consumer habits–via legal means (legislation) in tandem with the continued development of new business models.”

Streaming media could have larger carbon footprint than plastic discs — A provocative new report from Music Tank reveals the extent that information is not free. The report’s author notes, “Streaming or downloading 12 tracks, without compression, just 27 times by one user would, in energy terms, equate to the production and shipping of one physical 12-track CD album,” and “unlicensed file sharing could consume the equivalent of up to four times the annual combined electricity consumption of all UK households.”

Safe Harbor Not Loophole: Five Things We Could Do Right Now to Make the DMCA Notice and Takedown Work Better — The Trichordist presents a number of ideas to align the 1997 DMCA notice and takedown procedure more with its original intent rather than its current interpretation that has resulted in a “catch me if you can” attitude among a small minority of service providers profiting off infringement.

Why Are Google DMCA Notices Skyrocketing? — Plagiarism Today’s Jonathan Bailey examines the reason that DMCA notices to Google have increased so rapidly within the past few months. Bailey notes it is not so much because the amount of notices have increased, but because the search giant has relaxed previous throttles on the amount of notices allowed and begun working through its backlog — a backlog that explains why, as has been reported, some recent notices have targeted content that has already been removed.

Emmy-Nominated TV Shows Hit Home — The Primetime Emmy Awards are next Sunday, the 23rd. CreativeAmerica takes a look at some of the nominated shows and their contributions to state jobs and economies.

Warner Bros. eyes the future through its ‘tech ops’ — Fascinating profile of Warner Bros. “tech lab” at its Burbank studio. The LA Times says, “This might be a sneak peek at the future of the modern studio, where the digitization of delivery systems and the power of social media mean that making great movies and television shows is no longer enough to succeed. The new studio needs to manage complex processes as efficiently as Google and reach consumers as aggressively as Apple.”

Blood to Rain, in a Bag of Tricks— Take an inside look at the world of theatrical props in this NY Times profile of an informal gathering of prop professionals last week. “‘It’s kind of the stepchild of theater,’ said Faye Armon, a properties coordinator who works often at Lincoln Center Theater. Theatergoers probably understand what costume, set and lighting designers do. Their work can be eye-catching, and their names appear on a program’s main credit page. They get their own Tony Award category. But a props master?”

A+L Innovation Central Podcast: David Lowery — David Lowery (Cracker and Camper van Beethoven) has been on a roll lately, with several popular articles in the past months, including Meet the New Boss, Worse Than the Old Boss?, and a Letter to Emily White. Here, Chris Castle interviews Lowery about how he approaches fan outreach and what online tools he uses to connect with his listeners.

How Kansas City taxpayers support Google Fiber — Ars Technica reports that “Google Fiber isn’t exactly a free-market success story.” As they point out, former FCC official Fred Campbell says, “Google received stunning regulatory concessions and incentives from local governments, including free access to virtually everything the city owns or controls: rights of way, central office space, power, interconnections with anchor institutions, marketing and direct mail, and office space for Google employees. City officials also expedited the permitting process and assigned staff specifically to help Google. One county even offered to allow Google to hang its wires on parts of utility poles—for free—that are usually off-limits to communications companies.”

ACTA: Will It Ever Become A Valid International Treaty? — IP Watch provides an update on the Anti-counterfeiting Trade Agreement. The multilateral agreement has run into some opposition. It needs ratification from six member parties to go into effect; currently it has been signed (but not ratified) by seven nations.

Assessing the Academic Literature Regarding the Impact of Media Piracy on Sales — Though filesharing denialists will likely ignore this, a new report shows that piracy’s effects on media sales is very real. The authors note, “Based on our review of the empirical literature we conclude that, while some papers in the literature find no evidence of harm, the vast majority of the literature (particularly the literature published in top peer reviewed journals) finds evidence that piracy harms media sales.”

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Copyright Liability for Filelockers: Disney v Hotfile

August 20, 2012 · · 1 comment

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

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

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

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

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

The motions

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

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

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

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

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

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

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

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

Other issues to watch

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

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

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

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

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

Footnotes

  1. The studios also seek to strike portions of testimony from several of Hotfile’s expert witnesses and defendant Anton Titov. [↩]
  2. Once by Perfect10 and twice by Liberty Media Holdings. [↩]
  3. Note that the 9th Circuit ordered more briefing in Veoh this past June, following the decision in Viacom. Thus, the decision may yet be amended; the court also has a petition for rehearing on the case pending. [↩]
  4. Hotfile has also moved for partial summary judgment on the claim that it is protected by the DMCA safe harbor for any infringement that occurred after February 11, 2011 — ten days after it was sued by the studios. [↩]
  5. See Viacom v YouTube, 676 F.3d 19, 38 (2nd Cir. 2012) (“inducement of copyright infringement … which ‘premises liability on purposeful, culpable expression and conduct,’ … might also rise to the level of control under § 512(c)(1)(B)”); Columbia Pictures v Fung, cv 06-5578-SVW, Order Granting Plaintiffs’ Motion for Summary Judgment on Liability (CD Cali. 2009) (“inducement liability and the Digital Millennium Copyright Act safe harbors are inherently contradictory”); Arista Records v Usenet.com, 633 F. Supp. 2d 124, 142 SDNY 2009 (if defendants “encouraged or fostered such infringement, they would be ineligible for the DMCA’s safe harbor provisions”). [↩]
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Friday’s Endnotes – 08/17/12

August 17, 2012 · · Comments Off

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

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

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

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

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

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

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