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 – 07/20/12

July 20, 2012 · · 1 comment

Thousands of YouTube partners now make six figures a year — Google has reported that thousands of Youtube creators are now making over six figures a year. Though many of these are established content producers, like major label artists, there are a lot of new, YouTube-native producers, who have found success thanks to significant investment from Google in promoting creators.

The DMCA is Broken… — The Trichordist presents a post from an indie label that has reported over 50,000 DMCA takedown notices in the past year. “If site operators want to hide behind ‘how do we know what’s infringing’… Well, here’s how, we’ll let you know! If we issue you a notice, you now know… do you think the title will suddenly not be infringing the next day, when re-uploaded by the same offending person? Seriously? Does Billy in Pittsburgh suddenly own the rights to a Radiohead album (for example)?”

Music piracy – who’s on the moral high ground? — Interesting piece from the BBC. Notable quote: “Google’s Theo Bertram strongly disputes that: ‘I’m happy to say Google doesn’t support piracy and does support freedom of expression,’ he told me. ‘Those are not in conflict.’”

Vincent Misiano on the Golden Age of Television — TV director of tons of shows, including West Wing, Law and Order, Medium, Warehouse 13, and White Collar, Vincent Misiano shares his thoughts on filmmaking and technology. I share his thoughts that we are currently living in a “golden age” of television. I think you’d be hard-pressed to find a vehicle of storytelling throughout history that is so highly developed and fulfilling. As Misiano notes, we may be moving to a world that doesn’t support such storytelling, but that’s not a world I want to live in.

Kim Dotcom Extradition Judge Steps Down After Joking US Is ‘Enemy’ — The New Zealand judge who recently ruled that warrants executed in the Megaupload case were illegal has recused himself after making comments that his country’s long-term ally was an “enemy” at a copyright conference.

Viacom Top Lawyer Michael Fricklas on Piracy, YouTube and His Toughest Decisions (Q&A) — Congrats to Fricklas for receiving The Hollywood Reporter’s “Raising the Bar” award this year. THR has an interesting interview with the general counsel of Viacom.

Guest post: Dear Kim Ditcom — Independent filmmaker Ellen Seidler has a rebuttal to the Megaupload CEO’s “Letter to Hollywood” that is well worth a read. “For the record, the Internet does not belong to you and your ilk (no matter how many times you change your name).  The Internet belongs to us all–and that includes the millions of artists and creators who deserve a fair marketplace and an Internet that works for everyone.”

Memo to DOJ: Drop the Apple E-Books Suit — Senator Charles Schumer writes an insightful editorial on the DOJ’s anti-trust lawsuit involving e-books. “If publishers, authors and consumers are at the mercy of a single retailer that controls 90% of the market and can set rock-bottom prices, we will all suffer. Choice is critical in any market, but that is particularly true in cultural markets like books. The prospect that a single firm would control access to books should give any reader pause.”

Two Inane Suggestions for Compensating Artists Online — The Cynical Musician’s Faza explains why free culture guru’s Richard Stallman’s proposals for compensating artists online won’t work.

Google Exec: If You Want to Control the Pirates, Go After Their Money… — That was the response from Google in a “heated debate” between an exec from BPI. The response: “Once we’ve told Google 100,000 times that a particular site is illegal, we don’t think that site should be coming above iTunes and Spotify in the results.”

ICE-led IPR Center seizes 70 websites duping consumers into buying counterfeit merchandise — Kudos to ICE for launching the second phase of Operation in Our Sites, which targets the domain names of websites engaged in infringing activities. This latest round resulted in the seizure of 70 domain names engaged in selling a wide range of counterfeit goods. Many of the sites also displayed SSL Certificates, “further duping the consumer into thinking they were shopping on a legitimate website” and ”potentially putting customers’ financial information at risk,” according to the federal agency.

Weighing the costs of crowdfunding — The Future of Music Coalition provides some balance to the hype over crowdfunding, noting “that big pronouncements about how crowd-funding is ‘the future of music’ might be more than a bit inflated. Services like Kickstarter and Indiegogo are an important new tool in musicians’ arsenals. But they work best for artists who already have a particularly tech-savvy, deep-pocketed audience — and who have a long history of putting in the kind of work necessary to build a strong social media following — which … can leave music itself on the back burner.”

How Free is Ruining Everything — Epic, must-read post from Eamonn Forde.

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Friday’s Endnotes – 05/04/12

May 04, 2012 · · 2 comments

Why Musicians Need More Than Viral Videos to Succeed — Excellent interview with Billy Corgan on music, success, and value in today’s world.

You Can’t Have A Healthy Market Economy Without Property Rights.  Why Do So Many In Tech Blogosphere Want To Abolish Cyber Property Rights And Cripple The Cyber-Economy? — David Lowery returns to the Trichordist: “I realize that what I am saying about robust property rights and healthy economies is nothing new. It’s a rather elementary and banal critique of the Copyleft’s proposed cyber-economy. What is more interesting is why there are so few other voices out there challenging these wackjobs? Why is it left to the singer of a moderately successful cult rock band to challenge this nonsense? That’s the real story here. Where are the grown-ups?” Part 2 here.

If it looks like a bubble and it feels like a bubble… — Is Silicon Valley partying like it’s 1999? Or is a 2 year old company with 13 employees and no revenue or business plan really worth $1 billion?

Silicon Valley’s Hottest New Start-Up Idea: Nothing — This Forbes article suggests answers to the above questions. “Do you have a can’t-miss idea for a start-up that could be the next Facebook, Pinterest or Draw Something? Great. Write it down on a piece of paper. Now burn that piece of paper. Congratulations. You’re halfway to your first billion.”

Is the Midnight Screening the New Rock Concert? — Interesting article on Viacom’s new blog. Midnight screenings of films have gone from niche to mainstream and are filled with hardcore fans, making the experience more like a rock concert than just another day at the movies. Check out the rest of the Viacom blog, it’s a cut above your run-of-the-mill corporate blog/press release archive.

Jimmy Wales’s Latest Speech Is ‘Nonsense on Stilts’ — Speaking of films, Andrew Keen takes on Wikipedia founder Jimmy Wale’s recent comments that “Collaborative storytelling and filmmaking will do to Hollywood what Wikipedia did to Encyclopaedia Britannica.” “Like so many other digital utopians,” says Keen, ”Wales has been deluded by the leveling power of the Internet.”

Best Practices Make Best Partners — Good news: “Today the Association of National Advertisers (ANA) and the Association of Advertising Agencies (4A’s) announced a Statement of Best Practices encouraging their members to adopt proactive measures to combat rogue websites dealing in counterfeit and infringing goods.  The Best Practices also have the support of the Interactive Advertising Bureau (IAB).”

Rojadirecta — Both the US and Puerto 80 have filed their briefs concerning Puerto 80′s motion to dismiss the government’s civil forfeiture proceeding against the Rojadirecta domain name. US Memorandum of Law in Opposition to Motion (PDF). Puerto 80 Reply Memorandum of Law in Support of Motion (PDF). A hearing on the motion is scheduled for the beginning of next month.

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Stop Online Piracy Act [Walkthrough]

October 27, 2011 · · 16 comments

Yesterday, a dozen Democrat and Republican House members introduced the Stop Online Piracy Act. The bill, H.R. 3261, targets rogue sites that infringe on US intellectual property rights.

Full text of the bill.

Debate over the Stop Online Piracy Act has already hit full throttle, but I’ll leave that for another day.

Today I want to “walk through” the bill so that readers and creators know exactly what is in it and what to expect if it passes. I’ve tried to keep the legalese to a minimum here. This is not meant to be a comprehensive look at every bit and piece of the bill, but hopefully I’ve hit all the major points.

If you look at the text of the bill, you’ll notice that there are several sections I haven’t mentioned below — provisions that increase criminal penalties for trafficking in inherently dangerous counterfeit goods, for example. I don’t mean to suggest these aren’t as important as the ones directly related to copyright enforcement.

Attorney General actions against foreign infringing sites

The first section of the bill applies only to foreign infringing sites — sites where the domain name is not registered within the US. The Attorney General may commence an action under this section if one of these sites is directed at the US (meaning it is used by US users, and the owner of the site would be subject to personal jurisdiction in a traditional infringement lawsuit), the owner of the site is committing or facilitating a criminal copyright offense, and the site would be subject to seizure if it were a domestic site (like the domains seized by ICE over the past year).

This suit would then be filed against the site operator personally. If the operator cannot be found or doesn’t live in the US, the Attorney General may file an in rem action against the site itself. The statute also details how notice of the suit must be served.

Once begun, the AG files for a temporary restraining order, a preliminary injunction, or a permanent injunction against the site, ordering it to stop its infringing activites. A court would issue these injunctions under the same rules that govern every federal lawsuit — with both parties presenting their case (except in the case of a temporary restraining order, which can be issued ex parte but is limited to 14 days) and the injunction issuing only if the AG meets its burden. A preliminary injunction, for example, requires establishing likelihood of success on the merits and irreparable harm (among other factors).

The AG can then, after approval by the court, serve court orders on specified entities, requiring specified actions by each entity. In all cases, the entities are only required to take “technically feasible and reasonable measures” to comply with the orders.

(1) An online service provider must prevent access by its subscribers to the infringing site, including preventing the domain name from resolving to the site’s IP address. The service provider is not required to modify its “network, software, system, or facilities” in order to do this, and its DMCA safe harbors are not affected.

(2) A search engine must prevent the infringing site from being served as “a direct hypertext link”.

(3) A payment network provider must prevent or suspend transactions between US customers and the infringing site from completing. The payment network provider has no continuing duty to monitor transactions after it has taken these steps.

(4) An Internet advertising service is required to prevent providing advertising services to or relating to the infringing site. Like payment network providers there is no continuing duty to monitor once the advertising service has put its measures into place.

That’s it.

What happens if one of the entities above doesn’t comply with the order? The AG can bring an action for an injunction against the provider to order it to comply.1 The failure to comply must be knowing and willing, and this injunctive relief is the only legal remedy available here.2

In addition, in this action, entities are given a defense against failure to comply if they can show they do “not have the technical means to comply with this subsection without incurring an unreasonable economic burden.”

Finally, any of the above individuals and entities may move to modify or vacate the orders at any time after they are issued. The court may grant this relief if it finds that the site at issue has stopped, or never was, infringing, or if “the interests of justice otherwise require” it.

DMCA 2.0

This next section borrows the notice-and-takedown procedure of the DMCA and applies it to preventing profit from piracy.

Both foreign and domestic US-directed sites are subject to this section, but only if they are “dedicated to theft of US property.” The section defines this as either (1) a site that “is primarily designed or operated for the purpose of, has only limited purpose or use other than, or is marketed by its operator or another acting in concert with that operator for use in, offering goods or services in a manner that engages in, enables, or facilitates” copyright infringement or circumvention of technological measures; or, (2) a site where the operator has either remained willfully blind to a high probability of infringing acts occuring on the site or induced infringement through the site.

A copyright holder that has been harmed by one of these sites may serve a notice on payment network providers or Internet advertising providers that service the site. When a provider receives a notice, it is required to take the same technically feasible and reasonable measures described in the first section or reply with a counter-notification disputing the notice. As with the DMCA, copyright holders are liable for any monetary damages that may occur if they knowingly and materially misrepresent that a site is dedicated to the theft of US property.

If a provider serves a counter-notification or fails to comply with a notice under this section, the copyright holder can initiate an action very similar to the one the Attorney General can initiate under the first section of the bill. Court orders in this section are limited to the advertising and payment providers involved.

Commercial Streaming

Sorry, Justin Bieber is still not going to jail under the House’s version of the Commercial Felony Streaming Act included in SOPA. The language is largely the same, but there is one key difference.

To be convicted for criminal copyright infringement, the government must prove beyond a reasonable doubt that the defendant acted willfully. Most courts have interpreted willfulness strictly: an intentional violation of a known legal duty. But a small number of courts have instead adopted a lower standard: the intent to do the acts at issue without knowledge that they constituted infringement.3 The lower standard has caused some worry, especially when it comes to criminal copyright statutes applied to online infringement.

SOPA takes care of this. It says:

Any person acting with a good faith reasonable basis in law to believe that the person’s conduct is lawful shall not be considered to have acted willfully for purposes of the amendments made by this section. Such person includes, but is not limited to, a person engaged in conduct forming the basis of a bona fide commercial dispute over the scope of existence of a contract or license governing such conduct where such person has a reasonable basis in law to believe that such conduct is noninfringing. Nothing in this subsection shall affect the application or interpretation of the willfulness requirement in any other provision of civil or criminal law.

The bill offers a lot to digest, and I’ll be sure to have more analysis in the coming weeks. My initial thoughts: this is a well-crafted bill, providing effective remedies against the narrow problem of rogue sites. Anyone who makes a living creating knows it’s impossible to stop all piracy — that’s been true since the beginning of copyright — but at the very least, our laws should be able to reliably prevent individuals and companies from profiting off of online piracy. And this bill promises to be a big step in that direction.

The House Judiciary Committee is scheduled to hold a hearing on the Stop Online Piracy Act on November 16, 2011.

Footnotes

  1. Under this section, the AG can also bring an action for injunctive relief prohibiting any entity that has knowingly and willingly offered a product or service designed or marketed for circumventing the measures taken by the above entities. [↩]
  2. A failure to comply with any injuction issued may result in contempt of court. [↩]
  3. Prosecuting IP Crimes Manual. [↩]
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Rojadirecta pounds on the table

September 15, 2011 · · 2 comments

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

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

Puerto 80′s reply memorandum:

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

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

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

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

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

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

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

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

  • Harmony v. United States, 2 How. 210, 234 (1844): “whether he be innocent or guilty; and he impliedly submits to whatever the law denounces as a forfeiture attached to the ship by reason of their unlawful or wanton wrongs.”
  • Dobbins’s Distillery v. United States, 96 U. S. 395, 401 (1878): “Cases often arise where the property of the owner is forfeited on account of the fraud, neglect, or misconduct of those intrusted with its possession, care, and custody, even when the owner is otherwise without fault . . . and it has always been held . . . that the acts of [the possessors] bind the interest of the owner . . . whether he be innocent or guilty.”
  • J. W. Goldsmith, Jr.-Grant Co. v. United States, 254 U. S. 505 (1921): “It is the illegal use that is the material consideration, it is that which works the forfeiture, the guilt or innocence of its owner being accidental.”
  • Van Oster v. Kansas, 272 U. S. 465 (1926): “It is not unknown or indeed uncommon for the law to visit upon the owner of property the unpleasant consequences of the unauthorized action of one to whom he has entrusted it.”
  • Calero-Toledo v. Pearson Yacht Leasing Co., 416 U. S. 663 (1974): “the innocence of the owner of property subject to forfeiture has almost uniformly been rejected as a defense.”

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

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

Whether or not Puerto 80 is aware of the history of civil forfeiture law, it is still difficult to see how it can claim that forfeiture without an allegation of wrongdoing on the part of the property owner is “inconsistent with the way the statute itself is drafted.” The statute makes no reference to the culpability of the property owner. All that is required for property to be subjected to forfeiture is that it is “used, or intended to be used, in any manner or part to commit or facilitate the commission of an offense referred to in subparagraph (A).”

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

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

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

The changes are rung on the contention, and illustrations are given of what is possible under the law if the contention be rejected. It is said that a Pullman sleeper can be forfeited if a bottle of illicit liquor be taken upon it by a passenger, and that an ocean steamer can be condemned to confiscation if a package of like liquor be innocently received and transported by it. Whether the indicated possibilities under the law are justified we are not called upon to consider. It has been in existence since 1866, and has not yet received such amplitude of application. When such application shall be made it will be time enough to pronounce upon it.1

And again in 1996:

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

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

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

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

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

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

To succeed in a forfeiture action under 18 USC § 2323, the government must prove by a preponderance of the evidence, that (1) the property was used to commit or facilitate the commission of criminal copyright infringement, and (2) there was a “substantial connection” between the property and the offense. The US does not have to show evidence of a particular illegal act.3 And it may use circumstantial evidence to show the nexus between the property and the predicate act giving rise to forfeiture.

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

In other words, the US doesn’t have to prove its case in the forfeiture complaint. It may even, in fact, “use evidence gathered after the filing of a complaint” to meet its ultimate burden.”6 Puerto 80 provides very little support for its argument that the forfeiture complaint is deficient in this regard — the first memorandum supporting its motion to dismiss focused on arguing that the site isn’t personally liable for criminal copyright infringement, and this memo primarily argues that the scope of the §2323 is simply too broad.

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

Footnotes

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

September 07, 2011 · · 5 comments

Before Operation in Our Sites, there was htmlComics.

Though the US Government’s seizure of over 100 domain names as property facilitating the commission of copyright infringement over the past year has received a lot of attention, the story of htmlComics has mostly stayed out of the limelight (except within the comics community).

The case of htmlComics.com is, as far as I know, the first time a domain name has been forfeited under 18 USC § 2323(a) as property “used, or intended to be used, in any manner or part to commit or facilitate the commission of” criminal copyright infringement.1 For this reason, it’s worth taking another look at — although the circumstances are very different than the forfeiture case against the Rojadirecta domain names (the only domain name seized during Operation in Our Sites that has been disputed so far).

It’s just like a library

A man by the name of Gregory Hart (no relation) registered the htmlcomics.com domain in December 2008, and shortly after began creating a large library of digitized comic books. The site soon grew to include hundreds of thousands of complete copies of comics, attracting thousands of visitors and plenty of speculation over its legality.

Several online postings by Hart shed some light on his motivations for creating the site. In one, he says he’s never “read even one entire comic book!!!!!!!” and created the site as a sort of proof of concept of a large-scale digitized library project. In another, he asks about legal issues relating to the site, operating under the assumption that his site is no different from any public library.

htmlComics.com quickly attracted the attention of most major comic book publishers. Some sent cease and desist letters, but soon, a consortium of publishers — including Marvel Comics, DC Comics, Dark Horse Comics, Bongo Comics, Archie Comics, Conan Properties Int’l LLC, Mirage Studios Inc., and United Media — enlisted the aid of the FBI.

The Feds Get Involved

The FBI began an investigation of the site and Hart in July 2009. On April 20th, 2010, agents executed a search warrant on Hart’s residence, seizing various paper records and computer equipment. On May 27th, the FBI filed a complaint for forfeiture of the htmlComics.com domain name (along with five related domain names). A warrant for the seizure of the domain names was made the same day.

Like the forfeiture complaints filed against the domain names seized during Operation in Our Sites,2 the htmlcomics.com complaint alleges that the domain name is subject to forfeiture under 18 USC § 2323(a) because it is property used to facilitate the commission of criminal copyright infringement.

Hart filed a claim as an owner of the domain names and represented himself in the forfeiture proceedings. He filed his answer to the complaint on June 29th, along with several counterclaims against the government. The answer denied any wrongdoing. Hart repeated his assertion that the site was just like any public library:

The presentation of htmlComics.com was not in violation of U.S. Statutory laws. If it is, then so too is every private library within an apartment community, libraries within private clubs, every schoolhouse library, every prison library, and every military base library.

Hart counterclaimed for violations of the First Amendment, Fourth Amendment, Privacy Protection Act (42 USC § 2000AA), and trespass to chattels.

The US moved to dismiss the counterclaims, arguing that they were a “legal nullity” — the defendant in an in rem proceeding is the property, not the claimant, and any claim the claimant may have against the government must be brought in a separate action. As for the constitutional counterclaims, the US further argued that

the only conceivable basis for the Court’s subject matter jurisdiction is Bivens v. Six Unknown Named Agents of the Federal Bureau of Narcotics, 403 U.S. 388 (1971), under which an individual may bring a cause of action “against a federal agent who, while acting under the color of federal law, has violated the constitutional rights of [the] individual. Bivens actions are brought directly under the Constitution, but damages can be obtained only when (1) the plaintiff has no alternative means of obtaining redress, and (2) no “special factors counseling hesitation” are present. In essence, a plaintiff must meet heightened pleading requirements to even pursue a claim under Bivens. Under this standard, the Claimant’s First and Fourth Amendment counterclaims are grossly deficient and must be dismissed.

The court granted the motion to dismiss Hart’s counterclaims. The only success Hart would have came early on, when the court dismissed the claim against one of the six domain names because, unlike the others, it pointed to a blank page.

By January 2011, the US and Hart reached a pretrial settlement agreement, where Hart agreed the remaining five domain names were subject to forfeiture and released any future claims against the US and the FBI. The court entered the final judgment of forfeiture on February 2, 2011.

htmlComics, Operation in Our Sites, and the PROTECT IP Act

The differences between this case and Operation in Our Sites are obvious. This was a singular action, investigated by the FBI, against a specific site while Operation in Our Sites constituted a broader, coordinated enforcement effort by ICE. htmlComics.com hosted infringing content on its own servers while many of the domains seized by ICE, including Rojadirecta, did not host the content themselves — though, under the language of the forfeiture statute, this is not as relevant a distinction as some critics of the operation make it out to be.

It’s the similarities, however, that I find interesting. Both involve the use of 18 USC § 2323 to forfeit the domain names of websites aiding piracy. Both htmlComics and Rojadirecta raised First Amendment arguments against the seizures — though not too much should be read into the failure of the argument in htmlComics since it flopped procedurally, and the outcome of Rojadirecta’s arguments are still pending. This case especially highlights the advantage of the forfeiture provision, added by the PRO-IP Act in 2008 — it gives the federal law enforcement agencies more options to carefully craft efforts to reduce online piracy. The FBI could have brought criminal charges against Hart himself or the comic book publishers could have sued Hart and his company in civil court. Instead, it proceeded in rem against the offending site itself, which is probably the most direct route. In the same way, ICE has targeted the domain names of rogue sites through the forfeiture process, making it more difficult for them to operate and profit.

Congress is back in session this week, and work on the proposed PROTECT IP Act is expected to begin shortly. The bill will give the US an additional option to use against pirate sites. Through a process similar to the in rem forfeiture proceedings used in htmlComics and Operation in Our Sites, the Attorney General will be able to request court orders against the often unwitting partners of pirate sites — advertising and financial service providers. This process is especially useful for taking the profit out of pirate sites where the operators are, unlike Hart and htmlComics, unknown or operating overseas.

Footnotes

  1. I’ve uploaded some of the court filings for this case to Scribd. The rest are available through PACER, or at the RECAP archive. [↩]
  2. Along with Rojadirecta, the US has filed a complaint against tvshack.net, movies-link.tv, zml.com, now-movies.com, thepiratecity.org, planetmoviez.com, and filespump.com. [↩]
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Rojadirecta: Barking up the Wrong Tree?

August 09, 2011 · · 1 comment

Of the 100+ domain names seized by ICE since it began Operation in Our Sites last summer, only one has raised a challenge. Rojadirecta, which allegedly catalogs hundreds of links, primarily to live sporting events streaming online, has enlisted no less than six lawyers in its effort to prevent its domain names from being forfeited by the US government.

On Friday, Rojadirecta’s petition for release of seized property was denied by the court.1 On the same day, it filed its motion to dismiss in the Government’s forfeiture proceeding against its domain name. The Government’s response is due by August 26th, and Rojadirecta’s reply to the response is due September 2nd.

Was the court correct in refusing to release the domain name to Rojadirecta? Will Rojadirecta succeed in getting the Government’s forfeiture complaint dismissed?

The short answer to these questions are, in my opinion, yes and no. For the gory legal details, read on.

Petition to Release Seized Property

Civil forfeiture is based on the idea that property can be “guilty” — a strange idea, but not a new one.2 But other than the defendant being property rather than a person, a civil forfeiture proceeding largely mirrors any other civil lawsuit. It begins with a complaint filed in court, proceeds through motions practice and discovery, and (if it makes it this far) ends in trial and judgment.

In a previous post, I wrote how the petition to release seized property largely mirrors the procedure of a criminal defendant being released on bail pending trial. Viewed this way, it’s easy to see why Rojadirecta didn’t succeed with its petition. Essentially, Rojadirecta’s lawyers made two arguments: “our client should be released on bail because he’s innocent” and “our client should be released on bail because he was wrongfully arrested.”

Those are certainly valid arguments, just not in this context.

As I detailed in my previous post, a petition like this is only granted if a claimant is suffering a substantial hardship due to the seizure. Most deprivations of property will cause some level of hardship, obviously; Congress added this procedure to reach those situations where the seizure would be devastating — situations like “preventing the functioning of a business, preventing an individual from working, or leaving an individual homeless.”3

Rojadirecta failed to argue any of these.

It did argue, in part, that its users were suffering a substantial hardship due to the seizure because their First Amendment rights had been infringed. The court rejected this argument, causing some to scratch their heads, since it sounds like the court is saying it doesn’t think a loss of First Amendment rights is a substantial hardship.

That’s not what the court is saying, however. Infringement of free speech certainly causes substantial, if not irreparable, hardship. But the definition of “substantial hardship” in this particular statute is far more limited than the general meaning of the phrase. In addition, Congress didn’t intend to include free speech violations under this statute because those rights are already protected.

Claimants can challenge the legality of a seizure during the forfeiture proceeding itself or through existing procedures — for example, a Bivens action or a motion to suppress.4 The 983(f) petition is an additional layer of procedural protection on top of existing procedures, designed for a specific purpose. Rojadirecta simply raised this issue in the wrong place.

Judging by the brevity of the order, the denial of Rojadirecta’s petition was, as I had predicted, an easy call for the court to make.

Rojadirecta’s Motion to Dismiss

A motion to dismiss will be granted if the complaint is insufficient on its face.

Civil forfeiture complaints are governed by the Supplemental Rules in the Federal Rules of Civil Procedure, which state in part that the Government must ”state sufficiently detailed facts to support a reasonable belief that the government will be able to meet its burden of proof at trial.” “However,” as one court explains, “the Government is not required to allege in the complaint all of the facts and evidence at its disposal.”

It is sufficient for the Government to simply plead enough facts for the claimant to understand the theory of forfeiture, to file a responsive pleading, and to undertake an adequate investigation. The issue is one of pleading, not proof at trial. And it is for this reason that “[n]o complaint may be dismissed on the ground that the Government did not have adequate evidence at the time the complaint was filed to establish the forfeitability of the property.”5

What does the Government have to show to establish the forfeitability of property?

Federal civil forfeiture statutes, including those applying to criminal copyright infringement, are subject to CAFRA, the Civil Asset Forfeiture Reform Act of 2000. Under CAFRA, the Government must show that the defendant property is subject to forfeiture by a preponderance of the evidence. When the defendant property is alleged to be an instrumentality of a crime, the Government must also show that there is a substantial connection between the property and the alleged crime.

If the Government can show both, the only way a claimant can win is by rebutting the showing of a substantial connection or raising an affirmative defense to the forfeiture — the claimant is an “innocent owner” of the property, for example. Under CAFRA, an innocent owner is one who “did not know of the conduct giving rise to forfeiture; or upon learning of the conduct giving rise to the forfeiture, did all that reasonably could be expected under the circumstances to terminate such use of the property.”6

18 USC § 2323(a)(1)(B) subjects the following to forfeiture: “Any property used, or intended to be used, in any manner or part to commit or facilitate the commission of an offense referred to in subparagraph (A).” Subparagraph (A) refers to criminal copyright infringement offenses, including those set out in 17 USC § 506, which states:

(1) In general.— Any person who willfully infringes a copyright shall be punished as provided under section 2319 of title 18, if the infringement was committed—

(A) for purposes of commercial advantage or private financial gain;

(B) by the reproduction or distribution, including by electronic means, during any 180–day period, of 1 or more copies or phonorecords of 1 or more copyrighted works, which have a total retail value of more than $1,000; or

(C) by the distribution of a work being prepared for commercial distribution, by making it available on a computer network accessible to members of the public, if such person knew or should have known that the work was intended for commercial distribution.

Facilitation “occurs when the property makes the prohibited conduct less difficult or more or less free from obstruction or hindrance.”7 As one court noted, “It is ‘[i]rrelevant whether the property’s role in the crime is integral, essential or indispensable.’ A single incident of facilitating criminal activity is sufficient to trigger forfeiture.”8

Notice what is not required in civil forfeiture proceedings.

First, the Government does not have to prosecute or convict anyone of the underlying crime to seek forfeiture of property that facilitates that crime.9

Second, the forfeiture proceeding is not directed at the site operators of Rojadirecta, but at the domain name itself.10 The culpability of the site’s owners is irrelevant.11 In fact, the civil forfeiture has been described as an “essential tool” when the government “can prove that the property was involved in a crime, but cannot prove who the wrongdoer was.”12

With this in mind, let’s turn to Rojadirecta’s general argument supporting its motion to dismiss. It states, “the Complaint, which focuses entirely on Puerto 80’s actions, fails to allege facts that, if proven, would suffice to show that Puerto 80’s operation of the Rojadirecta site constitutes criminal copyright infringement.”

As we’ve just seen, the Government’s forfeiture complaint doesn’t have to allege such facts. In other words, Rojadirecta is barking up the wrong tree with its entire argument. The question of whether or not the operators of Rojadirecta are directly or indirectly liable for criminal copyright infringement — as well as the question of whether or not criminal copyright infringement even allows for indirect liability — is completely unrelated to the question of whether the domain name can be forfeited for facilitating the commission of a criminal copyright offense.

I doubt, then, that Rojadirecta can succeed with its motion to dismiss. Its argument doesn’t apply to the Government’s claim that its property was used to facilitate the commission of criminal copyright infringement.

Limits on Forfeiture

Some have wondered what limits the Government from seizing just about any web site’s domain name, considering the seemingly broad reach of civil forfeiture law. I’ve previously discussed some of the legal limitations preventing a seizure free-for-all; I want to briefly mention one more.

The Eighth Amendment’s prohibition of excessive fines places limits on civil forfeiture. The 2nd Circuit analyzes property forfeiture for excessiveness by considering the following:

(1) the harshness, or gross disproportionality, of the forfeiture in comparison to the gravity of the offense, giving due regard to

(a) the offense committed and its relation to other criminal activity,

(b) whether the claimant falls within the class of persons for whom the statute was designed,

(c) the punishments available, and

(d) the harm caused by the claimant’s conduct;

(2) the nexus between the property and the criminal offenses, including the deliberate nature of the use and the temporal and spatial extent of the use; and

(3) the culpability of each claimant.

It adds, “Determining the excessiveness of a civil in rem forfeiture is necessarily fact-intensive and the ‘quantum, in particular, of pecuniary fines neither can, nor ought to be, ascertained by any invariable law.’ Given the impossibility of establishing a formula for an excessive fine with surgical precision, this framework provides a useful template for the fact-finding process and the ultimate excessiveness inquiry.”13

A more detailed look at how this inquiry works in practice is beyond the scope of this article.

Footnotes

  1. The petition was actually filed by Puerto 80 Projects, the company that owns the Rojadirecta site. To keep things simple, I’ll refer to both the site and the site’s owners and operators as Rojadirecta for this article. [↩]
  2. See Calero-Toledo v. Pearson Yacht Leasing Co., 416 US 663, 680-684 (1974) where the Supreme Court traces the history of forfeiture laws since Biblical times. [↩]
  3. 18 USC § 983(f)(1)(C). [↩]
  4. US v. PlayboyMonthly.com, United States’ Motion to Dismiss Claimant’s Counterclaims, No. 8:10-cv-1214-T-27TBM (MD Fla. 2010); US v. $80,633, 512 F.Supp.2d 1196 (MD Ala. 2007). [↩]
  5. US v. $22,173.00 in US Currency, 716 F. Supp. 2d 245, 248-49 (SDNY 2010. [↩]
  6. Van Hofe v. US, 492 F.3d 175, 179-80 (2nd Cir. 2007). [↩]
  7. In re 650 Fifth Avenue and Related Properties, Memorandum Opinion and Order, No. 1:08-cv-10934-RJH (SDNY March 30, 2011). [↩]
  8. US v. LAM, No. 3:07-CR-374, Memorandum Opinion (ED Va. March 28, 2011). [↩]
  9. See, for example, Van Hofe at 179, US brought civil in rem forfeiture action against residence used to facilitate commission of drug crime without indicting and prosecuting owners personally; Austin v. US, 509 U.S. 602, 627 (1993) (Scalia, J. concurring in part and concurring in judgment), conviction irrelevant to forfeiture proceeding; The Palmyra, 25 US 1, 15 (1827), “no personal conviction of the offender is necessary to enforce a forfeiture in rem in cases of this nature”; US v. One Parcel of Real Estate Located at 7715 Betsy Bruce Lane Summerfield, 906 F. 2d 110,111-12 (4th Cir. 1990), “In civil forfeiture cases, property is subject to forfeiture ‘even if its owner is acquitted of — or never called to defend against — criminal charges.’” [↩]
  10. See Calero-Toledo v. Pearson Yacht Leasing Co., 416 US 663 (1974). [↩]
  11. See US v. Cherry, 330 F.3d 658, n.16 (4th Cir. 2003). [↩]
  12. Stefan D. Cassella, Overview of Asset Forfeiture Law in the United States, United States Attorneys’ Bulletin, Vol. 55, vol. 6, pg. 17 (November 2007). [↩]
  13. Van Hofe at 186. [↩]
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Rojadirecta Seeks Return of Seized Domain Names

July 13, 2011 · · 5 comments

A company owning domain names that had been seized by ICE as part of its efforts to fight online piracy is seeking their return pending the outcome of the Government’s forfeiture proceeding against them. On Monday, the US filed its memorandum of law opposing the return.

“Rojadirecta.com” and “Rojadirecta.org” were seized on February 1, 2011, as part of ICE’s third phase of Operation in Our Sites. The owner of the domain names, Puerto 80 Projects, and its legal counsel engaged in informal discussions with the government to return them, but Puerto 80 ultimately refused to accept the government’s condition that it stop facilitating copyright infringement in order to get its domain names back.

On March 22, Puerto 80 filed Seized Asset Claim Forms, identifying itself as owner of the domains and giving the US 90 days to file a forfeiture complaint in federal court. The US filed the complaint within the time frame, on June 17.

A few days earlier, Puerto 80 filed a petition for release of seized property. The petition and memorandum of law in support are available here. The EFF filed an amicus brief as well, available here.1

On Monday, July 11, the US filed its memorandum of law in opposition to the petition.

If the court grants the motion, it doesn’t mean Puerto 80 wins, it just means possession of the domain names will be returned to Puerto 80 during the forfeiture proceedings. The court may also enter any order necessary to ensure the property’s value is maintained while the proceeding is pending (like requiring Puerto 80 to post a bond), and the government may place a lien on it to prevent its transfer to another person.2 If the government eventually wins its forfeiture case, than the domain names are given back to be destroyed.

In many ways, this procedure is similar to a criminal defendant being released on bail after arrest and before trial.

Federal judicial forfeiture actions are governed by Supplemental Rule G of the Federal Rules of Civil Procedure. Those rules state that someone seeking return of seized property pending the outcome of a forfeiture proceeding may petition the court under 18 USC § 983(f).3

Section 983(f) lays out five conditions that must be met for a court to release property that is the subject of a forfeiture proceeding. It requires that:

(A) the claimant has a possessory interest in the property;

(B) the claimant has sufficient ties to the community to provide assurance that the property will be available at the time of the trial;

(C) the continued possession by the Government pending the final disposition of forfeiture proceedings will cause substantial hardship to the claimant, such as preventing the functioning of a business, preventing an individual from working, or leaving an individual homeless;

(D) the claimant’s likely hardship from the continued possession by the Government of the seized property outweighs the risk that the property will be destroyed, damaged, lost, concealed, or transferred if it is returned to the claimant during the pendency of the proceeding; and

(E) none of the conditions set forth in paragraph (8) applies.

Paragraph (8) states that release of seized property is unavailable if the property:

(A) is contraband, currency, or other monetary instrument, or electronic funds unless such currency or other monetary instrument or electronic funds constitutes the assets of a legitimate business which has been seized;

(B) is to be used as evidence of a violation of the law;

(C) by reason of design or other characteristic, is particularly suited for use in illegal activities; or

(D) is likely to be used to commit additional criminal acts if returned to the claimant.

In its petition, Puerto 80 says it meets all these requirements. The substantial hardship caused by the continued possession of the domain names that Puerto 80 claims include a reduction in traffic, a loss of business goodwill, and deprivation of its users’ and visitors’ First Amendment rights.

The US responds that Puerto 80 hasn’t shown it satisfies the requirements of 983(f) and doesn’t mince words in doing so:

In attempting to provide justification for granting this extreme remedy, Puerto 80 seeks to characterize the website it operated under the Rojadirecta Domain Names as an online discussion forum and, in so doing, would have this Court decide, on an expedited basis and without a fully developed factual record, a variety of issues that are more properly raised either in a motion to dismiss the Government’s Verified Complaint or following a period of discovery. Indeed, through its petition, Puerto 80 is attempting to use a limited provision of forfeiture law designed to provide relief in only the rarest of circumstances in order to mount a broader challenge to a widely employed tool of law enforcement.

Specifically, the US argues that the hardships cited by Puerto 80 are not the substantial ones Congress intended when it wrote 983(f). Looking at both the case law and legislative history, the US points out that, especially in light of the examples given by the statute — ”preventing the functioning of a business, preventing an individual from working, or leaving an individual homeless” — potential loss of goodwill and a 1/3 drop in traffic don’t qualify.

The US states that Puerto 80′s inclusion of the impact on the First Amendment rights of its users as a substantial hardship borne by Puerto 80 “borders on frivolous.” If there’s a First Amendment issue here, Puerto 80 must raise it in the forfeiture proceeding, not shoehorn it into a 983(f) petition.

Finally, the US states says the return of the domain names is likely to result in their further use in committing criminal copyright infringement, since it has no reason to believe Puerto 80 will stop the acts that led to the domain names being seized in the first place.

This portion is worth a read, as the US takes the time to elaborate on its theory of the case against the domain names — why it believes they facilitate criminal copyright infringement. It says “Puerto 80′s attempts to liken itself to an Internet search engine is wholly unavailing. Unlike a search engine or other site that aggregates links to existing content neutral material on the Internet, Rojadirecta organizes links to very specific content in a precise and targeted way.”

The US goes on to argue that even if Puerto 80 isn’t engaged in direct infringement on its website, it “certainly has engaged in contributory infringement, and has aided and abetted the infringement of others.”

My thoughts: this seems like an easy call for the court to make in favor of the US. Courts have read the “substantial hardship” requirement for these petitions strictly. An example given in the statute is “preventing the functioning of a business” — the case law suggests a substantial hardship is closer to completely preventing, ie a business would be forced to declare bankruptcy without the property seized, the functioning than significantly impeding the functioning.

The various substantive issues raised by Puerto 80 are more appropriately raised in the forfeiture proceeding itself. I don’t doubt they’ll do exactly that. But the 983(f) petition is a limited remedy, and I’d be surprised to see a court rule on substantive issues at this point.

Some other thoughts: Puerto 80 and the EFF devote considerable time to arguing that these seizures amount to an improper prior restraint under the First Amendment, and many in the blogosphere have shared this view. Those concerns extend to the pending PROTECT IP Act, since its provisions will largely depend on domain name seizures such as this.

The US disagrees, and its brief remarks on the issue in its memorandum suggest it’s approaching the issue similarly to how I’ve approached it here in previous posts.4 The government notes that the discussion forums remain on Rojadirecta’s site and are still accessible through other domain names, where case law dealing with seizures and the First Amendment have focused on whether or not the seizure actually removes expressive material from circulation.

In a footnote, the US states: “Indeed, it is clear from the record before this Court that the Government’s seizure of the Rojadirecta Domain Names was prompted by enforcement of the criminal copyright laws, and not as regulation of speech or other expressive conduct. As such, the seizure is not properly viewed as a prior restraint. See, e.g., Arcara v. Cloud Books, Inc., 478 U.S.697, 706 n.2 (1986).”

Finally, a word about the Spanish court decision finding Rojadirecta not liable for copyright infringement. The US notes that this doesn’t preclude Rojadirecta for being liable for violating US copyright law. Generally, any business that operates in a country is subject to that country’s laws; you can’t, for example, operate a mail-order marijuana business in a country where that substance is legal and ship to US customers without getting into trouble.

The EFF argues, however, that the district court should give the Spanish court decision preclusive effect under the principle of comity. I don’t find this argument convincing.

A nation’s courts aren’t required to take a foreign court’s decisions into consideration (except when specifically required by a treaty agreement between the two countries).5 But they generally will do so under the concept of comity, unless there’s a strong policy reason not to. Comity is based on respect between nations and the presumption that other nations will reciprocate.

Typically, comity shows up when someone asks a court to enforce a foreign court’s judgment. The EFF states, however, that “the principles apply more broadly.” They do, but not in the general sense the EFF suggests.

Giving effect to a foreign court decision means treating it as if it was a US court decision. That means it prevents the relitigation of either the same claim between the same parties that had already been decided (“res judicata”) or the same issue that had already been decided in an earlier case involving one of the parties (“collateral estoppel”).

I don’t think either res judicata or collateral estoppel preclude the forfeiture of these domain names. The parties are different: the Spanish case involved Spanish copyright owner Audiovisual Sport S.L. and the operators of Rojadirecta, this case is between the US government and the Rojadirecta domain names. The issues are largely different too: the primary issue in the Spanish case was whether the website infringed on copyrights, the primary issue here is whether the domain names facilitated the infringement of copyrights. Indeed, the Spanish court even said in its decision, “The actions of making available and advertising the games that are transferred facilitate download”.6

The court has 30 days to rule on Puerto 80′s petition unless both parties consent to an extension. More on this case as it develops.

Footnotes

  1. I’m curious to know if this is the first time anyone has filed an amicus brief for this type of petition. [↩]
  2. 18 USC § 983(f)(7). [↩]
  3. FRCP Supplemental Rule G(8)(d)(i). [↩]
  4. See COICA: First Amendment, Domain Name Seizures Don’t Violate First Amendment, ICE Seizures Criticism: Magic Words A Response to ‘Supporters of DHS Domain Name Seizures Undervalue Important Constitutional Protections’, and Responding to Sellars: Copyright and Content-based Regulations. [↩]
  5. By contrast, US states are required to recognize judgments made in another state’s courts under the Full Faith and Credit Clause of the Constitution. [↩]
  6. Declaration of Igor Seoane Miñán, Exhibit 1. [↩]
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Friday’s Endnotes – 06/24/11

June 24, 2011 · · 2 comments

Copyhype has a Facebook page — I created a Facebook page for Copyhype this week. Hope to see you there!

Video Streaming Bill Targets Criminals, Not Lip-syncers — The MPAA knocks down the fears that S.978 will put people in jail for embedding YouTube videos. Of course it won’t; how many people are in jail now for such conduct? (None). Yet, criminal infringement of the public performance right is already punishable by up to one year in prison — and has been since 1897 (that’s not a typo, the prohibition is over 100 years old).

“Independent” Creation in the Mainstream Media — Chris Castle shares his thoughts on the recent op-ed pieces from the NY and LA Times regarding the PROTECT IP Act.

Ask ARS: Which image services might commercialize my photos? — Ars Technica examines the TOS of several major UGC image sites to see which ones require users to grant permission for commercial use of photos they upload. Because that would be bad if that’s not what you wanted, and you didn’t realize you were granting that right. But if someone else uploads your content for a site to commercialize … then register your complaints with the you’re-a-greedy-creator-with-an-outdated-business-model department.

Questionable Morality — Faza at The Cynical Musician has written a number of fantastic posts this week. This one tackles the issue of the public good/private right distinction in copyright law by making an analogy to someone who trespasses in your home while you’re away for various reasons.

Big Idea, Big Support — The European Commission has been seeking proposals for implementing its Digital Agenda, the goal of which “is to deliver sustainable economic and social benefits from a digital single market based on fast and ultra fast internet and interoperable applications.” Dominic Young discusses one of the ideas he supports that’s been included — digital copyright licensing standards that make managing copyrights easy. (Full paper here).

Does Cable TV Have a Future — Andrew Keen interviews Peter Stern, Chief Strategy Officer at Time Warner Cable, in this fascinating series of videos. Among the topics discussed: Netflix, network neutrality, a la carte cable packages, and yes, the future of cable television.

New Dot-Anything Domain Name Policy Lousy for Most Bloggers — ICANN recently announced it is going forward with plans to allow applications for new top-level domains. Eric E. Johnson raises one of the concerns he has with the idea.

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PROTECT IP Act

May 19, 2011 · · 7 comments

A good bill just got better. On May 12, Senator Patrick Leahy and other Senate Judiciary Committee members introduced the Preventing Real Online Threats to Economic Creativity and Theft of Intellectual Property Act (PROTECT IP Act). The text of the bill is available here.

The bill is designed to advance two goals: enhancing the enforcement against overseas rogue websites and taking the profit out of piracy. It allows those ad servers and payment processors who only want to count legitimate businesses as their customers to cut off service to rogue sites without risking liability, and it encourages providers that are less inclined to cut off customers using their services for illegitimate purposes to act more responsibly.

This legislation is important in ensuring that laws protecting the progress of the arts and sciences keep up with the rapid progress of digital communications. A wide cross-section of the public recognizes this importance. In A Broad Coalition Indeed!, Kate Spence of the MPAA lists a few of the many organizations, unions, and trade associations that support the bill. The Copyright Alliance provides links to public statements in support of the bill in Join the Chorus: Voices Against Digital Theft. And, just a few days ago, forty-two state Attorneys General announced their support of the bill.

The PROTECT IP Act is a substantial rewrite of last session’s Combating Online Infringement and Counterfeits Act (COICA). The impact of provisions on existing secondary liability doctrine and the DMCA is made more explicit. Procedural protections for operators of web sites and third-party providers served with orders under the act are beefed up. Most notable is the addition of a private right for action under the law, though court orders by an individual rights holder are limited to financial service providers and advertising providers — court orders requiring search engines and domain name system servers to block access to a web site can only be made in actions initiated by the Attorney General, and even then are limited only to nondomestic domain names.

Perhaps one of the biggest changes from COICA is PROTECT IP’s requirement for the Attorney General or rightsholder to file a personal action against a registrant of a rogue site before proceeding against the domain name. Under COICA, the Attorney General could go straight to an in rem action against the domain name. The provision:

(2) IN REM.—If through due diligence the Attorney General is unable to find a person described in subparagraphs (A) or (B) of paragraph (1), or no such person found has an address within a judicial district of the United States, the Attorney General may commence an in rem action against a nondomestic domain name used by an Internet site dedicated to infringing activities.

Note that this provision is the same under both sections 3 and 4 of the Act; that is, an individual rights holder can only pursue a claim under the Act against a personal defendant. In rem actions remain solely within the Attorney General’s power.

It’s also worth noting that this provision is reminiscent of the language of the Anticybersquatting Consumer Protection Act, passed in 1999 as part of the Trademark Act.

(A) The owner of a mark may file an in rem civil action against a domain name in the judicial district in which the domain name registrar, domain name registry, or other domain name authority that registered or assigned the domain name is located if— … (ii) the court finds that the owner— (I) is not able to obtain in personam jurisdiction over a person who would have been a defendant in a civil action under paragraph (1); or (II) through due diligence was not able to find a person who would have been a defendant in a civil action under paragraph (1).1

The PROTECT IP Act includes a provision for the development of guidelines, largely similar to a provision in COICA, for the Department of Justice, law enforcement agencies, and intellectual property rights holders regarding the implementation of the act. It also provides for two separate reports to measure the effectiveness of the bill after it is enacted:

(1) REPORT ON EFFECTIVENESS OF CERTAIN MEASURES.—Not later than 1 year after the date of enactment of this Act, the Secretary of Commerce, in coordination with the Attorney General, the Secretary of Homeland Security, and the Intellectual Property Enforcement Coordinator, shall conduct a study and report to the Committee on the Judiciary of the Senate and the Committee on the Judiciary of the House of Representatives on the following:

(A) An assessment of the effects, if any, of the implementation of section 3(d)(2)(A) [required actions for operators of nonauthoritative domain name system servers] on the accessibility of Internet sites dedicated to infringing activity.

(B) An assessment of the effects, if any, of the implementation of section 3(d)(2)(A) on the deployment, security, and reliability of the domain name system and associated Internet processes, including Domain Name System Security Extensions.

(C) Recommendations, if any, for modifying or amending this Act to increase effectiveness or ameliorate any unintended effects of section 3(d)(2)(A).

(2) REPORT ON OVERALL EFFECTIVENESS.— The Register of Copyrights shall, in consultation with the appropriate departments and agencies of the United States and other stakeholders—

(A) conduct a study on—

(i) the enforcement and effectiveness of this Act; and

(ii) the need to modify or amend this Act to apply to emerging technologies; and

(B) not later than 2 years after the date of enactment of this Act, submit a report to the Committee on the Judiciary of the Senate and the Committee on the Judiciary of the House of Representatives on—

(i) the results of the study conducted under subparagraph (A); and

(ii) any recommendations that the Register may have as a result of the study.

Cut and Paste

Anyone reading the proposed bill will be struck by the similarities between sections 3 and 4. I was curious about how closely the two mirrored each other, so I worked up a side-by-side comparison, which I’ve included below in a PDF. Differences are highlighted in red, while language only appearing in one of the sections is highlighted in yellow.

After comparing the two sections like this, my curiousity was piqued even further. As you can see, aside from the fact that the first section deals with nondomestic domains, which only the Attorney General can proceed against, while the second deals with all domains, which the Attorney General or rights holders can proceed against, the vast majority of the provisions are exact duplicates. Even more curious, there are a tiny number of insubstantial differences in the two — compare (3)(d)(C)(ii), (3)(d)(3), (3)(e)(3), and (3)(f)(2)(A) to (4)(d)(2)(B)(ii), (4)(d)(3), (4)(e)(3), and (4)(f)(2)(A). If these sections were simply cut and paste, we would expect zero differences in the similar language; if they were written independently, we should expect differences throughout the same provisions. But instead, the language is identical except in four (that I’ve found) instances.

My larger question is, why is the bill drafted in this way? I agree that juggling the differences between the two provisions might result in some inelegant language, but separating them out like this — resulting in lengthy, duplicative provisions — seems like far less elegant drafting. My best guess is that there is a substantive reason for drafting the law in this fashion, but I’m hard-pressed to think of exactly what the reason would be. Planning for severability to mitigate the effects of a court striking down any provision in the future? That still doesn’t strike me as especially convincing, though, so I’d be interested to hear thoughts from my readers on this.

Footnotes

  1. 15 USC § 1125(d)(2). [↩]
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