Judge Posner Did Not Say That Embedding Infringing Videos Is “Totally Legal”

By , August 15, 2012.

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

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

Here’s a further sampling of the cheerful headlines:

And my personal favorite:

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

See if you can spot the syllogistic fallacy:

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

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

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

I’m still shaking my head.

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

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

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

With amici like these…

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

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

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

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

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

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

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

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

A bundle of rights

So what did Judge Posner actually say?

Recall that copyright is actually a bundle of rights:

§ 106. Exclusive rights in copyrighted works

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

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

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

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

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

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

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

17 U.S.C.A. § 106 (West 2012).

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

Turning to the opinion, Judge Posner states:

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

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

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

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

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

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

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

The public performance right

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

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

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

Judge Posner continues:

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

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

Id. at *8 (emphasis added).

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

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

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

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

The “Server Test”

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

To the extent that Perfect 10 can be read to stand for the proposition that inline linking can never cause a display of images or videos that would give rise to a claim of direct copyright infringement, we respectfully disagree. In our view, a website’s servers need not actually store a copy of a work in order to “display” it. The fact that the majority of the videos displayed on myVidster reside on a third-party server does not mean that myVidster users are not causing a “display” to be made by bookmarking those videos. The display of a video on myVidster can be initiated by going to a myVidster URL and clicking “play”; that is the point of bookmarking videos on myVidster—a user can navigate to a collection of myVidster videos and does not have to go to each separate source site to view them.

Flava Works, Inc. v. Gunter, No. 10-cv-06517, 2011 WL 3876910, *3-4 (N.D. Ill. Sept. 1, 2011) (emphasis added).

On appeal, Judge Posner disagrees:

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

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

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

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

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

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

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

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

Follow me on Twitter: @devlinhartline

Flava Works v Gunter: Does Embedded Video Infringe?

By , April 30, 2012.

A relatively unknown copyright infringement case is starting to attract more attention.

In October 2010, self-described “gay ethnic adult company” Flava Works sued Marques Rondale Gunter, who owns and operates myVidster, a “social video bookmarking” site for copyright and trademark infringement. Now the case is in front of the Seventh Circuit, and it has attracted amicus briefs from heavyweights like the MPAA, Google and Facebook, and perennial amici Public Knowledge and the EFF.

While the appeal raises several important issues, it is one in particular that has attracted much of the attention online. Can embedding a video infringe on copyright?

Flava Works in the Lower Court

Last May, the Northern District Court of Illinois ruled on Gunter’s motion to dismiss the complaint. The court dismissed all the claims except the contributory copyright infringement claim. It found that Flava Works had plead sufficient knowledge. Said the court, “The knowledge element for contributory copyright infringement is met in those cases where a party has been notified of specific infringing uses of its technology and fails to act to prevent future such infringing uses, or willfully blinds itself to such infringing uses.” myVidster’s receipt of multiple DMCA takedown notices involving the same files and users triggered a duty for it to take steps to prevent future infringing uses.

Later that summer, the Illinois court granted Flava Works request for a preliminary injunction against Gunter, concluding that it was likely to succeed on the merits of its claim of contributory copyright infringement. 1Note that the District Court followed the traditional standard for copyright infringement injunctions, where a likelihood of success on the merits creates a presumption in favor of an injunction. This is in contrast to the Second and Ninth Circuits, which extended the Supreme Court’s holding in eBay v. MercExchange that no such presumption exists for patent injunctions to copyright infringement cases. Gunter has appealed this point along with the others discussed here, and while it is an interesting and important issue, it is beyond the scope of today’s article. Notably, it rejected Gunter’s contention that the site was protected by the DMCA’s safe harbor. It primarily based this decision on the site’s lack of a repeat infringer policy — one of the prerequisites for safe harbor protection — and this decision seemed an easy one. Said the court, “It is difficult for us to understand how defendants can argue with a straight face that they have adopted and reasonably implemented a ‘repeat infringer’ policy.”

Gunter moved for a reconsideration of the preliminary injunction, which the court denied. The court explained, “The vast majority of myVidster users have not created backup copies of videos on the site, but have directed myVidster to “embed” video clips on the site through the posting/bookmarking process. It is this action, to which defendants also refer as “inline linking,” that is the focus of the instant motion to reconsider.” Gunter argued that the Ninth Circuit’s holding in Perfect 10 v. Amazon should compel a different result.

In Perfect 10, the Court was faced with the question of whether Google’s image search, which used in-line linking to display full-size images from other sites in its results, directly infringed the plaintiff’s display right. After interpreting the Copyright Act’s language, the Ninth Circuit adopted what the District Court called the “server test” — infringement of the display right is only possible when the image resides on the web site’s own servers, not when the image is only displayed in-line but resides on another web site’s computers.

Flava Works disagreed with Perfect 10:

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

To the extent that Perfect 10 can be read to stand for the proposition that inline linking can never cause a display of images or videos that would give rise to a claim of direct copyright infringement, we respectfully disagree. In our view, a website’s servers need not actually store a copy of a work in order to “display” it. The fact that the majority of the videos displayed on myVidster reside on a third-party server does not mean that myVidster users are not causing a “display” to be made by bookmarking those videos. The display of a video on myVidster can be initiated by going to a myVidster URL and clicking “play”; that is the point of bookmarking videos on myVidster—a user can navigate to a collection of myVidster videos and does not have to go to each separate source site to view them.

Gunter persisted and appealed Flava Works to the Seventh Circuit.

Can Embedding Infringe Copyright?

One of the major issues in the appeal — and the one that has attracted the attention of Google, Facebook, and the MPAA — is whether embedding videos violates a copyright owner’s public performance right. Secondary liability requires direct infringement, and the parties dispute the lower court’s conclusion that myVidster’s users, who add such embedded links to the myVidster site, are direct infringers.

Gunter, and amici Facebook and Google, urge the Seventh Circuit to adopt the Ninth Circuit’s “server test.” As noted above, the Ninth Circuit interpreted the Copyright Act to limit liability for public display of a copyrighted work to only those online users who actually copy the work onto their own server.

Flava Works, joined by the MPAA as amicus, argue in support of the lower court’s decision.

Gunter is facing an uphill battle here. As the lower court noted, the Ninth Circuit’s decision isn’t binding on the Seventh. And while the “server test” has been received favorably by some academics and service providers, it has apparently not been endorsed by any other court outside the Circuit. And, the “server test” is not found in the text of the Copyright Act or suggested by the legislative history.

There’s another problem for Gunter. Perfect 10 dealt solely with the public display right in copyright, while here the court is dealing with both the right to publicly display and publicly perform a work. The Ninth Circuit’s adoption of the “server test” was premised on the language of the Copyright Act’s definition for “display”:

To “display” a work means to show a copy of it, either directly or by means of a film, slide, television image, or any other device or process or, in the case of a motion picture or other audiovisual work, to show individual images nonsequentially.

The court seized on the definition’s inclusion of the word “copy” to support its conclusion. However, the Act’s definition of “performance” doesn’t refer to copies:

To perform or display a work “publicly” means—

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

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

On a side note, this definition makes sense. When a theater performs a dramatic play, or a band performs a musical composition, it doesn’t generally have a “copy” of the work, but such a performance is still within the exclusive rights of the copyright owner.

But more to the point, even if the Ninth Circuit’s “server test” were adopted by the Seventh Circuit, it doesn’t follow, from the language of the definitions, that it should be applicable to the public performance right.

It’s my opinion that embedding a video can be considered a public performance (I’ve touched on this issue before in relation to last summer’s Commercial Felony Streaming Act). In fact, I was somewhat surprised in researching to discover that the issue doesn’t seem to have come in front of a court until now. But others have concluded the same — here’s an article from 2007 quoting This Week in Law’s Denise Howell saying as much.

And, despite some of the hyperbole 2According to the site linked above: “If the MPAA is successful and the decision is upheld, this could have far reaching, and dire, consequences for Internet users of all stripes; the ruling would seem to include even the idea of linking back to the host-site instead of embedding, essentially rendering a critical part of online culture illegal. It would, much like ACTA, accomplish a large part of what SOPA and PIPA sought to do without actually requiring the pesky consent of the governed that otherwise is at the heart of American law.” that has resulted from Flava Work’s position on embedded links, I don’t believe a decision affirming the lower court would result in much of a change for occasional users of embedded links — like, say, bloggers or forum operators. These users have always had the benefit of the DMCA safe harbors for any unintentional infringement that might stem from embedding a video, as well as the fair use defense in appropriate circumstances.

Is Linking ever Infringement?

Part of the negative response to this case seems to stem from an idea that linking can never give rise to liability for infringement — this is, in fact, one of the arguments Google and Facebook make in their joint amicus brief. 3The court and parties to this case use the term “linking” to refer both to hyperlinking — where a web site’s text can be clicked to go to another web site — and embedded linking — where an image or video on another server is displayed as though it is part of a web site. Under the hood, both are acheived in much the same way, though each offers a different type of experience to the user. But such a bright line rule has never existed.

Congress certainly hasn’t held this view. In the legislative history for the DMCA, you can find evidence that Congress believed linking can, in some cases, be infringing. The House Commerce Committee explained that the “red flag” knowledge standard in the bill was intended “to exclude from the safe harbor sophisticated ‘‘pirate’’ directories—which refer Internet users to other selected Internet sites where pirate software, books, movies, and music can be downloaded or transmitted.” And the safe harbor for information location services itself (17 USC § 512(d)) expressly shields service providers against liability “for infringement of copyright by reason of the provider referring or linking users to an online location containing infringing material or infringing activity, by using information location tools, including a directory, index, reference, pointer, or hypertext link.”

And, despite its legal arguments, Google itself recognizes that linking can infringe copyright. In its AdWords copyright policy, Google states that “Software or sites that enable streaming, copying, or downloading of movies, music, television programs, games, or software” are not allowed — and such sites include “Link aggregation sites primarily aimed at enabling the download or streaming of music, movies, or other media.”

References

References
↑1 Note that the District Court followed the traditional standard for copyright infringement injunctions, where a likelihood of success on the merits creates a presumption in favor of an injunction. This is in contrast to the Second and Ninth Circuits, which extended the Supreme Court’s holding in eBay v. MercExchange that no such presumption exists for patent injunctions to copyright infringement cases. Gunter has appealed this point along with the others discussed here, and while it is an interesting and important issue, it is beyond the scope of today’s article.
↑2 According to the site linked above: “If the MPAA is successful and the decision is upheld, this could have far reaching, and dire, consequences for Internet users of all stripes; the ruling would seem to include even the idea of linking back to the host-site instead of embedding, essentially rendering a critical part of online culture illegal. It would, much like ACTA, accomplish a large part of what SOPA and PIPA sought to do without actually requiring the pesky consent of the governed that otherwise is at the heart of American law.”
↑3 The court and parties to this case use the term “linking” to refer both to hyperlinking — where a web site’s text can be clicked to go to another web site — and embedded linking — where an image or video on another server is displayed as though it is part of a web site. Under the hood, both are acheived in much the same way, though each offers a different type of experience to the user.

Commercial Felony Streaming Act FUD

By , July 06, 2011.

I know an internet meme has hit the mainstream when my mother asks me about it.

“Did you hear they want to throw people who post videos of lip-synching online in jail?” she asked me the other day.

She was referring to bill S.978, the Commercial Felony Streaming Act. The bill has raised considerable consternation online, with fears that it will be used against people engaged in all sorts of conduct that has up to now escaped legal attention, like posting videos on video-sharing sites or embedding videos on blogs. I had previously written about why those fears are overblown.

But those fears continue. Today I want to address the bill more in depth from a legal perspective to allay those fears.

The bill is addressed toward only large-scale, commercial piracy, and the bill is drafted accordingly.

To see why, I’ll show how the language creates several high bars to prevent it being applied to other types of infringement. But first, a little background.

Criminal Infringement of the Public Performance Right

If you take away only one thing from this article, take away this: S.978 doesn’t change what is legal and what is illegal.

Copyright is really a bundle of rights: the right to reproduce, distribute, and publicly perform, among others. Infringing any of these rights can trigger criminal infringement prosecution. Criminal infringement of reproduction and distribution has long carried felony charges in certain circumstances, but criminal infringement of other rights like public performance has been a part of the law since 1897 and has included the possibility of jail time.

Online, the distinction between what right is implicated by certain conduct blurs. Some courts have made a distinction between “downloading” and “streaming” to draw a line between reproduction and public performance, 1See, for example, US v. ASCAP, 485 F.Supp.2d 438 (SDNY 2007). though that doesn’t entirely clear up the confusion.

The distinction between downloading and streaming is not really a technical one. As Cory Doctorow explains in a 2009 column “Streaming will never stop downloading,” streaming is really only a subset of downloading. A work is still being copied, except with “streaming”, a user can start watching or listening before the entire work is finished copying, and generally, the copy isn’t permanently stored where it can easily be accessed later.

Legally, there is a difference between copying and a public performance. Ideally, that would translate online to a distinction between downloading and streaming, but as I just mentioned, that’s a difficult distinction to make.

Meanwhile, copyright owners are harmed just the same whether a site owner offers a movie that can be downloaded first and watched later or watched as soon as the downloading starts. Some copyright owners are particularly harmed by streaming: sports events are nearly always streamed since much of the experience comes from watching the event live.

Newly minted Register of Copyrights Maria Pallante explained the scope of this harm last June:

During its 2009-2010 professional basketball season, the NBA identified 2,975 unauthorized streams on just eight websites/services, while in the current 2010-2011 NBA season, the NBA identified more than 2,700 unlawful streams of games on just one foreign website alone. According to industry sources, monthly traffic to ten of the cyber lockers that provide unauthorized access to streamed content grew by 13 million separate users per month during 2010, to 105 million separate users per month. And a recent NBC Universal-commissioned study found that one site that provided access to pirated movie streams had 6.5 million unique users each month, while another similar website had 5 million unique users each month. Recent legal challenges involving claims of unauthorized streaming include a complaint by the Ultimate Fighting Championship (UFC) against life-casting website Justin.tv alleging that more than 50,000 viewers watched illegal streams of a live UFC bout, “UFC 121 Lesnar v. Velasquez” through the site, and that UFC vendors removed over 200 infringing feeds during just that live event. 2Promoting Investment and Protecting Commerce Online: The ART Act, the NET Act and Illegal Streaming, Statement of Maria A. Pallante, Register of Copyrights, before the Subcommittee on Intellectual Property, Competition, and the Internet Committee on the Judiciary United States House of Representatives, 112th Congress, 1st Session (June 1, 2011).

Bill S.978 seeks to address these problems by standardizing the penalties for large-scale, willful, commercial infringement of a public performance with the penalties for the same type of infringement of the reproduction and distribution right. S.978 amends the criminal copyright infringement provisions in part to add the following, stating that any person who willfully infringes a copyright:

(2) shall be imprisoned not more than 5 years, fined in the amount set forth in this title, or both, if–

(A) the offense consists of 10 or more public performances by electronic means, during any 180-day period, of 1 or more copyrighted works; and
(B)(i) the total retail value of the performances, or the total economic value of such public performances to the infringer or to the copyright owner, would exceed $2,500; or
(ii) the total fair market value of licenses to offer performances of those works would exceed $5,000

The language of the statute sets forth several bars to arbitrary and unreasonable application of the law, including its requirement of willfulness and the value necessary to trigger it. Let’s take a look at both of these in turn before looking at some more general bars to its application.

Willfulness

Civil copyright infringement is a strict liability tort — the intent or state of mind of an alleged infringer is irrelevant, and “innocent” infringement is not a defense. 3Although innocent infringement may reduce the minimum statutory damages available if the plaintiff seeks them.

Criminal copyright infringement, however, requires intent. The infringement must be “willful.” Courts have interpreted this to mean an “intentional violation of a known legal duty.” 4Prosecuting Intellectual Property Crimes, USDOJ, pg. 30, Third Edition (2006). In other words, in a criminal copyright trial, the government must prove a “bad purpose” or “evil motive” rather than merely an “intent to copy and not to infringe.” 5US v. Moran, 757 F.Supp. 1046, 1048 (D. Neb. 1991).

This is a high standard. In addition, it is a subjective rather than an objective standard, meaning the question is not whether a reasonable person would have known certain conduct infringed a copyright but rather what the alleged infringer himself thought, even if he was obviously wrong.

A good example of this distinction is found in the case law. In US v. Moran, the owner of a “mom-and-pop” movie rental store was charged with criminal copyright infringement after an investigation revealed that he was making a copy of every movie he got to rent out, keeping the originals in storage.

The owner testified that he did this as “insurance” because movies frequently became damaged or vandalized as they were rented out, and he was under the impression that, while piracy is illegal, his type of conduct was not. On this point, he was wrong, but the court noted that he honestly believed he was operating within the law, so the standard of willfulness hadn’t been met.

Obviously there are limits to this. Bad-faith claims or outright lying won’t save a willful infringer. Neither will disagreement over the validity of copyright law itself. 6See Cheek v. US, 498 US 192 (1991).

But it does mean that someone posting a mashup that they think is a fair use won’t find FBI agents at their door, 7The Prosecuting IP Crimes Manual says fair use has “rarely” been developed in criminal cases, in part because of the willfulness standard. I have yet to see a criminal copyright infringement case that presented a colorable fair use defense. nor does it mean an online intermediary with a legitimate DMCA policy in place will find itself in criminal court anytime soon.

Value

The second bar that has to be passed for a conviction under S.978 is establishing value. The proposed bill establishes two separate measures of value: either 10 or more performances within 180 days where the total retail value (or total economic value to the infringer or copyright owner) exceeds $2,500 or where the total fair market value of licenses to offer performances would exceed $5,000.

Contrary to some of the commentary I’ve seen, these numbers — retail value, total economic value, or fair market value — can’t be pulled out of thin air. They mean what they say they mean, not whatever a copyright owner or the government wants them to mean.

Retail value is simply what an authorized version would cost at the store. Felony provisions for reproducing a copyrighted work use the same measure of value. 818 USC § 2319(b). So a bootlegger copying a $20 DVD would need to make 125 copies in 180 days before coming within the scope of the felony provision.

What is the value of a performance? It’s equivalent to the fee for streaming or renting. New movie releases can be streamed online from places like Amazon and iTunes typically for $3.99. Pay-per-view events like UFC fights generally hover around $50.

Things like clips or cover songs would have values that are fractions of these. Your ordinary blogger won’t come close to reaching this bar. But a website operator pulling in 5 figures a year for offering hundreds (if not thousands) of unauthorized movies, TV shows, and sporting events (as evidence from Operation in Our Sites has shown was common for the sites whose domain names were seized) will.

Other Bars

Perhaps the biggest reason not to worry about this bill is that the government must prove willfulness, the total value, and all other elements of criminal copyright infringement under S.978 beyond a reasonable doubt. In a civil trial, a plaintiff only has to prove the elements of the case by a preponderance of the evidence — it is more likely than unlikely that a certain thing is true. It is far easier to be found civilly liable than it is to be found criminally guilty — just ask OJ Simpson.

The rule of lenity acts as another bar in criminal law. Criminal courts must construe any gray areas in a statute in favor of a defendant.

Finally, in my previous post, I talked about why prosecutorial discretion acts as a bar, a discussion that some have interpreted as me saying “trust the government.” That’s not the case.

The discussion here shows why the law itself prevents S.978 from being applied to conduct that many fear it applies to. These legal principles, however, prevent such convictions. Prosecutorial discretion — specifically, the government’s incentive to only bring cases it knows it can win and its limited time and resources to prosecute cases — means that those cases in the bubble between clearly legal and clearly illegal conduct won’t be prosecuted in the first place.

Conclusion

To sum up, Bill S.978 can’t be used to prosecute the uses that many fear it applies to. It doesn’t change what conduct is legal and what conduct is illegal. It is designed to apply only to outright pirates who profit off the streaming of unauthorized copyrighted works, and the language reflects this design.

References

References
↑1 See, for example, US v. ASCAP, 485 F.Supp.2d 438 (SDNY 2007).
↑2 Promoting Investment and Protecting Commerce Online: The ART Act, the NET Act and Illegal Streaming, Statement of Maria A. Pallante, Register of Copyrights, before the Subcommittee on Intellectual Property, Competition, and the Internet Committee on the Judiciary United States House of Representatives, 112th Congress, 1st Session (June 1, 2011).
↑3 Although innocent infringement may reduce the minimum statutory damages available if the plaintiff seeks them.
↑4 Prosecuting Intellectual Property Crimes, USDOJ, pg. 30, Third Edition (2006).
↑5 US v. Moran, 757 F.Supp. 1046, 1048 (D. Neb. 1991).
↑6 See Cheek v. US, 498 US 192 (1991).
↑7 The Prosecuting IP Crimes Manual says fair use has “rarely” been developed in criminal cases, in part because of the willfulness standard. I have yet to see a criminal copyright infringement case that presented a colorable fair use defense.
↑8 18 USC § 2319(b).