Friday’s Endnotes – 07/19/19

By , July 19, 2019.

Senate Judiciary Committee Passes CASE Act Legislation Streamlining Copyright Disputes — A big step forward for the bill, though it still has a long way to go. Based on recommendations made by the US Copyright Office in 2013, the bill would create a voluntary, inexpensive alternative venue to federal court for small copyright claims, giving individual creators and artists much needed relief.

Teaching Songwriting to World Dignitaries at the United States Patent and Trademark Office — Songwriter and Arts Envoy Amanda Colleen Williams shares her experience: “This week I had the privilege of leading a workshop for the assembled world copyright dignitaries at the U.S. Patent and Trademark Office (USPTO) / GIPA Copyright Seminar 2019.”

Disney Beats Antitrust Claim, But Must Face False Advertising Over Movie Download Codes — Redbox’s kitchen sink defense largely fails. Disney’s lawsuit against the movie rental company, which is aimed at Redbox’s practice of reselling separately the digital download codes that come with DVDs and Blu-Rays, will move forward.

Plagiarism in Pop Culture — Jonathan Bailey explores some of the interesting moral questions involving the events in the recently released film Yesterday. In that film, a struggling songwriter wakes up after an accident to find himself in a world where the Beatles never existed, and thus he is the only one to remember their music. He takes the opportunity to start performing the songs as his own, which launches him into fame and fortune (but at what cost?).

In memoriam:

Sound policy, as well as history, supports our consistent deference to Congress when major technological innovations alter the market for copyrighted materials. Congress has the constitutional authority and the institutional ability to accommodate fully the varied permutations of competing interests that are inevitably implicated by such new technology.

——Justice John Paul Stevens, who passed away Tuesday, writing in the seminal copyright decision Sony Corp. v. Universal City Studios, Inc., 464 US 417, 431 (1984).

Aereo takes its tiny antennas to Opposite Town

By , October 29, 2012.

Last September, broadcasters and amici supporters filed their briefs in the Second Circuit in WNET v Aereo. Within the last week or so, Aereo and its amici began to file their briefs in response. You can read Aereo’s brief here, as well as a brief from the EFF, Public Knowledge and the Consumer Electronics Association (CEA) and a brief from law professors.

Aereo, if you recall, is an online service which, like cable or satellite TV, retransmits broadcast television signals to paying services. But, unlike cable and satellite providers, Aereo is not licensed to publicly perform these copyrighted works because, as it argues, the equipment it uses is really, really tiny.

I’ve previously written about Aereo here. In July, the district court denied a preliminary injunction against Aereo. The broadcasters appealed that decision, and I’ve written about why I believe the court erred in denying the injunction. Oral arguments are scheduled for November 30th.

But as the appeal wends its way through the Second Circuit, I wanted to take a look at some of the arguments favoring the court’s decision both in the recently filed briefs and online. The reaction from amici and bloggers in support of Aereo is actually quite astonishing. So astonishing, in fact, that it seems at times that we’ve left the real world and entered Opposite Town. Let’s take a look at some of these arguments.

Aereo merely provides TV reception equipment for personal use.

A good deal of effort is spent characterizing Aereo as something other than your typical cable provider. It’s merely a facility where TV viewer’s can rent equipment similar to what they would use at home to watch and record their favorite shows, which certainly doesn’t require licensing. This is the crux of Aereo’s argument on appeal:

Aereo provides a technology platform that enables consumers to use remotely-located equipment, including an individual antenna and digital video recorder (“DVR”), to create, access and view their own unique recorded copies of free over-the air broadcast television programming. Essentially, for a small monthly fee, consumers are able to take advantage of current technology to use remotely-located “in the cloud” equipment functionally identical to that which they would otherwise have and use in their home for those same purposes.

Others have framed Aereo’s service this way as well. David Post, one of the law professors who signed the amicus brief, wrote in a blog post last week that “Aereo is in the business of allowing consumers, in effect, to rent a little teeny TV antenna that can pick up over-the-air broadcasts, and a little teeny bit of disk storage space, and then to record over-the-air programming for later viewing over the Net.” Last spring, Public Knowledge wrote, “No one thinks that it’s a public performance if a TV viewer attaches an antenna to his TV. Nor does a store like Radio Shack, who might have sold him the antenna, infringe any copyrights by doing so. Aereo is a bit different than this–it rents out antennas to TV viewers in the New York area, but keeps them in their own facility (which gets better TV reception).” And in its brief with the EFF and CEA,  it argues that Aereo’s service is no different from “the classic form of TV reception with a living-room set and a personal antenna, with the only difference being the length of the wire between antenna and set (or the replacement of that wire with an equivalent self-to-self transmission over the Internet).”

In effect, Aereo and its amici argue that its service — which receives transmissions of TV broadcast signals and retransmits them to paying subscribers — is the opposite of a cable service provider — which receives transmissions of TV broadcast signals and retransmits them to paying subscribers. 117 USC § 111(f)(3). But note that services which retransmit over the internet do not fall under this definition; WPIX v IVI, No. 11-788-CV (2012).

Aereo’s own terms of service even belie its characterization of its service as merely renting remotely-located equipment controlled by users. It grants users only a “non-exclusive, non-transferable, limited right to use and control” its equipment, it prohibits subscribers from using its equipment for “any commercial purpose whatsoever.” Aereo “retains exclusive ownership of all right, title, and interest in and to the Equipment, Site, and the Aereo Platform” and does not allow any subscriber to “reverse engineer, disassemble, modify, decompile and/or create derivative works of the Site, Equipment and/or the Platform.” And finally, “You may not transfer or attempt to transfer material available on Aereo’s Site and/or through your use of the Equipment and/or Platform, to another storage device or medium other than the DVR Equipment for your personal use.” It would seem that the difference between Aereo’s service and a viewer’s personal equipment is far more substantial than “the length of the wire.”

Aereo should win because of copyright’s technological neutrality.

Copyright law should be technologically neutral — I agree that this should be the default rule. Some of Aereo’s supporters have used this point to argue in favor of the service. Duke University Scholarly Communications Officer Kevin Smith, for example, has said that “such neutrality would seem to favor Aereo” in a recent post.

How so? Aereo’s primary argument is that it uses a lot of little antennas instead of one big antenna. CATV, cable providers, and satellite, retransmit broadcast signals through their systems to their subscribers. Aereo retransmits broadcast signals through its system to its subscribers. The former must have permission from the copyright holders to do so. Aereo argues it does not need permission, solely because the technology it uses is somewhat different.

This sounds like the exact opposite of “technological neutrality.”

Aereo assists in cord-cutting.

Indiewire asks, “Is Aereo the answer for cable cord-cutters who still want access to live TV?” Duke’s Kevin Smith says, “as someone who has long wanted to ‘cut the cable,’ I might be interested in the Aereo service if it is upheld.” Mashable says “Aereo makes cutting the cord even easier, and cheaper.” Wired describes Aereo as “one small step for cord cutting.”

Let me see if I got this straight. Cable TV provides access to broadcast TV for a monthly fee. Aereo provides access to broadcast TV for a monthly fee.

Switching from one to the other sounds like the exact opposite of “cord-cutting.”

Aereo is innovative.

Aereo and its supporters go to great pains to cast the service as an “innovation.” The law professor amicus brief, for example, frames this case as one involving “new technologies” and “major technological innovations.”

The TV antenna is not a new technology. Internet streaming is not a new technology.

Retransmitting TV broadcasts is not innovative — CATV has been around in the US since at least 1948 and has required a license since the Copyright Act of 1976. 217 USC § 111, P.L. 94-553 (Oct. 19, 1976). And Aereo is not the first website to try retransmitting broadcast signals over the internet without permission — Canadian company iCraveTV tried a similar service over a decade ago. 3A court subsequently enjoined iCraveTV’s streaming service.

The only “innovation” displayed by Aereo is the claim that it has figured out a way to do what cable providers do without having to pay license fees like they do. But building a system that does the same thing as something invented over 60 years ago sounds to me like the opposite of innovation. Here, “innovation” seems like merely a code word for “infringement.”

Aereo is furthering the public interest.

The EFF resurrects its argument that exempting Aereo from copyright liability furthers the public interest, an argument rejected by the district court even though it denied the preliminary injunction. According to the EFF, there is a public policy interest in making television broadcasts freely accessible to the public. But Aereo charges for this service. This sounds to me like the opposite of free.

Courts should rewrite the law to prop up Aereo’s business model.

Much ink has been spilled over a brief filed in favor of broadcasters by former Register of Copyrights Ralph Oman. In it, Oman argued that “It is nothing less than a major new exception, which could permit streaming of copyrighted works over the Internet … Whenever possible, when the law is ambiguous or silent on the issue at bar, the courts should let those who want to market new technologies carry the burden of persuasion that a new exception to the broad rights enacted by Congress should be established.”

Because copyright law is entirely a creature of statute, it is up to Congress to define its scope rather than courts. This has been a defining feature of copyright law, and one that has often acted to the detriment of copyright holders. 4See, for example, Sony v Universal City Studios, 464 US 417 (1984); Fortnightly v United Artists Television, 392 US 390 (1968); White-Smith Music Publishing v Apollo, 209 US 1 (1908). But, it seems, when this principle acts instead to the detriment of an economic user of copyrighted works, outrage ensues.

Much of this outrage stems from a severe misconstruction of Oman’s arguments. Peter Suderman at the Reason blog, for example, believes Oman is suggesting that inventors must “ask Congress for permission before releasing any new product.” Part is also based on a logical fallacy; says Suderman, “Aereo designed its system to be technically legal.” But that begs the question that Aereo’s interpretation of copyright law and its design based on that interpretation is, in fact, “technically legal.”

Duke’s Kevin Smith also takes exception to this portion of Oman’s brief, writing, “This is an extraordinary statement, suggesting that the Copyright Act was intended to force all innovators to go to Congress before beginning any service that might threaten some established form of exploiting the rights of copyright holders.”

That sounds to me quite ordinary. If Congress passes a law, and a business doesn’t like that law, it has to go to Congress to change the law. I mean, what’s the alternative? Corporations should be allowed to break the law? Perhaps that’s the thinking in Silicon Valley, but I respectfully disagree; corporations should be subject to laws just like everybody else.

References

References
↑1 17 USC § 111(f)(3). But note that services which retransmit over the internet do not fall under this definition; WPIX v IVI, No. 11-788-CV (2012).
↑2 17 USC § 111, P.L. 94-553 (Oct. 19, 1976).
↑3 A court subsequently enjoined iCraveTV’s streaming service.
↑4 See, for example, Sony v Universal City Studios, 464 US 417 (1984); Fortnightly v United Artists Television, 392 US 390 (1968); White-Smith Music Publishing v Apollo, 209 US 1 (1908).

Skipping commercials isn’t infringement, but copying is

By , October 09, 2012.

Currently, the four major US broadcasters are involved in litigation with satellite service provider Dish Networks. Judging by some of the stories online, you might think that the broadcasters are claiming that the Dish features in question infringe copyright solely because they allow viewers to skip commercials. 1See, for example, Fox sues Dish over commercial skipping, claims copyright infringement, where Cory Doctorow, as is typical, makes one erroneous claim after the other; TV Networks Say You’re Breaking The Law When You Skip Commercials; Why Fox thinks that skipping commercials is like robbing a bank.

But that’s not what’s happening here. Though these lawsuits are still in their early stages, I thought it would be worth taking a closer look at them.

The Broadcaster Business Model

TV broadcasters generally earn revenues from a number of ways. First, broadcasters sell advertising on over-the-air broadcasts of programs, which are viewed for free by viewers. They also receive fees from cable systems, satellite services, and other multichannel video programming distributors, each of whom retransmit broadcast programming to their own customers.

Additional revenues are made in secondary markets. For example, broadcasters may license programming to cable and satellite systems to be provided for video-on-demand (VOD) services, they may distribute programming to websites like Hulu, and they may rent or sell “ultra-premium” (commercial-free) programs through sites like iTunes, Amazon, and Netflix.

Dish Network’s Service

In March 2012, Dish Networks began offering its new “Hopper” DVR to subscribers for a monthly fee. Like traditional DVR’s, the set top device allows subscribers to record television programs for later viewing. But Dish added two new features.

The first, PrimeTime Anytime (“PTAT”), according to Dish, “automatically records all the shows on the four major networks in HD (ABC, CBS, NBC and FOX) Monday through Saturday from 8-11 p.m. and Sundays from 7-11:00 p.m. EST when enabled.” These recordings are available for eight days after broadcast and don’t take up any space on the viewer’s personal DVR.

The second, Auto Hop, automatically removes commercials from the PTAT recorded shows. As Dish explains, “When you are ready to watch your recorded PrimeTime Anytime content, simply open the PrimeTime Anytime or DVR menu screen. You will see a small Hopper (red kangaroo) icon beside each show that you may watch commercial-free. When you select a show with the Hopper icon, a pop-up message will appear on screen that asks whether you want to enable Auto Hop. Choose ‘yes,’ and simply sit back and watch your show commercial-free. Choose ‘no,’ and watch your show with the commercials intact.”

The Litigation

On May 24, 2012, Fox sued Dish Network in the Central District of California (Los Angeles) for breach of contract and copyright infringement. NBC and CBS filed similar copyright claims later that day in the same court. 2The Fox plaintiffs include Fox Broadcasting Company, Fox Television Holdings Inc and Twentieth Century Fox Film Corporation. The NBC plaintiffs include NBC Studios LLC, NBCUniversal Media LLC, Open 4 Business Productions LLC and Universal Network Television LLC. The CBS plaintiffs include CBS Broadcasting Inc, CBS Studios Inc and Survivor Productions LLC. The ABC defendants/counterclaimants include ABC, Inc, American Broadcasting Companies, Inc, and Disney Enterprises, Inc. For simplicity’s sake, I’ll refer to the plaintiffs by their marquee names. Only twenty-nine minutes before Fox filed its lawsuit against Dish in Los Angeles, Dish Network filed a declaratory relief action against Fox, CBS, NBC, and ABC in the Southern District of New York seeking a declaration that Dish was not infringing the networks’ copyrights.

What followed was a bit of judicial juggling. On July 9, the New York court ruled that the lawsuit filed by Dish in New York was an improper anticipatory filing and dismissed all the claims that were already pending in Los Angeles against Dish — that would be Fox’s copyright and contract claims as well as CBS’s and NBC’s copyright claims.

In September, the Los Angeles court transferred CBS’s copyright claim to New York where Dish’s declaratory relief contract claim against CBS is still pending. 3The CBS-Dish contract had a forum selection clause designating New York.

After the July 9 order, NBC amended its Los Angeles complaint to include contract claims. NBC and Dish currently have cross-motions pending in Los Angeles and New York as they continue to fight over the venue of NBC’s copyright and contract claims.

ABC has answered Dish’s complaint in New York and counterclaimed alleging copyright and contractual claims similar to the ones alleged by the other broadcasters in Los Angeles.

Fox’s Preliminary Injunction

While there are similar issues involved in each case, the first substantive ruling in these various lawsuits is likely to come from the litigation involving Fox. In late August, Fox moved for a preliminary injunction against Dish. The court heard arguments from both sides on September 21st, and a decision is likely to come soon.

Fox and Dish entered into a Retransmission Consent Agreement (“RTC”) in 2002. The Agreement allows Dish to retransmit Fox programming to its subscribers, subject to certain limitations. Fox alleges that Dish’s PTAT service and Autohop feature violates these limitations. These violations give rise to its breach of contract claim against Dish, but they also give rise to its copyright infringement claim, since a licensee who acts outside the scope of his license can be liable for copyright infringement. 4Sun Microsystems v Microsoft, 188 F.3d 1115, 1121 (9th Cir. 1998).

In addition, Fox argues that Dish violates its exclusive right to reproduction by making unauthorized copies, through both PTAT and Autohop, and its exclusive right to distribution by distributing these works to its subscribers. 5Fox also argues that, in the alternative, Dish is liable as a secondary infringer under the doctrines of inducement, vicarious liability, and contributory infringement.

In other words, Fox is not arguing that “skipping commercials is copyright infringement”; it is alleging that Dish made and distributed copies of its works without permission — the heart of copyright infringement — and also that its services exceeded the scope of the existing agreement between the two companies.

Dish’s Response: We’re Just Like Cablevision

In response, Dish raises a host of arguments to rebut Fox’s claims. Primarily, it seeks to characterize PTAT and Autohop as indistinguishable from a DVR system; it is the customer, and not Dish, making any copies, thus freeing Dish from any liability for breaching its contract or infringing copyright. Dish characterizes Fox’s arguments as variations on the theme that the “sky is falling.” 6This phrase is mentioned no less than three times in Dish’s Opposition to the Motion for Preliminary Injunction, perhaps not surprisingly, since one of Dish’s attorneys is Mark Lemley, who wrote an entire paper built around the phrase.

Perhaps part of the reason Dish was so keen in having these cases adjudicated in New York was to take advantage of the Second Circuit’s precedent in Cartoon Networks v CSC Holdings (the “Cablevision” case).

I’ve written about Cablevision before, but to recap the salient points — Cablevision was sued after rolling out a remote DVR feature (“RS-DVR”) for its subscribers. The Second Circuit rejected the broadcasters’ claim of direct infringement for the reproductions of their works made through the RS-DVR system, holding that the copies are “made” by Cablevision’s customers, not Cablevision itself. The court did so by reasoning that “volitional conduct” is “an important element of direct liability.”

Note, however, that in Cablevision, the court did not create a blanket rule; it explicitly noted that it “need not decide today whether one’s contribution to the creation of an infringing copy may be so great that it warrants holding that party directly liable for the infringement, even though another party has actually made the copy.” The court also did not consider whether Cablevision could face secondary liability for its RS-DVR system, as that theory of liability was “expressly disavowed by plaintiffs.”

Nevertheless, Dish is banking on a favorable comparison between its PTAT service and Cablevision’s RS-DVR. In its opposition to Fox’s motion for a preliminary injunction, Dish argues that, as in Cablevision, Dish’s customers are making copies, not Dish. This argument is obviously bolstered if it is made in a court where Cablevision is binding precedent. In response, Fox notes that Dish determines what programs are recorded, when they are recorded, and how they are accessed; the only act of “volition” by the customer is a “trivial ‘flip of the switch'” to activate the service.

Dish’s Response: We’re Just Like Sony

Moving past the direct infringement and contract claims, Dish relies on the Supreme Court’s decision in Sony v Universal City Studios to rebut secondary liability claims.

Dish argues that, “In short, home video recording equipment is legal” under Sony. This is not a new argument, as many have argued since Sony that the decision created a broad “safe harbor” against secondary liability. 7See, for example, Brett M. Frischmann, Peer-to-Peer Technology as Infrastructure: an Economic Argument for Retaining Sony’s Safe Harbor for Technologies Capable of Substantial Noninfringing Uses, 2005 Journal of the Copyright Society of the USA 329 (2005), characterizing Sony as creating a rule “which precludes secondary liability in situations where a technology is “capable of substantial noninfringing uses”; Pamela Samuelson, Three Reactions to MGM v. Grokster, 13 Mich. Telecomm. & Tech. L.Rev. 177 (2006), referring to “Sony safe harbor”; Randal Picker, Rewinding Sony: The Evolving Product, Phoning Home, and the Duty of Ongoing Design, U Chicago Law & Economics, Olin Working Paper No. 241 (2005), “The great virtue of Sony’s substantial noninfringing use test is that it creates an innovation safe harbor”; A&M Records v Napster, 114 F.Supp.2d 896, 915-16 (ND Cali. 2000), affirmed 239 F.3d 1004, 1019 (9th Cir. 2001), court rejects Napster’s argument that it is protected under Sony precedent;

But I would argue that Sony’s holding is far narrower. The doctrine of contributory infringement places liability on a third party who materially contributes to infringement and has knowledge of the infringing activity. 8Gershwin Publishing v Columbia Artists Management, 443 F.2d 1159, 1162 (2nd Cir. 1971). Sony held that impute the necessary knowledge to a device manufacturer based solely on the design of the device, so long as the device is capable of substantial noninfringing uses.

This is precisely how the Supreme Court later interpreted Sony in its 2005 decision in MGM v Grokster:

Sony‘s rule limits imputing culpable intent as a matter of law from the characteristics or uses of a distributed product. But nothing in Sony requires courts to ignore evidence of intent if there is such evidence, and the case was never meant to foreclose rules of fault-based liability derived from the common law.

Indeed, the Court there went on to hold that evidence that Grokster induced infringement satisfied the knowledge prong of contributory infringement. And Sony itself noted that in cases where there is an ongoing relationship between a device’s manufacturer or distributor, as opposed to a relationship that ends at the point of sale, the rule does not apply. 9Sony at 437-38.

Sony also does not apply to vicarious liability, where a third party can be held liable for infringement if he receives a direct financial benefit attributed to infringement and has the right and ability to supervise the direct infringers. 10MGM v Grokster, 380 F.3d 1154, 1164 (9th Cir. 2004).

These last two points are relevant here since the broadcasters have each alleged claims of inducement and vicarious liability against Dish. But setting these aside, is Dish even protected from liability for contributory infringement under Sony?

The Sony court, after all, held that the Betamax at issue was capable of substantial noninfringing uses for two reasons: first, it held that some broadcasters — ones who had not sued Sony — tacitly allow time-shifting of their programming, and, second, the plaintiffs “failed to demonstrate that time-shifting would cause any likelihood of nonminimal harm to the potential market for, or the value of, their copyrighted works” — leading to the Court’s conclusion that, on these facts, such time-shifting would be fair use.

Dish certainly cannot show the first — its PTAT service only copies programming from the four broadcasters who have sued here. And I’m not persuaded that Dish can show that any time-shifting enabled by its service, if the court accepts Dish’s characterization of its service as enabling time-shifting, doesn’t cause nonminimal harm to the potential market for Fox’s works. Its service directly competes with Fox’s licensed VOD options and guts its ad-based broadcasting model.

What’s next

Both Fox and Dish supply other arguments, and the other broadcasters have yet to weigh in on pretrial motions; it remains to be seen what issues will emerge as predominant.

But the bottom line is that none of the broadcasters are asserting that skipping commercials by itself amounts to direct copyright infringement. Fox notes repeatedly in its reply brief that it is not arguing that skipping commercials is infringement, nor is it seeking to overturn Sony’s decision on personal time-shifting or restrict the use of DVR’s. It is Dish’s alleged copying, in conjunction with automated removal of advertising, that gives rise to the contract and copyright claims. I’ll have more on these cases as they continue to develop.

References

References
↑1 See, for example, Fox sues Dish over commercial skipping, claims copyright infringement, where Cory Doctorow, as is typical, makes one erroneous claim after the other; TV Networks Say You’re Breaking The Law When You Skip Commercials; Why Fox thinks that skipping commercials is like robbing a bank.
↑2 The Fox plaintiffs include Fox Broadcasting Company, Fox Television Holdings Inc and Twentieth Century Fox Film Corporation. The NBC plaintiffs include NBC Studios LLC, NBCUniversal Media LLC, Open 4 Business Productions LLC and Universal Network Television LLC. The CBS plaintiffs include CBS Broadcasting Inc, CBS Studios Inc and Survivor Productions LLC. The ABC defendants/counterclaimants include ABC, Inc, American Broadcasting Companies, Inc, and Disney Enterprises, Inc. For simplicity’s sake, I’ll refer to the plaintiffs by their marquee names.
↑3 The CBS-Dish contract had a forum selection clause designating New York.
↑4 Sun Microsystems v Microsoft, 188 F.3d 1115, 1121 (9th Cir. 1998).
↑5 Fox also argues that, in the alternative, Dish is liable as a secondary infringer under the doctrines of inducement, vicarious liability, and contributory infringement.
↑6 This phrase is mentioned no less than three times in Dish’s Opposition to the Motion for Preliminary Injunction, perhaps not surprisingly, since one of Dish’s attorneys is Mark Lemley, who wrote an entire paper built around the phrase.
↑7 See, for example, Brett M. Frischmann, Peer-to-Peer Technology as Infrastructure: an Economic Argument for Retaining Sony’s Safe Harbor for Technologies Capable of Substantial Noninfringing Uses, 2005 Journal of the Copyright Society of the USA 329 (2005), characterizing Sony as creating a rule “which precludes secondary liability in situations where a technology is “capable of substantial noninfringing uses”; Pamela Samuelson, Three Reactions to MGM v. Grokster, 13 Mich. Telecomm. & Tech. L.Rev. 177 (2006), referring to “Sony safe harbor”; Randal Picker, Rewinding Sony: The Evolving Product, Phoning Home, and the Duty of Ongoing Design, U Chicago Law & Economics, Olin Working Paper No. 241 (2005), “The great virtue of Sony’s substantial noninfringing use test is that it creates an innovation safe harbor”; A&M Records v Napster, 114 F.Supp.2d 896, 915-16 (ND Cali. 2000), affirmed 239 F.3d 1004, 1019 (9th Cir. 2001), court rejects Napster’s argument that it is protected under Sony precedent;
↑8 Gershwin Publishing v Columbia Artists Management, 443 F.2d 1159, 1162 (2nd Cir. 1971).
↑9 Sony at 437-38.
↑10 MGM v Grokster, 380 F.3d 1154, 1164 (9th Cir. 2004).

SOPA: New remedies for existing liability

By , November 14, 2011.

That every person for every injury done him in his goods, land or person, ought to have remedy by the course of the law of the land and ought to have justice and right for the injury done to him freely without sale, fully without any denial, and speedily without delay, according to the law of the land. 1Chief Justice Thomas Philips, The Constitutional Right to a Remedy, 78 New York University Law Review 1309 (2003), paraphrasing Arkansas Constitution art. II, § 13; Illinois Constitution art. I, § 12; Maine Constitution art. I, § 13; Maryland Constitution Decl. of Rights, art. 19; Massachusetts Constitution pt. 1, § 11; Minnesota Constitution art. 1 § 8; New Hampshire Constitution pt. I, art. 14; Rhode Island Constitution art. I, § 5; Vermont Constitution ch. I, art. 4; and Wisconsin Constitution art. I, § 9.

Ineffective remedies are often just as bad as no remedy at all. While innovative, sustainable services continue to develop, offering consumers exciting and convenient new ways to enjoy content that remunerates creators, rogue actors still find it easy to profit off the misappropriation of someone else’s time and talents.

The Stop Online Piracy Act (H.R. 3261) gives creators more tools to address this type of commercial piracy. Since it was introduced, however, it has been subject to much criticism, and with the House Judiciary Committee holding a hearing on the bill Wednesday, the criticism is sure to continue.

While some of the criticism is legitimate — few bills are perfect when they are first introduced, hence the need for hearings — a lot of it is unfounded. One thing that should be kept in mind is that SOPA does not expand the scope of copyright law, of what is protected or what is not.

The Stop Online Piracy Act creates new remedies, it does not create any new liability.

Section 103 of SOPA provides for a procedure, similar to the notice-and-takedown procedure of the DMCA, that allows copyright holders to better protect their work against commercial misappropriation. This procedure is limited to use against sites that are, as the bill terms them, “dedicated to theft of U.S. property.” The bill includes three separate definitions for a site “dedicated to theft of U.S. property.”

To see why SOPA doesn’t expand the scope of copyright law, compare its definitions to current law. These definitions, for sites “dedicated to the theft of U.S. property”, incorporate existing standards of liability. That is, sites or services that fall within the scope of these definitions are already potentially liable for copyright infringement. All Section 103 of SOPA does is give copyright holders a new tool to more effectively protect their work from commercial misappropriation.

No legitimate purpose

The first definition of a site “dedicated to the theft of U.S. property” under SOPA is one 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.

The language of this definition mirrors that of the existing provision in the DMCA that prohibits devices that circumvent technological protection measures:

No person shall manufacture, import, offer to the public, provide, or otherwise traffic in any technology, product, service, device, component, or part thereof, that—

(A) is primarily designed or produced for the purpose of circumventing a technological measure that effectively controls access to a work protected under this title;

(B) has only limited commercially significant purpose or use other than to circumvent a technological measure that effectively controls access to a work protected under this title; or

(C) is marketed by that person or another acting in concert with that person with that person’s knowledge for use in circumventing a technological measure that effectively controls access to a work protected under this title. 217 USC § 1201(a)(2).

But in a broader sense, this definition draws upon the theory of liability originally set forth in Sony Corporation v. Universal City Studios — the “Betamax” case. There, the Supreme Court held that the sale of a good “does not constitute contributory infringement if the product is widely used for legitimate, unobjectionable purposes. Indeed, it need merely be capable of substantial noninfringing uses.” This holding borrowed from the staple article of commerce doctrine in patent law. A corollary to this doctrine is that “where an article is ‘good for nothing else’ but infringement … there is no injustice in presuming or imputing an intent to infringe.” 3Metro-Goldwyn-Mayer v. Grokster, 545 US 913, 932 (2005).

There is recognition in Sony itself that its holding on contributory infringement doesn’t extend to products or services which have no purpose other than infringement. Justice Blackmun said in his dissent, “If virtually all of the product’s use, however, is to infringe, contributory liability may be imposed; if no one would buy the product for noninfringing purposes alone, it is clear that the manufacturer is purposely profiting from the infringement, and that liability is appropriately imposed.” Blackmun’s dissent bore a strong resemblance to an earlier draft of what, at one point, was the majority opinion in Sony. 4Jonathan Band & Andrew J.  McLaughlin, The Marshall Papers: A Peek Behind the Scenes at the Making of Sony v. Universal, 17 Columbia – VLA Journal of Law & the Arts 427 (1993). The language of that draft bears an even stronger resemblance to SOPA’s definition of a site “dedicated to theft of U.S. property”: “Sony can be liable for contributory infringement only if the Betamax’s ‘most conspicuous purpose’ or ‘primary use’ is an infringing use.” 5Draft Majority Opinion of Associate Justice Harry A. Blackmun at 35 (June 13, 1983).

Willful Blindness

Willful blindness is sometimes also referred to as “Nelsonian knowledge“, after flag office Horatio Nelson, who fought for the British Royal Navy in the late 1700s and early 1800s. The following story explains why — this particular story also serves as the origin of the phrase “turning a blind eye.”

When some of your great grandfathers were little boys, there was a great war between England and France. Many of the battles were fought at sea. England had good ships and brave sailors and bold captains in plenty; but the best sailor and the boldest captain of them all was Lord Horatio Nelson.

[…] In one battle this brave officer lost an eye. In another he lost an arm; but though he had but one eye and one arm, he was always the first in the fight and the last out. He never would give in. At the battle of Copenhagen two of his ships ran aground. Admiral Parker, who had command of the fleet, thought Nelson had no chance of winning: so he hung out the signal to “stop fighting.”

But Nelson took no heed of it. His one eye danced with glee as the guns roared, and ropes and bits of timber flew through the air. When a shot struck the mast of his own ship and broke it to hits, he only said. “Warm work this! But I wouldn’t lie out of it for all the world!” Some one told him that the signal was up to “stop fighting.”

He laughed: and putting the glass to his blind eye, he said: “I don’t see the signal. Keep mine flying for closer battle. Nail it to the mast.” And he kept on fighting till he won the battle; and for his great victory he was made lord admiral of the fleet. 6The Brave Lord Nelson, Timely Topics, Vol. v. No. 1, pg 286 (Sept. 7, 1900).

The second definition of a site “dedicated to theft of U.S. property” under SOPA is a site where “the operator of the U.S.-directed site is taking, or has taken, deliberate actions to avoid confirming a high probability of the use of the U.S.-directed site to carry out acts that constitute” copyright infringement.

The language is taken directly — word for word — from last May’s Supreme Court opinion for Global-Tech Appliances v. SEB. The Court stated that “a willfully blind defendant is one who takes deliberate actions to avoid confirming a high probability of wrongdoing.”

Global-Tech presented the Court with the question of whether willful blindness can satisfy the knowledge requirement of 35 U.S.C. § 271. However, willful blindness itself is an incontrovertible part of the law. The Court explains:

The doctrine of willful blindness is well established in criminal law. Many criminal statutes require proof that a defendant acted knowingly or willfully, and courts applying the doctrine of willful blindness hold that defendants cannot escape the reach of these statutes by deliberately shielding themselves from clear evidence of critical facts that are strongly suggested by the circumstances. The traditional rationale for this doctrine is that defendants who behave in this manner are just as culpable as those who have actual knowledge. It is also said that persons who know enough to blind themselves to direct proof of critical facts in effect have actual knowledge of those facts.

The Court notes the wide acceptance of the concept of willful blindness. It begins its survey with a case from 1899 which embraced the idea and traces the doctrine through the 20th century. Today, “every Court of Appeals—with the possible exception of the District of Columbia Circuit, has fully embraced willful blindness, applying the doctrine to a wide range of criminal statutes.”

Finally, the Supreme Court presents a general formulation of willful blindness. “While the Courts of Appeals articulate the doctrine of willful blindness in slightly different ways, all appear to agree on two basic requirements: (1) the defendant must subjectively believe that there is a high probability that a fact exists and (2) the defendant must take deliberate actions to avoid learning of that fact.”

The doctrine of willful blindness applies to copyright law just as much as it does to law in general. 7In re Aimster Copyright Litigation, 334 F.3d 643, 650 (7th Cir. 2003), “Willful blindness is knowledge, in copyright law as it is in the law generally”; See also Island Software and Computer Service v. Microsoft, 413 F.3d 257, 263 (2nd Cir. 2005).

Inducement

The final definition of a site “dedicated to theft of US property” under SOPA is a site operated “with the object of promoting, or has promoted, its use to carry out acts that constitute” copyright infringement, “as shown by clear expression or other affirmative steps taken to foster infringement.”

Like the definition for willful blindness, this definition is taken directly from the Supreme Court. In Metro-Goldwyn-Mayer v. Grokster, the Court stated that “one who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties.”

The Court dubs this “inducement”, and it has been recognized as a form of secondary liability within copyright law for decades. In 1971, for example, the Second Circuit said that “one who, with knowledge of the infringing activity induces, causes or materially contributes to the infringing conduct of another, may be held liable as a ‘contributory’ infringer.” 8Gershwin Publishing v. Columbia Artists Management, 443 F.2d 1159, 1162.

Effective recourse

The Stop Online Piracy Act incorporates long standing principles of liability, principles that have applied to service providers and web site operators since the beginnings of the world wide web. The actions that would subject a provider to SOPA’s provisions are the same ones that would subject it to a copyright infringement suit under existing law and are actions that would not be protected under DMCA safe harbors.

What has been missing has been effective remedies against operators and providers that clearly fall within the scope of this liability: sites that have been purposely designed for the sole purpose of infringement, sites whose operators have taken deliberate steps to blind themselves from the use of their sites to engage in wrongdoing, and sites whose operators have actively promoted the use of their sites for piracy. For smaller content producers and individuals especially, this lack of effective recourse has proven damaging.

The goal of SOPA is to remedy this lack of effective recourse, and ensure that creators have “justice and right” freely, fully, and without delay for the injury caused by rogue sites.

References

References
↑1 Chief Justice Thomas Philips, The Constitutional Right to a Remedy, 78 New York University Law Review 1309 (2003), paraphrasing Arkansas Constitution art. II, § 13; Illinois Constitution art. I, § 12; Maine Constitution art. I, § 13; Maryland Constitution Decl. of Rights, art. 19; Massachusetts Constitution pt. 1, § 11; Minnesota Constitution art. 1 § 8; New Hampshire Constitution pt. I, art. 14; Rhode Island Constitution art. I, § 5; Vermont Constitution ch. I, art. 4; and Wisconsin Constitution art. I, § 9.
↑2 17 USC § 1201(a)(2).
↑3 Metro-Goldwyn-Mayer v. Grokster, 545 US 913, 932 (2005).
↑4 Jonathan Band & Andrew J.  McLaughlin, The Marshall Papers: A Peek Behind the Scenes at the Making of Sony v. Universal, 17 Columbia – VLA Journal of Law & the Arts 427 (1993).
↑5 Draft Majority Opinion of Associate Justice Harry A. Blackmun at 35 (June 13, 1983).
↑6 The Brave Lord Nelson, Timely Topics, Vol. v. No. 1, pg 286 (Sept. 7, 1900).
↑7 In re Aimster Copyright Litigation, 334 F.3d 643, 650 (7th Cir. 2003), “Willful blindness is knowledge, in copyright law as it is in the law generally”; See also Island Software and Computer Service v. Microsoft, 413 F.3d 257, 263 (2nd Cir. 2005).
↑8 Gershwin Publishing v. Columbia Artists Management, 443 F.2d 1159, 1162.