Can Google Be Seized By ICE?

February 15, 2011 · · Comments Off

Is Google in danger of being seized by ICE for facilitating copyright infringement?

It seems quite a few people have asked that question in the wake of ICE’s Operation in Our Sites, which seized the domain names of pirate sites last July, November, and, most recently, a few weeks ago.

John Moe, of American Public Media, asked Homeland Security Investigation Special Agent James Hayes that very question and posted the audio online.

The idea seems to be that most of the domains seized point to sites that link to infringing material rather than hosting it themselves. Google links to infringing material. Hence, Google is at risk for forfeiture.

In Super Bowl Seizures, I mentioned that facilitating property needs a substantial connection to the underlying crime to be subject to forfeiture under federal law but glossed over what that means. Today, I want to look at this standard in more detail and see what it means for Google.

The Forfeiture Standard

Federal law provides for the forfeiture of “any property used, or intended to be used, in any manner or part to commit or facilitate the commission of” copyright infringement.1 As noted in my previous post, this language is very broad: facilitation means the property need only make the commission of the crime “less difficult or ‘more or less free from hindrance’”, and the statute covers any property used in any manner or part. One could theoretically trace a “for want of a nail” line of all sorts of property that make a crime less difficult to commit.

However, courts have generally recognized that the connection between property and crime must be more than de minimis. In the language most often used by courts, the connection must, at a minimum, be more than “incidental” or “fortuitous.”

This broad language has been narrowed by the passing of the Civil Asset Forfeiture Reform Act of 2000, which added to the law language that says (emphasis added) “if the Government’s theory of forfeiture is that the property was used to commit or facilitate the commission of a criminal offense, or was involved in the commission of a criminal offense, the Government shall establish that there was a substantial connection between the property and the offense.”2 Congress intended the “substantial connection” language to require that the use of property to facilitate a crime is “significantly greater” than incidental or fortuitous.3

On the other side of the spectrum, the forfeiture statute does not require that the facilitation of a prohibited activity is the principle use of the property.4 Nor does it require that the property is indispensable to the commission of a prohibited activity.5

The first big question is where to draw the line between substantial and insubstantial connections.

Incidental and Fortuitous versus Deliberate and Planned

The terms “incidental” and “fortuitous” are often contrasted with the terms “deliberate” and “planned” in forfeiture cases.6 A closer look at the meaning of these words may aid in understanding what kinds of property may be forfeited. From Merriam-Webster:

  • incidental – (1) being likely to ensue as a chance or minor consequence; (2) occurring merely by chance or without intention or calculation.
  • fortuitous – (1) occurring by chance; (2) coming or happening by a lucky chance.
  • deliberate – (1) characterized by or resulting from careful and thorough consideration; (2) characterized by awareness of the consequences; (3) slow, unhurried, and steady as though allowing time for decision on each individual action involved.
  • planned – (1) arranged the parts of; (2) devised or projected the realization or achievement of; (3) had in mind.

The Merriam-Webster’s Dictionary of Synonyms adds further shading to the meanings of these words. In its entry for “accidental, casual, fortuitous, contingent, incidental, adventitious,” the book notes:

The last five of these words are synonyms of accidental but not always of one another. Accidental denotes simply either happening by chance or not of the real or essential nature of a thing. Casual, fortuitous, and contingent come into comparison with accidental in the first of these senses; incidental and adventitious chiefly in the second sense. […] Fortuitous so strongly implies chance that it sometimes connotes the absence, or seeming absence, of a cause […] Incidental may or may not imply chance; it typically suggests a real and often a designed relationship, but one which is secondary and nonessential.

We also learn that “Deliberate implies full awareness of the nature of what one says or does and often a careful and unhurried calculation of the intended effect or of the probable consequences”, while “Plan, in its widest sense, regularly implies mental formulation of the method [of achieving a given end].”

Substantial Connection

These definitions are helpful, but not exactly enlightening. Now we know, for example, that the commission of criminal activity need not be the principle purpose of property for it to be subject to forfeiture, but it must be more than the secondary purpose of property. Let’s take a quick look at how the courts have dealt with these meanings.

On one hand, the Oklahoma Supreme Court held that marijuana residue found in a weapons safe was not enough to support forfeiture of the weapons for facilitating the possession of marijuana with intent to distribute — the presence of the marijuana was incidental and fortuitous.7 On the other hand, courts have found a substantial connection between houses and drug offenses when the houses were used to store narcotics or engage in narcotic transactions.8

The Eighth Circuit held that there was not a substantial connection between a truck seen parked at property used to grow marijuana but used to transport roofing tile and the facilitation of the marijuana cultivation — the connection was “simply too tenuous and far removed to support its forfeiture.”9 The government was unable to provide any evidence that the truck was ever used to transport marijuana or even seed, fertilizer, or other supplies used to cultivate the plants.

But the same circuit held that there was a substantial connection between the commission of child pornography offenses and the home of where the offender committed the crime. Said the court:

The house enabled Hull to establish a hardwired connection to the Internet, which allowed him to distribute the contraband. It also provided a secure place to store the images that he later distributed. Use of a computer in the privacy of the residence, rather than in a library, coffee shop, or senior center, made it easier for Hull to conceal his crimes from public scrutiny. Hull posits that he could just as easily have used a motel room, but use of the residence avoided rental costs and the attention that would be attracted by frequent visits to local motels.10

If anything is clear, it’s that the standard for forfeiture, even with a “substantial connection” requirement, is still relatively low. But that raises the second question: to what extent should property owners be at risk of forfeiture for the actions of third parties?

Ownership and the Outer Bounds of Forfeiture

Who owns the property is irrelevant in forfeiture cases. In fact, prior to CAFRA, which added an “innocent owner” defense to all federal forfeiture statutes, the fact that an owner was unaware that his property was used to facilitate a criminal offense had been “uniformly rejected as a defense” in a long line of cases.11

The problem that should be apparent is whether this principle has an outer bound. Forfeiture has been sought, after all, to varying degrees of success against multi-unit apartment buildings where a number of tenants had sold and used drugs, motels which were the site of numerous drug transactions, and businesses that had problems with customers using and selling drugs.

Courts have hypothesized about the outer bound. “It is said that a Pullman sleeper can be forfeited if a bottle of illicit liquor be taken upon it by a passenger, and that an ocean steamer can be condemned to confiscation if a package of like liquor be innocently received and transported by it,” said the Supreme Court in 1921.12 Perhaps surprisingly though, such a situation has never reached a court. “When such an application shall be made it will be time enough to pronounce upon it,” continued the Court, a statement reiterated in 1996.13

Since courts have not addressed the issue, it’s necessary to explore these outer bounds on our own. Two principles emerge. First, while ownership of facilitating property is irrelevant, some privity between the owner and the offender must exist. Courts have upheld forfeiture where property owners have leased, lent, or otherwise allowed the offender possession, but forfeiture of property that had been stolen or wrongfully acquired would probably not be allowed.14 Second, despite the many times courts have said the culpability of the owner in the underlying crime is irrelevant for in rem forfeiture, the culpability of the owner — based on similar principles in tort law — would play a role in the outer bounds of what facilitating property may properly be forfeited. This culpability would play a role in separating the Calero yachts from the ocean steamers, the Bennis automobiles from the Pullman sleepers, and the Torrent-finder domain names from the Google domain names.

The Deterrent Function of Forfeiture

It may be helpful at this point to revisit the purposes of forfeiture. Stefan D. Casella explains:

Forfeiture is also used to abate nuisances and to take the instrumentalities of crime out of circulation. For example, if drug dealers are using a “crack house” to sell drugs to children as they pass by on the way to school, the building is a danger to the health and safety of the neighborhood. Under the forfeiture laws, we can shut it down. If a boat or truck is being used to smuggle illegal aliens across the border, we can forfeit the vessel or vehicle to prevent its use time and again for the same purpose. The same is true for an airplane used to fly cocaine from Peru into Southern California, or a printing press used to mint phony $100 bills.

The idea that an instrumentality — a thing — can be treated as an offender and properly confiscated by the state as a way of preventing, deterring, or punishing crime is an ancient one, stretching at least as far back as biblical times: “if an ox gore a man or a woman to death, the ox shall be surely stoned, and its flesh shall not be eaten,” reads Exodus 21:28.

At the same time, worry over the harshness that may result from forfeiture is almost inherent. Forfeiture has “repeatedly been called a hard law” wrote Edward Shippen in a 1787 court case, a call that has continued to be repeated since then by courts, commentators, scholars, and even Congress. The harshness arises in part because of the necessities of law enforcement and the difficulties in enforcing certain laws.15 Shippen identifies one of the difficulties as the “devices of ingenious men,” making forfeiture laws “necessary.” “If the end can be accomplished without infringing the private rights of the subject, it is so much the better; but, at all events, the exigencies of government must be satisfied.” The Supreme Court said much the same in 1844:

It is not an uncommon course in the admiralty, acting under the law of nations, to treat the vessel in which or by which, or by the master or crew thereof, a wrong or offence has been done as the offender, without any regard whatsoever to the personal misconduct or responsibility of the owner thereof. And this is done from the necessity of the case, as the only adequate means of suppressing the offence or wrong, or insuring an indemnity to the injured party.16

Third Party Liability and Its Limits

The deterrent function is defeated if “ingenious men” can evade forfeiture by simply divorcing ownership of property from its use. At the same time, the irrelevance of ownership to forfeiture places responsibility on property owners to ensure the things they own are not used to cause harm. “In breaches of revenue provisions some forms of property are facilities, and therefore it may be said, that Congress interposes the care and responsibility of their owners in aid of the prohibitions of the law and its punitive provisions, by ascribing to the property a certain personality, a power of complicity and guilt in the wrong,” said the Supreme Court on one occasion.17 On another, it observed that “to the extent that such forfeiture provisions are applied to lessors, bailors, or secured creditors who are innocent of any wrongdoing, confiscation may have the desirable effect of inducing them to exercise greater care in transferring possession of their property.”18

In fact, imposing increased responsibility on a third party to deter the wrongs of another is a common feature of the law, and there are many examples in other areas of the law that parallel what we see in forfeiture cases.19 In copyright law, obviously, third parties may be liable for aiding, benefiting from, or inducing infringement. Automobile owners may be liable for the negligent use of their car by someone who has borrowed it.

Wal-Mart is no stranger to the extent to which the law will hold a third party responsible for acts of another. According to the Wal-Mart Litigation Project, the company has been held liable for the injuries of a man shot by an unknown assailant in the parking lot, the injuries of a man shot by a child playing with a BB gun in the store, and the wrongful death of a man shot with ammunition bought at a store by minors because an employee failed to check ID. (I realize lawsuits like this often face heavy criticism; I point them out not to suggest they are or aren’t reasonable or logical but merely to describe the extent of third party liability as it currently exists.)

But there is a limit on how far this liability can be extended in forfeiture cases. This limit was recognized over 200 years ago by the Supreme Court when it said that “a forfeiture can only be applied to those cases in which the means that are prescribed for the prevention of a forfeiture may be employed.”20 The limit was restated by the Court recently when, after a survey of cases throughout history, noted that “In none of these cases did the Court apply the guilty property fiction to justify forfeiture when the owner had done all that reasonably could be expected to prevent the unlawful use of his property.”21

Courts have applied this “all reasonable means” standard in a subjective way: what is reasonable from the perspective of the owner in his specific circumstances, not what a judge would consider reasonable. “A property owner is not required to take heroic or vigilante measures to rid his or her property” of illegal activity.22 But the owner must do something, and at least one court has held that being aware of suspicious facts regarding the use of property triggers the duty to act.23

Comparisons to Tort Law

The duties of owners in the forfeiture context share some similarities to legal duties in tort law, but they are not an exact match. Perhaps this is due to the historically limited and specialized role of forfeiture. The closest analogue may be the tort of public nuisance, and in fact many state laws providing for forfeiture have been characterized as public nuisance laws.24 Like forfeiture, public nuisance has largely been defined through statute (although, unlike forfeiture, public nuisance also exists under common law), used to effectively address quasi-criminal activities where traditional criminal processes are ineffective. Prior to the introduction of zoning law, public nuisance laws were the only real way for towns and cities to regulate “less-desirable” businesses. And, like forfeiture, whether something is considered a public nuisance hinges more on the offense of property rather than any culpability of the owner.

And, like forfeiture cases, the outer bounds of what constitutes a public nuisance under a specific statute remains largely unexplored, especially when the property in question is engaged in legitimate business but happens to also be the site of targeted activity.

At best, we have a sort of “shoot from the hip” approach to deciding between actionable nuisances and facilitating property and legitimate businesses and uses of property. The parallel can be seen by comparing HSI Special Agent James Hayes’ response to the question of whether Google can be seized and the Washington Supreme Court’s decision in State ex rel Carroll v. Gatter.25

Hayes gave a decidedly nontechnical and nonlegal answer to the question. He noted that the federal government was only interested in targeting sites that haven’t done “due diligence” to ensure that they aren’t linking to infringing content. Their interest was limited only to those sites where piracy was the “main premise of doing business.” The Washington Supreme Court similarly gave a muddy, gut-feeling analysis in its decision. The court was faced with the question of whether the state could properly declare and abate the Oxford Hotel in Seattle as a public nuisance targeting places used for “purposes of lewdness, assignation, or prostitution.” The hotel had been the site of several acts of prostitution (some aided by bellmen employed by the hotel). However, the court noted that the intent of the law was to target places one would find in “red light districts”, and the Oxford Hotel had “a reputation for being a decent, orderly, respectable hotel in the community.”

Can Google Be Seized Or Not

I apologize if this discussion has not been particularly illuminating. Despite the long history of forfeiture, questions about its edges and outer bounds have not been thoroughly fleshed out. With that said, I’d like to offer my two cents on whether Google is at risk for having its domain name seized.

First, I don’t think there is a substantial connection between the Google domain name and links to infringing content that may appear in search results. Google’s search engine is designed to return results from as much of the web as it can scan, whether these results are links to html pages, documents, video, or audio, etc. Any links to infringing content appear only to the extent they exist. Displaying these links is only incidental to Google’s service.

The same can not be said for a site like Torrent-finder, one of the domain names seized by ICE. A site like this searches only public torrent trackers and returns results consisting solely of torrent files. When 90-99% of such files are infringing, the connection between a site like that and piracy can hardly be called incidental.26 It is exceedingly difficult to argue that the designer of such a site didn’t have the unauthorized distribution of copyrighted works in mind when planning a site like that.

Google also has a continuing obligation, like any search engine, to remove links when it becomes aware that the content they link to is infringing. Although some would argue that Google could do a better job at this, few would say it’s not doing “due diligence” to limit the availability of links to infringing content. But again, when a site is returning only results consisting of an almost complete majority of infringing content, a much higher level of due diligence is required to remain legitimate. Simply responding to DMCA takedown notices as they arrive when faced with such widespread, apparent infringement is not enough to qualify such a service for safe harbor; this “head in the sand” approach is also not enough to immunize such a site from forfeiture.

Google, then, is in the same category of the hypothetical Pullman sleeper and cruise ship, beyond the outer bounds of forfeiture.

The bottom line is that debate over whether Google can be forfeited or not is largely academic. The government has limited resources and is not interested in going after legitimate businesses that do their due diligence and engage in reasonable measures to ensure their property isn’t used for criminal offenses. There are unfortunately plenty of pirate sites to keep ICE busy.

Footnotes

  1. 18 USC § 2323(a). [↩]
  2. 18 USC § 983(c)(3). [↩]
  3. 146 Congressional Record 5231 (2000). [↩]
  4. Bennis v. Michigan, 516 US 442, 450 (1996). [↩]
  5. See, eg, US v. One Parcel of Real Estate Known as 916 Douglas Ave., Elgin, Ill., 903 F.2d 490, 493 (7th Cir. 1990). [↩]
  6. Most often in Eighth Amendment challenges, though courts have used such terminology outside that context, e.g., US v. 475 Cottage Drive, 433 F.Supp.2d 647, 656 (MD NC 2006). [↩]
  7. State ex rel. Redman v. $122.44, 231 P.3d 1150 (OK SCt. 2010). [↩]
  8. For example, US v. Premises Known as 3639-2nd St., NE, 869 F.2d 1093 (8th Cir. 1989). [↩]
  9. US v. One 1976 Ford F-150 Pick-Up VIN F14YUB03797, 769 F.2d 525 (8th Cir. 1985). [↩]
  10. US v. Hull, 606 F.3d 524, 527-28 (8th Cir. 2010). [↩]
  11. Bennis at 449, quoting Calero-Toledo v. Pearson Yacht Leasing Co., 416 US 663 (1974). For some of the earliest cases, see US v. Brig Malek Adhel, 43 US 210 (1844): “the acts of the master and crew, in cases of this sort, bind the interest of the owner of the ship, whether he be innocent or guilty; and he impliedly submits to whatever the law denounces as a forfeiture attached to the ship by reason of their unlawful or wanton wrongs”. [↩]
  12. JW Goldsmith, Jr.-Grant Co. v. US, 254 US 505. [↩]
  13. Bennis at 450-51. [↩]
  14. I say probably because, like the Pullman sleeper and ocean steamer hypothetical, this principle has not been reached by courts but only implied. See Calero-Toledo at 689, which also cites Peisch v. Ware, 4 Cranch 347, 364 (1808); JW Goldsmith at 512; US v. One Ford Coupe Automobile, 272 US 321, 333 (1926); and Van Oster v. Kansas, 273 US 465, 467 (1926). [↩]
  15. See, e.g., JW Goldsmith at 510-11. [↩]
  16. Brig Malek Adhel at 233. [↩]
  17. JW Goldsmith at 510 [↩]
  18. Calero at 687-88 [↩]
  19. Bennis at 452, “This deterrent mechanism is hardly unique to forfeiture. For instance, because Michigan also deters dangerous driving by making a motor vehicle owner liable for the negligent operation of the vehicle by a driver who had the owner’s consent to use it, petitioner was also potentially liable for her husband’s use of the car in violation of Michigan negligence law”; Van Oster at 467, ”It is not unknown or indeed uncommon for the law to visit upon the owner of property the unpleasant consequences of the unauthorized action of one to whom he has entrusted it. Much of the jurisdiction in admiralty, so much of the statute and common law of liens as enables a mere bailee to subject the bailed property to a lien, the power of a vendor of chattels in possession to sell and convey good title to a stranger, are familiar examples. They have their counterpart in legislation imposing liability on owners of vehicles for the negligent operation by those entrusted with their use, regardless of a master-servant relation”; Phile v. Anna, 1 Dall. 197 (1787), “It must certainly affect every humane man to fee the innocent suffer; but in society this is not strange or uncommon; and the distinction may properly be taken between criminal and civil cases. The law never punishes any man criminally but for his own act, yet it frequently punishes him in his pocket, for the act of another. Thus, if a wife commits an offence, the husband is not liable to the penalties; but if she obtains the property of another by any means not felonious, he must make the payment and amends. There are a variety of other instances, in which men are responsible for one another, in consequence of their connection in society.” [↩]
  20. Peisch at 363. [↩]
  21. Austin v. US, 509 US 602, 616 (1993). [↩]
  22. US v. Lavaland Annex, 256 F.3d 949, 954 (10th Cir. 2001); US v. 710 Main Street, 753 F.Supp 121, 125 (SDNY 1990). [↩]
  23. See US v. 2011 Calumet, 699 F.Supp 108, 110 (1988). [↩]
  24. See Bennis, Michigan statute declared any vehicle used for prostitution is a public nuisance and subject to abatement; C.J. Hendry Co. v. Moore, 318 US 133 (1943), “Section 845 of the California Fish and Game Code declares that a net used in violation of the provisions of the Code is a public nuisance and makes it the duty of any arresting officer to seize the net and report its seizure to the commission”; Van Oster, “The Kansas statute … declares that an automobile or other vehicle used in the state in the transportation of intoxicating liquor is a common nuisance and establishes a procedure followed in this case for its forfeiture and sale”; Lawton v. Steele, 152 US 133 (1894), New York act declares that “any net, etc., maintained in violation of any law for the protection of fisheries, is to be treated as a public nuisance, ‘and may be abated and summarily destroyed by any person’”. [↩]
  25. 260 P.2d 360 (1953). [↩]
  26. Research by the Internet Commerce Security Laboratory at the University of Ballarat has found that 89.9 percent of torrents infringe copyright; BitTorrent census: about 99% of files copyright infringing. [↩]
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Misunderstanding DMCA

October 25, 2010 · · 9 comments

Within the past 15 or so years, we’ve seen a large number of cases and laws addressing the issue of indirect liability — also referred to as secondary liability or third-party liability — for copyright infringement online.

In 1998, Congress passed the Digital Millennium Copyright Act, providing conditional safe harbors for online service providers. There’s also been a number of high-profile lawsuits against Napster, Aimster, Grokster, Limewire, and YouTube addressing indirect infringement.

Even so, there remains a misunderstanding among the public, especially online, about indirect liability. Why should X be liable when someone else is engaged in copyright infringement if X is only hosting/transmitting/providing a link to the unauthorized work?

This misunderstanding is embraced by TechDirt, who last week highlighted a story about an open letter from Russian ISPs to the entertainment industry in response to pressure on the ISPs for the copyright infringement of their users. TechDirt characterized the letter as explaining “basic liability concepts” to the entertainment industry. “The basic idea is that a third party service provider or tool should not be held liable for what users do with those tools,” explained Mike Masnick at TechDirt.

But that idea is not a “basic liability concept”; to the contrary, the idea ignores reality and the bulk of the history of law in most countries. Indeed, Masnick’s characterization of “basic liability concepts” isn’t even recognized in Russia1 — hence the reason the letter was written in the first place.

I previously wrote about secondary liability in Viacom Appeals Lawsuit Against YouTube, but I think the topic merits further discussion. There’s a gap in the common, public understanding of liability and how the law treats liability. The gap stems from a misunderstanding of tort law in general and is compounded when we start talking about indirect tort liability and how it is applied in the copyright context. You can see the gap in this understanding of tort law not only in debates concerning indirect copyright infringement, but also displayed in the perennial debates about tort reform, or in public reactions to what are sometimes referred to as “frivolous lawsuits.”2

To bridge the gap in understanding, I want to take a walk through tort law and why we have it. Next, I want to take a look at secondary liability in general and then specifically in terms of copyright. Finally, I want to look at how these concepts transferred to the online world and the legislative responses to dealing with the particular challenges of applying them to internet service providers. We’ll see that zero liability for service providers for the actions of their users is not a “basic liability concept” — far from being a logical or foregone conclusion, it is one of several possibilities of liability for service providers based on ancient concepts of tort liability, and it is an option that has, in part, been discarded in most of the world.

First, let’s talk about what “torts” are and why I brought them up.

These Torts are Delicious

Torts, in their broadest sense, are legal “wrongs”. They are private, rather than public, wrongs — distinguishing them from crimes — and they stem from universally applicable duties, rather than voluntarily agreed-upon duties — distinguishing them from contract claims.

The reason I’ll be talking about torts is that copyright infringement is a tort. In 1869, the Massachusetts Circuit Court wrote:

Rights secured by copyright are property within the meaning of the law of copyright, and whoever invades that property beyond the privilege conceded to subsequent authors commits a tort.3

This characterization of copyright infringement as tort has survived since then.4

The Goals of Tort Law

I think a big reason for the gap in understanding comes from a lack of understanding the goals of tort law. Most people understand the basic goals of criminal law. Some things are just bad — murder, robbery, rape. Society as a whole wants to either prevent them from happening or punish those who do them. Criminal law serves these goals; prison and fines act as punishment, the threat of prison and fines acts as a deterrent.5 The problem comes when people assume that the law of torts — private wrongs — has the same goals as the law of crimes — public wrongs. Deterrence and punishment are indeed part of the goals of tort law, but there are more goals to consider. One way of looking at it is laid out by Sir John William Salmond, who wrote in 1891:

A law is a rule of conduct set by the state and enforced by a sanction; a sanction is an evil inflicted upon those who disregard the rule; the administration of justice is that function of the state which consists in the infliction of such sanctions, that is to say, in punishment . Now, as a matter of fact, punishment is not an invariable or essential end of the administration of justice, but is merely one of several ends. These are at least three in number; namely, (i) prevention, (2) punishment, and (3) compensation.6

The addition of “compensation” to the ends of justice plays a large role in the administration of tort law. Indeed, nowadays economics plays just as much a role in shaping the law of torts as morality and ethics. Tort law professor F. Patrick Hubbard restates these goals from a modern perspective as such:

The tort system’s redistribution of the loss from the plaintiff to the defendant has been justified in terms of three policy goals. First, the liability for payment of compensatory damages prevents wrongdoing and thus protects rights in several ways, particularly: (1) the payment for injuries caused by wrongful conduct provides an incentive to avoid wrongful conduct; and (2) even where no wrongdoing is involved, imposing liability for accident costs provides an incentive to reduce injuries not currently preventable by due care by lowering the level of activity, or by seeking innovations that result in new, more cost-effective safety measures. Second, our sense of fairness requires that, as a matter of “corrective justice,” victims who suffer injury because their rights have been wrongly denied should have recourse to a system that requires injurers to pay compensation. These injurers “deserve” to bear the costs of their wrongs, not innocent victims. This concept of “just desert” also serves to limit liability from becoming disproportionately large in comparison to a defendant’s wrongdoing. Third, compensation of victims is frequently said to be, by itself, a goal of tort law.7

A thorough discussion of the goals and justifications of tort law is well beyond the scope of this article; for more, check out Stanford Encylopedia of Philosophy’s entry on Theories of Tort Law. For purposes of our discussion, it’s enough to say that modern tort law goes beyond merely “placing blame.” It asks also, among other things, what are the most efficient ways to allocate the losses attached to wrongs among the parties involved and what rules provide the best incentives to reduce the likelihood of wrongs. While differing theories about tort law compete, it is safe to say that the goals of “fairness” and “efficiency” are at the heart of modern tort jurisprudence.

Secondary Liability in Tort Law

The gap in the public’s understanding of tort law grows wider when it comes to secondary liability — those doctrines that place liability on someone other than the person who actually committed the wrong. How can this be? In 1883, political economist William Edward Hearn wrote:

§ 4. The general principle of justice which governs men’s responsibility for their conduct has two branches. One is that, subject to certain specified grounds of defence, every man is answerable for his own acts and his own forbearances, or for those which he has ordered. The other is that no man is answerable for the conduct of any other person. To the latter proposition, however, there are certain exceptions. These are cases of vicarious liability.8

Vicarious liability grew out of the long-established doctrine of respondeat superior in common law. Respondeat superior states that an employer, or principal, is liable for the acts of his employee, or agent.9

Contributory liability is the name most often used in the intellectual property context to describe the doctrine of holding someone liable for their contribution to the commission of a tort.10 The theory behind it is sometimes referred to as “concert of action” and it finds its genesis in the criminal law idea of “aiding and abetting.”11

“The most ancient authorities of the law” considered those who assisted in the commission of a crime to be guilty of the crime itself.12 So, for example, a getaway driver for a bank robber could be found guilty of the robbery even if his role was limited to sitting in the car while others did the actual robbing.

This principle remains the same when the wrong in question is a tort rather than a crime. In 1831, the Supreme Court of Ohio wrote in Bell v. Miller:

All concerned in the commission of a trespass are considered principals. An assault and battery may be committed by a party not present, if he be a principal actor in or adviser and promoter of making the attack. If one person employ another to commit an assault and battery or any other trespass, and the act is perpetrated, both are guilty, and both responsible in damages. It was not supposed that this was now a debatable question.13

The justifications for secondary liability build off of the fairness and efficiency goals of tort law. Associate professor of law Mark Bartholomew restates it as such: “While vicarious liability exists to redistribute risk in the absence of fault, contributory liability seeks to apportion liability on the basis of moral dessert.”14

Secondary Liability in Copyright Law

As mentioned above, copyright infringement is a tort. One would expect, then, that doctrines of secondary liability have made their way into cases dealing with copyright infringement. And indeed, they have.

Courts have generally recognized three theories for holding a third party indirectly liable for direct infringement caused by another:

  • Vicarious infringement — where one profits from direct infringement that one has the right and ability to control15
  • Contributory infringement — where one has knowledge of the infringement and causes or materially contributes to the infringement16
  • Inducement — where one engages in purposeful conduct that encourages infringement with the intent to encourage infringement17

These well-established principles of secondary liability have been applied in infringement cases for decades, if not longer.18 But it wasn’t until the widespread adoption of the internet over the last 20 or so years that these doctrines have played an increasingly important role in copyright infringement cases.

One quick note: some copyright critics cling to the belief that secondary liability doesn’t exist in the realm of copyright infringement because it is not mentioned in the Copyright Act. The belief is bolstered, perhaps, by Justice Stevens’s remark in Sony v. Universal City Studios that “The Copyright Act does not expressly render anyone liable for infringement committed by another.”19 But the idea that third-party liability in copyright infringement is invalid is wrong on two counts.

First, the US operates under a common law system. The law is developed in the courts unless and until it is modified by statute. As shown above, courts have long recognized doctrines of secondary liability in infringement cases. And if you read just a couple sentences more, you see Stevens explain the same:

The absence of such express language in the copyright statute does not preclude the imposition of liability for copyright infringements on certain parties who have not themselves engaged in the infringing activity. For vicarious liability is imposed in virtually all areas of the law, and the concept of contributory infringement is merely a species of the broader problem of identifying the circumstances in which it is just to hold one individual accountable for the actions of another.

Second, even recognizing that secondary liability exists in copyright law under the common law, some have suggested that Stevens was, in fact, wrong that the Copyright Act didn’t expressly recognize it. Peter Menell and David Nimmer explain:

The extensive legislative history underlying the 1976 Act refers specifically to the law of torts in clarifying that “where the work was infringed by two or more joint tort feasors, the bill would make them jointly and severally liable …” More references to tort law undergird the 1976 Act’s remedial provisions. These references cement the proposition that tort doctrine furnishes the background law for determining what circumstances render someone liable for infringement and, if liable, the scope of remedies.

The legislative history makes two direct references to indirect liability standards, both of which support the continuation of then-existing doctrines and their further refinement through judicial decisions. In explaining the general scope of copyright, the House Report recognizes contributory liability:

The exclusive rights accorded to a copyright owner under section 106 are ‘to do and to authorize’ any of the activities specified in the five numbered clauses. Use of the phrase ‘to authorize’ is intended to avoid any questions as to the liability of contributory infringers. For example, a person who lawfully acquires an authorized copy of a motion picture would be an infringer if he or she engages in the business of renting it to others for purposes of unauthorized public performance.

In discussing infringement, the House Report explains:

Vicarious Liability for Infringing Performances

The committee has considered and rejected an amendment to this section intended to exempt the proprietors of an establishment, such as a ballroom or night club, from liability for copyright infringement committed by an independent contractor, such as an orchestra laeder [sic]. A well-established principle of copyright law is that a person who violates any of the exclusive rights of the copyright owner is an infringer, including persons who can be considered related or vicarious infringers. To be held a related or vicarious infringer in the case of performing rights, a defendant must either actively operate or supervise the operation of the place wherein the performances occur, or control the content of the infringing program, and expect commercial gain from the operation and either direct or indirect benefit from the infringing performance. The committee has decided that no justification exists for changing existing law, and causing a significant erosion of the public performance right.

That excerpt shows legislative intent to preserve the principles of vicarious liability that had developed through the courts under prior law under the 1976 Act.20

Copyright Liability Online

With the advent of digital technology — allowing text, music, and visual works to be reproduced easily and perfectly — and the internet — allowing digital files to be distributed cheaply across the globe — liability for copyright infringement quickly entered new territory.

Copyright infringement has traditionally been characterized as a strict liability tort, meaning one can be liable without intending to infringe any of the exclusive rights protected by copyright.21 This strict liability, in theory, implicates many parties that make up the backbone of the internet since transmission of digital data necessarily involves “copying” and distribution, as well as public display or performance, at many different stages.

In the US, the Digital Millennium Copyright Act (DMCA) — specifically, the safe harbors the bill amended to §512 of Title 17 of the US Code —  was a watershed bill for dealing with copyright liability online. One can divide how the law treats copyright liability for online service providers into two eras: pre-DMCA and post-DMCA.

Prior to the DMCA, it was up to courts to determine whether service providers were directly infringing on copyright for their role in copying and transmitting infringing works originally uploaded by users of the service. In at least one case, Playboy Enterprises v. Frena, the court found that the service provider was liable for direct infringement.22 Despite Playboy Enterprises, however, the case law suggests that courts were largely unwilling to hold service providers liable for direct infringement.23

When we turn to the question of indirect infringement — whether a service provider is liable for vicarious or contributory infringement — the pre-DMCA case law shows a far more muddied application of the doctrines. Contrasting approaches to these doctrines as applied to service providers emerged in the courts, with the result being a great deal of uncertainty for service providers.24

Governments around the world faced the same issues. The internet represented a great source of innovation and advancement. How best to craft liability rules that would ensure continued innovation and advancement while protecting long-established, real world rights online? The US Congress ultimately crafted the DMCA to address these concerns and provide certainty.

Addressing Online Liability Through Legislation

The choice for what level of liability online service providers should be subjected to, by law, generally comes down to one of three options: no liability, strict liability, or some type of limited or conditional liability. The DMCA takes a mixed approach, depending on what role an online service provider has taken on. Service providers have zero copyright liability if they are only engaged in transmitting and routing data, or if copies are made for system caching purposes.25 Conditional liability is placed on service providers for infringing works residing on the provider’s system at the direction of a user — for example, an unauthorized video uploaded to YouTube, an unauthorized photo posted on a message board, or an unauthorized song hosted on a user’s web site.

The general consensus is that conditional liability for service providers in the copyright context is the best of the three options.26 This approach balances the multitude of competing factors involved: it creates incentives on parties to reduce the harms of copyright infringement while avoiding overzealous monitoring that may suppress noninfringing speech. Most major countries around the world have adopted some form of conditional liability for online service providers in the copyright realm.27

What would liability for service providers look like today had there not been a DMCA? The answer is unclear. Certainly, there would have been a period of great uncertainty at the early stages of the growth of the internet as courts addressed the question. Perhaps the common law would have developed toward standards which fairly and efficiently allocated the risks of user infringement among the various parties; it is not unlikely, however, that courts could have adopted rules placing more of a burden on service providers for user infringement. Either way, if the question was left to the courts, it would likely have stifled innovation when such a result would have been most detrimental. A large company at the time like Yahoo or AOL could easily fend off legal challenges, where a cash-strapped startup might have folded, unable to fight in court no matter how likely its eventual success would be.

Conclusion

Zero liability for online service providers is far from a “basic liability concept.” Tort law has long recognized several doctrines where indirect liability may be imposed, and copyright law has long adopted those doctrines. Absent legislation like the DMCA, it is uncertain how courts would have applied those doctrines to service providers in the online context. The period of greatest uncertainty in the law would have coincided with the early stages of the widespread adoption of the internet: a time when uncertainty would have provided the most detriment.

It’s true that the laws regarding online liability for service providers are far from perfect. Stakeholders on all sides have expressed areas where they could be improved. But claims that zero liability for service providers are a foregone conclusion from a “common sense” point of view or that they reflect “basic liability concepts” are entirely off-base.

See Also

Footnotes

  1. Christopher Osakwe, Russian Civil Code. Parts 1-3: Text and Analysis (Wolters Kluver 2008). [↩]
  2. Most notably the “hot coffee” lawsuit against McDonalds. [↩]
  3. Lawrence v. Dana, 15 F. Cas. 26, 61 (C.C. Mass. 1869). [↩]
  4. Peter S. Menell & David Nimmer, Unwinding Sony, 95 California Law Review 941, 996 (2007). [↩]
  5. This is obviously an over-simplification for the purpose of discussion. For a more detailed look at theories of criminal law, start at Stanford Encyclopedia of Philosophy – Theories of Criminal Law. [↩]
  6. Essays in Jurisprudence and Legal History, pg. 123. [↩]
  7. Hubbard, The Nature and Impact of the ‘Tort Reform’ Movement, 35 Hofstra Law Review 437, 445-46 (2006). [↩]
  8. The Theory of Legal Duties and Rights, pg 125. [↩]
  9. See, for example: Broom, Manisty, and Cagney, A Selection of Legal Maxims, Classified and Illustrated, pg. 798 (1884) for a discussion of the doctrine and its long-standing place in history. [↩]
  10. For example, in trademark cases like Inwood Labs v. Ives Labs, 456 US 844 (1982) and especially in patent cases: Thomson-Houston Electric v. Kelsey Electric, 72 F1d 1016 (1896). [↩]
  11. See In re Aimster Copyright Litigation, 334 F.3d 643, 651 (7th Cir. 2003); Boedecker, Kasulis, Morgan, and Stoltman, The History of Enterprise Liability, Ninth C.H.A.R.M. Conference on Historical Analysis and Research in Marketing, 205, 210 (1999). [↩]
  12. The American and English Encyclopedia of Law, pp. 29-30 (Edward Thompson Company, 1896). [↩]
  13. Bell v. Miller, 5 Ohio 250 (Supreme Court of Ohio, 1831). [↩]
  14. Mark Bartholomew, Copyright, Trademark and Secondary Liability after Grokster, 32 Columbia Journal of Law & the Arts 445, 465 (2009). [↩]
  15. Shapiro, Bernstein & Co. v. HL Green Company, 316 F.2d 304, 308-309 (2nd Cir. 1963). [↩]
  16. Gershwin Publishing Corp. v. Columbia Artists Man., 443 F.2d 1159, 1162 (2nd Cir. 1971). [↩]
  17. Arista Records v. Lime Group (SDNY 2010). While there has been some doubt as to whether inducement is a new theory of secondary liability or just a restatement of contributory infringement, the court in Arista Records concluded that the Supreme Court in MGM v. Grokster confirmed inducement as a “distinct cause of action.” [↩]
  18. See Unwinding Sony, pp 996-1005 for a thorough discussion of the history here. [↩]
  19. 464 US 435. [↩]
  20. Unwinding Sony, pp. 995-96. [↩]
  21. Patry on Copyright, §9:5. [↩]
  22. 839 F. Supp. 1552 (M.D. Fla. 1993). [↩]
  23. Alfred Yen, Internet Service Provider Liability for Subscriber Copyright Infringement, Enterprise Liability, and the First Amendment, 88 Georgetown Law Journal 1833, 1842 (2000). [↩]
  24. Yen, 1877. [↩]
  25. 17 USC § 512 (a) and (b). [↩]
  26. See, for example, Alan Woodfield, When Should the Bell Toll? The Economics of New Zealand’s Debate on Indirect Liability for Online Copyright Infringement, 1 Review of Economic Research on Copyright Issues 119, 147 (2004), discussing why New Zealand’s adoption of conditional liability was the best of the three options. [↩]
  27. See Woodfield; Aditya Gupta, The Scope of Online Service Providers’ for Copyright Infringing Third Party Content Under the Indian Laws – the Road Ahead, 15 Journal of Intellectual Property Rights 35 (2010) (discussing UK, Canada, Australia, and India); VK Unni, Internet Service Provider’s Liability for Copyright Infringement – How to Clear the Misty Indian Perspective, 8 Richmond Journal of Law & Technology 13 (2001) (also discussing Canada, Australia, and India, as well as Singapore); the procedure the Russian ISPs propose in their letter highlighted in the TechDirt article mirrors these approaches. [↩]
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Viacom Appeals Lawsuit Against YouTube

August 18, 2010 · · 1 comment

On August 11, 2010, media giant Viacom filed notice with the Second Circuit that it would be seeking an appeal in its legal battle against YouTube. The Southern District Court of New York essentially threw out the case, granting summary judgment to YouTube on June 23. Viacom originally sued the video site in 2007, claiming that the site did not do enough to prevent users from uploading infringing videos. The stakes are high – Viacom alleges $1 billion in damages, and Google has already spent $100 million to defend. More importantly, the case may have ramifications for many sites that rely on users for content.

What is this case all about? Some have suggested that Viacom is trying to “get back” at YouTube after it failed in a bid to buy the video site. Or even more sinisterly, maybe the case is an example of the entertainment industry’s shift toward propping up failing business models by extracting settlement money from legal threats. Exploring those contentions may have merit, but that’s not what this site is for. Instead, I’m more interested in examining the legal principles at work to get a better grasp at what’s going on inside the courtroom.

The case boils down to this: what obligation does a host like YouTube have to keep infringing materials off their site? To understand this a little better, let’s first take a closer look at secondary liability and internet safe harbors.

Secondary Liability

Qui facit per alium facit per se.1

By default, we are not responsible for someone else’s actions. There are circumstances however where the law does hold one person responsible for the actions of another. In criminal law, for example, someone aiding and abetting a criminal can be charged with the same offense. In civil law, the concept is sometimes referred to as secondary liability.2

It makes sense. If you have some sort of control over another’s actions and you benefit from their wrongdoing, or if you help someone knowing they will use your help to commit a wrong, you shouldn’t be let off the hook. Secondary liability is also a form of risk allocation. Holding someone responsible for the acts of those in their control encourages safety and fair business practices. Finally, secondary liability addresses concerns of obtaining redress when someone is wronged. It is more efficient to sue a single employer rather than multiple employees, and the person running the show often has deeper pockets than those under his control.

Secondary liability is well-established in many areas of the law. Let’s turn now to how courts have used it in the copyright context.

Secondary Liability in Copyright

Courts have applied two separate theories of secondary liability to copyright cases: vicarious  liability and contributory infringement.3 Vicarious liability includes the concept of respondeat superior, used to hold employers responsible for the acts of their employees, and requires that one benefits from conduct within one’s right or ability to control. Contributory infringement requires providing the means to engage in infringement with knowledge that infringement will occur.

One point of confusion: it’s easy to conflate secondary liability with direct infringement, but important to keep the two ideas separate.4 Direct infringement requires an unauthorized reproduction, distribution, or public performance. Secondary liability is liability for indirect infringement. The person doing the actual reproduction or distribution is directly liable; anyone who is not engaged in those acts but is contributing to – or controlling and benefiting from – that direct infringement is indirectly liable.

While vicarious liability is fairly easy to find in older copyright cases5, contributory infringement was relatively rare before the internet became popular. It became easy for anyone connected to transmit all kinds of data, including copyrighted content – and transmit they did, first by the hundreds, than by the thousands, than by the millions (often anonymously). The transmission of this content was made possible by several different parties: ISPs, web hosts, BBS operators, etc. Which of these parties should also be held responsible for infringement by internet users?

The DMCA

Needless to say, courts struggled with applying traditional legal doctrines to new, unfamiliar technologies. Concerned about the effects liability would have on the growth of an important communications network and the problem of having inconsistent law throughout the country, Congress passed the Online Copyright Infringement Liability Limitation Act (OCILLA) as part of the Digital Millennium Copyright Act of 1998 (DMCA).6

OCILLA provides online service providers7 with a conditional safe-harbor from secondary liability.  For anything stored on a service provider’s system or network at the direction of a user – e.g., a video uploaded to YouTube – service providers can qualify for this safe-harbor if they do not have knowledge of the specific infringing act, do not benefit directly from the infringement, and remove the infringing material when they receive notification from a content owner. This last aspect is known as a “notice-and-takedown” procedure.

So, continuing with the YouTube example, a user who uploads a television clip to YouTube has directly infringed – he has reproduced and distributed a copyrighted work without authorization from the owner.  YouTube would ordinarily be indirectly liable for this infringement, either because it has provided the means for the user to infringe or because it has the right and ability to control what is presented on its site and benefits from the traffic its content attracts. But under OCILLA, it is shielded from this potential liability if it removes the video once it either has knowledge that it is infringing or when the content owner sends a DMCA notice.

Viacom v. YouTube

The heart of the case between Viacom and YouTube hinged on interpretation of the “knowledge” component of the safe-harbor. The full language of the statute states that a service provider only qualifies if it

(i) does not have actual knowledge that the material or an activity using the material on the system or network is infringing; (ii) in the absence of such actual knowledge, is not aware of facts or circumstances from which infringing activity is apparent; or (iii) upon obtaining such knowledge or awareness, acts expeditiously to remove, or disable access to, the material.

Viacom alleged that YouTube was acting in “willful blindness“. It was well aware that large amounts of  content on its site was infringing but chose to ignore it – welcoming it, even – unless it received notification from the content owner. Essentially, Viacom argued, this awareness of infringement in general constituted the “actual knowledge” that triggers YouTube’s obligation to remove the material without receiving notice from the content owner.

The court sided instead with YouTube, and held that actual knowledge meant “actual or constructive knowledge of specific and identifiable infringements of individual items.” “General knowledge that infringement is ‘ubiquitous’ does not impose a duty on the service provider to monitor or search its service for infringements.”

That leaves the second prong of the knowledge component – a lack of awareness of “facts or circumstances from which infringing activity is apparent.” This is sometimes called “red flag infringement,” as in the facts and circumstances surrounding the activity should raise a red flag that infringement is occurring.

After reading the case though, I couldn’t figure out what, if anything, constitutes a “red flag”. Several others have pointed out that courts have largely written out the “red flag” prong. Here, the court wholesale adopted reasoning from Perfect 10 v. CCBill, a 9th Circuit case dealing with “red flag” trademark infringement. Copyrights and Campaigns author Ben Sheffner notes how unconvincing the reasoning of that case was:

In other words, under Ninth Circuit precedent, having material identified by its poster as “illegal” and “stolen” is not a red flag that infringing activity is taking place. One is left to wonder whether the panel would have ruled the same way had actual red flags been waved in the defendants’ faces.

One of the basic rules of interpreting a law is to avoid rendering any part superfluous.8 Courts assume lawmakers had a reason for wording a statute the way they did; any interpretation that vitiates a word, phrase, or entire provision subverts the lawmaking process.9

So the question is, what exactly would count as a “red flag”? It would have to be something less than specific knowledge that a particular work is infringing, but something more than general knowledge of infringing activity, including material specifically identified as being “illegal” or “stolen.” It’s difficult to think of anything that would fall in that middle ground, and it is possible that this interpretation of “red flags” will be revisited on appeal.

Why This Matters

This ruling has little effect on YouTube. Its policies have changed substantially since the suit was filed; today, many content providers have few qualms with YouTube’s approach to infringement, and the site continues to develop technological solutions to police infringement more effectively, especially its Content ID program. In addition, the pending appeal means that the lower court’s holding has little effect.

But the issues at play bring up a larger question: how much burden should be placed on hosts for policing infringement when they encourage user-generated content to drive traffic to their sites and, ultimately, sell advertising (or make money off the traffic in some other way)? While the DMCA has given content providers a mechanism to remove infringing material that is far cheaper and faster than going to court, the scale of the internet and ease of reproducing and distributing content means that creators still must focus an inordinate amount of time on managing infringement. YouTube is just one of many sites.10 If we talk about secondary liability in the context of risk allocation, should sites like YouTube – which receive a direct benefit by allowing user-generated content and have a greater ability to monitor what is uploaded on the back-end than multiple content creators have on the front-end – have more of an obligation to minimize direct infringement?

We’ll have to wait and see.

Footnotes

  1. “He who acts through another does the act himself.” [↩]
  2. It is also sometimes called third-party liability, a linguistic oddity that makes me chuckle. [↩]
  3. A third type of secondary liability, inducement, was introduced in MGM v. Grokster, but it is still unclear whether the Supreme Court meant to create a new, discrete form of secondary liability or whether they were merely rephrasing the concept of contributory infringement. [↩]
  4. Some courts have even fallen into this trap – see Patry on Copyright § 21:40 [↩]
  5. Many cases involve unauthorized public performances of music by bands hired by dance halls [↩]
  6. OCILLA was codified as 17 U.S.C. § 512. [↩]
  7. “Online service providers” encompasses any company or service that transmits or communicates information between users and includes internet service providers and web sites. [↩]
  8. CRS Report for Congress, Statutory Interpretation: General Principles and Recent Trends. [↩]
  9. This is different from a court striking down a law on constitutional grounds. If the constitutionality of a law is not being challenged, courts generally don’t have the power to change the meaning of laws to whatever suits them. [↩]
  10. Viacom notes that monitoring YouTube alone is time-consuming. [↩]
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