Friday’s Endnotes – 09/23/11

By , September 23, 2011.

Free speech shouldn’t be a shield for online thieves — Mike McCurry and Mark McKinnon, co-chairmen of Arts+Labs, pen this must read editorial about free speech and copyright. “We are not lukewarm First Amendment advocates. One of us went to jail to protect freedom of the press and the other routinely had to defend this freedom to belligerent skeptics on the White House staff.  But we believe it is a misuse of the First Amendment to shield rogue websites whose main purpose is distributing illegal copies of intellectual property.”

Chamber leads push for copyright enforcement bill — The US Chamber of Commerce spearheaded a coalition of 359 businesses and organizations in support of rogue sites legislation, sending a letter to US Congress members on Thursday. In other news, Sen. Ron Wyden continues his curious remarks that this bill will damage “innovation.”

Free as in speech… — Rob Levine points to a recent interview he did with Scottish novelist Ewan Morrison where he discusses some of the interesting political questions surrounding copyright, technology, and free culture. He highlights some of the “intellectual inconsistencies” in copyright critics’ positions — he only scratches the surface though, as you can easily find other examples of these types of inconsistencies.

Portland, Oregon Reports Jobs Boost — Portland is currently home to several television and film productions, including one of my faves, TNT’s Leverage. Portland mayor Sam Adams recently published a letter to local residents detailing the economic impact filming has on the city: for example, “In 2009, the Portland metropolitan region alone saw $52 million in direct spending through local film productions, totaling a $102 million economic impact for the year.”

95% of BitTorrent files infringe copyrights according to AFACT — A new report from the Australian Federation Against Copyright Theft is consistent with other reports in showing that nearly all BitTorrent files are unauthorized copies of films, television shows, and music.

File-sharing protest bomb threat video lands teenager in court — An 18 year-old New Zealander finds himself in trouble with the law after his threats in connection with the country’s recent graduated response legislation. Talk about your disproportionate responses.

Policing the digital storage landscape — Should provisions to address the rampant infringement taking place on cyberlockers be added to rogue sites legislation currently being considered by Congress? Content providers and the US Copyright Office think so.

Copyright terrm success for artists and record companies — Dominic McGonigal explains the EU’s recent directive to increase the term of copyright protection on sound recordings from 50 to 70 years. “Without this change, [thousands of] musicians were facing reducing royalties each year as recordings go out of copyright. For record companies, this potentially increases the value of their back catalogue, allowing more investment in new artists.”

Call for papers: 2012 Cardozo Arts & Entertainment Law Journal Symposium — The working title of the symposium is “Examining and Overcoming Enforcement Issues in Copyright Law”: “The Symposium is an opportunity for academics, practitioners, consultants, and students to exchange ideas related to the protection of intellectual property in the Digital Age, from the perspective of enforcement, as well as self-policing and cooperative agreements. Topics might include examinations of the PROTECT IP Act of 2011, the America Invents Act, Content ID and similar technologies, and the recent cooperative agreement between ISPs and content owners.”

Rojadirecta seeks refuge in First Amendment

By , September 21, 2011.

 

Puerto 80 Projects has filed its opening brief in its appeal of the Southern District Court of New York’s denial of its petition to release its Rojadirecta domain names — which had been seized by ICE as property used to facilitate criminal copyright infringement — prior to the completion of the civil forfeiture proceeding. It separately has a motion to dismiss before the court in that proceeding, which I wrote about last week.

[scribd id=65234499 key=key-hnwm3e62c0jf8z4t7e7 mode=list]

Puerto 80 spends considerable time explaining why prior restraints are bad and what procedures are required under the Constitution. This point is indisputable and uncontroversial — preventing prior restraints is considered the “chief purpose” of the First Amendment. 1Near v. Minnesota, 283 US 697, 713 (1931). But what they don’t do is spend much time explaining why this particular seizure is a prior restraint.

In fact, they don’t explain why at all — they just flat-out state, “The government’s ex parte seizure of Puerto 80’s domain name constituted a prior restraint on speech.” Later, they repeat, “The government’s seizure of the subject domain names constitutes an unlawful prior restraint on speech that suppresses Puerto 80’s users’ and readers’ protected First Amendment activities.”

But calling something a prior restraint doesn’t make it a prior restraint. As the Supreme Court pointed out over 50 years ago, “The phrase ‘prior restraint’ is not a self-wielding sword.” 2Kingsley Books v. Brown, 354 US 436, 441 (1957).

The Defining Characteristics of a Prior Restraint

Ironically, Puerto 80 cites to Alexander v. US to support its first statement that this seizure is a prior restraint. It quotes the Court’s statement that “Temporary restraining orders and permanent injunctions — i.e., court orders that actually forbid speech activities — are classic examples of prior restraints.” But that doesn’t mean all restraining orders or injunctions are prior restraints — like the forfeiture of Alexander’s bookstores in this case, which the Supreme Court held constitutional.

More importantly, the Court later notes the reason to be careful with the “prior restraint” label. It said, “Because we have interpreted the First Amendment as providing greater protection from prior restraints than from subsequent punishments, see it is important for us to delineate with some precision the defining characteristics of a prior restraint.”

The second case Puerto 80 cites to for its self-defining statement provides a clue as to one of these defining characteristics: “An order that prohibits the utterance or publication of particular information or commentary imposes a ‘prior restraint’ on speech” (Emphasis added).

A prior restraint does not refer to any and all suppression of First Amendment activities; the suppression must reference specific subject matter or viewpoint. Although the Supreme Court has never fully defined “prior restraint”, it has been clear that only content-based injunctions can constitute prior restraints. 3DVD Copy Control Ass’n v. Bunner, 75 P.3d 1 (Cali Sup. 2003), citing Thomas v. Chicago Park Dist., 534 US 316 (2002).

For Puerto 80 to succeed in its prior restraint argument, then, it must show that this seizure was content-based. But how can this be? The First Amendment activities that it claims were suppressed revolve around the “forum discussions on the Rojadirecta.com and Rojadirecta.org sites”, which included “political discussions, commentary, and criticism by the site’s users.”  Surely Puerto 80 isn’t claiming that the government seized the domain names because of the content of those discussions — that it perhaps wanted to restrain certain opinions about baseball games.

Now, if the government did want to suppress a site because of the message it conveyed and used the Copyright Act — or any other generally applicable statute — as a pretext, then that likely would be an impermissible prior restraint. But no one is seriously suggesting that anything of that sort has occurred here.

The only way this seizure could be characterized as a prior restraint is if Puerto 80 can convince the court that the restraint of the copyright-protected material on the site is content-based. It attempts to do so, in an argument confined to a footnote. The only legal support for its claim comes from a law review article — co-written by Mark Lemley, one of the attorneys for Puerto 80.

The article hardly counts as legal support: it makes the argument that copyright injunctions should be treated more as prior restraints because currently, and historically, they have not. Indeed, preliminary injunctions in copyright are common, as are pretrial seizures of infringing materials and tools.

Admittedly, the seizure of a domain name to be forfeited as property facilitating copyright infringement is only a recent development. But Puerto 80 makes no attempt to distinguish this action from other copyright injunctions and sanctions.

Prior Restraint in Napster

Puerto 80’s argument is reminiscent of the prior restraint argument made by Napster.

Like Puerto 80, Napster stood in the shoes of its users and argued against a proposed preliminary injunction because it “would silence the entire Napster community, violating not only Napster’s free speech rights, but those of its users as well.” This injunction would be “particularly egregious because it would silence the Napster community in advance of any ruling by the Court confirming that Napster’s directory is protected by the First Amendment. Courts have uniformly viewed any injunction that could act as a prior restraint on free speech as presumptively invalid.”

The District Court disagreed with Napster — noting that in the realm of copyright injunctions, “free speech concerns ‘are protected by and coextensive with the fair use doctrine.'” The court addressed the injunction’s reach to non-infringing portions of Napster’s service, like its message boards and chat rooms. Napster could continue to operate those with the injunction, but

In the event that Napster, Inc. cannot separate the infringing and non-infringing aspects of its service, its First Amendment argument still fails. Courts will not sustain a First Amendment challenge where the defendant entraps itself in an “all-or-nothing predicament.” Even if it is technologically impossible for Napster, Inc. to offer such functions as its directory without facilitating infringement, the court still must take action to protect plaintiffs’ copyrights.

Napster appealed the grant of the preliminary injunction to the Ninth Circuit on a number of grounds, among them its continued belief that the injunction was an impermissible prior restraint. The court, however, recognized this as a frivolous argument, saying only that it would “briefly address Napster’s First Amendment argument so that it is not reasserted on remand.”

We note that First Amendment concerns in copyright are allayed by the presence of the fair use doctrine. There was a preliminary determination here that Napster users are not fair users. Uses of copyrighted material that are not fair uses are rightfully enjoined. 4A&M Records v. Napster, 239 F.3d 1004, 1028 (9th Cir. 2001).

Copyright and First Amendment Challenges

The fact that the domain name seizure isn’t a prior restraint doesn’t mean there’s no First Amendment issue. The Supreme Court has said that “content-neutral time, place, and manner restrictions can be applied in such a manner as to stifle free expression” 5Thomas v. Chicago Park at 323. and also that criminal and civil sanctions having some incidental effect on First Amendment activities are subject to First Amendment scrutiny “where it was conduct with a significant expressive element that drew the legal remedy in the first place … or where a statute based on a nonexpressive activity has the inevitable effect of singling out those engaged in expressive activity.” 6Alexander v. US at 557, quoting Arcara v. Cloud Books, 478 US 697, 706-07 (1986). But these are distinct arguments that Puerto 80 does not raise in its opening brief.

Nevertheless, it should be remembered that there’s good reason why prior restraint is rarely found in cases involving copyright. Copyright is “the engine of free expression”, and infringement causes harm to a copyright holder’s free speech rights. 7See Salinger v. Colting, 607 F.3d 68, 81 (2nd Cir. 2010); Speech interests of creators; and The chilling effect of copyright infringement. What’s more, copyright has “built-in free speech safeguards” that reduce the need for relying on First Amendment doctrines like prior restraint.

We’ve even seen courts explicitly resolve infringement cases on fair use grounds which had earlier been resolved on First Amendment grounds. In Triangle Publications v. Knight-Ridder Newspapers, the appellate court began, “For years, Courts and commentators have recognized a potential conflict between copyright and the First Amendment. However, until the District Court’s opinion in the case now before us, no Court had ever held that a copyright suit could be defeated by a First Amendment defense. We affirm the result reached by the District Court, but disagree with the Court’s rationale. Contrary to the District Court, we hold that fair use constitutes a valid defense to the copyright infringement suit involved in this case.” 8Compare this to Suntrust Bank v. Houghton Mifflin, 252 F.3d 1165 (11th Cir. 2001), where the court vacated a preliminary injunction against the author of The Wind Done Gone, a parody of Gone With the Wind. Although it used the term “prior restraint” in its opinion, the injunction was vacated since the defendant’s strong fair use defense made it unlikely the plaintiff would succeed on the merits of the case.

In most cases concerning infringement, free speech is raised only as a “self-wielding sword” — “the last refuge of an infringing scoundrel”. 9L. Ray Patterson, Free Speech, Copyright, and Fair Use, 40 Vanderbilt Law Review 1, 36 n.110 (1987). When a case doesn’t involve some question of legitimate appropriation of a copyrighted work, “few courts” allow defendants “to hide behind the first amendment.” 10Sid & Marty Krofft TV v. McDonalds, 562 F.2d 1157, 1170-71 (9th Cir. 1977). Based on the court filings so far, it’s my opinion that there’s no legitimate appropriation here, only a web site that seems keen on raising every defense it can to avoid responsibility for facilitating infringement.

A CAMP Conference is scheduled for October 3rd; the reply brief from the US is due November 15th.

 

References

References
↑1 Near v. Minnesota, 283 US 697, 713 (1931).
↑2 Kingsley Books v. Brown, 354 US 436, 441 (1957).
↑3 DVD Copy Control Ass’n v. Bunner, 75 P.3d 1 (Cali Sup. 2003), citing Thomas v. Chicago Park Dist., 534 US 316 (2002).
↑4 A&M Records v. Napster, 239 F.3d 1004, 1028 (9th Cir. 2001).
↑5 Thomas v. Chicago Park at 323.
↑6 Alexander v. US at 557, quoting Arcara v. Cloud Books, 478 US 697, 706-07 (1986).
↑7 See Salinger v. Colting, 607 F.3d 68, 81 (2nd Cir. 2010); Speech interests of creators; and The chilling effect of copyright infringement.
↑8 Compare this to Suntrust Bank v. Houghton Mifflin, 252 F.3d 1165 (11th Cir. 2001), where the court vacated a preliminary injunction against the author of The Wind Done Gone, a parody of Gone With the Wind. Although it used the term “prior restraint” in its opinion, the injunction was vacated since the defendant’s strong fair use defense made it unlikely the plaintiff would succeed on the merits of the case.
↑9 L. Ray Patterson, Free Speech, Copyright, and Fair Use, 40 Vanderbilt Law Review 1, 36 n.110 (1987).
↑10 Sid & Marty Krofft TV v. McDonalds, 562 F.2d 1157, 1170-71 (9th Cir. 1977).

Sony BMG v Tenenbaum: District Court Erred in Reducing Jury Verdict

By , September 19, 2011.

It’s not about the money.

Friday’s First Circuit opinion in Sony BMG v. Tenenbaum is about a lot of things, but what it’s not about — and what will nevertheless get the most attention — is the $675,000 a jury awarded against Joel Tenenbaum for downloading and distributing 30 songs, which the District Court reduced to $67,500, and which the appellate court reinstated.

It’s a lot of money, of course. I think it’s highly unlikely any of the jurors who awarded the damages really expect Tenenbaum to be able to pay it all in a lifetime, and certainly Sony and the other record labels aren’t expecting to receive a check for anywhere near that amount.

Instead, this case has taken on constitutional dimensions, concerning due process, the right to a jury trial, and the boundaries and roles of different institutions — courts, juries, and Congress — in our legal system.

It’s about whether disagreement over the effects of laws can justify bypassing bedrock legal principles — whether we can sacrifice the processes that make democracy work for expediency.

In that respect, the First Circuit should be commended for saying “no”.

This is an interesting decision and worth a read. There’s quite a bit inside it, more than I’ll cover in this post.

What’s most interesting about this case is that the one line by the court that has been noted by those disappointed in the decision as the one positive 1See the EFF, Techdirt, and Ars Technica. may not be as positive as they believe. In the opinion, the court says, “We comment that this case raises concerns about application of the Copyright Act which Congress may wish to examine.” The court is not so much talking to Congress as it is to the lower court. It’s saying, in essence, if you don’t like the results of the Copyright Act’s statutory damages, take it up with Congress, because it’s highly unlikely that we will find a constitutional limitation in cases like this.

Joel Tenenbaum and Jammie Thomas-Rasset

Because Tenenbaum is very similar to Capitol Records v. Thomas-Rasset, the only other major label end user downloading case to make it to trial, it can be easy to confuse the two. To recap:

In Thomas-Rasset, the judge reduced the jury’s award of $1.92 million through the common law process of remittitur. The record labels opted for a new trial, solely on damages, instead of accepting the remitted amount. 2The Seventh Amendment right to a jury trial requires that plaintiffs be given this choice. After a new jury awarded $1.5 million against Thomas-Rasset, the court reduced the award on constitutional grounds, ruling that the award violated due process under the standard set by the Supreme Court in St. Louis IM & S v. Williams.

In Tenenbaum, after the jury returned a verdict of $675,000, the court, noting that the record labels had not accepted the remitted award in Thomas-Rasset, skipped straight to the constitutional ground. As in Thomas-Rasset, the court reduced the award on due process grounds, but unlike Thomas-Rasset, it used a different standard, one developed to address punitive damages (which generally aren’t set by statute) and set out in BMW v. Gore.

The decision

The main holding in this case is fairly narrow. The First Circuit held that the District Court erred when it skipped over the question of remittitur and reduced the damages on constitutional grounds. It reversed the reduction in damages and remanded to the lower court to reconsider the remittitur question.

But the court ruled on a number of other issues brought by Tenenbaum. It held that the Copyright Act is not unconstitutional after the Supreme Court decision in Feltner v. Columbia Pictures Television, so-called “consumer copying” is not exempt from damages, and statutory damages are available without a showing of actual harm.

The harm of P2P piracy

The First Circuit begins by describing how P2P piracy has effected the recording industry. It notes that record labels have never granted blanket licenses for uploading music files to the Internet for public consumption. “Such a license,” said the court, “would deprive the companies of their source of income and profits and essentially drive them out of business.” But the development of digital audio and P2P made such uploading easy and commonplace.

The proliferation of [P2P] networks from 1999 onward and the piracy they enable has had a significant negative impact on the recording industry. Between 1999 and 2008, the recording industry as a whole suffered a fifty percent drop in both sales and revenues, a figure plaintiffs attribute to the rise of illegal downloading. This reduction in revenues has, in turn, diminished recording companies’ capacities to pursue, develop and market new recording artists. It also affected the companies’ employees. The loss in revenues has resulted in a significant loss of industry jobs. Sony BMG Music Entertainment and Warner Music Group, for example, each have suffered a fifty percent reduction in workforce since 2000.

The court then traced the history of the record labels’ response to P2P piracy, beginning with consumer education and legal actions against P2P services and leading to its campaign against individual infringers, including Joel Tenenbaum.

Tenenbaum’s Conduct

The First Circuit devotes over 8 pages in the 65 page opinion to describing Tenenbaum’s actions that led to the trial. The portrait they paint is one of an avid “file-sharer” who downloaded and distributed music continuously for nearly a decade. The court said that “Over the duration of Tenenbaum’s conduct, he intentionally downloaded thousands of songs to his own computers from other network users. He also purposefully made thousands of songs available to other network users.” It also observed that “Tenenbaum regularly looked at the traffic tab, and he admitted it ‘definitely wasn’t uncommon’ for other users to be downloading materials from his computer.”

The court notes too the warnings Tenenbaum received that his conduct was illegal: from his father, his mother, his college, his ISP, and finally from the record labels themselves. Up until the trial, Tenenbaum denied he did anything wrong, shifting the blame to seemingly any individual he could think of. According to the court, “These individuals included a foster child living in his family’s home, burglars who had broken into the home, his family’s house guest, and his own sisters.”

It wasn’t until asked at trial that Tenenbaum finally admitted responsibility for his conduct.

All of Tenenbaum’s arguments rejected

Next the court rejected three of Tenenbaum’s arguments raised on appeal.

The first is that the Supreme Court decision in Feltner rendered the Copyright Act’s statutory damage provisions unconstitutional. Although the court found that Tenenbaum waived this argument because he didn’t clearly make it in the district court, it nevertheless found it wrong. Feltner held that, although the statutory damages provision only refers to “the court”, statutory damages must be determined by a jury (unless a jury trial is not requested by the plaintiff). Tenenbaum’s argument was a stretch — I won’t spend any time on this, so you can read the opinion if you want to see the details.

Next, Tenenbaum argues that the statutory damages provision doesn’t apply to “consumer copiers.” Again, although the court found this argument waived, it took the time to explain why it was wrong.

We start with the inaccuracy of the labels that Tenenbaum’s argument uses. Tenenbaum is not a “consumer-copier,” a term he never clearly defines. He is not a consumer whose infringement was merely that he failed to pay for copies of music recordings which he downloaded for his own personal use. Rather, he widely and repeatedly copied works belonging to Sony and then illegally distributed those works to others, who also did not pay Sony. Further, he received, in turn, other copyrighted works for which he did not pay. Nor can Tenenbaum assert that his was merely a “noncommercial” use and distribution of copyrighted works as those terms are used elsewhere in the Act. His use and distribution was for private gain and involved repeated and exploitative copying.

But even if the court did agree that Tenenbaum was engaged in “consumer copying” it wouldn’t have mattered. The language of the Copyright Act is crystal clear: the distinctions or exceptions that Tenenbaum asks the court to read into the law simply don’t exist. The court continued:

Asking us to ignore the text and the plain meaning of the statute, Tenenbaum argues Congress was unaware that suits like this could be brought and so could not have intended the statute to apply here. The argument is wrong both on the law and on the facts.

The First Circuit observed that Congress “specifically acknowledged that consumer-based noncommercial use of copyrighted materials constituted actionable copyright infringement” when it increased the amounts available under the statutory damage provisions in 1999. Two years before that, it amended the Copyright Act to impose criminal liability even when the infringement is noncommercial. And the fact that the record labels’ pursuit of end-user infringers cuts against Tenenbaum’s argument rather than supporting it:

Even if we assume that copyright owners have historically chosen first to litigate against the providers of new technologies of reproduction and dissemination rather than the users of those new technologies, that may best be explained by the owners using a cost benefit analysis, and says nothing about Congressional intent. Historically, the costs of prosecuting infringement actions against individual users could be thought by owners to have exceeded the benefits. That the copyright owners have turned to litigation against individual infringers only underscores that the balance of the copyright holder’s cost-benefit analysis has been altered as peer-to-peer networks and digital media become more prevalent.

The Circuit also rejected Tenenbaum’s argument that there must be some relation between statutory damages and actual harm. It points to the language of the Copyright Act, which allows a copyright holder to elect to receive statutory damages instead of actual damages — language that the Supreme Court has affirmed means statutory damages are available as an alternative remedy from actual damages, “[e]ven for uninjurious and unprofitable invasions of copyright.” Besides that, Sony had provided “extensive testimony” of the harm caused by Tenenbaum’s conduct during trial.

Finally, Tenenbaum raised a number of arguments that the jury instructions were in error. Even though all but one of these arguments were not preserved for appeal, the First Circuit nevertheless took the time to explain why they are wrong.

Doctrine of Constitutional Avoidance

The First Circuit next held that the district court erred when it bypassed the issue of common law remittitur and reduced the jury verdict on due process grounds. This is the most important portion of the decision in Tenenbaum, and it sheds some light on the future of not only this case, but also Thomas-Rasset.

The court declined to adhere to the doctrine of constitutional avoidance on the ground that it felt resolution of a constitutional due process question was inevitable in the case before it. A decision on a constitutional due process question was not necessary, was not inevitable, had considerable impermissible consequences, and contravened the rule of constitutional avoidance. That rule had more than its usual import in this case because there were a number of difficult constitutional issues which should have been avoided but were engaged.

The court notes two of those issues: first, the proper standard for measuring the due process limitations on awards of statutory damages, and second, whether reducing statutory damages in this fashion, without allowing plaintiffs the option of accepting them or seeking a new trial, violates the Seventh Amendment.

The doctrine of constitutional avoidance, where courts must avoid reaching a constitutional question if it can decide an issue on nonconstitutional grounds, seems counterintuitive to many people at first glance. The Constitution is the “supreme law of the land”, 3US Constitution, Article VI. after all — if something violates the Constitution, why wouldn’t we want judges to put a stop to it?

The answer to that is in the Constitution itself. The power of the Judicial branch is not unlimited — Article III provides that courts may only hear “cases or controversies” and not render advisory opinions. The Constitution also provides for separation of powers. Congress is vested with the power to make laws, and a court that is too active in its efforts to rule laws unconstitutional is essentially encroaching on this power.

From this foundation, along with principles of judicial restraint, the doctrine of constitutional avoidance has developed. Though it is a long-standing doctrine, it received its most famous elaboration by Supreme Court Justice Brandeis in his concurrance to Ashwander v. Tennessee Valley Authority.

Gore vs. Williams

But while the First Circuit declined to rule on the proper standard for analyzing statutory damage awards, it did hint that it is leaning more toward Williams than Gore.

First, it noted that the presumptive standard for statutory damages is Williams and questioned whether courts would have “leeway and reason” to bypass this standard and apply a different one. 4The court hypothesized that this different standard could be “the Gore standard, some combination of Williams and Gore, or some other standard”.

Second, it questioned the applicability of Gore to copyright statutory damages. These damages serve different purposes than punitive damages. In addition, both Gore and Williams involved review of state-authorized awards, not one set by Congress pursuant to one of its specifically enumerated powers.

Finally, Williams remains good precedent, and the Supreme Court has never suggested Gore should extend to constitutional review of statutory damages. The First Circuit rounds out its skepticism by observing that the concerns which led to the standard in Gore aren’t present in a statutory damage context, and the only other circuit court to address an issue like this declined to apply Gore and instead applied Williams. 5That case is Zomba Enterprises v. Panorama Records, 491 F.3d 574 (6th Cir. 2007).

While not overtly endorsing the Williams standard, this decision hints that, should the First Circuit confront this issue in the future, it will go down that road. And, based on its comment noting “concerns about application of the Copyright Act which Congress may wish to examine”, the circuit court judges suggest they are inclined to think such a verdict would survive a due process challenge under Williams.

This saga is far from over — it remains to be seen if the parties settle or continue the litigation, and it remains to be seen how the district court responds if they do continue. The Thomas-Rasset appeal is also waiting in the wings, with the record labels’ opening brief due October 13th.

References

References
↑1 See the EFF, Techdirt, and Ars Technica.
↑2 The Seventh Amendment right to a jury trial requires that plaintiffs be given this choice.
↑3 US Constitution, Article VI.
↑4 The court hypothesized that this different standard could be “the Gore standard, some combination of Williams and Gore, or some other standard”.
↑5 That case is Zomba Enterprises v. Panorama Records, 491 F.3d 574 (6th Cir. 2007).

Friday’s Endnotes – 09/16/11

By , September 16, 2011.

Senate Judiciary Committee report on PROTECT IP, July 22, 2011:

The Committee notes that protecting intellectual property in the form of copyrighted material is not only important to our economy and jobs, but is also important for advancing the goals of the First Amendment. The United States Supreme Court has long held that copyright protection advances the goals of the First Amendment by “supply[ing] the economic incentive to create and disseminate ideas.” The “clause [of the Constitution] empowering Congress to grant patents and copyrights is [based] in the conviction that encouragement of individual effort by personal gain is the best way to advance public welfare through the talents of authors and inventors in ‘Science and useful Arts.'”

Further, Justice O’Connor wrote that copyright law is the very “engine of free expression.” It exists not to prevent free speech, but to promote it. Justice O’Connor went on to recall that “freedom of thought and expression ‘includes both the right to speak freely and the right to refrain from speaking at all.'” As rogue Internet sites evade U.S. intellectual property laws, they not only cause economic harm, but they trample on these First Amendment values.

UK Culture Secretary calls for boldness in dealing with online piracy — Barry Sookman reports on the speech given by UK Culture Secretary Jeremy Hunt to the Royal Television Society on September 14, 2011. The talk deals broadly with UK communications policy, but does address the problem of unlawfully distributed content online. Just a taste: “John Stuart Mill defined liberty as the freedom to do anything provided it does not impinge on the freedom of others. Unlawfully distributing copyrighted material is theft – and a direct assault on the freedoms and rights of creators of content to be rewarded fairly for their efforts. Fundamental to our concept of both freedom and the law is that it should apply to everyone without fear or favour. This means it must apply equally in the virtual world as in the physical world.”

Do it, or we’ll do it for you: Jeremy Hunt and Ed Vaizey stand up for human rights of UK artists — Chris Castle also comments on Hunt’s recent remarks, paying specific attention to the relationship between Google and Prime Minister David Cameron.

Study: 92% of music fans still prefer ownership — Digital Music News highlights a recent study by eMusic, administered by Insight Research Group that found this and other interesting statistics concerning consumer attitudes toward digital music, streaming services, and buying habits.

If free culture is going to be so great, why are bullies in charge of it? — John Degen looks at the far-too-common backlash that creators and creator advocates get from free culture advocates when they say something provocative like people should get paid for their work. Good article, but this comment from Degen, FTW: “it’s always been easy to NOT make a living at being a professional artist. The free culture movement is just making it easier.”

Found one! We re-unite an author with an “orphaned work” — On Monday, the Authors Guild and others filed suit against five universities and the HathiTrust for plans to release digital scans of “orphan works”, books that are still under copyright protection but where the rights-holder is unable to be found. In this blog post, the Authors Guild finds one of the authors on the list of orphan works the trust plans to release after a few minutes on Google.

Entrepreneurs Demonstrate It Is Time To Act On The Protect Ip Act — The Copyright Alliance looks at last week’s letter from tech entrepreneurs against the proposed rogue sites legislation. “By rehashing generations old history and repeating myths and misstatements about the bill, the main thing the signatories have shown is that there is nothing new they can bring to the debate, and that it is time for Congress to act on the legislation.”

The Supreme Court of Canada Copyright Tariff Pentalogy — The Supreme Court of Canada, which historically has heard copyright cases relatively infrequently, is set to hear five cases December 6-7. James Gannon presents a summary of the cases, all involving judicial review of Copyright Board decisions on collective licensing.

With Great Power Comes No Responsibility — Rob Levine questions Google’s apparent position that it has absolutely no responsibility when its services are used, exactly the way they were designed to be used, for illegal purposes. “On a literal level, the company abides by its public relations mantra, ‘Don’t Be Evil.’ But that’s only because it prefers to outsource bad behavior in a way that enables it to make money and still abide by the letter of the law. ”

Backstage helps out on September 11th — Last week, many US bloggers shared there thoughts on the 10th anniversary of the 9/11 attacks. Here, Eric Hart (my brother) looks at how NYC theater professionals and IATSE members pitched in to assist with rescue efforts and the aftermath.

Turntable comes clean about funding. Next up: label deals, more users — Some more updates on the much-buzzed new music service. I previously wrote about Turntable.fm and licensing; here, Peter Kafka reports that “Basically they’re gunning for a hybrid license which would have them paying more per stream than Pandora does, but less than a full-fledged, on-demand interactive service like Spotify ponies up.”

Tenenbaum: an alternative view — An older article, but with the Tenenbaum appeal currently awaiting decision and the Thomas-Rasset appeal to begin briefing in October, I thought it would be of interest. Both appeals concern what, if any, due process (Fifth Amendment) limitations are placed on a jury award of statutory damages. But here, attorney Emily Maruja Bass asks a different question: does the reduction of the jury’s award violate the Seventh Amendment rights of the plaintiffs? With great analysis, Bass presents a persuasive argument that it might.

Rojadirecta pounds on the table

By , September 15, 2011.

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

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

Puerto 80’s reply memorandum:

[scribd id=63825861 key=key-1rncb6dg5nwje0ntnytg mode=list]

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The changes are rung on the contention, and illustrations are given of what is possible under the law if the contention be rejected. It is said that a Pullman sleeper can be forfeited if a bottle of illicit liquor be taken upon it by a passenger, and that an ocean steamer can be condemned to confiscation if a package of like liquor be innocently received and transported by it. Whether the indicated possibilities under the law are justified we are not called upon to consider. It has been in existence since 1866, and has not yet received such amplitude of application. When such application shall be made it will be time enough to pronounce upon it. 1JW Goldsmith-Grant v. US, 254 US 505, 512 (1921).

And again in 1996:

The dissent also suggests that The Palmyra line of cases “would justify the confiscation of an ocean liner just because one of its passengers sinned while on board.” None of our cases have held that an ocean liner may be confiscated because of the activities of one passenger. We said in Goldsmith-Grant, and we repeat here, that “[w]hen such application shall be made it will be time enough to pronounce upon it.” 2Bennis v. Michigan, 516 US 442, 450-51 (1996).

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

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

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

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

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

To succeed in a forfeiture action under 18 USC § 2323, the government must prove by a preponderance of the evidence, that (1) the property was used to commit or facilitate the commission of criminal copyright infringement, and (2) there was a “substantial connection” between the property and the offense. The US does not have to show evidence of a particular illegal act. 3In re Seizure of all funds, 68 F.3d 577, 580 (2nd Cir. 1995), citing Marine Midland Bank, N.A. v. United States, 11 F.3d 1119, 1124 (2d Cir.1993); United States v. Ten Thousand Seven Hundred Dollars and No Cents in US Currency, 258 F. 3d 215 (3rd Cir. 2001); United States v. US Currency in Amount of $150,660, 980 F.2d 1200, 1205 (8th Cir. 1992); United States v. $250,000 in United States Currency, 808 F.2d 895, 899-900 (1st Cir.1987); United States v. $4,250,000, 762 F.2d 895, 903-04 (11th Cir.1985). And it may use circumstantial evidence to show the nexus between the property and the predicate act giving rise to forfeiture.

That’s the ultimate burden the US has to meet for property to be forfeited. At this stage in the game, the US need only “state sufficiently detailed facts to support a reasonable belief” that it will be able to meet this burden, 4FRCP, Supplemental Rules G(2). and “state the circumstances from which the claim arises with such particularity that the defendant or claimant will be able, without moving for a more definite statement, to commence an investigation of the facts and to frame a responsive pleading.” 5FRCP, Supplemental Rules E(2)(a).

In other words, the US doesn’t have to prove its case in the forfeiture complaint. It may even, in fact, “use evidence gathered after the filing of a complaint” to meet its ultimate burden.” 618 USC § 983(c)(2). Puerto 80 provides very little support for its argument that the forfeiture complaint is deficient in this regard — the first memorandum supporting its motion to dismiss focused on arguing that the site isn’t personally liable for criminal copyright infringement, and this memo primarily argues that the scope of the §2323 is simply too broad.

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

References

PROTECT IP: Support for rogue sites legislation continues to grow

By , September 13, 2011.

Last May, the Senate Judiciary Committee unanimously approved the PROTECT IP Act, which aims to reduce the ability for sites dedicated to infringement to profit from piracy. Now that Congress is back in session, House Judiciary chairman Lamar Smith plans to introduce a House version of the bill.

In July, the Senate Judiciary Committee released its report on the proposed legislation. The report includes the bill’s background and legislative history to date, as well as a section-by-section summary and other housekeeping bits.

What’s notable about PROTECT IP is how broad the support for it is. On the political front, the support is bi-partisan and from every level of government, from local to state to federal.

The bill was originally sponsored by  Patrick Leahy (D-VT), Chuck Grassley (R-IA), Orrin Hatch (R-UT), Christopher Coons (D-DE), Chuck Schumer (D-NY), Sheldon Whitehouse (D-RI), Lindsey Graham (R-SC), Richard Blumenthal (D-CT), Dianne Feinstein (D-CA), Al Franken (D-MN) and Herb Kohl (D-WI).

Since being introduced, it has attracted co-sponsorship from Senators Lamar Alexander (R-TN), Kelly Ayotte (R-NH), Michael Bennet (D-CO), Roy Blunt (R-MO), John Boozman (R-AR), Benjamin Cardin (D-MD), Thad Cochran (R-MS), Bob Corker (R-TN), Richard Durbin (D-IL), Kristen Gillibrand (D-NY), Kay Hagan (D-NC), Amy Klobuchar (D-MN), Joseph Lieberman (I-CT), John McCain (R-AZ), Marco Rubio (R-FL), Jeanne Shaheen (D-NH), and Tom Udall (D-NM).

Private sector support is broad as well; individuals, labor unions, small businesses and large, trade associations, and other organizations have added their voice — including creators and producers in every medium and subject matter covered by copyright.

I’ve put together a list of many of the statements and editorials showing support for PROTECT IP. It’s comprehensive, though I know it’s not complete. And while I certainly want to show the breadth of support for rogue sites legislation, I also think it will be handy for future reference. Many thanks to the MPAA blog for reporting on many of these and providing copies of the letters.

  • 05/12/11 — Joint statement of theAmerican Federation of Musicians (AFM), American Federation of Television and Radio Artists (AFTRA), Directors Guild of America (DGA), International Alliance of Theatrical Stage Employees, Moving Picture Technicians, Artists and Allied Crafts of the United States, Its Territories and Canada (IATSE), Screen Actors Guild (SAG), and International Brotherhood of Teamsters, representing over 400,000 “creators, performers, and craftspeople.”
  • 05/12/11 — Independent Film and Television Alliance, Motion Picture Association of America, and National Association of Theatre Owners. Letter (PDF).
  • 05/12/11 — National Music Publishers Association.
  • 05/12/11 — Nashville Songwriters Association International. Letter (DOC).
  • 05/12/11 — Recording Industry Association of America.
  • 05/12/11 — Graphic Artists Guild.
  • 05/12/11 — Copyright Alliance.
  • 05/12/11 — US Chamber of Commerce.
  • 05/12/11 — Viacom.
  • 05/12/11 — NBCUniversal.
  • 05/16/11 — National Association of Attorneys General, with signatures from 42 state attorneys general. Letter (PDF).
  • 05/20/11 — Kamala Harris, California Attorney General. Letter (PDF).
  • 05/23/11 — Software & Information Industry Association. Letter (PDF).
  • 05/24/11 — Floyd Abrams, noted First Amendment expert. Letter (PDF).
  • 05/25/11 — Cinemark USA (TX). Letter (PDF).
  • 05/25/11 — Cobb Theaters (AL). Letter (PDF).
  • 05/27/11 — Governor Beverly Perdue (NC). Letter (PDF).
  • 06/13/11 — Governor Gary Herbert (UT). Letter (PDF).
  • 06/13/11 — Cinema Centers (PA). Letter (PDF).
  • 06/14/11 — Los Angeles Area Chamber of Commerce.
  • 06/14/11 — Politico editorial from Arts+Labs co-chairman and former White House press secretary for President Bill Clinton Mike McCurry.
  • 06/20/11 — Hallett Cinemas (WA). Letter (PDF).
  • 06/21/11 — Governor Dannel Malloy (CT). Letter (PDF).
  • 06/24/11 — Internet engineer George Ou article DNS Filtering is Essential to the Internet, countering technical criticisms of PROTECT IP.
  • 06/24/11 — Logan Luxury Theatres (SD). Letter (PDF).
  • 07/08/11 — Oregonian editorial from Concord Music Group president Glen Barros in support of PROTECT IP.
  • 07/12/11 — State International Development Organizations, which supports state international trade agencies. Letter (PDF).
  • 07/13/11 — Institute for Policy Innovation.
  • 07/21/11 — California Healthcare Institute. Letter (PDF).
  • 08/02/11 — The National District Attorneys Association, which represents over 39,000 of America’s state and local prosecutors. Letter (PDF).
  • 08/21/11 — Eagles’ songwriter Don Henley editorial in USA Today.
  • 08/23/11 — Washington Post editorial in support of PROTECT IP.

Friday’s Endnotes – 09/09/11

By , September 09, 2011.

The 2011 Music-Sales Boost, By the Numbers — Billboard reports some good news: music sales are up in 2011. Nielsen presented the numbers at a NARM-sponsored webinar and looked at possible causes. One of them: the shutdown of LimeWire late last year. “The spike in sales was immediate, noticeable and lasting.”

Great Digital Expectations — The Economist surveys the rapidly-changing publishing industry. This year, for the first time, e-book sales overtook adult hardcover sales. And shuttering physical book stores — long the primary promotional channel for publishers — cast a gloom over the industry.

Visual Cues Impact Judgment of Piano Performances — Very interesting article about recent research that shows that what we see effects what we hear. “Despite the fact the soundtracks were identical, ‘Nearly all participants identified differences between the pairs of video recordings,’ the researchers report. Duplicating the results of the 1990 study, the ‘performances’ by the male pianists were perceived as more precise, while the female pianist’s ‘performance’ of Chopin was judged as more dramatic.”

Tunes on the Tube, What Does it all Mean? — “Have you noticed how much more music is on television today?” asks the RIAA’s Mitch Glazier. From shows like The Voice, Glee, and Dancing With the Stars to the record-high ratings for music award shows, the common theme seems to be “fans’ healthy appetite for music discovery and their desire to be blown away by a voice, a song, a talent.”

Copyright law puts brakes on Internet traffic — After New Zealand’s recent graduated response laws went into effect, ISPs have reported that international P2P traffic has dropped by as much as 10% before a single warning notice had even been sent.

Tech Execs Should Read the PROTECT IP Act Before Attacking It — The MPAA responds to yesterday’s letter from tech company bosses opposing the PROTECT IP Act. It notes specifically that the definition of infringing sites is anything but “vague” and the “burdens for smaller tech companies” are largely imaginary.

Still a Long Way to Go for Anti-Counterfeiting Trade Agreement — The ACTA largely dropped from the news once negotiations wrapped up last year, but it is open for signature until May 2013. IP Watch takes a look at where that process is at and some of the issues that have cropped up.

In the Courts

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

FLAVA WORKS, INC. v. Gunter, No. 10 C 6517, Memorandum Order (N.D.Illinois September 1, 2011)

Does Posting on the Internet Trigger US Copyright Registration Requirement?

By , September 08, 2011.

Back in June, I wrote about Kernel Records Oy v. Mosley, where a Norwegian chiptune producer sued hip-hop producer Timbaland for allegedly sampling one of his tracks (“Acid Jazzed Evening”) without permission, using it in the track “Do It” by Nelly Furtado.

In somewhat of a twist, the court granted summary judgment in favor of Timbaland since Kernel Records had not timely registered its copyright. Although foreign copyright owners are generally not required by US law to register their copyright with the US Copyright Office as a prerequisite to filing an infringement suit, the magistrate judge noted that the Copyright Act does require registration when the work is published “simultaneously in the United States and another treaty party” — and since the judge found that Kernel had first published its work on the Internet, this amounted to a simultaneous publication that triggered the registration requirement.

Only one other court had previously confronted the issue of whether first publication on the Internet triggers the registration requirement for foreign copyright holders under this statute, and that court held that it doesn’t. 1Moberg v. 33T LLC, 666 F.Supp.2d 415 (D. Dela 2009).

Kernel Records quickly filed a notice of appeal with the Eleventh Circuit and last week filed its appellate brief with the court, embedded below. (Link).

[scribd id=64219598 key=key-2inkrzrc0dgmemzdv4p3 mode=list]

In the well-argued brief, Kernel says that the court’s interpretation of the Copyright Act’s registration requirement was incorrect. It also raises two other issues. It argues that the district court should not have dismissed its claim so quickly for failure to register its copyright — Kernel eventually did register its copyright on March 31, 2011, but the court denied its motion to amend its claim to reflect this fact. Kernel also argues that the court erred in granting summary judgment since there was a factual dispute over whether the work was even first published on the Internet in the first place.

The last point is interesting, as it seems to involve a faulty reading of a transcription from a deposition where two people are speaking at the same time — one of whom doesn’t speak English as his primary language. Kernel raises some policy issues with its second argument that are worth taking a look at. But it’s the first point that seems to me to be the main attraction in this appeal.

While copyright protection automatically vests in a work as soon as it is in a fixed medium, under the US Copyright Act, “no civil action for infringement of the copyright in any United States work shall be instituted until preregistration or registration of the copyright claim has been made in accordance with this title.” 217 USC § 411(a). The Copyright Act states that

For purposes of section 411, a work is a “United States work” only if—

(1) in the case of a published work, the work is first published—
(A) in the United States;

(B) simultaneously in the United States and another treaty party or parties, whose law grants a term of copyright protection that is the same as or longer than the term provided in the United States;

(C) simultaneously in the United States and a foreign nation that is not a treaty party; or

(D) in a foreign nation that is not a treaty party, and all of the authors of the work are nationals, domiciliaries, or habitual residents of, or in the case of an audiovisual work legal entities with headquarters in, the United States 317 USC § 101.

The lower court held that “publishing AJE [Acid Jazzed Evening] on a website in Australia was an act tantamount to global and simultaneous publication of the work, bringing AJE within the definition of a “United States work” under §101(1)(C) and subject to §411(a)’s registration requirement.”

Kernel Record’s first argument in its appeal is that this holding interprets the statute incorrectly.

The statute specifies four ways a published work qualifies as a United States work, three of which are relevant to the inquiry herein. A work is a United States work under Definition 1(A) if it is first published in the United States; under Definition 1(B) if it is first published simultaneously in the United States and a longer-term party or parties; and under Definition 1(C) if it is published in the United States and a non-treaty party. 17 U.S.C. § 101. Definition 1(D) is inapplicable as it is undisputed the author of AJE, Gallefoss, is not a national, domiciliary, or habitual resident of the United States.

Kernel notes that the statutes use of “only” means that these four definitions are exclusive — it notes the familiar interpretive canon of expressio unius est exclusio alterius (“the mention of one thing implies the exclusion of another”). Thus, a work first published simultaneously in the US and a treaty country with a longer copyright term is a US work under (B), but a work simultaneously published in the US and a treaty country with a shorter term — or a work published in the US, a treaty country with a longer term, and a treaty country with a shorter term — is not.

If posting a work online, then, results in “simultaneous global publication”, it does not fall within this definition of a US work. Posting a work on the Internet amounts to publication in every country with Internet access, as Kernel notes. This would include treaty parties with shorter terms, treaty parties with longer terms, and non-treaty parties, and none of the definitions of a US work includes all of these together.

It’s a strong argument, and one that is bolstered by Kernel’s second argument: this interpretation tracks the Berne Convention’s definition of “country of origin” in Article 5(4). The legislative history of the Berne Convention Implementation Act is explicitly clear that it was Congress’s intent to do so. As Kernel points out, “The District Court‘s interpretation unnecessarily creates a conflict between United States law and the very treaty the United States was attempting to implement.”

Given that Kernel Records has solid arguments for this and the other two issues it has raised, I think it’s likely that the Eleventh Circuit will remand back to the lower court, where the litigation will move forward. Mosley has 30 days to file his reply brief.

References

References
↑1 Moberg v. 33T LLC, 666 F.Supp.2d 415 (D. Dela 2009).
↑2 17 USC § 411(a).
↑3 17 USC § 101.

htmlComics: Domain Name Forfeiture Before Operation in Our Sites

By , September 07, 2011.

Before Operation in Our Sites, there was htmlComics.

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

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

It’s just like a library

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

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

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

The Feds Get Involved

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

Like the forfeiture complaints filed against the domain names seized during Operation in Our Sites, 2Along with Rojadirecta, the US has filed a complaint against tvshack.net, movies-link.tv, zml.com, now-movies.com, thepiratecity.org, planetmoviez.com, and filespump.com. the htmlcomics.com complaint alleges that the domain name is subject to forfeiture under 18 USC § 2323(a) because it is property used to facilitate the commission of criminal copyright infringement.

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

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

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

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

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

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

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

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

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

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

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

References

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

The Copyright Infringement isn’t Theft Trope

By , September 06, 2011.

Spend any amount of time reading or talking about copyright and you’re bound to have come across a debate over infringement and theft. Like many internet debates, it is very much a dead horse that has been beaten — I personally have written not one but two posts on the topic — yet the subject never dies.

Case in point: a couple weeks ago, Ben Jones at TorrentFreak resurrected the debate in an article called Copyright Infringement and Theft – The Difference. In it, Jones says, “A common recurring theme in the comments here on TorrentFreak is that P2P file-sharing is ‘stealing’. While such sentiments are often expressed by the industry lobby groups, it’s completely at odds with the law. It could also be the very LAST thing those bodies want.”

In the article, Jones makes the argument that since copyright infringement is enforced in courts through infringement claims rather than theft claims, it is wrong to ever use theft-type language to describe the harm caused by infringement. While this is not the only argument used by the “infringement is not theft” crowd, it is one of the more common ones.

It is also semantic nonsense.

At the risk of belaboring this point, here are five reasons why this argument fails.

#1. It’s based on an imaginary rule

According to the argument advanced in the TorrentFreak article, it’s wrong to call copyright infringement theft because it isn’t prosecuted under theft statutes.

This argument implies a rule: you’re only allowed to use words in their formal, legal manner. Throw away your Merriam-Webster’s, because the Blacks Law Dictionary is the only proper source for learning the meaning of a word.

Even the strictest language prescriptivist would cringe at the thought of such a rule. Many words have different meanings in different contexts — a certain definition in one context doesn’t preclude other definitions in other contexts.

#2. It assumes there’s only one legal definition for theft

If we accept this arbitrary, made-up rule, we still run into problems. Which legal definition of “theft” do we use? Every jurisdiction has its own specific definition; in the US, that means there is a different definition in each state.

Some states don’t call it “theft” at all. In West Virginia, for example, the criminal deprivation of personal property is prosecuted as either grand or petit larceny, depending on the value of the property. 1W.Va.Code § 61-3-13. Cries of “Larceny isn’t theft!” would be the nonsensical result of this argument. Stealing is stealing no matter what a lawyer is required to call it for pleading purposes.

#3. The same argument doesn’t make sense with other words

Suppose, for the sake of argument, that we can get around the previous two objections: it’s a settled rule that we should only use words in their formal, legal sense, and we can agree on a legal definition for “theft.” We still run into absurd results under this argument.

“Theft” is commonly used to describe the criminal offense of depriving someone of personal property. But in most jurisdictions, someone can sue for a wrongful deprivation in civil court rather than pressing charges. Such a claim would be for conversion — the “unauthorized dominion over personal property in interference with a plaintiff’s legal title or superior right of possession” 2LoPresti v. Terwilliger, 126 F.3d 34, 41 (2nd Cir. 1997).. It’s entirely accurate, then, to say that “conversion isn’t theft”, but so what? The nature of the act itself doesn’t change depending on which court the claim is brought in.

#4. Stealing or theft?

The crux of the argument advanced in the TorrentFreak article is that infringement isn’t theft, but it kicks off with an example of a comment that “P2P file-sharing is ‘stealing'”. So which is it? Even if this particular argument was valid, does that mean it extends to the characterization of infringement as stealing? Stealing isn’t a legal term, after all — though it should be noted that, in the US, criminal copyright infringement is codified under the heading “Stolen Property“.

This little switch-a-roo just highlights the semantic shenanigans involved in the “infringement isn’t theft” argument.

#5. Some pretty smart people disagree

The argument that calling copyright infringement “theft” is “completely at odds with the law” takes on a patronizing air — i.e., “you’re only calling it theft because you don’t understand the law as well as we do.” This is no more than hubris, however; many people whose job it is to know the law know better.

In Metro-Goldwyn-Mayer v. Grokster, Justice Breyer, joined by Justices Stevens and O’Connor, said, “deliberate unlawful copying is no less an unlawful taking of property than garden-variety theft.” 3545 US 913, 961 (2005) (concurrence). The Supreme Court has been comfortable referring to copyright infringement as theft on other occasions. 4For example, Harper & Row Publishers v. Nation Enterprises, 471 US 539, 558 (1985) (citing Iowa State University Research Foundation v. American Broadcasting Cos., 621 F.2d 57, 61 (2nd Cir. 1980): “The fair use doctrine is not a license for corporate theft, empowering a court to ignore a copyright whenever it determines the underlying work contains material of possible public importance” ; Teleprompter Corp. v. Columbia Broadcasting System, 415 US 394, 417 (1974) (J. Blackmun, dissent in part): “A CATV that builds an antenna to pick up telecasts in Area B and then transmits it by cable to Area A is reproducing the copyrighted work, not pursuant to a license from the owner of the copyright, but by theft”; Dun v. Lumberman’s Credit Assn, 209 US 20,22 (1908): “[a] number of instances are disclosed in the evidence which have strong tendency to establish the charge that defendants have used some of complainants’ copyright material in making their book … such indicia is held to indicate a substantial theft of copyright property.” Lower courts and Congress have also used “theft” to describe copyright infringement on various occassions. 5See, for example, In re Verizon Internet Services, 240 F.Supp.2d 24, 35 (D. DC 2003): “There is little doubt that the largest opportunity for copyright theft is through peer-to-peer (“P2P”) software”; A&M Records v. Napster, 114 F.Supp.2d 896, 900 (ND Cali 2000): “The matter before the court concerns the boundary between sharing and theft, personal use and the unauthorized world-wide distribution of copyrighted music and sound recordings”; Protecting Intellectual Rights Against Theft and Expropriation Act, S.2863 (2004); Artists’ Rights and Theft Prevention Act, S.1932 (2003); Digital Theft Deterrence and Copyright Damages Improvement Act, PL 106-160 (1999); No Electronic Theft Act, PL 105-147 (1997).

Perhaps TorrentFreak and the rest of the “infringement isn’t theft” crowd knows more about the law than Supreme Court Justices, federal court judges, and Congress, but I’m willing to bet that that’s not the case.

Copyright infringement is theft

Language is incredibly malleable; we use words in a variety of ways. Many people over the centuries have described the deprivation of the exclusive rights in the fruits of their creative endeavors as “theft”, there’s no question about that.

But I think it is fair to ask why some bristle at any mention of theft in connection with infringement and piracy. I highly doubt their motives are solely to increase legal literacy by ensuring that words are used in their exact legal sense — mistakenly, in this case, as shown above. After all, one doesn’t have to look very far to see losing civil defendants being described as having been found “guilty”, or statutory damages for infringement being described as “fines” by these same critics — both terms that aren’t accurate in their strictly legal sense.

It’s my sense that this linguistic peeving is explained by the fact that “theft” has definite moral overtones to it, while “infringement” is still capable of euphemistically avoiding any moral concerns. Perhaps proponents of this argument hope that by straining semantics, they don’t have to confront the very real harm that infringement causes to creators and the public.

In other words, the “infringement isn’t theft” argument is often just cover for some other point.

References

References
↑1 W.Va.Code § 61-3-13.
↑2 LoPresti v. Terwilliger, 126 F.3d 34, 41 (2nd Cir. 1997).
↑3 545 US 913, 961 (2005) (concurrence).
↑4 For example, Harper & Row Publishers v. Nation Enterprises, 471 US 539, 558 (1985) (citing Iowa State University Research Foundation v. American Broadcasting Cos., 621 F.2d 57, 61 (2nd Cir. 1980): “The fair use doctrine is not a license for corporate theft, empowering a court to ignore a copyright whenever it determines the underlying work contains material of possible public importance” ; Teleprompter Corp. v. Columbia Broadcasting System, 415 US 394, 417 (1974) (J. Blackmun, dissent in part): “A CATV that builds an antenna to pick up telecasts in Area B and then transmits it by cable to Area A is reproducing the copyrighted work, not pursuant to a license from the owner of the copyright, but by theft”; Dun v. Lumberman’s Credit Assn, 209 US 20,22 (1908): “[a] number of instances are disclosed in the evidence which have strong tendency to establish the charge that defendants have used some of complainants’ copyright material in making their book … such indicia is held to indicate a substantial theft of copyright property.”
↑5 See, for example, In re Verizon Internet Services, 240 F.Supp.2d 24, 35 (D. DC 2003): “There is little doubt that the largest opportunity for copyright theft is through peer-to-peer (“P2P”) software”; A&M Records v. Napster, 114 F.Supp.2d 896, 900 (ND Cali 2000): “The matter before the court concerns the boundary between sharing and theft, personal use and the unauthorized world-wide distribution of copyrighted music and sound recordings”; Protecting Intellectual Rights Against Theft and Expropriation Act, S.2863 (2004); Artists’ Rights and Theft Prevention Act, S.1932 (2003); Digital Theft Deterrence and Copyright Damages Improvement Act, PL 106-160 (1999); No Electronic Theft Act, PL 105-147 (1997).
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