Commercial Felony Streaming Act FUD

By , July 06, 2011.

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

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

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

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

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

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

Criminal Infringement of the Public Performance Right

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

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

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

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

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

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

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

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

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

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

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

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

Willfulness

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

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

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

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

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

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

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

Value

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

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

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

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

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

Other Bars

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

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

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

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

Conclusion

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

References

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

Friday’s Endnotes – 07/01/11

By , July 01, 2011.

Barbara Ringer and Copyright History:  Remembering a Mentor, Colleague and Friend — H/T to Dean Kay for passing this along. On Monday, I shared an article written by Barbara Ringer. Long acknowledged as the “Nation’s foremost authority on copyright law”, this article, written by Morton David Goldberg after Ringer passed away 2 years ago, tells of the life of the fascinating and inspirational Ringer and her contributions to US and international copyright law.

Brown v. Entertainment Merchants Association — Not copyright related, but big news as the Supreme Court finally hands down its opinion on whether California’s law restricting the sale of violent video games to minors is constitutional. It’s not.

Midnight in Paris, 6/30 — The Copyright Alliance calls “civil society” groups to task for refusing to sign onto a draft Communique on Internet policy-making principles produced by the OECD, simply because the draft, briefly and with caveats, recognizes the need to protect intellectual property.

Harry Potter and the Well of Red Ink — Screenwriter John August explains how participation statements work after Cory Doctorow offered up a 2009 statement from Harry Potter as evidence that everything anyone in the entire entertainment industry says is a bald-faced lie. August also points out, “Every industry — from oil to tech to toys — has ways of obfuscating exactly how much money it’s making.” To that, I would add “every taxpayer does the same.”

Forward-Looking Image — As a film lover, NY’s Museum of the Moving Image was a dream come true when I visited years ago.  It looks like it’s time to revisit, as the Museum reopened earlier this year after a three year expansion project. The Brand New blog looks at the new digs from a branding and design standpoint, but also offers a broader look at what you’ll find inside.

Why the Guild supports S. 978, the Commercial Felony Streaming Act — The Graphic Artists Guild released its statement of support of S.978 this week. The statement addresses the “crazy rumors circulating on the internet and on blogs that this bill will turn the internet into a police state; parents will go to jail for posting a family video with music or a TV show in the background on YouTube, people will be arrested for singing in public,” etc, etc. Kudos to the Guild.

Academic Publisher Steps up Efforts to Stop Piracy of its Online Products — The Chronicle of Higher Education reports on scholarly database SciFinder’s efforts to prevent unauthorized access to its services. Interestingly, the culprits aren’t typically looking to expand their minds: “Most hackers, to be clear, are not after the latest scientific journals when they steal college users’ names and passwords: In many cases, they use the information to send spam e-mails from college accounts, according to campus security officials.”

Diary of a Copyright Infringement Lawsuit, pt. 4 — The latest in Photo Attorney Carolyn Wright’s series that goes step by step through a hypothetical infringement lawsuit. Great info for creators and budding lawyers alike.

That’s it for this week. To all my fellow US readers, I hope you have a safe and fun Fourth of July weekend!

 

Demonizing Copyright

By , June 27, 2011.

The tagline of this site is “understanding the copyright wars.” The reasons for so much debate surrounding this subject are many, but the why of the copyright wars might be boiled down like this:

The onslaught of the new technology, combined with the introduction into the international copyright system of countries with different needs and with conflicting economic and political concepts, leaves the future of copyright very much in question.

More interesting, though, is the level of rancor surrounding the debates about that future:

Like any other law, copyright is a pragmatic response to certain felt needs of society and, like any other law, must change in scope and direction as these needs change. But changing any law is never an easy matter, and the case of copyright is made much more difficult by the religious fervor and theological arguments thrown at each other by the contending parties. The personal anger, the emotion, the presentation of viewpoints in stark black-and-white terms, are quite different in degree and character from what one might find in disputes over, say, admiralty or insurance law.

It is easy to make fun of the kind of confrontation I am talking about, where the mere mention of a word like “monopoly” or “property” will cause chairs to be pushed back from tables, faces to redden, breathing to shorten and bitter words to be exchanged.

Most interesting? These words were written in 1974, by the late Barbara Ringer. A copy of her essay, The Demonology of Copyright, is available at the Copyright Office’s website, and it is highly recommended reading.

The Engine of Free Expression

One of the themes Ringer explores is how copyright emerged at a time when democracy was replacing more repressive forms of government in the western world. It’s true that copyright law has its genesis in early printing monopolies, and the privileges granted to publishers went hand in hand with government control over what could be published. But Ringer notes that by the 18th century, a fundamental shift had occurred in England:

As a result of the bloodless revolution taking place in the English constitutional system, basic individual freedoms, notably freedom of speech and freedom of the press, were becoming established under commonlaw principles. The Statute of Anne marked the end of autocracy in English copyright and established a set of democratic principles: recognition of the individual author as the ultimate beneficiary and fountainhead of protection and a guarantee of legal protection against unauthorized use for limited times, without any elements of prior restraint of censorship by government or its agents.

This wasn’t an isolated occurrence:

It is striking that the second and third copyright statutes in the world — those of the United States of America and of France — were adopted immediately following the revolutions in those countries that overthrew autocratic government and were based on ideals of personal liberty and individual freedom. The Rights of Man in both cases certainly included the Rights of the Author, and the French word for copyright, “le droit d’auteur,” reflects this philosophical approach literally.

With this theme in mind, Ringer turns to other topics, including the sharp debates over the words used in the copyright context, like “monopoly” and “property.” Next, she takes a look at the goals of copyright, and reminds readers that these goals don’t dissipate in the face of rapid technological changes:

I believe it is society’s duty to go as far as it can possibly go in nurturing the atmosphere in which authors and other creative artists can flourish. I agree that the copyright law should encourage widespread dissemination of works of the mind. But it seems to me that, in the long pull, it is more important for a particular generation to produce a handful of great creative works than to shower its schoolchildren with unauthorized photocopies or to hold the cost of a jukebox play down to a dime, if that is what it is these days.

If you change photocopies and jukeboxes to their modern day equivalents, then the arguments alluded to here are the same ones heard today. The challenges facing creators in the digital era, it seems to me, are much the same as the challenges they faced four decades ago when Ringer wrote those words (though the scope of the challenge is larger).

Ringer concludes with a strong endorsement of ensuring the continuing vitality of creator’s rights. Though the words are nearly forty years old, the sentiment remains true:

If the copyright law is to continue to function on the side of light against darkness, good against evil, truth against newspeak, it must broaden its base and its goals. Freedom of speech and freedom of the press are meaningless unless authors are able to create independently from control by anyone, and to find a way to put their works before the public. Economic advantage and the shibboleth of “convenience” distort the copyright law into a weapon against authors. Anyone who cares about freedom and authorship must insure that, in the process of improving the efficiency of our law, we do not throw it all the way back to its repressive origins in the Middle Ages.

Friday’s Endnotes – 06/24/11

By , June 24, 2011.

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

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

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

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

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

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

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

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

Making Copyright Management Information Sexy: Murphy v. Millennium Radio Group

By , June 21, 2011.

Copyright management information is not a particularly sexy topic, but that all changed thanks to the help of a couple of nude DJs.

On June 14, the Third Circuit released its opinion in Murphy v. Millennium Radio Group. The underlying dispute is fairly straight-forward. A photographer was hired by a magazine to shoot a photo of two radio show hosts (the photo made it look like the two DJs were naked). Later, someone at the radio station where the two worked uploaded the photo to the station’s website and used it as part of a contest, all without Murphy’s permission.

What’s interesting, though, is that Murphy also brought a claim for removal of “copyright management information” (CMI) under 17 USC § 1202, alleging that the radio station had removed a “gutter credit” that identified him as the author from the photo before uploading it.

The District Court had dismissed Murphy’s CMI claim, holding that copyright management information is technological information used in automated copyright management processes, not garden-variety identification like the “gutter credit” that was removed. 1Murphy v. Millennium Radio Group, No. 08-1743 (D. NJ, March 31, 2010).

On appeal, the First Circuit reversed, stating that “the mere fact that Murphy’s name appeared in a printed gutter credit near the Image rather than as data in an ‘automated copyright protection or management system’ does not prevent it from qualifying as CMI or remove it from the protection of § 1202.”

While the question about what types of information are covered by the definition of CMI has come up at the district court level, this is (to the best of my knowledge) the first time a Circuit Court has addressed the issue. 2In 2003, the Sixth Circuit dealt with a CMI claim that apparently also involved the removal of text indicating author information on a non-digital work, but the question of whether this qualified as CMI wasn’t in front of the court and the claim was resolved on other grounds; Gordon v. Nextel Communications, 345 F.3d 922.

This broad reading of the statute has raised questions. Tom Casagrande of the Likely to Be Confused blog notes the irony that removal of non-digital author information violates the Digital Millennium Copyright Act under this holding. Hollywood Reporter Eriq Gardner says the decision will impact copyright law in the digital age.

I think this interpretation of the statute is broader than what Congress intended, though it is wholly supported by the statutory text. It raises some questions about the role of copyright management information going forward, though I think the impact this decision will have is blunted by the other elements required for a CMI claim. Today I want to look at content management information in some more detail, the First Circuit’s decision and some of the questions it raises, and why this decision might not make much of a difference.

Integrity of Copyright Management Information

Section 1202 became law in 1998 as part of the Digital Millennium Copyright Act (DMCA). It, along with the better known anti-circumvention provisions of § 1201, was designed to implement requirements of two WIPO treaties produced the year before. Both provisions were considered “technological adjuncts” to copyright law, “intended to ensure a thriving electronic marketplace for copyrighted works on the Internet.” 3The Home Recording Rights Coalition has an excellent collection of the legislative history of the DMCA.

The Senate Judiciary Committee noted when reporting on the bill to add CMI provisions into law, “Copyright Management Information (CMI) is an important element in establishing an efficient Internet marketplace in copyrighted works free from governmental regulation. Such information will assist in tracking and monitoring uses of copyrighted works, as well as licensing of rights and indicating attribution, creation and ownership.” 4Text of S. 2037, Digital Millennium Copyright Act, as reported by the Senate Judiciary Committee (May 6, 1998). According to the House Judiciary Committee’s report, “This section will operate to protect consumers from misinformation as well as authors and copyright owners from interference with the private licensing process.” 5H. Rept. 105-551 (Part I), Report of the House Judiciary Committee on H.R. 2281, WIPO Copyright Treaty Implementation Act (May 22, 1998).

Below is excerpts from the text of the statute, including what is prohibited, the definition of CMI, and the remedies available to those bringing a claim under § 1202.

§ 1202. Integrity of copyright management information

(b) Removal or Alteration of Copyright Management Information.— No person shall, without the authority of the copyright owner or the law—

(1) intentionally remove or alter any copyright management information,

(2) distribute or import for distribution copyright management information knowing that the copyright management information has been removed or altered without authority of the copyright owner or the law, or

(3) distribute, import for distribution, or publicly perform works, copies of works, or phonorecords, knowing that copyright management information has been removed or altered without authority of the copyright owner or the law,

knowing, or, with respect to civil remedies under section 1203, having reasonable grounds to know, that it will induce, enable, facilitate, or conceal an infringement of any right under this title.

(c) Definition.— As used in this section, the term “copyright management information” means any of the following information conveyed in connection with copies or phonorecords of a work or performances or displays of a work, including in digital form, except that such term does not include any personally identifying information about a user of a work or of a copy, phonorecord, performance, or display of a work:

(1) The title and other information identifying the work, including the information set forth on a notice of copyright.

(2) The name of, and other identifying information about, the author of a work.

(3) The name of, and other identifying information about, the copyright owner of the work, including the information set forth in a notice of copyright.

(4) With the exception of public performances of works by radio and television broadcast stations, the name of, and other identifying information about, a performer whose performance is fixed in a work other than an audiovisual work

(5) With the exception of public performances of works by radio and television broadcast stations, in the case of an audiovisual work, the name of, and other identifying information about, a writer, performer, or director who is credited in the audiovisual work.

(6) Terms and conditions for use of the work.

(7) Identifying numbers or symbols referring to such information or links to such information.

(8) Such other information as the Register of Copyrights may prescribe by regulation, except that the Register of Copyrights may not require the provision of any information concerning the user of a copyrighted work.

§ 1203. Civil remedies

(b) Powers of the Court.— In an action brought under subsection (a), the court—

(1) may grant temporary and permanent injunctions on such terms as it deems reasonable to prevent or restrain a violation, but in no event shall impose a prior restraint on free speech or the press protected under the 1st amendment to the Constitution;

(2) at any time while an action is pending, may order the impounding, on such terms as it deems reasonable, of any device or product that is in the custody or control of the alleged violator and that the court has reasonable cause to believe was involved in a violation;

(3) may award damages under subsection (c);

(4) in its discretion may allow the recovery of costs by or against any party other than the United States or an officer thereof;

(5) in its discretion may award reasonable attorney’s fees to the prevailing party; and

(6) may, as part of a final judgment or decree finding a violation, order the remedial modification or the destruction of any device or product involved in the violation that is in the custody or control of the violator or has been impounded under paragraph (2).

(3) Statutory damages.—

(B) At any time before final judgment is entered, a complaining party may elect to recover an award of statutory damages for each violation of section 1202 in the sum of not less than $2,500 or more than $25,000.

What Types of Information are Covered by § 1202?

One of the earliest interpretations of CMI came in IQ Group v. Wiesner Pub. 6409 F.Supp.2d 587 (D. NJ 2006). There, the defendant was alleged to have distributed ads created by plaintiff via email after removing the plaintiff’s logo and hyperlink from the ads. The court held that these didn’t constitute CMI under the statute based on its interpretation of the statute and the legislative history and the fact that a broader interpretation would impermissibly blur the lines between trademark and copyright. On the latter point, it pointed to the Supreme Court’s decision in Dastar Corp v. Twentieth Century Fox Film, which warned against “disregarding the trademark/copyright distinction.”

The Central District of California adopted the same position as IQ Group when it held that the removal of an author’s name and copyright notice on a fabric sample didn’t give rise to a claim under § 1202. 7Textile Secrets v. Ya-Ya Brand, 524 F.Supp.2d 1184 (2007). In rejecting a broad interpretation, it said “considering § 1202’s placement in the structure of the DMCA — a statutory scheme which, along with protecting the integrity of copyright management information, also prohibits the circumvention of technological measures that protect copyrighted works — the Court finds that such a wide-reaching interpretation would not be proper.”

But other decisions have adopted the same broad interpretation as the First Circuit: Cable v. Agence France Presse, 728 F.Supp.2d 977 (ND Illi 2010); Associated Press v. All Headline News, 608 F.Supp.2d 454 (SDNY 2009); and McClatchey v. Associated Press, 2007 WL 776103 (WD PA 2007). In all these cases, the courts relied on the plain language of the statute.

The First Circuit took the second approach in Murphy. Said the court:

There is nothing particularly difficult about the text of § 1202. Even the Station Defendants, and the courts whose decisions they cite, do not contend that § 1202 is, in itself, ambiguous or unclear. Read in isolation, § 1202 simply establishes a cause of action for the removal of (among other things) the name of the author of a work when it has been “conveyed in connection with copies of” the work. The statute imposes no explicit requirement that such information be part of an “automated copyright protection or management system,” as the Station Defendants claim. In fact, it appears to be extremely broad, with no restrictions on the context in which such information must be used in order to qualify as CMI. If there is a difficulty here, it is a problem of policy, not of logic. Such an interpretation might well provide an additional cause of action under the DMCA in many circumstances in which only an action for copyright infringement could have been brought previously. Whether or not this result is desirable, it is not absurd, as might compel us to make a more restrictive reading of § 1202’s scope.

Under this definition, it would seem that any information regarding copyright ownership on any copyrighted work — digital or not — is covered by § 1202.

Jane Ginsburg previously noted that, in this manner, § 1202 looks a lot like a moral rights provision 8Have Moral Rights Come of (Digital) Age in the United States? 19 Cardozo Arts & Entertainment Law Journal 9 (2001). — and in the US, with only a few exceptions, copyright law has long been focused on protecting only economic rights. This would be a dramatic shift in US copyright doctrine, one that I’m not sure Congress actually intended.

Will Murphy “Swallow Up” the Copyright Act?

While the First Circuit’s decision may give pause, I don’t think it is wrong: its interpretation of CMI is consistent with the plain language of the statute. Even under such a broad reading of the language, I don’t think there is a danger that § 1202 will result in much change in US copyright law.

What counts as CMI under the statute, after all, is only the first step. To successfully bring a claim under § 1202, a plaintiff still has to establish that the defendant knew or had reasonable grounds to know that intentionally removing or altering CMI “will induce, enable, facilitate, or conceal an infringement.” This is a high standard: one has to prove knowledge, intent, the purpose for removing CMI, and the fact that there was an infringement.

Between this case and the other three mentioned above that reached similar conclusions, none of the plaintiffs have gotten to that point. 9McClatchey and AP v. All Headline News have apparently settled out of court; Agence France Presse and this case are still ongoing.

Law professor Greg Lastowka believes much the same; most infringement cases don’t give rise to CMI claims, and those that do face a high bar:

For instance, in a hypothetical situation where an author’s publisher wished to remove the author’s attribution without permission, the author would have no cause of action against the publisher, unless the publisher’s copying of the work would constitute infringement. In most cases it would not, because the author would have transferred copyright or licensed the publisher to reproduce the work without requiring attribution. Additionally, even where infringement could be found to exist, the burden of showing a culpable mental state on the part of the defendant is a heavy burden for any plaintiff.  Rights-owning plaintiffs in several cases have failed to prevail on their CMI claims because they lacked admissible evidence of the requisite mental state of the infringing defendant. 10Digital Attribution: Copyright and the Right to Credit, 87 Boston University Law Review 41 (2007).

The First Circuit also addressed concerns over its interpretation, especially concerns that a CMI claim could be brought even when a defendant successfully argues fair use:

The Station Defendants argue that this interpretation would cause the DMCA to “swallow up” the Copyright Act, effectively making the latter redundant. In fact, if an infringer merely copies an entire work whole—as in the example above of a pirated film on DVD—Section 1202 will probably not be implicated, as the infringer will not have removed or altered any CMI. The Station Defendants point out that most fair uses will involve the removal of CMI. However, unlike § 1201, § 1202 applies only when a defendant knows or has reasonable grounds to know that the removal will “induce, enable, facilitate, or conceal” an infringement. Thus, those intending to make fair use of a copyrighted work are unlikely to be liable under § 1202.

Content management information has received little attention since its removal became prohibited by law over a decade ago. The First Circuit’s decision in Murphy will likely shine more of a spotlight on the subject, though the impact of this decision remains to be seen.

References

References
↑1 Murphy v. Millennium Radio Group, No. 08-1743 (D. NJ, March 31, 2010).
↑2 In 2003, the Sixth Circuit dealt with a CMI claim that apparently also involved the removal of text indicating author information on a non-digital work, but the question of whether this qualified as CMI wasn’t in front of the court and the claim was resolved on other grounds; Gordon v. Nextel Communications, 345 F.3d 922.
↑3 The Home Recording Rights Coalition has an excellent collection of the legislative history of the DMCA.
↑4 Text of S. 2037, Digital Millennium Copyright Act, as reported by the Senate Judiciary Committee (May 6, 1998).
↑5 H. Rept. 105-551 (Part I), Report of the House Judiciary Committee on H.R. 2281, WIPO Copyright Treaty Implementation Act (May 22, 1998).
↑6 409 F.Supp.2d 587 (D. NJ 2006).
↑7 Textile Secrets v. Ya-Ya Brand, 524 F.Supp.2d 1184 (2007).
↑8 Have Moral Rights Come of (Digital) Age in the United States? 19 Cardozo Arts & Entertainment Law Journal 9 (2001).
↑9 McClatchey and AP v. All Headline News have apparently settled out of court; Agence France Presse and this case are still ongoing.
↑10 Digital Attribution: Copyright and the Right to Credit, 87 Boston University Law Review 41 (2007).

Friday’s Endnotes – 06/17/11

By , June 17, 2011.

CREATE: Protecting Creativity from the Ground Up — On Wednesday, I had the pleasure of attending this event from Arts+Labs, which brought together creators, content and technology professionals, elected officials, and others to “examine the business and rights challenges facing creators in the digital era.” The Arts+Labs blog and YouTube channel has video of the panel discussions that are worth watching if you were unable to attend:  PROTECT – Current State and Future of Copyright, Counterfeiting, and Beyond, The Future of the Digital Economy, and A Conversation with the Creators.

StageIt — Evan Lowenstein (of Evan and Jaron) was one of the panelists on the Conversation with the Creators panel at CREATE on Wednesday. Lowenstein talked briefly about the company he launched last year, StageIt, which he described as “a front row seat to a backstage experience.” The service allows artists to give intimate performances in front of their computers and allows fans to interact with the artists via chat.

Why Selling E-books at 99 Cents Destroys Minds— Open Letter Books publisher Chad Post discusses e-books and pricing, and why his nonprofit publishing house decided to offer its books in digital format at $4.99. On the current popularity of 99 cent e-books, Post explains, “Now, you pay what you would pay for an app and dump it after you’re done. And why not? Those ‘expensive’ books are a lot of work. As someone devoted to literary culture, this scares the crap out of me.”

Behind the music: Illegal downloads are an ‘economic issue in ideological drag’ — The Guardian reports on this past weeks’ World Copyright Summit held in Brussels. “A few eyebrows were raised when it turned out Google had sent a representative to make a presentation at said party, opening his speech with the words: ‘I’m not going to speak about copyright as I know nothing about it.’ He then proceeded to demonstrate a new project they were working on, digitising artwork from some of the world’s most prestigious museums.”

President of NMPA Calls for Blanket Licensing of Mechanical and Sync Rights — Also this week was the annual meeting of the National Music Publishers Association. Billboard reports on president David Israelite’s call to revisit the Section 115 Reform Act of 2006, which sought to address “the current unavailability of an efficient and reliable mechanism whereby legitimate music services are able to clear all of the rights they need to make large numbers of musical works quickly available by an ever-evolving number of digital means while ensuring that the copyright holders are fairly compensated.”

Copyright-Protected Assets in the National Accounts, Rachel Soloveichik and David Wasshausen — “The Board on Science, Technology, and Economic Policy of the National Research Council has created the Committee on the Impact of Copyright Policy on Innovation in the Digital Era in order to evaluate and propose how to expand and improve research on the impacts of copyright policy, particularly on innovation in the digital environment.” To that end, it has set up the Copyright Policy Research Forum to present draft papers and solicit feedback. This paper presents data from the past 70 years about the investment, prices, and costs of “long-lived artwork” like films, scripted television, and music that is interesting in and of itself. It also has yet to receive any feedback and could, I think, benefit from a close look at some of the assumptions used to calculate production costs of various types of works.

First Circuit Notes Split re: CopyrightAct Requires Written Agreement Before Creation of the Work — A “work made for hire” agreement must be in writing in order to be valid under the Copyright Act. But does the written agreement have to be made before a work is created? In TMTV v. Mass Productions, Nos. 09-1439, 09-1956 (June 13, 2011), the First Circuit noted that the circuit courts are split on this question.

Easy versus Right— Leslie Burns reviews Google’s new Image Search feature, which provides image owners the ability to search for infringing uses of their works, giving it a thumbs-down. Burns writes, “Sounds great–an easy way to find infringing uses of your work. Wonderful! Free! Huzzah! Except, it really isn’t free. You’ll pay for it, just as you do for all things Google. It’s just not so obvious as getting a bill every month.”

Gone Elvis— The Copyright Alliance reports on First Lady Michelle Obama’s recent talk at a meeting of Hollywood guilds where she urged creators to support military families by sharing their stories through film. “The wars are coming to a close, but the real work continues,” said Obama “I urge you to do what you do best: Be creative, funny, dramatic and move us.” The Copyright Alliance notes, “The role the First Lady has called on our community to play is a role that we act out every day.  Through their work, artists and creators inspire and inform, and give us a deeper, more personal understanding of the world around us.”

Swedish Copyright Reform Proves Ability to Deter — James Gannon notes the dramatic shift in Sweden’s willingness to protect the rights of creators. Though the country has long been known as somewhat of a haven for digital piracy websites, one of the largest BitTorrent trackers there recently announced it was shutting down, citing the increasing risks of operating outside the law.

The Adventures of the Statute of Anne in the Land of Unlimited Possibilities: The Life of a Legal Transplant (PDF) — Reader David pointed me to this article by law professor Oren Bracha, which traces the history of US copyright law. It looks at the similarities of substance and language between the Statute of Anne and the first US Copyright Act and offers several possible reasons for why the first Congress relied so heavily on England’s copyright law.

Timbaland wins 2nd Sampling Lawsuit in 3 Months

By , June 15, 2011.

It’s been a good couple of months for music producer Timbaland.

At the end of March, the 11th Circuit affirmed a grant of summary judgment in favor of Timbaland in a copyright infringement suit brought by Saregama. 1Saregama India v. Mosley, No. 10-10626 (March 25, 2011). The Indian music production and distribution company alleged that Timbaland had sampled a portion of one of its catalog songs for rapper The Game’s “Put You on the Game.” For more about the court’s decision, which resolved on copyright ownership issues rather than infringement issues, check out Saregama’s Lack of Standing to Sue at Spicy IP.

Last Tuesday brought another court victory for the producer in a completely different case. On June 7, 2011, the Southern District Court of Florida affirmed its previous grant of summary judgment in favor of Timbaland in Kernel Records Oy v. Mosley.

Perhaps you recall the saga: Timbaland allegedly sampled portions of the Finnish chiptune “Acidjazzed Evening” to make the song “Do It” for Nelly Furtado’s 2006 album Loose. Kernel Records Oy, which had acquired the rights to Acidjazzed, sued both Furtado and Timbaland in 2009. 2Joe Bosso, Timbaland, Nelly Furtado sued for plagiarism, MusicRadar.com (June 17, 2009).

Timbaland’s remarks about the controversy, when the story first broke that he had sampled from Acidjazzed, attracted some outrage (and were reminiscent of Judith Griggs — editor of the infamous Cooks Source magazine — response to food blogger Monica Gaudio). Among other things, the producer said, “It makes me laugh. The part I don’t understand, the dude is trying to act like I went to his house and took it from his computer. I don’t know him from a can of paint. I’m 15 years deep. That’s how you attack a king? You attack moi?” 3Jayson Rodriguez, Timbaland still in shock over Jay-Z, Madonna, Elton Collaborations, MTV.com (Feb 9, 2007).

Like Saregama, the court never reached the issue of whether the use of the sample was infringement. Instead the court held that Kernel Records had failed to register its copyright before filing suit. But wait, you might say, I thought foreign copyright owners didn’t need to register their works in the US?

Normally, that’s true. But not if the work is first published online, says the Florida District Court.

Copyright Registration

The subject of copyright registration is one of great confusion for those who aren’t copyright lawyers, so I think a quick review might be helpful.

Under the Berne Convention, of which the US is a party member, copyright protection is automatic — it vests as soon as a work is in fixed form. Formalities like registration are not allowed under the Convention, though many countries do provide the option of registering a work for certain evidentiary and other purposes.

In the US, however, registration is also required for creators of “United States works” before filing a copyright infringement lawsuit. 417 USC § 411(a); see Reed Elsevier v. Muchnick, 130 S.Ct. 1237 (2010). Owners of non-US works can sue without registering, though they still must comply with registration requirements if they wish to seek statutory damages in court. 5Football Ass’n Premier League v. YouTube, 633 F. Supp. 2d 159 (2009). (And, while optional for non-US works, registration still confers certain rebuttable presumptions in court.)

Kernel Records, assuming that the Finnish Acidjazzed was not a United States work, hadn’t registered the copyright before suing Timbaland. That would turn out to be a fatal assumption.

Does Online Publication Subject a Foreign Author to US Registration Requirement?

Whether online publication amounts to a work being simultaneously published in the US was an issue of first impression for the Florida court and apparently had only been addressed by one other district court. In Moberg v. 33T, Judge Hillman, of the District Court of Delaware, faced the same question and came to the opposite conclusion as Kernel Records. The Florida court explained:

Judge Hillman articulated three reasons for rejecting the proposition that publishing a work on the Internet “automatically, instantaneously, and simultaneously causes that work to be published everywhere in the world.”

First, he concluded that such a result would subject every copyright holder to the formalities of the copyright laws of every country that has such laws which “is contrary to the purpose of the Berne Convention.” Next, Judge Hillman reasoned that transforming the plaintiff’s photographs into “United States works” “simply by posting them on the internet would allow American citizens to infringe on foreign copyrighted works without fear of legal retribution, since the majority of foreign works are never registered in America.” This would be contrary to the Convention’s stated purpose of forming “a Union for the protection of the rights of authors in their literary and artistic works.” Finally, Judge Hillman determined that U.S. copyright laws, in accord with the Convention, currently protect foreign works in the United States “without requiring the artists to undertake any formalities in the United States.” He concluded that requiring artists who posted their work on a foreign country’s website to comply with U.S. copyright formalities would be contrary to that law.

Unfortunately for Kernel Records, the Florida court declined to adopt Hillman’s interpretation of “United States work.” The court said, “Judge Hillman’s contextual and policy-driven analysis is reasonable and sound but is, in our opinion, wholly untethered to the actual statutory and treaty language that governs this dispute.” Based on that language, the court came to its conclusion that online publication of a work is “simultaneous global publication.”

Florida District Court Says Yes

The Copyright Act defines a “United States work” — one that is subject to the §411 registration requirement — as a work that, if published, was 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 617 USC § 101.

The court arrived at its conclusion that Acidjazzed fell within this definition by looking at the language of (B). Acidjazzed was “published”, said the court, when it was shared on a German website. 7Kernel Records disputed this fact, saying the song was first published in an offline “disk magazine”, but the court concluded that they hadn’t provided any credible evidence to back up their dispute. Germany is a treaty party with the same term of copyright protection provided in the US. Finally, said the court, publication on a website amounts to “simultaneous global publication” — “There can be little dispute that posting material on the Internet makes it available at the same time — simultaneously — to anyone with access to the Internet.”

Thus, since Kernel was required to register its copyright before filing a lawsuit and it hadn’t done so, Timbaland was entitled to summary judgment.

The Bottom Line

The proposition that US works include any work first published online anywhere in the world might seem at first a little surprising, but in reality (and as the court notes) the practical effect is small. As mentioned earlier, foreign authors already have an incentive to register a copyright in the US to pursue statutory damages or receive evidentiary benefits. At most, it adds one additional step before a foreign author can sue in a US court. 8Though the 11th Circuit, where this case occurred, has adopted the rule that a copyright is not considered “registered” until the Copyright Office actually processes the registration, as opposed to the rule that a copyright is considered registered as soon as the Copyright Office receives the registration materials. See Cosmetic Ideas v. IAC, 606 F.3d 612, 616 (9th Cir. 2010).

Kernel Records again faced bad news. Though it had eventually registered its copyright, the court ruled that it was too late in the game. (In fact, the whole opinion seems like one long string of bad news for Kernel.)

So, barring an appeal, Timbaland walks away victorious for the second time in 3 months. He is joined by Cypress Hill, who emerged unscathed from their own sampling lawsuit on June 1, also resolved on copyright ownership issues. 9Syl Johnson v. Cypress Hill, Nos. 08-3810, 09-2213, 10-1733 (7th Cir 2011). I’ll bet Jay-Z hopes to join both soon.

References

References
↑1 Saregama India v. Mosley, No. 10-10626 (March 25, 2011).
↑2 Joe Bosso, Timbaland, Nelly Furtado sued for plagiarism, MusicRadar.com (June 17, 2009).
↑3 Jayson Rodriguez, Timbaland still in shock over Jay-Z, Madonna, Elton Collaborations, MTV.com (Feb 9, 2007).
↑4 17 USC § 411(a); see Reed Elsevier v. Muchnick, 130 S.Ct. 1237 (2010).
↑5 Football Ass’n Premier League v. YouTube, 633 F. Supp. 2d 159 (2009).
↑6 17 USC § 101.
↑7 Kernel Records disputed this fact, saying the song was first published in an offline “disk magazine”, but the court concluded that they hadn’t provided any credible evidence to back up their dispute.
↑8 Though the 11th Circuit, where this case occurred, has adopted the rule that a copyright is not considered “registered” until the Copyright Office actually processes the registration, as opposed to the rule that a copyright is considered registered as soon as the Copyright Office receives the registration materials. See Cosmetic Ideas v. IAC, 606 F.3d 612, 616 (9th Cir. 2010).
↑9 Syl Johnson v. Cypress Hill, Nos. 08-3810, 09-2213, 10-1733 (7th Cir 2011).

Copyright Legislation 2.0

By , June 13, 2011.

Imagine if the web had not progressed past the technology available around the mid 1990s, when it made its way into the mainstream.

No Flash or JavaScript, no CSS, PHP, or XML, no widgets or APIs. Just plain vanilla HTML (and maybe some server-side scripting if you knew what you were doing).

It would be hard to imagine a web like this today. Today’s web allows a myriad of ways for people to engage in communication, commerce, social networking, entertainment, and learning. This is possible because the technology behind the web continued to progress, rather than being frozen in place.

Freezing the technology in place would make little sense. Yet, when it comes to the legal framework that protects copyright and content creators, there are some who call foul whenever new legislation is proposed, who believe it makes perfect sense for the law to be frozen in place while technology rapidly advances.

The underlying idea seems to be that unchecked, wide-scale copyright infringement is just how things are going to be from now on. Content creators need to get busy adapting or get busy dying.

But why shouldn’t the law continue to adapt as well?

Currently, two bills are pending in Congress — S.978 and the PROTECT IP Act. Both address specific problems. S.978 standardizes the criminal penalties for streaming large amounts of copyrighted works with the penalties of copying and distributing large amounts of copyrighted works, since the harm from both types of piracy is the same. The PROTECT IP Act targets websites whose sole purpose is infringement. These sites are easy to set up, and the ability to profit from advertising or subscriptions provides an incentive to create them. Copyright owners find the DMCA takedown provisions ineffective against such sites and civil lawsuits are difficult to bring against such sites because of their nature. Legitimate advertising and financial transaction providers are also in a bind with these sites since they expose themselves to liability whenever they cut service off to a user.

In other words, laws like these take into consideration the evolution of the online world. As the internet matures and new business models for providing content develop, new problems emerge. The same is true in most areas of life.

Consider automobiles. Although driving has been the primary means of transportation for decades, laws continue to be tweaked for safety, environmental, and other considerations. Just ten years ago, very few states had so-called “move over” laws. But today, every state except Hawaii and D.C. has enacted such laws. The goal with these laws is not to completely eliminate traffic accidents, but to address specific situations where safety problems have arisen.

In the same way, the goal of legislation like the PROTECT IP Act and S.978 is not to completely eradicate online piracy, or allow copyright owners to “go back to the way things were.” Piracy is part of the copyright landscape, and it will always exist in some form or another.

The goal is rather to allow creators and legitimate intermediaries to develop sustainable business models that allow both widespread dissemination of content and the ability to be remunerated for those who invest their time and money to create. Obviously, one of the big challenges facing creators is figuring out these business models, but that doesn’t mean the law shouldn’t also play a role. The alternative would be like using a static web site in a Web 2.0 world.

Friday’s Endnotes – 06/10/11

By , June 10, 2011.

Internet Piracy and How to Stop It — The NY Times comes out in support of the PROTECT IP Act, though it does have some concerns. It worries that it may lead to overreaching and provides the DMCA takedown notice of Lenz’s dancing baby as an example — but it’s hard to see how that’s an appropriate comparison since a single DMCA takedown is relatively easy to send while the PROTECT IP Act’s remedies are only available after filing a lawsuit, something that is just as timely and costly without the bill.

Kudos to Google: Privacy Settlement Adds Insult to Injury — Sandra Aistars at the Copyright Alliance reports on the class-action settlement that Google agreed to for allegations that its Buzz service violated users privacy. The search giant paid out millions of dollars to advocacy groups that advance its business interests. Also be sure to check out Chris Castle’s skeptical look at this example of “Google justice.”

Is Hollywood Dead? — Great post from screenwriter William Martell over at his blog, Sex in a Submarine. “On message boards, there are always people who think that Hollywood is dead but just doesn’t know it, and there’s gonna be this whole new non-corporate paradigm. Look, we have the internet, and these cheap digital cameras — the movie industry as we know it will be dead in no time. We will not longer be *forced* to watch the movies that Hollywood makes, we can watch *good* movies for a change. No more TRANSFORMERS movies and no more sequels and no more HANGOVER lowest common denominator comedies. Once the evil corporations are gone, once Hollywood is dead and buried and being eaten by worms; we’ll be living in a freakin’ Entertainment Utopia! Only great films!” Martell explains why these people are wrong.

5 Reasons Free is Hurting us All — John Jantsch talks about when “free” becomes “free for all”. He believes that “information wants to be worth paying for” and provides five reasons why consistently giving content away for nothing hurts both content producers and audiences.

How long should a good thing last? — Dominic Young looks at the arguments for and against the length of copyright’s term.

Is Revoking Internet Access a Violation of Human Rights? — IP attorney James Gannon has an excellent response to the UN Human Rights Council’s recent remarks about graduated response laws.

“An English writer on statistics, on hearing that 80,000 copies of his book had been sold in Russia, sent a courteous letter to the Soviet Government to ask whether royalties were paid semi-annually as in England. An equally courteous reply said that royalties to capitalists were contrary to proletarian principles.” Zechariah Chafee, Jr., Reflections on the Law of Copyright, 45 Columbia Law Review 503 (1945).

Fears of Felony Streaming Bill Overblown

By , June 07, 2011.

The Senate Judiciary Committee is set to consider legislation that would make unauthorized public performance of a copyrighted work a felony.

Currently, only unauthorized reproduction and distribution can incur felony charges under criminal copyright infringement provisions — violation of other exclusive rights, like public performance, is considered a misdemeanor.

Bill S. 978 (referred by some as the “Commercial Felony Streaming Act” or “Commercial Felony and Streaming Act”), introduced May 12, 2011, provides for a maximum 5 year prison sentence if “the offense consists of 10 or more public performances by electronic means, during any 180-day period, of 1 or more copyrighted works; and the total retail value of the performances, or the total economic value of such public performances to the infringer or to the copyright owner, would exceed $2,500; or the total fair market value of licenses to offer performances of those works would exceed $5,000.”

The MPAA explains the reasoning behind the proposed legislation:

While existing law provides felony penalties for willful copyright infringement, such penalties only apply to defendants who illegally reproduce or distribute the copyrighted work. Due to technological advances since enactment of these penalties, copyrighted content can now be illegally streamed, not just downloaded, online. However, it is unclear whether Internet streaming constitutes distribution of copyrighted works, and therefore eligible to be prosecuted as a felony.

Internet streaming of copyrighted works clearly implicates the public performance right, and thus can be subject to criminal liability currently if done willfully and “for purposes of commercial advantage or private financial gain.” Due to the lack clarity surrounding the felony offense, however, prosecutors are reluctant to pursue cases against even the most egregious, illegal Internet streaming services. Indeed, prosecutors tend to focus their limited resources and manpower on prosecuting felony offenses that might result in significant jail time because such prosecutions have the greatest deterrent effect.

Newly appointed Register of Copyrights Maria Pallante testified to the Judiciary Committee in support of the legislative goals of the Act earlier this month. Echoing the MPAA’s explanation for the need of the bill, she added:

One might ask why it is not sufficient to prosecute streaming as a misdemeanor.  The fact is, as a practical matter, prosecutors have little incentive to file charges for a mere misdemeanor. This means that, compared to similar infringing conduct involving the large-scale making or distributing of copies (e.g. DVDs of a movie), streaming is not only a lesser crime on the books, it is a crime that may never be punished at all.  As a matter of policy, the public performance right should enjoy the same measure of protection from criminals as the reproduction and distribution rights; prosecutors should have the option of seeking felony penalties for such activity, when appropriate.

Though the proposed legislation makes only a nominal change in the law and is broadly supported, it has attracted some concern that it could cover a wide range of common activities online — some have even suggested that if the bill passes, the government will start throwing people in jail for embedding infringing YouTube videos.

What counts as a “public performance” online?

The US Copyright Act gives creators of “literary, musical, dramatic, and choreographic works” the exclusive right “to perform the copyrighted work publicly.” 117 USC § 106(4). It also states that “to ‘perform’ a work means to recite, render, play, dance, or act it, either directly or by means of any device or process or, in the case of a motion picture or other audiovisual work, to show its images in any sequence or to make the sounds accompanying it audible.” 217 USC § 101. Finally, the Act states that “to perform or display a work ‘publicly’ means—(1) to perform or display it at a place open to the public or at any place where a substantial number of persons outside of a normal circle of a family and its social acquaintances is gathered; or (2) to transmit or otherwise communicate a performance or display of the work to a place specified by clause (1) or to the public, by means of any device or process, whether the members of the public capable of receiving the performance or display receive it in the same place or in separate places and at the same time or at different times.”

Though the application of the public performance right continues to evolve in the online arena, the law generally distinguishes between downloading and streaming, with downloading constituting a reproduction and streaming constituting a performance. 3See, for example, US v. ASCAP, 485 F.Supp.2d 438 (SDNY 2007).

The Second Circuit has taken a broad view of who can be directly liable for infringement of the public performance right online. The court has adopted the conclusion of the Southern District in New York that “Congress intended the definitions of ‘public’ and ‘performance’ to encompass each step in the process by which a protected work wends its way to its audience.” 4David v. Showtime/The Movie Channel, Inc., 697 F. Supp. 752, 759 (1988), quoted in NFL v. PrimeTime 24 Joint Venture, 211 F.3d 10, 13 (2nd Cir. 2000). In other words, the fact that one service provider has permission to publicly perform a certain work doesn’t by itself give users or services permission to “re-publicly perform” that work — the same is true in the offline world, which is why public establishments like bars and restaurants need a license to play music for their customers even when that music comes from a radio playing music from stations that themselves are licensed to publicly perform works. 5See Broadcast Music, Inc. v. Claire’s Boutiques, 949 F.2d 1482 (7th Circuit 1991). Other circuits seem to embrace this interpretation as well. 6For example, the 7th Circuit cites to David in Video Views v. Studio 21, 925 F.2d 1010, 1020 (1991) to support its statement that “the Copyright Act contemplates a broad interpretation of the concept of ‘public performance.'”

Perhaps the broadest interpretation of what is a public performance was made by a district court in Texas in Live Nation Motor Sports v. Davis. 7No. 3:06-CV-276-L. (ND Texas 2007). There, the court found a defendant liable for copyright infringement for merely linking to (rather than embedding) the plaintiff’s webcast without permission. Though this case rightfully raised concerns, its interpretation doesn’t seem to have been adopted by any other court.

Some have argued that the Ninth Circuit uses a different test for determining liability for direct infringement of the public performance right, based on that court’s decision in Perfect 10 v. Amazon. 8For example, Evan Brown, Enthusiast website owner enjoined from streaming webcasts of racing events, Internet Cases blog (Dec 22, 2006); Jason Lunardi, Guerrilla Video: Potential Copyright Liability for Websites that Index Links to Unauthorized Streaming Content, 19 Fordham Intellectual Property Media and Entertainment Law Journal 1077, 1113-14 (2009). The court there used what it called the “server test” — direct infringement of a public display right only occurs when the content is copied on the service provider’s own server — not, for example, when it is displayed through inline linking or framing (though such a server provider may still be indirectly liable).

But I think the Ninth’s holding in Perfect 10 is only limited to the public display right and doesn’t extend to the public performance right. The Copyright Act defines the display right as showing a “copy” of a work, and the court based its conclusion largely on this inclusion of the word “copy” in the definition. 917 USC § 101. It said, “Instead of communicating a copy of the image, Google provides HTML instructions that direct a user’s browser to a website publisher’s computer that stores the full-size photographic image. Providing these HTML instructions is not equivalent to showing a copy.” 10508 F. 3d 1146, 1160 (2007).

Unlike the definition of “display”, the definition of “performance” in the Copyright Act doesn’t require a “copy”. Thus, the question of where the actual content is hosted is irrelevant to whether a public performance has occurred. As far as I can tell, no court has applied the “server test” in the public performance context, so I think it’s reasonable to say there’s an open question about whether the Ninth Circuit takes a different approach than the Second in determining who is liable for violating the performance right online.

Will S.978 Put You in Jail for Embedding Infringing Videos?

Despite the breadth of the public performance right, civil lawsuits against individuals alleged to have infringed it online are rare — Live Nation Motor Sports is the exception rather than the rule. The worry that S.978 will lead to prisons overflowing with people for sharing online videos that happen to be infringing is overblown.

The standard for establishing criminal copyright liability is much higher than civil liability. Prosecutions for criminal copyright infringement under existing law are rare. According to the Administrative Office of the US Courts, less than 50 people are charged with a criminal copyright offense every year. 11Caseload Statistics 2010. There’s no reason to think that this number will change drastically because of S.978.

Other factors support the idea that most internet users have no reason to worry about this bill. The Department of Justice’s Prosecuting IP Crimes Manual lists several considerations for US Attorneys to keep in mind when deciding whether to bring charges. Among the considerations specific to IP crimes:

  • Federal criminal prosecution is most appropriate in the most egregious cases.
  • Limited federal resources should not be diverted to prosecute an inconsequential case or a case in which the violation is only technical.
  • Federal prosecution is most appropriate when the questions of intellectual property law are most settled. Victims have a broad range of civil remedies that include restitution, damages, punitive or quasi-punitive damages, injunctions, court costs, and attorneys’ fees.
  • The sources or manufacturers of infringing goods and services are generally more worthy of prosecution than distributors.

There are many other considerations that limit the application of criminal copyright infringement laws to only the most egregious pirates. No one need worry about facing jail time for sharing videos online should S.978 pass.

References

References
↑1 17 USC § 106(4).
↑2 17 USC § 101.
↑3 See, for example, US v. ASCAP, 485 F.Supp.2d 438 (SDNY 2007).
↑4 David v. Showtime/The Movie Channel, Inc., 697 F. Supp. 752, 759 (1988), quoted in NFL v. PrimeTime 24 Joint Venture, 211 F.3d 10, 13 (2nd Cir. 2000).
↑5 See Broadcast Music, Inc. v. Claire’s Boutiques, 949 F.2d 1482 (7th Circuit 1991).
↑6 For example, the 7th Circuit cites to David in Video Views v. Studio 21, 925 F.2d 1010, 1020 (1991) to support its statement that “the Copyright Act contemplates a broad interpretation of the concept of ‘public performance.'”
↑7 No. 3:06-CV-276-L. (ND Texas 2007).
↑8 For example, Evan Brown, Enthusiast website owner enjoined from streaming webcasts of racing events, Internet Cases blog (Dec 22, 2006); Jason Lunardi, Guerrilla Video: Potential Copyright Liability for Websites that Index Links to Unauthorized Streaming Content, 19 Fordham Intellectual Property Media and Entertainment Law Journal 1077, 1113-14 (2009).
↑9 17 USC § 101.
↑10 508 F. 3d 1146, 1160 (2007).
↑11 Caseload Statistics 2010.
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