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March 30, 2007

More on Perfect 10 v. CCBill

Here’s a rundown of the key holdings in yesterday’s Ninth Circuit opinion in Perfect 10 v. CCBill.

  1. DMCA section 512 Safe Harbor. The first issue was whether the defendants — a hosting provider and a credit card processor for sites hosting allegedly infringing material — could claim the benefit of the safe harbor from claims of secondary copyright liability found in 17 U.S.C. 512. It’s remarkable how the parties raised issues implicating nearly every nook and cranny of a rather complicated section of the Copyright Act.
    • Termination Policy. In order to get the benefit of the section 512 safe harbor, a service provider must have “adopted and reasonably implemented” a policy for terminating “repeat infringers” in “appropriate circumstances.” 17 U.S.C. 512(i)(1)(A).
      • Such a policy is implemented by having “a working notification system, a procedure for dealing with DMCA-compliant notifications, and if it does not actively prevent copyright owners from collecting information needed to issue such notifications.”
      • Maintaining a record of “most” users in order to identify repeat infringers is sufficient to meet this standard.
      • A repeat infringer policy is always “reasonable” if the service provider responds when it has “knowledge of the infringement.”
      • A service provider’s action or inaction in response to claims of infringement made by other copyright holders are relevant to show whether the service provider’s repeat infringer policy is “reasonably implemented”.
    • Takedown notices.
      • A takedown notice sent pursuant to section 512(c)(3) has effect only if it includes each of the six items required by that section as part of the same document.
      • Of particular importance is the declaration under penalty of perjury required by section 512(c)(3)(A)(vi). This is because “[a]ccusations of alleged infringement have drastic consequences: A user could have content removed, or may have his access terminated entirely. If the content infringes, justice has been done. But if it does not, speech protected under the First Amendment could be removed.”
    • Apparent infringement. A service provider loses immunity if it fails to take action when it is “aware of facts or circumstances from which infrinigng activity is apparent.” 17 U.S.C. 512(c)(1)(A)(ii).
      • Domain names that can be read to imply infringement do not make infringement “apparent.” Here, the court held that the domain names “illegal.net” and “stolencelebritypics.com” were not admissions that the photographs found there were actually illegal or stolen, but were “an attempt to increase [the sites'] salacious appeal.”
      • A poorly-worded copyright disclaimer stating that the webmaster does not “claim any rights to these files, other than the right to post them” did not make infringement apparent.
    • Standard technical measures. There’s a provision in section 512(i) stating that a service provider loses its safe harbor if it interferes with certain narrowly-defined “standard technical measures” that are “used by copyright owners to identify or protect copyrighted works.” Rather cleverly — though, I think, probably erroneously — Perfect 10 argued that accessing sites on the web is such a “standard technical measure,” and by refusing to sell an account to Perfect 10 for access to the website interfered with that measure. This issue was remanded for further factual development, both as to whether website access is a “standard technical measure” under the statute’s definition and whether CCBill blocked Perfect 10′s credit card because it was investigating infringement or because it had previously refused CCBill’s charges.
    • Transitory communications. There’s also a provision in section 512(a) providing a separate safe harbor for service provisers who are “conduits” for infringing content, providing connections without modifying the content. The paradigm case of such a service provider is a network backbone operator. Rather cleverly, CCBill claimed to be just such a conduit, since it sends credit card data from the billing site to the relevant banking systems. Perfect 10 argued that for the safe harbor to apply, the condut must carry the allegedly infringing communications. Recognizing that “[t]he Internet as we know it simply cannot exist if those intervening computers must block indirectly infringing content,” the court held that “[s]ervice providers are immune for transmitting all digital online communications, not just those that directly infringe.”
    • Information location tools. Yet another provision in section 512(d) immunizes service providers who provide “information location tools” that link users to infringing content. Rather cleverly, CCBill claimed that by including a link back to the relevant website in a confirmation email after the user has used CCBill to pay for her subscription, CCBill is operating an “information location tool” and all of its operations are immune from secondary copyright liability. The court rejected this broad reading, holding that the “information location tool” safe harbor thwarts only claims that the provision of links to infringing content gives rise to liability, and does not immunize the linker’s entire operation from claims unrelated to the link.
    • Information posted by users. Section 512 also limits the liability of service providers who provide networked storage space for information uploaded by users. At issue here was whether the defendants met the requirement of section 512(c)(1)(B), that it “not receive a financial benefit directly attributable to the infringing activity, in a case in which the service provider has the right and ability to control such activity.” The court held that “direct financial benefit” in section 512 imports that term’s meaning from the common law of vicarious copyright liability. In that context, the “direct financial benefit” analysis asks “whether the infringing activity constitutes a draw for subscribers, not just an added benefit.”
  2. Communications Decency Act. The Communications Decency Act, 47 U.S.C. 230, immunizes users and providers of interactive computer services from liability arising out of information posted or transmitted by another. The statute carves out an exception for “intellectual property,” so section 230 does not immunize a service provider from secondary liability for, for example, users’ violations of the Copyright Act (though section 512 does provide such immunity). The court’s important holding here is that “intellectual property” in section 230 means only “federal intellectual property.” Thus, section 230 renders users and providers of online services immune from secondary liability for a another’s infringement of any state-law IP right, such as rights of publicity, trade secrets, and state trademarks. This would also apply to pre-1972 sound recordings, the only class of works still covered by state copyright laws.

This unanimous and straightforward opinion clarifies a large number of open questions related to secondary liability for the infringing acts of others under federal copyright law and under state intellectual property laws. It shows a pragmatic understanding of the risks faced by online service providers in a way that few other appellate opinions have. Further, it shows recent Ninth Circuit appointee Milan Smith to be a clear writer and a thorough legal analyst.

March 29, 2007

9th Cir. Decides Perfect 10 v. CCBill

The Ninth Circuit Court of Appeals today released its decision in Perfect 10 v. CCBill. The opinion deals with DMCA section 512 and CDA section 230. I’ll have more to say once I’m done reading it.

Schoen on the PTO P2P Report

Seth Schoen has a lengthy and insightful post on the Patent and Trademark Office’s “report” on peer-to-peer file sharing I mentioned here.

March 26, 2007

UW – Milwaukee follows UW – Madison’s Lead, Will Not Forward RIAA Letters

The University of Wisconsin – Milwaukee sent the email reproduced below to all students, faculty, and staff this morning. Like the letter sent by UW – Madison a few weeks ago, it indicates that the university won’t forward letters it receives offering to “settle” file sharing cases brought by the recording industry, though it will comply with a lawful subpoena.

SUBJECT: Illegal File Sharing at UWM

This announcement is being sent to all known UWM faculty, staff and student e-mail addresses.

The Recording Industry Association of America (RIAA) has recently increased its threat of lawsuits against students and others who engage in illegal digital file sharing. This is in response to perceived violations of the Digital Millennium Copyright Act of 1998, which specifically addresses copyright infringement of digital materials such as music, movies and software.

As you may know from recent press reports, the RIAA is now targeting individuals who live in university residence halls or use university computing resources. Because the RIAA can only identify violators by their ISP (Internet Service Provider) identifier, they are sending letters to universities requesting that these letters be forwarded to students, faculty and staff.

The RIAA notified UWM of its plans to send settlement proposal letters for individuals on the UWM campus whom they believe are guilty of violating federal copyright laws. These letters request that a monetary settlement be made by the violator in lieu of court action by the RIAA.

After consultation with UW System, our own legal counsel and with our understanding of federal law, UWM has decided that these letters will not be passed on to individuals. However, should RIAA send UWM a lawful subpoena for users’ account information, UWM will comply.

It is important to be aware of copyright law and avoid illegal P2P (peer-to-peer) file sharing.

For more information, visit the UWM Information Security Web Site at https://www3.uwm.edu/imt/security/index.cfm.

If you have questions, please e-mail dmca@uwm.edu.

March 21, 2007

That’s Not Trademark Law’s McJob

This story from Der Spiegel reports an attempt by McDonald’s to get the word “McJob” (“a low-paid job with few prospects, typically one taken by an overqualified person”) from the Oxford English Dictionary.

“Dictionaries are supposed to be paragons of accuracy. And it this case, they got it completely wrong,” Walt Riker, a Mickey D’s McSpokesman complained to the Associated Press. “It’s a complete disservice and incredibly demeaning to a terrific work force and a company that’s been a jobs and opportunity machine for 50 years.”

I’m sure the city of Shanghai would prefer that its name couldn’t be used as a verb, and Vidkun Quisling probably wasn’t thrilled to see himself nouned. But language develops in a generative way that’s not centrally controlled. Dictionaries accurately report the way people use language, not the way people should use language. If people constantly misuse, say, the word “hopefully,” it takes on the meaning that’s assigned to it, in dictionaries as on the street. Trademark ownership does not confer a right to control the development of the English language.

March 19, 2007

P2P File Sharing Fights Terrorism

On the Pho listserv, Gordon Mohr proposed this syllogism. I love it.

Major premise: Peer-to-peer file sharing harms for-profit copyright piracy.
Minor premise: Some for-profit copyright piracy aids terrorism.
Conclusion: Peer-to-peer file sharing fights terrorism.

Sure, it’s glib, and it’s only true if the P2P file sharing in question diverts funds which would otherwise have gone to that presumably small percentage of for-profit copyright pirates who actually fund terrorism, but I think it has a very nice ring to it.

March 16, 2007

University of Wisconsin Stands Up to RIAA

A student at the University of Wisconsin – Madison forwarded to me the email quoted below, which was apparently sent to all students. It makes me proud to be an alumnus of UW: the University is refusing to forward to students the vaguely extortionate “settlement” letters the RIAA has been asking universities to send to their students, and recognizes that not all unauthorized P2P sharing of copyrighted works is illegal.

From: UW-Madison Office of the CIO
Date: Mar 16, 2007 11:54 AM
Subject: UW-Madison copyright compliance notice
To: [REDACTED]

The recording industry is threatening lawsuits against those who may have engaged in illegal file sharing. They are currently targeting students who live in university residence halls. Recently, UW-Madison and other universities have been notified that they will receive settlement letters that are to be passed on to the individuals whom the senders believe to be guilty of copyright infringement. Consistent with current network management procedures and our understanding of federal law, UW-Madison does not plan to forward these letters directly to campus network users. We will, of course, comply with a valid subpoena.

However, if the UW-Madison is given cause to believe that a student, faculty or staff network user may have infringed on copyrights, it will take action. University network policies empower the CIO to terminate that person’s network access until the matter is resolved. The Dean of Students office (for students) or supervisors (for employees) will be notified and other disciplinary action may be taken, as appropriate.

Unauthorized peer-to-peer file sharing of copyrighted works is illegal in many circumstances, and a violation of the university’s Appropriate Use Policy. Please be advised of your rights and responsibilities under these rules. For more information, see: http://www.doit.wisc.edu/ security/policies/ appropriate_use.asp

Ken Frazier
Interim CIO,
UW-Madison

UPDATE, 19 March: A story in the Badger Herald has this great quote from a UW IT department spokesman:

“These settlement letters are an attempt to short circuit the legal process to rely on universities to be their legal agent,” Rust said. “It basically says, you are illegally downloading and/or sharing information; and before we take legal action, you can remedy this situation and pay for the music or movies that you’ve downloaded.”

Rust said DoIT receives about 10 to 20 cease-and-desist notices per day, which they are obligated to forward to their users. The notices are only warnings, Rust added, but the settlement letters brought on by the Recording Industry Association of America are more of a threat.

The settlements are usually around $700 per instance, but could be as much as $3,500, according to Rust.

“So you can imagine some people have probably come to that website with their credit card and paid it,” Rust said. “We do not want to be a party to that; we are not the legal agent for the recording agency, nor do we aspire to (be).”

UPDATE, 20 March: The Wisconsin State Journal has this article on UW’s rejection of the RIAA’s “settlement letters.” Also, Slashdot has run an item linking to this post.

March 8, 2007

USPTO Sounds the Alarm on P2P (Curiously)

Via 27B/6 comes news that the United States Patent and Trademark Office has published a report on the dangers of P2P filesharing. Here’s the press release, and here’s the report.

I, too, am very concerned about the dangers P2P filesharing poses to patent and trademark holders. Why, who knows what patents might be infringed by the BitTorrent or FastTrack protocols? The P2P software distributors might be marking their goods with the name of an unrelated firm, in an attempt to pass off their goods as manufactured by another! This menace to inventors and marketers has been brought into your child’s bedroom!

Oh, wait. The report is about copyright infringement, not patent or trademark infringement. And that’s what makes this whole affair rather curious. The USPTO doesn’t administer copyright law; the Copyright Office does. This matters, in part, because the Copyright Office is part of the Library of Congress, which is part of the Legislative branch, whereas the PTO is part of the Department of Commerce, which is part of the Executive branch.

The PTO has attempted from time to time — particularly under Bruce Lehman — to take over the administration of copyright law, but these attempts have been rebuffed. This report was nominally issued by the PTO’s Office of International Relations (the only part of the PTO which has any copyright-related duties, in that it advises foreign governments on all IP issues and deals with all IP treaties), but the report’s connection to any international matter is unclear. One wonders whether this is the start of yet another attempt by the PTO to gain authority over copyright law.

March 7, 2007

C-SPAN Adopts Creative Commons-Like Copyright Policy

Via Wendy, I see that C-SPAN has introduced a liberalized copyright policy for “current, future, and past coverage of any official events sponsored by Congress and any federal agency.” There’s apparently no legalese available, but C-SPAN says they’ll “allow non-commercial copying, sharing, and posting of C-SPAN video on the Internet, with attribution.”

This is great. C-SPAN appears to be licensing all of this content, dissemination of which is so important to democracy, under the equivalent of the Creative Commons Attribution-NonCommercial license. I look forward to seeing, for example, whether they allow the creation of noncommercial derivative works.

The Copyright Office Comes to California: Contemporary Art Panel

I’m at the Copyright Office Comes to California program in San Jose. This post represents my impressions of the proceedings, not a direct quote or transcript. My comments are in square brackets. This is a copyright-wonk sort of event, so let me know in the comments if there’s something you’re interested in and don’t understand.

This is a panel called “Artistic License: A Look at Copyright and Contemporary Art.” the panelists are:

* Maria Pallante, Deputy General Counsel, U.S. Copyright Office
* Adine Varah, Deputy City Attorney, City and County of San Francisco
* Simon J. Frankel, Covington & Burling, LLP
* Christine Steiner, Law Offices of Christine Steiner
* Jared Jussim, Executive Vice President, Legal Affairs, Sony Pictures Entertainment (Santa Monica)

[I'm recovering from a cold and liveblogging panels is exhausting, so these notes will be much more skeletal than usual.]

Maria Pallante:
Rirkrit Tiravanija made this [unbelievably cool] installation sculpture that’s a pirate TV station. This came to me when I was at the Guggenheim. The artist wanted to transmit movies into the airwaves in NYC. They had to use cleared movies PD movies, or clips. He wanted a letter on the wall from her about why the work had been ruined. [I saw this work at the Guggenheim. It included a stack of pirate TV station schematics for people to take home. Loved it.]

Douglas Gordon made an installation in which the “you talkin to me” scene from Taxi Driver is played on parallel screens, and the viewer walks between.

[She defines appropriation art, installation art, etc.]

Christine Steiner:
There was a suit over Barbara Kruger’s “It’s a Small World But Not If You Have To Clean It.” Kruger prevailed, as the photo was in the public domain and the model’s publicity claim failed.

Jeff Koons gets sued pretty frequently. He lost the line of puppies case, but won the niagara (shoe photos) case.

Also, Sherrie Levine, “After Walker Evans” — she makes whole scale takings of iconic Walker Evans photographs.

And the Tom Forsythe “Food Chain Barbie” series, various Christian Marclay pieces, etc.

Simon Frankel:
Fair use is about storytelling — justifying the borrowing or showing why the plaintiff is hurt.

I litigated the Mattel v. Walking Mountain case. Mattel took a mall survey about what the work meant; the court discarded the evidence, since parody is a question of law, not of public opinion. (He tells a funny story about Harry Pregerson at oral argument, of which there are many.) More than half of Forsyth’s sales were, unbeknownst to him, before the suit, to Mattel’s investigators.

Willingness to pay a license fee does not establish market harm.

Adine Varah:
SF has lots of public art. We try to keep it out of court.

It includes the doors to the courthouse, “Facsimile” by Diller + Scofidio on the Moscone Center facade, Precita Eyes murals, the Fillmore Street “Shades of Blue” bridge (problem with bullet holes), etc.

We get a VARA waiver from our artists. (She describes the waivers.)

Jared Jussim:
These are my views, not those of Sony. “The speaker reserves the right to disclaim this speech as the ravings of a madman.”

I’m in enemy territory, but I have been assured safe conduct back to Southern California, and though I am flying the flag of parley, I still wear a metal helmet on my head.”

Nobody wants to be a philistine, so even the thinnest story about art is good for getting a judge to find fair use.

Some facts about the motion picture business. You need around 10 projects to develop before greenlighting one. One picture from 10 that are produced clears from theatrical revenues alone. You can assume around 50% of the box office gets to the studio. 6 out of 10 clear from all sources of revenue. 4 never clear at all. From the revenues, you’ve got to pay for not only the winner, but all the losers too. The big studios survive only because they have big back catalogs that they can exploit again and again. We need that money to keep it going.

The films represent not only our rights, but the rights of hundreds of other people who work on the film. No studio can use a film clip without the consent of the talent depicted as a matter of SAG union contracts. If we violate it, we pay them three times the daily rate to shoot the reproduced segment.

The studios’ ROI is in the single digits.

These artists trying to take advantage of something they haven’t paid for. These elites.

Let’s talk for a moment about Candice Breitz. (He reads from the NYTimes review.) Every actor negotiates about how it’s shot and who the creative community is for that film. You’re taking something that people have agreed on and changing it without their consent. You’re changing the work of the cinematographer and the writer without their consent.

We cleared all the art on the walls in Rocky Balboa. We did research and paid money. Their success rate on locating photos is 90-95%. We locate and we pay. They want to use it for nothing.

We clear all sorts of things. We spend a lot of money on it. We clear the albums people pick up in the record store in the movie.

When the actor gives us consent, they’re giving us consent, not you artists.

In other countries, you have moral rights. These rights are violated by this art.

Do I think you can use film clips for something? Of course. But to take it or manipulate it and abuse it I think is a violation of rights.

Let’s talk for a second about money. I represent crass commercialism.

To just go out and buy a DVD and show it publicly cuts into our ability to reap what we have sown. This is not how we run our film market. This isn’t how America became the predominant producer of motion picture.

[Outrageous!]

Disclaimer Haiku:
West wind seems to say,
"This is not legal advice;
I'm not your lawyer."

(And if you're a client with whom I have a preexisting attorney-client relationship, this still isn't legal advice.)

In case you're wondering, this blog is also not intended as advertising, as a representation of anything but my personal opinion, or as an offer of representation.

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