joegratz.net

Judge Neil V. Wake of the District of Arizona today issued this opinion in one of the RIAA file-sharing cases, Atlantic v. Howell.  The RIAA had argued that even though there was no evidence that the defendant’s file sharing software had ever actually sent out any infringing files, the fact that the defendant made those files available for download was an independent infringement of the distribution right, 17 U.S.C. 106(3).  Some courts have (erroneously) so held, but Judge Wake rebuffed the RIAA’s attempt to lower its burden of proof:

The court agrees with the great weight of authority that § 106(3) is not violated unless the defendant has actually distributed an unauthorized copy of the work to a member of the public. The statute provides copyright holders with the exclusive right to distribute “copies” of their works to the public “by sale or other transfer of ownership, or by rental, lease, or lending.” 17 U.S.C. § 106(3). Unless a copy of the work changes hands in one of the designated ways, a “distribution” under § 106(3) has not taken place. Merely making an unauthorized copy of a copyrighted work available to the public does not violate a copyright holder’s exclusive right of distribution.

Much of the credit goes to an outstanding amicus brief filed by Fred von Lohmann of the EFF.

Techdirt has a post on a rather triumphal press release put out by a law firm claiming that “[t]he US District Court for the District of Idaho has found that copyright law protects a lawyer demand letter posted online by the recipient.” That’s one way of interpreting the judge’s ruling, but I don’t think it’s the right way.

Here’s what happened. An anonymous poster (”Tom Paine”) said some things on a message board that a company called Melaleuca didn’t like. Melaleuca’s lawyers sent a letter to the message board’s administrators asking them to take down the posts to which they objected. Then, a second anonymous poster (”d2″) posted Melaleuca’s cease-and-desist letter to the message board.

Melaleuca wanted to know Tom Paine’s identity so that they could take some action against him. But bringing a John Doe lawsuit would be expensive and time-consuming. Then Melaleuca had a clever idea: because section 512 of the Copyright Act allows pre-litigation subpoenas to uncover the identities of anonymous online copyright infringers, they could get Tom Paine’s identity by (1) accusing d2 of infringing the copyright in their cease and desist letter, then (2) claiming that d2 and Tom Paine were the same person.

Well, it almost, sort of worked.

They were successful in getting d2’s identity, because the court found the test for issuance of a section 512 subpoena to be a lenient one: If the Copyright Office issues a registration, the court found, that’s all the copyrightability analysis a court must undertake in order to enforce a pre-litigation subpoena under section 512. The court did not say that the C&D letter was copyrightable, or that posting it was not fair use. Instead, the court merely said that Melaleuca had met the low bar of showing a prima facie case of infringement. As the court put it:

[T]he Court will not go into an in-depth analysis of the merits of a copyright infringement claim in determining whether to quash this subpoena. It is sufficient in this instance that Melaleuca has registered the Sheppard Letter with the Copyright Office.

Unlike the Patent and Trademark Office, the Copyright Office (for various very good reasons) does not perform an in-depth examination of each registration. As the lawyer who put out the press release notes, “a US copyright registration is usually ‘rubber stamped’ and obtained on an expedited basis in about five business days.” Close cases, such as an attempt to register a virtually purely functional work such as a legal demand letter, usually result in the issuance of a registration, the validity of which is later contested in court. The district court in this case decided that the validity of the copyright should be determined after the plaintiffs actually filed their lawsuit for copyright infringement. It did not, as the press release implies, make a conclusive determination of copyrightability.

Melaleuca was thwarted in its ultimate goal of unmasking “Tom Paine.” The court found that Melaleuca had presented insufficient evidence that “d2″ and “Tom Paine” were one and the same, and quashed that portion of the subpoena which sought Tom Paine’s identity. (The edited version of the decision on the web site of the lawyer who put out the press release conveniently leaves that part out, but it makes up a substantial part of the court’s decision, which is available here.)

The world has a new good cause. A group of writers and academics with ties to the fanfic community has founded the Organization for Transformative Works.  As befits an organization with its roots in a deeply postmodern art form, the organization is a bit of a pastiche: part EFF, providing legal support to the fanfic community; part Participatory Culture Foundation, creating and disseminating software that furthers its policy goals; and part academic society, publishing a peer-reviewed journal on “fanworks and practices.”

I’m exicted to see what they do. They’re certainly well-represented on the legal side, as Rebecca Tushnet, the leading legal scholar on fanfic, is on the organization’s founding board.

I’ve received a number of emails asking for basic information about the ramifications of the Sixth Circuit’s decision in Connection Distributing case, discussed here.  I can’t say what the decision means for any particular person, but here are some helpful facts:

• Who is this “Sixth Circuit”? The decision was issued by a three-judge panel of the United States Court of Appeals for the Sixth Circuit. The Sixth Circuit encompasses Kentucky, Michigan, Ohio, and Tennessee.
• What happens now? The government can ask for rehearing by the full Sixth Circuit court sitting together (or “en banc”). If rehearing is denied, the government can ask the Supreme Court to review the case. In very few cases is en banc rehearing or Supreme Court review granted — but in very few cases does a Court of Appeals declare a federal statute unconstitutional. If the Supreme Court decides to review the case, its decision would have nationwide effect.
• What does it mean if rehearing en banc and Supreme Court review are denied? It will mean that federal district (trial-level) courts in Kentucky, Michigan, Ohio, and Tennessee, as well as later three-judge panels of the Sixth Circuit Court of Appeals, will have to abide by the ruling.
• What does it mean for jurisdictions outside Kentucky, Michigan, Ohio, or Tennessee? As a formal matter, not much. But federal courts look to other federal courts for guidance in deciding their cases, and no Circuit (other than, arguably, the D.C. Circuit) has affirmatively found Section 2257 to be constitutional. Other courts may look to Connection Distributing as a persuasive authority in deciding future cases about the constitutionality of Section 2257.

My practice doesn’t include any 2257 work, and I can’t help you with your recordkeeping compliance. But I hope that the above helps clarify what the Sixth Circuit’s decision means (and doesn’t mean).

This year, I’m co-chair of the American Bar Association Section of Intellectual Property Law Special Committee on the Digital Millennium Copyright Act. My co-chair is Kate Spelman of Cobalt LLP, and we have a great deal planned for the coming year. If you’re an ABA member, I encourage you to join the Section and the committee. Both are filled with thoughtful, engaged lawyers who care about the development of the law.

This year, Kate and I are hoping the committee will study and propose ABA policy on a number of issues, including:

• the two sets of “principles” for user-generated content sites that were recently promulgated (1 2);
• the international effect of notices sent pursuant to 17 U.S.C. 512; and
• the Federal Circuit’s 2004 holding that plaintiffs in anti-circumvention cases brought under 17 U.S.C. 1201 must show that the circumvention they allege has facilitated copyright infringement.

If these issues sound interesting to you, join our committee! If you’re already an IP Section member, you can join in just one click from this page. If you’re an ABA member but not an IP Section member, go here first to join the IP Section. If you’re not an ABA member, start here.

Kate and I are looking forward to a great committee year. I’m writing this on a flight home from the IP Section’s Fall Leadership Meeting in Chicago, where all of the committee chairs met to discuss their committees’ plans. If the DMCA committee doesn’t ring your bell, take a look at these other committees; many of them have some fascinating plans for the year.

A programming note. Tomorrow, November 5th, I’ll be honored to participate in a lunchtime panel at Stanford Law School with four highly-regarded law professor bloggers (Ann Althouse, David Friedman, Eric Goldman, and Larry Solum), moderated by none other than Jonathan Zittrain. The event is free and open to the public, and details are here. I understand that a recording will be available after the program concludes.

But that’s not all! For a double dose of Bay-area legal blogging tomorrow, attend the second Bay Area Blawgers meetup, organized by Eric Goldman. Details are here; RSVPs are required.

In a beautifully written, powerfully reasoned opinion, the Sixth Circuit today declared 18 U.S.C. § 2257 facially unconstitutional under the First Amendment for overbreadth. The opinion, in Connection Distributing Co. v. Keisler, is here. The statute imposes harsh recordkeeping requirements on all producers and disseminators of sexually explicit content, ostensibly in order to more easily find and prosecute child pornographers. In practice, as discussed in this post from December of 2005, the statute burdens parties who have nothing to do with child pornography — and many, particularly on the Internet, who don’t produce pornography at all.

The Sixth Circuit panel, in patient and careful terms, explained that the government doesn’t get to chill lawful speech in order to make its law-enforcement job easier. Bravo.

Yesterday, the Ninth Circuit granted rehearing en banc in the Roommates.com case, which I expressed my concerns about here. This means that the existing panel opinion was withdrawn by the court, and is no longer usable as precedent. A 15-judge panel will now hear and decide the case as if the panel opinion had never existed.

This is great news for the Internet, and might even be good news for the fictional “harrassthem.com” hypothesized in Judge Kozinski’s panel opinion. It is, however, definitely bad news for the real harrassthem.com (”This hypothetical website brought to you by joegratz.net,”) since that example is unlikely to appear in the court’s en banc decision.

Judge Ponsor of the District of Massachussetts has decided Mass MoCA v. Büchel, a case featuring the thrilling combination of an improperly-bisected house, a suspended spider-hole, and a huffy Swiss artiste.

The story, in brief: Christoph Büchel is an installation artist. Mass MoCA, an art museum, commissioned Büchel to create a large installation. Büchel worked with museum staff to physically create the artwork. When the work was nearing completion, Büchel left the project, maintaining that the museum was unwilling to adequately fund the project. (Incidentally, the piece itself seems pretty brilliant, if a little overtly polemical; it’s called “Training Ground for Democracy,” and presents a manufactured vision of American life featuring the above-mentioned house, through which a cinder-block wall was constructed, apparently in the wrong place, and the spider-hole, which was supended in the air, apparently against the artist’s wishes.) Museum staff continued their work for a while, based on their best guess as to what Büchel would have wanted — at least until relations between Büchel and the museum turned permanently icy.

So the museum was left with a garden-variety breach-of-contract case — and with a hangar-sized gallery full of an almost-finished installation. What to do with it?

The museum wanted to exhibit the unfinished work as an unfinished work, explaining the circumstances of its creation, but not calling it a work by Christoph Büchel. The artist wanted it destroyed, and wanted damages for the museum’s “mutilation” of the work (by working on it after he left the project).

The key legal issue here is the interpretation of the Visual Artists’ Rights Act, a statute situated within the Copyright Act but having nothing to do with copying. VARA protects certain one-of-a-kind or limited-edition “works of visual art” from misattribution, intentional mutilation, or (if the work is one of “recognized stature”) intentional destruction.

So, interesting questions arise: is it possible to “mutilate” an artwork that isn’t even finished yet? Is it misattribution to show an unfinished, unattributed artwork, when many in the audience already know who the artist was? Is a museum staffer “mutilating” an artwork when he modifies it under the artist’s direction? When he modifies it against the artist’s wishes, but from the artist’s own drawings? When he modifies it without direction from the artist but believing, albeit mistakenly, that he is realizing the artist’s vision?

These were the issues before the court in Mass MoCA v. Büchel. Büchel’s brief is here; the museum’s brief is here. They make for interesting (if occasionally needlessly vitriol-filled) reading.

Sadly, there’s no written opinion — the judge ruled from the bench on Friday. But we know from the notice of appeal to the First Circuit that the judge held in favor of Mass MoCA, holding the Visual Artists’ Rights Act (and, apparently, the Copyright Act) inapplicable to Büchel’s installation. It’s too bad the details are so sketchy. I’d really like to know how the judge reached the conclusion that the Copyright Act, which covers any expressive, tangible work, didn’t cover a warehouse-sized sculpture, which — whatever else it is — is certainly tangible and certainly expressive.

I find it easier to swallow the idea that the VARA might not apply. The statutory language just doesn’t tell us what to do about unfinished works. Büchel tries to import a concept from general copyright law: because a work is copyrighted if it is fixed in a tangible medium of expression, whether or not it is finished, Büchel argues that the VARA applies to all works of visual art, whether or not they are finished. But, as the museum argues in its brief, this leads to absurd results. The VARA rights are waivable only in writing, not orally, so if VARA applies to unfinished art works, it’s hard to see why an assistant who modifies the work at the artist’s direction wouldn’t be liable. A reading of VARA that causes it to apply only to art works that have been declared finished by the artist would seem to fit with legislative intent; after all, it requires that limited-edition works to be signed by the artist, something that’s generally done to signify that a work is finished.

While I don’t think Büchel ought to be able to use copyright law (or a copyright-like law like VARA) to prohibit the exhibition of the unfinished work, I do think that the museum is making a mistake. As many have pointed out, norms are more important than laws in the art world, and by pressing the legal question, the museum may be disregarding the moral one.

At any rate, I expect a fascinating opinion out of the First Circuit. Continuing coverage is likely to be found on The Art Law Blog, written by Donn Zaretsky, who was responsible at least in part for Büchel’s excellent (if unsuccessful) summary judgment brief.

On this week’s Technology Liberation Front podcast, a number of IP luminaries discuss the UMG Recordings v. Augusto case, in which an eBay seller is defending against a copyright infringement claim based on his resale of “promotional” CDs given away by UMG.

Full disclosure: I’m proud to be a member of the team representing Mr. Augusto.

Yesterday, the Ninth Circuit Court of Appeals decided Perfect 10 v. Google. The case encompasses numerous issues, from section 512 to fair use to the bounds of secondary copyright liability. Here’s a summary of the most interesting parts to me (not to be confused with the most interesting parts to the litigants or to the court):

1. Preliminary Injunctions and Fair Use. The court held, for the first time, that in order to get a preliminary injunction in a copyright case, the plaintiff must not only demonstrate a substantial likelihood of proving his prima facie case, but must also demonstrate a substantial likelihood of overcoming any defenses raised by the defendant. First, “the defendant is responsible for introducing evidence of fair use in responding to a montion for a preliminary relief,” then the plaintiff must “show it is likely to succeed in its challenge to the alleged infringer’s evidence.” Slip op. at 5767. The availability of preliminary injunctions in cases where the plaintiff’s prima facie case is easy to prove but the defendant has a strong fair use defense chilled speech, when it didn’t ban it outright. This holding is likely to mean that plaintiffs will rarely get preliminary injunctions in many of the cases copyfighters care about — cases where copying is obvious and the real question is fair use.
2. Preliminary Injunctions and Section 512. The court also held that a plaintiff seeking a preliminary injunction must demonstrate a substantial likelihood of overcoming a defense under 17 USC 512. Section 512 contains its own rules about injunctions, but the court held that because “the DMCA does not change copyright law,” general principles apply. Accordingly, if the defendant raises a section 512 defense, the court first decides whether the defendant is likely to qualify for protection under section 512, then applies the appropriate injunction rules depending on the answer.
3. The “Server Test.” In analyzing whether the copyright holder’s display right has been violated, we are told that the “displaying” is performed by the web server, not by the user’s computer. Displaying is “show[ing] a copy;” here, the copy being shown resides on the server, and is shown by transmitting it over the Internet to the user’s computer for display. In a slightly weird turn, the court says that a computer owner displays a work when she “uses the computer to fill the computer screen with the photographic image stored on the computer, or by communicating the stored image electronicallly to another person’s computer” (so the server is doing the displaying in the web context because it stores the image). What’s weird is that right in the middle of this analysis, the court cites MAI v. Peak, which held that copies held in RAM are sufficiently “fixed” to be copies for copyright law purposes. If RAM copies are “fixed” (which they aren’t, but we’ll argue about that another day), why isn’t the user the one displaying the work by “us[ing] the computer to fill the computer screen with the photographic image stores on the computer”? I have to imagine that the fact that web browsers store transmitted images in RAM before displaying them wasn’t before the court.
4. In-Lining Images Is Not a Display. Well, it’s not direct infringement, at least. IMG tags and links are just HTML instructions, the court says, and “[p]roviding these HTML instructions is not equivalent to showing a copy.” This is because the HTML doesn’t represent the photographic image; you can’t display the image solely by knowing the URL, because the server the URL is pointing to has to actually serve the image.
5. Framing Is Not a Display. Having another site’s content display inside a frame is not infringement, because the content itself is being served by the original website. It might confuse consumers, but the court rightly notes that confusion is dealt with by trademark law, not copyright law.
6. Linking is not Distribution. Because the data itself is coming from some other server, linking to infringing content is not a “distribution” of that content. Connectedly, the “deemed distribution” rule from Hotaling (the bad Hotaling, not the good Hotaling) doesn’t apply because Google doesn’t have a copy of the allegedly distributed full-size images, and you can’t distribute something you don’t even possess. (I expect that some will see this as an adoption of the Hotaling rule by the Ninth Circuit, but I think it’s dicta. Napster is bad enough.)
7. Art. I, sec. 8, cl.8 Gets Teeth. The court says that courts must be “flexible in applying a fair use analysis,” and that the four fair use factors must be “‘weighed together in light of the purposes of copyright’” (quoting Campbell). And then comes the best part. “The purpose of copyright law is ‘[t]o promote the Progress of Science and the useful Arts,” and to serve the welfare of the public” (internal quotations and citations omitted). So courts must weigh the factors together, balancing the benefit to the generation of knowledge that comes from greater protection against the public interest in making fair use of copyrighted works. Excellent. (I’m hoping for summary dispositions in really egregious fair use cases that just say, “The district court failed adequately to consider the Progress of Science and the Useful Arts. VACATED and REMANDED.”)
8. Superseding Use. Use that displaces sales of the copyrighted work has rarely been held to be fair use. But here, the court held that even if the defendant’s use supersedes some of the copyright holder’s revenue-generating uses, it can still be fair use if the value to the public from the defendant’s use outweighs the “significance” of the superseding use. This is perhaps the most important holding, in part because it helps to get rid of the circular argument that the copyright holder wanted to license uses like the defendant’s. Even if the copyright holder could have garnered some meager licensing revenue by prohibiting uses like the defendant’s, the “market harm” factor won’t weigh against the defendant if the benefit to the public outweighs the superseded benefit to the copyright holder.
9. Evidence of Harm. In order for the “market harm” factor of the fair use analysis to tip in the plaintiff’s favor, the plaintiff must come forward with evidence of actual market harm. Market harm cannot be presumed, and “hypothetical” harm isn’t good enough. This will help to erode further the circular “I could have licensed this use, therefore it is not fair use” argument; on the other hand, it makes the sham “licensing” of use that’s actually fair use all the more pernicious, because it makes the use less likely to be found to be fair use in the future.
10. The User’s Local Cache Is Fair Use. The court held that the user’s local web cache is a fair use copy because it is a transformative use — presumably because it is using the image data not as a photograph, but as a means toward faster web-browsing performance. The effect on the copyright holder’s rights is minimal — who’s going to license the image for use in their own local cache? — and the public benefit is significant, so it’s fair use. The court also expressed some doubt that “such automatic copying could constitute direct infringement,” presumably under a CoStar v. Loopnet volitional copying theory.
11. Substantial Noninfringing Use. The court held that substantial noninfringing uses for a product defeats a claim for secondary copyright liability based on an infringement-facilitating product design, but does not immunize a defendant from other sources of secondary liability. Thus, for example, if Sony had sent letters to each VCR owner exhorting them to duplicate and sell movies they rented from the video store, Sony would be subject to contributory copyright liability for sending the letters, even though it is not subject to liability for the infringement-facilitating design of its product.
12. Imputed Intent. The court held that intent is an element of a claim for contributory copyright infringement. Then, the court effectively read that element back out of the doctrine by holding that intent may be imputed if the defendant knew that infringement was “substantially certain” to result from her action. (Just like in Torts class.)
13. Contributory Liability. The court announced a new formulation of the contributory liability doctrine for internet sites: in order to be liable, the defendant must have actual knowledge that specific infringing material is available, and must then fail to take simple measures which would have prevented further damage. The court also called those “simple measures” “reasonable and feasible means.” Recall, however, that compliance with section 512 makes this analysis go away; it removes secondary liability for service providers if its procedures are followed. The district court hadn’t reached the section 512 analysis, so the court remanded this issue.
14. Vicarious Liability. As with all forms of secondary liability, a claim for vicarious liability must be based on some underlying act of direct infringement performed by someone. Here, that direct infringement was the unauthorized display of Perfect 10’s images on websites unaffiliated with Google. For a plaintiff to prevail on a claim of vicarious liability, he must show that the defendant has the right and ability to control the direct infringement, but fails to do so. Here, the court found that Google had no right nor ability to control the display of Perfect 10’s images on the unauthorized websites, since Google didn’t run those websites and couldn’t shut them down even if it wanted to. Perfect 10 argued that Google could have shut down the sites’ AdSense accounts, depriving them of revenue, but the court pointed out that doing so would not remove the images from the third-party websites.

It’s a big opinion, with a lot of holdings, but most of them make sense and apply the law correctly. The case now goes back down to the district court for further factfinding and analysis. There’s a dispute over the adequacy of Perfect 10’s section 512 takedown notices, and after Perfect 10 v. CCBill, Google will have a much easier time prevailing on that issue.

The Ninth Circuit Court of Appeals issued its opinion today in Fair Housing Council of San Fernando Valley v. Roommates.com, LLC.

Roommates.com operates just like a dating service, except that it’s for finding roommates: people enter facts about themselves and preferences about the people they want to be matched with, then the system steers people to the profiles of people who match.

However, the housing world is unlike the dating world in one crucial respect: it’s legal to post a personal ad saying you don’t want to date people who have kids, or people who aren’t Hispanic, or people who are male. But the Fair Housing Act says it’s not legal to post an ad for housing saying you won’t rent to people who have kids, or people who aren’t Hispanic, or people who are male.

(Whether this provision of the Fair Housing Act applies to people seeking roommates, rather than offering rental units in which they don’t live, wasn’t an issue at this stage in the case, and I don’t have the expertise to opine on it.)

The Fair Housing Council sued Roommates.com under the Fair Housing Act, alleging that by asking users for their roommate preferences in categories like gender, familial status, and national origin, Roommates.com violates the Fair Housing Act. Roommates.com claimed that it was immune from this suit under section 230 of the Communications Decency Act. Section 230 says that online publishers of user-generated content aren’t liable for the content their users post (subject to certain exceptions not applicable here), so long as they aren’t “responsible, in whole or in part, for the creation or development of” the content.

This raises an extremely interesting question: If I have a website which encourages users to post unlawful content, am I “responsible, in whole or in part, for the creation or development of” that content, or am I immune under section 230? In his opinion, Judge Kozinski uses a colorful example:

Imagine, for example, www.harrassthem.com with the slogan “Don’t Get Mad, Get Even.” A visitor to this website would be encouraged to provide private, sensitive and/or defamatory information about others—all to be posted online for a fee. To post the information, the individual would be invited to answer questions about the target’s name, addresses, phone numbers, social security number, credit cards, bank accounts, mother’s maiden name, sexual orientation, drinking habits and the like. In addition, the website would encourage the poster to provide dirt on the victim, with instructions that the information need not be confirmed, but could be based on rumor, conjecture or fabrication.

(Yes, I registered the domain, and www.harrassthem.com now works, linking back to the Ninth Circuit opinion. Feel free to suggest amusing, non-liability-producing uses for it in the comments.)

Kozinski expresses doubt over whether such a site would be immune under Section 230. But after posing this rich, tantalizing question, and before deciding it, the court turns away from the question of whether Roommates.com’s questionnaire itself violates the FHA.

Instead, the court held that Roommates.com’s use of the data to control access to users’ profiles and to generate emails listing only “matches,” rather than the site’s publication of an unlawful housing preference, that strips it of Section 230 immunity. By making its site obey a user’s discriminatory housing preferences, the court held, Roommates.com was no longer a “passive pass-through” or mere “facilitator of expression by individuals.” Instead, it was creating new content of its own — an “additional layer of information” it is responsible, at least in part, for developing.

I find this holding somewhat troubling. It seems that the court was concerned with Roommates.com’s implementation of its users’ discriminatory preferences. By the court’s reasoning, it seems, merely repeating something a user posted, even in edited form, is permissible, but taking actions or generating new information (such as “match” emails) based on the user’s post can give rise to liability. This raises difficult line-drawing questions, since it makes some automatic processes (like a script that deletes all the dirty words in a post) cause a site to retain its immunity, while making others cause a site to lose its immunity.

Thankfully, I think discrimination laws may be among a very small set of laws to which such a rule could apply. Taking action or generating new content based on user-generated content doesn’t give rise to liability in many areas outside intellectual property, and intellectual property laws are already categorically excluded from CDA immunity.

Still, legal rules that make the automatic parsing of data (User: “I want a female roommate”) into metadata (Server: “Hmm, perhaps I should match this user only with females”) a legally actionable event make me uncomfortable.

In copyright, there are two ways to prove a prima facie case of copying. First, the plaintiff could show that (1) the defendant had access to the plaintiff’s copyrighted work, and (2) the defendant’s work is substantially similar to the plaintiff’s copyrighted work. Or, second, the plaintiff could show that her work and the defendant’s work are so similar that copying is the only realistic basis for the similarities — in other words, the plaintiff could show “striking similarity.”

On Wednesday, the United States District Court for the Southern District of New York granted summary judgment in favor of defendant Brian Transeau (yes, that Brian Transeau, a/k/a BT, who did those great Tori Amos remixes back in 1996 — you know, the “Talula” remix that was the second B-side on the Professional Widow 12″? But I digress . . .) and against plaintiff Ralph Vargas.

Vargas alleged that BT copied a drum riff from a breakbeat LP Vargas released in 1994.  The allegedly copied riff appears in BT’s track “Aparthenonia,” off Breakz from the Nu Skool.  BT claimed that the riff wasn’t copied; he’d put it together himself in Reason while working on his tour bus. (You can hear the two recordings side by side at the Columbia Law School Music Plagiarism Project.)

Vargas didn’t sell many copies of his breakbeat LP, and he was unable to show that BT had access to it.  So, to prevail, Vargas would have to show that his riff and BT’s were “strikingly similar.” Both sides presented expert testimony on similarity, and BT re-created the drum riff from scratch in Reason for the court. Vargas’s experts waffled during their depositions on whether they could rule out independent creation, stating that the works are “significantly similar, if not identical,” but failing to explain why or to rebut BT’s expert, who did a FFT spectrogram of the two recordings that showed differences.

The court found that Vargas’s expert’s conclusory statements about striking similarity were insufficient to create a disputed issue of material fact that would prevent summary judgment and necessitate a trial. Because the burden was on the plaintiff to prove each element of his case, and the plaintiff had failed to present any expert who found striking similarity (rather than merely substantial or significant similarity), the defendant prevailed on summary judgment.

This seems a little odd, but the oddness, I think, comes from the doctrine itself. “Striking similarity” is not a standard that admits much analysis or evidence; almost by definition, the similarity strikes one or it doesn’t.  All the evidence is in the two recordings. If the court is to “apply logic and experience to determine” whether copying is the only explanation, as Mel Nimmer said it should, why should the plaintiff be required to produce an expert to avoid summary judgment at all? The court reached the right result here — the evidence of independent creation was substantial — but it’s hard to say why there wasn’t a genuine issue of material fact just because their expert couldn’t rule out independent creation (and it’s even harder to say why Vargas didn’t find himself some expert who would rule out independent creation).

I’m not crazy about “striking similarity” as a doctrine for precisely this reason: it collapses the whole analysis into the question of whether the factfinder thinks the two works could or couldn’t have been created independently. The doctrine withstands analysis so poorly that it’s hard to say why and whether any evidence or advocacy is needed at all: at its core, the “striking similarity” doctrine says that, when the plaintiff can’t prove access, the factfinder is to listen to the two works and decide who wins, with close cases going in favor of the defendant.

(For more beating up on substantial similarity (just smarter than mine), see this post at Bill Patry’s blog.)

Congratulations to the Stanford Fair Use Project, which was co-counsel for BT during this case’s long history.

It’s been an eventful 24 hours in copyright. Jack Valenti died, leading to some nice encomia — and leading one wag to comment, “I suppose now he’ll find out how the Boston Strangler felt about being compared to a VCR.”

And two copyright bills were introduced in Congress: one good, one bad.

First, the bad. Rep. William Delahunt (D-MA) has reintroduced a bill that would extend copyright to fashion designs. If you’re wondering why this is a bad idea, read Chris Sprigman and Kal Raustiala’s law review article on the subject, “The Piracy Paradox: Innovation and Intellectual Property in Fashion Design.”

Second, the good. Reps. Jay Inslee (D-WA) and Don Manzullo (R-IL) have introduced H.R. 2060, the “Internet Radio Equality Act.” The bill would have several effects on the rates paid by webcasters for their digital transmissions of sound recordings:

• The bill would nullify the March 2, 2007 rate determination issued by the Copyright Royalty Board, which would otherwise double webcasting rates over the next five years.

• With regard to commercial webcasters, the bill would:
  • Set an interim rate for webcasts made between 2006 and 2011. Webcasters could choose to pay $0.0033 per hour of sound recordings transmitted to a single listener or 7.5% of gross revenues “directly related to” webcasting.
  • Set a new standard that the Copyright Royalty Board will use to set rates for webcasts made after 2011. Instead of the current standard — in which the rates are those that “would have been negotiated in the marketplace between a willing buyer and a willing seller” — the bill directs the Copyright Royalty Board to set a rate based on the factors set forth in 17 U.S.C. 801(b)(1). Those factors include the furthering the public interest in access to copyrighted works, delivering a fair return to the copyright holder, recognizing owners’ and users’ respective roles in making works available to the public, and avoiding unnecessary disruption of existing industry practices.
• With regard to non-commercial webcasters, the bill would:
  • Set an interim rate. For each year between 2005 and whenever the parties agree on a rate or the Copyright Royalty Board sets a new rate under the new standard set forth below, non-commercial webcasters must pay 150% of whatever they paid in 2004.
  • Set a new standard. The bill would add sound recordings to the kinds of works covered by the collective bargaining provision of section 118, and would add all “non-profit institution[s] or organization[s]” to the class of users who can take advantage of section 118. (My reading of this is that groups of noncommercial webcasters could bargain collectively with SoundExchange, and if they can’t come to an agreement, the Copyright Royalty Board would set a rate based on the rate negotiated by other groups of noncommercial broadcasters and webcasters.)

• The bill orders three studies:
  • One by the National Telecommunications and Information Administration on the competitiveness of the Internet radio marketplace and the effects of webcasting royalties thereon.
  • One by the FCC on the effects of webcasting royalties on localism, diversity, and competition.
  • One by the Corporation for Public Broadcasting on the effect of webcasting royalties on public radio stations.

While it’s almost certain to be modified before passage, the bill represents a great step forward in coming up with a set of webcasting royalty rates that fairly compensate copyright holders without destroying webcasters.

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.

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.

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.