joegratz.net

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.)

In an opinion published today in Leadsinger, Inc. v. BMG Music Publishing, the Ninth Circuit held that Leadsinger’s karaoke devices, which contain copies of lyrics for display on a TV screen, are not eligible for a license under 17 U.S.C. 115 because they are “audiovisual works,” not “phonorecords.”  This holding is the same as the Second Circuit’s holding on the same question in ABKCO Music, Inc. v. Stellar Records, Inc. 96 F.3d 60, 65 (2d Cir. 1996). This means that companies marketing karaoke versions of songs, when they display the lyrics, must separately negotiate licenses with the relevant music publishers rather than relying on the statutory license that would be available if the karaoke versions were marketed without the ability to simultaneously display lyrics.

Perhaps more interestingly, the court affirmed the dismissal with prejudice of the plaintiff’s declaratory judgment claim asserting noninfringement based on the fair use doctrine.  The court held that resolving the fair use inquiry on a motion to dismiss is proper when the facts alleged in the complaint, if true, resolve the fair use inquiry.

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.

I’m at the Business Success Using Open Source Software panel at the ABA Annual Meeting in San Francisco. The participants are:

• Katherine Spelman (moderator, Cobalt LLP)
• Pam Samuelson (Boalt Hall)
• David Kappos (IBM)
• Karen Copenhaver (Choate Hall & Stewart; fmr. GC, Black Duck Software)
• David Marr (Sun)

As with all of my liveblogging, these are my impressions of the proceedings and are not for attribution to the participants, and certainly not to me.
David Kappos:

OSS has come a long way in the 20 years it’s been on the scene. It started as a set of programming tools put out by the FSF; we lawyers eventually came to understand and like the GPL, turning copyright law into a tool of inclusion rather than exclusion.

OSS has now grown in an amazing way; there are more than 150,000 OSS projects, dozens of license agreements, Wikipedia, world-class programming tools, Firefox, Linux, and a myriad of business models that make OSS as a development paradigm not only profitable but preferred.

We can’t find a software start-up in the Valley that isn’t using OSS. If you don’t think your clients are using OSS, you have a surprise coming.

And now governments are permitting and even mandating the presence of OSS in their bidding processes.

This brings us to some questions: How does business get profitably conducted around free software? What are the roots of OSS? Can it apply to other fields? Why haven’t other fields adopted open development models? How does the OSS model that works so well for copyrights work for patents? What are the limits of the OSS model, and what’s coming in the future?

A number of business models have emerged around OSS:

• Support and service. This is the Red Hat model. Software is distributed under an OSS license, with services offered for a fee.
• Building block model. This is the TiVo model. Companies are using OSS as a component of their business — embedded Linux, etc.
• Add-on solutions model. This is the IBM model. Using OSS (typically Linux) and offering solutions that build around that and integrate it into larger situations. This is an extremely successful business and scales well.
• Proprietary extension model. This involves developing proprietary software that links to OSS in conformance with the GPL, then donating that proprietary software to the community as its competitive advantage fades. IBm does this with WebSphere.

Most of those business models leverage shared infrastructure. This is all about avoiding spending money on unproductive effort and spending it close to customers’ needs.

Can this work outside of software? Yes. IBM instituted an organization called power.org, where we put a giant amount of architecture information about the power architecture (which is a microprocessor architecture) into the public domain. It’s working: there’s a vibrant community.

What about pharma? An organization called CAMBIA in Australia licenses bio innovations under open principles.

And it works for information, too: Wikipedia and, indeed, the GPL3 process itself. Open development will work wherever there is commonality of problems, opportunity for profit or reputational gain from contributions, and call for open standards for interoperability.

It can work for patents as well as copyrights. IBM donated 500 software patents for free use in OSS. We wanted to make patents less threateing to OSS — and even a tool to promote OSS. Many other companies, including OBM, have announced more pledges since then. Then there was the formation of OIN. Google just joined as a licensee. This is rationalizing the discoursein the OSS/patent area.

Also, Peer-to-Patent is bringing the two areas together. It’s allowing experts from all over the world to submit and comment on prior art. It’s apparent that this is going to be the wave of the future — “the USPTO meets the 21st century.”

So what about efforts to capture the millions of lines of OSS as prior art? We’ve been working on that — there’s lots still to do, but the idea is to categorize the code by patent classes so that they can easily be used by patent authorities.

OSS is on its way to turning patents to a positive force for OSS.

OSS is going to continue to flourish and grow in areas other than software. We had a CodeJam to help solve major world problems, and taking the IP stress out of the system allows people to collaborate better.

OSS is here to stay; it will grow; it will spread to other problems. It is showing that, like copyrights, patents can not only coexist with OSS but fuel its growth. The OSS model with thrive alongside proprietary development, and will create plenty of legal issues along the way.

Pam Samuelson:

I’ll be talking about OSS and competition. I got interested in this when I taught a class with Mitch Kapor. I’ve also written a paper on it.

Two perceptions:

• Proprietary software and OSS are in a deadly war, and one will strangle the other. (This is hyperbole. Eben Moglen writes about “triumph” over proprietary software; Craig Mundie writes similarly harshly about OSS. Pay no attention.)
• FOSS is hostile to IP. (This is also false. Some people who like OSS are also hostile to IP, but nothing inherent in OSS is outside the standard IP narrative.) The specifics of the license don’t matter that much to the developers. It’s a social constitution, a social norm. Not only will you get sued if you violate the license, but you’ll be shunned — and that’s sometimes worse.

I agree with David that FOSS and proprietary software can coexist in the same products, and will increasingly do so. Also, there are some sectors where one or the other will just prevail: avionics software will probably always be mostly proprietary.

But some places, there is head-to-head competition. IE v. Firefox. Linux v. various server OSes. You get more innovation in such situations, and that’s great. Firefox is driving innovation in IE, and vice versa. MySQL has put price pressure on Oracle. And so on.

OSS has significant development advantages: spreading out common work, a supportive community, and it can be (though it is not necessarily) cheaper. It’s certainly easier to modify internally, by its nature.

There are some risks. One is, “who do I call if it breaks?” For this reason, support services can be sold. Forking can lead to incompatability. Patent risks are still real. Linux may now be in a really good place, but not all projects have companies throwing patent licenses at them. And it’s not easy to transition a proprietary product into a successful OSS project. (Netscape had to be rebuilt substantially to make it into an OSS product.)

Overall, OSS can be less risky: less investment than proprietary development, and somewhat less chance for financial reward.

David Marr:

I’ll be talking about the GPL. The area that can be most difficult for us as lawyers — copyleft. Ask them:

• What GPL code is being used?
• What form are the bits in — binary or source?
• What has been done with the bits?

Then you get three hard questions:

• When is the source obligation triggered?
• What must we release?
• How must we release it?

[He has very good slides that explain the answers to these questions, including an amazing slide with a spectrum of situations drawing the line when copyleft attaches. I’ll try to get a copy and post them.]

Karen Copenhaver:

Design that Matters is a company that started a number of years ago. You could graduate from an engineering school without having anything you designed get manufactured. These kids got this idea that people should put their designs up against manufactured products — and that they could put together a portfolio of products that NGOs around the world needed and use them as student design projects. Then the students could put their designs back into the portfolio, if they wished.

The first product was an IV clamp. (They were quite non-intuitive.) The second was a projector for schools. (Turns out school is at night, and there’s no light for books.) The third is a baby incubator. (Existing incubators required consistent electricity and frequent changes to the filters.)

Building a world where it’s easy (but not mandatory) to share — with an open source design model — was the goal. It’s a wonderful story. We’re five years into it, and we’ve never had an IP issue. The sharing rate is very high. The students realize the joy of being permitted to share.

When I think about OSS, I think about making things possible, like Wikipedia, that could not have been imagined before.

The idea I wanted you to get was that world-leading companies are embracing this model as a way to find efficiency — not just as a legal curiosity or a project for hairy geeks. None of us is alone, and OSS is a very sophisticated acknowledgement of our interdependence.

It has restored competition to the software industry, and the compeititon is perfect, due to the ability to fork any project. There’s more and more infrastructure that none of us wants to build alone. It is providing, and is going to provide, a platform for innovation.

[Then some very interesting questions and answers, which went too fast for me to write down.]

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.

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 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.

This will be useful to almost nobody, but someone on SFist asked about it, so here it is.

This is a Python CGI which grabs and parses the XML bus prediction data from NextBus.com for the San Francisco Muni. I wrote it so I could have easy mobile access to certain bus lines (including my beloved 21-Hayes) for which data wasn’t otherwise easily accessible. It doesn’t work for that anymore; it only works for bus lines for which the data is easily available on NextBus.com. (Apparently the rest of the bus lines will be available soon.)

Anyway, this is likely to be of some use to people who want to do cool SOAP web services stuff with the Muni bus prediction XML data. Right now it’s a CGI that provides a really light fast web interface for the prediction data, but it could pretty easily be hacked into a command line prediction script or a widget or a much slicker web interface. It’s licensed under CC-BY. Here it is:

NextBus Python Script

I talk a lot about the importance of the public domain, and the ways in which technology is making the public domain a more important cultural source than it’s been before. But it’s not that often that I get to participate in enriching the commons.

Back in 2004, I found an old yearbook at a rummage sale that contained photos from a Bob Dylan concert in 1963. I scanned the pictures, posted them on the web, and told the story here. Some denizens of a Dylan messageboard discussed the pictures, did some sleuthing, and found out more details.

Today, I was shocked to find that one of the pictures from that forgotten old yearbook is now the featured photo in the Wikipedia article on Bob Dylan.

The New York Times has a very nice story today on LibriVox, a project working to create volunteer-read, public domain MP3 audio books. The project uses texts from Project Gutenberg, and the recordings’ complexity ranges from a solo recording of nonsense verse “The Purple Cow” to a full-cast recording of Hamlet.

I came across the project this past spring and recorded one letter’s worth of definitions from The Devil’s Dictionary by Ambrose Bierce — an old favorite. The recording is being checked and combined with others’ contributions, and should be released soon. Among its other volunteer constituencies, LibriVox makes a great hobby for pedantic old hams like me.

It’s wonderful to see how people are squeezing as much utility as possible out of the frozen pool of public domain works we’re left with after the last 30 years of legislation. Imagine what could be done if the public domain were larger!

The EFF, along with a team at Akin Gump led by Elizabeth Rader, represent Dr. Stuart Frankel in a declaratory judgment action filed yesterday against Lyons Partnership, owners of copyrights and trademarks in Barney, the fictional purple dinosaur. Lyons sent numerous C&D letters to Frankel regarding a parodic page on his website. Highlights of those C&Ds include:

• Sending two more nearly-identical C&D letters directly to Frankel for four years after being notified that he was represented by counsel, in apparent violation of DR 7-104 of the New York Lawyer’s Code of Professional Responsibility;
• Asserting that implicit threats of violence toward an imaginary purple dinosaur are actionable under copyright law; and
• Claiming that any use of Barney — evidently even parody or other fair use — is unlawful without permission from the copyright holder.

The EFF, it would seem from the exchange of correspondence attached to the complaint, was already a bit peeved at Lyons for sending a C&D in 2001 threatening to sue over the EFF’s mirror of a rather tasteless but nonetheless noninfringing essay about Barney written in 1994 and stored in an archive of BBS textfiles.

There’s certainly room for settlement. However, unconditional capitualtion on the part of Lyons, while the wisest course, may not be the likeliest. I wouldn’t be surprised if Frankel settled for nothing less than a judicial declaration of the parodic nature of his use. He doesn’t have much to lose, since he has some of the best copyright lawyers on the planet working on his side pro bono.

The Times reports that the Online Guitar Archive, or OLGA, a fan-created database of guitar chords and tablature for popular songs, has been shut down again due to complaints of copyright infringement.

OLGA was first shut down ten years ago, when a complaint from EMI caused UNLV to kick the site off its servers. I was a teenage keyboard player, and had been using OLGA (and the USENET posts out of which it grew) as an online fakebook since 1992 or so. It seemed totally unjust that a noncommercial resource created by and for amateur musicians could be destroyed by one letter from a lawyer. It was my outrage at this apparent injustice, in part, that led me to start learning about copyright law. While I no longer think the copyright holders’ allegations of infringement were entirely without merit, I still feel the sting of losing access to music available nowhere else, at any price.

Here’s a wrap-up of my posts from the Bandwidth Conference.

First up was The Tuning Fork, in which some very experienced and thoughtful radio programmers talked about the reasons radio isn’t dead, contrary to convenntional wisdom.

Next was an hour of conversation with Terry McBride, founder of Nettwerk. His wisdom and savvy was astonishing, and I think his session outlined the future of the music business better than any other part of the conference.

A la carte downloads? Subscriptions? Mechanical licensing? Ringtone licensing? Fred von Lohmann and his smart panel of lawyers helped to sort it all out on The Licensing Panel.

Chris Anderson then led a great panel on the long tail called Nouveau Niche.

Saturday morning was a panel on the role of the listener — especially in promotion — called High Speed Fan.

Next was a panel on online music pricing, featuring very smart provocations from John Buckman.

Finally, Thomas Dolby and other visionaries gave us their predictions about the future of the music industry in the Crystal Ball panel.

Thanks to Toby and crew for putting together such a great conference, and thanks to all the panelists who shared their insights. I had a great time, and learned a lot about the business end of the music business.

I’m at the Bandwidth Conference at a panel called, “What’s It Worth To You?”. The moderator is David Harrell, and the panelists are John Buckman, Neeta Ragoowansi, Layne Fox, and Yobie Benjamin.

Q: How is Magnatune’s pricing approach working out?

Buckman: Magnatune asks how much the user wants to pay. Everyone knows they don’t have to buy music to get music. If they’re already on the site, they’re willing to pay for it, so we want to reward them by letting them decide how much the artist deserves. They can buy for as low as $5, but the average is $8.50. People feel good about buying someplace that trusts them.

Q: You only do full album downloads, not individual songs, right? Why?
Buckman: Right. On one level, it’s an artistic choice. We’re not selling music that plays on the radio, so people are picking the music because they like it. I don’t like registration systems — it’s an impediment to purchasing. There’s a high credit card merchant fee, so $1 transactions only work with registration.

Q: Terry McBride said digital dcownloads would end up in the 25 to 49 cent range per song. Thoughts on that?

Fox: I own my own label in addition to working at a distributor. From a distributor standpoint, we want whatever will bring people into the space. That requires balancing what’s best fo the consumer and what’s best for the content owners. We have to keep waiting tosee what happens with unusual models like eMusic and other subscription services.

Buckman: That’s the wrong question. We should actually be looking at gross revenue per customer. Individual cost is meaningless — we need to look for the way that makes people shell out as much as possible per month.

Q: How do you see pricing shaking out when the consumer-as-seller takes a cut?

Benjamin: We empower both consumers and large organizations. Music is one of the things in our toolkit. We don’t price under 99 cents — we work with the big digital distributors, and within that construct we can’t price too low.

Buckman: Can the price go up based on the selection? Would people pay more to download from a well-selected blues blog than from the full catalog?

Benjamin: We have an 800-blogger beta. The lazy guys have few to no sales. The guys that actually write about the music sell, and sell for a higher premium. We sell CDs, too, through those guys who put work into it.

Q: The premium you’re talking about is one thing, but 8 of the top 10 top-selling iTunes albums are priced higher than physical CDs on iTunes. They’re doing a lot of premium-level specials, too. There’s flexibility you’d never have with a physical CD.

Benjamin: We’re not a pure-play music site. We have a very wide SKU set. We have four million books. The types of products you can sell is different. We can do cross-merchandising of products. The other thing we do is allow for variable pricing, with a floor.

Q: When connection speeds go higher, will people be re-sold WAVs later?

Benjamin: Sure, that could happen.

Q: Magnatune has WAVs, though, right?

Buckman: Yeah. WAVs, FLACs, anything. The Russian sites sell by the megabyte, incidentally, which is an interesting model.

Q: Let’s talk about SoundExchange. There’s some confusion.

Neeta: SoundExchange is the nonprofit organization designated to collect and distribute royalties for artists and record labels for use by XM, Sirius, cable digital radio, and webcasters. They have to pay for the use of sound recordings. It’s like ASCAP or BMI — they collect for the composer or publisher for the musical work. There’s a relatively new right to publicly perform sound recordings by certain methods, and people collect that money through us. The area of confusion arises because the section 114 statutory license doesn’t cover interactive subscription services, only non-interactive services. There are gray areas.

Buckman: Do you know numbers?

Neeta: when we did our first distribution, we’d collected $3.5 million — not a big deal, when split among 40,000 recording artists. This year, we’re up at about $68 million, and it’s going up. We’re in the middle of an aribtration with the webcasters. We’re asking for 30% higher, they’re asking for 30% lower, we’ll probably meet somewhere in the middle.

Audience Question: What’s “commercially released”?

Neeta: Well, that’s a subject of debate. But probably anything that’s been distributed on the internet is “commercially released”. Some say it must be sold, but that’s a minority view. [She describes the division of the SoundExchange royalty.] Who’s the “featured artist”? Our policy committee deals with those questions.

Buckman: How does a label or musician register?

Neeta: They come to our website and register. Tell everyone to register! There’s money waiting! It takes 15 minutes. We pay out based on reports from licensees.

Buckman: For years, major label artists only saw ASCAP and BMI royalties. As those perhaps fade, does anyone think we’ll see government-like organizations to replace sales?

Neeta: It’s definitely an argument in the webcaster arbitrations when we’re setting rates. When determining value, we look at other pieces of the pie. If there’s more statutory pricing, they’ll look at the overall economic pie.

Buckman: It seems like most things will be interactive streaming. Should we just tax everyone abd pay it out?

Benjamin: There are other mechanisms. GoodStorm does something like this.

Q: Terry Fisher has proposed an alternative compensation system. Everyone’s competing for dollars now — if we were in a pro rata situation, do the rich get richer?

Buckman: ASCAP and BMI have dual accounting for big players versus small players. The expectation is that the big guys will pay off the government to make sure that continues. The same thing could happen in a pro rata situation, and that woudl be bad. But 2/3 of the money made is licensing, not sales to consumers, so I don’t see the industry being in trouble even if P2P takes over, so long as they can stil lmake stars and sell licenses.

Q: How’s the licensing for sync and similar rights on your website going?

Buckman: It’s great! We’re doing a lot of licenses for independent films, and we’re the only place you can do licenses like this online instantly. One of the cool things is how many people in the music and related businesses hate the people they work for, so some of those people enjoy giving money to us, who are not evil. How strange that the record labels get in trouble for payola, but won’t license podcasts. Collecting money from people who have money — like ad agencies — works great; suing welfare moms doesn’t.

Q: When is the single-price model going to change?

Fox: It’ll be a while.

Benjamin: Once one major gets rid of DRM, it’s all coming down. They’ll immediately go to variable pricing, higher than current rates.

Buckman: People are willing to pay 30% more for music without DRM.

Fox: Will that send everyone to subscriptions?

Benjamin: I don’t like subscriptions — I think it’s fundamentally horrible for the artist.

Fox: Some day, music will be like water as Fisher says.

Buckman: Allofmp3.com is the future. I use this all the time. The utility model isn’t as good as the by-the-megabyte model allofmp3 uses.

Fox: Allofmp3 doesn’t pay the artists, and they’ll get closed down soon. Alternate revenue is coming from branding, which allows people to enjoy music for free. Instead of looking to a subscription service, artists should be looking to different new types of licensing.

Benjamin: People are donating their music to be sold for good causes on our site. There will be a lot of experiments. Moving away from DRM is on the horizon. I’m optimistic.

Fox: We’re just starting to see that the majors might consider getting rid of DRM.

Buckman: The majors know that their audience despises them. You’ll die eventually if that’s true. They’ll have to do something eventually.

Audience Q: Why are we charged for sound recording performance when terrestrial radio companies don’t?

Neeta: Around the world, there’s a sound recording performance right. Terrestrial broadcasting in the US is an anomaly. Terrestrial radio should pay. That might even out the playing field between new and old technologies.

Audience Q: As your popularity goes up, your costs just for bandwidth goes up, which isn’t true for terrestrial radio.

Buckman: The internet radio isn’t as strong as the broadcasting lobby. Yet.