Content Which Falls Under Fair Use Is Not Infringing

One of the elements that Lenz had to prove for her 512(f) claim was that Universal knowingly asked YouTube to take down a video that was not infringing. In its brief, Universal tries to claim that this can never happen when it argued that “because fair use is a defense to an otherwise infringing use, Universal could not – under any analysis – have made any misrepresentations (knowing or otherwise) when it notified YouTube that Plaintiff had incorporated “Let’s Go Crazy” into her video without authorization from the copyright owner.”

To understand this difference, it’s helpful to look at criminal law. Defenses to crimes tend to fall into two different categories: “I didn’t do it” or “I did it, but I had to.” One helpful analogy is to look at a self-defense argument in the case of murder. You are still admitting that you killed someone and that that is wrong, but you are also arguing that it should be excused for some other reason (generally that the person you killed was threatening you).

Similarly, Universal is arguing that each and every post that uses infringing content in any way, even those ways explicitly identified by the statute as fair uses, are infringements on copyright. They claim that fair use is an affirmative defense (the self-defense of copyright) which may excuse the infringement after the fact, but which does not change the legal status of the original use.

It is easy to see why Universal would seek such a ruling. If this were the case, Universal or any other copyright owner would not need to take any care when sending out takedown notices to ensure that the use was infringing. It could simply send out notices as it chooses and potentially rely even further upon automated processes to do so.

Fortunately, the judge pointed out, both in this decision and a prior one, that this seems to be clearly wrong. In the prior order, Judge Fogel states that “if copyright owners are immune from liability by virtue of ownership alone, then to a large extent Section 512(f) is superfluous.” This is clearly the correct decision. After all, fair use is even defined in the statute as non-infringing: “Notwithstanding the provisions of sections 106 and 106A, the fair use of a copyrighted work…is not an infringement of copyright.”

No Requirement of Monetary Harm, But Must Prove Proximate Cause

This latest decision focused heavily on a discussion of what damages are available to a plaintiff in a case like this. Both parties put forward competing interpretations of the language of 512(f). The relevant language states that a party in violation of the section “shall be liable for any damages, including costs and attorneys’ fees, incurred by the alleged infringer, by any copyright owner or copyright owner’s authorized licensee, or by a service provider, who is injured by such misrepresentation, as the result of the service provider relying upon such misrepresentation in removing or disabling access to the material or activity claimed to be infringing, or in replacing the removed material or ceasing to disable access to it.”

Lenz argued that the phrase “any damages” should be interpreted to mean “any harm whatsoever” and points out that this language is broader than the “actual damages” language used in other areas of Title 17. Universal contested this reading, stating that the “actual damages” languages was meant as a contrast to statutory damages, not as a form of limitation.  Universal instead argued that, by analogy to common law fraudulent misrepresentation, damages should be limited to economic harm. It also further argued that the misrepresentation must be the proximate cause of the harm, due to the “as the result of” language in the passage above.

Judge Fogel’s decision ultimately draws from arguments put forward by both sides.  He agrees with Lenz on the issue of what damages may be considered, stating that “requiring a plaintiff…to demonstrate in addition not only that she suffered damages but also that those damages were economic and substantial would vitiate the deterrent effect of the statute.” The impact of this decision may be enormous. It’s likely that most plaintiffs who might suit under this section would be just like Stephanie Lenz: individuals whose personal videos were removed. There’s not likely to be economic harm suffered by such a plaintiff, and Fogel’s decision opens the way for such a plaintiff to sue and still recover for other harm, such as the harm to their First Amendment rights. As one of Lenz’s lawyers stated, “what’s important here is that someone who’s had their speech chilled can move forward and bring a lawsuit under 512(f).”

However, Fogel’s decision did place a significant burden upon such plaintiffs when he subsequently found that such damages “must be proximately caused by the misrepresentation of the copyright owner to the service provider and the service provider’s reliance on the misrepresentation.”  He pointed out that were this not the case, plaintiffs could show they have suffered harm merely by filing a suit and thereby incurring costs and fees.

The biggest constraint this puts on plaintiffs is that Judge Fogel interpreted this proximate cause requirement (combined with the fee shifting provisions already in place in 17 U.S.C. § 505) to mean that plaintiffs cannot recover attorney’s fees from after the litigation commences, since those fees are not proximately caused by the misrepresentation. This may end up taking the teeth away from 512(f), as most plaintiffs will not want to bear the brunt of their attorney’s fees when bringing such claims, especially since without monetary harm, their recovery is likely to be relatively low.

Now What?

While it’s unclear what larger impact this decision will have, it has already raised ordinary people’s awareness about the ways in which the provisions of the DMCA could impact their lives and demonstrated first hand what you can do if you experience a takedown. Statistics on YouTube currently indicate that the video has received over a million views and over a thousand comments, which demonstrates the degree to which people have been interested in this controversy. Stephanie Lenz herself seems to have become an activist in this area. Her personal blog indicates that this case has caused her to become interested and explore other topics affecting free speech and fair use. Though Stephanie Lenz may have suffered few monetary damages, it’s easy to see from her writings that she feels the harm to her speech rights very keenly.

Authorizing infringement

In a nearly two hundred-page judgment, Justice Dennis Cowdroy found that the applicant companies had succeeded in proving that users of iiNet’s services had “made available online,” “electronically transmitted,” and “copied” certain films. However, the applicants had failed to show that iiNet had “authorized” those infringements. The case centered around the use by iiNet’s customers of the peer-to-peer BitTorrent protocol to share movie files, in breach of the studios’ copyrights. The critical issue in the case was whether iiNet, by failing to take any steps to stop infringing conduct, authorized the copyright infringement by its users. Under Australian copyright law, authorizing the infringement of copyright by another is itself treated as an infringement.

Three step reasoning

There were three main steps to Justice Cowdroy’s reasoning:

1. He found that, though iiNet had knowledge of the infringements and did not act to stop them, this did not lead to a finding of authorization. Under the Australian law of authorization, there is a distinction between providing the “means” of infringement, and providing a “precondition” for infringement. Justice Cowdroy distinguished the present facts from earlier cases, including a 2005 Federal Court ruling in a case brought against the licensors of the Kazaa file-sharing software. In the Kazaa case, the software provided the “means” for infringement, whereas in the case of internet services, there did “not appear to be any way to infringe the applicants’ copyright from the mere use of the internet.” Here, the means of infringements at issue was the BitTorrent system, which iiNet had no control over.
2. AFACT had pushed for iiNet to implement a system of notification, suspension, and termination of infringing customers, but the judge found that this would not have been a “reasonable step” for the purposes of Section 101(1A)(a) of the Copyright Act 1968. This section provides that, in determining whether a person has authorized infringement, a court must consider, among other things, (a) the extent of the person’s power to prevent the infringement; (b) the nature of any relationship existing between that person and the infringer; and (c) whether the person took “any other resonable to steps to prevent or avoid” the infringement. The judge noted that “[t]he applicants appear to premise their submissions on a somewhat binary view of the world whereby failure to do all that is requested and possible to co-operate with copyright owners to stop infringement occurring, constitutes approval of copyright infringement. Such view is not the law. It is possible to be neutral. It is possible to prefer one’s own interests to those of the copyright owners.” (para. 504). iiNet could therefore not be held to be authorizing the infringements on the basis that they had failed to adopt a system such as the one urged by the applicants.
3. iiNet could not be seen as sanctioning, approving or countenancing copyright infringement, as it had done no more than to provide an internet service to its customers. In the Kazaa case the respondents intended copyright infringements to occur, and the software was deliberately structured to achieve this result. By contrast, in this case there was no evidence that iiNet “favored” infringement in its provision of access to the internet.

A disappointing ruling

The judge noted that the applicants would be disappointed by the ruling, as it was clear that infringement of their copyrights was occuring on a large scale, worldwide (para. 19). Yet this fact did not compel him to find authorization of infringement merely because “something must be done.” Australian law recognizes no positive obligation to protect the copyright of others, and the judge found that iiNet provides a legitimate communication service which is neither intended nor designed to infringe copyright (para.20). Justice Cowdroy is also reported to have remarked that “[i]f the ISPs become responsible for the acts of their customers, essentially they become this giant and very cheap mechanism for anyone with any sort of legal claim.”

The battle may not be over, however, as reports from before the ruling was issued suggest that AFACT may appeal the decision to the High Court of Australia, which could take another two years.

ISP liability in the United States

In the United States, secondary liability for copyright is dealt with as a matter of vicarious or contributory infringement, rather than “authorization” (though the concepts involved are similar). However, ISPs are protected from copyright infringement claims by Section 512(a) of the Copyright Act, which provides that service providers will not be liable for “infringement of copyright by reason of the provider’s transmitting, routing, or providing connections for, material through a system or network controller or operated by or for the service provider.” This section provides strong protection for ISPs, and likely explains why a case such as the one brought against iiNet in Australia has not been brought against a U.S. ISP.

Timeline

The first trial took place in 2007. A jury found that Thomas-Rasset (then simply Thomas) had “willfully” infringed and held her liable for $222,000 in damages. That figure came from a penalty of $9,250 per song, out of the $150,000 per song maximum permitted by the Copyright Act .

Thomas was granted a retrial because of a jury instruction that making a copyrighted file “available” was sufficient to show infringement. Federal Judge Michael Davis, who presided over the first trial, came to believe after appeal that his jury instructions were incompatible with Eighth Circuit precedent. Citing National Car Rental System, Inc. v. Computer Associates International, Inc. (8^th Cir. 1993), Judge Davis decided that the plaintiff had to show that defendant actually shared a file with a third party, rather than simply making the file available for sharing.

In the second trial in 2009, Judge Davis set aside a jury award of $1.92 million, calling it “monstrous” and pointing out that Thomas-Rasset did not make a monetary profit from her infringement. Davis reduced the damages to $54,000, allowing the parties to accept the award or proceed to a third trial.

The RIAA not only accepted the damages, but reduced them further in a settlement offer of $25,000. The RIAA’s terms allowed Thomas-Rasset to pay the award in installments to a fund for musicians. As a condition for the settlement, the RIAA said the judge would have to vacate his remittur (reduction) of the jury award.

Thomas-Rasset’s lawyers have announced her intention to reject this and any other settlement offer that requires her to pay damages. The RIAA’s deadline for accepting the offer was last Friday, January 29^th.

Issues

The major issue raised in this case is the constitutionality of the awards against Thomas-Rasset—and, by implication, future file-sharers like her. She intends to challenge the constitutionality of not only the $1.92 million jury award in the second trial, but also the judge’s reduced award. Even the reduced award, her lawyers contend, is unconstitutionally excessive: it is 2,250 times the usual $1 price of a downloaded song.

The RIAA is adamantly opposed to any finding that the judge’s awarded damages are unconstitutional. Moreover, the RIAA is trying to vacate the judge’s remittur because it is keen to prevent any precedent allowing judges to reduce jury awards in copyright infringement cases. That is why the vacature (making the original judgment legally void) of the remittur was the sole—and firm—condition of its settlement offer. For its absolute insistence on this point, the RIAA has been accused of bullying. Joe Sibley, one of Thomas-Rasset’s attorneys, recently described the situation as the RIAA trying to “scare” people into paying “exorbitant” damages. Nevertheless, the RIAA continues its attempt to vacate the remittur and thus keep the legal door open for million-dollar damages awards in file-sharing cases.

This trial raises another issue, namely what exactly it takes to prove infringement against a particular individual. Proving that songs were shared from a particular computer or IP address is often simple. However, proving that a particular user of that computer was the infringer is a different matter. Here, the files were shared from Thomas-Rasset’s password-protected computer at her IP address, using a username she had used for a number of years. The two juries evidently found this compelling evidence of Thomas-Rasset’s guilt, although Thomas-Rasset’s lawyers argued that anyone could have used the computer and username in question. Judge Davis was not convinced by and did not approve of Thomas-Rasset’s attempts to suggest that her children or ex-boyfriend infringed using her computer. The defense lawyers argued that alternative explanations were possible, and that MAC and IP addresses (identifiers for a particular computer that are transmitted during file-sharing) can be spoofed, though they offered no evidence that this had happened here.

Possible Future Developments

Wired recently described the RIAA as “winding down” its lawsuit campaign against file-sharers and shifting its efforts to getting internet access to infringers cut off. But there are still loose ends. Thomas-Rasset insists on going to a third trial rather than accepting a settlement. Therefore, it is still unclear whether there will be the precedent of a judge setting aside a jury award in a copyright infringement case will stand. That will depend on the outcome of the third trial.  Additionally, Thomas-Rasset’s challenge to the constitutionality of the judge’s award is still unresolved.

Furthermore, a second infringement case with a U.S. defendant also went to trial in July 2009: the recording industry’s suit against Joel Tenenbaum. The jury held Tenenbaum liable for $22,500 per song; since he was found to have infringed 30 songs, this amounted to $675,000 in damages. The judge finalized the jury award in December 2009. Like Thomas-Rasset, Tenenbaum is challenging the award’s constitutionality. Anyone who has ever shared a song using BitTorrent, Kazaa, or LimeWire should probably pay attention to what happens next.

• Twitter is a source of evidence for a murder charge, reports the New York Daily News.  But could those tweets be copyrighted?  Law.com’s Law Technology News weighs in.

• The Electronic Frontier Foundation provides a good, link-heavy analysis of the unanswered questions surrounding Google’s decision to stop censoring their Chinese services.

• For some reason, Psystar keeps fighting Apple, posts Gizmodo.

• Custom and Border Protection’s laptop searches may have gone too far, as revealed in a series of Freedom of Information Act requests for documents, reports Gizmodo.  EFF is looking for potential plaintiffs.

• The Wall Street Journal Law Blog analyzes how advances in medical science have impacted the rights of surrogate mothers.

• IBM gets the more U.S. patents than any other company for the 17th consecutive year, says MSN’s Moneycentral.  But Microsoft’s much smaller patent portfolio is worth more, reports The 271 Patent Blog.

• The Prior Art offers a fascinating look into the jury’s decision in i4i v Microsoft, complete with juror interviews.

• Chief U.S. District Judge Vaughn Walker in San Francisco decided to allow showing the trial challenging California’s Proposition 8 on YouTube, reports the San Francisco Chronicle.  The Wall Street Journal Law Blog questions whether that’s a good thing.

• Patent Librarian notes that Wikipedia citations in patent applications are up 59%, but Patently-O puts that increase in perspective.

• A report commissioned by the French government recommends taxing Google on their online advertising revenues in France to help fund legal outlets to buy media hurt by online piracy, reports the Mercury News.  President Sarkozy supports the measure, says PC World.

• The Wall Street Journal reports that Philip K. Dick’s estate claims Google infringed on its intellectual property by using the name “Nexus One” for the new Google-branded phone.  It brings to mind this recent post by Seth Godin.

• The Electronic Frontier Foundation responds to Bono’s recent New York Times Op-Ed, in which the musician / global icon lamented media piracy and suggested digital tracking be used to help criminal enforcement.

• Law.com provides an insightful guide to mining web 2.0 as a source of evidence.

• The Colorado Department of Transportation created an iPhone app to tell users if they’re too drunk to drive, the latest in a series of state efforts “to reach out to the Twitter-iPhone-Facebook generation,” according to the Wall Street Journal.

• The Ninth Circuit Court of Appeals affirmed [decision, pdf] a district court ruling that tasers should only be used in limited circumstances, as they pose a greater threat to their targets than other non-lethal police weapons.  The San Jose Mercury News reports on the suit that originated from a city police officer using a stun gun on a San Jose State student.

• Broadcom agreed to settle the securities fraud class action against it, says the Wall Street Journal Law Blog.

• The L.A. Times reports that the California Science Center has been sued for canceling a showing of film attacking Darwinian evolution and promoting intelligent design.

• Blizzard helps police make a drug arrest of a suspect tracked by his World of Warcraft account, posts kokomo perspective.

• Patent Docs reviews Senator Patrick Leahy’s proposals for patent reform.

• Third Circuit gives “Spam filter ate my filing notice” excuse a second chance, from the Technology & Marketing Blog.

• EFF sues to find out how the government spies on us using social networks; Indiana University students makes a Freedom of Information request to find out much the big telcos charge the government to spy on their networks, says Wired.

• The New York Times opines in favor of the Empire State’s decision to collect sales tax on online purchases from out-of-state retailers delivered in New York.

• Lazy IP enforcement leads to prosecution of the wrong guy, who makes a big deal out of it, says Ars Technica.

• FTC isn’t done with Intel yet, now looking into anticompetitive behavior with regard to Nvidia, reports BusinessWeek.

• Google to end free access to subscription news, blogs Gizmodo.

• And for an international perspective: BioTechBlog reports on IP and the biotech industry in India.

The Anti-Counterfeiting Trade Agreement

ACTA is a proposed agreement between the United States, the European Union, Australia, Canada, Japan, Singapore, Morocco, Mexico, the Republic of Korea, New Zealand, and Switzerland. The purpose of the agreement is to combat the spread of counterfeit goods, including software and information technology.

All states that have been party to the negotiations know the details of its provisions. Additionally, ACTA proponents in the recording industry, critics at Public Knowledge (home page), as well as some internet providers and electronics companies have been given the text of the agreement. Yet despite this information-sharing among the key players, the actual text of ACTA is still a “properly classified” secret—a state of affairs that has sparked ire and curiosity among those watching its progress.

The Obama administration claims to be keeping the text a secret for reasons of national security.  The White House denied a Freedom of Information Act request for the text of ACTA by Knowledge Ecology International in March 2009. This follows the Bush administration’s decision to deny a similar FOIA request by the Electronic Frontier Foundation and Public Knowledge in early January 2009. EFF and Public knowledge later dropped their suit, finding it futile.

As the MPAA memo shows, proponents argue that ACTA is a reasonable—indeed, a necessary and overdue—response to increased global piracy. They argue that the entertainment and recording industries will suffer tremendously if this piracy is allowed to continue, and that ACTA is a win-win solution for creators, copyright owners, and consumers. The Office of the United States Trade Representative (USTR) ACTA Fact Sheet (pdf) also points to physical threats to health and safety from counterfeit medical supplies, as well as alleging the economic dangers of Internet piracy.

Controversial Aspects

ACTA opponents point to public comments and leaked documents that suggest problematic aspects of the proposed agreement. Although the secrecy of ACTA negotiations prevents any precise legal analysis of its terms, particular concerns have emerged among ACTA critics.

Leaked documents suggest ACTA proponents want the agreement to “encourage” ISPs to “cooperate” with copyright holders in removing infringing materials. There are no specifics on what this cooperation means or how it will be encouraged. However, the Electronic Frontier Foundation notes that ACTA-supporting copyright holders are the same people who want Internet providers to terminate customers’ Internet access after repeated allegations of copyright infringement. These ACTA supporters also want to make network-level filtering mandatory for Internet providers, which would involve deep packet inspection (looking at the data of Internet transmissions) of customers’ communications. These measures have serious privacy implications because Internet providers would have to look closely at the actual content of their users’ communications. There are also due process issues. Would a copyright-holder have to prove infringement in court to get an Internet provider to cut off service to an alleged repeat offender? Or would a complaint from a copyright-holder be enough?

ACTA might also create greater border search power, which has inspired fears of inspectors seizing travelers’ iPods filled with downloaded songs.  Participants in ACTA negotiations have sought to allay these fears by saying that ACTA will not target personal use of iPods and computers. The ACTA Fact Sheet contains a statement that ACTA’s focus is on large-scale infringement and does not require searching personal iPods or laptops.

ACTA critics also have more generalized concerns. First and foremost, as Public Knowledge argues, is the secrecy of the ACTA proceedings.  The USTR denies any secrecy in the fact sheet linked above, pointing out that preliminary negotiations were announced and that the USTR asked for comments from the public. However, it is undeniable that proposed provisions have been kept secret and even been declared classified. Another concern is that ACTA will not actually be a treaty. Instead, it will be an “executive agreement,” which means it will not require Congressional approval. Finally, critics fear ACTA will be used as leverage to pass expansive domestic copyright legislation.

While ACTA may be controversial and scary to many, its supporters show little sign of slowing.

ACTA Timeline

The 6th round of ACTA negotiations took place November 4-6, 2009. Representatives from the various countries agreed to meet again for another round in January 2010. They aim to conclude the agreement “as soon as possible” in 2010.

For More Information

• ACTA Summary of Key Elements Under Discussion, from the Swedish Presidency of the European Union (document link at top of right sidebar)
• Comments filed with USTR by various organizations of differing views on ACTA
• EFF’s ACTA page
• The Free Software Foundation’s ACTA campaign (ACTA critics)

By Anjali Bhat and Paul Sullivan.

Background

Apple was not always hostile to clones. In fact, from 1995 to 1997, Apple  licensed several companies, such as Power Computing, to build and sell Mac clones. But this era came to a close when Steve Jobs returned to the company in 1997, and Apple has not granted a license to produce clones since. In April 2008, Florida-based Psystar, Inc. began selling computers on which it had installed modified copies of OS X. Apple, not surprisingly, quickly filed suit alleging a veritable laundry list of state and federal claims. Apple recently moved for summary judgment on its copyright infringement, DMCA violation, and contributory infringement claims.  The court granted Apple summary judgment on all three claims.

Copyright Infringement

Apple alleged that Psystar had infringed upon its two registered copyrights in Mac OS X by violating its reproduction right, distribution right, and right to create derivative works.

Apple’s reproduction right

Under 17 U.S.C. § 117(a), an owner of a copy of a computer program may copy or modify that program for limited purposes. Though it is doubtful that Psystar’s use was the sort covered by this exception, the court did not need to consider this because it found that Psystar waived the defense by neglecting to plead it in their answer. The court also denied Psystar the defense of “fair use” under 17 U.S.C. § 107 because Psystar failed to address the four factors used to determine fair use. (These factors are: the purpose and character of the use, the nature of the copyrighted work,  the amount and substantiality of the portion taken, and the effect of the use upon the potential market.)

Apple’s distribution right

The first sale doctrine, codified under 17 U.S.C. § 109, is the right of the purchaser of a copy of a copyrighted work to then sell that particular copy of the work without the authorization of the copyright owner. Though Apple was not willing to concede that Psystar, or anyone for that matter, could own a copy of Mac OS X rather than a license to use it, the court assumed for the sake of argument that Psystar did own the initial copy they purchased. Even under this assumption, Psystar’s use was a violation of Apple’s distribution right because it made unauthorized copies for distribution.

Apple’s right to create derivative works

Defined in 17 U.S.C. § 101, a derivative work is work based upon a preexisting work which itself represents an original work of authorship. The court found that Psystar violated Apple’s exclusive right to produce derivative works when it made modifications to Mac OS X to get it to run on non-Apple hardware.

Contributory Infringement

In addition to Psystar’s direct copyright infringement, the court found that Psystar committed “contributory infringement.” Contributory infringement occurs when an individual or entity induces or encourages others to infringe a copyright. The court found that Psystar was accomplishing this by selling machines to the public with its unauthorized copies of Mac OS X installed.

Violation of the DMCA

Section 1201(a)(1)(A) of the Digital Millennium Copyright Act makes it a violation of the act to “circumvent a technological measure that effectively controls access to a work protected under the title.” The court found that Psystar violated this section of the statute when it used decryption software to circumvent the security measures Apple built into Mac OS X to prevent it from running on non-Apple computers. Furthermore, Psystar also violated § 1201(a)(2), which prohibits trafficking in technology designed to circumvent protections on a work covered by the act, by marketing the computers featuring its hacked version of OS X. If this weren’t enough bad news for Psystar, the court also found that every time a computer with their circumvention installed was turned on they committed yet another violation of the DMCA (§1201(b)) by creating another copy of their modified OS X in the computer’s memory.

Copyright Misuse – Psystar Grabs At A Straw

In its cross-motion for summary judgment Psystar claimed that Apple was guilty of copyright misuse. Copyright misuse can be understood as a legal cousin of antitrust violation (a theory already proposed by Psystar and rejected by the court). Copyright misuse occurs when a copyright is used in a way that violates the public policy embodied in copyright law. This is a rather nebulous concept, which the court acknowledged, but the line demarcating misuse in the case law seems to be that a licensing agreement for use of a copyrighted work cannot go so far as to attempt to control competition outside the copyright. The court illustrated such an overreaching licensing agreement by citing the  Fourth Circuit case of Lasercomb America v. Reynold, Inc., 911 F.2d 970 (4th Cir. 1990). In Lasercomb America, Lasercomb sold a software program on the condition that buyers agree to noncompete language which would prohibit them from developing their own software in that area. Apple’s refusal to allow OS X to be installed on non-Apple machines is distinguishable because it seeks only to control the use of their own software and is therefore not a violation.

Moving Forward

Apple hasn’t yet filed a motion on its non-copyright claims—breach of contract, induced breach of contract, trademark infringement, trademark dilution, trade dress infringement, state unfair competition, and common law unfair competition—which remain for trial.  Additionally, Apple hasn’t asked for a permanent injunction yet, but it seems inevitable at this point.  As of November 21, 2009, “Hackintosh” computers can still be purchased on Psystar’s website.

The full text of the summary judgment order is available here.

By Ben Liebowitz and Michael Holloway

The Exclusive Rights of the Artist

Copyright law in the United States is authorized by Article I, Section 8, Clause 8 of the United States Constitution and codified in Title 17 of the United States Code. Copyright applies to “original works of authorship fixed in any tangible medium of expression,” “musical works, including any accompanying words,” and “sound recordings,” among other things.³ The bifurcation of “musical works” and “sound recordings” can be confusing for copyright novices. For the purposes of copyright, composing music, i.e. coming up with a melody and accompanying lyrics and committing them to paper entitles one to a right in that composition. When the song is played and recorded, a separate copyright is created that applies to the recording itself, distinct from the underlying composition. The same person may have the copyright to the composition and the recording, or they could be held by a separate composer and performer.

These two copyrights bestow slightly different sets of rights on the holders. Composers of musical works have the right to a fee (set by statute) for every copy of a recording of their work produced⁴, and an exclusive right to public performance of their work, whether live or on a recording.⁵ Copyright holders for sound recordings have the exclusive right to control reproduction⁶ and distribution⁷ of their recording, but not over the public playing of the recording.⁸ There is an exception – if the public performance involved a digital audio transmission, then the performer needs to clear rights for the sound recording pursuant to 17 U.S.C. § 106(6).⁹

So how does all this apply to John McCain? Let’s start with the rallies. If we assume that McCain’s campaign legally obtained a copy of “Barracuda,” then no rights pertaining to the recording itself are infringed when it’s played at a rally. However, the campaign is on the hook for publicly performing the underlying musical composition: it is the Wilsons’ exclusive right to grant the campaign a license. Had McCain’s aides or a cover band performed the music live, he still would have needed to get the permission of the songwriters. This is the same right your high school chorus and college a capella groups had to (ostensibly) clear before adding a copyrighted song to their repertoires. Based on the artists’ after-the-fact reactions, it seems likely that had the McCain campaign approached each one of the aforementioned artists to seek a license to publicly perform their work, the answer would have been no. But the McCain campaign secured permission through another route: a license from ASCAP, as explained below.

In the case of television or web-hosted videos, the campaign would also have to clear sound recording rights (because the recording is being reproduced in their motion picture work), in addition to the public performance license they would have already secured from ASCAP.

ASCAP and Copyright Collectives

ASCAP (American Society of Composers, Authors and Publishers) and BMI (Broadcast Music Incorporated) are the largest copyright collectives in the United States. A copyright collective serves two primary functions: it assists the copyright holder in monitoring violations and enforcing their copyrights, and it assists an entity wishing to use copyrighted material in identifying copyright holders and negotiating licenses with them.¹⁰ Copyright holders give authority to the collective to licenses their works, enforce their copyrights, collect royalties, and redistribute those royalties to the copyright holders. One type of license, the kind that the McCain campaign presumably obtained from ASCAP, is a “blanket license”, which gives the licensee the right to perform any work from their entire catalog.¹¹

Assuming McCain’s campaign obtained the correct license for the venue, it has the right to play any song in ASCAP’s catalog. Generally, once a copyright holder signs with ASCAP, ASCAP must grant a license to whomever pays the appropriate fee, without regard to whether the copyright holder themselves would choose to grant a license to a potential licensee.¹²

This kind of licensing is not the same as playing a song under a claim of “fair use.” Under “fair use,” no license is sought.Instead, the user of the copyrighted work claims that he or she should not need to seek permission, based on a four-factor test in the Copyright Act.¹³ In contrast, the McCain campaign has purchased rights to the music it wishes to use—rights which the copyright holders, like the Foo Fighters, placed in the hands of ASCAP.

While the McCain campaign’s decision to obtain an ASCAP license has allowed them to keep playing “Barracuda” and “My Hero” over the objections of their composers, it exposes a deficiency in the law. The rationale behind ASCAP was to reduce transactional costs for broadcasters like radio stations who would otherwise have to obtain rights from every artist they played – a time consuming and expensive process. By paying ASCAP, the McCain campaign avoided negotiating with each artist whose work they wanted to use. Assuming the campaign plays enough music to justify paying for a license to ASCAP’s entire catalog, an additional benefit is that this gets around the fact that the artists themselves won’t give a license. This privileges deep-pocketed parties by creating a de facto compulsory license for licenses bought in bulk, while a party with limited resources has no recourse if rebuffed by the individual copyright holder. If the intended policy benefit of this system was to create public access to artists’ works, it does so only on a limited, expensive basis.

Back to the case at hand: if a court ruled that McCain had violated the copyright of the artists (let’s say one of the songs the campaign used wasn’t in the ASCAP catalog), what would he be liable for? Copyright holders can sue for damages, encompassing either the profits made through the infringement or (more relevant here) statutory damages.¹⁴ Statutory damages range between $750 and $30,000 per infringement, at a judges discretion, and can be raised to $150,000 if the infringement is “willful.”¹⁵ Costs and attorney’s fees can also be awarded to the successful filer of an infringement suit.¹⁶ Thus, if McCain did not hold a license to use the works in question, his campaign could be held liable for as little as $750, or as much as $150,000 for each work infringed.

YouTube and the DMCA

McCain’s woes with copyright law didn’t end with music. The campaign also picked a fight with Google over the removal of campaign videos and ads from YouTube. At issue are Google’s responsibilities and McCain’s rights under the Digital Millennium Copyright Act (DMCA). The DMCA, passed in 1998, amended Title 17 of the US Code. One of the most significant provisions of the act, and the one at issue here, was the creation of “safe harbors” from liability for Online Service Providers that hosted infringing materials so long as they abided by certain notification guidelines.¹⁷

The statute provides that a service like YouTube will be safe from liability for hosting infringing content if, upon receipt of a takedown notice, they remove the challenged material in a timely fashion. In order to protect uploaders from abusive takedown notices, the service provider can reinstate the challenged content after a waiting period of 10 business days after receiving a counter-notice from the content uploader if the uploader hasn’t been sued for infringement.¹⁸

The McCain campaign took exception to Google’s removal of campaign ads from YouTube, complaining that the notice-and-takedown regime that YouTube complied with stifled free speech. The campaign requested that YouTube carry out “a full legal review of all take-down notices on videos posted from accounts controlled by (at least) political candidates and campaigns,”¹⁹ including an analysis of whether the challenged material would be covered by a fair use limitation on copyright. McCain’s ads featured excerpts of televised debates and music that drew notices from rights holders, like Warner Music Group, which demanded that YouTube remove a popular McCain ad that featured Frankie Valli’s “Can’t Take My Eyes Off You.”²⁰ Warner is likely the owner of the specific sound recording used in the ad, and asserting its right over the reproduction of the recording made in the ad without its permission.

YouTube responded to the campaign by pointing out that while limiting legal reviews to only official campaign uploads would reduce the burden of reviewing all uploaded content, YouTube, as an intermediary content host, simply was not in a position to perform a substantive legal review of the claims in takedown notices. YouTube Chief Counsel Zahavah Levine noted that “[t]he claimant and the uploader, not YouTube, hold all the relevant information in this regard, including the actual source of any content used, the ownership rights to that content, and any licensing agreements in place between the parties.”²¹

As to assessing fair use, Levine emphasized the uncertainty produced by the complex fact-based balancing test that goes into making a fair use determination, stating that “[l]awyers and judges constantly disagree about what does and does not constitute fair use. No number of lawyers could possibly determine with a reasonable level of certainty whether … videos for which we receive disputed takedown notices qualify as fair use.”²² Levine’s unstated point is that YouTube’s lawyers are being paid to make sure YouTube avoids liability, not make speculative determinations on behalf of its users.

Finally, Levine referred to YouTube’s neutral policies, emphasizing that the company prefers not to favor any category of content or user over another, pointedly adding that “there is a lot of content on our global site that our users find to be equally important [to United States political campaigns], including… political campaigns from around the globe at all levels of government, human rights movements, and other important voices.”²³

A Constant Tension

The McCain campaign’s complaint to Google highlighted one of the central underlying conflicts of copyright: the tension between the exclusive rights of copyright holders and the first amendment’s guarantee of free speech. To the McCain’s campaign, the curtailment of its political speech—one of the most protected and revered categories of speech—was a violation of a fundamental right. University of Virginia Professors Christopher Sprigman and Siva Vaidhyanathan succinctly expressed the sentiment in a Washington Post column: “[u]sing a song to communicate a political message is just the kind of speech the First Amendment was designed to protect.”²⁴ Yet however controversial the results—artists’ songs being used by the candidates they oppose, access to a presidential candidate’s message blocked by a studio that owns the ad’s background music, and the provider of an increasingly important medium for political discourse erring on the side of caution (and maybe censorship) to avoid liability—what we really saw was the current state of the law. Though as Zahavah Levine suggests, perhaps that might change now that a US Senator has felt the practical results of his handiwork, and hasn’t been too pleased.

By Hamilton Falk, Raza Panjwani, TJ Wilkinson and Rajiv Batra

1. One of the authors of this post, being a history major with an affinity for Americana would like to note that presidential campaign songs have a storied history. If you’re capable of recalling your high school American history classes, you may remember that William Henry Harrison’s 1840 presidential campaign got a special mention in your textbook for his campaign jingle, “Tippecanoe and Tyler too.” At some point candidates decided that self-referencing jingles just weren’t doing the trick and turned to popular music. In recent memory, Bill Clinton punctuated the final line of his 1992 convention speech (“and don’t stop thinking about tomorrow!”) by segueing to Fleetwood Mac’s “Don’t Stop.” Bob Dole, on the other hand, got into trouble for riffing on the 60s Motown hit “Soul Man,” using the reprise “I’m a Dole Man” for his 1996 presidential campaign.That earned him a reprimand from the song’s writer, Isaac Hayes.
2. Christopher Sprigman & Siva Vaidhyanathan, Cue ‘Barracuda’, Wash. Post, Oct. 13, 2008, at A21, available athttp://www.washingtonpost.com/wp-dyn/content/article/2008/10/12/AR2008101201630.html.
3. Copyright Act of 1976, 17 U.S.C. § 102(a) (2005).
4. 17 U.S.C. § 115.
5. 17 U.S.C. § 106(4).
6. 17 U.S.C. § 106(1).
7. 17 U.S.C. § 106(3).
8. 17 U.S.C. § 114(a).
9. You can thank the radio station lobby for that exception, since they wanted to only pay once when they played a recording over the air, but didn’t want competition from internet radio stations.
10. Bruce P. Keller & Michael P. Cunard, Copyright Law: A Practitioner’s Guide §4:1:4:C (Incorporating Release No. 9 2007).
11. Id.
12. Harvey Reid, ASCAP & BMI – Protectors of Artists or Shadowy Thieves? (2005), http://www.woodpecker.com/writing/essays/royalty-politics.html.
13. 17 U.S.C. §107.
14. 17 U.S.C. § 504.
15. 17 U.S.C. § 504(c).
16. 17 U.S.C. § 505.
17. 17 U.S.C. § 512(c).
18. 17 U.S.C. § 512(g).
19. Sarah Lai Stirland, Stifled by Copyright, McCain Asks YouTube to Consider Fair Use (2008), http://blog.wired.com/27bstroke6/2008/10/stifled-by-copy.html
20. Id.
21. Letter from Zahavah Levine, Chief Counsel, YouTube, to Trevor Potter, Gen. Counsel, McCain-Palin 2008 (Oct. 14, 2008) (available from Sarah Lai Stirland, YouTube to McCain: You Made Your DMCA Bed, Lie in It (2008) http://blog.wired.com/27bstroke6/2008/10/youtube-to-mcca.html
22. Id.
23. Id.
24. Christopher Sprigman & Siva Vaidhyanathan, Cue ‘Barracuda’, Wash. Post, Oct. 13, 2008, at A21, available at http://www.washingtonpost.com/wp-dyn/content/article/2008/10/12/AR2008101201630.html

What fair use is, and how it works alongside the DMCA

“Fair use” is a doctrine under US copyright law that permits certain acts that might otherwise be considered copyright infringement. Copyright law gives authors the right to exclude others from their work, and can sometimes get in the way of the ultimate goal of copyright, which is to promote progress in art and science. The theory here is that without copyright protections, many artists and authors would be discouraged from distributing their work. The fair use exception allows copyright protections to remain in place while enabling consumers some degree of freedom in their use of purchased media. For example, it was generally understood that ripping CDs for personal use was legal because it fell under the fair use exception. However, fair use was dealt a serious blow with the enactment of the DMCA in 1998 and the widespread use of DRM protections. Indeed, fair use is not a defense to a DMCA claim.

The DMCA specifically prevents someone from “circumvent[ing] a technological measure that effectively controls access to [copyrighted works]” without permission from the copyright owner (17 U.S.C.A. § 1201(a)(1)(A) & (3)(A)). It also prohibits a person from, among other things, making such a tool or offering it to the public (17 U.S.C.A. § 1201(b)(1)). This provision has given content providers the power to take legal action against virtually anyone who tampers with their DRM protections, even those who would have otherwise been protected under the fair use doctrine — often times consumers like you.

A prime example of how courts have used this DMCA provision to strike down a DRM-removing technology involves DeCSS. As you might know, DeCSS removes the DVD content protection, or Content Scrambling System (CSS), essentially enabling anyone with a computer and a little know-how to rip DVDs. In the frequently cited case of Universal City Studios v. Corley 273 F.3d, 429 (2d Cir. 2001), the Second Circuit Court of Appeals affirmed a district court’s ruling that barred Eric Corley — aka Emmanuel Goldstein, publisher of the infamous 2600 hacker quarterly — from making DeCSS available for download on 2600.com, or posting links to other websites offering the program for download. Among other things, the court rejected the idea that DeCSS could be protected under the fair use doctrine, reasoning that fair use is concerned with how one uses a copyrighted work, not how someone obtains the work in the first place. Thus, the court concluded that the right to view a DVD does not create a right to decrypt the DVD.

Because the DMCA doesn’t distinguish between types of media involved or how protections are circumvented, the Corley case will most likely play a role in any future legal battle over DRM-stripping software. So far as FairUse4WM is concerned, the fair use doctrine would appear not give Viodentia (or users or distributors of the program) any protection against alleged DMCA violations, and FairUse4WM could suffer the same defeat in a US court as DeCSS. The European Union has enacted similar legislation to the DMCA, namely the 2001 EU Copyright Directive (EUCD). But Microsoft has admitted that it doesn’t know Viodentia’s location and has recently initiated action with Yahoo and Google to investigate. Legal defeat, however, has not at all magically eliminated the availability of DeCSS on the web. This may give some insight as to how effective current legal relief in the US will be once internet users take hold of a desirable new technology.

Have we seen the end of fair use? Current law still leaves a little wiggle room. While programs specifically designed to circumvent copyright protections have little chance of overcoming the DMCA, manual workarounds may still be legal. For example, most downloadable music services (begrudgingly) allow users to burn audio CDs from the music they buy. Doing so also strips the files of their DRM, but because users have permission to copy to CD, this use is acceptable under the DMCA. Re-ripping the CD back into unprotected audio files for personal use is probably acceptable under fair use or by some other right (the RIAA allows copying of CDs for personal use but not because of fair use). Whether courts would view this multi-step process as DRM “circumvention” under the DMCA has yet to be seen.

So where will the line between fair and illicit use eventually be drawn? The current legal incongruity between manual DRM workarounds and blatant DRM hacks reflects the questionable post-DMCA state of the fair use doctrine. Will this be enough to encourage lawmakers and courts to rethink their position on the DMCA? Only time will tell.

Microsoft takes legal action

On September 22, Microsoft filed a complaint against “John Does 1-10, a/k/a ‘Viodentia’,” alleging that Viodentia created and distributed software, FairUse4WM, that incorporates code from Microsoft’s Windows Media Format SDK v. 9.5. Microsoft argues that Viodentia should therefore be held liable for copyright infringement. Filing an action against a John Doe is somewhat tricky in the American legal system; we have an adversarial legal system, and when you file against a John Doe, you’re suing somebody whose identity you don’t know and who’s therefore not represented in court. One of the first steps, then, when suing a John Doe is to find out just exactly who you’re suing. This is done through a third party discovery motion, which needs to be approved by the court. Accordingly, Microsoft filed a Motion for Leave to Conduct Third Party Discovery on September 26.

In granting the motion for third party discovery to identify Viodentia, Judge John Coughenour set explicit limits on who can be subpoenaed and what can be requested. Judge Coughenour allowed discovery against two named e-mail providers, Yahoo! and Google. Microsoft may only look for information that is reasonably likely to lead them to identify the user of the targeted IP address(es). Judge Coughenour also authorized a limited second level of discovery that works as follows: if Microsoft’s Google and Yahoo! discovery uncovers an IP address relevant to the identification of Viodentia, Microsoft is permitted to issue subpoenas to the ISP that operates or issued that IP address in order to determine the identity of the user.

If Microsoft is unable to procure useful information from Google or Yahoo!, or if they run into a dead end at the ISP level, it will need to find some other means of identifying Viodentia. To expand the scope of its search, Microsoft would need to seek and receive further permission from the court. The present order gives Microsoft only 120 days to discover Viodentia’s identity. Although Microsoft can seek a time extension, if it cannot name an actual person in its suit before Judge Coughenour’s patience wears out, the case will likely be thrown out.

If Microsoft does identify Viodentia, the case can proceed. This would entail service of process and would involve thorny jurisdictional questions if Viodentia does not reside in or have sufficient ties to the US. In that case, even if the infringing acts alleged in the lawsuit occurred in the US, unless Viodentia can be prevailed upon to come to the US and be properly served, the case would likely be dismissed on grounds of forum non conveniens (inconvenient forum).

The critical importance of the subpoena power to Microsoft’s case against Viodentia explains the otherwise-mysterious question of why Microsoft has filed a suit for copyright infringement rather than for circumvention of DRM. The subpoena power is a little-noticed feature that the DMCA added to copyright law. In the old days, ISPs often refused to disclose the identities of their users. Then along came the DMCA’s 17 U.S.C. 512(h)(1), which enables a content owner to subpoena an ISP and demand user identities. This is crucial because ultimately, it is the only way to maintain a lawsuit and force a user like Viodentia to stop. But here’s the problem: 512(h)(1) applies only to copyright violation and not to DRM circumvention. If it were only a matter of hacking WM, Microsoft would not be able to use a subpoena to identify Viodentia. Therefore, Microsoft must claim copyright infringement, whether or not that actually is the case.

In the meantime, Microsoft is issuing cease-and-desist letters to websites hosting FairUse4WM, alleging the same copyright infringement as alleged against Viodentia. It remains to be seen if Microsoft will attempt to advance its copyright argument against these websites by filing suit, or whether it will focus its efforts on Viodentia. Since websites hosting FairUse4WM cannot hide behind the fair use doctrine as noted above, those that are within Microsoft’s legal reach will likely heed Microsoft’s threats rather than be ensnarled in a costly legal battle. However, it is important to note that legal defeat has not magically eliminated the availability of similar DRM-stripping programs like DeCSS on the web. This may give some insight as to how effective current legal relief in the US and abroad will be once internet users take hold of a desirable new technology.

Is all of this still relevant if Microsoft intends to turn its back on PlaysForSure? Absolutely. Zune or no Zune, PlaysForSure is supposed to live on for its current partners. What’s more, Microsoft’s case against Viodentia will likely establish important legal precedent for actions against the creators of other current and future DRM-stripping programs. If you thought Microsoft’s lawyers were scary, wait until you see Apple’s.

Legal analysis courtesy of Scott McMillan, Zachary Sharpe, and Trevor Adler. Reposted from Engadget.