Friday, July 29, 2005

Immunity for the gun manufacturers?

Let me get this straight: A company can be held liable for making software, but somehow deserves immunity if it manufactures weapons?

The Senate is considering whether a bill designed to shield the firearms
industry from most lawsuits that result from gun crimes should give children and
police the right to sue.

Supporters say the shielding legislation, sponsored by Sen. Larry Craig,
R-Idaho, and backed by the National Rifle Association, is necessary to protect
the gun industry from massive, court-ordered damages that could bankrupt
it.

The comparison between P2P software companies and gun manufacturers
makes a lot of sense to me. Why should we hold them to different standards?
But then, logic is moot when you have the NRA and RIAA on opposite sides of the
fight.

Read the Protection of Lawful Commerce in Arms Act here.

This quote from the NY Times article sums up my thoughts nicely: "Opponents of Craig's bill say no industry should have that kind of legal protection, least of all one that makes and distributes weapons."

(Also posted on Loosely Coupled)

Monday, July 25, 2005

Grokster hearing lineup

In case you haven't seen it, here's the Grokster hearing lineup.

You can also check out the webcast from the committee site, commerce.senate.gov.

Issues Related to MGM v. Grokster

Full Committee Hearing

Thursday, July 28 2005 - 2:30 PM - SR-253

Panel 1:

Mr. Adam Eisgrau
Executive Director, P2P United

Mr. Gregory G. Kerber
Chairman & CEO, Wurld Media, Inc.

Mr. Mark G. Heesen
President, National Venture Capital Association

Mr. Dave Baker
Vice President Law & Public Policy, Earthlink

Mr. Mitch Bainwol
Chairman & CEO, Recording Industry Association of America

Mr. Fritz Attaway
Executive Vice President, Motion Picture Industry of America

Friday, July 22, 2005

Legislating IP

aka The Induce Act blog turns 1 today.

Thanks to all of the great coontributing editors and bloggers for their help.

Thursday, July 21, 2005

Grokster hearing July 28

Public Knowledge reports that there will be a Grokster hearing in the full Senate Commerce Committee will be July 28 at 2:30 p.m. No official word on witnesses, but expect the RIAA to testify, as well as representatives from peer-to-peer companies and some venture capital types.

Wednesday, July 20, 2005

Judge Roberts, the internet and copyright

Yesterday, President Bush nominated D.C. Circuit Court of Appeals Judge John Roberts to the Supreme Court. What effects might this nomination have on internet and IP law?

William Patry looks at Judge Roberts and Copyright. In Judge Roberts' tenure on the DC Circuit, he issued an opinion in one copyright case, Universal City Studios LLP v. Peters, 402 F.3d 1238 (D.C. Cir. April 8, 2005).
The Universal Case was an agency appeal, a staple of the DC circuit diet. MGM and Universal couldn't establish they had complied with the Copyright Office's regulation (37 CFR 252.4) for filing a claim to entitlement to royalties for cable and satellite compulsory license fees. The Office rejected the claims, meaning no royalties. The studios sued under the APA and the Due Process Clause of the 5th Amendment. The district court found no merit and Judge Roberts, writing for the panel affirmed.
Patry finds this opinion to be as "thorough, mainstream, and well-written."

Evan Brown examines Supreme Court nominee John Roberts and the law of the Internet and finds only one case where Roberts sat on a panel (but did not author the opinion),Recording Indus. Assn. of America, Inc. v. Verizon, 351 F.3d 1229 (U.S.App.D.C., 2003). In that case, the court reversed the district court and held that a copyright owner can issue a subpoena to an internet provider in order to disclose the identity of a subscriber under the DMCA only if that ISP actually stores infringing files on its servers. Verizon did not store any files on its servers, so it merely served as a conduit for data transferred between internet users, and the district court should not have issued the subpoenas.

More general discussion about the nomination is available at The Supreme Court Nomination Blog, Think Progress, TPM Café Supreme Court Watch, as well as Underneath Their Robes.

Friday, July 15, 2005

More on illegal linking in Australia

via Technology and IP Business: "Can hyperlinks infringe copyright?"
I think that the ZD net report overstated the actual decision in the cooper case

The judgment makes clear (I think) at para 63 that the hyperlinking as such wasn't the problem. But Cooper was found to have gone beyond mere hyperlinking and actually designed and organised his site to permit and authorise downloading of unlawful copies of recordings.

Linking can be illegal in Australia

An Australian man have been found guilty of copyright infringement for linking to infringing material, even though he didn't host it himself (via Furd). The ISP was also found liable because they did not take affirmative steps to prevent the infringement.

I haven't been able to find a copy of this latest decision, but it would be interesting to see if there was any similarity to Grokster's "Active Inducement" test. This article suggests that the site had "authorised copyright infringement by providing links to illegally copied music files" and that "[d]isclaimers published on the site were insufficient to provide a shield against copyright claims".

(Also posted on Loosely Coupled)

Thursday, July 14, 2005

Guest Post: Oz ISP, employee and principal held liable for copyright breaches

“Oz ISP, employee and principal held liable for copyright breaches”, by Alex Malik

Another day another copyright battle! Australia’s Federal Court has handed down its decision in Universal Music Australia v Cooper (the ComCen case). While no final orders has been made, Justice Brian Tamberlin found for the recording industry applicants on all counts, in what has been described by the recording industry as a “major blow against piracy.”

Following an investigation by Music Industry Piracy Investigations (MIPI) into the website www.mp3s4free.net, Universal Music Australia and 30 other companies, including seven international companies, commenced proceedings against the alleged registrant of the mp3s4free.net domain name, Mr Stephen Cooper, and the internet service provider (ISP), E-Talk Communications (trading as ComCen Internet Services). Proceedings were also commenced against an employee and principal of ComCen.

MIPI proclaimed that this case was “a world first”, being an action not only against an MP3 website, but also against an ISP which provided website access to users, thereby allowing them download unauthorised sound recordings from the site. According to MIPI, “the website (was) … one of the largest of its kind … in the year preceding the commencement of legal proceedings, approximately seven million people visited the website, resulting in over 100 million hits to the website.”

The case was significant because it was the first time the recording industry had accused an ISP of being directly involved in music piracy by allowing its infrastructure to be used for file-trading activities. ComCen unsuccessfully claimed that they were not liable for any copyright infringements because they didn’t host any MP3 recordings on their servers. Further, they claimed that they were not aware of any infringing behaviour associated with the mp3s4free.net website, and were in no position to control the behaviour of their subscribers. His honour rejected these claims.

The court accepted MIPI’s claims that Cooper’s website provided hyperlinks to external websites, which allowed individuals to engage in the unauthorised downloading of sound recordings. The court held that Cooper had “permitted or approved” and thereby authorized the copyright infringement by internet users who accessed the mp3s4free.net website. The court also found that the respondents engaged in misleading and deceptive conduct under section 52 the Trade Practices Act by making false claims about the legitimacy of the MP3 files available through the website, and the rights of consumers to legally download the files.

The website was “user friendly and attractive” and “visitors could readily select from a variety of catalogues of popular sound recordings for download.” The website used an extract from the ARIA charts to demonstrate that many of the latest hit singles were available to users.

Peer to peer, or peerless?

This decision may not necessarily impact on the Australian peer to peer cases currently going forward including the Kazaa case, where the parties are awaiting a judgement, and the Swiftel (Perth) ISP BitTorrent case, which will be heard later in 2005. In the ComCen case users could download from a centralised server. Although the respondents didn’t host the files, the evidence indicated that these downloads could have been switched off by the respondents if they had wanted to do so. The hyperlinks could have simply been disabled. However, Kazaa, BitTorrent and other P2P systems can’t be simply turned off. There is no overriding master switch. They are decentralised systems. There simply isn’t the same level of centralised control as exists with sites like mp3s4free.

The court held that in the ComCen case, Mr Cooper had “sufficient control of his own website to take steps to prevent the infringement.” Another point of difference is that Mp3s4free apparently existed for one reason only – to allow consumers to download music for free of charge and free of restrictions. While infringement is a substantial problem on P2P networks let’s not forget that there are many legitimate uses of P2P networks. P2P networks are used to trade public domain content, licensed content like music and films in return for the payment of a fee, or free the personal content, like blogs and other private writing.

Any long term value in the judgement?

Despite the decision in their favour, the recording industry’s celebrations may be fleeting. On January 1, 2005 the Australian/US Free Trade Agreement (FTA) took effect. Under the FTA so-called “safe harbour” provisions were inserted into the Copyright Act. The effect of these amendments was to provide a defence for internet service providers excluded liability for damages for copyright infringement upon certain conditions.” The FTA provisions create four safe harbours for carriage service providers. These cover the transmission, caching, hosting and referencing of infringing materials. Eligibility for safe harbour protection is depends on fulfilling certain obligations including in same, cases the removal of content stored or cached material, or the termination of customer accounts.

This case was decided on the basis of the law as it existed prior to the FTA amendments, so this case may not be a useful precedent with respect to ISP conduct after January 1, 2005.

The position of ISPs may further be further complicated by the forthcoming ISP’s Code of Conduct which the Internet Association of Australia (IIA) has been working on with copyright holders. According to the IIA, it is moving to finalise an industry code of practice “for ISPs, webhosts and other 'carriage service providers' in relation to copyright in online content.” Such a code may include the principles for the issue of takedown notices and related matters.

32 months and counting

The ComCen case has had a lengthy and expensive looking history. This case commenced with the execution of Anton Piller orders made by Justice Emmett on October 17, 2003. The Anton Piller raids were conducted by the recording industry. The execution of the Anton Piller order followed a MIPI investigation which had commenced in November 2002. In effect, nearly 3 years of work, time and effort has gone into this court case.

Anton Piller raids involve the execution of civil search and seizure warrants by private enforcement units, and have been used by the recording industry in other leading cases, including the current Kazaa case. Anton Piller raids have been described by some critics as being “draconian” and “excessive and heavy handed.”

Since 2003 the parties have been to court with respect to this matter numerous times. For example, the case proceeded from October 25 to 29, 2004, and from February 7 to 11, 2005. In a related hearing, in January 2005 the Federal Court allowed MIPI to continue its search of Comcen's computers and servers after it was alleged that the ISP refused to let forensic investigators gain access to its facilities.

During the course of proceedings, the applicants and respondents were represented by a QC, 2 SCs, 9 barristers and 4 firms of solicitors. The costs associated with these proceedings were probably very high. I wonder how much money was spent in this case, and I wonder if the record companies consider it money well spent despite the recent legislative changes.

Daniel and the recording industry

Initially, Mr Cooper the first of the respondents was unrepresented, and in the judgement his honour thanked counsel for stepping in to assist Mr Cooper in what was “a complex case.”

ComCen was also only a small ISP. With only eight employees ComCen was certainly no Telstra or Optus (Australia’s two largest ISPs). The ISP operated out of Camperdown, a small suburb not far from the centre of Sydney, while Mr Cooper was based in Queensland. It is likely that a case against a small ISP was viewed by the recording industry as its best opportunity to push for a “test case” with a satisfactory result. The respondents also lost the public relations war, which seems to becoming increasingly important in modern copyright infringement cases.

Conclusion

The decision in the ComCen case appears to raise more questions than it answers, especially for ISPs.
· What is the current legal position of Australian ISPs with respect to the conduct of their subscribers?
· What is the current legal position of Australian ISP employees and managers with respect to the conduct of ISP subscribers?
· Do Australian ISPs have a duty of care to ensure that their subscribers do not contravene the Copyright Act?
· If so, does this duty of care extend to other forms of illegal conduct?
· What about the privacy of ISP subscribers?
· Will ISP subscribers have to vet the contents of their website in advance, in order to satisfy their ISP that no legislation has been infringed?
· Will personal subscribers have to submit their “blogs” to their ISPs in advance in order to satisfy their ISP that the blog does not contain any defamatory statements which could result in ISP liability?

The case has been decided, but the law is certainly not settled. With clenched teeth and shaking heads, we wait for the next one …

1. Alex Malik is a lawyer, music industry commentator, and academic researcher at the University of Technology in Sydney. From 1997 to 2000 he was a Senior Legal Officer at the Australian Communications Authority, based in Canberra. From 2000 to 2002 Malik's was ARIA's Legal Counsel. In 2001 Malik participated in the Consultative Forum of the Copyright Law Review Committee examining Copyright and Contract, representing ARIA, PPCA and IFPI. Malik is currently undertaking a PHD in law, with a specialisation in copyright law in the digital age. He can be contacted at Alex.Malik@student.uts.edu.au.
2. http://www.iia.net.au/codes.html
3. http://www.iia.net.au/news/050501.html

Tuesday, July 12, 2005

Senate licensing reform hearing reports and testimony

Frantic studying for the Bar is keeping me from actually reading any of this, but here are a couple of blog posts about today's Senate Judiciary Committee hearings on Music Licensing Reform. The Committee page now has links to the prepared statements from the witnesses.

Cathy Kirkman, Silicon Valley Media Law Blog: Senate hearing continues debate on music licensing reform: "More testimony about reform of the Section 115 compulsory license was given today, this time before the Senate Judiciary Committee's Subcomittee on Intellectual Property. Several parties opined that removing the impediments to licensing of online services is a necessary step to provide legitimate services to consumers and thereby reduce piracy, and that the Grokster decision provides a window of opportunity to move forward in this manner."

Frank Field, FurdLog: Music Licensing Hearing Statements Posted.

Keep an eye on this

lawsuit.

Monday, July 11, 2005

Innovation in the Post-Grokster Era

Many, including myself, initially thought the unanimous Grokster decision was a disaster for innovation. Some still claim it will significantly chill innovation as nuances of the inducement test are fleshed out in litigation, but it's not the clear disaster that we once thought.

As I mentioned briefly in that latter post, I don't think it dramatically affects the landscape for real innovators. In fact, it just might be the best decision they could have reached. The fact is, the bad actors are going to be punished, whether by a Court-created rule or legislation. If the Supreme Court decision let Grokster and StreamCast off, Congress would have stepped in with what would certainly have been much broader than the active inducement test.

More significantly, the decision decouples the underlying technology from the intentions and actions of the creators. The decision is not an indictment on peer-to-peer software itself. The way I see it, it just means that bad actors can't hide behind the guise of innovation.

Judging from two recent announcements in the peer-to-peer space, it seems those chilling effects might be somewhat exaggerated.

Opera Browser recently announced native support for BitTorrent files. Kevin suggested that this was a hitlist nominee, but I disagree. In fact, I don't think they would have liability under inducement even if Bram Cohen was found liable. The fact is, because this test considers the behavior of the actors as well as the technology, we can reach different results for two companies distributing identical software. And that's a good thing. Christian Krogh, Opera's VP of engineering, puts it very well in the article: "Viewing it as a download protocol, in the same way as you can view HTTP and FTP, it seems like a normal extension of the capabilities of a browser."

Microsoft has even ventured into the peer-to-peer space, announcing what it claims is a better BitTorrent. Of course, while Microsoft Research is responsible for many of the innovations that come out of Redmond, it doesn't mean Microsoft will release this as a consumer product.

The point is, innovation is still happening, and I would argue that it is not despite the Grokster decision but because of it. As much as we might complain about the ambiguity of the inducement test, it demonstrates a desire to protect the well-meaning innovator.

(also published on Loosely Coupled)

Senate hearing on licensing reform

Tomorrow, the Senate Judiciary Committee Subcommittee on Intellectual Property will hold a hearing about Music Licensing Reform.

These people are expected to testify:
PANEL I

Marybeth Peters
U.S. Register of Copyrights
Washington, DC

PANEL II

Rob Glaser
Chairman and CEO
RealNetworks, Inc.
Seattle, WA

Rick Carnes
President
Songwriters Guild of America
Nashville, TN

Glen Barros
Pres and CEO
Comcord Records
Beverly Hills, CA

Marilyn Bergman
President and Chairman
American Society of Composers, Authors and Publishers
New York, NY

Ish Cuebas
Director of Merchandising Operations
Trans World Entertainment
and
Co-Chairman of the Media on Demand Task Force Corporate Circle
National Association of Recording Merchandisers
Albany, NY
For those in DC, it will be at 2:30 p.m. Senate Dirksen Building, Room 226. Otherwise, it will be webcast.

Previously: House hearings on music licensing reform and more on compulsory licensing reform.

Friday, July 08, 2005

Hit List Nominee

Opera Browser

Thursday, July 07, 2005

Grokster Hearings

Public Knowledge reports that the Senate Commerce Committee will hold a Grokster-related hearing July 14, and that the Technology, etc., subcommittee, will have its own hearing on the same topic July 28.

Friday, July 01, 2005

Rip, Share & Burn

From Findlaw's Writ: HOW MGM V. GROKSTER BENEFITS INFORMATION TECHNOLOGY COMPANIES
U.C. Davis law professors Anupam Chander and Madhavi Sunder explain some of the positive implications of the Supreme Court's MGM v. Grokster decision for technologies -- and potential future technologies -- whose status would otherwise have been uncertain. Chander and Sunder note that at the same time that the Court gave the go-ahead to the suit against Grokster itself, it also made future suits against inventions such as the iPod harder to bring. It did so by clearly rejecting media industries' desired standard for contributory copyright infringement, as Chander and Sunder explain.