Copyright Law Ronald W. Staudt

Class 27December 3, 2013

Today’s plan

ISP Secondary Liability

RTC v. Netcom- pre DMCA

Viacom v. YouTube—DMCA safe harbors

MP3tunes and BitTorrent

RTC V. Netcom facts Erlich connects to Klemesrud's BBS using a telephone and a modem. Erlich then transmits his

messages to Klemesrud's computer, where they are automatically briefly stored. According to a prearranged pattern established by Netcom's software, Erlich's initial act of posting a message to the Usenet results in the automatic copying of Erlich's message from Klemesrud's computer onto Netcom's computer and onto other computers on the Usenet. In order to ease transmission and for the convenience of Usenet users, Usenet servers maintain postings from newsgroups for a short period of time--eleven days for Netcom's system and three days for Klemesrud's system. Once on Netcom's computers, messages are available to Netcom's customers and Usenet neighbors, who may then download the messages to their own computers. Netcom's local server makes available its postings to a group of Usenet servers, which do the same for other servers until all Usenet sites worldwide have obtained access to the postings, which takes a matter of hours. Francis Decl. P 5.

Unlike some other large on-line service providers, such as CompuServe, America Online, and Prodigy, Netcom does not create or control the content of the information available to its subscribers. It also does not monitor messages as they are posted. It has, however, suspended the accounts of subscribers who violated its terms and conditions, such as where they had commercial software in their posted files. Netcom admits that, although not currently configured to do this, it may be possible to reprogram its system to screen postings containing particular words or coming from particular individuals. Netcom, however, took  no action after it was told by plaintiffs that Erlich had posted messages through Netcom's system that violated plaintiffs' copyrights, instead claiming that it could not shut out Erlich without shutting out all of the users of Klemesrud's BBS.

RTC v Netcom- direct liabilityThe court is not persuaded by plaintiffs' argument that Netcom is directly liable for

the copies that are made and stored on its computer. Where the infringing subscriber is clearly directly liable for the same act, it does not make sense to adopt a rule that could lead to the liability of countless parties whose role in the infringement is nothing more than setting up and operating a system that is necessary for the functioning of the Internet. Such a result is unnecessary as there is already a party directly liable for causing the copies to be made. Plaintiffs occasionally claim that they only seek to hold liable a party that refuses to delete infringing files after they have been warned. However, such liability cannot be based on a theory of direct infringement, where knowledge is irrelevant. The court does not find workable a theory of infringement that would hold the entire Internet liable for activities that cannot reasonably be deterred. Billions of bits of data flow through the Internet and are necessarily stored on servers throughout the network and it is thus practically impossible to screen out infringing bits from noninfringing bits. Because the court cannot see any meaningful distinction (without regard to knowledge) between what Netcom did and what every other Usenet server does, the court finds that Netcom cannot be held liable for direct infringement.

ISP Secondary Liability

RTC V. Netcom- pre DMCA case Scientology document left on Usenet

newsgroup after notice from PContributory liability. Landlord?? But here D provides

access, storage, transmission. If D knew in time to stop distribution, its substantial participation in public distribution of postings is enough to establish contributory infringement.

• What is knowledge? Equivocal? Fair use? © notices?

Vicarious liability? Right and ability to control a Q of fact despite huge volume of messages but no proof of financial benefit tied to infringement .

Viacom v. YouTube

Google buys YouTube for $1.65 Billion Denies rumor of $500 million litigation reserve

1 Billion daily video views, 24 hours of video posted every minute

Users register, agree to terms and upload video. YouTube makes copies to convert to Flash format for streaming

Film, TV networks, music, sports all sue Google claiming between 2005-8—79,000 infringing clips on YouTube

How do safe harbor provisions work?

ISP Secondary Liability

DMCA’s 512 shields online service providers Transitory Digital Network Communication System caching Information Stored at Direction of Users

Knowledge, knowledge of apparent infringement Notice and take downNo financial benefitDesignated agent

Information Location Tools

512(k) Definitions(1) Service provider

(A) As used in subsection (a), the term “service provider” means an entity offering the transmission, routing, or providing of connections for digital online communications, between or among points specified by a user, of material of the user’s choosing, without modification to the content of the material as sent or received.

(B) As used in this section, other than subsection (a), the term “service provider” means a provider of online services or network access, or the operator of facilities therefor, and includes an entity described in subparagraph (A).

512(i) Conditions for Eligibility

(1) Accommodation of technology.— The limitations on liability established by this section shall apply to a service provider only if the service provider—

(A) has adopted and reasonably implemented, and informs subscribers and account holders of the service provider’s system or network of, a policy that provides for the termination in appropriate circumstances of subscribers and account holders of the service provider’s system or network who are repeat infringers; and

(B) accommodates and does not interfere with standard technical measures.

512(c) Information Residing on Systems or Networks At Direction of Users

(1) In general.— A service provider shall not be liable for monetary relief, or, except as provided in subsection (j), for injunctive or other equitable relief, for infringement of copyright by reason of the storage at the direction of a user of material that resides on a system or network controlled or operated by or for the service provider, if the service provider—

(A) (i) does not have actual knowledge that the material or an activity using the material on the system or network is infringing;

(ii) in the absence of such actual knowledge, is not aware of facts or circumstances from which infringing activity is apparent; or

(iii) upon obtaining such knowledge or awareness, acts expeditiously to remove, or disable access to, the material;

(B) does 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; and

(C) upon notification of claimed infringement as described in paragraph (3), responds expeditiously to remove, or disable access to, the material that is claimed to be infringing or to be the subject of infringing activity.

512(i)(2) Definition

As used in this subsection, the term “standard technical measures” means technical measures that are used by copyright owners to identify or protect copyrighted works and—

(A) have been developed pursuant to a broad consensus of copyright owners and service providers in an open, fair, voluntary, multi-industry standards process;

(B) are available to any person on reasonable and nondiscriminatory terms; and

(C) do not impose substantial costs on service providers or substantial burdens on their systems or networks.

Viacom v. YouTubeDistrict Court Opinion

SJ for YouTube on all claims of direct & secondary liability- DMCA provides safe harbor D “welcomed” infringing material. But when notices are

received, video swiftly removed General knowledge that infringement is ubiquitous does not

impose a duty to monitor or search for infringment- need to know of specific infringing activity

Replication, transmittal and display fall under 512(c)(1)- “storage at the direction of the user.”

Right and ability to control also requires item specific knowledge

Grokster not applicable to YouTube Termination policy fight – Viacom loses.

Viacom v. YouTube 2012 U.S. App Lexis 6909 (2d Cir. April 5, 2012) NO Summary Judgment on actual knowledge or

awareness of facts and circumstances

DC correctly determined that 512 (c)(1)(A) safe harbor requires actual knowledge or awareness of facts and circumstances of specific and identifiable instances of infringement BUT…

“Upon a review of the record, we are persuaded that the plaintiffs may have raised a material issue of fact regarding YouTube's knowledge or awareness of specific instances of infringement. The foregoing Premier League e-mails request the identification and removal of "clearly infringing, official broadcast footage." The March 2006 report indicates Karim's awareness of specific clips that he perceived to be "blatantly illegal." Similarly, the Bud Light and space shuttle e-mails refer to particular clips in the context of correspondence about whether to remove infringing material from the website. On these facts, a reasonable juror could conclude that YouTube had actual knowledge of specific infringing activity, or was at least aware of facts or circumstances from which specific infringing activity was apparent. See § 512(c)(1)(A)(i)-(ii). Accordingly, we hold that summary judgment to YouTube on all clips-in-suit, especially in the absence of any detailed examination of the extensive record on summary judgment, was premature.”

Viacom v. YouTube 2012 U.S. App Lexis 6909 (2d Cir. April 5, 2012)

NO Summary Judgment on willful blindness § 512(m) limits the willful blindness doctrine because Congress

determined that safe harbors cannot be conditioned on affirmative monitoring by service providers, but “willful blindness” not abrogated.

“The District Court cited § 512(m) for the proposition that safe harbor protection does not require affirmative monitoring, Viacom, 718 F. Supp. 2d at 524, but did not expressly address the principle of willful blindness or its relationship to the DMCA safe harbors. As a result, whether the defendants made a "deliberate effort to avoid guilty knowledge," In re Aimster, 334 F.3d at 650, remains a fact question for the District Court to consider in the first instance on remand.”

Viacom v. YouTube 2012 U.S. App Lexis 6909 (2d Cir. April 5, 2012) Reversed and remanded to reexamine “Control and Benefit”

under 512(c)(1)(B)

“Apart from the foregoing knowledge provisions, the § 512(c) safe harbor provides that an eligible service provider must "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." 17 U.S.C. § 512(c)(1)(B). The District Court addressed this issue in a single paragraph, quoting from § 512(c)(1)(B), the so-called "control and benefit" provision, and concluding that "[t]he 'right and ability to control' the activity requires knowledge of it, which must be [*42] item-specific." Viacom, 718 F. Supp. 2d at 527. For the reasons that follow, we hold that the District Court erred by importing a specific knowledge requirement into the control and benefit provision, and we therefore remand for further fact-finding on the issue of control.”

Requiring item-specific knowledge makes “B” duplicative of “A”- so DC & Defendant are wrong in this interpretation

Plaintiff’s view is also wrong that ability to block and remove = right & ability to control- otherwise ability to do takedown under A would disqualify under B—”something more” required—remand to figure this out….

Viacom v. YouTube 2012 U.S. App Lexis 6909 (2d Cir. April 5, 2012)

“By reason of storage at the direction of the user…” Two types of “service providers”

Transcoding- ok Playback--ok Related videos--ok Syndication of 2000 videos to Verizon??? Remand!

Repeat infringer policy

Grokster theory

Capital v. MP3tunes

Facts MP3tunes – sells independent artists songs Locker storage, Lockersync, deduplication, Sideload…Sideload Plug in…. Index, track

details Take down notices- removes links but no

removal from users lockers.512 (i) repeat offenders

Capital v. MP3tunes Take down notices

Specified songs- indexes & users lockers

Red flags If investigation is required to determine if material is infringing

then not red flags

Benefit and control Lockers same price for infringing and not Users selected link sites- liability would sweep up Google and

Yahoo

Contributory liability for songs in notices that are still in lockers but no direct liability based on de-duplication

Columbia Pictures Industries v. Fung

Facts: film studios accuse Fung sites of inducing infringement (Grokster liability) DC agrees and denies 512 safe harbors Client server and peer to peer networks

Centralized p2p- Napster and eDonkeyHybrid p2p using supernodes- FastTrack used by

GroksterBitTorrent innovations- dot-torrent files –metadata,

publishers, trackers, seeders, leechers

Fung’s role- isohunt improves trackers adding backup, forum, top searches,…

Columbia Pictures Industries v. Fung

DC Fung liable for contributory infringement- inducing

and no 512 a, c or d safe harbors apply

Inducement elements 1 Distribution of a device or product, 2 infringement,

3 object to promote infringement, 4 causation Fung argues Grokster not applicable because he did

not write or distribute BitTorrent or distribute a device or product- held -- Perfect 10 cases apply Grokster inducement to a service so P wins on first element of Grokster test

Columbia Pictures Industries v. Fung

Acts of infringement, object of promoting use to infringe and causation 96% confirmed or highly likely infringing Invites illegal uploads, urges downloads by

messages and posts & no filtering and ad revenue base

Causation caveats– when did D have unlawful purpose…multiple actors unlike Sony and Grokster

512 safe harbors- not impossible here

Columbia Pictures Industries v. Fung

512 safe harbors Fung is not a service provider or conduit

under “a”- Fung not users specifies connections

As to 512(c) and (d), even if Fung’s inducing actions don’t automatically invalidate this safe harbor, Fung had “red flag” knowledge without regard to P’s notice AND financial benefit and control

Review Session Wednesday, Dec. 4

Come with your questions