Today, House Judiciary Committee Chairman Bob Goodlatte (R – Va.) announced that the Judiciary Committee will conduct a comprehensive review of US Copyright Law in the coming months. In remarks made by the Chairman, he said: “The goal of these hearings will be to determine whether the laws are still working in the digital age.”
He also indicated that Maria Pallante testified last month before the Committee about her desire for the “next great copyright act.” New policy issues have arisen due to the advance of technology.
This is probably the start to a big policy review of Title 17 – the larger copyright act that includes the DMCA. The DMCA will probably be a major topic of discussion and reform (hopefully only in connection with the anti-circumvention provisions).
The statement from Goodlatte can be found here.
The long-awaited decision in the Viacom case against YouTube has finally been resolved in favor of YouTube. The Second Circuit opined in April of 2012 that the DMCA safe harbor protected YouTube against liability for copyright infringement when it stored Viacom’s copyrighted protected content on YouTube’s servers. The Court remanded the case to the lower court for a decision on 4 open areas of inquiry, as follows:
1. Did YouTube have knowledge or awareness of specific infringements?;
2. Was YouTube wilfully blind to specific infringements?;
3. Did YouTube have the “right and ability to control” infringing activity (and therefore forfeit the DMCA safe harbor)?; and
4. Did YouTube’s “syndication” of infringing clips occur at the direction of users to store the clips on YouTube’s servers?
Here is how the Court ruled as to each point.
1. Did YouTube have knowledge or awareness of specific infringements?
Viacom argued that it is not up to Viacom to figure out if YouTube has stored infringing content without the permission of Viacom. The Court said that this argument’s “foundation is an anachronistic, pre-DMCA concept”. In fact, the DMCA makes it clear by its own terms that it is the responsibility of the content owner (Viacom) to to discover infringing content and to send a DMCA Notice to YouTube. The judge believed that Viacom’s attempt to shift the burden to the ISP to police and monitor for infringing content was “extravagant” and contradicted the statutory language of the DMCA.
2. Was YouTube wilfully blind to specific infringements? Did YouTube have the “right and ability to control” infringing activity (and therefore forfeit the DMCA safe harbor)?
The Court reiterated that under section 512(m) of the DMCA, the safe harbors are not conditioned on affirmative monitoring or policing by the ISP to look for infringing material located on its servers. The Court emphasized that the ISP may be “blind” to specific infringements which would constitute “red flags” of specific infringements and therefore deprive the ISP of the safe harbors. The concept is that a service provider, even without knowledge of specific infringing activity, may so influence or participate in a user’s infringing activity, while gaining a financial benefit from it, as to lose the safe harbor. Under what circumstances can this happen?
In the Ninth Circuit, what is required is “high levels of control” over the activities of the users or “purposeful conduct” regarding the activities of the users. In at least one case, an ISP pre-screened submissions before allowing them to be posted, refused to allow postings until and unless all of its prerequisites have been met, rendered extensive advice to users regarding content and editing, constitutes an influence or participation by the ISP in the user’s infringement such that the ISP loses the safe harbors.
The Court held that YouTube did not “control” user’s activity by automating search technologies for the users to view content (including infringing content), by exercising its rights not to monitor its service for infringements, by enforcing basic rules regarding content (such as limitations on violent, sexual or hateful content), by facilitating user access, by assisting some content owners with seeking out infringing content. Moreover, there was no evidence that YouTube induced its users to upload infringing content.
Bottom line: If you are an ISP, do not pre-screen postings, advise on content (specific advice other than standard community guidelines), or edit user content. Otherwise you will lose the safe harbors. This is entirely consistent with the policy underlying the DMCA.
4. Did YouTube’s “syndication” of infringing clips occur at the direction of users to store the clips on YouTube’s servers?
YouTube “syndicates” content by formatting in such a way that allows users to view the content on mobile devices. Thus, the syndication is really a file formatting process that doesn’t change the content, but simply formats the content for mobile viewing. This is an automated process that happens to all content. The Court found that this automated feature did not change the basis of the safe harbor … infringing material stored at the direction of the users.
The opinion really did not delve into what types of facts would constitute “wilfull blindness” so as to deprive the ISP from the safe harbor. It does, however, reaffirm what all the Courts have said – the DMCA safe harbors are strong and alive and the Plaintiff in any action against the ISP must have solid, direct (not circumstantial) evidence of an intent (deliberate), or an awareness of facts that are red flags of specific infringement, or facts that satisfy a yet undefined “wilfull blindness” standard.
Viacom v. YouTube, Southern District of New York, April 18, 2013.
The House has passed CISPA (Cyber Intelligence Sharing and Protection Act). Today, many websites are participating in an internet shutdown to protect the bill. Those in opposition are concerned that CISPA will authorize the government to peek into private records of individuals under the guise of a cyber crime investigation.
Specifically, CISPA could allow private companies to share your personal information with other companies and the government without informing you of it. The wording that relates to what information can be shared is vague, which raises concerns about what personal information of yours will be shared. The bill has been changed over time to address some of these concerns but most privacy advocates feel that it still has large loopholes that could be abused.
It has been reported that the Senate does not have the support for the bill and the President will veto it if it does pass Congress.
A great article about the bill and its supporters can be found here.
A new case (March 30, 2013) out of the Southern District of New York has ruled that the resale of digital music does not fall within the first dale doctrine of copyright law and constitutes infringement. In a scathing opinion against Redigi, Judge Sullivan draws a distinction between physical copies of records and digital copies of records. This case will cause ripples across the digital environment of file sharing. It is too early to tell if it will be appealed by Redigi.
Brief Facts: Launched on October 13, 2011, ReDigi’s website invites users to “sell their legally acquired digital music files, and buy used digital music from others at a fraction of the price currently available on iTunes.” Thus, much like used record stores, ReDigi permits its users to recoup value on their unwanted music. Unlike used record stores, however, ReDigi’s sales take place entirely in the digital domain.
Issue before the Court: The novel question presented in this case is whether a digital music file, lawfully made and purchased, may be resold by its owner through ReDigi under the first sale doctrine.
Reasons Supporting the Opinion. Why did the Court rule against Redigi? Here is what the Court said.
(1) Violation of right to make copies. The Court focused on the reproduction right of copyright law. The owner of a copyright has the sole and exclusive right to dictate who can reproduce or copy the protected work. The Court said, that when Redigi “migrates” a file from a user’s computer to its Cloud Locker, so that the same file is transferred to the ReDigi server, the fact that a file has moved from one material object – the user’s computer – to another – the ReDigi server – means that a reproduction has occurred. Similarly, when a ReDigi user downloads a new purchase from the ReDigi website to her computer, yet another reproduction is created. It is beside the point that the original phonorecord no longer exists. It matters only that a new phonorecord has been created.
(2) Violation of distribution right. The Court also focused on the distribution right of copyright law. The owner of a copyright has the sole and exclusive right to dictate who can “distribute” the protected work. The Court concluded that, absent the existence of an affirmative defense, the sale of digital music files on ReDigi’s website infringes Capitol’s exclusive right of distribution.
(3) Fair Use defense is not applicable. The Court also analyzed the “FAIR USE” defense to copyright infringement. The fair use defense is essentially an analysis of FOUR factors. The Court said, “On the record before it, the Court has little difficulty concluding that ReDigi’s reproduction and distribution of Capitol’s copyrighted works falls well outside the fair use defense. Each of the statutory factors counsels against a finding of fair use. The Court concludes that the fair use defense does not permit ReDigi’s users to upload and download files to and from the Cloud.
The first factor requires the Court to determine whether ReDigi’s use “transforms” the copyrighted work and whether it is commercial. Both inquiries disfavor ReDigi’s claim. Plainly, the upload, sale, and download of digital music files on ReDigi’s website does nothing to “add something new, with a further purpose or different character” to the copyrighted works. ReDigi’s use is also undoubtedly commercial. ReDigi and the uploading user directly profit from the sale of a digital music file, and the downloading user saves significantly on the price of the song in the primary market.
The second factor – the nature of the copyrighted work – also weighs against application of the fair use defense, as creative works like sound recordings are “close to the core of the intended copyright protection” and “far removed from the . . . factual or descriptive work more amenable to fair use.”
The third factor – the portion of the work copied – suggests a similar outcome because ReDigi transmits the works in their entirety, “negating any claim of fair use.”
Finally, ReDigi’s sales are likely to undercut the “market for or value of the copyrighted work” and, accordingly, the fourth factor cuts against a finding of fair use. The product sold in ReDigi’s secondary market is indistinguishable from that sold in the legitimate primary market save for its lower price. The clear inference is that ReDigi will divert buyers away from that primary market. In sum, ReDigi facilitates and profits from the sale of copyrighted commercial recordings, transferred in their entirety, with a likely detrimental impact on the primary market for these goods.
(4) First Sale Doctrine does not apply to digital records. Under section 106(3) of the Copyright Law, the owner of a particular copy or phonorecord lawfully made under this title, or any person authorized by such owner, is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord. Under the first sale defense, “once the copyright owner places a copyrighted item [here, a phonorecord] in the stream of commerce by selling it, he has exhausted his exclusive statutory right to control its distribution.
In addition, the first sale doctrine does not protect ReDigi’s distribution of Capitol’s copyrighted works. This is because, as an unlawful reproduction, a digital music file sold on ReDigi is not “lawfully made under this title.” Moreover, the statute protects only distribution by “the owner of a particular copy or phonorecord of that particular copy or phonorecord . . . of that copy or phonorecord.” Here, a ReDigi user owns the phonorecord that was created when she purchased and downloaded a song from iTunes to her hard disk. But to sell that song on ReDigi, she must produce a new phonorecord on the ReDigi server. Because it is therefore impossible for the user to sell her “particular” phonorecord on ReDigi, the first sale statute cannot provide a defense. Put another way, the first sale defense is limited to material items, like records, that the copyright owner put into the stream of commerce. Here, ReDigi is not distributing such material items; rather, it is distributing reproductions of the copyrighted code embedded in new material objects, namely, the ReDigi server in Arizona and its users’ hard drives. The first sale defense does not cover this any more than it covered the sale of cassette recordings of vinyl records in a bygone era.
The Court goes on to say that “Section 109(a) still protects a lawful owner’s sale of her “particular” record, be it a computer hard disk, iPod, or other memory device onto which the file was originally downloaded. While this limitation clearly presents obstacles to resale that are different from, and perhaps even more onerous than, those involved in the resale of CDs and cassettes, the limitation is hardly absurd –the first sale doctrine was enacted in a world where the ease and speed of data transfer could not have been imagined. There are many reasons, some discussed herein, for why such physical limitations may be desirable. It is left to Congress, and not this Court, to deem them outmoded.”
Accordingly, the Court concludes that the first sale defense does not permit sales of digital music files on ReDigi’s website.
Public Policy Behind Opinion. At the heart of the opinion, is the Court’s reluctance to change copyright law which it believes would result if it ruled in favor of Redigi. The Court says, that, at base, ReDigi seeks judicial amendment of the Copyright Act to reach its desired policy outcome. However, “[s]ound policy, as well as history, supports [the Court's] consistent deference to Congress when major technological innovations alter market for copyrighted materials.
The Court said, “Congress has the constitutional authority and the institutional ability to accommodate fully the varied permutations of competing interests that are inevitably implicated by such new technology.” Such deference often counsels for a limited interpretation of copyright protection. However, here, the Court cannot of its own accord condone the wholesale application of the first sale defense to the digital sphere, particularly when Congress itself has declined to take that step.”
Google does a good job of reporting about its DMCA Notices and other take-down or informational requests from the Government as a result of a search warrant or subpoena.
Its most recent report contains stunning statistics that serves as a reminder of how GIGANTIC Google really is. As of today, the stats looks like this:
Copyright removal requests received for Search in the past month
15,913,302 URLs Requested to be Removed
34,299 Specified Domains
2,754 Copyright Owners
1,858 Reporting Organizations
The transparency report, in its entirety, can be found here.