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Dissecting a Remarkable Ruling

* The blog title is a reference to this Order of the Stick comic. (It’s safe for work, so long as you don’t read it out loud.)

Last time we surveyed the forces that lead to this recent extraordinary magistrate’s opinion. It was handed down May 1, but already it’s become notorious for its almost gleeful taking down of the four porn-industry rights-holding plaintiffs. The key is to read the snerk-inducing footnotes. Highlights include these gems:

Footnote 7, in which the concept of “moral high ground” is discussed:

Plaintiff K-Beech’s rambling motion papers often lapse into the farcical. In its papers, counsel for K-Beech equate its difficulties with alleged piracy of its adult films with those faced by the producers of the Harry Potter books, Beatles songs and Microsoft software, and compare its efforts to collect from alleged infringers of its rights to the efforts of the FBI to combat child pornography. In an ironic turn, the purveyors of such works as Gang Bang Virgins, explain how its efforts in this matter will help empower parents to prevent minors from watching “movies that are not age appropriate” by ensuring that viewers must

… Read More»

Judges: Courts Aren’t Litigation Clearinghouses

Last summer, I started to blog about mass-defendant bittorrent cases pending in Washington, D.C., some of which involved over 10,000 anonymous defendants. Since the plaintiffs didn’t know who the defendants were, but they did know to IP address to which a bittorrent was sent, they would sue the defendants as “John Doe,” then ask the court for permission to send subpoenas to the defendants’ internet service providers. The subpoenas would ask for the contact information of the subscriber who was assigned that particular IP address at that particular time.* In theory, the subscriber would be your defendant, or at least someone who knew the real defendant (e.g., a family member).

* Since most consumers are dynamically assigned an IP address by their ISP for each internet session, and that IP address will likely change from session to session, you need to know not only the IP address but also the exact time the IP address was being used.

Recall that the first hurdle that the plaintiff must clear is a request for early discovery. Normally, discovery in federal court can’t start until there’s been a conference among the parties’ lawyers, which is … Read More»

Part 2 of 2: The Second Circuit Punts on Third Down

Last time, I laid out the context for the Second Circuit’s decision in the Viacom v. YouTube case–i.e., the state and open issues of the law of the DMCA safe harbors. This time, I’ll get into what the Second Circuit actually said, pointing out where the Second Circuit agrees with, and diverges from, the Ninth Circuit’s reasoning in Shelter Capital v. UMG (the “Veoh case”).

Knowledge Requirement Is Limited to Specific Knowledge

The Second Circuit agrees with the Ninth Circuit that only knowledge of specific acts of infringement may defeat the Knowledge Requirement, whether under the actual knowledge or “red-flag” prongs.

The Second Circuit goes a bit further and describes “red-flag” knowledge as “objective” knowledge, as opposed to subjective knowledge. I.e., a reasonable person would have had knowledge (without conducting an investigation!) regardless of his or her actual knowledge. If that’s the case, the scope for red-flag knowledge must be very narrow indeed, since a person with so much awareness would almost always have enough facts to constitute actual (subjective) knowledge.

As it happens, the Second Circuit found instances that arguably show actual … Read More»

Part 1 of 2: Second Circuit on DMCA Safe Harbor: It’s Complicated

Well, if you were hoping that the DMCA safe-harbor law would clear up with the Second Circuit’s long-awaited opinion in Viacom v. YouTube–that we’d get to the point where folks would know the contours of the safe harbor without having to consult with a lawyer–then last Thursday was, indeed, as Prof. Goldman put it, a “bummer.” There were things to criticize in last December’s Ninth-Circuit decision in Shelter Capital v. UMG (better known as the “Veoh case”), and certainly rights-holders were unhappy with it, but at least you knew where things stood. The basic lesson from Veoh was: comply with the DMCA notice-and-takedown regime, watch out for notices of infringement by non-rights holders, and things’ll probably be OK.

But YouTube muddies the waters–at least, for a while. That’s not really meant as a criticism. Simplicity and “bright line rules” are nice because it saves business folks and consumers money (fewer legal fees) and worry. But an appellate court’s job is, in this case, to interpret a statute. Sometimes the best interpretation is also a complex or “fuzzy” one. True, lawyers are the main beneficiaries, but … Read More»

Part 2 (of 2): Welcome Nice Pinterest Users to the Bizarro World of Copyright and the Internet!

Last time, we took stock of the recent kerfuffle about Pinterest, copyright and Pinterest’s Terms of Use (“TOU”), and we even looked at those horrifying, normal TOU. In this post, I want to step back and answer two basic questions: Should Pinterest users really worry about being sued for copyright infringement? And is there really something to all this fuss?

I’ll preface the rest of what I’m going to say by emphasizing that, although I’m a lawyer in this field (i.e., copyright and the internet), I’m not giving you legal advice here. A lot of this is reasoned speculation, but I could turn out to be wrong, and I don’t know your specific legal situation and speak to it. OK?

Is Someone Really Going to Sue Nice Pinterest Users?

How much should you worry if you’re using Pinterest? I suspect you don’t have that much to worry about. Unlike Napster, Pinterest isn’t threatening an entire livelihood here. Flickr has already done all the damage the internet is going to do to professional photographers, in a perfectly legal manner, by … Read More»

Part 1 (of 2): Teacup in a Tempest

So, here I was all ready to write a post about how everyone should just stop freaking out about Pinterest’s terms of use (“TOU”), when someone tweeted this excellent piece from the Copyright Librarian (updated here) that basically makes all the points I was going to make. And lots of other people have been making all kinds of other points about Pinterest, copyright and terms of use. Is that going to stop me from writing about Pinterest? Of course not!

The Pinterest kerfuffle started a couple of weeks ago with several articles about a lawyer–not a copyright lawyer, but a good, solid lawyer–who (1) is a photographer and (2) actually read Pinterest’s TOU. In tears (a perfectly natural reaction from reading any TOU), she took down her Pinterest account. This generated a good deal of interest across the Internet, including from Pinterest’s CEO–and, alas, a good deal of legal misinformation.

Nipping it in the Bud

We’ll focus on the article in Business Insider article that “broke” the story (as opposed to the original blog post). What happened was that the lawyer/photographer posted a blog entry about how … Read More»

Part 3: Will Willfulness Ride to the Rescue?

In the first part of this three-part series, we tried to put the MU Indictment into a practical context. Last time, we started to look at the substance of the legal issues, starting with the government’s case. We concluded that, because of some essential differences between civil and criminal copyright infringement, the government’s case isn’t as easy as we civil lawyers would have thought (though I think the government will find some way to make it work).

Now, we’ll apply the same logic to MU’s DMCA safe-harbor defense. It turns out there probably isn’t such a thing as a DMCA safe-harbor defense in criminal actions, but that may not make much of a practical difference because of the criminal action’s willfulness requirement.

Of Course the DMCA Covers Criminal Actions. It’s in Here Somewhere…

If you’re a civil copyright lawyer like me, the DMCA safe harbors are almost an article of faith. Without it, the Internet would be a very, very, very different place. (Whether it would be a better or worse place, I cannot say.) So it comes as something of a shock to discover that it might not apply to … Read More»

Part 2: The Government’s Unclear Path to Conviction

Last time, I tried to give some practical perspective to the Megaupload Indictment. It was, at the same time, business as usual and completely extraordinary. I predicted (we’ll see how accurately) that MU will be the only major indictment of its kind in the medium term. I gave two reasons for it. First, indicting MU served its broader purpose of sending a message to other file-sharing sites. Second, the government will probably want to see how well its legal theories do–because, as we’ll discuss this time, the government’s case isn’t as straightforward as many of us (including me) thought it was.

For purposes of post, we’re going to ignore the “easy” parts of the government’s case, i.e., those involving direct copyright infringement, because the lessons there are less applicable. I assume that legitimate file-sharing sites are at least careful enough not to engage in direct copyright infringement (other than, arguably, distribution, which is a vexed issue).

Primary Consideration, Secondary Liability, Uncommon Law

When I (and, I assume, a lot of other people) first heard of the MU Indictment, we figured the government’s case-in-chief would be a slam dunk, … Read More»

Part 1: Situation Normal: The Sky’s Falling

I’ve put off blogging about MegaUpload (“MU”) for several weeks now–too long, really–for a few perfectly good reasons. I’ve been busy. I’ve been sick. Mostly, though, although I can talk about the DMCA at length, I’m not super familiar with criminal procedure. I do, however, have some experience with FBI investigations, since sometimes a lawyer has to ask the Department of Justice to intervene in a criminal matter, and the FBI is usually pretty good about keeping you informed.

In the meantime, the dramatic events of January 20, when New Zealand authorities descended on the multi-million dollar pad of Megaupload founder Kim Dotcom (and cutting him out of a “safe room”*), is old news now. The fall-out has shaken out, with several music-sharing/locker services radically altering their business practices.

* What’s the point of a “safe room” if the police can still cut you out?

But I have been given a reprieve, because just a few days ago, the Department of Justice filed a superseding indictment against MU (which you can access here). It’s honestly not that big a deal, but I can pretend it’s significant enough to write a couple … Read More»

When Is a Phonorecord Not a Phonorecord?

Last time, we finally figured out how ReDigi operates and how it plans to get around the fact that it must make at least one (and often two) intermediate copies of a song file in order to complete the sale of the song file. ReDigi’s solution is to structure itself as an Amazon-style music locker and rely on space/format shifting for those intermediate copies.

But this doesn’t get around the other concern I raised (way back here), which we might call the “phonorecord problem.” Recall that the nub of the RIAA’s argument is that the First-Sale Doctrine is limited the distribution right. The RIAA’s point was that the intermediate copies exercised the reproduction right and, therefore, fell outside the scope of the First-Sale Doctrine. While I thought there might be a different way of looking at that issue, it turns out ReDigi is fine with the RIAA’s argument, since it thinks it has an alternate (and better) legal theory regarding those intermediate copies.

The “phonorecord problem” is more fundamental. Under a strict and plain reading of the Copyright Act, the distribution right is limited to the distribution of physical embodiments … Read More»

Is ReDigi a Marketplace or a Music Locker?

I am compelled to blog about ReDigi one more time because, at long last, we actually know how ReDigi operates. And it’s not *quite* how ReDigi says it works on its FAQ. It’s actually far more clever and elegant–at least, legally speaking. This means, among other things, that parts of my previous posts about ReDigi are no longer completely accurate* (because they were based on the ReDigi FAQ and some other public statements by ReDigi). At a minimum, I need to clear that up. But also, ReDigi’s legal theory is worth an additional blog post.

*Among other things, the whole “Do Star Trek replicators infringe copyright” thing was unnecessary, as it turns out. As you’ll see, ReDigi does not destroy the original at the same time it creates the copy–a technological feat that would be remarkable but not impossible. Still, it’s an interesting thought experiment into the nature of the reproduction right, no?

ReDigi ReCap

To recap a bit about ReDigi: it provides an online marketplace for the re-sale of used audio files. It has one very important limitation: only songs you purchased online were eligible–thus, you can’t sell songs … Read More»

One of the Great Unanswered Questions Is Answered!

This is the third post on the recent and important Ninth Circuit opinion in the “Veoh case” (actually styled, UMG Recordings v. Shelter Capital, but we’ll call it “Veoh”). In the first post, we marveled at Universal’s surprising leading argument and worried about the fate of user-created videos of cute kittens. In the last post, we analyzed Universal’s surprisingly weak argument that Veoh had “red flag” knowledge of infringing activity and wondered if Universal hadn’t made things worse for rights holders on that issue.

Universal’s third and final argument fares rather better*, although it, too, ultimately fails. It targeted the financial benefit requirement (which, remember, is really a “no financial benefit” requirement). Recall that there are two prongs to this requirement: (1) the provider not receive a “financial benefit directly attributable to the infringing activity”; and (2) the provider have “the right and ability to control” the infringing activity.

* I still think that Universal would have been better off targeting Veoh’s repeat infringer policy. There’s so much we just don’t know about this requirement. Universal would have had a much better shot at reshaping … Read More»

Think the DMCA Is Outmoded? Complain to Congress, Not to the Courts

This is the second post on the recent Ninth Circuit opinion in the “Veoh case” (actually styled, UMG Recordings v. Shelter Capital). Last time, we focused on (marveled at, really) Universal’s surprising leading argument: that pretty much any website that makes user-uploaded content publicly accessible (with a probable exception for pure displayed text) is not covered by the DMCA safe harbor on grounds that the safe harbor covers only passive storage, not display, performance or internal copying. We also worried about the fate of user-created videos of cute kittens.

In this post, we’ll look at one of Universal’s two remaining arguments, which are much more conventional.

Recall that, to be eligible for the DMCA safe harbor governing user-provided content, the website must meet three general requirements: (1) a knowledge requirement (or, more accurately, an ignorance requirement); (2) a financial-benefit requirement (or, more accurately, a financial-non-benefit requirement); and (3) a notice-and-takedown requirement (which is intertwined with the first requirement*). Universal attacked both the knowledge and financial-benefit requirements.

* As we’ll see next time, it turns out all three requirements are intertwined with each other.

This … Read More»

Ninth Circuit: It’s OK to Let the Public Access User-Uploaded Content

I think by now you’ve read a few headlines about Ninth Circuit’s decision in UMG Recordings v. Shelter Capital, which is better known as the “Veoh case,” just before Christmas. Mostly, the headlines say something like: Veoh Dodges Universal Music’s Copyright Claims, or Universal Loses DMCA Lawsuit Against Veoh.

But when you read the opinion, you should be struck by two things that have nothing to do with Veoh. First, Universal Music wasn’t just trying to get some compensation from a specific video site–it was trying to put video sites out of business. There’s no other way to explain the strategic choices Universal Music made. Second, as a result, in part, of Universal Music’s choices, the Ninth Circuit has just made Viacom’s life a lot harder for its case against YouTube.

Understanding Universal’s Peculiar Legal Strategy

If you’ve been reading my blogs on the DMCA defense (mostly in connection with the Nashville lawsuit against Grooveshark), you know that, even after 12 years, there are several very basic unanswered questions about DMCA safe-harbor protection. Off the top of my head, the most significant are:

1. What does it

… Read More»

Can Green Day Exit Through the Gift Shop?

Are you ready for another installment of Is it Fair Use?, the fast-paced, action-packed game in which I give you a fact pattern, and you take a blind stab at whether the court found or didn’t find fair use. Today’s installment is brought to you by Green Day, and also by the Oscar-nominated documentary, Exit Through the Gift Shop.

Our story begins with the artist Los Angeles artist Derek Seltzer, who created a work of art, which he called, Scream Icon. I’d show it to you, but it’s impossible to find an image that isn’t part of a story that gives away the ending! It consists of a black-and-white portrait of a fanged man in a rictus of a huge, well, scream. AAAAAAARG! Sort of like that.

Seltzer put this image onto posters and stickers, and then posted those images on walls, telephone poles and what-not around town. It doesn’t appear from the opinion that Seltzer had much success selling copies of Scream Icon, though he did license it once to a rock band for use in a music video.

One day, another artist, Roger Staub, happened across … Read More»

Is it Fair Use? Looks at Trademark

We’ve already looked at the “Elf On/Elf Off” decision (CCA & B, LLC v. F + W Media Inc., N.D. Ga. Sept. 22, 2011) with respect to copyright infringement, but it also has an extensive fair use analysis for trademark. Here at Is it Fair Use?, we don’t discriminate against trademark-flavored fair use! Let’s play!

Elf Off’s Use of Elf On’s Marks

You can read about the two books’ content here. In addition, the court compared the two books’ covers and other trademark indicia as follows:

Defendant’s book cover includes the book title in a font that is quite similar to Plaintiff’s stylized logo font, an image of an elf in a green costume dangling from a shelf, the subtitle “A Christmas Tradition Gone Bad,” a byline attributing the story to Horace the Elf, and a final sentence, in red font: “A new holiday parody – for Mom and Dad!” (Emphasis in original.) The book is also 10” by 10” by .25” – much thinner than Plaintiff’s box set. Elf Off is not sold with a doll or special packaging. The back cover shows

… Read More»

And Other Loose Ends.

This is going to be (I hope) the last post about the ReDigi situation, at least for a while. I’ll admit I got distracted by the RIAA’s little missive to ReDigi. I want to sum up and wrap up. First, the summing:

The Three Legal Obstacles to a Digital First-Sale Right

Looking over the five (!) previous posts about ReDigi, we see three obstacles to its legality:

1. Do the consumers who wish to sell their digital singles actually own, or merely license, the music files? That’s what Vernor helps us answer, as discussed here.
2. Is the First-Sale Doctrine limited to the same physical item that was the subject of the “first sale”? I discuss this question here and here.
3. By what right can ReDigi make the temporary, intermediate copies necessary to transfer the song file? I discuss this issue here and here.

So. There. Now, let’s tie up a few loose ends.

What About Amazon?

When I first discussed whether ReDigi’s system could comply with Vernor (to answer the question of whether the potential sellers “own” the digital downloads), I focused exclusively on the iTunes Store license agreement. I did so … Read More»

A Judge May Have Found a Better Way

Courts have been struggling for several years now with how treat online anonymous speech when faced with requests to unmask the identities of the anonymous speakers. I outlined the issues previously in these two blog posts, but the problem amounts to:

• Balancing the right to speak anonymously (an aspect of the First-Amendment right of free speech) against the right to seek and obtain redress against wrongdoers.
• The sneaking suspicion that anonymous speaker is just trying to duck answering for their wrongdoing.
• The sneaking suspicion that the supposedly aggrieved party is really just trying to unmask and embarrass the anonymous speaker.

It’s not just that courts have come up with a bewildering variety of tests to balance the competing rights, it’s the breadth of attitudes that courts have displayed on this issue. Some courts really privilege the right to speak anonymously. Others don’t seem to give a toss.

Another problem is that these tests are supposed to be straightforward and easy to apply–“bright-line” rules–but in practice, they usually don’t survive their application to the next set of facts. Thus, although they’re meant to be applied broadly, they tend to be limited to … Read More»

Digital Content: Dumb Data or Clever Instructor?

I received so many comments on my ReDigi post that I need to write a couple of follow-up posts to address the good questions. This post and the next will focus on questions raised about the fact that ReDigi needs to make an intermediate copy of the song files, and the one after that will clean up some lingering issues about the first sale doctrine itself.

The Intermediate Copy

My last post was focused on the first-sale doctrine and the Vernor decision, but several people pointed out that, in order to transfer a music file from the seller to the buyer, ReDigi has to make at least one intermediate copy. It doesn’t matter ReDigi erases the seller’s copy of the file at the same time it makes a copy of the file on its own server–it’s still making a copy, and making a copy requires exercise of the reproduction right. See Sega Enterprises Ltd. v. Accolade, Inc., 977 F.2d 1510 (9th Cir. 1992). So, assuming ReDigi isn’t licensed* and assuming ReDigi may avail itself of the first-sale doctrine**, what defense might it have against a claim that this intermediate copy is an infringement?… Read More»

What Old Cases Don’t Teach us About New Tricks

In my last post, we started to look at the legal claims made by the RIAA in the demand letter it sent to ReDigi. We focused on the plain language and legislative history of the first-sale statute–banged our heads against it, really. I concluded that the statute is simply not equipped to resolve a situation in which a digital download is sold by its owner (under Vernor) by sending it to the buyer over the internet while simultaneously removing the song file from the seller’s storage.

The RIAA will argue that the statute’s failure means victory for it: if the first-sale statute does not specifically provide for digital transfers, then they must fall outside the statute’s scope. ReDigi will argue that the statute shouldn’t be so rigidly and technically applied. Its purpose is to facilitate re-sale (and re-transfer) of copies that had previously been sold. The only reason the statute seems so limited is that it was only codifying old case law, and the case law, by its very nature, couldn’t predict how the technology for re-transferring digital content would evolve.

In its demand letter, the RIAA … Read More»