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CPTWG MEETING #101CPTWG MEETING #101January 11, 2007January 11, 2007

Legislative/Litigation UpdateLegislative/Litigation Update

Jim BurgerJim Burgerjburger@dowlohnes.comjburger@dowlohnes.com

CPTWG MEETING #101CPTWG MEETING #101January 11, 2007January 11, 2007

Legislative/Litigation UpdateLegislative/Litigation Update

Jim BurgerJim Burgerjburger@dowlohnes.comjburger@dowlohnes.com

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Legislative/Regulatory Legislative/Regulatory IssuesIssues

Legislative/Regulatory Legislative/Regulatory IssuesIssues

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OverviewOverviewOverviewOverview Legislative/Regulatory Issues Legislative/Regulatory Issues

UK Gowers ReportUK Gowers Report EU Copyright LevyEU Copyright Levy Australian Copyright ReformAustralian Copyright Reform New Zealand Copyright ReformNew Zealand Copyright Reform China-MPAA Anti-Piracy AgreementChina-MPAA Anti-Piracy Agreement

LitigationLitigation Universal Music Group v. MySpaceUniversal Music Group v. MySpace Paramount Pictures v. Load ‘N Go VideoParamount Pictures v. Load ‘N Go Video Auto Inspection Services v. Auto Inspection Services v.

Flint Auto AuctionFlint Auto Auction Tracfone Wireless v. BillingtonTracfone Wireless v. Billington Perfect 10 v. Visa Perfect 10 v. Visa Union Fédérale des Consommateurs v. SonyUnion Fédérale des Consommateurs v. Sony

Legislative/Regulatory Issues Legislative/Regulatory Issues UK Gowers ReportUK Gowers Report EU Copyright LevyEU Copyright Levy Australian Copyright ReformAustralian Copyright Reform New Zealand Copyright ReformNew Zealand Copyright Reform China-MPAA Anti-Piracy AgreementChina-MPAA Anti-Piracy Agreement

LitigationLitigation Universal Music Group v. MySpaceUniversal Music Group v. MySpace Paramount Pictures v. Load ‘N Go VideoParamount Pictures v. Load ‘N Go Video Auto Inspection Services v. Auto Inspection Services v.

Flint Auto AuctionFlint Auto Auction Tracfone Wireless v. BillingtonTracfone Wireless v. Billington Perfect 10 v. Visa Perfect 10 v. Visa Union Fédérale des Consommateurs v. SonyUnion Fédérale des Consommateurs v. Sony

UK: Gowers ReportUK: Gowers Report

British government commissioned Andrew British government commissioned Andrew Gowers (former editor of Gowers (former editor of Financial TimesFinancial Times) to ) to conduct independent review of UK’s IP lawsconduct independent review of UK’s IP laws

Key Recommendations for UK:Key Recommendations for UK: Do not support extension of copyright term Do not support extension of copyright term Increase penalties for online piracyIncrease penalties for online piracy Enact private use exception to allow format Enact private use exception to allow format

shiftingshifting Allow for use of “orphan works”Allow for use of “orphan works”

EU Copyright LevyEU Copyright Levy Copyright levy is a special sales tax on electronics, Copyright levy is a special sales tax on electronics,

books and other media.books and other media. Fees distributed by collection agenciesFees distributed by collection agencies Rationale: to compensate artists for private copying of Rationale: to compensate artists for private copying of

their workstheir works 20 of 25 EU countries have levy; levy amounts 20 of 25 EU countries have levy; levy amounts

vary greatly:vary greatly: German levy on sale of iPod: 2 eurosGerman levy on sale of iPod: 2 euros French levy on sale iPod: 51 eurosFrench levy on sale iPod: 51 euros

Dec. 13—European Commission delays Dec. 13—European Commission delays consideration of copyright levy reform proposal consideration of copyright levy reform proposal indefinitelyindefinitely

Copyright Levy Reform Alliance vows to move Copyright Levy Reform Alliance vows to move issue to the courtsissue to the courts

Australian Copyright ReformAustralian Copyright Reform Parliament passed legislation Dec. 5.; law fully in effect as of Jan. 8, Parliament passed legislation Dec. 5.; law fully in effect as of Jan. 8,

20072007 Extensive overhaul to Australia’s copyright laws; key provisions Extensive overhaul to Australia’s copyright laws; key provisions

include:include: Technological protection measuresTechnological protection measures New criminal penalties and “on-the-spot” finesNew criminal penalties and “on-the-spot” fines Time-shifting and format-shiftingTime-shifting and format-shifting

Individuals may record television and radio programs in the home to Individuals may record television and radio programs in the home to watch or listen to at later timewatch or listen to at later time

Owner of book, newspaper or periodical may make a reproduction in a Owner of book, newspaper or periodical may make a reproduction in a different form for private/domestic usedifferent form for private/domestic use

Exceptions for non-commercial activities of libraries, educational Exceptions for non-commercial activities of libraries, educational institutions, cultural institutions institutions, cultural institutions

““Fair dealing” uses for parody and satireFair dealing” uses for parody and satire

New Zealand Copyright ReformNew Zealand Copyright Reform Copyright (New Technologies and Performers' Rights) Copyright (New Technologies and Performers' Rights)

Amendment Act 2006Amendment Act 2006 Key ProvisionsKey Provisions

Circumvention only prohibited if undertaken to Circumvention only prohibited if undertaken to infringe copyright infringe copyright

Criminal penalties for prohibited circumvention Criminal penalties for prohibited circumvention activitiesactivities

Protection for copyright management informationProtection for copyright management information Format-neutral space-shifting and time-shifting Format-neutral space-shifting and time-shifting

permittedpermitted Limits on ISP liabilityLimits on ISP liability

China-MPAA Anti-Piracy China-MPAA Anti-Piracy AgreementAgreement

China has second largest number of internet China has second largest number of internet usersusers

China signed MOU regarding IP piracy with China signed MOU regarding IP piracy with four trade associations (including MPAA)four trade associations (including MPAA)

Trade groups will:Trade groups will: Provide lists of copyrighted works that they seek to Provide lists of copyrighted works that they seek to

protect to China’s National Copyright protect to China’s National Copyright Administration (NCA) Administration (NCA)

Notify NCA of piracy involving Chinese serversNotify NCA of piracy involving Chinese servers NCA will coordinate information and vows to NCA will coordinate information and vows to

increase enforcementincrease enforcement RIAA did not sign MOURIAA did not sign MOU

LitigationLitigationLitigationLitigation

Universal Music Group v. MySpaceUniversal Music Group v. MySpace UMG filed suit against MySpace (Nov. 17, 2006)UMG filed suit against MySpace (Nov. 17, 2006)

UMG filed similar suits against file sharing companies UMG filed similar suits against file sharing companies Grouper and Bolt in Oct. 2006 (cases pending)Grouper and Bolt in Oct. 2006 (cases pending)

Complaint allegesComplaint alleges:: MySpace allows users to post copyrighted music and videos MySpace allows users to post copyrighted music and videos

on its site without authorization from copyright owneron its site without authorization from copyright owner MySpace reformats illegally posted materials to facilitate MySpace reformats illegally posted materials to facilitate

further distribution over its networkfurther distribution over its network MySpace claims:MySpace claims:

Shielded from liability under DMCA safe harbor Shielded from liability under DMCA safe harbor It does nothing to induce or encourage users to post It does nothing to induce or encourage users to post

copyrighted materials without authorizationcopyrighted materials without authorization MySpace plans to launch new digital flagging tool to MySpace plans to launch new digital flagging tool to

reduce infringement on its networkreduce infringement on its network

Paramount Pictures v. Load ‘N Go Paramount Pictures v. Load ‘N Go VideoVideo

Load ‘N Go Video offered to copy movies onto iPods and other portable video players for consumers who purchased relevant DVD

Motion picture studios filed suit (S.D.N.Y.) claiming copyright infringement and violation of the DMCA

EFF response: It claims that Hollywood is using DMCA to deny

consumers fair use rights MPAA responded that suit is against a business, not a

consumer

Auto Inspection Services v. Auto Inspection Services v. Flint Auto AuctionFlint Auto Auction

BackgroundBackground AIS licenses vehicle inspection software; software contains AIS licenses vehicle inspection software; software contains

user identification feature that allows AIS to track users of user identification feature that allows AIS to track users of the software the software

Feature alerted AIS to allegedly unauthorized use involving Feature alerted AIS to allegedly unauthorized use involving licensee Flint; AIS terminated Flint’s license, but Flint went licensee Flint; AIS terminated Flint’s license, but Flint went on to design a similar program as a replacement on to design a similar program as a replacement

AIS sued, claiming violations of DMCA and Copyright ActAIS sued, claiming violations of DMCA and Copyright Act Decision (E.D. Mich.)Decision (E.D. Mich.)

User detection feature not technological protection measure User detection feature not technological protection measure because it does not control access to copyrighted materialbecause it does not control access to copyrighted material

Feature simply alerts AIS as to identity of user; feature does Feature simply alerts AIS as to identity of user; feature does not prevent access to copyrighted source codenot prevent access to copyrighted source code

Tracfone Wireless Inc. v. Tracfone Wireless Inc. v. BillingtonBillington

Librarian of Congress recognized 6 new exceptions Librarian of Congress recognized 6 new exceptions during DMCA 2006 triennial reviewduring DMCA 2006 triennial review One exception allows users to legally circumvent software One exception allows users to legally circumvent software

locks on mobile phone handsets for purposes of locks on mobile phone handsets for purposes of connecting to a wireless networkconnecting to a wireless network

Tracfone, pre-paid phone manufacturer, sued Tracfone, pre-paid phone manufacturer, sued Librarian of Congress and Register of Copyrights Librarian of Congress and Register of Copyrights (S.D. Fla.), claiming:(S.D. Fla.), claiming: Exemption is vague and overbroadExemption is vague and overbroad Its comments were improperly ignored during Its comments were improperly ignored during

rulemaking proceedingrulemaking proceeding Library of Congress claims that comments were Library of Congress claims that comments were

extremely late with no sufficient justification for delayextremely late with no sufficient justification for delay

Perfect 10 v. VisaPerfect 10 v. Visa

Perfect 10 sued credit card companies for Perfect 10 sued credit card companies for copyright infringement arising out of illegal sale copyright infringement arising out of illegal sale by third party websites of its copyrighted imagesby third party websites of its copyrighted images Suit alleges that defendants are secondarily liable for Suit alleges that defendants are secondarily liable for

processing payments for such salesprocessing payments for such sales Credit Card Companies respond that they:Credit Card Companies respond that they:

Do not promote or control infringing activitiesDo not promote or control infringing activities Do not have a duty to police the Internet Do not have a duty to police the Internet

Oral arguments were heard Dec. 4 (9th Cir.)Oral arguments were heard Dec. 4 (9th Cir.)

Union Fédérale des Consommateurs Union Fédérale des Consommateurs v.v. SonySony

Sony sells a line of “Net WM” players and offers Sony sells a line of “Net WM” players and offers music downloads (in its proprietary ATRAC 3 music downloads (in its proprietary ATRAC 3 format) on its “Connect” site. format) on its “Connect” site.

Net WM player line does not support downloads Net WM player line does not support downloads from rival music download sitesfrom rival music download sites

French consumer group Union fédérale des French consumer group Union fédérale des consommateurs (UFC) filed suit against Sony (Feb. consommateurs (UFC) filed suit against Sony (Feb. 2005)2005) Suit alleges that Sony’s DRM policies are unfair trade Suit alleges that Sony’s DRM policies are unfair trade

practicespractices French court ruled against Sony (Dec. 15.):French court ruled against Sony (Dec. 15.):

Sony’s bundling of Net WM player with Connect music Sony’s bundling of Net WM player with Connect music download site is an illegal tying arrangementdownload site is an illegal tying arrangement

Sony misled purchasers of Net WM players by not Sony misled purchasers of Net WM players by not disclosing that player does not support music downloads disclosing that player does not support music downloads from other sitesfrom other sites

Union Fédérale des Union Fédérale des Consommateurs Consommateurs v.v. Sony Sony (cont.)(cont.)

Remedies:Remedies: Sony pays UFC 10,000 eurosSony pays UFC 10,000 euros Sony must clearly label music players to disclose Sony must clearly label music players to disclose

lack of support for music downloads from rival lack of support for music downloads from rival commercial sitescommercial sites

Sony must post copy of the decision on its Sony must post copy of the decision on its homepagehomepage

UFC filed similar suit against Apple for its UFC filed similar suit against Apple for its iTunes/iPod DRM scheme; decision expected iTunes/iPod DRM scheme; decision expected later this monthlater this month