Faulkner University

From the SelectedWorks of Stephen M Collins Jr.

September 2, 2009

Copyright Infringement via BitTorrent Websites;Who’s to Blame?Stephen M Collins

Available at: https://works.bepress.com/stephen_collins/1/

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Copyright Infringement via BitTorrent Websites; Who’s to Blame?

Stephen Collins1

Fall 2009

1. Introduction

The revolution of the internet has had a significant impact on the way society

obtains, accepts, and transfers information. Technological advances have allowed

internet users the availability to download and distribute large files in ways that were

once inconceivable. With these technological advancements, people who wish to legally

distribute copyrighted material are left guessing about which licenses are required in

order to do so legally.2 From this confusion, distributors and consumers are increasingly

engaging in copyright infringement because of ease of access.3

This paper will discuss a brief history of peer-to-peer (p2p) files sharing

technology and how MGM Studios, Inc. v. Grokster, Inc.4 changed the way companies

and users distribute and download files. Next, this paper will discuss the future of p2p

networks through the use of technology known at BitTorrent. Within this analysis, the

paper will determine if the three-tiered system that BitTorrent incorporates has significant

liability to infringe upon an artist’s copyright. And, the main thesis of this paper is to

determine if torrent search sites, one of the tiers of BitTorrent technology, is either

directly, contributorily, or vicariously liable for distributing links to possible copyrighted

material, but not actually distributing the data themselves.

1 J.D., Faulkner University, Jones School of Law, expected May 2010. 2 William Sloan Coats and Melissa Keyes, Recent Developments in Vicarious Liability and Copyright

Licensing for Music, PLI Order No. 11389, 265 (2007). 3 Id. 4 545 U.S. 913 (2005).

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2. A brief history of modern peer-to-peer technology.

File sharing has been around longer than most people realize.5 In the late 60’s

and early 70’s, universities and companies implemented intranet network systems in

order to transfer and receive data.6 These systems acted in a very similar way to how p2p

systems work today; by not using centralized servers to store data, but simply transferring

data from one computer to another.7 As this idea of transferring information started to

take shape, more people started to use these systems. Soon, newsgroups were formed as

a way for academia, researchers, and business people to exchange ideas and information

very quickly. But, it was not until the creation of a software application named Napster

before the main-stream public took notice of p2p technology.8

In 1999, Shawn Fanning, a freshman at Northeastern University, created the p2p

file sharing application known as Napster.9 Napster is an application that allows

computers to connect to each other in order to find and download select files.10 Napster

was not a true p2p exchange because it did implement centralized servers in order to

index connected users and the files they possessed, but the actual transferring of data was

directly from computer A to computer B.11 Napster gained immense popularity because

it catered to the transferring of music, most of which was copyrighted material. Users of

the application would upload and download songs without having to purchase a compact

5 See, a brief(ish) history of p2p, http://iml.jou.ufl.edu/projects/Fall02/Moody/history.html, (last visited March 18, 2009). 6 Id. 7 Id. 8 Id. 9 See, napster history, http://www.bsu.edu/web/tnsumrall/history.html, (last visited April 18, 2009). 10 Id. 11 Id.

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disc or pay licensing fees. This created a major problem for the recording industry,

which saw Napster users as thieves.12

In 2000, A&M Records and several other recording studios brought suit against

Napster.13 The plaintiffs argued that Napster was a contributory and vicarious copyright

infringer.14 In order to be contributorily liable, Napster must be engaged in “personal

conduct that encourages or assists the infringement.”15 Napster argued that their uses

were not infringing upon copyrights due to the theory of fair use.16 They argued that

their users were engaging in music sampling, space-shifting, and permissive

distribution.17 The 9th Circuit held that Napster users did infringe upon the copyright

holder’s right to reproduction and distribution.18 Their reasoning incorporated the theory

of contributory liability, acknowledging that since Napster had the ability to control the

infringing behavior of its users, it had a duty to do so.19

From Napster, a barrage of p2p applications flooded the internet.20 This was due

to the fact that even though a company can be legally forced to shut down, the desired

content is still available. Since general p2p file sharing applications do not use centralized

servers to store data, when an application is forced to shut down, the content is not lost.

File sharing applications such as Grokster and Morpheus simply created another way for

peers to access each other’s files. The creation of multiple file sharing applications and

an uncontrollable amount of copyrighted material available led to the second major

12 Id. 13 284 F.3d 1091 (2002). 14 Id. at 1095. 15 239 F.3d 1004, 1019 (9th Cir. 2001). 16 Id. at 1014. 17 Id. 18 284 F.3d 1091, 1098 (2002). 19 Id. 20 See, file sharing timeline, http://www.scribd.com/doc/2166496/file-sharing-time-line, (last visited April 18, 2009).

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lawsuit concerning p2p file sharing applications. The United States Supreme Court heard

Metro-Goldwyn-Mayer Studios Inc., et al. v. Grokster LTD., et al. in late March, 2005.21

In Grokster, the issue presented was “under what circumstances the distributor of

a product capable of both lawful and unlawful use is liable for acts of copyrights

infringement by third parties using the product.”22 The Plaintiffs argued a vicarious

liability theory.23 This theory incorporates an “imposition of liability when the defendant

profits directly from the infringement and has a right and ability to supervise the direct

infringer, even if the defendant initially lacks knowledge of the infringement.”24 The

Defendants argued that “free copying even of copyrighted works may be authorized by

the rightholders,” and “potential noninfringing uses of their software are significant in

kind, even if infrequent in practice.”25 The Court held that “one who distributes a device

with the object of promoting its use to infringe copyright, as shown by clear expression or

other affirmative steps taken to foster infringement, is liable for the resulting acts of

infringement by third parties.”26

The Supreme Court’s reasoning stated that to contributorily infringe upon a

copyright, one has to encourage or promote direct infringement, and to vicariously

infringe, one makes a profit off of direct infringement and does nothing to stop the direct

infringement.27 Evidence showed that the Defendants took active steps to encourage

direct infringement which the Court labeled as an inducement to infringement. The Court

21 545 U.S. 913 (2005). 22 Id. at 918-919. 23 Id. at 931. 24 Id. 25 Id. at 922. 26 Id. at 919. 27 Id. at 930.

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added this third prong of indirect liability of a copyright infringement, which included

advertising an infringing use and instructions on how to perform an infringing use.28

The Grokster decision is distinguishable from the Napster decision because

Napster indexed a list of its users and facilitated connections though centralized servers

known as “supernodes.”29 Therefore, since Napster had an index list of its users and

facilitated connections between users, the Court held that Napster was contributorily

liable because it knew of the infringement and did nothing to stop it.30 Grokster and

Morpheus, on the other hand, did not incorporate centralized servers, but still

contributorily infringed on copyright holders by inducing and profiting from the third

party infringement.31 To sum up the law, a p2p file sharing application can be

contributorily or vicariously subject to copyright infringement either by knowing about

the infringement and doing nothing about it or encouraging and profiting from a third

party’s direct infringement. A p2p file sharing application may also be indirectly liable

for copyright infringement if they actively induce a third party to commit the

infringement.

3. An explanation of what BitTorrent Technology is.

BitTorrent technology represents the latest wave in p2p files sharing

applications.32 This technology is a file distribution application that allows high speed

transfers of large files from one computer to another over a dedicated transfer protocol

28 Id. at 936. 29 See, David Baumer – Digital Rights Management, http://www4.ncsu.edu/~baumerdl/DRM.a.ppt, (last visited March 19, 2009). 30 Id. 31 supra note 26. 32 William Sloan Coats and Melissa Keyes, Recent Developments in Vicarious Liability and Copyright

Licensing for Music, PLI Order No. 11389, 267 (2007).

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(.torrent). 33 BitTorrent technology is a three step process by which files are distributed

from one machine to another.34 William Coats describes the process of how BitTorrent

technology transfers large files, at high speeds, with minimal costs.

“BitTorrent technology is three-fold: (1) each file to be shared is broken up into a number of smaller, equally-sized pieces which are downloaded one at a time; (2) once a peer downloads (transfers from) one piece from one peer, he in turn can upload (transfer to) that same piece to another peer or peers, even before he obtains the entire file; and (3) the pieces are transferred from peer-to-peer in random order, which increases opportunities for data exchange by increasing the chances that two peers will have different pieces of the same file.”35

Major companies have incorporated BitTorrent technology in order to distribute data to

their consumers at a much faster rate then just downloading the data from a single server.

Blizzard Entertainment, the publishers of the popular massive multiplayer online (m.m.o.)

game World of Warcraft, regularly uses BitTorrent technology to distribute patches of

data to World of Warcraft subscribers. This allows their 10.5 million subscribers to

download the desired content from each other instead of downloading the patch from

Blizzard’s servers. By doing this, Blizzard distributes the data quicker and saves money

by not draining bandwidth from their servers. In order to utilize this technology,

BitTorrent has a three-tiered system consisting of clients, tracking servers and torrent

sites.36

A. Clients

A client (Internet user) downloads the BitTorrent application which allows the

client to connect to the BitTorrent network.37 The first BitTorrent application (BitTorrent)

33 Id. 34 Id. 35 Id. 36 Id. 37 Id.

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was created by Bram Cohen in 2001.38 But, Cohen coded the original application in open

source code, which has allowed others to modify and distribute variations of the original

application. Thus, BitTorrent was the first application utilizing BitTorrent protocol

technology, but hundreds of generic applications have been created from the original

source code.39 Once a user downloads a .torrent file, the BitTorrent application reads

the .torrent file and communicates with the tracking server in order to facilitate the

download. One major characteristic of the BitTorrent application that makes it different

from traditional p2p software, such as Napster, is that the BitTorrent application lacks a

search function to find the necessary .torrent files for download.40 Therefore, a client has

to go through a third party, usually a torrent site, to search and download the

necessary .torrent files in order to download the desired data.

B. Tracking Servers

Tracking servers do not pose much of a threat to indirect copyright

infringement.41 The purpose of a tracking server is to facilitate communication with

different peers that are trying to download the same file.42 The tracker server also directs

peers to new “seeds” if the original protocol (the source (peer) where the file is being

downloaded from) is destroyed.43 Tracking servers do not store any data about the

exchange of information between the peers that are requesting the server.44 Thus,

38 See, BitTorrent Clients, http://a.scarywater.net/torrent/clients/, (last visited March 19, 2009). 39 Id. 40 See Plaintiffs’ Opposition to Defendant’s Motion to Dismiss at 5, Columbia Pictures Indus., Inc. v.

Bunnell, et al., 2006 WL 5363088 (C.D.Cal. Filed May 1, 2006). 41 supra note 32. 42 See, Quartermeg – The source for BitTorrent Client Information, http://www.quartermeg.com/bittorrent-

tracker.htm, (last visited April 18, 2009). 43 Id. 44 supra note 32, at 279.

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contributory liability, in reference to tracking servers, would be very difficult to prove.45

This is because tracking server operators would be very unlikely to have actual

knowledge of the peers and information being processed upon the server.46

Vicarious liability is also difficult to pin on tracking server operators. Tracking

servers usually do not advertise nor profit from their operation.47 Tracking servers

operate within the background of the BitTorrent technology and play a passive role in

transfer of data.48 They do not control nor know of the trading that occurs between

peers.49 Because of this lack of knowledge, it would be very difficult to prove that

tracking servers are inducing people to infringe.50 Therefore, to prove tracking servers

encourage, contribute, or vicariously induce people to infringe copyrighted material

solely by their operation would be a difficult task.51 Although tracking servers do not

pose much of a threat to copyright infringement themselves, the tracking servers that

have had suits filed against them have been attached to torrent sites.52

C. Torrent Sites

Torrent sites pose the biggest danger for copyright infringement.53 Once a client

downloads the BitTorrent application, he can download a “.torrent” file for the requested

media whether it is music, movies, software, television shows, computer games, or any

45 supra note 32, at 279. 46 Id. 47 Id. 48 Id. 49 Id. 50 Id. 51 Id. 52 Id. at 279. 53 Id.

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other file type desired.54 The .torrent files contain metadata concerning what file is to be

downloaded and about the tracker server, which will facilitate the transfer.55 In order for

the client to find the correct .torrent file, he will go to a site that has the capabilities to

search for links to .torrent files. Any website can host a .torrent file, but sites created for

the distribution of .torrent links have been set up like search engines, with indexes

of .torrent files and a search function built in.56 By using a torrent site, the client is able

to search for any .torrent file just like a person would search for a specific web page

through Google. The client enters search terms for the desired .torrent file, and the

torrent site distributes links to the desired data. Once the client has downloaded

the .torrent file from the third party site (link provided by the torrent site), the client

application (ex. BitTorrent) reads .torrent metadata and designated tracker server

information to connect the client with other peers for download.57

A torrent site is the direct link between the BitTorrent client and the requested

data.58 Torrent sites provide the necessary links for a client to find the particular file they

are requesting. An argument of copyright holders is that torrent sites “materially

contribute” to the direct infringement of their users.59 Without torrent sites, BitTorrent

application users could not find the necessary files in order to complete their download.60

This is because the BitTorrent application does not provide a search function for the

54 Matthew Helton, Secondary Liability for Copyright Infringement: BitTorrent as a Vehicle for

Establishing a New Copyright Definition for Staple Articles of Commerce, 40 COLUM. J.L. & SOC. PROBS. 1, 19 (2006) 55 Id. at 19-20. 56 supra note 32, at 275. 57 supra note 53, at 20. 58 supra note 32, at 275. 59 Id. at 274. 60 Id.

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necessary .torrent files.61 Copyright owners also argue that torrent site owners

vicariously infringe the copyright holder’s rights by having the ability to control the

content on their websites, control access to their websites, and create revenue by

advertising from their websites.62 The site works as the search engine and indexer

of .torrent files and allows users to access thousands of files (.torrents).63 While there

have been many cases concerning the legality of traditional p2p file sharing applications

such as Napster and Grokster, there has never been a case, decided on its merits,

concerning the legality of a torrent site. Columbia Pictures, Inc. v. Bunnell64, a case

concerning the legality of the torrent site, TorrentSpy.com, is the only case to go to trial

on the issue of secondary copyright infringement.

4. An analysis of the legality of torrent sites.

Proper analysis of the legality of torrent sites should start with whether the sites

may be held indirectly liable for copyright infringement. A party is liable for indirect

copyright infringement either by contributory infringement, vicarious infringement, or

inducement of infringement.65

Contributory infringement occurs when there is direct infringement from a third

party, where the indirect party has actual knowledge of the infringement, and the indirect

party material contributes to the infringement of the third party.66 The affirmative

61 Id. 62 Complaint at 10-13, Columbia Pictures Indus., Inc., v. Fung, 447 F.Supp.2d 306 (2006). 63 See Plaintiffs’ Opposition to Defendant’s Motion to Dismiss at 5, Columbia Pictures Indus., Inc. v.

Bunnell, et al., 5 (C.D.Cal. Filed May 1, 2006). 64 Columbia Pictures v. Bunnell, 2007 WL 4877701 (C.D.Cal. 2007). 65 supra note 32, at 272. 66 William Sloan Coats, Mark Weinstein & Erik R. Zimmerman, Pre- and Post-Grokster Copyright

Infringement Liability for Secondary and Tertiary Parties, 12TH ANNUAL INSTITUTE ON INTELLECTUAL PROPERTY LAW G-877, at 337 (David Bender and Robert P. Taylor eds., 2006).

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defense to the accusation of contributory infringement is that the product is being used

for substantial non-infringing use. The substantial non-infringing use theory was defined

in Sony Corp. of America v. Universal City Studios67, where the Supreme Court held that,

“...a manufacturer of a product is not liable for contributory infringement as long as the

product is ‘capable of substantial noninfringing uses.’”68

Vicarious infringement occurs when a third party commits a direct infringement

and where the indirect party has actual knowledge of the infringement, the ability to

control the infringement, and gains a financial benefit from the third party’s

infringement.69 In A&M Records, Inc. v. Napster70, the 9th Circuit expanded the theory of

increasing financial benefits holding that even an increase in Napster’s “user base” would

derive a financial benefit.71 They reasoned that the more users Napster acquired, the

greater their index of files would be, thus making the content more lucrative to potential

users.72

The newest theory pertaining to indirect liability for copyright infringement is that

of inducement of infringement. The Supreme Court, in MGM Studios, Inc. v. Grokster73

,

laid out this theory with three elements.74 The Court held that one who distributes a

device, with the intent to promote its use to infringe copyrights, is liable for the actions of

the infringing third party.75 The Court set the level of intent quite high, stating, “...mere

knowledge of infringing potential or of actual infringing uses would not be enough here

67 464 U.S. 417 (1984). 68 Id. at 498. 69 supra note 66, at 332. 70 239 F.3d 1004 (2001). 71 Id. at 1023. 72 Id. 73 545 U.S. 913 (2005). 74 Id. at 919. 75 Id.

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to subject a distributor to liability.”76 The Court then goes on to state, “The inducement

rule, instead, premises liability on purposeful, culpable expression and conduct...”77

A. The only torrent search site case to go to court in the United States;

Columbia Pictures, Inc. v. Bunnell.

TorrentSpy.com was a popular torrent site where over one million torrents were

indexed, with thousands being added daily.78 The website not only provided a large

index of torrent files for users but also hosted message boards/forums for users to make

comments about specific torrents and implemented a rating system for popular torrents to

be displayed as a news feed on the front page.79 At one point, TorrentSpy.com claimed

to be the largest BitTorrent search engine on the internet.80 The number of users reached

an estimated total of six million views a day at TorrentSpy.com’s peak in late 2008.81

On February 23, 2006, the Motion Picture Association of America, on behalf of

their copyright owners, filed suit against TorrentSpy.com, iSohunt.com (a Canadian

Company), and other torrent search engines.82 In their Opposition to Defendants’ Motion

to Dismiss, the copyright holders contended that the torrent sites operators participated in

inducement, had actual knowledge and material contribution of infringement, acquired

76 Id. at 937 77 Id. 78 See CNET News – TorrentSpy shuts down in the U.S., http://news.cnet.com/TorrentSpy-shuts-down-in-

the-U.S./2100-1030_3-6204618.html, (Last visited March 22, 2009). 79 Id. 80 Id. 81 See torrentspy.com – Traffic details from Alexa, http://www.alexa.com/data/details/traffic_details/torrentspy.com?h=300&range=6m&site0=www.torrents

py.com&site1=mininova.org&site2=thepiratebay.org&site3=torrentz.com&site4=isohunt.com&size=Med

ium&w=610&y=t&z=0, (Last visited March 22, 2009). 82 See ORDER GRANTING PLAINTIFFS’ MOTION FOR TERMINATING SANCTIONS, Columbia

Pictures Indus., Inc. v. Bunnell, et al., 1 (C.D.Cal. Filed December 13, 2007).

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financial benefits, and had the right and ability to control which files were index within

their torrent sites.83

i. Argument for the Copyright Holders.

The copyright holders claimed that the torrent sites actively participated in

inducement by knowing that their user’s main purpose was to use the site for

infringement purposes.84 Also, the copyright holders contended that the way the .torrent

files were categorized, by names of specific television shows or movies, is “a classic

enticement to infringe.”85

The copyright holders alleged that the torrent site operators had actual and

constructive knowledge of the infringement due to the fact that the torrent site operators

managed, indexed, and controlled the .torrent files associated with the infringed copies of

data.86 The Plaintiff’s argue that just by visiting the site, anyone, including the

Defendants, would immediately observe the infringement of copyrighted files.87 The

Plaintiff’s also argue that the torrent site operators materially contributed to their users’

infringement by providing the critical link from the BitTorrent application to the

downloaded product.88 The copyright holders allege that even though the torrent site does

not actually distribute the copyrighted material, they are still “materially facilitating

infringement” because, without the torrent search sites, the client would not be able to

locate the desired .torrent files.89

83 supra note 63, at 6-13. 84 Id. at 8. 85 Id. 86 Id. at 9. 87 Id. 88 Id. at 11 89 Id.

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In regards to the financial benefit drawn by the Defendants, the copyright holders

argue the main draw of torrent sites is the links to the copyright holder’s movies and

television shows.90 Because the torrent site operators generate ad revenue based on the

amount of traffic the site receives, without the popular infringed works, there would not

be as many users.91 Therefore, the infringed data is a direct link to the amount of revenue

the torrent site gains.92

The last argument that the Plaintiffs presented was that the Defendants had the

right and ability to control the conduct on their websites.93 The Plaintiffs’ argument

centers around the fact that the Defendants had the ability to control which .torrent files

were uploaded and indexed within their site.94 Also, the Plaintiffs contend, that the

torrent site operators had the ability to control access to the website from users by

banning known infringers from uploading or downloading material.95 The Plaintiffs’

argument centers on the point that since the Defendants had all a substantial amount of

actual knowledge of infringement, and did nothing about it, it is obvious that the torrent

site operators’ main intentions were to contributorily and vicariously infringe copyrighted

material with actual inducement.96

ii. Argument of the Torrent Site Operators

90 Id. 91 Id. 92 Id. 93 Id. at 12. 94 Id. 95 Id. 96 Id. at 13.

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Torrent site operators claim that their websites did not house any infringing

content. 97 The sites merely provided links which only contain “textual information

assembled by automated processes and without copyrighted content.98 The torrent site

owners argue that, after the client downloads the .torrent file from the torrent site, the

client has to use third party software in order to pursue a download. And, the torrent site

owners argue, “that pursuit may, according to the desires of the user [client], lead to [the

client downloading] infringing files located elsewhere on the Internet.”99

The torrent site operators start their argument by comparing the torrent site

functions to that of a traditional search engine such as Google.100 The operators state, “In

contrast to conventional search engines like Google, the torrent system provides the user

with a virtual representation of selected portions of the Internet for the user’s greater

convenience and utility.”101 Instead of providing a user with a link to a traditional web

page, such as Google does, the purpose of a torrent site is to provide a user with a link to

a .torrent file.102 The objective of the torrent sites is to provide information to a

requesting party using the most convenient way.103 The Defendants claim that a

traditional search engine such as Google or Yahoo could be used to obtain the same

information that a torrent site retrieves, but the torrent site was developed to retrieve the

desired file protocol with greater utility.104 Their argument continues by explaining that

when a user takes advantage of the search function on a torrent site and downloads

97 See Defendants’ Memorandum of Points and Authorities in Support of Defendants’ Motion to Dismiss for Failure to State A Claim (rule 12(b)(6)), Columbia Pictures Indus., Inc. v. Bunnell, et al., 4 (C.D.Cal. Filed March 27, 2006). 98 Id. at 5. 99 Id. 100 Id. at 1. 101 Id. 102 Id. 103 Id. 104 Id.

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a .torrent file, the file does not contain any copyrighted material.105 Torrent sites provide

indexes of content located elsewhere and provide links to the off-site data.106 The .torrent

files only contain “textual information assembled by automated processes and without

copyrighted content.”107

The Defendants next refute the claim that the torrent site operators have the

ability to prevent infringement. They claim that they do not have the capacity to

censor .torrent files based on a file name and link. In order to control the content

uploaded to their sites, the site operators would have to inspect every uploaded link and

then make a determination as to whether the material was actually copyrighted and if the

copy was in fact not authorized.108

The torrent site operator’s final argument is that, according to Grokster109, in

order to claim secondary liability, there has to be evidence of actual infringement.110 The

Defendants state that there has been no claim of actual direct infringement, since

BitTorrent technology is practicable for both legitimate purposes and copyright

infringement. The Defendants cite the Grokster111 decision which says “mere knowledge

of infringing potential or of actual infringing uses would not be enough here to subject a

distributor to liability. Nor would ordinary acts incident to product distribution, such as

offering customers technical support or product updates, support liability in

105 Id. at 5. 106 supra note 32, at 276. 107 Id. 108 Id. 109 545 U.S. 913 (2005). 110 Id. at 940 (“In addition to intent to bring about infringement and distribution of a device suitable for infringing use, the inducement theory of course requires evidence of actual infringement by recipients of the device.”). 111 Id. at 937.

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themselves.”112 The Defendants contend that the copyright holders have not asserted any

specific acts of actual infringement by third parties.

iii. Court Proceedings and Pre-trial Judgment

On December 13, 2007, the United States District Court for the Central District of

California issued an order granting Plaintiffs’ motion for terminating sanctions.113 In the

Order, the Court held that the Defendants willfully disposed of evidence in four ways.

First, the Defendants deleted and modified TorrentSpy User Forums Postings.114 Wes

Parker, one of the Defendants, instructed his forum moderators to delete any forum posts

that had to do with piracy.115 He even suggested that moderators search through old

forum postings in an attempt to delete any information relating to piracy.116 Forum

posting names were modified to replace copyrighted names with generic names.117 Two

forum postings were deleted all together; a forum posting instructing the user on how to

“crack” copyright security software and a forum posting pertaining to a glossary of

terms.118 Second, the Defendants deleted directory headings referencing copyrighted

works.119 Third, in April 2007, the site operators destroyed parts of users’ Internet

Protocol (I.P.) addresses in an attempt to prevent the Plaintiffs from discovering if the

Defendants had uploaded any copyrighted material.120 And last, the Defendants

concealed the identities and addresses of site moderators.121

112 Id. 113 See ORDER GRANTING PLAINTIFFS’ MOTION FOR TERMINATING SANCTIONS, Columbia

Pictures Indus., Inc. v. Bunnell, et al., 2007 WL 4877701 (C.D.Cal. Filed Dec. 13, 2007). 114 Id. 115 Id. 116 Id. 117 Id. 118 Id. 119 Id. at 2. 120 Id. at 3. 121 Id.

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Therefore, the Court held that, “Although termination of a case is a harsh sanction

appropriate only in ‘extraordinary circumstances,’ the circumstances in this case are

sufficiently extraordinary to merit such a sanction.”122

The Court reasoned that the Defendants went to extreme lengths in an effort to

destroy evidence and provided false testimony under oath in attempts to hide evidence of

the evidentiary destruction.123 The court noted that lesser sanctions would not be

sufficient to punish the Defendants and give relief for the prejudice and harm caused to

the Plaintiffs.124

Default Judgment was entered against the Defendants, and the court issued a

judgment of $110,970,000 dollars to the Plaintiffs.125 The Court awarded statutory

damages of $30,000 for each of the 3,699 infringements claimed by the Plaintiffs.126 The

Court also issued a Permanent Injunction forbidding the “TorrentSpy System” from

“directly, indirectly, contributorily, or vicariously infringing in any manner and

Copyrighted Works, etc.”127

B. An analysis of Columbia Pictures, Inc. v. Bunnell.

While torrent sites operators potentially face a battle against secondary liability of

copyright infringed data, copyright owners might have a difficult time placing the blame

on the torrent site operators. A case from the 9th Circuit almost parallels the arguments

that TorrentSpy.com made concerning torrent sites and traditional search engines

concerning secondary liability for linking to copyrighted material.

122 Id. at 8. 123 Id. 124 Id. 125 See, mpaaruling.pdf – Wired.com, http://blog.wired.com/27bstroke6/files/mpaaruling.pdf, (Last visited March 22, 2009). 126 Id. at 2. 127 Id. at 2-4.

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In Perfect 10, Inc. v. Google, Inc.128

, Perfect 10, a company that specializes in

adult content and runs a subscription based web service sued Google for direct,

contributory and vicarious liability for posting thumbnail versions of copyrighted

photographs on Google Image Search.129 The photographs were published by an

unauthorized third party on the third party’s website, but Google Image Search

automatically indexed the web pages containing the photographs and provided thumbnail

versions of the images based on the requests by Google Image Search users.130 When a

user clicked on the thumbnail, the link, which was attached to the thumbnail, would take

the user to the desired third party website.131 Perfect 10 claimed that Google directly

infringed Perfect 10’s rights under the copyright law by reproducing, displaying and

distributing unauthorized copies of Perfect 10’s photographs.132 Google claimed that the

thumbnail images fell under the doctrine of fair use.133 The Court of Appeals for the

Ninth Circuit held, as to the claim of direct liability, that Google’s Image Search

technology, by displaying millions of thumbnail images, is a “significant benefit to the

public,” and their use of Perfect 10’s thumbnails was a fair use.134

Perfect 10 alleged that Google was contributorily liable by assisting the infringing

third party website in distributing their unauthorized pictures through thumbnails on

Google Image Search.135 The Ninth Circuit held that Google could be contributorily

liable if “it had knowledge that infringing Perfect 10 images were available using its

128 487 F.3d 701 (9th Cir. Cal. 2007). (The case was later consolidated with Perfect 10, Inc. v. Amazon.com,

Inc., but the Google style is used because this analysis only includes issue pertaining to Perfect 10 and Google.) 129 Id. at 713. 130 Id. 131 Id. 132 Id. at 725-26. 133 Id. 134 Id. at 725. 135 Id. at 729.

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search engine, could take simple measures to prevent further damage to Perfect 10's

copyrighted works, and failed to take such steps.”136

Perfect 10 also claimed the Google was vicariously liable for the infringed

photographs.137 The Court did not accept this theory.138 The Court held that in order for

Perfect 10’s argument to succeed, they must prove that “Google has the right and ability

to stop or limit the infringing activities of third-party websites” and “that Google derives

a direct financial benefit from such activities.”139 The Court also noted that while Google

does have the authority to terminate advertising partnerships, they do not possess a legal

right to stop or limit copyright infringements on third party websites.140 This

distinguishes Google from Napster’s vicarious liability because Napster had the ability to

terminate users’ accounts and ban them from the Napster system.141

Perfect 10, Inc. v. Google, Inc.142

is a pertinent case to use to analyze, compare

and contrast the issues presented in Columbia Pictures, Inc. v. Bunnell.143 The

defendants, in both cases, were accused of contributory and vicarious liability by having

links to copyrighted material on their individual sites. The main difference between the

two sites is that of intent. Google’s main intention is to distribute links, and a person

normally goes to Google to find links to websites. An Internet user normally does not

use Google’s services to find material to download. The torrent site operator’s contention

is that their intentions are the same as Google. The design of their website is to provide a

user with links, as well. But, the torrent site links are directed to a specific file protocol.

136 Id. 137 Id. at 730. 138 Id. 139 Id. 140 Id. 141 Id. 142 487 F.3d 701 (9th Cir. Cal. 2007) 143 2007 WL 4877701 (C.D.Cal. Filed Dec. 13, 2007)

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Whether or not the file protocol is used mainly for copyright infringement purposes is left

up to a court of law.

If torrent site operators are able to convince a court that their services fall into the

same category as traditional search engines, then the torrent site operators might have a

practical defense to vicarious liability and infringement.144 The defense would be that

while the torrent site operators have the power to restrict access to the torrent site, they

have no ability to police the conduct of their users once they have left the site. And,

patrolling the site for copyrighted material would be extremely difficult. 145

But, according to the Google case, even if the torrent sites are regarded as search

engines, they are still not shielded from contributory liability. Under the Google case, the

torrent sites would be liable for contributory infringement if they knew of the

infringement, could take simple steps to fix the infringement, but did not take the relevant

steps. In order to prove contributory liability, the copyright holders would have to show

that the torrent sites had actual knowledge of the infringement.146 In the case of

TorrentSpy, the ranking of top torrents on the front page could be enough to prove that

the site had actual knowledge of the copyrighted material.147 If the torrent site operators

advertise certain torrents or classify torrents in certain ways, this could also show actual

knowledge of copyrighted material, or inducement of infringement.148

Internationally, torrent sites have been subject to the same claims of secondary

liability as presented in Bunnell. Two pending cases are presently before courts

internationally. iSohunt.com, a popular Canadian torrent site, is presently being sued by

144 supra note 32, at 278. 145 Id. 146 Id. 147 Id. 148 Id.

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the Canadian Recording Industry Association in the Supreme Court of British

Columbia.149 The case follows the same issues presented in the Bunnell case.

ThePirateBay.org, currently the most popular torrent site, is facing litigation from

Swedish prosecutors in the appeals court of Stockholm, Sweden.150 As with the

iSohunt.com case, the Plaintiffs argue that ThePirateBay.org committed indirect

infringement of copyrights by providing links to copyrighted material.151 The trial court

held that ThePirateBay.org was liable for secondary copyright infringement, but

ThePirateBay.org refused to shut down pending the results of the appeals process.152

Since both of the aforementioned cases are currently pending in international

courts, their verdicts could shape the way that courts in the United States interpret

indirect copyright infringement in regard to torrent sites. If either jurisdiction decides in

favor of the torrent site operators and provides a safe harbor to the torrent site operations,

then an influx of sites might flee to their jurisdiction. The Internet does not stop at

country borders, which could be very problematic if courts are in dispute about the

legality of these sites.

5. Solutions for a torrent site to avoid liability in a post-Grokster world.

The question of whether torrent search sites directly or indirectly infringe the

rights of copyright holders is a very complex issue. On one hand, the torrent site owners

argue that their websites do nothing more then distribute links to other parts of the

149 See WebTVwire – IsoHunt Lawsuit Sends Message to CRIA, RIAA, MPAA & More, http://www.webtvwire.com/isohunt-sues-cria/, (Last visited May 8, 2009). 150 See Wired.com – Pirate Bay Trial: The Hottest Ticket in Stockholm, http://www.wired.com/threatlevel/2009/02/pirate-bay-tria/, (Last visited May 8, 2009). 151 Id. 152 See Techdirt – Pirate Bay Loses A Lawsuit; Entertainment Industry Loses and Opportunity, http://www.techdirt.com/articles/20090417/0129274535.shtml, (Last visited May 8, 2009).

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internet. They contend that their websites do not house any copyrighted material, and in

order for a person to obtain copyrighted material, the user has to go to other websites and

use third party software to download the files.

Copyright holders argue that the torrent site operators are indirectly infringing

upon their copyrights. They claim that the operators contributorily and vicariously

induce copyright infringement by knowing about the direct infringement, promoting the

infringement, and profiting from the infringement.

From analysis of the evidence presented, torrent search sites are indirectly liable

for their users’ direct infringement. The holding in Perfect 10, Inc. v. Google, Inc.153

creates a substantial liability for the torrent search site operators. In Perfect 10, the Ninth

Circuit held that a website could be contributorily liable if “it had knowledge that

infringing material was available using its search engine, could take simple measures to

prevent further damage to the copyright holder’s copyrighted works, and failed to take

such steps.”154

The torrent site owners have actual knowledge of the infringing data. By placing

the .torrent links in specific categories such as television shows and movies, proof is

obvious that the operators have actual knowledge of what the links pertain to.155 The

operators could prevent further damage to the copyrighted works by simply deleting, or

not indexing, the links to the copyrighted material. Even though torrent site operators

claim it is not their job to baby-sit the content uploaded to their site, in actuality, by

owning the site, and by the Court’s holding in Perfect 10, they are responsible for the

153 supra note 128. 154 487 F.3d 701, 729 (9th Cir. Cal. 2007). 155 See Plaintiffs’ Opposition to Defendant’s Motion to Dismiss at 9, Columbia Pictures Indus., Inc. v.

Bunnell, et al., 9 (C.D.Cal. Filed May 1, 2006).

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content attached to it.156 If the Court finds the torrent sites indirectly violated copyright

holder’s rights, there are many solutions that the torrent site operators could implement in

order to operate their websites and not infringe the rights of the copyright holders.

Torrent search sites could take a number of steps to help avoid liability from

indirect copyright infringement. Since BitTorrent technology allows Internet users to

exchange data at such fast rates with minimal costs to the distributor, the technology is

unlikely to become obsolete.157 Due to the fact that the technology is greatly

decentralized, the task of tracing where copyright infringement originates is difficult.158

The hardest argument for the torrent sites to overcome is trying to shift the blame to

another tier of the BitTorrent system. BitTorrent application serves an obvious non-

infringing use, and the tracking servers play a very passive role in the process. Even

though torrent sites do not distribute any copyrighted data, their essential link in the

BitTorrent chain creates possible liability because, without their service, the copyright

infringement would not be feasible.

One possible solution for torrent site operators is to regulate what uploads are

indexed into the torrent search engines. Simply regulation, by user registration and

verification, would allow a site operator to monitor .torrent uploads of users with greater

detail.159 With only verified users being able to upload material, if an infringing file did

get indexed, the site operators would have a greater ability to remove the material and

ban the user if need be. The entertainment industry should also have a part in monitoring

the information accessible by the torrent search sites. If the entertainment industry took

156 supra note 136. 157 see William Sloan Coats and Melissa Keyes, Recent Developments in Vicarious Liability and Copyright

Licensing for Music, PLI Order No. 11389, 267 (2007). 158 Id. 159 supra note 40.

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an active role in policing the torrent search sites for infringing material and the torrent

search complied in removing infringing works, the search sites could still operate, avoid

liability, and distribute links to non-infringing works.

Another possible solution for copyright holders, specifically major entertainment

corporations, is to create embedded security software within the files that does not allow

them to be transformed into digital copies. Although this solution would be hard to

implement and even harder to invent, if the entertainment corporations had control over

the way their copyrighted material was converted, then they would be able to control the

medium by which the copyrighted material is distributed to the consumer. Microsoft and

many software companies have implemented a security measure such as this with the

invention of security access codes.160 Most Microsoft operating systems designate a

specific access code in order to install and operate the software on the specific

machine.161 Without the specific access code, the software will not install and make a

copy on the requesting machine.

If the entertainment industry was able to implement a security measure such as a

required application code, the reproduction of digital copies of media would greatly

diminish. By requiring a security code to access the information in a digital format, the

average direct infringer would be seriously inhibited from creating digital copies for

distribution. If there is a reduction in the ease of access of making digital copies, then the

ease of access in illegally distributing the digital copies will be reduced as well. This

would help control the distribution of copyright infringing material.

160 see SelfTest – What is an Authorization Code, System ID and/or Activation Key?, http://www.selftestsoftware.com/generic.asp?page_id=p00475, (Last visited May 8, 2009). 161 see CodeProject: ASP.NET – Web Application and Windows Authentication, http://www.codeproject.com/KB/aspnet/WindowsSecuritynASPNet.aspx, (Last visited May 8, 2009).

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The best solution is for the torrent site operators to implement a “pay-to-play”

service. Since BitTorrent technology has such positive capabilities in regard to quick and

cheap distribution, a torrent site operator could create a site in which subscribers pay for

access to the .torrent files and the torrent site operators pay a royalty fee to the deserving

copyright holder. This solution possesses the same business model that software such as

iTunes and the Wal-Mart Online Music Store have.

With the introduction of mp3 downloads in the 1990’s, the entertainment industry

had to manipulate their existing business models in order to survive the threat of direct

and contributory copyright infringement. P2P file sharing applications such as Napster

and Grokster created a substantial threat to the entertainment industry much like

BitTorrent technology and torrent search sites create today. In order for the entertainment

industry to control and profit from the new digital technology of mp3 downloads, the

industry had to reinvent their business models. Soon, programs such as Apple’s Itunes

and Wal-Mart’s music service provided the consumer with a cheap legal way to utilize

the technology of downloaded music and pay for the licensing to use the products.162

These programs have ensured that the consumer is going to receive a quality copy of the

desired media and have streamlined access to the media. These programs charge a

minimal “pay-to-play” fee/subscription and compensate the deserving copyright

holders.163 Before the creation of Digital Media stores, copyright infringement and

online piracy, especially concerning the download of music, was rampant.164 With the

162 see Apple Introduces iTunes – World’s Best and Easiest To Use Jukebox Software, http://www.apple.com/pr/library/2001/jan/09itunes.html, (Last visited May 8, 2009). 163 see zed equal zee – So does iTunes license of distribute music?, http://zedequalszee.com/2009/03/11/so-

does-itunes-license-or-distribute-music/, (Last visited May 8, 2009). 164 see TimesOnline – Napster reborn as legal song-swapping service, http://business.timesonline.co.uk/tol/business/industry_sectors/media/article1168138.ece, (Last visited May 8, 2009).

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entertainment industry remolding their business models, in order to compensate for a

maturing technological society, Itunes and Wal-Mart music stores are able to have better

control over the market place and still gain proceeds from digital copies of media.165

The torrent search sites have an opportunity to remold their current business

models in order to dissolve the contributory liability they are facing. By implementing a

“pay-to-play” system, a torrent search site will be able to ensure the consumer that a

quality copy of the media requested is available and downloaded. The torrent search sites

will also be able to use the proceeds from the sites to pay copyright holders their deserved

licensing fees. By the torrent site operators paying for permission to distribute the

copyright holder’s material, they avoid all of the theories of secondary liability. The

torrent site operators have already created the necessary means to implement a program

such as this. They would not have to change the actual process of the torrent tracking

sites. The torrent site operators would only have to require a subscription fee to access

the torrent search sites or require a fee per download.

If the torrent site operators were to implement a “pay-to-play” service, they would

still be able to use the technology behind the BitTorrent idea. This would allow the

torrent site operators to run their indexing services without having to create more pricey

software applications or purchase increased bandwidth for their web services. This

solution avoids liability for the torrent search site operators and gives credit and proceeds

to the deserving copyright holders.

165 see Washington Post – At 30, Apple Is Mainstream – And a Target, http://www.washingtonpost.com/wp-

dyn/content/article/2006/04/01/AR2006040100194.html, (Last visited May 8, 2009).

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6. Conclusion

Copyright infringement over the Internet has become an increasing problem since

the creation of the first p2p file sharing application. With the invention of the personal

computer and the ease of access for a user to access any type of media at almost

instantaneous speeds, the problem of copyright infringement is a serious issue. Because

of the way that BitTorrent technology is crafted, if one torrent site is shut down, ten more

are ready to fill their void. Torrent site companies are avoiding jurisdiction by taking

operations over-seas. Copyright holders, especially corporations that can control

distribution, are going to need to get creative and find a way to distribute their products to

the consumer fast and cheap. If the copyright holders can find a way to do this, then the

wave of raging unauthorized file sharing might dissolve.