I Heard it Through the GrapevineThe Law and Policy of Filesharing

Steven J. McDonald

General Counsel

Rhode Island School of Design

Dramatis Personae

• Colleges, Universities, and other ISPs

(supporting cast)

• Users

• The "Industry"

• Congress

• Advocacy Groups

Can't Stop the Music

• According to 2002 data, college students "are twice as likely to have downloaded music compared to the general population and they are three times as likely to do so on any given day" (Pew Internet Project)

• As of May 2003 – before the RIAA lawsuits – more than one half of full-time college students were downloading music, and more than one third were uploading it (Pew Internet Project)

• The RIAA lawsuits initially cut the number of downloaders roughly in half (Pew Internet Project), but that number has been increasing again since October 2003 (NPD Group)

But I Still Haven't FoundWhat I'm Looking For

• In June 2004, an average of 8.3 million people were logged onto file-sharing networks at any given time, up from 6.8 million a year earlier, and 1 billion songs were available on those networks, up from 820 million a year earlier (BigChampagne)

Grand Theft Audio

"The students and other users of your school's network who upload and download infringing copyrighted works without permission of the owners are violating Federal copyright law. 'Theft' is a harsh word, but that it is, pure and simple. . . . Students must know that if they pirate copyrighted works they are subject to legal liability."

– RIAA Letter to College Presidents

Back on the Chain Gang

"This is a serious challenge that calls for immediate, concrete action. . . . Specifically, we urge you to adopt and implement policies that:– Inform students of their moral and legal

responsibilities to respect the rights of copyright owners

– Specify what practices are, and are not, acceptable on your school's network

– Monitor compliance– Impose effective remedies against violators"

– RIAA Letter to College Presidents

Coming Soon to aComputer Near You

• "It's getting clear – alarmingly clear, I might add – that we are in the midst of the possibility of Armageddon." – Jack Valenti on file sharing

• "We are going to bleed and bleed and hemorrhage, unless this Congress at least protects one industry that is able to retrieve a surplus balance of trade and whose total future depends on its protection from the savagery and the ravages of this machine. . . . [T]he VCR is to the American film producer and the American public as the Boston strangler is to the woman home alone." – Jack Valenti on the VCR

Listen to What the Man Said"Some staggering statistics illustrate the magnitude of the problem. Research of FastTrack, a P2P file-sharing service, showed that 16% of all the files available at any given moment are located at . . . U.S. educational institutions. In addition, FastTrack users trading from . . . U.S. educational institutions account for 10% of all users on FastTrack at any given moment. It's unlikely that this amount of file-sharing activity is in furtherance of class assignments."

– Representative Lamar Smith

Dancin' to the Jailhouse Rock

"Colleges and universities have a duty to address these crimes aggressively. School presidents and other administrators cannot stand by as taxpayer-funded information systems and tuition dollars are being used to build Internet systems that help facilitate unethical behavior."

– Representative Ric Keller

Face the Music

"The fact of the matter is, while I'm sympathetic to the young people, they're breaking the law. And until the university or this Committee is willing to do something about it, we're just wasting everybody's time."

– Representative Maxine Waters

Hey, Teacher, Leave Them Kids Alone

"[T]hese issues require a circumspect analysis of the impact of network monitoring on privacy and academic freedom. While network monitoring is appropriate for certain purposes such as security and bandwidth management, the surveillance of individuals' Internet communications implicates important rights, and raises questions about the appropriate role of higher education institutions in policing private behavior."

– EPIC Letter to College Presidents

Liability: Users

• Direct infringement: "Anyone who, without the authorization of the copyright owner, exercises any of the exclusive rights of a copyright owner, . . . is an infringer of copyright."

• Exclusive rights include copying and distribution, the very functions that are at the heart of file-sharing

• (Very) strict liability– Knowledge and intent are irrelevant to liability– "'Innocent' infringement is infringement

nonetheless."– Potential liabilities include as much as $150,000 per

infringement, plus attorney fees and possible criminal penalties

But You Said It's Nice to Share

• "Space shifting" your own music for your own personal use is generally regarded as fair use – see, e.g., RIAA v. Diamond Multimedia Systems (9th Cir. 1999)

• Transferring physical possession of a CD to someone else is protected under the "first sale" doctrine

• "Sharing" with 10,000,000 of your closest personal friends is neither

I Fought the Law, and the Law Won

"Napster users who upload file names to the search index for others to copy violate plaintiffs' distribution rights. Napster users who download files containing copyrighted music violate plaintiffs' reproduction rights."

– A&M Records v. Napster (9th Cir. 2001)

I'm Not That Innocent

• Internal Napster documents recognized that "we are . . . making pirated music available" and recommended that the company remain ignorant of users' names and IP addresses "since they are exchanging pirated music"

Liability: Software Providers

• Contributory infringement: "[O]ne who, with knowledge of the infringing activity, induces, causes or materially contributes to the infringing conduct of another, may be held liable as a 'contributory infringer'."

Let's Go to the Videotape

"[T]he sale of copying equipment, like the sale of other articles of commerce, does not constitute contributory infringement if the product is widely used for legitimate, unobjectionable purposes. Indeed, it need merely be capable of substantial noninfringing uses."

– Sony Corp. v. Universal City Studios (U.S. 1984)

Caught in the Balance

"[W]hen a supplier is offering a product or service that has noninfringing as well as infringing uses, some estimate of the respective magnitudes of these uses is necessary for a finding of contributory infringement."

– In re Aimster Copyright Litigation (7th Cir. 2003)

Gypsies, Tramps & Thieves"A retailer of slinky dresses is not guilty of aiding and abetting prostitution even if he knows that some of his customers are prostitutes – he may even know which ones are. The extent to which his activities and those of similar sellers actually promote prostitution is likely to be slight relative to the social costs of imposing a risk of prosecution on him. But the owner of a massage parlor who employs women who are capable of giving massages, but in fact as he knows sell only sex and never massages to their customers, is an aider and abettor of prostitution . . . ."

– In re Aimster Copyright Litigation (7th Cir. 2003)

The Day the Music Died

• "The slinky-dress case corresponds to Sony, and, like Sony, is not inconsistent with imposing liability on the seller of a product or service that, as in the massage-parlor case, is capable of noninfringing uses but in fact is used only to infringe."

• "Aimster has failed to produce any evidence that its service has ever been used for a noninfringing use, let alone evidence concerning the frequency of such uses."

If Music Be the Food of Love, Play On

"Defendants distribute and support software, the users of which can and do choose to employ it for both lawful and unlawful ends.  Grokster and [Morpheus] are not significantly different from companies that sell home video recorders or copy machines, both of which can be and are used to infringe copyrights. While defendants, like Sony or Xerox, may know that their products will be used illegally by some (or even many) users, and may provide support services and refinements that indirectly support such use, liability for contributory infringement does not lie 'merely because peer-to-peer file sharing technology may be used to infringe plaintiffs' copyrights.'"

– MGM Studios v. Grokster, Ltd. (C.D. Cal. 2003)

Neither a Borrower Nor a Lender Be

"Here, it is undisputed that there are substantial noninfringing uses for Defendants' software – e.g., distributing movie trailers, free songs or other non-copyrighted works; using the software in countries where it is legal; or sharing the works of Shakespeare. . . . [T]he Morpheus program is regularly used to facilitate and search for public domain materials, government documents, [and] media content for which distribution is authorized . . . [or] as to which the rights owners do not object . . . ."

– MGM Studios v. Grokster, Ltd. (C.D. Cal. 2003)

It's the Same Old Song,But with a Different Meaning

Since You Been Gone

• When the lawsuits started, Kazaa incorporated in Vanuatu for "tax reasons"

Liability: ISPs• Contributory infringement is again the

issue• However, the DMCA provides ISPs with

safe harbors from liability in four situations:– Information Residing on Systems or

Networks At Direction of Users– Transitory Digital Network Communications– System Caching– Information Location Tools

Put Our Service to the Test

• The definition of "service provider" is quite broad and generic: "a provider of online services or network access"

• "Colleges and universities are just Internet Service Providers that charge tuition." – former Harvard counsel Allan Ryan, Jr.

• * Ellison v. Robertson (9th Cir. 2004)

General Conditions for Eligibility

• Must adopt, inform users of, and "reasonably implement" a policy that provides for the termination of the accounts of "repeat infringers" in "appropriate circumstances"

• Must accommodate, and not interfere with, "standard technical measures"

Be My Host

"A service provider shall not be liable for . . . infringement of copyright by reason of the storage at the direction of a user of material that resides on a system or network controlled or operated by or for the service provider . . . ."

Eligibility Conditions forHosted Content Safe Harbor

• Have no actual knowledge that specific material is infringing or awareness of facts and circumstances from which it is apparent– Need not monitor or affirmatively seek out infringement

• "Expeditiously" remove or disable access to infringing material upon gaining such knowledge or awareness

• Derive no financial benefit directly attributable to the infringing activity

• Register a designated agent to receive notices of claimed infringement

• Comply with notice and takedown procedure upon receipt of a notice that "substantially complies"

Just Passing Through

"A service provider shall not be liable for . . . infringement of copyright by reason of the provider's transmitting, routing, or providing connections for, material through a system or network controlled or operated by or for the service provider, or by reason of the intermediate and transient storage of that material in the course of such transmitting, routing, or providing connections . . . ."

Eligibility Conditions forConduit Safe Harbor

• Transmission is directed by someone else• Transmission is carried out by an automatic

technical process with no selection of material by provider

• Provider does not select recipients• Any transient copy is not "ordinarily"

accessible to others or retained for longer than "reasonably" necessary for the transmission

• Material is transmitted without modification of content

Nota Bene

• Knowledge apparently doesn't matter

• Takedown requirement doesn’t apply

• But virtually all of the takedown notices colleges and universities are receiving involve precisely this situation

• Can we just throw them away?

• Should we?

You Sure Ask a Lot of Questions

• Are you sure you've done everything the safe harbor requires?

• Are students with respect to whom we receive multiple notices "repeat infringers" we must terminate under our "reasonably implemented" policies anyway?

• Do we fail our students if we don't protect them from themselves?

• What would Congress do if we were to take that position?

Options

• Do nothing• Respond anyway• Education• Bandwidth usage limits and quotas• Packet shaping• Filtering• Market forces• Offer alternatives

Don't Punish Me with Brutality

• Progressive discipline• Termination of room connection v. termination

of account• "[A] service provider shall not be liable to any

person for any claim based on the service provider's good faith disabling of access to, or removal of, material or activity claimed to be infringing or based on facts or circumstances from which infringing activity is apparent, regardless of whether the material or activity is ultimately determined to be infringing."

School of Hard Knocks

"What happens at Penn State if you are caught? By statute, the University must immediately block your network access when we receive notification that a particular computer has been involved in a violation of the law. You may also be taken to court by the copyright holder or charged in the federal courts with a crime. That is not all that can happen. . . . A student can be expelled and an employee terminated under University policy."

– Broadcast message from Penn State's Provost

Stop! In the Name of Love

"While the tactics these organizations have chosen to employ may seem heavy-handed, they are correct that much of the file-trading that occurs through the use of these programs constitutes copyright infringement. . . . At an institution devoted to the creation of art, we should be especially mindful of these issues. Artists' livelihoods are dependent in large part on the creation of, and the respect of others for, copyrights. Just as you would wish to protect the economic value of your own copyrights, so, too, do the musicians, filmmakers, and other fellow artists whose work is being traded over the Internet without appropriate compensation."

– Broadcast message to the RISD Community

University of Florida: ICARUS

• Integrated Computer Application for Recognizing User Services

• Automatically detects P2P traffic and disables user account

• First strike: 30 minutes + tutorial

• Second strike: 5 days

• Third strike: judicial system

Cornell: "Pay by the Drink"

• Cornell has implemented a usage-based fee structure

• For $3.00 per month, each user can send or receive up to 2 gigabytes of data through Cornell's internet connection to the outside world

• Internal traffic is free• Excess usage costs $.002 per megabyte• Cornell estimates that more than 80% of its

users will never have to pay more than the basic fee

You Can't Always GetWhat You Want

• 3000 users in the first 24 hours

• 100,000 downloads in the first 24 hours

• 500,000+ songs available

• But limited to "tethered downloads"

Getting to Know You,Getting to Know All About You"A copyright owner . . . may request the clerk of any United States district court to issue a subpoena to a service provider for identification of an alleged infringer . . . . The subpoena shall . . . order the service provider . . . to expeditiously disclose to the copyright owner . . . information sufficient to identify the alleged infringer of the material . . . to the extent such information is available to the service provider."

Or Maybe Not

"The issue is whether § 512(h) applies to an ISP acting only as a conduit for data transferred between two internet users, such as persons . . . sharing P2P files. . . . We conclude from both the terms of § 512(h) and the overall structure of § 512 that . . . a subpoena may be issued only to an ISP engaged in storing on its servers material that is infringing or the subject of infringing activity."

– RIAA v. Verizon Internet Services (D.C. Cir. 2003)

A Hollow Victory?

• How to get a subpoena under the DMCA:– The person requesting a DMCA subpoena must,

among other things, submit "a sworn declaration to the effect that the purpose for which the subpoena is sought is to obtain the identity of an alleged infringer and that such information will only be used for the purpose of protecting rights under this title. . . . [If the request satisfies these requirements,] the clerk shall expeditiously issue and sign the proposed subpoena and return it to the requester for delivery to the service provider."

Judge Not . . .

• How to get a "normal" subpoena:– "The clerk shall issue a subpoena, signed but

otherwise in blank, to a party requesting it, who shall complete it before service. An attorney as officer of the court may also issue and sign a subpoena on behalf of . . . a court in which the attorney is authorized to practice . . . ."

– No sworn declaration required– Not limited to identity– No requirement of judicial approval– Few grounds to contest

50,000,000 Elvis Fans Can't Be Wrong

"One may search the Copyright Act in vain for any sign that the elected representatives of the millions of people who watch television every day have made it unlawful to copy a program for later viewing at home, or have enacted a flat prohibition against the sale of machines that make such copying possible."

– Sony Corp. v. Universal City Studios (U.S. 1984)

Coming Attractions

• The Protecting Intellectual Rights against Theft and Expropriation (PIRATE) Act

• The Piracy Deterrence and Education Act• The Artists' Rights and Theft Prevention

(ART) Act• The Inducing Infringements of Copyright

(INDUCE) Act