File sharers now have even more to fear

Decision confirms that illegal P2P users can expect to get sued many miles from home.

The United States District Court for the District of Columbia has handed another procedural victory to plaintiff record companies in a copyright infringement suit relating to music traded over P2P networks. The court ruled that it had personal jurisdiction over an out-of-state accused file-sharer merely because the defendant offered sound recordings to the public and was able to download recordings made available by others.

Plaintiff record companies filed suit against 35 John Doe defendants, identifying those defendants by their IP addresses and the songs they were accused of illegally distributing. John Doe #18, who was notified of the suit by his ISP Verizon, asked the court to dismiss the case for lack of personal jurisdiction, arguing that he did not have sufficient contacts with the District of Columbia.

The court denied John Doe #18’s motion to dismiss. For one thing, the motion was premature. “Simply, the parties [could not] formally litigate any aspect of personal jurisdiction until the defendant [had] actually been identified.” Without knowing who the defendant was, the court could not tell whether it had jurisdiction.

As it turns out, the prematurity of the motion was inconsequential. The court held that, anonymous or not, the plaintiffs established that the court had personal jurisdiction over John Doe #18. By simply contracting with Verizon, a “District of Columbia-based ISP,” and using a Verizon facility to trade files, John Doe #18 was “transacting business” in the District, and caused tortious injury in the District.

Further, by simply making files available for download by others through his file-sharing software, and being able to download other files, John Doe #18 “clearly directed tortious activity into the District of Columbia.”

Finally, citing to the case of Gorman v. Ameritrade Holding Corp., 293 F.3d 506 (D.C.Cir. 2002), and the famous case of Zippo Mfg. Co. v. Zippo Dot Com, Inc., 952 F.Supp. 1119, (W.D.Pa.1997), the court held that John Doe #18’s computer was “transformed . . . into an interactive Internet site.” This “interactivity” provided the sort of “continuous” and “systematic” contacts with the forum sufficient to support personal jurisdiction over the defendant.

Virgin Records America, Inc. v. Does 1-35, Slip Copy, 2006 WL 1028956 (D.D.C., April 18, 2006).

Google caching not copyright infringement

Suit by plaintiff who “manufactured” claim against Google dismissed on summary judgment.

The Google search engine uses an automated program called the “Googlebot” to crawl the World Wide Web, indexing the information that is contained on billions of pages. During this process, Google makes and analyzes a temporary copy of each page the Googlebot encounters, and stores those copies on the Google servers. These stored copies are referred to as “cached” versions.

For years, Google has provided to its users links not only to the original location of web pages, but also provides links to the cached versions. A cached version shows how a particular page appeared the last time the Googlebot visited it, and also presents the user’s search terms, where they appear on the page, in highlighted text. A cached version may also provide a copy of a page that no longer exists on the server where it was originally published.

People generally agree that Google provides a useful service by making the cached versions available, and most website publishers consent to their pages being indexed in this way. Publishers who do not want Google to index their content can simply add a few lines of HTML to their pages, which instruct the Googlebot not to index those pages. This method is widely known among web developers.

Blake Field is an author who published his own literary works online. Although he knew how to include the HTML in his pages which would prevent the Googlebot from indexing his site, he left out those instructions. Eventually, Google indexed the pages containing Field’s works, and links to cached versions of the pages began showing up in Google search results.

In 2004, Field sued Google in federal court in Nevada. He alleged that by allowing users to download cached versions of his web pages, Google was infringing on the copyright to his literary works. Both Field and Google moved for summary judgment in the case, and the court ruled in favor of Google, dismissing the suit.

Google raised a number of affirmative defenses against Field’s claim of copyright infringement, and the court ruled in Google’s favor on each of them.

Implied license

The court held that Field had impliedly given Google a license to provide cached copies of his works. Of particular importance was the fact that Field knew how to prevent Google from redistributing cached versions of his work, but chose not to enact such measures. The court found that Field instead made a conscious decision to permit the caching. Accordingly, the conduct could be “reasonably interpreted as the grant of a license . . . for that use.”

Estoppel

The court also held that Field was estopped from claiming that Google had engaged in copyright infringement. On this defense, Google successfully demonstrated that (1) Field knew of Google’s allegedly infringing conduct beforehand, (2) Field intended for Google to believe it had a right to cache the pages, (3) Google was unaware of Field’s true intentions, and (4) Google detrimentally relied on Field’s conduct.

Fair use

Perhaps the most provocative portion of the court’s decision comes from its holding that Google’s providing of the cached links was protected under the doctrine of fair use. Looking at the factors set forth in Section 107 of the Copyright Act [17 U.S.C. §107], the court found that the functions served by the cached copies, e.g., showing how a page appeared in the past and highlighting search terms, made them sufficiently transformative of the original use of the pages. Even though Google provided cached copies of the entire works, the court found such use permissible, because “[w]ithout allowing access to the whole of a Web page, the Google Cached link cannot assist Web users (and content owners) by offering access to pages that are otherwise unavailable.” Finally, the court found that there was no evidence that Google’s cached copies adversely affected any market for Field’s works.

Field v. Google, — F.Supp —, No. 04-CV-413 (D.Nev., January 19, 2006).

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Decision provides guidance on registering a copyright for web pages

Plaintiff Darden filed an application with the Copyright Office to register his claim of copyright in the text, maps and formatting of the website Appraisers.com. The Copyright Office denied the application, and this denial was affirmed each time during two reconsiderations within the Copyright Office. Noting that in general, the formatting of web pages is not copyrightable, the examiners determined, among other things, that Darden’s claim of copyright was too broad: the website as a whole lacked the requisite amount of originality to sustain registration.

Darden sought review in federal court of the Copyright Office’s adverse decision. However, the court affirmed the decision, holding that the denial was not an abuse of discretion. The court determined that the examiners at the Copyright Office had “intelligently account[ed]” for the denial via “reasoned decision making.”

The real problem with Darden’s application was that he was trying to claim copyright not just in the specific textual and graphical elements of the site, but was trying to claim copyright in the basic way the website was laid out. The “unoriginal formatting elements” and “uncreative layout” are not subject to protection, thus could not be included in the registration. The examiners had explained:

[T]he longstanding practice of the Copyright Office is to deny registration of the arrangement of elements on the basis of physical or directional layout in a given space, whether that space is a sheet of paper or a screen of space meant for information displayed digitally.

Accordingly, the Copyright Office was correct when it denied Darden a copyright registration for the style in which many web pages are formatted.

Darden v. Peters, — F.Supp.2d —, 2005 WL 3370676 (E.D.N.C., December 6, 2005).

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Law

Infringement action against eDonkey user will proceed toward trial

In a copyright infringement action pending in the Eastern District of Pennsylvania, the court has refused to grant Paramount Pictures’ motion for summary judgment. Defendant John Davis has been accused of being the “first propagator” – that is, the first person to offer illegal copies for P2P distribution – of last year’s movie “Lemony Snicket’s A Series of Unfortunate Events.”

The court determined that several material issues of fact remained, thus precluding summary judgment. The court ruled that Davis should be allowed to present evidence at trial as to, among other things, whether he was properly identified as the person engaging in infringing activity over the eDonkey network, and whether he was indeed the “first propagator.”

The court put forth a significant amount of effort analyzing Paramount’s claim that Davis should be sanctioned for reformatting his hard drive just a few days after receiving notice of the potential lawsuit against him. Because of this activity, all evidence of whether eDonkey or a copy of the Lemony Snicket movie were ever on Davis’ computer was lost. The court found that given the circumstances, Davis should have known to keep this evidence intact. The court also determined that this “spoliation” of relevant evidence caused significant prejudice to Paramount, resulting in substantial unfairness and the need to deter such conduct in the future. Although the court denied Paramount’s request to enter judgment in its favor because of the spoliation, the court stated that it would consider the deletion of the information in weighing Davis’ liability at trial.

Perhaps the most interesting aspect of this opinion lies not in the legal analysis, but in the detailed explanation by the court of the process by which Paramount monitors file sharing networks to determine whether any copyrighted works are being infringed. There is also a detailed description of the forensics involved in identifying “first propagators.” Anyone interested in the detective work that goes on prior to file-sharing lawsuits would find this case particularly interesting.

Paramount Pictures Corp. v. Davis, 2005 WL 3303861, (E.D. Pa., December 2, 2005).

Seventh Circuit rules in BMG v. Gonzalez: downloading music via P2P is not fair use

The lawsuits filed by the music industry against individual users of peer-to-peer (P2P) software are beginning to make their way through the court system. The Seventh Circuit has affirmed a lower court’s grant of summary judgment against a user of Kazaa, holding that the downloading of copyrighted music files is not fair use under the Copyright Act.

Defendant-appellant Gonzalez used the Kazaa P2P software to obtain over 1,300 copyrighted sound recordings, some of which were contained on CDs she owned. BMG music and others filed a federal lawsuit against Gonzalez in 2003 alleging copyright infringement. Gonzalez’s defense was that by downloading the songs, she was merely sampling them to see whether she would want to purchase the entire CD. Accordingly, Gonzalez argued, she was not liable for infringement, because her conduct was protected under the doctrine of fair use.

The District Court disagreed, and granted summary judgment in favor of the recording industry plaintiffs. The District Court enjoined Gonzalez from engaging in any further infringement, and ordered her to pay over $22,000 in damages. Gonzalez sought review with the Seventh Circuit, which affirmed.

Judge Easterbrook’s opinion is unequivocal in rejecting Gonzalez’s fair use argument. The Court easily distinguished the present case from Sony Corp. of America v. Universal Studios, Inc., 464 U.S. 417 (1984) (also known as the Betamax case).

“This is not a form of time-shifting along the lines of [the Betamax case]. A copy downloaded, played, and retained on one’s hard drive for future use is a direct substitute for a purchased copy – and without the benefit of the license fee paid to the broadcaster.”

The Court’s analyzed Gonzalez’s claim in light the effect of P2P file-sharing on the potential market for the music. The Court emphasized that downloading unlicensed copies of music, even if for the purpose of testing whether one would want to later buy it, directly competes with legitimate means for consumers to sample music they might like.

For example, broadcast radio allows potential music purchasers to listen for free – and the artists and publishers profit in this scenario not only from future sales, but from the royalties paid by the broadcaster. Similarly, in legitimate online services such as iTunes and the revived Napster (who pay artists and publishers agreed-upon royalties), potential purchasers can sample music for little or no cost and later buy the tracks.

The Court noted that these modes of previewing music in an authorized manner “share the feature of evanescence.” Because downloading unlicensed permanent copies from the Internet directly competes with these legitimate means for artists and publishers to generate profit, the only relevant fair use factor weighed against Gonzalez. Accordingly, the District Court was correct to have found that Gonzalez committed copyright infringement.

BMG Music v. Gonzalez, — F.3d — No. 05-1314 (7th Cir., December 9, 2005).

More coverage of this case:

The IPTAblog

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File sharing

Discussion of Google Book Search at John Marshall Law School on November 29

I will be speaking on a panel addressing the issues in the Google Book Search (f/k/a Google Print) cases at noon on November 29, 2005 at the John Marshall Law School in Chicago. If you’re in the neighborhood, be sure to stop by – it should be an interesting discussion. I’m honored to be on the same panel as professors Leslie Reis and David Sorkin of John Marshall, as well as Bill Keefe from the school’s library staff.

InternetCases.com Podcast — November 9, 2005

Cindy Cohn Part I

This “special edition” of the InternetCases.com Podcast is the audio from a talk given by Cindy Cohn, the legal director and general counsel for the Electronic Frontier Foundation. Ms. Cohn spoke to a meeting of the Internet Law Committee of the Intellectual Property Law Association of Chicago (“IPLAC”) on November 4, 2005. Ms. Cohn discussed issues relating to file sharing — in particular, the Grokster decision, as well as actions taken by the entertainment industry against individual file-sharers.

The talk is being presented here at InternetCases.com in two parts. This first part is Ms. Cohn’s main talk. The question and answer sesssion (edited for brevity and understandability) will be posted as Part 2 at a later date.

This was a lunchtime meeting, so please excuse the sound in the backgroud of soda cans opening, and other general sounds such as papers rattling, etc.



Download the podcast

Running time: 34:08
File size: 11.7 MB

Music courtesy of Blandy under a Creative Commons license.

If you enjoy listening to the InternetCases.com Podcast, please vote for it at Podcast Alley.

Peer-to-peer Litigation Summit planned for Chicago on November 3, 2005

If you’re interested in the legal issues surrounding file-sharing in a post-Grokster world, and will be in Chicago on November 3, be sure to attend the First Annual P2P Litigation Summit scheduled to take place at Northwestern University School of Law. Here’s an announcement from attorney Charles Lee Mudd Jr., one of the event’s primary organizers:

On November 3, 2005, the Electronic Frontier Foundation and I (through my firm Privacy Resolutions P.C.) will co-sponsor the First Annual P2P Litigation Summit in Chicago, Illinois at the Northwestern University School of Law. The daylong conference brings together public and private defense attorneys, clients, investigators, advocates, and academics to discuss the latest developments in peer-to-peer litigation. How do the RIAA and MPAA go about identifying plaintiffs? What are the most effective legal strategies and tactics? Is it better to settle immediately, or fight it out in the courts? How is this impacting the individuals sued? What is the role of ISPs in this quagmire? Should Congress step in and, if so, what legislation is needed? Are there other ways to compensate authors for their works?

A complete agenda and registration information can be found at http://www.p2plitigationsummit.com. Registration is $150.00 per person and $40.00 per person for students.

Ninth Circuit affirms $35 million judgment against semiconductor manufacturer

Case is rare appellate decision under Semiconductor Chip Protection Act of 1984

Altera Corporation filed suit in the U.S. District Court for the Northern District of California against Clear Logic, Inc., a competitor in the semiconductor industry. Altera alleged that Clear Logic had violated the Semiconductor Chip Protection Act of 1984, 17 U.S.C. §901 et seq. (“SCPA”), by using the bitstream generated when programming Altera programmable logic devices to create application-specific integrated circuits. A jury found in favor of Altera, and awarded more than $30 million in damages, plus an additional $5 million in interest and costs.

Clear Logic appealed to the Ninth Circuit, arguing that the trial court improperly instructed the jury regarding the affirmative defense of legitimate reverse engineering, which is provided for under the SCPA. The court affirmed, however, holding that certain misstatements of the law in the jury instructions were harmless error.

The trial court’s instructions initially defined “legitimate reverse engineering” to allow copying and analyzing only “non-protectible concepts or techniques” embodied in a mask work. This was an incorrect statement of the law, but the court concluded that further instructions adequately provided correction. The later instructions explained that “it is permissible [under the SCPA] to reproduce ‘a registered mask work’ as a step in the process of creating an original chip, so long as the purpose of reproducing the chip is appropriate.”

Accordingly, the court held that the jury was able to properly conclude that the Clear Logic mask works incorporated into the application-specific integrated circuits were not original, but were copies prohibited under the SCPA.

Altera Corporation v. Clear Logic, Inc., — F.3d —, 2005 WL 2233252 (9th Cir., September 15, 2005).

Supreme Court nominee John Roberts and the law of the Internet

John Roberts, President Bush’s nominee for the Supreme Court has only been on the bench since 2003, when he was appointed to the U.S. Court of Appeals for the District of Columbia Circuit. In that time, it does not appear that Judge Roberts authored any opinions dealing squarely with what most would consider “Internet law.”

Roberts was on the panel of judges (but not the author of the opinion) in the case of Recording Indus. Assn. of America, Inc. v. Verizon, 351 F.3d 1229 (D.C.Cir., 2003), which garnered a significant amount of attention upon its pronouncement. In that case, the Court of Appeals reversed the decision of the district court which had denied Verizon’s motion to quash subpoenas issued by the RIAA. The RIAA had issued such subpoenas pursuant to the Digital Millenium Copyright Act (“DMCA”), seeking to learn the identity of accused file sharers.

The court held that under the DMCA, a subpoena could issue only to Internet service providers that actually stored infringing material on their servers. Because Verizon was acting as a mere “conduit” for data transferred between Internet users, the subpoenas should not have issued.

Of course, the Grokster opinion has changed the overall landscape of potential liability for copyright infringement over peer-to-peer networks. The author of this weblog will defer to more knowledgeable sources rather than speculate on how a Supreme Court Justice Roberts would rule on such a matter.

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