IS THE
the online file-sharing war and
contributory copyright infringement
by
Joseph Matthew Burello
Entertainment Law
Professor Green
TABLE OF CONTENTS
I. Introduction............................................ 1
II. A Brief
Overview of Copyright Law....................... 2
A. Purpose of
Copyright.................................... 2
B. Subject Matter
of Copyright............................. 3
C. Rights Afforded
by Copyright............................ 4
D. Copyright
Infringement.................................. 4
E. The Fair Use
Defense.................................... 6
F. Remedies................................................ 7
III. The Internet.......................................... 8
A. What is the
Internet?................................... 8
B. What are
People Doing on the Internet?.................. 9
C. Access and
Using the Internet........................... 9
IV. History of
File-swapping Services...................... 11
A. Pre-Napster............................................ 11
B. Napster................................................ 12
C. Post-Napster........................................... 13
V. Privacy on
the Internet................................ 15
A. Privacy
Rights: In General............................. 15
B. Unreasonable
Intrusion upon Seclusion.................. 15
C. Internet
Service Providers............................. 16
VI. The Future
of File-swapping Services................... 17
A. The Impact of
Recent Developments...................... 17
VII. Conclusion........................................... 19
On
These recent
decisions seem to be a marked change from the court’s previous stances towards
favoring the entertainment industry’s positions, however users and proprietors
of file-swapping services should not rejoice just yet.[3]
MGM plans to immediately appeal Judge Wilson’s decision to the 9th
Circuit Court of Appeals. Moreover, if upheld,
This paper aims to provide the reader with an applicable foundation in copyright law, the internet and file-swapping services, as well as recent developments in online privacy, in order to better understand the impact of Judge Wilson’s decision on the future of online file-swapping.
II.
A
Brief Overview of Copyright Law
Copyrights are currently governed by the Copyright Act of 1976, as amended.[6] Copyright laws exist “to stimulate the creation of as many works of art, literature, music and other ‘works of authorship’ as possible, in order to benefit the public.”[7] Thus, the author’s interest in the “work of authorship” is secondary to the public’s interest in the same work, and “courts generally put the public’s interest first,” as well.[8]
Copyright law attempts to carry out its purpose by granting creators of works of authorship limited rights in the author’s particular method of expressing an idea, but not the idea itself, for a limited time period.[9]
B. Subject
Matter of Copyright
The Copyright Act of 1976 provides that copyrights exist “in original works of authorship fixed in any tangible medium of expression, now known or later developed, from which they can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device.”[10]
It has been argued that digital media do not qualify as “fixed in [a] tangible medium of expression,” but in Williams Electronics, Inc. v. Artic International, Inc. the court concluded that information recorded on magnetic media or encoded on silicon chips fulfills the “fixed in [a] tangible medium of expression” requirement for copyright purposes.[11] Thus, digital copies of music, movies, etc., residing on silicon chips are deemed “fixed in a tangible medium,” and are covered under the subject matter of copyright.
Section 106 of the Copyright Act of 1976 gives the owner of a copyright the exclusive rights: 1) to reproduce the copyrighted work; 2) to prepare derivative works based upon the copyrighted work; 3) to distribute copies of the copyrighted work to the public; 4) to publicly perform the work; and 5) in the case of sound recordings, to perform the copyrighted work publicly by means of a digital audio transmission.[12]
Court’s have found that file-swapping services infringe on the copyright owner’s rights to reproduce the copyrighted work, to distribute the work to the public, and to perform the copyrighted work publicly by means of digital audio transmission.[13]
Infringement of a copyright owner’s rights can be direct, vicarious, or contributory.[14]
Anyone is liable for direct infringement to the owner of the copyrighted work if that person violates the exclusive rights to reproduce, adapt, publicly distribute, publicly perform or display a copyrighted work.[15] It does not matter if the infringer intended to infringe or had knowledge of the copyright, however the courts will take this into account when determining a remedy.[16]
“When the right and ability to supervise [a direct infringer] coalesce with an obvious and direct financial interest in the exploitation of copyrighted materials,” vicarious liability may be found.[17] The defendant need not know of or participate in the direct infringement to be liable.[18]
Contributory infringement applies to anyone “who, with knowledge of the infringing activity, induces, causes or materially contributes to the infringing conduct of another.”[19] This results in a two part test: “1) the defendant must know or have reason to know of the other person’s infringing activity; and 2) the defendant must actively participate by inducing, materially contributing to or furthering the other person’s directly infringing activity.”[20] However, when selling or distributing items that could be used for infringement (e.g., VCRs, tape recorders, etc.), one cannot be held liable if the product also has a substantial non-infringing use, even if the proprietor knows that some users may use the item to infringe.[21]
Once an initial showing of copyright infringement has been shown, the defense of “fair use” may be available. Section 107 of the Copyright Act of 1976 states that fair use can be found when the copying involved “purposes such as criticism, comment, news reporting, teaching[], scholarship or research.”[22] A fair use analysis is applied on a case-by-case basis under notions of equity and common sense.[23]
Courts consider four factors when determining whether fair use is present: 1) “The purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes”; 2) “the nature of the copyrighted work;” 3) “the amount and substantiality of the portion used in relation to the copyrighted work as a whole;” and 4) “the effect of the use upon the potential market for or value of the copyrighted work.”[24] The above list is not exclusive, nor is any one factor conclusive.[25]
In Storm Impact, Inc. v. Software of the Month Club, for example, the plaintiff was a game developer who distributed his games freely online, and the defendant was a distributor who placed plaintiff’s games online and allowed them to be freely available for download.[26] In its analysis, the court determined that the fair use factor of the effect of the infringing use on the potential marketplace was too great to find defendant’s conduct to be fair use. The court came to this conclusion even though neither parties charged for the downloading of the copyrighted material because the plaintiff holds the exclusive right to distribute his material the way he sees fit even if the material is distributed freely.[27]
Once a defendant is found liable for copyright infringement the courts have several remedies available to them: 1) injunctions and disposal of infringing articles; 2) damages or profits (statutory damages available to registered copyright owners); and 3) costs and attorney fees.
In UMG Recordings, Inc. v. MP3.com, Inc., defendant was an internet company that purchased thousands of CDs and then charged subscribers to its website to download copies of the songs to the user’s computers.[28] Plaintiffs filed suit claiming copyright infringement and won.[29] Copyright law states that statutory damages fall between $750 and $30,000 per copyright infringement.[30] The court eventually awarded statutory damages in the total amount of $53,400,000.[31]
The nature of the internet has presented entirely new and difficult questions when attempting to apply copyright laws.
The internet is a worldwide interconnected collection of computers connected by communications equipment and software. Computers are interconnected with each other as long as they share “information.”[32] The most significant aspects of the internet are the enormous amounts of information being shared amongst the interconnected computers, and the absence of physical boundaries between the transmissions of the interconnected computers.
B. What
are People Doing on the Internet?
The internet is multifunctional and has become “a powerful means of communication, a method of doing research in a virtual library, a way to exchange data, and a system for buying and selling goods and services.”[33]
At the heart of the internet is the ability to transfer files and share data.[34] File Transfer Protocol (FTP) “is an internet protocol that permits users to transfer files between two systems.”[35]
C. Access
and Using the Internet
A person usually accesses the internet by paying a fee to an Internet Service Provider (ISP) who, in turn, provides a connection to the internet through their hub centers.[36] The types of connections available, going from slowest to fastest, are modem access, cable and Digital Subscriber Lines (DSL), Integrated Services Digital Networks (ISDN), T1 and T3 lines, and fiber optic.[37]
Most home users have traditionally connected to the internet using a modem over their existing telephone lines. With the advent of greater file-swapping, the evolution of communication infrastructures, and the reduction in pricing, more and more home users have opted for the faster cable and DSL connections. To download an entire song using a modem connection would take anywhere from five to thirty minutes or more. The same song over a cable or DSL connection could be downloaded in as little as thirty seconds. Most businesses have a greater need for higher bandwidths due to the greater number of users and amount of data being transferred. Thus, most businesses opt for the T1, T3, or higher connections. Users downloading music at workplaces may acquire an entire song in as little as five seconds by taking advantage of these faster internet connections.
Once an internet connection has been established, a user can access various communication protocols. Using a web browser or other computer program, a user can view web pages, watch videos, play games, chat with others online, and numerous other activities over what is called the HTTP protocol. Using the aforementioned FTP protocol, users can transfer files with other online users. The Intel Corporation has stated that file sharing is the wave of the future.[38] There are an unlimited number of uses for file sharing over the internet, and there is no dispute that the practice “is here to stay.”[39]
IV.
History
of File-swapping Services
Not too long ago, “music fans swapped compact disks (CDs) and recorded the songs they liked from others’ CDs onto their own cassettes.”[40] This type of “file-swapping” was awkward and the resulting copied song suffered quality degradation as it was converted from the digital to analog formats. As the internet became more and more popular, users began to trade the original digital files with one another online, thus avoiding the quality degradation issue. These early file-swappers had to deal with large file sizes and slow internet connections so the file-swapping that occurred was small in numbers and, for the most part, went unnoticed. In the mid 1990s a new compression and decompression system known as MP3 entered the online community.[41] MP3 technology compressed what had previously been large files and allowed users to begin trading music en mass even with the slower internet connections.[42]
Although file-swapping had been going on in small numbers since the beginning of the internet, in June 1999 Shawn Fanning released his Napster software which brought file-swapping into the mainstream.[43]
Napster was an easy-to-use search tool designed to help the user find and download MP3 files. Napster allowed the user to establish direct connections with everyone else who had the application and then download directly from other peoples’ music libraries.[44] Using an advanced search system, Napster scoured multiple online libraries for the songs requested, then, with the click of the mouse, the download began.[45]
Napster’s ease of use and the attraction of free music brought many novice computer users online that previously would not have been. The more people downloaded, the more the need for faster internet connections became apparent and the market for DSL and cable connections began to flourish. By the year 2001, most users in metropolitan areas could acquire a DSL or cable connection for less than $50 a month.
The combination of smaller file sizes, faster connection speeds, and the ease of using Napster brought the average number of songs swapped in one month to 2.79 billion at Napster’s peak.[46]
The large number
of files being swapped finally caught the attention of the Recording Industry
Association of America (RIAA), and on
Although Napster had been effectively shutdown, users had tasted the world of free music and trading continued on a large scale using other services such as Limewire, Bearshare, and Hotline. Unlike Napster which had a central server that compiled the user’s libraries of music, the next generation of file-swapping services relied on strict peer-to-peer (P2P) networking with no central server, and thus no “service” that could be shutdown. P2P involves numerous personal computers whose files can be accessed by others who are members of the same network.[50] “In other words, parts of the network are distributed all over the country or the world.”[51]
It is the development of P2P services that has created a troubling issue for the recording and motion picture industries because now there was no one “service” such as Napster to go after, only the millions of file-swapping programs existing on users’ computers. Now, these industries would have to focus more on the individual users who downloaded copyrighted material in order to halt file-swapping.
The Restatement (Second) of Torts § 652B states that an invasion of privacy occurs when someone “intentionally intrudes, physically or otherwise, upon the solitude or seclusion of another or his private affairs or concerns,…[and that] intrusion [is] highly offensive to a reasonable person.”[52] The “reasonable person” standard varies by setting and jurisdiction as privacy-based torts are traditionally state law.[53] The majority of the states, however, follow the Restatement approach.[54]
B. Unreasonable
Intrusion upon Seclusion
One of the interests protected by an individual’s right to privacy is the right to be free from unreasonable intrusion upon seclusion.[55] An action based upon unreasonable intrusion is made up of two elements: “1) an intentional intrusion, physically or otherwise, on another’s solitude, seclusion, or private affairs or concerns, which 2) would be highly offensive to a reasonable person.”[56]
Until recently, users of the internet who downloaded songs and movies were shielded from intrusion upon seclusion by the fact that much of their activity conducted online was done anonymously. In order for outside agencies to discover the identity of the user, the internet service provider would have to divulge the identity of its customer. Internet service providers had an interest in keeping the identities of their customers private for both privacy rights concerns as well as preventing a “quelling effect” of online communities because of the fear of intrusion.
On April 24, 2003, the United States District Court for the District of Columbia enforced a motion requiring Verizon, an ISP, to turn over the identity of an anonymous user of the ISP, who was alleged to have infringed copyrights with respect to more than 600 songs downloaded from the Internet in a single day, to the Recording Industry Association of America.[57] The court arrived at this result after applying the new Digital Millennium Copyright Act (DMCA).[58] The 17 U.S.C.A. § 512 of the Act was added to provide limitations on the liability of internet service providers for copyright infringement.[59] The court reasoned that the subpoena power to identify an infringer in 17 U.S.C.S. § 512(h) of the Act applied to all internet service providers within the scope of the DMCA, including the ISP, not just to those storing information on a system or network at the direction of a user.[60] Thus, Verizon, and any other ISP, must now turn over the names of any users whom a third party copyright owner alleges in good faith to have infringed on their copyright.[61]
VI.
The
Future of File-swapping Services
The impact of the Grokster, Napster and Verizon cases, along with the Digital Millennium Copyright Act, has resulted in new avenues of alternative legal strategies being made available to owners of copyrighted material being traded online.
A. The
Impact of Recent Developments
The Napster case showed us that file-swapping services with a central server may be effectively shut down for failing to guard against the swapping of copyrighted materials, however, as we have seen, the practical effect of the Napster case is now of very little significance because central server-type file-swapping services exist only in very small numbers. Most file-swapping now occurs in strict peer-to-peer (P2P) software programs where no “service” need exist at all. This leaves plaintiffs in file-swapping cases to either go after the internet service provider, or the individual downloader.
By taking the Grokster and Verizon cases together, one can now see the strategy of future file-swapping cases. Grokster has shown us that file-swapping software, in theory at least, can establish a substantial non-infringing use defense. Thus, strict peer-to-peer software like Grokster passes muster and are probably here to stay. Verizon, however, has opened an entirely larger door for prosecutions against the millions of individual downloaders.
The entertainment industries, as well as other copyright holders, can now get a court order to have an internet service provider turn over a user’s personally identifiable information in order to prosecute that user for direct copyright infringement. Because of the enormous numbers of downloaders, prosecuting every one of them would probably be impossible. Therefore, the copyright holders will likely go after those who are engaging in large-scale transfers of hundreds or even thousands of songs a day in order to make the prosecutions economical and shut down the worst offenders.
Although the battle may seem to be over at first glance with the copyright holders now having an avenue to prosecute offenders, the battle of privacy rights has not yet fully developed. Privacy rights on the internet, despite their importance, are less developed than that of copyright. The questions that future cases will pose will be to determine what constitutes the “highly offensive to a reasonable person” standard.[62] Does Verizon’s turning over of a user’s personally identifiable information violate this standard? Is the process involved in acquiring this information to discretionary and susceptible to abuse? These questions and others will undoubtedly be brought up in future cases.
File-swapping “is here to stay.”[63]
The rhetoric war to convince the public that file-swapping is ethically wrong
has failed.[64]
The entertainment industries, and copyright holders in general, have been
forced to look to the courts to protect their intellectual property interests.
As the law continues to develop with these cases the courts seem to be
lessening the importance of privacy rights and contributory negligence of
file-swapping services in favor of enforcement of copyright laws against direct
infringers. Future cases will help in defining these same privacy rights and
provide the practitioner with more solid guidelines to follow in prosecuting
file-swapping copyright infringers.
[1]
MGM Studios, Inc. v. Grokster, Ltd.,
2003
[2]
Yahoo! News - Court Rejects Suit Against
Web Song-Swappers
<http://story.news.yahoo.com/news?tmpl=story&u=/nm/20030425/wr_nm/tech_music_dc_10>
(accessed
[3] See, for example, A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004 (2001).
[4]
Judge: File-swapping tools are legal |
CNET News.com <http://news.com.com/2100-1027-998363.html> (accessed
[5]
[6]
17 U.S.C. Sections 101 et seq.
[7] Margreth Barrett, Intellectual Property, 179 (3rd ed., Emanuel 2000).
[8]
[9]
The time period for individual authors is life plus
seventy years and ninety-five years for corporations. See Sonny Bono Copyright Term Extension Act – Wikipedia
<http://www.wikipedia.org/wiki/Sonny_Bono_Copyright_Term_Extension_Act>
(accessed
[10] 17 U.S.C. Section 102(a).
[11] Williams Electronics, Inc. v. Artic International, Inc., 685 F.2d 870, 877 (1982).
[12] 17 U.S.C. Section 106.
[13] A&M Records, Inc. v. Napster, Inc., 114 F. Supp. 2d 896 (2000).
[14] Barrett at 244-46.
[15]
[16]
[17] Shapiro Bernstein & Co. v. H.L. Green Co., 316 F.2d 304, 307 (2d Cir. 1963).
[18] Barrett at 246.
[19]
Gershwin Publishing Corp. v.
[20] Barrett at 245.
[21]
Sony Corp. of
[22] 17 U.S.C. Section 107.
[23] Barrett at 251.
[24] 17 U.S.C. Section 107.
[25] Barrett at 254.
[26]
Storm Impact, Inc. v. Software of the
Month Club, 1998
[27]
[28]
UMG Recordings, Inc. v. MP3.com, Inc.,
2000
[29]
[30]
Wired News: RIAA Wins Suit Against
MP3.com, <http://www.wired.com/news/business/0,1367,35933,00.html>
(accessed
[31] UMG Recordings at 1.
[32] George B. Delta and Jeffrey H. Matsuura, Law of the Internet, 1-5 (1998).
[33] Michael Rustad and Cyrus Daftary, E-Business Legal Handbook 2002 Ed., 29 (2002).
[34]
[35]
[36]
[37]
[38] Miller at 125.