Digital Media Lawyer Blog

Digital media law update: Despite the tremors caused by the Lenz case, a recent decision by a Wisconsin District Court shows that it can still be difficult to obtain a judgment holding a defendant liable for sending a false DMCA notice. See Third Education Group, Inc. v. Phelps, E.D.Wisc., No. 07-c-1094, Decision and Order Following Court Trial (November 25, 2009).

The Digital Millennium Copyright Act puts a powerful tool in the hands of a person who claims to be the owner of a copyright. Copyright law provides for six-figure statutory damages against an ISP who permits infringing material to reside on a site under its control after receiving notice of the presence of the material. However, the DMCA provides immunity from these civil damages if an ISP takes down such material in response to a notice from the putative owner of the copyright, and meets certain other tests. This provides a strong incentive for an ISP to reflexively take down infringing material -- such as by disabling an entire website -- upon receiving a DMCA takedown notice.

This puts serious weapon in the hands of the general public that can be used protect legitimate copyright interests -- or can be misused by someone who has no rights in material used by a competing business to get its site shut down.

To prevent abuse of the notice and take down system, Congress put two major protective measures into the DMCA: the counter-notice procedures in § 512(g) and the misrepresentation rule in § 512(f). Section 512(f) provides that a person who "knowingly" misrepresents that material on a site is infringing is liable for any damages, including attorneys fees, incurred by the alleged infringer."

It can be very hard to prove a knowing misrepresentation occurred. Courts interpreting this statute have generally found that to be liable, the person who sent a false DMCA notice must have lacked the honest belief that material was infringing. As stated by the 9th Circuit, "Congress's apparent intent [was] that the statute protect potential violators from subjectively improper actions by copyright owners." Rossi v. MPAA, 391 F.3d 1000, 1005 (9th Cir. 2004).

To determine whether the sender of a false DMCA notice had a good faith belief in the truth of the notice, courts do not limit themselves to the testimony of the sender. Rather, courts consider the information that the sender relied on. However, it doesn't take much evidence for the court to find that the author of a DMCA notice acted in good faith.

For example, the Rossi case concerned the website www.internetmovies.com, which Rossi described as an online magazine that provided visitors with a directory of websites containing information about movies. Rossi's site contained the words "Join to download full length movies online now!" In fact, users could actually download no movies through Rossi's site or through the links to which he referred users -- a fact that MPAA investigators missed because they never attempted to download any movies from Rossi's site.

However, the 9th Circuit stated that the sender of a DMCA takedown notice is not required to perform a "reasonable investigation" and "cannot be held liable simply because an unknowing mistake is made, even if the copyright owner acted unreasonably in making the mistake." Id. at 1005. Accordingly, the 9th Circuit found that the MPAA acted in subjective good faith because the language on Rossi's site "led the MPAA employees to conclude in good faith that motion pictures owned by MPAA members were available for immediate downloading from the website."

Continue reading "Third Education Group v. Phelps: DMCA Notice and Takedown Procedures Lightly Policed by Misrepresentation Rule" »

Digital media law update: The U.S. has been in talks with the E.U., Japan, Canada and a number of other mostly developed nations since 2006 to develop the Anti-Counterfeiting Trade Agreement (ACTA). Several further rounds of ACTA negotiations have been scheduled, including meetings in Mexico this month and in Wellington, New Zealand in April 2010. Assuming an agreement is reached, ACTA, like any other international treaty, will have to be ratified to become U.S. law.

ACTA is supposed to provide international rules for enforcing a broad spectrum of intellectual property rights, including addressing Internet piracy. ACTA is not intended to affect the fundamental rights of the citizens of its signatories. However, virtually any law affecting the Internet has the potential to affect individual rights, such as freedom of expression and freedom of association.

ACTA negotiations have raised considerable concern among Internet access rights groups because the negotiations have been conducted in secret. A long list of industry "insiders" have been permitted to review drafts of ACTA documents -- including attorneys associated with Public Knowledge, a consumer rights advocacy group. However, they have been required to sign non-disclosure agreements that prohibit them from sharing what they have learned with the general public.

Despite the secrecy, a number of ACTA-related documents have been leaked to the public. A summary of the ACTA chapter dealing with the Internet was leaked in September 2009, and a set of comments by the E.U. regarding ACTA language proposed by the U.S. was leaked in October 2009. These documents suggest that ACTA is largely being modeled on the Digital Millennium Copyright Act and may not create the great threat to Internet access rights that some claim.

Among other provisions, current ACTA proposals would:

• Require member states to provide for third-party liability for ISPs: Third party liability appears to refer to liability for contributory infringement and for inducing infringement. These legal principles are already enshrined in current U.S. law, including the DMCA. The E.U. objected to this language -- but on the grounds that it went too far, because some E.U. member states do not permit civil liability for contributory copyright infringement. Rather, the E.U. indicated that it would prefer that the exact circumstances triggering liability be undefined, and that ACTA only provide for exemptions from civil liability.

Continue reading "Too Soon to Worry about the Anti-Counterfeiting Trade Agreement (ACTA)?" »

There has been a lot of recent press touting manufacturers of Mac clones. Clone manufacturers attempt to unlock the tie between Apple software and hardware by selling non-Apple hardware that include copies of Apple's much-loved software. However, because Apple does not sell copies of its software for use on non-Mac hardware, the only way for this business to work economically is for the cloner to modify the Mac software and then create copies of this modified software for use on non-Mac computers. These are actions that necessarily would seem to violate Apple's copyrights over its software. And so found a court in a recent decision in favor of Apple. See Apple, Inc. v. Psystar Corp., N.D. Cal. 3:08-cv-03251, Order re Cross Motions for Summary Judgment (November 13, 2009).

The defendant in the case, Psystar, made a line of computers called Open Computers. Psystar purchased a copy of Mac OS X and modified it by removing the Mac OS X bootloader and kernel extension files and replacing them with files that would permit Mac OS X to run on non-Apple hardware. The modified copy of Mac OS X was used as new master copy for mass reproduction and installation on Psystar computers.

As Judge William Alsup found, Psystar's actions created a target-rich environment for infringement claims. Among Apple's exclusive rights that he found Psystar had violated were: (1) its reproduction rights (by downloading copies of Apple's software onto its clones, and creating copies in the computers' RAM when the computers were turned on); (2) its distribution right (by selling copies of Apple's software to the public), and (3) its right to create derivative versions (by making the modifications noted above to permit the use of Mac OS X on non-Apple hardware).

Continue reading "Apple v. Psystar: Installation of Modified Apple Software on Cloned Computers Constituted Copyright Infringement" »

Digital media law: Has Judge Matz gone too far? With his September 11, 2009 grant of summary judgment in favor of Veoh, Judge Matz closed the loop on UMG's copyright infringement case against Veoh. UMG Recordings, Inc. v. Veoh Networks, Inc., Central Dist. of Calif., No. CV-07-5744. However, under his ruling, to qualify for a DMCA safe harbor against infringement, an interactive service provider is not required to "ferret out" cases of infringement, can do nothing in the face of generalized awareness of infringement on its site, and is effectively only required to remove access to infringing materials if provided information from a copyright holder that would pass muster under the DMCA "notice and takedown" rules. Does Judge Matz' decision, which places virtually all of the burden of preventing copyright infringement onto the backs of copyright holders, accurately reflect the intent of the DMCA?

The UMG v. Veoh case should already be familiar to those in the digital media community, since a prior summary judgment has already been the subject of a published opinion. UMG Recordings, Inc. v. Veoh Networks, Inc., 620 F.Supp2d 1081 (C.D.Cal. 2008). Veoh operates a video sharing platform that is something of a combination of Hulu and YouTube. As part of its interactive side, Veoh permits users to upload videos which are available for free downloads. Veoh also permits users to download content from major media companies such as SonyBMG, ABC, CBS, ESPN, Viacom and Warner Television.

Veoh employs robust copyright protection technology and procedures. Veoh's terms of use prohibit users from uploading copyrighted material. They also provide a procedure for copyright holders to send in notices of infringement. When copyright holders send in a notice of infringement, Veoh disables access to the allegedly infringing videos within a day or two, at most. While Veoh does not review videos prior to their being uploaded, it employs a couple of different forms of fingerprinting technology to remove infringing videos after they have been uploaded. One form of fingerprinting technology disables access to any video that has previously been identified as infringing. Another fingerprinting technology, "Audible Magic," takes an audio fingerprint of uploaded files and compares them to fingerprints in Audio Magic's database. Veoh removes videos that contain material in the Audio Magic database for which Veoh has not obtained a license.

Despite its use of these technologies, UMG sued Veoh in September 2007, claiming that Veoh had permitted users to upload thousands of allegedly infringing video files onto its site. Veoh claimed that it was entitled to a DMCA safe harbor for this material, because it resided on its system "at the direction of a user of [the] material." 17 U.S.C. § 512(c)(1).

To qualify for this DMCA safe harbor, an interactive service provider must show, inter alia, that: (1) it has no actual or constructive knowledge of the infringement, (2) upon receiving knowledge of an act of infringement, it "acts expeditiously to remover, or disable access to, the material", (3) it does not receive a direct financial benefit from infringing conduct that it controls, (4) it operates a notice and takedown system for infringing material, and (5) it reasonably implements a policy for terminating repeat infringers. 17 U.S.C. § 512(c), (i), (j).

UMG claimed that Veoh had failed most of these tests.

The knowledge tests

Judge Matz was highly skeptical of any evidence that could show that Veoh had actual or constructive knowledge of infringement -- short of fully compliant and sworn DMCA notices.
UMG claimed that Veoh had actual knowledge that an entire category of music Veoh users were uploading was subject to copyright protection - music. Judge Matz rightfully rejected this overreaching argument, stating that "merely hosting videos with music cannot be a basis for finding actual knowledge." However, UMG further argued that Veoh had actual knowledge that infringement was occurring after the RIAA sent Veoh notices of names of artists whose copyrighted works appeared on its site. Judge Matz also rejected this argument, noting that the DMCA notice procedures require that a copyright holder provide a "representative list of works" that are infringed on a site, not the names of artists whose works are infringed.

Continue reading "UMG v. Veoh: Has Judge Matz Gone too Far in Placing the Burden of Identifying Instances of Copyright Infringement onto the Backs of Copyright Holders?" »

Digital media law: As reported yesterday by Jaikumar Vijayan of ComputerWord.com, on August 28, a San Jose, California jury reached verdict in excess of $32M favor of Louis Vuitton Malletier against ISP operator Akanoc Solutions, Inc. and related defendants on contributory trademark and copyright infringement claims. Louis Vuitton Malletier, S.A. v. Akanoc Solutions, Inc., U.S.D.C., Northern District of California, Case No. C07-03952. The contributory trademark infringement claims in this case are similar to those raised in Tiffany v. eBay. Tiffany (NJ) Inc. v. Tiffany and Co., 576 F.Supp2d 463 (S.D.N.Y. 2008). However, the trials in the two cases have produced opposite results, largely based on the differing views taken by the courts of the evidence that can be used to show knowledge of infringing activity.

Louis Vuitton is the distributor of the well-known line of luxury handbags that bear the distinctive LV trademark. Akanoc offers traditional ISP webhosting services. However, its website indicates that it specializes in providing English-language webhosting services to Chinese companies, to assist in their sale of goods into the U.S. Its site states that "Attracting American clients through use of an online web presence is the key to success!" and that " Our company specializes in creating unique solutions to solve urgent needs of information exchange between the two nations based on the extensive background knowledge of the Chinese economy."

In 2006-2007, Louis Vuitton had its investigators purchase goods sold using its trademarks from websites hosted by Akanoc. Each item purchased was sent using a return address in China. After inspection, Louis Vuitton concluded that the goods were counterfeit. Louis Vuitton then sent letters to Akanoc identifying the websites that it believed were selling counterfeit goods and asking Akanoc to take down the sites. Akanoc acted to take down at least some of the sites. However, in its amended complaint, Louis Vuitton identified dozens of infringing websites that it claimed were still operational as of July 2008.

Louis Vuitton went forward at trial solely on contributory trademark and copyright infringement theories -- and prevailed on both of these claims, winning a jury award of $31.5M on its trademark claims and $900,000 on its copyright claims. Trial documents indicate that this victory was, at least in part, the result of the relaxed view taken by Judge James Ware of the evidence that is admissible and/or sufficient to establish a defendant's knowledge of the presence of infringing activity by the users of its services.

In Inwood Labs, Inc. v. Ives Labs, Inc., 456 U.S. 822, 102 S.Ct. 2182 (1982), the U.S. Supreme Court stated that "if a supplier of a manufacturer or distributor intentionally induces another to infringe a trademark, or if it continues to supply its product to one whom it knows or has reason to know is engaging in trademark infringement, the manufacturer or distributor is contributorially responsible for any harm done as a result of the deceit." Id. at 855. These rules have been held to apply whether the supplier is providing an ingredient for the infringer's product, or a service, such as space in a flea market, for the infringer to sell his wares. Hard Rock Café Licensing Corp. v. Concession Services., Inc., 955 F.2d 1143, 1148-49 (7th Cir. 1992).

Continue reading "Louis Vuitton v. Akanoc: Letters to ISP Demanding Takedown of Infringing Websites Played Critical Role in Jury Finding that ISP Had Knowledge of Trademark Infringement" »

The suit between Tiffany and eBay is providing a serious test of eBay's "Notice and Takedown" model for avoiding contributory infringement liability for counterfeiting and other trademark misuse by sellers on its site. (Fn1) In this suit, Tiffany seeks to hold eBay liable for contributory and direct infringement, false advertising and trademark dilution for its involvement in the sale of counterfeit Tiffany merchandise on its site.

According to eBay, more than 100 million listing appear on eBay at any one time, and approximately 6 million new listings are posted each day. However, a certain percentage of these listings are for counterfeit goods. Tiffany alone reported 20,915 infringing listings to eBay in 2003, 45,242 in 2004, 59,012 in 2005 and 134,779 in 2006. According to Tiffany, 30% or more of Tiffany jewelry list on the site at any time can safely be deemed to be counterfeit.

Selling counterfeit trademarked merchandise constitutes trademark infringement. It also downgrades the confidence of consumers in the integrity of the source of those goods. eBay does not take possession of, and hence never sees, the goods sold on its site, so to combat the sale of counterfeit goods on its site, eBay has employed an ever-expanding arsenal of computer-based defenses. Chief among these is its "notice and takedown" system -- its VeRO program. Under this system, a trademark, copyright or patent rights owner who sees an infringing item on the site can report the listing to eBay by submitting a Notice of Claimed Infringement (NOCI).

eBay's NOCI form is its Digital Millennium Copyright Act (DMCA) takedown notice form -- which eBay has converted for use for all forms of alleged intellectual property rights infringement. The form requires that the rights owner submit all of the elements required for a DMCA notice (Fn2): (i) the identity of the alleged rights owner, (ii) the identity of the specific eBay listing numbers where the infringing material is located, (iii) the type of infringement, and (iv) the required DMCA statements that the complaining party has a good faith belief that the use on eBay is unauthorized and that the complaining party is authorized to act for the rights owner. For an overview of the VeRO program and to obtain a NOCI form, see http://pages.ebay.com/help/tp/vero-rights-owner.html.

Upon receiving a NOCI, eBay verifies that the NOCI contains the necessary information and appears accurate, and then removes the reported listing. At the time of the Tiffany v. eBay trial (2008), 75% of reported listings were removed within 4 hours. After removing a listing, eBay also attempts to prevent or to undo any actual sale. If the listing is removed before a sale has occurred, eBay cancels all bids and notifies the seller and bidder that the listing has been removed. If a sale has already occurred, eBay cancels the transaction retroactively, removes the listing and informs the parties that the listing has been removed and that the transaction should not be completed. eBay also refunds all associated fees. eBay also reviews the seller's account and may suspend the seller. (Fn3)

In addition to its NOCI system, eBay also uses what it terms a "sophisticated fraud engine," on which it spend more than $5 million annually to maintain and enhance. This search engine "uses more than 13,000 different search rules to locate potentially infringing or problematic activity. For example, it searches for listings that explicitly offer "knock-off," "replica," or "faux" merchandise. eBay also suspends sellers for repeat violations, conducts periodic "clean-up" reviews of listings and warns sellers against listing counterfeit goods. (Fn4)

Continue reading "Tiffany v. eBay: eBay's Notice and Takedown System and Trademark Law" »

I have recently had a number of discussions with website operators that bring audio, video and other content to their websites via "in-line" linking, about whether this practice violates copyright laws. In-line linking is a form of hyperlinking that permits a host website to incorporate images and other materials from other websites into the host website. The HTML in the "in-line" link directs the user's browser to retrieve a linked-to image from a source website and display it on the user's screen -- all without leaving the host website.

Typically, the linked material appears on the user's screen in a "frame" -- surrounding material from the host website. In many cases, a shot of the opening frame (in the case of video clips) or a diluted version object itself (in the case of photographs) will be used as a "thumbnail," which the user will click to activate the hyperlink. This technology has been used in Google's image search function and in social networking and affinity sites, among others.

"In-line" linking and "framing" have often been criticized by the owners of the source objects. For example, in many cases, the "frames" on the host website will cover over advertising and trademarks of the source website. This reduces the ad revenue stream that the source website may have counted on to pay for the content. It is also often claimed that the creation of thumbnails reduces the demand for cell-phone downloads of images.

So do in-line linking, framing and the use of thumbnails violate copyright laws? In many cases -- as the legacy of series of decisions in the Perfect 10 case -- the answer will be "No."

Perfect 10 is a media company that distributes photographs of female models through its magazine, website and via cell-phone downloads. Because it exists on the internet, it was covered by Google's search text and image engines. Google image searches would recover Perfect 10 photographs, which would be displayed as thumbnails on Google's site. When a user clicked on the thumbnail, "his computer would pull up a page comprised of two distinct frames, one hosted by Google and a second hosted by the underlying website that originally hosted the full-size image." Perfect 10 v. Google, Inc., 416 F.Supp.2d 828 (C.D. Cal. 2006).

The Google frame, at the top of the screen, stated that the thumbnail "may be scaled down" and that the Google frame was not the context in which the picture was originally found. The Google frame also gave the URL of the source of the picture, although often in truncated form. The thumbnail was created by Google from the original photograph and existed on Google's servers. While the essence of the image could be viewed, thumbnails typically eliminated over 97% of the pixels in the original image. Id. at p. 847, n. 13.

Continue reading "The Legacy of Perfect 10: Websites that Use In-line Linking and Thumbnails to Bring Third Party Content to Users Can Avoid Suits for Direct Copyright Infringement" »

If you are thinking about issuing a take-down notice to a website on which you have found material that infringes your copyright, make sure that you include sufficient detail on the identity and location of the infringing works. The case law indicates that the courts are taking an increasingly Arminian view (i.e., demanding "sinless perfection) of the detail that must be provided in a take-down notice to meet the Digital Millennium Copyright Act's (DMCA) "substantial compliance" rule. 17 U.S.C. § 512(3).

The text of the DMCA provides that a take down notice must provide "information reasonably sufficient to permit the service provider to locate the material." However, in many cases Court have ruled that to be effective take-down notices must identify the specific location of each infringing copy of a work. For example in Hendrickson v. eBay, Inc., 165 F. Supp.2d 1082 (C.D. Cal. 2001), in which the plaintiff claimed that eBay was permitting the sale of pirated copies of a movie on its site, the Court indicated that the plaintiff needed to "include the specific item numbers of the listings that are allegedly offering pirated copies of Manson for sale."

There is one prominent case in which a plaintiff was allowed to take a shortcut in specifying the location of pirated material on a website -- ALS Scan, Inc. v. RemarQ Communities, Inc., 239 F.3d 619 (4th Cir. 2001). However, the facts of this case are somewhat unusual -- and do not represent the standard infringement scenario typically encountered when dealing with the interactive websites common today. The plaintiff, ALS, was in the business of creating and marketing adult photographs, and held the copyright for these photographs. The defendant, RemarQ, was an internet service provider that also hosted 30,000 newsgroups. Two of the newsgroups hosted by RemarQ actually included ALS's name in their title: "alt.als" and "alt.bniaries.pictures.erotica.als." Both of these newsgroups contained hundreds of ALS-copyrighted photographs.

ALS sent RemarQ a take-down notice that referenced these newsgroups, stated that they were created for the sole purpose of violating its copyrights and trademarks and demanded that RemarQ cease carrying the newsgroups. RemarQ refused to remove the newsgroups, but agreed to removed individual postings that infringed ALS's copyright if ALS identified them "with sufficient specificity." Id. at 621. ALS sued RemarQ, which defended by claiming that ALS had not substantially complied with the DMCA take-down notice standard and also that RemarQ had no knowledge of the alleged infringement. RemarQ argued that ALS had never provided it with a "representative list" of the infringing photographs and never identified that photos with sufficient detail for RemarQ to remove them.

The Fourth Circuit disagreed. It found that because ALS had identified the two sites "created for the sole purpose of publishing ALS's copyrighted works", asserted that "virtually" all the images on the sites were its copyrighted material, and referred RemarQ to the specific addresses of the website -- this was sufficient. Id. at 625 (emphasis added).
However, in the modern world of interactive media, the circumstances that occurred in ALS v. RemarQ will be rarely repeated. Often, a copyright holder will find its works scattered in snippets throughout hundreds of thousands or millions of files on a website. In such cases, a take-down notice that fails to state the locations where the infringing materials can be found is likely to be found insufficient.

Continue reading "DMCA Take-Down Notices with Little Detail on the Identity and Location of Infringing Material Are Often Found to Be Insufficient" »

The Digital Millennium Copyright Act provides several safe harbors for internet service providers and web hosting services against copyright claims. For interactive digital media companies, one of the most useful is provided in 17 U.S.C. § 512(c) - for "information residing on systems or networks at direction of users." If you operate a qualifying internet service and fulfill the requirements enumerated in the statute, you are immune from liability if a user has posted copyrighted information that can be accessed by other users on your site.

There are three requirements to qualify for this safe harbor:

(1) the service provider cannot have actual or constructive knowledge that infringing activity is taking place on its system, OR it must "act expeditiously" to remove infringing material upon obtain knowledge of its existence;

(2) if it has the right and ability to control the infringing activity, it cannot receive a direct financial benefit from it,

AND

(3) if it receives a DMCA "takedown notice," it must expeditiously to disable or remove the infringing material. (Fn1)

The interesting thing about these requirements is that they are conjunctive. In other words, if an internet service provider fails to meet any one of them, it doesn't qualify for the safe harbor. Many people have heard about "DMCA takedown notices" and assume that a plaintiff has to serve a DMCA notice in order to bring a copyright suit against an internet service provider. Not necessarily so. If there is solid evidence that the service provider has actual or constructive knowledge of infringing activity, then a copyright holder can sue without ever sending a DMCA notice. There are a number of recent cases against digital media companies where plaintiffs have brought suit without first sending a DMCA notice.

So why bother sending a DMCA notice at all? The problem is one of proof. Without sending a compliant DMCA notice, it is often very difficult to prove that the service provider had actual or constructive knowledge of the infringing activity.

Continue reading "Digital Millennium Copyright Act: Why a Compliant Take-Down Notice Can Be Important in a Successful Copyright Infringement Claim against an Internet Service Provider" »

Power.com is a social networking aggregator, boasting over 5 million users in India and Brazil, that launched business in the U.S. in November 2008. It permits users to simultaneously log-in to multiple social networking sites, such as Myspace and Facebook and instant messaging sites, such as Twitter.

While some website operators might consider this service as free advertising, other might see it as posing the danger of supplanting the websites it aggregates. In fact, Power.com has already drawn significant lawsuit fire. In December 2008, shortly after the site premiered, Power.com was sued by Facebook. (Facebook, Inc. v. Power Ventures, Inc., et al., U.S.D.C., Northern District of California, Case No. C 08-5780).

Facebook claimed that Power.com was circumventing Facebook's protocols for accessing its information, infringing on Facebook's trademark, and inducing Facebook users to provide them with email addresses of Facebook contacts for the purposes of sending commercial messages that it falsely stated came from "The Facebook Team." Facebook brought claims against Power.com under numerous legal theories, including violation of the CAN-SPAM act (15 USC §7701), copyright and trademark infringement, violation of the Digital Millennium Copyright Act and violation of California's unfair competition law.

In response, Power.com brought a motion to dismiss/motion for more definite statement -challenging the sufficiency of the allegations in the complaint. However, the bar to survive such a motion in Federal court is not very high. Under Federal rules, a plaintiff generally does not have to be specific about the facts that underlie the claims he brings in a lawsuit. Federal courts deem it sufficient that the complaint merely contain sufficient facts to give the defendant "fair notice" of the nature of the claim and its basis. The courts rely on discovery and law and summary judgment to weed out unmeritorious claims. The main exception to this rule is for claims alleging fraud. For these claims, the complaint must state what the fraudulent representations were, who said them and where and when.

These rules largely dictated the outcome here. After Facebook filed its opposition, Power.com actually withdrew its motion as to the CAN-SPAM claims. According to Power.com's reply brief, this did not amount to a concession that the claims had merit, but merely that Facebook had met the pleading standards for these claims.

Continue reading "Facebook Suit Against Social Networking Aggregator Power.com Survives Initial Court Test" »

Since entering its discovery phase, formal courtroom proceedings in Viacom's copyright infringement suit against YouTube and Google have substantially quieted down. Press reports suggest that the lull in public proceedings may be due to settlement efforts. However, the nature of this case suggests that the parties' discovery burdens could be substantial and causing a slowdown.

Viacom's claim in this suit is that YouTube had permitted over 150,000 clips of Viacom-owned content, such as clips from "SpongeBob SquarePants", "SouthPark" or "The Daily Show with Jon Stewart" to be uploaded and viewed by users. According to Viacom's complaint, its copyrighted material has been viewed on YouTube "an astounding 1.5 billion times." Raising both direct and indirect infringement theories, Viacom claimed that YouTube had created an environment that "promotes" and "induces" copyright infringement.

YouTube and Google's primary response was that their actions were protected by the Digital Millennium Copyright Act (DMCA). According to YouTube's Answer, "YouTube . . . fulfills its end of the DMCA bargain, and indeed goes far beyond its legal obligations in assisting content owners to protect their works."

In two recent suits, a similar internet file-sharing service, Veoh, has prevailed at summary judgment using the DMCA safe-harbor defense that the infringing material was "information residing on systems or networks at direction of users." 17 U.S.C. §512(c); see IO Group, Inc. v. Veoh Networks, Inc., 586 F.Supp.2d 1132 (N.D. Cal. 2008); UMG Recordings, Inc. v. Veoh Networks, Inc., 2008 WL 5423841 (C.D.Cal. 2008). YouTube may also prevail in its case against Viacom. However, this does not mean that sailing will be smooth for YouTube.

Continue reading "Controlling Discovery in Digital Media Cases: Lessons from the Viacom Suit Against YouTube/Google" »

Among the anti-circumvention rules in the Digital Millennium Copyright Act (DMCA) are prohibitions against the removal or alteration of "copyright management information." (17 USC §1202). While the popular understanding of the DMCA is that its provisions are specifically targeted to digital media, the definition of "copyright management information" appears very broad and includes:

• The title and other information identifying a work, including the information set forth in a notice of copyright.
• The name(s) and other identifying information of the author, owner and/or performer of the work.
• Terms and conditions for use of the work, and
• Identifying numbers or symbols referring to such information or links to such information.

See 17 USC §1202(c).

At face value, nothing about these definitions appears to limit "copyright management information" to digital or other electronic information. However, the earliest District Court cases decided that Congress had intended to limit this provision to "automated copyright management systems functioning within a computer network environment." IQ Group, Ltd. v. Wiesner Publishing, LLC, 409 F.Supp.2d 587, 596 (D. New Jersey 2006); Textile Secrets International, Inc. v. Ya-Ya Brand Inc., 524 F.Supp.2d 1184 (C.D. Cal. 2007). Among technological measures that these decisions indicated would qualify under this standard were electronic envelopes and digital watermarks. This interpretation was followed, without significant comment, in another recent Southern District of New York decision. See Silver v. Lavandeira, Southern District of New York, 08 Civ. 6522 (JSR) (January 7, 2009 Magistrate's Report and Recommendation).

That early trend is meeting some resistance. In March 2007, a court in the Western District of Pennsylvania held that Section 1202(c) defines "copyright management information" broadly to include "any" of the information set forth in its defined categories, whether digital or not. McClatchey v. Associated Press, 2007 WL 776103 (W.D. Pa. 2007). This meant that cropping the title, author's name and copyright notice on printouts of photographs could violate this provision of the DMCA. In February 2009, directly rejecting the IQ Group and Textile Secrets rulings, a court in the Southern District of New York stated that the phrase "the technological measures of automated systems" is not found in the statute. As such, it found that the statute could cover manual removal of copyright information. See Associated Press v. All Headline News Corp., Southern District of New York, 08 Civ. 323 (PKC) (February 17, 2009 Memorandum and Order).

It is too early to tell how this split will be resolved. If the broader view of the statute is accepted, it could substantially change the requirements even for fair use of copyrighted information. Under the statute removal or alteration of copyright information is prohibited "without the authority of the copyright owner or law" -- without exception. Section 1202(b).

David D. Johnson is a business lawyer whose practice focuses on litigation and other issues relating to digital media and consumer electronics companies. David can be contacted at (310) 785-5371 or DJohnson@jmbm.com.

In a January 28, 2009 ruling, an Arizona Federal District Court judge ruled that features included in a "bot" that enabled users to avoid detection and hence obtain access to the elements of game software stored on the game owner's server violate the anti-circumvention rules of the Digital Millennium Copyright Act. (fn1)

The successful counterclaimants in this ruling, Blizzard Entertainment, Inc. and Vivendi Games, Inc., own and operate the widely-distributed World of Warcraft ("WoW") online computer game. In WoW, players control characters within a virtual universe, which interact with characters controlled by other players and computer-generated characters. As players progress, they acquire in-game assets, experience and power.

WoW game software resides in two types of locations: WoW "game client" software is purchased by and downloaded onto the hard drives of individual gamers. WoW "game server" software is located on a Blizzard-owned server and downloaded by users as the game is played.

Glider, which is owned by MDY Industries, is a program known as a "bot", short for "robot", which "plays" WoW while the owner is away from his computer. Blizzard alleged that Glider enables a user to advance more quickly within WoW. Blizzard claimed that Glider enables users to acquire an "inordinate number of game assets -- sometimes referred to as 'mining' or 'farming' the game -- with some users even selling those assets for real money in online auction sites." Blizzard claimed that Glider was diminishing the value of WoW and causing Blizzard to lose customers and money. (fn2)

To detect and prevent the use of bots such as Glider, WoW uses software, referred to by Blizzard as "Warden", which contains two elements: (i) "scan.dll", which scans the user's computer for unauthorized programs such as Glider, before the user logs onto WoW servers; and (ii) the "resident" component of Warder, which periodically sends requests to the user's game client software asking for reports on the content of certain defined portions of WoW memory. If the game client software reports information showing a "clean" segment of memory, Warden let the user continue playing the game. (fn3)

Continue reading "Arizona District Court Finds that Detection Evasion Features of a "Bot" which Permitted Users to Access Software on Interactive Game Distributor's Server Violate the DMCA" »

In another case involving Veoh.com, a federal judge has again rebuffed an attempt by a copyright-holder to claim that the safe harbors of the Digital Millennium Copyright Act (DMCA, 17 U.S.C. § 512) do not protect the video file-sharing site. UMG Recordings, Inc. v. Veoh Networks, Inc., 2008 WL 5423841 (C.D. Cal. 2008).

The Veoh website includes videos supplied by Veoh's content partners and permits visitors to access large library of commercial television shows and movies. Veoh also permits users to upload their own video content. While Veoh has policies against uploading copyrighted material, copyright holders have alleged that users can, at least temporarily, circumvent Veoh's measures -- with the result that copyrighted music and videos are distributed to other users.

In response to suits from such copyright holders, Veoh has claimed qualified immunity under the DMCA. The DMCA, provides several safe harbors for digital media service providers, including limited immunity for infringing information "residing on systems or networks at direction of users." (fn1)

In UMG Recordings v. Veoh, copyright holder UMG Recordings, Inc. claimed that Veoh cannot take advantage of this safe harbor because Veoh performs several functions on user-uploaded videos that are not "storage" and are not "undertaken at the direction of a user." (fn2) These included: (1) creating "Flash-formatted" copies of the uploaded videos; (2) creating "chunked" versions of the uploaded videos; (3) allowing users to access videos via streaming; and (4) allowing users to download whole video files.

In his December 28, 2008 ruling, the judge started with the key assumption that all the activities cited by UMG amounted to "software functions directed toward facilitating access to materials stored at the direction of users." (fn3) Then, focusing on the precise wording of the DMCA, the judge noted that the provision of the DMCA in question -- 17 USC §512(c) -- doesn't state that safe harbor protection is only available for "storing" information. Rather Section 512(c) states that limited immunity is available for infringement "by reason of" or "as a result of" such storage. The judge stated that "when copyrighted material is displayed or distributed on Veoh, it is 'as a result of' or 'attributable to' the fact that users uploaded the content to Veoh's servers." (fn4)

Continue reading "Court Finds that File-Sharing Site Can Be Entitled to DMCA Safe Harbor Protection even though It Converts and Allows Access to User-uploaded Content" »