Now Available At Your Local Flea Market: Safe Harbors

from the do-your-own-policing dept

Tue, Apr 20th 2010 10:54am — Dennis Yang

Online marketplaces like eBay have a bit of protection from liability if their platforms are used to sell counterfeit or copyrighted goods. However, in the offline world, flea markets have historically not been granted the same type of protection, as seen in Fonovisa v. Cherry Auctions (1996), where flea markets were found to be liable for selling infringing works.

But now, the same protections afforded to online marketplaces could now be coming to their offline counterparts. Texas judge Lynn Hughes has dismissed the case Sony Discos Inc. v. EJC Family Partnership, where Sony Music sued a flea market operator, Elwin J. Cole, for copyrighted goods being sold at the market. Sony alleged that EJC was guilty of contributory infringement by allowing its sellers to sell copyrighted goods in the market. The judge disagreed, ruling that it was not EJC's responsibility to police the market for Sony (full ruling here - pdf):

Sony does not argue and cannot show that Cole aided or enhanced infringing sales specifically, in a manner distinct from Cole's facilitation of all sales at the flea market.

...Cole is not akin to the driver of a get-away car; he is closer to the service station manager who sells the bank-robber gasoline.

So, perhaps driven by the safe harbors enjoyed by their online counterparts, offline flea markets are no longer to be held responsible for infringing uses of their marketplaces. If infringement happens, then it's reasonable for the owners to go after those specifically responsible -- it's inefficient and unfair to expect a marketplace to do the police work, especially when there are tons of non-infringing sales happening all of the time.

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Filed Under: flea markets, liability, safe harbors, secondary liability

28 Comments

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Big_Mike (profile), 20 Apr 2010 @ 10:50am

I don't understand
Wait, I don't understand. You are saying that if I copy CDs and go to a flea market to sell the copies I can get in trouble not the Flea market? That doesn't make since, I mean I did all the wrong and the flea market had nothing to do with it. They should be the ones that suffer for my wrong doings, not me... This is just wrong....
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Ima Fish (profile), 20 Apr 2010 @ 11:03am

"he is closer to the service station manager who sells the bank-robber gasoline"

Wow, a smart judge... from Texas?! The truth is stranger than fiction.
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Chronno S. Trigger (profile), 20 Apr 2010 @ 11:10am

Re:
It's easy when it's an actual physical good. When you add "digital" and "Internet" to the charges, it gets hard.
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Anonymous Coward, 20 Apr 2010 @ 11:11am

Re:
Not east texas I assume.
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Ima Fish (profile), 20 Apr 2010 @ 11:35am

Re: Re:
Good one.
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Anonymous Coward, 20 Apr 2010 @ 11:35am

physical flea markets are large and hard to check. online flea markets are electronic and can rapidly be checked. sony should have given the flea market owner a DMCA notice, that would have changed everything.
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Anonymous Coward, 20 Apr 2010 @ 11:36am

Re: Re:
Hey, a couple of us from East Texas aren't total morons. However, you are correct. Judge Hughes is in the Southern District of Texas
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wallow-T, 20 Apr 2010 @ 11:39am

IANAL, so a serious, non-rhetorical question: why was this case decided differently than the FONOVISA case?
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Hephaestus (profile), 20 Apr 2010 @ 11:44am

"Cole is not akin to the driver of a get-away car; he is closer to the service station manager who sells the bank-robber gasoline."

That is an interesting view and its worth noting that. If the same rules were to be applied in the real world as are being applied to online, then building managers would be allowed to break into your apartment on a regular basis and look around for counterfeit items.

This also brings up another weird and interesting though. If intelectual property becomes real property under the law. Could the act of having the ISP scan your personal property be considered trespass? What happens if the ISP deletes the files in question? Would it be destruction of property? What if the monetary value of the property were at the value required for it to be a felony?
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:Lobo Santo (profile), 20 Apr 2010 @ 11:48am

Re: *A-hem*
Proof that fiction is, in fact, stranger than truth:

Think of the strangest true thing you've ever heard, now add a monkey in a Hitler disguise.
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Dennis Yang (profile), 20 Apr 2010 @ 12:10pm

Re:
In Fonovisa it was argued that people were going to the flea market FOR the CDs, so the thought was that the market knew about what was going on, and benefited directly from the infringing goods being there.

That said -- Fonovisa was in 1996. If Fonovisa were tried today, who knows if the ruling would be the same..
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Colg, 20 Apr 2010 @ 12:14pm

Re: Re: *A-hem*
"Think of the strangest true thing you've ever heard, now add a monkey in a Hitler disguise."

I don't think one more monkey in a Hitler suit is going to make that much of a difference and theirs no room for him in the blimp anyway, what with the zebra chain gang in the cabin and Hojatoleslam Kazem Sedighi behind the wheel spouting nonsense.
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NAMELESS.ONE, 20 Apr 2010 @ 12:15pm

DO NOT EVEN THINK ABOUT HTIS IN CANADA
its illegal and they've been doing raids and busts
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Richard (profile), 20 Apr 2010 @ 12:19pm

Market Ouvert
Actually some physical markets in the UK used to have an even stronger protection called Market Ouvert

http://en.wikipedia.org/wiki/March%C3%A9_ouvert

This protected not only the market - but even the buyer of stolen goods!

It was abolished only 15 years ago.
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Comboman, 20 Apr 2010 @ 12:21pm

Re:
The swap meet operator in the Fonovisa case admitted he was aware that counterfeit recordings were being bought and sold at his establishment and did nothing to stop it. That is probably the major difference.
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Anonymous Coward, 20 Apr 2010 @ 12:31pm

Re:
Yes, online, all you have to do is wave the magical counterfeit detection wand over the descriptions of the items and wait for it to beep!
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Josh in CharlotteNC (profile), 20 Apr 2010 @ 12:31pm

Re:
"physical flea markets are large and hard to check. online flea markets are electronic and can rapidly be checked."

Incorrect. There are at least two major difficulties.

One is the same problem of content filters. Start filtering out everything with "porn" and very quickly "pron" is used instead - then filter "pron" as well and "pr0n" comes along. Oh, and you just blocked cooking sites who insist you wear an a-pron by accident. Slaying the hydra quickly becomes insurmountable.

Two is also one of the key issues with Youtube/Viacom lawsuit. How was Youtube to tell the difference between legit Viacom uploads and non-legit uploads? Even Viacom itself couldn't tell.
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mike allen (profile), 20 Apr 2010 @ 12:37pm

it said
mike di not say copied CDs just copyrighted material therefore i assume some of the sales were actually people selling therir old CD / vynal collections or dealing in second hand material. which is surely legal.either that or the copies may actuallt be of goodd quality.
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PaulT (profile), 20 Apr 2010 @ 1:20pm

Re:
Easier to check against a list of known filenames/fingerprints? Yes, assuming said list is accurate and foolproof to begin with (not normally the case).

Easier to track down every infringing item? Absolutely not. In fact, it may be even more difficult to do that for digital items that can be obfuscated in a huge number of ways.
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Dementia (profile), 20 Apr 2010 @ 1:38pm

Re:
Actually, I don't think any ISP's have been asked to access your computer to look for any infringing material, just monitor the data going to and from it. This would be more like the building manager opening you mail and packages, and then, when a store owner accuses you of shoplifting, evicting you from you building.
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Overcast (profile), 20 Apr 2010 @ 1:42pm

I'm curious...

If you buy an original CD and make a backup copy.. then loose the original - say it's destroyed.. Can you then sell the backup copy, assuming you don't retain another copy for yourself?
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Jon B., 20 Apr 2010 @ 1:50pm

Re:
"Texas Southern District Court"

Somebody must have heard that Texas was the right place for stuff like this, and forgot that it's East Texas they were looking for.
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senshikaze (profile), 20 Apr 2010 @ 2:09pm

Re: Re: Re: *A-hem*
sadly, that is way easier to believe than a smart Texan judge.
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Anonymous Coward, 20 Apr 2010 @ 2:45pm

Re: Re:
not a question of perfection. in a flea market the stuff is under the counter and not seen. online it cant hide because the site owner controls the counter. there is a very big difference.
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Any Mouse, 20 Apr 2010 @ 3:37pm

Re: Re: Re:
Still trying to blow that goat, are you? Too bad it isn't so simplistic as you make it out to be. It's no easier to police an online market place than it is a physical one.
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Anonymous Coward, 20 Apr 2010 @ 3:44pm

Re: Re: Re:
In a flea market you can tell when a gun is a gun, and when an obvious bootleg is an obvious bootleg. Any Joe Schmoe walking by a booth could point that out to you.

Online, it's impossible to tell that file "My Vid is Cool" #123231/5000000 contains infringing content.

Looking for illegal goods in a flea market is like searching for a needle in a haystack - difficult, but doable. Searching for illegal content on the internet is like separating shell fragments from igneous sand on a beach.
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Andrew D. Todd, 20 Apr 2010 @ 4:50pm

Sony's Real Intention.
Well, let's be realistic, and state some obvious points. Sony did not think that the flea market operators was going to go around and programmatically inspect every CD and stamp it with a distinctive approval sticker, or whatever. Sony's obvious intent was to induce the flea market operator to ban the selling of all CD's, including remaindered or used CD's-- which is of course what happened in 2003, a year or so after the events in question. The flea market operator presumably came to the conclusion that a small class of merchants who attracted lawsuits from big corporate lawyers were not worth the trouble. This inducement of such a blanket ban of course constitutes a violation of the Sherman and Clayton antitrust acts. Of course, the operator could have had much more fun if he had played along, and got a Sony representative to say the magic words for a concealed tape recorder to pick up.

To the extent that they have had the political power, the music and movie industries have attempted to secure bans on a wide range of "secondary transactions," on the grounds that consumers would obtain legitimate copies, keep them just long enough to make their own private copies for listening, and return the legitimate copies to the market. Sony's actions have to be viewed in this context.

It's a pity that the flea market operator didn't go in for a bit of entrapment.
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Anonymous Coward, 20 Apr 2010 @ 5:54pm

Re:
1. The first case was in California and ultimately decided by the 9th Circuit, which reversed the trial court.

2. This case is in Texas and the trial court opinion will likely be appealed, with a reversal almost certain to follow by the 5th Circuit.
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