Michael Robertson Challenges Ruling That Says He Has To Pay Over $40 Million For Copyright Infringement
from the red-flags-indeed dept
Earlier this year, we wrote about the troubling ruling against MP3Tunes.com, in which it was found to be "willfully blind" to infringement on its music locker service -- raising serious questions for basically any cloud service provider. EMI, the record label suing, used an incredibly low standard for what it considered to be willful blindness, but the jury bought it. On top of that, it found MP3Tunes founder Michael Robertson not just personally liable for certain infringement, but said he'd have to pay somewhere around $41 million for it.In response, Robertson is fighting back, asking the judge to basically overrule the jury on a number of different matters. There's a lot in the filing that's worth reading, but it highlights just how crazy some of the details are in this case. The biggest issue is the whole "willful blindness" issue or "red flag knowledge." As other courts have noted, this has to be in reference to specific instances of infringement -- but that wasn't shown for many of the files in this case. Rather, the jury was only told of general infringement. This was the issue at the center of the big YouTube/Viacom case, in which YouTube won the argument that Viacom had to show red flag knowledge of specific infringement, rather than just arguing general knowledge of infringement. Yet, in this case, the issue seems to have been flipped.
There's also the troubling aspect of how the jury found Robertson guilty of not just direct infringement (of 22 files), but also "vicarious and contributory liability" on a list of over 2000 additional works. But, as Robertson notes, for that to be the case, EMI would have to have shown Robertson receiving a direct financial benefit from that infringing activity, and, in fact, Robertson received nothing from the infringement, or the company -- instead, he lost millions.
The trial record is devoid of evidence that Robertson received any such direct financial benefit. In fact, not only did Robertson not receive any direct financial benefit from MP3tunes’ and its users’ infringing activity, he personally invested and lost over $6.8 million. Moreover, uncontroverted trial testimony shows that Robertson has (a) never taken a salary or a bonus from MP3tunes... and (b) never received any dividends or any distribution, even directly or indirectly through any of the trusts, from MP3tunes...Furthermore, it notes how the jury appears to have confused benefit for the company with benefit for Robertson directly. Furthermore, he argues that some of the arguments seem entirely based on a made up concept of tertiary liability. Basically, the jury argued that MP3Tunes has secondary liability for the actions of its users (already a questionable statement, given its compliance with the DMCA's safe harbors), and beyond that Robertson thus has tertiary liability for MP3Tunes' secondary liability. Anyone who believes in the nature of a limited liability corporation, and separating the liability of the company from its staff, might want to pay attention to that issue.
Tellingly, Plaintiffs do not dispute these facts. Instead, they argued that Robertson could have made money, if his plan had been a success.... But the Liability Charge rejected such hypothetical conjecture; rather, it requires that “Robertson received a financial benefit directly attributable to the infringing activity of MP3tunes.” .... Indeed, the very conjecture Plaintiffs assert is itself an implicit admission that Robertson did not receive a financial benefit. ... (“Had he succeeded and signed up millions of users, he could have taken the company public, gotten investors or sold the company”) (emphasis added)). Such speculative conjecture is too remote to support vicarious copyright liability
Under the charge, Robertson may be liable for MP3tunes’ secondary liability without any proof of his knowledge of, benefit from, or contribution in, the users’ direct infringement; and without any direct infringement by MP3tunes. That simply is not the law, and is contrary to the fundamental limits of secondary liability.On the willful blindness/red flag issue, Robertson notes the made up and artificial standard that EMI uses, that if they had recieved DMCA notices with 10 or more links to a particular website, they had red flag knowledge that all links from that website must be infringing.
Plaintiffs simply counted the number of occurrences of domains in their takedown notices, and when the count reached 10, assigned to MP3tunes willful blindness or red flag knowledge that all sideloads from such domain were infringing. That is insufficient. MP3tunes could not discern any specific instances of infringement merely from the fact that any particular domain was present more than 10 times on takedown notices. In fact, counting the number of occurrences on takedown notices does not even rise to a showing of “a high probability of general infringement” or “a generalized awareness of infringement,” which are not enough to establish willful blindness or red flag knowledge.He further presents proof that EMI itself miscounted. Five out of thirteen domains they listed had errors. On top of that, he points out that EMI itself authorized free MP3s on many of those domains. In other words, there were authorized works on those same sites, which EMI insists Robertson must have known were infringing.
In addition, the number “10” was plucked from thin air. Why not three? Why not 15 or 20? Where was the evidence showing the significance of 10 occurrences? Moreover, the lack of notice of specifically infringed works means MP3tunes had to conduct an investigation to determine which works were infringed: (i) which domains met the threshold of 10; (ii) which works were owned by Plaintiffs; and (iii) which works were sideloaded without authorization.
There are other issues raised in the filing as well, which you can read below, including questions about liability on cover art images. The specific legal issues in the case concerning secondary liability and red flag knowledge are quite important, because it will absolutely be cited as precedent in other cases as well. Unfortunately, as we've noted for a while there's sometimes a difference between "real law" and "file sharing law" in which courts decide if something feels like infringement and then twists itself to make it so. This case has all the indications of a court feeling like Robertson did something wrong, even if it doesn't seem to actually fit under the law. Thus, the effort here may be quite a long shot. Unfortunately, the ramifications of that will be felt by tons of other services, especially those in the cloud computing space.
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Filed Under: contributory infringement, copyright, dmca, michael robertson, red flag knowledge, safe harbors, secondary liability, tertiary liability
Companies: emi, mp3tunes
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Calling someone a hacker or a pirate in today's milieu, is not unlike calling a person a witch in Salem during 1692.
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Response to: Groaker on Jun 4th, 2014 @ 10:13pm
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Re: Response to: Groaker on Jun 4th, 2014 @ 10:13pm
"Sufficiently advanced technology is indistinguishable from magic?"
BURN THE WITCH!!!!
/s
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Re: Response to: Groaker on Jun 4th, 2014 @ 10:13pm
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I've long wanted to serve on a jury, but have never been called up (and I'm past middle age). Ironically, every single one of my friends and family have been called up (most multiple times) and most of them view it as a huge pain in the ass.
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In response, Robertson is fighting back"
Well, yeah... When you're talking about that sort of money you might as well fight to the bitter end. Whether you owe the money to the cartels or the lawyers, you're screwed anyway so why let them get it easily?
" Five out of thirteen domains they listed had errors. On top of that, he points out that EMI itself authorized free MP3s on many of those domains."
...and before the usual chorus of morons join in - this is the problem. The copyright holders themselves can't even work out which works are infringing with any degree of accuracy, even as they're selecting the pool to use as evidence in front of a court of law. As with Viacom, when presenting evidence to a jury, they can't even work out which ones they authorised directly. How, therefore, can any third party possibly know the difference, especially as part of a "simple algorithm" or whatever voodoo they assume Google can cook up?
Does anyone have a real answer to this, or do they just accept that third parties have to do the impossible, with guaranteed lawsuits whether they succeed or not? If so, do you honestly not see the problem here?
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If he is lucky
The arguments are a bit light. Arguing the magic number of 10 is pretty funny actually, it's like asking someone "if I hit you in the face, how many times do I have to do it before you decide to stop me?". 10 would be a pretty high number if the guy hitting you was Georges St Pierre. I don't tolerate having to tell my son the same thing 10 times before he is in trouble for not paying attention, I think the courts can see that level as not only reasonable, but even lenient in giving this guy plenty of chance to stop what he was doing.
Moreover, as soon as they were able to attribute even a little bit of the piracy to him personally, the game was over. He cannot be pirating stuff and also claiming not to know.
It will be interesting to watch the appeal, but I am thinking that much of it will be tilting at windmills.
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Re: If he is lucky
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Re: If he is lucky
" it's like asking someone "if I hit you in the face, how many times do I have to do it before you decide to stop me?"."
No, it's asking me if I can stop the guy next to you from hitting you, but I have my back turned doing something else and it takes a few times to get my attention. Do you still not understand the fact that the services aren't pirating anything themselves, that the question is only whether they encouraged or directly profited?
"He cannot be pirating stuff and also claiming not to know."
Perhaps. But, if it's so clear-cut, why did the evidence against him include things that he had been given permission to distribute? if they can't even identify the content correctly, why should we trust claims of actions, especially since those apparently contain instances of tertiary liability - that is, NOTHING like him "pirating stuff" personally.
"I am thinking that much of it will be tilting at windmills."
Well, you'd know what that's like, I suppose.
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Re: If he is lucky
'Plaintiffs simply counted the number of occurrences of domains in their takedown notices, and when the count reached 10, assigned to MP3tunes willful blindness or red flag knowledge that all sideloads from such domain were infringing. That is insufficient. MP3tunes could not discern any specific instances of infringement merely from the fact that any particular domain was present more than 10 times on takedown notices. In fact, counting the number of occurrences on takedown notices does not even rise to a showing of �a high probability of general infringement� or �a generalized awareness of infringement,� which are not enough to establish willful blindness or red flag knowledge. '
The argument they were making basically boiled down to 'Once the number of DMCA claims concerning a particular web-site/IP address reaches 10, then all future uploads from the site/IP address should be treated, by default, as infringing, and refusal to treat them as such constitutes 'willful infringement'/red flag knowledge of infringement.'
And if you think that's a reasonable, and more to the point legal argument, I invite you to point out where in the law it states such a thing.
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He did not make money he lost money
Seriously , with this statment the judge should have condemmed the jury and found out who the mpaa mole was in the jury.
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Re: He did not make money he lost money
I like it: Hypothetical profits used to pay for a violation of imaginary property ordered by a jury deciding using made-up law.
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Re: Re: He did not make money he lost money
" he could have paid EMI $40M... EMI could have been happy with that"
Yeah, right... If he made a cent of profit, you can guarantee they'd be asking for billions, not millions.
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It seems that if the company derived any income from infringing material, that'd constitute "direct financial benefit" The benefit in this case is that the defendant would've lost more than $6.8 million.
I don't think you need to show a profit or receive a disbursement to be considered to have received "direct financial benefit"- only income derived from infringing activity.
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Re: Anonymous Coward, Jun 5th, 2014 @ 5:39am
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Secondary liability
BULLSHIT/HORSEPUCKY
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Re: Secondary liability
Does that mean that the US government can personally sue everyone who owns BP stock for the BP oil spill, because it must be their fault as an owner for the law breaking in cutting back on safety that caused the accident.
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When did Troy Aikman join EMI's legal team?
He didn't.
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Robertson is out for himself, as usual
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Re: Robertson is out for himself, as usual
As with Kim Dotcom, I'm sure the man has many flaws and isn't necessarily the best person to deal with on a personal level. This, however, has nothing to do with the criticisms of those attacking him.
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Re: Re: Robertson is out for himself, as usual
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From The future
"When you were born The USA had several policing regimes. The CAI, FBI, Rangers, County Sheriff, City Police, The IRS and the most feared of all, the RIAA. They were part of the record companies and were ruthless and determine to take down every music lover they could" said Joe.
His son replied : "What is the RIAA and what is a record company?"
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