Oops: After Seizing & Censoring Rojadirecta For 18 Months, Feds Give Up & Drop Case

from the took-'em-long-enough dept

Looks like we've got something of a repeat of the Dajaz1 insanity, in which the US government seized and censored a website for over a year before giving up and handing the domain back -- though this time it's with Rojadirecta. You may recall the Rojadirecta case, where two domains have been held by the US government on a highly questionable legal theory for over a year and a half -- well, the government just dropped the case, and it appears that the domains will be returned.

The case began when ICE seized two Rojadirecta domains from the Spanish company Puerto 80. As we noted at the time, Puerto 80 had been found legal (twice) in Spain, so it was hard to fathom that there could be "willful" infringement here.

Of course, over time, the situation got even more ridiculous. As with Dajaz1 and other sites, the US Attorneys in charge of the case stalled when the site fought back. In the case of Rojadirecta, Puerto 80 decided to stop waiting and sued the government. From there, something of a comedy of errors by the government ensued, with bizarre and unsupportable claims, and (worst of all) repeated attempts to mix and match different pieces of the law to dance around the fact that there was no legal basis for the seizure and the whole thing was unconstitutional. Each time the feds would present an argument, as you picked it apart, you could see that even they didn't seem to understand the law.

It appears that someone over there finally figured it out. We'd been waiting a while to hear from the court, and the last thing we'd heard was Rojadirecta/Puerto 80 pointing to Judge Posner's recent ruling about how a site embedding clips from elsewhere isn't infringing. Some copyright maximalists insisted that this had nothing to do with Rojadirecta, and that Rojadirecta would still lose... but not everyone agreed.

Today the government filed a "voluntary dismissal" notice of the case against Rojadirecta.org and Rojadirecta.com. You can see the short dismissal notice below. What's unfortunate, of course, is that the government might now get away with this blatant censorship and disregard for basic due process, without a court ruling showing that it was an illegal move by the feds. In other words: without punishment, the feds may feel free to do this again. This is now the second (and third) example of the government seizing a domain and censoring it for over a year on a very questionable legal theory -- and when the pressure finally gets to be enough, the government turns tail and runs, giving back the domain with no explanation or apology for blatant censorship. That's unacceptable.

Mark Lemley, who was on the legal team defending Puerto 80, told me:

We're obviously thrilled that after 18 months it looks like we will get the domain names back. I think this is a sign that you can stand up for what's right in copyright law and win.

That's true... but just the fact that they had to fight this for 18 months while the government held their domains raises serious questions about the government's actions here. It's probably not worth it for Puerto 80 to pursue things any further, but it's unfortunate that in both cases where people have fought back against the government's over-aggressive seizures of domain names, the government has tried to wait them out... and then finally admitted by default that it was wrong, and handed back the domains.

I expect that we may see a few more such cases as well. Unfortunately, though, we may not get a clear legal ruling telling the government it can't do this -- meaning that they'll be free to continue to abuse their powers in such a manner going forward.

Update: Added the letter that the DOJ sent with the dismissal notice, suggesting that the MyVidster ruling impacted their thinking...

Filed Under: censorship, copyright, criminal copyright law, doj, domain seizures, domains, free speech, ice, rojadirecta, seizures
Companies: puerto 80

Rojadirecta Points Court To FlavaWorks Ruling Concerning Infringement On Linking Sites

from the time-for-a-wake-up-call dept

We recently wrote about the (somewhat surprising) ruling by Judge Posner in the 7th Circuit appeals court's Flava Works vs. myVidster case, in which Posner pointed out that a site providing links to infringing content is not infringing. He actually ruled that just watching the videos or embedding them are not direct infringement either. As we noted that seemed to have direct bearing on a number of other cases out there, including the criminal charges against Rojadirecta (and against TVShack's Richard O'Dwyer). It appears that Rojadirecta's lawyers wasted little time in letting the judge in their cases know about the ruling. While Rojadirecta's fight is in the 2nd Circuit, hopefully this helps the courts to recognize how ridiculous the governments' charges are. Even if they don't quite agree with Posners' ruling, just the fact that there are significant questions over whether or not linking/embedding are legal, should raise significant questions about the "willfulness" needed to show criminal copyright infringement.

Filed Under: copyright, criminal, liabiity, linking, rojadirecta
Companies: flava works, puerto 80

Feds Tie Themselves In Legal Knots Arguing For Domain Forfeiture In Rojadirecta Case

from the that-makes-no-sense dept

If you don't recall, among the various domains that ICE and the DOJ seized last year were two domains -- rojadirecta.com and rojadirecta.org -- held by a Spanish company, Puerto 80. After extended negotiations to try to get the government to return the domain names, Puerto 80 finally sued the government to get them back. Almost immediately after, the government filed to forfeit the domains (seizing property is supposed to be a temporary thing -- if the owner wants it back, the government has to file for forfeiture to keep it permanently). Thus there are two semi-parallel issues going on here. Either way, the judge rejected the request to return the domains prior to the trial, and while the appeal on that process is ongoing, back in the district court, the fight over forfeiture has continued.

Last December (actually the same day that the government was handing back the Dajaz1 domain in a similar dispute), the lower court dismissed the forfeiture claim -- saying that the government failed to plead willful copyright infringement, which is necessary to show criminal copyright infringement. However, it allowed the government to refile, which it did. The two sides have filed their latest motions in the case, and once again, it appears that they're talking about two totally different things. In fact, reading through the government's filing, it appears that they either have no understanding of the law itself, or have twisted themselves into such a tight knot, that they're not sure how to get out of it.

The details are a bit tedious, but let's see if we can break it out. First off, the seizure and forfeiture are "in rem" -- meaning that the case is against the domains themselves, and not the owners of the domains. That can be an awkward distinction, obviously, but the government makes it much, much more awkward in that it seems to shift its argument back and forth constantly. For example, it repeatedly (in a rather mocking tone) rejects the arguments of Puerto 80 by noting that no one is accusing Puerto 80 of anything. The case is merely about how the Rojadirecta domains "facilitate" criminal copyright infringement. So the government argues that the court should ignore the (rather compelling) defenses for why Puerto 80 did not violate criminal copyright law.

Now, that part is fine... but where it gets weird is that the government immediately then tries to use Puerto 80s actions as proof of facilitating infringement. If you're playing along with the home game, the government is arguing both that Puerto 80s actions are meaningless to the case and that Puerto 80's actions are the key to facilitating criminal copyright infringement. Basically, whenever Puerto 80 points out that its actions do not meet the standard of criminal copyright infringement, the government waves its hands and says "doesn't matter, we're not charging you, just the URL." But then to prove that the URL "facilitated" the actions, it cites Puerto 80's actions, rather than the URL's actions. That's because the URL doesn't act. It's just a URL. See the following as an example:

Additionally, there can be no serious argument that the Government has alleged that the Rojadirecta Domain Names' facilitation of the underlying copyright offense was anything but substantial. See Amended Complaint... ("At all relevant times, the links displayed on the main homepage of the Rojadirecta Website were purposefully aggregated and organized by the owner(s) and/or operator(s) of the Rojadirecta Website. Moreover, more than half of the material available on the Rojadirecta Website at any given time during law enforcement's investigation appeared to be dedicated to making infringing content available to users of the Rojadirecta Website.")....

Puerto 80's arguments about its own conduct are irrelevant and misapprehend the nature of the inquiry

See that? First it's "here's all the evidence of things done by Puerto 80"... and then immediately, "Puerto 80's actions are irrelevant".

At times this reaches absolutely absurd levels, such as the part of the government's filing in which they assert that the domain itself had knowledge of infringement. The feds can't say Puerto 80 had knowledge, since (again) they admit that Puerto 80 is not being charged. So they switch and anthropomorphize the domain itself:

Indeed, the Rojadirecta Domain Names were repeatedly noticed that they were linking to copyright infringing content.

You see? It's not Puerto 80 who was noticed, but the domain name itself. It must have "known." Or something.

The government's argument gets even worse from there, because nowhere does it show where the criminal copyright infringement happened. In order for the government to claim that the Rojadirecta domains facilitated criminal copyright infringement, you would think the first step would have to be to show where it actually happened. Here, the government basically waves its hand and says, "of course it happened." First, it highlights the fact that because of links on the Rojadirecta sites, content could be streamed from third party sites. In fact, it straight out admits that Rojadirecta hosted no infringing content, but rather it was all on these other sites. It then notes that such streams likely violated the performance and reproductions rights under the Copyright Act. That may be true, but that, alone, does not make it a criminal offense. That requires willfulness -- which was the problem in the original filing.

But, here again, the feds run into a serious problem: how can they show willfulness on the part of the infringer when they never identify an infringer? The entire filing insists that the domains should be forfeited because they were used to facilitate a crime, but they never show that any crime was actually committed, because they never even attempt to identify who committed the crime. They admit that it's not Puerto 80 (even as they try to use Puerto 80's actions). It likely isn't the users of Rojadirecta (and the government doesn't even try to make that claim). Instead, it seems to hint at an imaginary party who willfully infringed, but is never actually identified! It's really amazing.

The implications here are staggering. Basically, the feds are arguing that they can seize and then forfeit a domain without showing any crime actually happened. Instead, all they need to do is vaguely assert that someone, somewhere may have possibly violated a law somehow using the domain in the process -- but they never have to actually prove anyone violated the specific law. In other words, if the government wanted to, under this definition, it could easily seize and forfeit any search engine domain or any website that allows public comments, merely by asserting that a link in a search result or a link in a comment led to infringing material. That's an insane interpretation of the law -- yet it appears to be the one that the feds are asserting.

One hopes that the judge actually understands the absolutely insanity of the feds' argument here. Puerto 80's lawyers lay it out nicely (pdf) in their response, but courts can be funny sometimes -- especially in copyright cases. Still, the argument made by Puerto 80's lawyers lay out just how ridiculous this interpretation would be:

Under the government’s construction of [the law], every domain name that pointed to a website containing links to infringing copies would “facilitate” and have a “substantial connection” to the offense of criminal copyright infringement, and would therefore be subject to forfeiture. The broad construction of the term “facilitation” the government seeks would give it the power to shut down google.com, yahoo.com, bing.com, or any of an array of other channels of communication that—like every site on the Internet—link to content provided by third parties that might or might not be infringing. The property in question is two domain names, which (in the government’s words) are merely “labels” that “resolve” to websites, and are distinct from the servers that host the website or any content of it....

The government’s theory would have allowed it to seize the New York Times issue that published the Pentagon Papers and destroy it, on the theory that the New York Times was facilitating Daniel Ellsberg’s violation of national security laws. And the Times would have had no opportunity to show that its speech was lawful. There is no reason to think Congress intended the forfeiture statute to extend so broadly. And even if it had, Congress lacks the power to confer such plenary control over speech on government agents acting without judicial sanction.

Of course, all of this doesn't even touch on two other important issues in the case. One is the First Amendment questions raised by seizing a domain and the second is the fact that US copyright law only matters in the US, not in Spain. In both cases, the government again comes back with wacky responses. On the First Amendment claim, it argues there's no First Amendment issue, relying incorrectly on the Arcara vs. Cloud Books case. But that ruling is clear that it only applies if the crime in question is not expressive. But copyright infringement is often absolutely expressive. It may not be protected expression but it is expression, and as such it requires First Amendment scrutiny to make that determination. The government flat out claims that copyright infringement (which it falsely calls "intellectual property theft") is "unrelated to speech." That's simply incorrect. Courts have long established that there is a balance between copyright and the First Amendment, and you can only establish infringement following a ruling by a court. Yet here the government wants to skip over that step entirely. As Puerto80 notes:

The government argues that the links on the Rojadirecta website are not protected speech because they constitute copyright infringement. But that argument exactly misses the point of the prior restraint doctrine. Unless and until there has been a final determination on the merits after an adversary hearing, there is no basis to find that criminal copyright infringement occurred on the third party sites to which the Rojadirecta website linked.

As for US law being applied outside the US, here the government just tries to wave this issue off again. It first admits that US law does not apply outside its borders, but then insists that it is "inconceivable" that some infringement didn't happen inside the US. But that's not how the law works. You have to actually show the infringement. You can't just insist that it happened somewhere in the US and move on...

The further this case goes, the worse and worse the government's arguments seem to get, and the less and less it seems to understand about the hole it has dug for itself.

Filed Under: criminal copyright infringement, doj, forfeiture, ice, rojadirecta, seizure, spain
Companies: puerto 80

Puerto 80 Makes Its Argument For Why The Seizure Of Rojadirecta Was Unconstitutional

from the keep-watching-this-space dept

As you may recall, there are two parallel cases going on at the same time concerning Puerto 80 and its domains that the US government seized earlier this year. The first, as we discussed earlier, is the forfeiture procedure, which has been temporarily dismissed over a technicality (soon to be refiled). But perhaps more interesting is the appeal over the refusal of the government and the courts to return the domain prior to the forfeiture process beginning. Again, just for reference, the seizure process is first, and is (supposed to be) temporary, but the later forfeiture process is permanent. The district court effectively said that there was no First Amendment issue to be raised during the seizure process because, apparently, the court didn't think that trampling on one's First Amendment rights represents a substantial hardship.

While the forfeiture process continues (with a short break), Puerto 80 also appealed the ruling during the seizure period, and the 2nd Circuit appeals court agreed to expedite that case. The hearing there is happening in a little over a week, and Puerto 80 has filed its brief in that appeal, which is embedded below. The summary is that they're focusing on the fact that this is prior restraint. Even if the content turns out to be infringing and unprotected, seizing it before that determination is made represents classic prior restraint:

...throughout its brief, the government assumes that the First Amendment does not protect any Rojadirecta content that the government claims links to infringing material. Not so. True, were the government ultimately to show at a hearing that the Rojadirecta web sites or certain content on those web sites infringed copyrights, that content would no longer be protected. But the very point of the prior restraint doctrine is that the government does not get to assume that speech is unprotected without first affording the speaker notice and an adversarial hearing on that issue. The government’s failure to afford either renders its acts here unconstitutional.

Under the government’s view of the Constitution, no First Amendment scrutiny is required in order for it to shut down a search engine, a website, a newspaper, or a printing press it believes is being used to violate the law—not just prior to a determination of the illegality of the content, but without ever having to prove that its owner violated the law. All it needs to do is assert that those sites are somehow facilitating infringement. The government’s theory would have allowed it to seize the New York Times issue that published the Pentagon Papers and destroy it, on the theory that the New York Times was facilitating Daniel Ellsberg’s violation of national security laws. And the Times would have had no opportunity to show that its speech was lawful. That is simply not the law. New York Times Co. v. United States, 403 U.S. 713 (1971) (effort to block publication of information alleged to violate the law in advance of legal hearing was an unconstitutional prior restraint).

Interestingly, Puerto 80 has chosen not to challenge the claim that violating the First Amendment does not represent a substantial hardship. I'm sure there are reasons for this -- and, indeed, the caselaw on "substantial hardship" suggests it may be limited -- but it still seems crazy to me to think that violating the First Amendment isn't automatically deemed a substantial hardship. Even if that's not how the courts have ruled, it seems like they should. The basic reasoning given in the filing is that if the seizure violates the First Amendment, whether or not it also was a "substantial hardship" is meaningless. So if they just show a First Amendment violation, the issue of substantial hardship is moot.

Either way, Puerto 80 avoids that argument (and, indeed, chides the government for focusing on that issue, when it's not even part of the appeal).

It then, as expected, relies heavily on the ruling in Fort Wayne Books v. Indiana, which makes it clear that seizures that involve expressive speech need to meet a higher Constitutional standard. It also eviscerates Arcara v. Cloud Books, the favorite case of the government and those who support these seizures. As we've noted from the beginning, the court in Arcara is quite clear: the ruling simply does not apply to cases that involve legality of content itself, but only to other sorts of crimes (in this case, prostitution).

The filing is a good, quick read. Hopefully the panel finds it persuasive.

Filed Under: first amendment, free speech, prior restraint, rojadirecta
Companies: puerto 80, rojadirecta

Court Dismisses Puerto 80 Rojadirecta Case (For Now)... But Doesn't Give Back The Domain

from the um,-what dept

As we're still discussing the mess from the Dajaz1 censorship, in the other big case involving domain censorship, we've got another troubling situation.

Yesterday was the latest hearing in the forfeiture case involving Rojadirecta (Puerto 80), and the end result was that -- believe it or not -- the case was dismissed (pdf). The ruling doesn't say much -- basically says the reasons were stated during the oral arguments, and there's no transcript yet. However, the basics are that it was dismissed on a technicality (over a failure to plead the willfulness, which is necessary for criminal infringement), and the government has 30 days to amend and refile its complaint -- which is quite likely. While having the case dismissed sounds like a big deal, this seems more like a temporary pause, rather than anything meaningful at this point (unlike the Dajaz1 situation).

But here's the weird thing: technically, because of the dismissal, there's no forfeiture case going on, and the seizure time period has long expired. So... um... why does the government still have the domains in question? There's no ongoing case, and even if the government intends to refile, it's hard to see how it has a right to hang onto the domains in the meantime. But... it is. It seems like both Dajaz1 and Puerto 80 should be celebrating the returns of their domains today, but only one is....

Filed Under: copyright, criminal copyright infringement, doj, domain seizures, forfeiture, rojadirecta, seizures
Companies: puerto 80, rojadirecta

Puerto 80 Explains How Rojadirecta Domain Seizures Violated The First Amendment

from the prior-restraint dept

The appeal of a district court's refusal to return the Rojadirecta domain names has moved forward. Our original post discussed a filing to ask the Second Circuit appeals court for an expedited hearing of the case, which the court has agreed to do. That means that this case should move relatively quickly. To kick that off, Puerto 80s opening brief in the appeal is below. It goes through, in great detail, how seizing a domain name without any notification, and then stalling any attempt to get it back, clearly qualifies as prior restraint. The full thing is worth reading, as it lays out the argument clearly and in great detail. But here's the summary of the argument:

The government seized and shut down two Internet domain names—the 21st century equivalent of printing presses. See Reno v. American Civil Liberties Union, 521 U.S. 844, 870 (1997) (noting that through use of the Internet, “any person with a phone line can become a town crier with a voice that resonates farther than it could from any soapbox. Through the use of Web pages, mail exploders, and newsgroups, the same individual can become a pamphleteer.”). Seizure of that sort is a prior restraint on speech. Prior restraints are “‘the most serious and least tolerable infringement’ on our freedoms of speech and press.” United States v. Quattrone, 402 F.3d 304, 309 (2d Cir. 2005) (quoting Nebraska Press Ass’n v. Stuart, 427 U.S. 539, 559 (1976) ). They can be justified only by scrupulous attention to procedure and an extraordinary showing on the merits. Neither is present here.

The government seized and shut down Puerto 80 and its users’ means of communication in an ex parte procedure with no notice to Puerto 80 and no adversary hearing of any kind. It held those domain names for more than six months before any court ever considered whether the seizure violated the First Amendment or caused Puerto 80 substantial hardship such that the domain names should be released pending a determination of the merits of the forfeiture case. To date, no court has reached the merits of the government’s case. When the district court did rule, it dismissed the First Amendment concerns in a paragraph, improperly placing the burden on Puerto 80 to show that it suffered substantial hardship from the government’s prior restraint. And the government did all this without ever having had to prove to any court that Puerto 80 (or anyone else) was guilty of copyright infringement. Indeed, to this day the government takes the position that it will never have to justify its seizure by showing that Puerto 80 violated any law. (MJN, Exhibit D at 1.)

The procedure used by the government flies in the face of First Amendment law. Decades of First Amendment jurisprudence establishes that the government is entitled to seize property used for speech only after notice to the property owner and an adversarial hearing that fully vets the merits of the government’s case and concludes that the defendant acted unlawfully. This seizure was conducted with no notice, no hearing of any kind, and was based only on the government’s assertion that it had probable cause to believe that criminal infringement occurred because some of the content linked to by Puerto 80 may be unauthorized. That procedural failure is itself enough to condemn the government’s action as an unlawful prior restraint. And it is compounded by the government’s substantive failure to show anything more than probable cause to believe that criminal copyright infringement had occurred. The First Amendment requires more than probable cause. It requires a final determination on the merits that Puerto 80’s use of the domain names was unlawful. For both reasons, the government’s prior restraint was unlawful and should be lifted.

From there, it goes into a much more detailed explanation of why the seizures represent a violation of the First Amendment. There were some questions as to whether or not this argument would get heard at all after the district court's original ruling, so it's good to see it come up here. Hopefully the court recognizes the seriousness of the issue. I'm guessing the Justice Department will try to sidestep the First Amendment issues by focusing on the question of "substantial hardship," but one hopes that the court can recognize the simple ridiculousness of the government being able to seize an entire domain with no notice, no adversarial hearing, no path to getting the site back and (most importantly) no proof or evidence that a crime was actually committed.

Filed Under: domains, free speech, ice, prior restraint, seizures
Companies: puerto 80, rojadirecta

Puerto 80 Responds Forcefully To DOJ's Claims Concerning Domain Seizures

from the government-overreach dept

While Puerto 80 has already appealed the rejection of its attempt to get back its domain names (the two rojadirecta domains that Homeland Security seized), the separate case, involving the permanent forfeiture of those domains, continues. As you may recall, Puerto 80 put forth its motion to dismiss, noting that the government appeared to be wholly making up a legal standard that doesn't exist, while also showing that Puerto 80 did not break criminal copyright law. The government responded bizarrely by trying to argue that Puerto 80's actions don't really matter, because it's not about Puerto 80... and then spent most of its brief explaining why Puerto 80 did things that broke the law.

Now Puerto 80 has responded, and this time it's coming out even more forcefully against the government, explaining how its theory for seizure and forfeiture is absolutely ridiculous, and would effectively allow the government to seize all sorts of property if it so chose, including any search engine domain, any telephone network infrastructure, any electrical company's infrastructure -- just because such tools could be shown to have been used by someone, somewhere, possibly for illegal purposes, even if the company in question had nothing to do with it:

The government’s view of its powers under the civil forfeiture law, articulated for the first time in its opposition to Puerto 80’s motion to dismiss, is breathtaking. In the government’s view, it doesn’t need to allege that Puerto 80 violated any law, or even engaged in any civil wrong, in order to seize and shut down its Internet domain name. As long as the government thinks that someone, somewhere in the world, is engaged in copyright infringement, it believes it is entitled to seize any asset that might be connected to that infringement, whether or not the owner engaged in any wrongdoing, and whether or not that asset in fact “facilitated” the commission of any crime. And it further believes it is entitled to seize Internet domain names and shut down protected speech without ever having to prove that the speech was, in fact, unlawful, much less that the owner of the asset was responsible for any crime.

On the government’s view of its powers, it is entitled to seize the Google, Bing, or Yahoo web site, because someone, somewhere, has used those sites’ search engines to find infringing content. It is entitled to seize Verizon’s telephone network for the same reason. It is entitled to seize the power company, since numerous crimes are “facilitated” by the use of electricity. And the only reason the government lost the Pentagon Papers case, New York Times Co. v. United States, 403 U.S. 713 (1971), is that it asserted the wrong statute. Had the government simply seized the New York Times’ printing presses, pointing out that they were being used to “facilitate” the disclosure of government secrets, it would have been able to block the disclosure of Daniel Ellsberg’s secrets.

As the filing notes, "this cannot be the law." And, almost certainly, it's unconstitutional.

The full filing (embedded below) is fantastic. It no longer dances around the issue and flat out points out that the government's argument is incoherent, pulling different actions from different actors together to try to pretend that a single party did something wrong.

But in attempting to argue its new “facilitation” theory, the government cites to different acts by different actors (Puerto 80, other websites that are streaming content, and unidentified users who follow links to the content) for different elements of the alleged offense. Not only does this approach render the government’s opposition brief incoherent; it does nothing to change the fact that the Complaint fails to plead the elements of criminal copyright infringement by Puerto 80 or any other actor.

Specifically, Puerto 80 points out that in order to show criminal copyright infringement, the government needs to show that a party willfully infringed for profit. But it doesn't do so. It shows that some people may have infringed. And it shows that Puerto 80 may have profited. But it does not (and cannot) show that Puerto 80 itself willfully infringed for profit. In fact, it doesn't even try, because it knows that Puerto 80 itself did not infringe directly.

Finally, Puerto 80 points out that even if the government's argument is accurate, then the law must be unconstitutional:

Under the government’s newly-raised construction of the statute, the government may use the forfeiture statute to make an end-run around the First Amendment by seizing a lawful channel of communication. Such a seizure prevents lawful speech, and constitutes a prior restraint on that lawful speech. The government’s suggested construction of the forfeiture statute would render it unconstitutional, and should therefore be rejected.....

[....]

If the government’s theory of “facilitation” were adopted, the government would be permitted to shut down a search engine, website, newspaper, and printing press not just prior to a determination of the illegality of the content, but without ever having to show that it was operating unlawfully. It would permit, for instance, the government to shut down an entire printing press and newspaper for running an advertisement that contained allegedly infringing content. Or it would permit the seizure of a search engine because of its indexing allegedly infringing material. Such actions are plainly unconstitutional.

It's nice to see Puerto 80 hitting much harder on these key points, which it seemed to skirt around in the earlier filings. I'm wondering if the Justice Department even realizes how screwed up the argument it's trying to make really is. It never shows any criminal copyright infringement, but then says it can simply seize a domain because of some criminal copyright infringement which doesn't even appear to exist. The whole thing is incredible. Hopefully the court recognizes this and smacks the Justice Department around a bit for its ridiculous claims in trying to take these domains.

Filed Under: copyright, criminal copyright infringement, doj, domain seizures, forfeiture, rojadirecta, seizures
Companies: puerto 80, rojadirecta

Puerto 80 Appeals: Asks Court To Recognize That Trampling The First Amendment Is Substantial Harm

from the and-here-we-go dept

We had just noted that the government had replied to Puerto 80's motion in the Justice Department's attempt to forfeit the two Rojadirecta domains it had seized earlier this year. In it, we wondered if Puerto 80 was also going to be appealing the earlier ruling from the court refusing to return the domains, saying that Puerto 80 failed to show that a First Amendment violation represented "substantial hardship." It turns out that Puerto 80 is in fact appealing that ruling, as the filing embedded below shows.

To understand what's going on, you have to dig a little bit into the laws around seizure and forfeiture. While similar and related, they're two separate things. Seizure is the preliminary effort, in which the government, with some sort of (often rubberstamped) court approval, goes and takes something. There are specific rules around that, and while the laws are not perfectly clear, it does seem to suggest that the purpose of seizure in most cases is to hold evidence for a future trial, with the thinking being that leaving it in the hands of criminals could mean that the evidence might disappear. Forfeiture is a process that often follows seizure, in which the government makes its case that it should get to permanently keep some property. In many (but not all) cases, the government seizes first, and then forfeits later, in two separate processes.

In the Rojadirecta case, Puerto 80 initially challenged the seizure, including on First Amendment grounds, arguing that seizing such a domain without an adversarial hearing represented a classic case of prior restraint. In response, about a week later, the government then went forward with the separate process of filing to be able to keep those domains via the forfeiture process. So there were actually two parallel processes going on -- one about seizure and the other about forfeiture.

The specific filing against the seizure asked for the domains to be returned, which is allowed under seizure laws if the owner of the property can show "substantial hardship" from the government retaining the property. The judge ruled that a First Amendment violation did not count as a substantial hardship, and that it was the wrong time to raise the First Amendment anyway, suggesting it was better off being raised during the forfeiture fight that was about to start. What we've been writing about this week was the forfeiture fight, since the judge "closed" the seizure part with that previous ruling.

However, even as the forfeiture process is ongoing, Puerto 80 is now officially appealing the ruling on the seizure part of the case and arguing, compellingly, that the seizure itself was prior restraint and that a First Amendment violation is, without question, a "substantial hardship," contrary to the court's original claims. Not surprisingly, Puerto 80 relies on the Fort Wayne Books vs. Indiana case that is pretty damning to the government's rationale:

In Fort Wayne, state and local officials (respondents) filed a civil action pursuant to Indiana’s RICO laws, alleging that the defendant bookstores had engaged in a pattern of racketeering activity by repeatedly violating Indiana’s obscenity laws. 489 U.S. at 50-51. Prior to trial, respondents petitioned for, and the trial court granted, immediate seizure of the bookstores pursuant to a state law that permitted courts to issue seizure orders “upon a showing of probable cause to believe that a violation of [the State’s RICO law] involving the property in question has occurred.” Id. at 51. On appeal, the Supreme Court held that the pretrial seizure order was unconstitutional, stating that “mere probable cause to believe a legal violation has transpired is not adequate to remove books or films from circulation.” Id. at 66. As in Fort Wayne, the government here has seized an entire business and effectively suppressed all of the expressive content hosted on it, including political discussions, commentary, and criticism by the site’s users— without it being determined whether the seizure was “actually warranted” under the relevant statutes. Id. at 67.

The prior restraint on Puerto 80 users’ and readers’ First Amendment rights constitutes irreparable harm of the highest order. The Supreme Court has held that “[t]he loss of First Amendment freedoms, for even minimal periods of time, unquestionably constitutes irreparable injury.” Elrod v. Burns, 427 U.S. 347, 373 (1976); see also Bery v. City of New York, 97 F.3d 689, 693 (2d Cir. 1996) (“Violations of First Amendment rights are commonly considered irreparable injuries for the purposes of a preliminary injunction.”). In CBS, Inc. v. Davis, the Supreme Court stayed the lower court injunction that prohibited CBS from broadcasting video footage documenting unsanitary practices in the meat industry, finding that such prior restraint caused “irreparable harm to the news media that is intolerable under the First Amendment.” 510 U.S. 1315, 1315-16, 1318 (1994) (emphasis added). The deprivation of Constitutional rights is, therefore, ipso facto irreparable injury and subject to expedited review.

In the instant case, the government effectively shut down an entire website, suppressing all of the speech hosted on it, based on an assertion that there was probable cause to believe that some of the material linked to by the website (though not found on the website itself) might be infringing. Puerto 80 was not provided any advance notice, nor was it provided the opportunity to contest the seizure before (or, for that matter, shortly after) the government shut down the site. Nor were the site’s users afforded any notice or opportunity to contest the seizure. That procedural failing itself indicates that the government’s action was an unlawful prior restraint. “[T]he lack of notice or opportunity to be heard normally renders a prior restraint invalid.” United States v. Quattrone, 402 F.3d 304, 312 (2d Cir. 2005) (citing Carroll v. President & Comm'rs of Princess Anne, 393 U.S. 175, 180 (1968)).

The filing at this point is mainly to convince the court to accept an "expedited appeals" process, rather than a full filing on the reasons why the seizure was prior restraint and why prior restraint is a substantial hardship, but it certainly presents the basics of the argument. What the case may come down to is a question of whether or not "irreparable injury" is the equivalent of "substantial hardship." Not surprisingly, I would argue that an irreparable injury that involves stomping on someone's First Amendment rights is a very substantial hardship. So far one judge has disagreed. We'll see what happens on appeal.

Filed Under: copyright, criminal copyright infringement, doj, domain seizures, forfeiture, free speech, prior restraint, rojadirecta, seizures
Companies: puerto 80, rojadirecta

DOJ: This Case Has Nothing To Do With Puerto 80; Now Here Is Why Puerto 80 Is Guilty

from the dance-doj-dance dept

Following Puerto 80's motion to dismiss the attempt by the US government to forfeit its domains, the Justice Department has filed its response (pdf) in which it more or less mocks Puerto 80's lawyers for "not understanding" what they're fighting about in court. Having read both of the documents and being familiar with the case, I will agree that there is certainly some confusion (perhaps on both sides) about the exact nature of the arguments, but it appears that the government is partly the cause of this, in that it keeps leaping back and forth between arguments, since it can't make a single coherent argument for why forfeiture makes sense under the law.

Specifically, the government is claiming that its sole reason for trying to forfeit the domain (and for seizing it in the first place) is that "those domain names themselves facilitated the commission of a recognized crime." That is, it argues that Puerto 80 is wasting its time in suggesting that Puerto 80 did not engage in criminal copyright infringement, because the government has not charged Puerto 80 with anything. It's just claiming that the domains themselves are property used to commit a crime, and therefore can be forfeited.

But the government seems to want to have its cake and eat it too. That's because, in order to show that the domains were used to commit a crime, it keeps going back to actions done by Puerto 80. But then, when Puerto 80's lawyers keep explaining why Puerto 80 did not violate the law, the government tries to claim that this is meaningless because it's not accusing Puerto 80 of anything.

Talk about a disingenuous Catch-22 sort of argument.

For example, here's the kind of mocking that the DOJ presents against Puerto 80:

Despite what Puerto 80 appears to believe, the Government has neither charged Puerto 80 with a crime, nor has it filed a civil lawsuit against that company. Instead, and as the Complaint makes absolutely clear, the Government has brought a civil action against certain property an in rem proceeding against two domain names that facilitated the commission of criminal copyright infringement and are thus subject to forfeiture pursuant to Section 2323(a)(I) of Title 18, United States Code.

But... then... in making its case, the government still relies on actions of Puerto 80 and not the domains in question. Even worse, contrary to what the DOJ states, nowhere does it make the case that criminal copyright infringement occurred. Now, as we've stated before, for criminal copyright infringement to occur, and as the government clearly states in its filing, the government needs to show:

(1) the existence-of a valid copyright; (2) an act of infringement of that copyright; (3) willfulness on the part of the infringer; and (4) either that (a) the infringement was for purposes of commercial advantage or private financial gain, or (b) the infringer reproduced or distributed, during any 180-day period, one or more copies or phonorecords of one or more copyrighted works, with a total retail value of more than $1,000.

(1) and (2) aren't hard to show -- but the infringement is done by third parties (users of the site) rather than Puerto 80. In fact, the government even admits multiple times that the content is not hosted or distributed by Puerto 80, but by third parties. (3) is much, much trickier, and the government fails to show willfulness at all -- except to insist that Puerto 80 had willingness to infringe. Again, note that the government goes back to focusing on Puerto 80 here, even though it keeps insisting that it's not on trial. Even worse, it fails to respond to the pretty clear claims by Puerto 80 in its filing that its actions were clearly not willful since it had been tried and found not guilty of infringement twice in its home country. And yes, as people will point out, we're talking about US law, rather than Spanish law, but it's pretty ridiculous to think that Puerto 80 would go through such a huge legal process at home... and then somehow still think that it was willfully infringing on copyrights.

Point (4) is where an even bigger problem sets in. Once again, the DOJ focuses on Puerto 80 getting commercial gain:

With respect to private financial gain, the Complaint makes clear that when an Internet· user selected an individual link to a particular sporting event from the Rojadirecta website and the corresponding stream of the telecast began to run, advertisements that were separate and distinct from any commercials that may have been aired during the stream of the sporting event broadcast were periodically displayed at the bottom of the video during the live stream. (Compl. ~ 14c). On a motion to dismiss, this Court is required to draw all inferences from the allegations of a complaint in the light most favorable to the plaintiff. Roth, 489 F.3d at 510. It is certainly a permissible inference for this Court to draw that these advertisements generate revenue and result in private financial gain.

All of that is accurate... but again, it's about Puerto 80 who (again) the DOJ insists is not being sued here. Basically, the government totally fails to properly allege criminal copyright infringement, in that it doesn't show how those four elements all take place by a single party. Instead, they pull from here and there to patch together such a claim. A user of Rojadirecta may infringe... and Rojadirecta may profit from an ad shown on the site, but that's not willful copyright infringement for the purpose of financial gain. Furthermore, as the MP3Tunes case recently showed, merely having ads near infringement is not profiting from infringement: "However the financial benefit must be attributable to the infringing activity.... While Sideload.com may be used to draw users to MP3tunes.com and drive sales of pay lockers, it has non-infringing users." Merely the fact that infringing content can "draw" users to the site doesn't mean that the profit is directly from infringement.

So, while it is true that Puerto 80's lawyers may have argued for much more than the specific issue at stake in this case, it's in part because the DOJ itself keeps shifting its argument. It can make cases for civil infringement against users. It might be able to make a case for civil inducement for Puerto 80... but what it's doing -- quite amazingly -- is mashing together both of those arguments to pretend that two separate civil issues chopped up together can adequately show criminal copyright infringement... and from that they can claim that the domains were used for such things.

If anything, it seems that Puerto 80's lawyers were too clever in arguing ahead of the DOJ, who I'm still not entirely convinced understands what it's really arguing here. Puerto 80's lawyers didn't just try to show that no full criminal copyright claim was presented by the government. It also tried to debunk the two parts of the (4) factors that the DOJ tried to pin on Puerto 80. The government then says it doesn't care what Puerto 80 did, even as it uses its own questionable claims of what Puerto 80 did to make its case. It's really quite stunning.

On a separate note, even though Puerto 80's lawyers chose not to use the First Amendment claim, the Justice Department seems to be begging for it. As we've noted in the past, the ruling in Fort Wayne Books v. Indiana makes it clear that a standard higher than probable cause needs to be used in seizures:

Thus, while the general rule under the Fourth Amendment is that any and all contraband, instrumentalities, and evidence of crimes may be seized on probable cause (and even without a warrant in various circumstances), it is otherwise when materials presumptively protected by the First Amendment are involved... It is "[t]he risk of prior restraint, which is the underlying basis for the special Fourth Amendment protections accorded searches for and seizure of First Amendment materials" that motivates this rule.

But here the government is arguing in the other direction saying the standard is even lower than probable cause! It's saying that it just needs "reasonable belief," now that the case has moved on to the forfeiture stage, rather than just discussing the seizure:

Nor is the Government required to show probable cause for forfeiture. See,~, Daccarett, 6 F.3d at 47. Instead, the complaint simply needs to establish a "reasonable belief' that the government will be able to meet its burden at trial. Id. "In other words, the complaint need not allege facts sufficient to show that specific property is tainted, but facts sufficient to support a reasonable belief that the government can demonstrate" the ultimate trial burden "for finding the property tainted."

I'm at a loss to see how this makes any sense at all. Remember, the judge in the case has already said that Puerto 80 can't challenge the seizures on First Amendment grounds, because trampling your First Amendment rights is not a "substantial hardship." That, alone, seems like something that should be appealed. But it also seems like it wipes out any avenue for challenging the seizure on First Amendment grounds, because the standard now being discussed is merely "reasonable belief." Now, it is true that this is just for the motion to dismiss, and the standard at trial is going to be higher, but, honestly, why should a trampling of free speech have to wait so far into the process before being resolved? Plenty of other cases are willing to put the First Amendment issue upfront and center...

Filed Under: copyright, criminal copyright infringement, doj, domain seizures, forfeiture, rojadirecta, seizures
Companies: puerto 80, rojadirecta

Rojadirecta Argues That The Justice Department Is Making Up Laws; Has No Legal Basis To Forfeit Its Domain

from the well-argued dept

Late Friday, Puerto 80, the company behind Rojadirecta, filed its motion to dismiss (pdf) the attempt to forfeit the two domains rojadirecta.org and rojadirecta.com. Because people get confused, a quick explanation is in order: the government already seized the domains, which is a temporary process, but it is now trying to forfeit them permanently, which involves a separate (though similar) process. The part we wrote about on Friday, in which the court refused to give back the domains, was more in dealing with the seizure. Now we've moved on to the discussion over forfeiture.

The argument put forth in the latest filing is actually quite specific and technical, but seems extremely compelling. In simplified form, it is that the Justice Department is making up a law that doesn't exist. More specifically, the argument is that the Justice Department is playing a bit of a game with the law here. It fails to allege the specific conditions necessary to prevail under the law it claims to be using -- and even admits that it fails on those key points. Instead, it appears to be trying to rely on the standards from a different law, which quite clearly in the law cannot be used for this kind of action. Separately, in a bit of a surprise, Puerto 80 does not even raise the First Amendment issue, though I have a theory as to why, which I'll explain later.

The details are a bit technical, so let's dive in. I will say, first off, that what's being argued over here is pretty technical, and trying to reduce it down to a simple "but of course it infringes!" is meaningless for a variety of reasons. I would hope that we can have this debate actually focus on the specifics of the argument, rather than a back and forth using broad brush strokes unrelated to the specifics of this case.

As for the specifics, in order to seize the domain, the government argued it had probable cause that these domains were property used for criminal copyright infringement. Criminal copyright infringement has some very specific hurdles that need to be met, as we've discussed before, found in section 506 of US Copyright law. For this particular case the factors that matter are that the government must show that Rojadirecta willfully directly infringed (by reproduction or distribution of) the copyrighted works of others which have a value of $1,000 or more, for the purpose of commercial advantage or financial gain. There are a few other factors related to criminal copyright infringement, but they simply are not relevant here, so we will ignore them.

The problem with the government's attempt to forfeit these domains is that it completely fails to allege a rather key component required under section 506: that Rojadirecta directly infringed on anyone's copyrights. Instead, it only alleges that it was involved in indirect infringement by linking to content hosted elsewhere. Again, for the sake of clarity, direct copyright infringement occurs when the specific party is actually copying or distributing the content itself. There are, however, a number of different forms of indirect copyright infringement, including contributory infringement, vicarious infringement and inducement. However, those are only found in civil copyright law and are not found in criminal copyright. Furthermore, no court can simply say that because they're in civil copyright law, they also appear in criminal copyright law, because criminal copyright law has to be specific in the statute, not driven by common law principles, as is the case with indirect infringement in civil copyright law.

What's amazing is that the government more or less concedes this point, by never even arguing that Rojadirecta directly infringed anyone's copyright, pointing only to the fact that it linked to works on other servers. The filing goes through a long list of case law that shows it is extremely well-established in the law that, at best linking can only be indirect infringement, and even then the barrier is quite high:

Because Puerto 80 did not copy anything, it cannot be found liable for direct infringement by virtue of hosting links to content. This is a firmly established legal proposition that has been affirmed time and time again by many courts. See CoStar Group, Inc. v. LoopNet, Inc., 373 F.3d 544, 546 (4th Cir. 2004) (“Because LoopNet, as an Internet service provider, is simply the owner and manager of a system used by others who are violating CoStar’s copyrights and is not an actual duplicator itself, it is not directly liable for copyright infringement.”) (emphasis in original). Accord Perfect 10, Inc. v. Amazon.com, Inc., 487 F.3d 701, 717 (9th Cir. 2007) (party from whose site content is actually transmitted and subsequently displayed on the end-user’s screen is responsible for display, not search engine that merely links to that content); Online Policy Group v. Diebold, Inc., 337 F. Supp. 2d 1195, 1202 n.12 (N.D. Cal. 2004) (“hyperlinking per se does not constitute direct copyright infringement because there is no copying.”); Arista Records, Inc. v. MP3Board, Inc., No. 00 CIV. 4660(SHS), 2002 WL 1997918, at *4 (S.D.N.Y. Aug. 29, 2002) (linking to content does not implicate distribution right and thus, does not give rise to liability for direct copyright infringement); Ticketmaster Corp. v. Tickets.com, Inc., 54 U.S.P.Q.2d 1344, 1346 (C.D. Cal. 2000) (“[H]yperlinking does not itself involve a [direct] violation of the Copyright Act (whatever it may do for other claims) since no copying is involved. . . . [It] is analogous to using a library’s card index to get reference to particular items, albeit faster and more efficiently.”); Bernstein v. JC Penney, Inc., No. 98-2958 R EX, 1998 WL 906644, at *1 (C.D. Cal. Sept. 29, 1998) (granting motion to dismiss on the ground that hyperlinking cannot constitute direct infringement).

To further prove this point, the filing notes that if linking to copyrighted material existing elsewhere on the internet alone constituted direct copyright infringement, nearly every website online would be guilty, "including websites hosted by the Department of Justice and the White House," and then shows where both include links to others' works. On top of that, it points to the Justice Department's own manual on Prosecuting Intellectual Property Crimes and notes that it only discusses direct copying, and never mentions any secondary or indirect copyright infringement issues as being applicable.

Even more damning, the filing points to both COICA and PROTECT IP, which try to establish some form of criminal secondary liability as evidence that even Congress knows existing copyright law has no such thing.

The standard response from those who support these efforts to seize and forfeit domains is that indirect infringement, or secondary liability claims, can work. However, this fails also, and shows where the government is either trying to make up a law that doesn't exist, or is playing a quick game of switcheroo between laws to try to get what it wants. As explained above, none of the secondary liability concepts found in civil copyright law are found in criminal copyright law. Supporters of these procedures always try to get around this by leaping over to "aiding and abetting" laws, which can be used in relation to copyright under certain specific circumstances (with a pretty high bar). However there are two massive problems with this: (1) the government never alleges aiding and abetting in its complaint. And there's a good reason for that: because the laws on forfeiture do not allow forfeiture for aiding and abetting.

Let that sink in a bit. Because it basically undermines the entire case. In simplified form: for forfeiture to be allowed, the government must show direct copyright infringement. And yet, it does not even try to. Instead, it seems to allege criminal secondary or indirect infringement, which does not exist in the law. For those who try to ignore the fact that there is no such thing as indirect infringement in criminal copyright law, and who argue that it's the same thing as "aiding and abetting," that argument fails equally, because the government did not allege aiding and abetting in its forfeiture claim... and that's because forfeitures are not allowed for aiding and abetting.

At this point, the only way the government wins is if the court either does not understand what the law actually says, or effectively pretends that the Justice Department's made up law exists, which it is expressly not allowed to do.

Separately, Puerto 80 points out that the government cannot and does not show "willful" infringement (which is necessary to allege criminal infringement), in part because of the two rulings in Spain that found Rojadirecta legal in its home country. Now, many have tried to argue that the rulings in Spain do not matter, because this is about US copyright law. And that is true to a certain extent. However, it is extremely relevant for presenting any evidence of willfulness. A court would have to be convinced that the folks behind Rojadirecta somehow purposely set up a system that they knew was legal in Spain, while specifically willfully violating US copyright law. That seems like a massive hurdle (though perhaps less massive than the issue above of direct/indirect liability in criminal copyright law). Separately, the filing points out that the government makes no actual showing of willfulness (even unrelated to the Spanish rulings), merely noting that the ICE agent downloaded works that were covered by copyright. And yet (again) the case law is clear that just knowing of infringement is not enough to show willfulness, or (as the courts have held) it "would turn every copyright claim into willful infringement."

Finally, Puerto 80 argues that US copyright law can only be applied to infringement acts that occur in the US, and points to a fun case we discussed earlier this year, alleging infringement on the song Grandma Got Run Over By A Reindeer. In that case, a Canadian resident uploaded a video with that song in Canada, and the court found that the defendant could not be sued in the US, even though the video was available in the US. This is a problem for the government's case:

Rojadirecta’s content (i.e., its links and discussion forums) is stored on servers residing outside the United States. Compl. ¶ 14(f) (alleging that the domain names are hosted on a server in Canada). There is no allegation that Puerto 80 operates its site from within the U.S., and indeed the Complaint appears to acknowledge that the Rojadirecta site is based in Spain.... The government accessed the links which directed them to the allegedly infringing material by visiting a site hosted outside the United States. Thus, each step of the process occurs outside the United States, and any material that Puerto 80 has control over resides on serves outside the United States. Therefore, no act of infringement by Puerto 80 has taken place in the United States. Accord Perfect 10, Inc. v. Amazon.com, Inc., 487 F.3d 701, 718-19 (9th Cir. 2007) (copying (and therefore infringement) occurs when material is stored on server).

Not surprisingly, I find that this filing is really quite compelling and strong. I don't see how a judge who actually understands the filing can rule against Puerto 80 in this case.

Now, as for the surprise that First Amendment issues aren't being raised at all in the filing (especially since the judge on Friday specifically noted that Puerto 80 could raise such issues in this very filing). The only thing I can figure is that since this is the lawsuit over forfeiture, rather than the seizure, the First Amendment issue is moot. That is, prior restraint only occurs when there's a restriction on speech before it's deemed illegal. At this stage of the legal fight, they're arguing over whether or not the speech is legal or not, so there's no First Amendment issue to be argued. But, even then I'm not entirely sure, since even the judge suggested the First Amendment issues could be raised at this stage of the game. Either way, I'm surprised.

No matter what, this case is certainly one to follow closely. When the government replies, we'll go through that as well...

Filed Under: copyright, criminal copyright, domain names, rojadirecta
Companies: puerto 80, rojadirecta