Judge Mocks Public Interest Concerns About Kicking People Off Internet, Tells Cox It's Not Protected By The DMCA

from the that's-a-problem dept

Judge Liam O'Grady -- the same guy who helped the US government take all of Kim Dotcom's stuff, is the judge handling the wacky Rightscorp-by-proxy lawsuit against Cox Communications. The key issue: Rightscorp, on behalf of BMG and Round Hill Music flooded Cox Communications with infringement notices, trying to shake loose IP addresses as part of its shake down. Cox wasn't very happy about cooperating, and in response BMG and Round Hill sued Cox, claiming that 512(i) of the DMCA requires ISPs to kick people off the internet if they're found to be "repeat infringers." Historically, it has long been believed that 512(i) does not apply to internet access/broadband providers like Cox, but rather to online service providers who are providing a direct service on the internet (like YouTube or Medium or whatever). However, the RIAA and its friends have hinted for a while that they'd like a court to interpret 512(i) to apply to internet access providers, creating a defacto "three strikes and you lose all internet access" policy. Rightscorp (with help from BMG and Round Hill Music) have decided to put that to the test.

This is a big, big deal. If the case goes against Cox, then it would create a massive problem for the public on the internet. Accusations of infringement could potentially lead to you totally losing access to the internet, which could really destroy people's lives, given how important the internet is for work and life these days. The details of the case look like they should favor Cox pretty easily. After all, Cox pointed out that Rightscorp only had licenses from the publishes, meaning they had no copyright in the sound recording -- yet they admitted to downloading the sound recording, suggesting that, if anything, Rightscorp was a mass infringer. On top of that there was pretty strong evidence that Rightscorp does not act in good faith in how it runs its shakedown practice, telling people that they have to take their computers to the police to prove their innocence (really).

Unfortunately, as Eriq Gardner reports, Judge O'Grady has ruled against Cox on a very key point: does its current policy grant it safe harbor under the DMCA. The judge said no, though we're still waiting for the full ruling as to why.

The bigger story is O'Grady's determination that there is "no genuine issue of material fact as to whether defendants reasonably implemented a repeat-infringer policy as is required by §512(i) of the DMCA," granting a motion that Cox is not entitled to a safe harbor defense.

Now, just because you're not protected by the safe harbor it does not mean that you are automatically guilty of infringement. There are cases where sites have not qualified for the safe harbor and still prevailed. But it does make things more difficult and complicated and, much more importantly, opens the door to lots and lots of mischief by the RIAAs and MPAAs of the world to use this to kick people off the internet entirely based on accusations of copyright infringement. That's immensely worrisome.

O'Grady doesn't seem to think that kicking people off the internet is really a big deal. Earlier in the case, we've discovered, in the process of flat out rejecting an attempt by Public Knowledge and EFF to file an amicus brief, Judge O'Grady made his views clear:

I read the brief. It adds absolutely nothing helpful at all. It is a combination of describing the horrors that one endures from losing the Internet for any length of time. Frankly, it sounded like my son complaining when I took his electronics away when he watched YouTube videos instead of doing homework. And it's completely hysterical.

That's his response to two well known public interest groups explaining to him the "real world harmful effects" of Rightscorp's copyright shake-down trolling business. But he didn't want to hear any of it. Because protecting the ability of Americans to not be the subjects of extortion schemes and to enable them to communicate and work is "hysterical" and no different from kids not doing their homework because of too much YouTube.

The details here matter, but I would imagine that Cox is likely to appeal. One hopes that the appeals court is more open to listening to the concerns over copyright trolling and kicking people off the internet.

Filed Under: 512i, copyright, dmca, liam o'grady, safe harbors, three strikes
Companies: bmg, cox communications, rightscorp, round hill music

Rightscorp's Copyright Trolling Phone Script Tells Innocent People They Need To Give Their Computers To Police

from the uh,-that's-not-how-this-works dept

We already wrote about the various filings in the Rightscorp-by-proxy lawsuit against Cox Communications. However, mixed in with all the filings are some interesting tidbits and exhibits. One that caught my eye was an exhibit revealing the "script" that Rightscorp gives its agents to use when people call in after receiving a notice. Cox Communications filed this in showing that the actual plaintiffs (BMG and Round Hill Music) "turned a blind eye" to Rightscorp's misconduct. The script is quite something, with a few ridiculous statements. The most ridiculous, however, is the following. If the caller says that they're innocent, here's how Rightscorp has its agents respond:

In order to cancel this matter without payment, you will need to go and get a police report and fax or email it to us. The police may take your devices and hold it for ~5 days to investigate the matter. You must be sure that it was not you, anyone in your household, including friends and neighbors or you will be breaking a different law with the police department.

Every part of that statement is bullshit -- and it's clearly designed to do one thing only: to frighten the caller into just paying up. To tell totally innocent people that they need to hand over their computers to the police for five days and that if anyone else used their computer to infringe that they'll be violating some sort of criminal law is downright disgusting. It just highlights that Rightscorp is in the extortion/shakedown business, rather than actually trying to stop copyright infringement.

There is plenty of evidence that Rightscorp's targeting efforts were not that accurate, and plenty of innocent people were swept up by its systems. And to then target these -- often unsophisticated -- users and tell them they have to go to the police and could be breaking the law if someone else happened to use their computer is both sleazy and dishonest.

There's a similar script for users who claim they were "hacked" which still involves having to go to the police:

Our clients appreciate that you believe you were hacked but the fact remains that we have evidence that a computer at IP address ____ has been distributing our client's product on the BitTorrent network from __ date to as recently as ___. Your ISP confirmed that this is your account. There have been __ infringements over a period of time..... In order to cancel this matter without payment you will need to go and get a police report and fax or email it to us. The police may take your devices and hold them for 3-5 days to investigate the matter. You must be sure that it was not you, anyone in your household, friends or neighbors, as you may be breaking another law with the police department. With this many infringements, the only way we can cancel the matter without payment is if you get a police report and fax it to us. If you fax us a police report, we will close the matter.

The script also includes the "usual" misleading claims, such as saying that people downloading songs have received penalties as high as $150,000. Yes, that's the maximum for statutory damages, but only for willful infringement, and such numbers have never been awarded for some random person just downloading some songs. To suggest otherwise is clearly misleading. Similarly, the script has the agents implying that Rightscorp's technology is never wrong in identifying users, and furthermore, falsely claiming that even if someone else used your WiFi network, that you are still responsible. This is in direct contrast to the actual law on the matter.

Distributing these composition on the BitTorrent network violates US Federal law 17 USC 106 which states that the copyright owner has the sole right to determine who may distribute their copyrights to the public. More than 200,000 people have been sued for doing exactly this since 2010 with penalties as high as $150,000 per infringement. We send mails to ISPs like yours (state their ISP if available) each time we see a computer illegally distributing our client's copyrighted works. The ISP looks up which subscriber was using the IP address at the time the infringement occurred and sends our notice to that subscriber. If you are receiving our notices, it is because your ISP has identified you as the network that was used to illegally distribute our client's copyrighted material. According the the Acceptable Use Policy that most ISP's have, the account holder is solely responsible for what occurs on their network regardless of who actually committed the infringement. We are authorized by the copyright holders to extend offers of settlement in exchange for a release of liability from the infringement. We are only contacting you while the settlement offer is still available. At S20 per infringement, we believe this is a much more financial friendly alternative. Would you like to settle these infringements now?

And, of course, there are all sorts of inaccuracies on little tidbits of copyright law. A copyright holder does not have the "sole right" because there are exceptions, and it's not about the distribution "of the copyrights" but rather the distribution of the work, which may be covered by copyright. Oh, and the actual statutory damages are $150,000 per work infringed rather than per infringement, which may sound like the same thing, but isn't. But those are just little inaccuracies compared to the bigger lies above.

The script also makes it clear that Rightscorp will hound you until you pay, and they threaten that your internet access may get cut off:

(Sir or Ma'am) I do need to let you know we will be continuing to contact you with all methods possible, which will include email, regular mail and phone calls until this is paid or our client decides to no longer offer the settlement. This is a pre-litigation communication. Once our client has removed the settlement, we can no longer aid you in obtaining the release of liability. This could potentially result in the suspension or termination of your internet, escalation up to and including litigation.

It's like the classic shakedown scheme, except made to look legal thanks to US copyright law.

Filed Under: copyright, copyright trolling, phone script, police
Companies: bmg, cox communications, rightscorp, round hill music

Cox Points Out That Rightscorp Is Either A Mass Infringer Itself... Or Admits That Downloading Songs Can Be Fair Use

from the oops dept

Remember Rightscorp? This is the company that is trying to be sort of a "light" copyright trolling operation, sending threatening letters to individuals, but letting them "settle" for lower dollar amounts than the more traditional copyright trolls (in the $10s of dollars rather than in the $1000s). The scheme hasn't been working all that well. Late last year, Righstcorp, along with two music publishing clients, BMG and Round Hill Music, decided to sue broadband ISP Cox, to test the (nutty) theory that the DMCA already requires ISPs to kick users off the internet if they receive multiple takedown notices. The whole lawsuit, beyond the questionable legal theory, appeared to be an attempt to force Cox and others to hand over subscriber info.

Either way, going after Cox may be proving to have been a serious strategic mistake. Both companies have filed motions for summary judgment and the contrast between the two is somewhat stunning. BMG/Round Hill Music's is readable here* and basically focuses on the argument that Cox is somehow unable to make use of the DMCA's safe harbors. While many of the details are redacted, the basic argument is the same as initially filed. That because Cox doesn't kick customers off its service entirely, it fails to meet the requirements of the DMCA's safe harbor:

Cox does not qualify for a safe harbor because, at least since 2010, it has never had nor implemented a policy to terminate repeat infringers in appropriate circumstances. Instead, Cox has created a notification system designed to limit the circumstances in which Cox will learn of infringement on its system. Cox has [REDACTED] more than 95% of the millions of infringement notices sent to it by copyright holders without taking any action.

Of course what it's ignoring is that what Cox was complaining about was that the policies that Rightscorp wanted here included sending blatantly misleading information to end users and sharing information back with Rightscorp. That's not required under the DMCA.

Meanwhile, the motion for summary judgment from Cox is quite a read, with the folks over at TorrentFreak posting an initial summary.

The real kicker: Rightscorp is only working with the publishers, who certainly appear to hold a legitimate copyright interest in the publishing/compositions. But that's different than the copyright in the actual sound recordings. That's held by someone else, who does not appear to be partnered with Rightscorp. And yet, Rightscorp itself claims to have downloaded the various song files to help it find infringers. Yet... if it doesn't have authorization or a license from the copyright holders of the sound recordings, that sounds like Rightscorp just engaged in massive copyright infringement.

That, alone, would be a pretty strong point -- but then Cox's lawyers twist the knife. They point out that the only way in which Rightscorp's own actions would not be infringing is if they were to claim fair use in the downloading of all those song recordings. But if that's the case, then isn't Rightscorp clearly admitting that many of the people its threatening and shaking down would also have a legitimate fair use argument?

Oh, and one final knife twist: given that courts have held that those issuing DMCA takedowns need to take into account fair use before sending those takedowns, this would act as evidence that Rightscorp failed to do that.

In its work for Plaintiffs Rightscorp downloaded files of thousands of sound recordings over the BitTorrent protocol, evidently to create evidence of infringements over Cox’s network.... But copyrights in sound recordings are separate from copyrights in musical compositions.... Rightscorp either committed massive infringements of the sound recording copyrights or must have relied on the fair use doctrine. If the latter, that fact is an admission that activity over BitTorrent may constitute fair use, but there is no evidence that Rightscorp considered the possibility of fair use in generating millions of notices of claimed infringement. Because fair use is not infringement, Rightscorp’s notices contained fraudulent misrepresentations about detections of infringement. See Lenz.... Thus, because Rightscorp acting as agent for Plaintiffs either was an infringer itself or engaged in misrepresentations, Plaintiffs have unclean hands.

Ouch. It will be fun to see these companies try to twist themselves out of that one. The rest of the filing is worth reading as well, and we may do some followup posts on other aspects included. But, in short, Cox points out that the legal theories here make no sense, that the company abused the DMCA process, there there is no evidence of actual infringement and that the publishers failed to actually mitigate any of the damages. You never know how the courts will eventually rule on these things, but from a first glance, Rightscorp's chances aren't looking too good right now.

* Correction: I originally got confused and posted the wrong document here -- but the right document has now been posted.

Filed Under: bittorrent, copyright, copyright infringement, copyright trolling, fair use, sound recordings
Companies: bmg, cox, righscorp, round hill music

Cox Claims Rightscorp's 'Extortionate' Lawsuit Really A Backdoor Way To Get Subscribers' Info

from the cox-blocked dept

Rightscorp (via two music publishers) has dragged Cox into court to test its novel (read: legally unsound) theory that complying with the DMCA means cutting off service to "repeat infringers." The theory itself is largely untested, but far from promising. But that isn't stopping BMG and Round Hill Music (with Rightscorp as a not-so-silent partner) from taking a flyer on a bad legal bet. Certainly, the theory would be advantageous to the shakedown efforts Rightscorp generously refers to as a "business model," but, so far, the only thing being offered as "evidence" of repeat infringement is Rightscorp's own declarations.

Those declarations are highly suspect. Cox has filed an opposition to Rightscorp's Motion to Compel that highlights the anti-piracy company's extortion-esque tactics.

In a statement that leaves little to the imagination, Cox notes that Rightscorp is “threatening” subscribers with “extortionate” letters.

“Rightscorp is in the business of threatening Internet users on behalf of copyright owners. Rightscorp specifically threatens subscribers of ISPs with loss of their Internet service — a punishment that is not within Rightscorp’s control — unless the subscribers pay a settlement demand,” Cox writes (pdf).

Cox has refused to participate in Rightscorp's quasi-legal activities. While the company is not opposed to passing on infringement allegations, it did ask Rightscorp to remove the threatening language (cutting off service, $150,000 per infringement claim) first. Rightscorp refused to do so. This impasse is obviously unacceptable to Rightscorp, which depends on the (very) occasional settlement payment to keep its business barely afloat.

As Cox points out, Rightscorp has decided the best course of action is to maintain its unsteady perch on the edge of legality. In the filing, Cox alleges that Rightscorp tried to make the ISP a "business partner" in its shakedown attempts.

“Rightscorp had a history of interactions with Cox in which Rightscorp offered Cox a share of the settlement revenue stream in return for Cox’s cooperation in transmitting extortionate letters to Cox’s customers. Cox rebuffed Rightscorp’s approach,” Cox informs the court.

But that's not the only legally-dubious tactic the "cutting edge" anti-piracy firm has deployed. It's also attempting to use this lawsuit's discovery process to sidestep subpoena limitations.

The motion lays bare one of Plaintiffs’ primary reasons for bringing this lawsuit. Plaintiffs seek to circumvent the Cable Privacy Act process and instead use discovery in this case to force Cox to reveal, en masse, PII for possibly tens of thousands of Internet subscribers who Plaintiffs speculate might be violating their copyrights. The Cable Privacy Act expressly prohibits Cox from disclosing its subscribers’ PII, for good reason: Internet subscribers have a compelling privacy interest in the confidentiality of their personal information, which can of course be vulnerable to exploitation for myriad improper purposes. If a copyright holder earnestly believes that an unnamed Internet subscriber is infringing upon its copyrights, the proper course is to bring a “John Doe” lawsuit against the subscriber and then to use third-party subpoena power to obtain identifying information from the user’s Internet Service Provider. That legitimate procedure allows notice to the subscriber and an opportunity for the subscriber to act to protect his or her rights. It also relieves the ISP of the unfair responsibility of adjudicating which of the two competing interests (the subscriber’s or the accuser’s) should trump the other.

[...]

Plaintiffs nominally (Rightscorp in reality) claim to have identified “approximately 150,000” infringers, including several hundred “egregious infringers,” among Cox’s subscribers. But Plaintiffs apparently have only IP addresses to go on. (Doc. 72, Corrected Br. at 3.) Plaintiffs have not filed any “John Doe” lawsuits against Cox customers and have not sought information from Cox by subpoena. More importantly, Plaintiffs do not seek, and have not sought, leave to add “John Doe” defendants in this case.

[...]

The practical dynamics of this motion are suspect: If there are 150,000 infringers among Cox subscribers, as Plaintiffs claim, why would they limit themselves (at least for now) to just 500 “egregious infringers”? Will Plaintiffs seek to depose or serve Rule 45 subpoenas on those 500? Will Plaintiffs now seek to add those 500 as co-defendants? Why do Plaintiffs want a blank-check “open order” to continually demand that Cox reveal more identities at later stages in this action? When tested in practical terms, Plaintiffs’ motion makes no sense, and their arguments plainly are an obvious pretext for some other motive.

"Pretext for some other motive" basically describes the entirety of Rightscorp's business model. It subpoenas ISPs for subscriber info, under the unspoken pretext that further legal action is in the offing. But instead of suing file sharers, the company instead uses the information to harass subscribers into paying "settlements" for alleged infringement.

Despite the damning claims made by Cox, the court has partially granted the questionable Motion to Compel. The ISP has been ordered to turn over the "Top 250 IP Addresses recorded to have infringed in the six months prior to filing the Complaint." This distinction is important, because as Cox points out in its opposing motion, the plaintiffs' constantly-widening net had managed to drag in alleged infringers whose infringement didn't occur until after the lawsuit was filed.

Plaintiffs’ stated justifications for their extraordinary request do not help Plaintiffs’ cause. Plaintiffs acknowledge that they “must establish direct infringement of the copyrighted works asserted in this case,” and imply that their motion serves that end. (Doc. 72, Corrected Br. at 4.) But that implication is illogical because Plaintiffs seek PII for 500 subscribers of the 150,000 supposedly implicated here. Surely Plaintiffs are not prepared to concede that their claims fail for the works that the other 149,500 subscribers allegedly infringed. Notably, of the 500 allegedly “egregious infringers” the Plaintiffs hand-picked, 250 allegedly infringed after this lawsuit was filed. (Doc. 72, Corrected Br. at 4.) Those subscribers’ alleged infringements, therefore, cannot have formed a basis for Plaintiffs’ claims in this suit. And nowhere do Plaintiffs even assert that Rightscorp sent purported DMCA notices to Cox with respect to those particular subscribers.

Cox has come out swinging in the early going, and its assertions confirm much of what has been written about Rightscorp and its tactics. This aggressive stance should help uncover plenty of damning details, none of which should have a positive effect on Rightscorp's shriveling stock price.

Filed Under: copyright, copyright trolling, extortion, lawsuits, personal information, shakedown, subpoenas
Companies: bmg, cox, rightscorp, round hill music

Music Publishers, With Help From Rightscorp, Test Legal Theory That DMCA Requires Kicking Repeat Infringers Off The Internet

from the this-ought-to-get-interesting dept

Late Wednesday evening before Thanksgiving, two music publishers, BMG and Round Hill Music, who are partners of struggling copyright trolling operation Rightscorp, sued the ISP Cox, testing out the theory that (1) the DMCA requires ISPs to kick "repeat infringers" offline entirely and (2) that notices from Rightscorp suffice to prove that one is a repeat infringer. You can read the complaint here [pdf or embedded below].

There's a lot of background here to unpack -- very little of which made it into the WSJ's initial coverage of this story. First off, it's true that the DMCA safe harbors include a requirement of a "repeat infringer" termination policy in 512(i). Furthermore, for years, the RIAA and its friends have insisted that 512(i) means that ISPs need to boot people off the internet entirely. After the RIAA, MPAA and five top ISPs agreed to the "voluntary" six strikes program, in which the ISPs insisted that it wouldn't kick anyone off the internet for file sharing, the RIAA started telling people that even when ISPs said that, 512(i) would require ISPs to kick users offline anyway.

However, that hadn't been tested in court. There had been some thinking that the RIAA and associated labels would likely wait until they had enough examples of individuals hitting all "six strikes" and still having an account before testing out this legal theory -- but it looks like Rightscorp's friends are jumping the gun. If it succeeds, then the legacy copyright players will have a massive new weapon in their arsenal: a digital guillotine that would allow them to pressure ISPs to kick people entirely off the internet for a few simple infringements.

It's interesting that the target of the lawsuit is Cox for a couple of reasons. First, years back, Cox was actually one of the first ISPs to kick people offline for file sharing, publicly stating that the DMCA required it. This argument was, and remains, incorrect, but it's unclear if Cox still follows the same practices today. The filing says that Cox says this is its policy, but it doesn't actually follow through. Second, Cox is not a partner in the "six strikes" program -- and it makes you wonder if the plaintiffs will try to use that against the company (which could pressure ISPs into joining the program to avoid liability). In other words, it's possible that part of this strategy will be to force all ISPs to join the "voluntary" six strikes program.

Either way, the legal theory is fairly questionable. As AT&T argued years ago when such a theory was floated, an ISP can't just assume that someone is a "repeat infringer" based on questionable notices -- especially when the evidence for such notices (generally IP addresses) is notoriously unreliable. Furthermore, it's worth reading the details of probably the key case on implementing a "reasonable" policy, the Perfect 10 v. CCBill case. While the situations are not analogous, that case certainly seems to suggest that service providers have pretty wide latitude in setting up a policy, so long as they're not purposely trying to interfere with efforts to respond to infringement. The fact that, at least in the past, Cox did kick users off its service, suggests that it's not ignoring these issues and has a policy, even if it's not to Rightscorp's liking. Now, that CCBill case is in the 9th Circuit, and this lawsuit was filed in Virginia (the 4th Circuit), so perhaps the plaintiffs are hoping for a friendlier view towards these theories.

In the specifics in this case, BMG and Round Hill seem to be upset that Cox won't forward Rightscorp's notices -- and, in fact, appear to treat them as spam:

Plaintiffs, through their agent, have attempted to work closely with Cox to find a workable and common sense solution to Cox's system-wide repeat infringer problem. Cox, however, has refused to engage with Plaintiffs' agent in any substantive way and instead has taken the position that repeat infringement notices provided to Cox "do not relate to matters subject to the DMCA." Incredibly, Cox's Privacy Counsel advised Plaintiffs' agent that it has implemented a "policy not to accept or to forward notices such as those sent to us by your firm." Moreover, Cox chose "to limit the number of notices that [it] can accept from many senders because of the total volume that [it] receive[s]."

By its actions. Cox has intentionally ignored and continues to ignore the overwhelming evidence that provides it with actual knowledge ofrepeat copyright infringers on its network and Cox actually has taken measures to avoid and stop receiving those notifications in direct violation of the spirit and legal requirements of the DMCA. Cox cannot have any credible, effective repeat infringer policy, let alone one that is reasonably implemented as required by 512(i), if it purposefully ignores notifications, sufficient under the DMCA, of repeat infnngers sent by copyright owners who are tracking the repeat infnngers on the Cox network and providing Cox with actual knowledge of those repeat infringers on a daily basis.

Once again, though, the publishers are exaggerating the actual law and what's happening. They seem to assume that Cox has some sort of legal obligation to pass along Rightscorp's notices, which just isn't the case. Furthermore, the lawsuit states, incorrectly, that "Cox directly profits" from repeat infringements. But that's wrong. Cox may profit from people who have used its service to infringe, but the law (and court rulings) have been fairly clear that Cox would need to profit specifically from the infringements itself, not merely because some users infringe. Users who infringe and users who don't all pay Cox the same amount, so Cox receives no special profits from infringement, blowing a big hole in the legal theory presented.

No matter what, courts sometimes come out with wacky decisions, and this one could quickly shape up to be a key case in testing this theory that's floated around for years, but has never really been tested. That makes this a clear case to follow, as it could have tremendous impact. If the publishers' theory is vindicated by the courts, it would mean that -- contrary to all the previous promises that ISPs wouldn't kick people accused of infringing offline -- the US technically might require the loss of internet service for repeat infringers. Such a policy would clearly go against stated aims of the government in encouraging internet access, but it's not impossible. I would imagine that if such a result came about, the resulting protests from internet users would be even more vocal than what happened to prevent SOPA. Kicking people entirely off their internet connection for copyright infringement has always been a non-starter in the US. Kicking that hornet's nest seems like a risky move for these publishers.

Filed Under: 512i, copyright, dmca, music publishers, repeat infringer policy, repeat infringers, six strikes, three strikes
Companies: bmg, cox, rightscorp, round hill music