German Court Says ISP Not Responsible For Users Who Infringe

from the about-time dept

As we've noted in some past stories, and as I discovered in great detail last year when I was there, German copyright law is a huge mess, where secondary liability issues are extremely unclear with many people arguing that the law allows for broad secondary liability on just about anything. For example, during one of my speaking engagements, someone in the audience read aloud a comment from Techdirt, and warned me that, under German law, I was legally responsible for that comment (which referred to... um... a rather dark period in German history) and that I must delete it.

When it comes to copyright, this has caused all sorts of other problems and it's one of the reasons that YouTube remains limited in Germany. Part of the issue is that the court rulings in Germany have been mixed on this, with no clear precedent yet being set. Thankfully, a recent ruling has rejected EMI's attempt to pin secondary liability on an ISP for its users infringing. EMI had argued that the ISP, HanseNet, should be forced to use DNS blocking to stop some of its users from infringing. The court ruled against EMI's view and said that such an argument was "unprecedented." Tragically, I don't think that's quite accurate considering some other rulings in the country, but at least it's nice to see some additional good rulings on issues like secondary liability.

Filed Under: copyright, germany, secondary liability, third party liability
Companies: youtube

Really Bad Idea: Make ISPs Liable For Cybercrime Efforts

from the oh-come-on dept

Let me start off this post by noting that, while I don't know Noah Schachtman personally (other than a few emails back and forth many years ago), I've always liked his work writing for Wired and other publications. However, I'm surprised to see him advocating the strong use of third party liability as a tool to deal with cybercrime, as a part of a paper for the Brookings Institute. The idea is that, when talking about spammers & scammers online, there are, perhaps, a small number of ISPs who tend to do business with these guys, and Schachtman believes that by making those ISPs liable, it would pressure them into cutting off the bad clients.

Schachtman has numerous caveats and is pretty specific in his plan that it only apply to a specific list put out by a trusted independent third party, that the methodology for being on the list is clear and that an appeals process also be explicit. On top of that, he says that it should be limited to "universally recognized crimes, like theft, fraud, and criminal trespass" and is clear in saying that it "wouldn’t work for politically inflammatory speech or copyright infringement; they’re too open to abuse and overly broad interpretation."

Also, in reading the report, it's clear that this isn't just something he came up with overnight, or some random blogger or reporter dashing off a column on some fragment of a thought they had an hour before deadline. He's put a lot of thought and research into this. But I still think the idea is dreadful and shortsighted. It wouldn't solve the problem it seeks to deal with, at all, and (even worse) it would open up all sorts of collateral damage or unintended consequences.

First off, it wouldn't solve the problem it's trying to solve. We've seen this time and time again with attempts to shut down any kind of "rogue" behavior online by going after intermediaries. The bad players just figure out some other place to go, and they often go further underground in ways that makes it tougher to find or track them and their activities. Even Schachtman admits that many would likely jump to ISPs elsewhere. So, if it's not actually stopping the behavior, then what's the value?

Second, while Schachtman is clear that this shouldn't be used for those other things, chipping away at third party liability protections in any arena is quite dangerous, because it's not hard to see lobbyists using that to push for such rules to be expanded to cover their pet area. Anyone who thinks that the RIAA and MPAA wouldn't pounce on this and work hard to add copyright infringement to the list simply hasn't been paying attention. What Schachtman describes in terms of the ability to sue an ISP for third party actions has been the legacy entertainment industry's wet dream for over a decade. Anyone who thinks that politicians would distinguish the types of crimes that Schachtman focuses on from garden variety claims of copyright infringement is living in a dream world.

And, honestly, I'm still at a loss as to why this is actually needed. It seems like there remain much more effective ways to deal with issues like this that don't involve giving up basic concepts of properly applying liability to the actual party responsible. The first is actually targeting those responsible for the crimes. If they're using known ISPs, then it seems like there is a record trail that can be traced back to go after those actually breaking the law to try to put them out of business. Second, if the concern (as it appears) is that some US ISPs are doing this and that's a shame, then deal with that publicly, by more publicly shaming ISPs who are popular among criminals. Use public pressure to get them to (a) either help law enforcement or (b) to enforce reasonable terms of service. Trying to make them liable as a third party will make life difficult for them, but not the actual scammers.

Filed Under: copyrights, cybercrime, isps, liability, third party liability

Caught With A DUI In New Jersey? You Can Now Blame The Bar That Served You

from the liability? dept

This is from a few weeks back, but techinabox writes in to point out the latest in ridiculously misapplied third party liability. It appears that in New Jersey, if you get good and drunk at a bar, and then hop in your car and get into legal trouble for driving under the influence (DUI), you can blame the bar for serving you... and win. The state supreme court said that it's perfectly reasonable for Fredrick Voss to sue the bar that served him drinks, even though he was the one who drove to the bar on his motorcycle, drank a bunch, and then got back on his motorcycle after drinking, drove off, ran a red light and got into an accident. A lower court still needs to determine if the bar actually is liable, but the supreme court seems to have no issue with holding bars liable in such situations. It's pretty scary that we keep seeing stories concerning attempts to stretch third party liability. Beyond blaming the wrong party, third party liability only serves to take responsibility off the parties actual responsible. It's a bad idea... but one that seems to be getting more and more popular.

Filed Under: blame, dui, new jersey, responsibility, third party liability

Why Arguing That Google Is In The Best Position To Stop Infringement Is Wrong

from the it's-not-and-it-makes-no-sense dept

While we did cover Google/YouTube's own filing in Viacom's appeal of YouTube's victory at the district court concerning its liability for infringing videos on the site, we did not cover the various "friend of the court" (amici) briefs filed by a variety of folks in support of YouTube's argument. If you'd like to see them all, Michael Barclay has put them all together in a single page, including his own (excellent) analysis of the key points raised in the briefs. Eric Goldman also does a nice job discussing many of the briefs and the key issues raised by them. If you want to understand what people are saying, read those two pages, and you should be in great shape (though, if you were reading both of their blogs already -- as you should -- you'd already be ahead of the game).

However, I did want to focus in on one particular brief, by law professor Michael Carrier, author of an excellent book on innovation (and how the law interferes with innovation), addressing the issue of "least cost avoidance," when it comes to stopping copyright infringement (pdf and embedded below).

It's one of the key arguments often made by content industry folks in arguing that tech companies and ISPs should be responsible for somehow policing their systems for infringement: that those service providers are in the best position to stop the infringement. For many years, we've always explained why this didn't make sense from a pure liability standpoint. These service providers aren't the ones doing the infringement and thus -- fundamentally -- it makes little sense to pin the liability on a party that didn't perform the law-breaking action. The response from the content industry is often to point to the concept of the "least-cost-avoider principle," which shows up in various aspects of the law, in which courts will sometimes shift liability around to put it on those in the best position to stop the law breaking at the lowest cost. And, in fact, this was found in some of the arguments supporting Viacom.

Carrier's amicus brief does a wonderful job debunking the argument. He does brush over a key point, that I wished got more attention: that it's incredibly unlikely that the service providers really are the least-cost-avoiders in these circumstances, since they have no clue what's really infringing and what's not (as demonstrated by Viacom's own confusions over staff members uploading promotional clips to YouTube...). However, for the purpose of making his point, he goes even further, suggesting that even if it's true that YouTube would be the least-cost-avoider, such a least-cost-avoider makes no sense in the context of copyright and innovation.

The brief points out that least-cost-avoider rules are used in tort law, in particular involving accidents -- which are situations in which no beneficial externalities are created as a result:

In these settings, lowering the costs of preventing accidents makes sense. Accidents do not offer any benefits for society. And the only downside to requiring actors to prevent accidents is that their costs will increase.

More important, requiring parties to take measures to reduce accidents will not have detrimental effects on third parties. No third parties will suffer collateral consequences if a driver is forced to slow down to the speed limit. Or if a barge fortifies its hull to prevent oil spills. Or if a manufacturer reduces the use of asbestos in its products. In short, the harms from the application of the least-costavoider principle in tort law are observable and do not threaten adverse unanticipated effects across other sectors of the economy.

But that's not the case in copyright law. In copyright law, infringing on copyright may certainly hurt some parties, but it also creates positive externalities and can lead to certain innovations. In fact, entire books have been written on how infringement is often a driver of innovation. Thus, taking the "least-cost-avoider" principle (even assuming it's true, which remains in question) could potentially cause serious harm:

The least-cost-avoider standard would result in innovative technologies becoming less useful and more cumbersome. Application of such a standard would have made some of today's leading technologies just a shadow of the invaluable innovation they ultimately became. For example, courts could have required photocopier manufacturers to modify their copiers to prevent the copying, absent a copyright owner’s approval, of "any document displaying a ©."

The brief goes on to note that, to copyright holders, pretty much every disruptive innovation first appears as some evil form of infringement that must be stopped. Applying this kind of principle would likely have stifled all sorts of beneficial technologies before they could have gotten off the ground.

It is understandable--if short-sighted--to not recognize the benefits of disruption. But it is not appropriate to reengineer the law to block disruptive innovation. The Constitution promotes the "Progress of Science and useful Arts." It does not guarantee that copyright owners are entitled to protect their existing business models against the onslaught of innovation.

The disruptive innovation unleashed by new technologies reveals the difference between tort law and copyright law in the application of the least-cost-avoider standard. There is no legitimate fear in tort law about eliminating valuable activity from society by overdeterring fast drivers or brittle boat hulls filled with gasoline. In contrast, there is monumental concern with stifling disruptive innovations by saddling them with the burdens of copyright owners.

In other words, even if we assume that service providers are the lowest cost providers of stopping infringement, that doesn't mean that's the best way to "Promote the Progress of Science and useful Arts." There's a lot more in the brief, but wanted to post this as a key piece of the puzzle in responding to claims that it makes sense to put the burden on service providers based on such a principle. While I tend to disagree that service providers are the least cost avoiders in the first place, even if they are, the potential net harm on innovation they can cause should be a huge concern in shifting liability.

Filed Under: copyright, least cost avoider, liability, third party liability, youtube
Companies: google

Woman Sues Match.com Because She Was Assaulted By Someone She Met On Site

from the misplaced-liability dept

A few years back, there was an online dating site, whose main differentiator was that it would supposedly do background checks on anyone who joined. That company had a habit of not just playing up this differentiator, but of trying to get laws passed that would make life difficult for other dating sites -- such as forcing them to put a warning on every page reading: "WARNING: WE HAVE NOT CONDUCTED A FELONY-CONVICTION SEARCH OR FBI SEARCH ON THIS INDIVIDUAL." Thankfully, it doesn't seem like those lobbying efforts have gotten very far, but I'm reminded of this because of a new lawsuit filed against Match.com by a woman, who claims she was sexually assaulted by a man she met on the site. This is, of course, horrible. But the fault lies with the guy, not with Match.com

In fact, the whole thing seems suspiciously similar to those old attempts to get such laws passed, in that the woman isn't asking for monetary damages, but to require Match.com to run background checks on everyone. Of course, this is a liability question and it's difficult to see how Match.com could or should be liable here. Obviously, when you meet someone you don't know, there are risks, but pinning the liability on the tool people use to meet seems quite problematic.

Filed Under: liability, third party liability
Companies: match.com

Third Parties Increasingly Targeted In Infringement Cases

from the getting-out-of-control dept

We've seen, lately, that the entertainment industry has been targeting third parties for liability. For years, they've talked about making ISPs more "liable" for infringement, but now they're extending that web in potentially problematic ways. Of course, this is a lot of what the whole COICA debate is about. Part of the way COICA works is by extending liability to third parties -- ISPs, advertising partners, domain registrars, payment processors -- if they don't cut off all services to those accused of infringement (often without any adversarial hearing). But in some cases, they're already targeting those third parties, and two separate stories on TorrentFreak demonstrate that.

The first involves Liberty Media suing Paypal along with Hotfile (and 1,000 John Does) for alleged infringement. Hotfile is a cyberlocker, which has plenty of perfectly legitimate uses, but is also frequently used for infringement. Liberty Media walks through a complex set of relationships, which it seems to interpret in the most nefarious way possible. For example:

"Demonstrating that Defendant Hotfile.com is aware of the illegality of its conduct, it offers two methods for download services. For its first option, Defendant Hotfile.com permits its partners to download a stolen movie at a very slow transfer speed for no charge. The other option allows users to pay a premium to download the movie ten times faster."

It certainly sounds bad when you put it like that, but of course, plenty of file storage/file transfer sites offer tiered packages that involve paying for faster transfer rates. That, in no way, demonstrates awareness of illegal content. I'm not saying Hotfile isn't potentially liable, but claiming the tiered pricing is evidence of that seems strange.

But it seems even worse that Liberty is suing PayPal as well -- and I would bet that PayPal will quickly file to be dismissed from the case, as an unrelated third party, or one protected by safe harbors. It's going to be quite a stretch for Liberty to prove that Paypal is somehow liable for the actions not just of a company that uses Paypal, but the users of that company. It's fourth or fifth party liability, rather than third party liability.

The other story involves a case that's a bit further along, where a judge has ordered a preliminary injunction against two ad providers and a domain registrar over a website that allegedly hosts infringing scans of various books. Since the holder of the domain is kept private via eNom's Whois Privacy Protection Service, the court ordered eNom to reveal the identity of the domain owner and to "disable the website." The judge also ordered the two ad networks -- Clicksor and Chitika -- to stop working with the site.

While I could see suing the John Does behind the site, and then working to get a subpoena to identify the real parties behind the alleged infringement, directly suing these three companies seems like a huge stretch, and it's disappointing that the judge rushed to issue the injunction so quickly. The original complaint (pointed out by Eric Goldman, makes some ridiculously broad claims about third party liability.

This is unfortunate, but not a surprise. We've been warning for the better part of a decade the problems with third party liability. Those who benefit from it will always push to stretch it to dump liability on third parties who had absolutely nothing to do with the actual infringement, and often had no idea that any infringement was going on. These payment companies, ad networks and registrars are quite far removed from any actual infringement. As noted above, they're barely "third parties" at all, as they're really fourth or fifth parties, so far removed from the actual infringement as to make these legal actions really quite questionable. It's hard to see how anyone can reasonably argue that a registrar or a payment processor or an ad network should somehow be liable for actions done by the users of a site that they work with. If this continues it will severely stifle many of these activities, as payment providers and ad networks won't do business with all sorts of perfectly legitimate sites, just to avoid the liability of being blamed for the actions of someone two steps removed.

Filed Under: secondary liability, third party liability
Companies: chitika, clicksor, enom, hotfile, liberty media, paypal

Time For Google To Leave Italy? Italy Announces That YouTube Responsible For All Content

from the it's-not-tv dept

Not this again. The Italian government has long had trouble comprehending how YouTube is simply a platform for users. Of course, some might say this is willful ignorance. Italy's Prime Minister Silvio Berlusconi owns Italy's largest private broadcaster, Mediaset, and doesn't much like the competition. In fact, back in 2008, Mediaset sued Google over its content appearing on YouTube, and a year ago, an Italian court (surprise, surprise) sided with Berlusconi and ordered YouTube to remove all Mediaset content, though it doesn't explain how YouTube is to know what is and what is not infringing. Of course, this is also the same country where a politician wanted to sue thousands of YouTube commenters for making fun of him under a video on YouTube. And, most famously, Italy is the country that bizarrely and inconceivably found Google execs criminally liable for a video posted to Google Video.

The latest in the Italian government's war against YouTube is that it's declared that YouTube qualifies as a TV station and is subject to television regulations (Google translation of the original Italian, found via Slashdot). What this means is that not only will YouTube/Google have to pay a tax as a TV broadcaster, but it now has other regulatory controls, including an obligation to publish "corrections" within 48 hours to anyone who claims they were slandered, and an obligation to not broadcast "inappropriate" content during times when children might watch.

But, of course, the biggest issue is that it says that if there's any editiorial control, even automated (so I assume the "favorites" or "recommended" lists count), suddenly, YouTube becomes liable for all of the content. In other words, in order to help Berlusconi win his lawsuit against YouTube, Italian politicians have effectively changed the law to make sure that YouTube is now liable for the content of third party users. This effectively means that the risk of running such a platform in Italy becomes ridiculously high. I imagine Google will fight this in the courts, but at some point, it makes you wonder if Google wouldn't just be better off leaving Italy altogether, and seeing how folks there feel about its government's decisions.

Filed Under: italy, regulations, third party liability, youtube
Companies: google, mediaset, youtube

Broadband Reports Hit By Righthaven; Goes With Kitchen Sink Approach In Response

from the questions,-questions,-questions dept

We've been covering the various stories of Righthaven lawsuits for months now, and one of the latest involves a site that we link to frequently here on Techdirt. The always excellent BroadbandReports.com has been sued by Righthaven after a forum user posted an LVRJ story. The article highlights the long list of defenses that the site is putting up against Righthaven, many of which we've seen from other Righthaven defendants, such as Nevada being the inappropriate venue and that Righthaven offers up an "implied license," with its encouragement to share.

That said, reading between the lines of the responses, it certainly looks like the site had not registered with the Copyright Office to get DMCA safe harbors. In fact, so far as I can tell, while Righthaven has sued multiples sites that involved forums where the content was posted by a third party, the company has been careful to only sue those without a registered DMCA agent. I'd be curious if there were any examples to the contrary, as I've yet to find one. So, first, a quick public service announcement: if you run any sort of site that allows public participation -- blogs, forums, whatever -- register with the copyright office for DMCA protection. Do it now. Seriously. It can protect you from this kind of headache.

That said, I think it's quite an interesting question if a site still deserves protection from liability for third party comments even if they have not registered. I think a very strong case could certainly be made that such protections remain, though it might involve more of a process to have the court recognize this. First, you have the common sense point: which is that it makes little sense to pin liability on a third party tool or service provider that has no idea that a potentially law-breaking action has been taken. Second, the case law in trademarks, where there is no safe harbor as there is in copyright, has found that such service providers are protected anyway. I would think the various wins that eBay has had over Tiffany would be incredibly relevant case law for showing that even absent a registered DMCA agent, a site like BroadbandReports still should not get third party liability for comments of users.

Another argument that I find compelling is the fact that Righthaven made absolutely no effort to mitigate "damages" by first asking the site to remove the content. While Righthaven legally can go straight to suing, courts tend not to look kindly on companies that fail to take basic actions that could mitigate damages even without a lawsuit.

The final interesting defense is a claim of "copyright misuse," which is a tremendous longshot, but it would be a huge win if the court accepted it, and would more or less represent the end of Righthaven. If you're unfamiliar with it, copyright misuse is a defense against a charge of copyright infringement, when it's believed that the copyright holder was abusive or improper in filing the lawsuit. I doubt the court would accept this, though I think the claim actually makes quite a lot of sense. It's been quite clear from the beginning that Righthaven has no interest, whatsoever, in using copyright law for its intended purpose, but is merely twisting the system to force companies to pay up settlement fees. It would be great if the court smacked them down on a copyright misuse claim, but my guess is that many judges will be afraid to go that far.

Filed Under: copyright, copyright misuse, dmca, lawsuits, safe harbors, third party liability
Companies: broadband reports, las vegas review journal, righthaven, stephens media

The Oscars vs. GoDaddy

from the ah-loopholes dept

The Motion Picture Academy is somewhat infamous for its over-aggressive IP claims around the "Oscar" awards. It's even sued a blog that was helping to promote the event. Apparently, just suing one website wasn't enough, so back in May it sued domain registrar GoDaddy for allowing a bunch of domains to be registered.

Now, in a reasonable world, where liability is properly applied, GoDaddy would never be liable for actions of its users. But, unfortunately, one of the very few areas that DMCA and Section 230 safeharbors do not cover is trademark law. So, the Academy may actually be able to get away with blaming GoDaddy for not magically blocking anyone from registering any domain that might, possibly, maybe be about the Oscar Awards:

Suing under the Anticybersquatting Consumer Protection Act, the Academy disputes more than a 100 domain names, including 2011oscars.com, academyawardz.com, jaylenososcars.com, betacademyawards.com, oscarsunplugged.com, oscarshotels.com, oscarstravel.com, oscarsliveblogging.com ... etc. Damages could total as much as $10 million.

On top of the basics of blaming GoDaddy for allowing such domains to be registered, the Academy seems to directly be taking issue with the fact that GoDaddy has a system for letting domain holders "park" those domains and make money from ads. The Academy tries to spin this as GoDaddy purposely "profiting" off of its intellectual property, but that's ridiculous. GoDaddy is just offering a general domain parking ad system. It's making money off of any parked domains. It has nothing to do with their intellectual property. And, frankly, if these domains were really so valuable to the Academy, why didn't they register them in the first place?

To make the whole thing even more ridiculous, the Academy claims that a GoDaddy patent application shows that it knows that it needs to filter out ads on certain types of domains. But just because you develop a system to do so, it doesn't mean you are legally required to abide by it.

The whole thing is, frankly, absurd. If the Academy has a problem with certain domains, it should go after those who actually registered them. Not the registrar. If this lawsuit actually gets anywhere, it could create a real chill for registrars, who will then feel the need to review and block certain registrations, even if they would be perfectly legal.

Filed Under: oscars, registration, third party liability, trademark
Companies: godaddy, motion picture academy

Apple Sued For Copyright Infringement Because Third Party App Has Someone Else's Bird Sounds

from the tweet-tweet dept

Eric Goldman points us to a copyright infringement lawsuit filed against Apple, because of a third party application for the iPhone called iBird (the developer of that program has also been sued). Apparently, one guy, Martyn Stewart, has gone around and recorded a bunch of different nature sounds, and the developer of iBird used them in his program. Stewart has an application in to register the copyrights, which seems pretty iffy to me: what "originality" did he actually add to the recording?

The developer of iBird seemingly admits to using Stewart's sounds. If you actually accept the idea of the copyrights on those sounds, then it seems like it should be a lawsuit solely between Stewart and the iBird developer. But including Apple because it offers iBird in the iPhone app store seems pretty ridiculous. On top of that, there's some oddity on the timing as well. Stewart admits that he's been collecting these sounds for 35 years, and that the iBird developer first approached him in 2007. But he only filed an application to copyright the sounds in December of 2009, which may cause some difficulty for him (though, it's not clear when the iBird product was actually released, which could make a difference here).

Either way, I can't see how Apple has any liability here at all, unless Stewart sent a DMCA takedown that was ignored, and there's no indication of that in his lawsuit. This feels like a typical "Steve Dallas lawsuit" in that it lumps in a big company tangentially related to the lawsuit, just because it has lots of money, and the guy suing is hoping against all the odds (and common sense and the law) that it will somehow pay up or be forced to pay up.

Filed Under: app store, copyright, ibird, iphone, third party liability
Companies: apple