We've been covering the newly released "son of COICA" censorship bill, now renamed the PROTECT IP Act, this week, breaking the news of the summary version of the law as well as posting the full text. However, as people dig deeper into the text, it looks worse and worse. In fact, I have to apologize, because I think I got fooled by the summary text into believing the actual text of the bill wasn't as bad as it turns out to be.
Sherwin Siy, over at Public Knowledge, points out that the part that we'd been highlighting as applying to "search engines" actually is not about just search engines, but applies extremely broadly to "interactive computer services," a phrase that the courts have treated quite broadly for years. Update: Apparently the "interactive computer service" phrase was in a draft of the bill, but then was switched out for "information location tool" in the final version. However, there are still serious concerns about the loss of DMCA safe harbor provisions...
The real issue here is that it seems to eliminate some of the important safe harbors provided by the DMCA. It kind of makes you wonder if that was the purpose of this bill all along. The entertainment industry has been whining for a while about how the DMCA's safe harbors need to go, and have test marketed that line of argument a few times, only to see major push-back. It's beginning to look like they decided to use the PROTECT IP Act to undo the DMCA's safe harbors with a bit of misdirection. First, they got people to focus on the issues from COICA (seizing sites, etc.) and then with the "summary" they turned the debate into it being about search engines, rather than all interactive service providers.
Updated: To clarify with the update above, the target isn't quite as broad due to the last minute change in the phrasing, but there's still a significant threat to the DMCA safe harbors. That's because while the new act says that it shouldn't impact the DMCA, the actual wording of the bill suggests otherwise. Specifically, the bill notes that "nothing in this Act" and "no order issued" can be used as evidence to knock out a safe harbor, but that leaves a massive loophole: allegations about the sites can still be used as evidence for "red flag" violations under the DMCA. So, for example, a rightsholder could use the PROTECT IP Act to make allegations against a site, and then claim that service providers now have red flag knowledge. It wouldn't be exempted because the Act only exempts actual court orders or the Act itself... the allegations are not exempted, and could be claimed as a sign of infringement, upon which service providers would be expected to act.
That makes this law significantly worse than COICA. It's a full on attack on the basic proper application of liability, and seeks to impose liability on third parties where it doesn't belong.
Last week, a single three judge panel from the 9th Circuit appeals court heard two key appeals concerning the DMCA, and specifically the DMCA's safe harbors for service providers. Lawyer Michael Barclay attended both appeals and has an excellent report and analysis of each. It's not always easy to read the tea leaves of which way judges are leaning on appeals like this, but based on both appeals, and the details of both cases, if I had to guess, I'd say that the appeals court will uphold both lower court rulings, even if this seems slightly contradictory.
If you're not aware of the details of the two cases, the Veoh case is quite similar to the YouTube/Viacom case. Veoh was a video hosting website that ended up in a lawsuit with Universal Music, who not only sued the company, but sued a bunch of its investors as well (a tactic that the record labels have tried a few times, despite the fact that investors are shielded from liability for the actions of company management for very good reasons: otherwise you'd create a massive chill on investment). The judge wisely tossed the Veoh lawsuit, noting that the company was clearly protected by the DMCA safe harbors, and the separate action against the investors was also shot down. Of course, mainly because of this lawsuit, Veoh ran out of money and was forced to shut down. It ended up selling off its assets to some other company, but a "mystery funder" (I'll give you three guesses...) showed up and continued funding the appeal.
The IsoHunt case is one that has probably received more attention. IsoHunt is one of many BitTorrent search engines out there, and it was sued by the movie studios. Given similar lawsuits, it wasn't much of a surprise when IsoHunt lost, but there were elements of the ruling that were quite troubling. It was really the first big DMCA safe harbor lawsuit to make use of the "red flag" provisions of the DMCA. Most safe harbor cases have focused on whether or not the service provider responded to notices, but in this case, the court said that there were enough "red flags" that, even in the absence of notices, IsoHunt should have blocked certain files. This is problematic for any number of reasons, as it leaves an incredibly vague standard out there that is, in many ways, incompatible with the notice-and-takedown provisions of the DMCA. The only real way to reconcile these would be to say that red flags only apply to very specific infringing works, rather than the fact that infringement takes place on the site. Unfortunately, the court didn't really do that here. It also took certain statements from IsoHunt founder Gary Fung really out of context to support the claim that he was inducing infringement under the Supreme Court's Grokster standard for inducement.
It's interesting to see that IsoHunt's lawyer, Ira Rothken, even referenced the Veoh case in his opening remarks, trying to make the claim that IsoHunt has an even stronger case than Veoh, in that IsoHunt is a pure search engine and, unlike Veoh, doesn't host or control any of the actual content. Separately, he argued that the evidence presented for inducement by Gary Fung came from 2003, but the actual infringement in the case came in 2007 -- and suggested that you can't use general inducement for specific cases of infringement. Apparently, the court was skeptical on this. It would surprise me if the court found that convincing at all, as I don't think anything in previous inducement rulings have ever suggested the inducement has to be directly tied to the infringing files. Anyway, you can listen to the IsoHunt hearing below:
The Veoh hearing, on the other hand, appeared to go pretty strongly in Veoh's favor. Universal Music's argument appeared to be that the DMCA safe harbors are meaningless, because they're kinda annoying for Universal Music. That's a bit of an exaggeration, but not by much -- and the judges aren't buying it. Universal kicks it off by ridiculously claiming that the Veoh ruling would upend copyright law. That's simply not true, and the judges immediately called Universal's lawyer on this, pointing out that copyright law and the case law in the 9th Circuit clearly puts the burden on the copyright holder to file notices, rather than expect service providers to proactively police.
Universal also argued that the DMCA only applies to backend infrastructure service providers, not every other service providers. That's a massive uphill climb there, as no court has ever ruled that. Thankfully, the judges seemed rightfully skeptical, and pointed out that this would decimate the DMCA's safe harbors (exactly what Universal Music and the RIAA wants, of course). Finally, Universal Music tried to argue (again against all sorts of precedent) that since the DMCA was merely locking in common law precedent, vicarious liability could be interpreted broadly. Again, the judges seemed skeptical, noting that this would apparently destroy the DMCA's safe harbors. From Barclay's summary:
Judges Fisher and Berzon had problems with that interpretation. Judge Fisher said that under vicarious liability principles, most commercial web sites would satisfy the “financial benefit” provision, and since in response to a takedown notice they could remove the content, that would satisfy Marenberg’s interpretation of the control provision. Both Judges Fisher and Berzon told Marenberg that under his interpretation, the safe harbor would therefore go away: Judge Berzon told Marenberg his view of the statute “kind of blown the whole thing up.”
We've actually seen a weaker, less legalistic, version of this argument made here many times before. We see people argue all the time that, for example, YouTube must be liable because it makes some money from hosting, and thus is profiting from infringement. Except, that's not what the law says. YouTube isn't profiting from infringement. It's profiting (if it's profiting) from providing a service, which is hosting and displaying videos. It makes that money whether the works are infringing or not. If Universal's interpretation of the safe harbors is correct, there are no more safe harbors online, because any for-profit company loses all safe harbors. That's clearly not what Congress intended.
Either way, you can year the Veoh hearings below as well:
I still think that the appeals court will likely uphold both lower court rulings (though, I'm only about 70% confident on that...), even if it is a bit bizarre when you compare the two. IsoHunt doesn't host or transmit any infringing content. Veoh likely did. And yet Veoh has been deemed protected, while IsoHunt was not. That seems like a questionable outcome no matter what.
If you talk to folks in the recording industry, they seem to insist that Grooveshark is absolutely illegal. However, the company has structured itself in a way that it believes is perfectly legal -- which is why it's now upset that Google and Apple have each pulled its mobile app from their marketplaces and has issued an open letter, explaining why it's legal and asking Google and Apple to let it back into their app stores.
First, the company makes the distinction between "licensed" and "legal":
First, there is a distinction between legal and licensed. Laws come from Congress. Licenses come from businesses. Grooveshark is completely legal because we comply with the laws passed by Congress, but we are not licensed by every label (yet). We are a technology company, and we operate within the boundaries of the Digital Millennium Copyright Act of 1998 (DMCA). Some would have you believe that those of us who use the DMCA to innovate are inherently infringers and that claiming Safe Harbor under the DMCA is as good as admitting guilt. Not so.
The DMCA's Safe Harbor component encourages technology companies to innovate in hopes that they will eventually solve some of the problems that are plaguing content producers today. The Safe Harbor provision reads like it was written specifically for YouTube and Grooveshark, and its necessity continues to be illustrated every day. If it weren't for this notion, many of the products and services that are now taking a bite out of piracy would never have been born.
While I agree with the importance of the DMCA's safe harbors, and the idea that they are important to encourage innovation, Grooveshark is being a little misleading in the whole licensed/legal arena. It really should go into more detail. The way Grooveshark operates, is that (like YouTube), users upload content, which others can then stream. Grooveshark works to abide by the DMCA to discourage and takedown infringing material -- and notes that it has taken down 1.76 million tracks and suspended 22,274 users who abused the system. As it notes, those are "not the characteristics of a company 'dedicated to copyright infringement.'" It also pays performance rights organizations for the streaming content.
The real issue is whether or not the users have the rights to upload the works. That's where the licensing aspect comes in. Grooveshark has been trying for a while now to get record labels to agree to effectively offer a blanket license to its users, so that they can upload those songs, and the labels can then make some money off of the usage as well. In some ways, it's like YouTube's ContentID system, in helping labels monetize their music that users are hoping to share. Both EMI and Universal Music have sued Grooveshark, with EMI dismissing the case after agreeing to a license. Universal Music is still fighting the lawsuit.
So, effectively, the way Grooveshark is structured today is that its users might infringe on copyrights, and the company keeps seeking licenses that would make those uses authorized. The somewhat open legal question is whether or not Grooveshark itself is liable as well. It claims that it follows the DMCA safe harbors and is protected (and, for that reason, I'm sure is very, very, very interested in the eventual outcome of the YouTube/Viacom lawsuit concerning the overall contours of the DMCA safe harbors). The labels, I'm sure, claim that Grooveshark is "inducing" infringement through its overall design.
Not surprisingly, I think Grooveshark presents an interesting legal situation, which should be legal under the DMCA. Unfortunately, the courts often get a little wacky when it comes to interpreting the law in these situations. If YouTube continues to prevail over Viacom, Grooveshark is in a much stronger legal position. If the appeals court reverses, however, it may have more trouble. Of course, given all this, it is somewhat amusing that Google would dump Grooveshark, suggesting a violation of its terms of service. If Google is arguing that YouTube is legal, you would think it would recognize that Grooveshark relies on the very same line of legal logic.
A little over a year ago, we discussed a district court ruling that said that the site Ripoff Report (and its parent company XCentric) was not required to remove content, even though the content had been found (in a default judgment, since the defendants did not show up) to be defamatory. The court ruled that Section 230 clearly protected Ripoff Report as a service provider from being liable for user actions. While some worried that this meant that it would be possible for defamatory content to not be removable, this seemed like an overreaction, and targeted the wrong issue. The real problem was with the default judgment practice, and the idea that just because you can't find the people actually liable, some people think it's okay to blame someone else instead. That's just not right.
Last week, in an appeal on that original case, the appeals court basically ruled the same way: Ripoff Report has no requirement to remove the content judged to be defamatory, because it is not a party to the lawsuit, and thanks to Section 230 it cannot be a party to that lawsuit. However, it is notable that Ripoff Report has put additional information on that page, indicating that the content was found to be defamatory, which more or less should alleviate much of the concern. Separately, as Eric Goldman notes in the link above, the fact that it's possible that defamatory content may be online with no way to take it down probably isn't a huge concern, as the situation is unlikely to happen all that frequently. Most sites seem willing to take down such content.
Separately, as Paul Levy astutely points out in his own analysis of the case, the courts in various states have made it clear that in order to deal with that pesky First Amendment issue, there shouldn't even be injunctions against defamatory speech -- only monetary awards:
I am much less worried about the normative consequences of holding that the web host can't be enjoined, because there is another significant problem with extending either injunction to Ripoff Report. There is a hoary doctrine holding that "equity will not enjoin a libel" -- that no matter how false and hurtful a statement may be, the only proper remedy for defamation is an award of damages, not an injunction.
And, indeed, this is probably how it should be. The way to deal with such speech is more speech.
Levy's link, unfortunately, shows that some courts don't recognize this, even in states whose laws are under this maxim. Levy notes that the day after the Seventh Circuit ruled in favor of Ripoff Report in the lawsuit above, a Florida state court granted a rather hasty temporary restraining order against Ripoff Report/XCentric, in a case with some similarities. It again involved charges of defamation. Ripoff Report was sued, but removed from the lawsuit thanks to Section 230. The woman who actually wrote the comment was also sued, and eventually settled, with a promise that she would make "good faith efforts" to remove content. Ripoff Report, famously, does not remove content (though, Levy notes that's not entirely true), so it refused. The plaintiff, John Giordano, asked the court for a temporary restraining order against Ripoff Report, requiring it to remove the comments. The court gave Ripoff Report one day's notice, before holding a hearing (Ripoff Report's lawyer had to call in from Arizona), and the court then granted the restraining order. Levy, again, explains why this ruling was clearly in error:
Part of the problem with the reasoning is that it is circular -- Xcentric is being ordered to take down the posting because it failed "to comply with [the previous] order," but that order did not compel XCentric to do anything; thus there was nothing for it not to comply with. And in other respects, the reasoning is just wrong. The order expressly treats XCentric as the "publisher" of the statements in defiance of the statute's express command that a provider of interactive computer services shall not be "treated" as the publisher of content provided by another; and the courts addressing section 230 have consistently agreed that the decision whether to remove posts is part of the "publisher" function that Congress intended to leave to web hosts' discretion. Nor does the court explain how it can issue the equitable remedy of an injunction -- especially an injunction forbidding speech -- against a party that has not been held liable for the speech.
Moreover, allowing motions for injunctive relief is inconsistent with the statutory language providing an immunity from suit as well as from liability, and with one of the basic reasons why host immunity is such an essential element of the system of online freedom of speech. Even if the host is protected against damages claims, the very need to respond to motions for injunctive relief imposes the expense of litigation and thus threatens to enable the heckler's veto that animated Congress to adopt Section 230 in the first place, and to make it a part of American law so fundamental that a foreign defamation judgment cannot be enforced in the United States unless it meets section 230's requirements. And hosts are understandably chary of being enjoined, because even if it is s very specific statement that has already been held to be false that is enjoined, the host has to worry about being held in contempt if somebody later posts that same statement online.
Also curiously not addressed by the Florida court was why it was entitled to issue a prior restraint on less than a full evidentiary hearing on the merits.... [In] many jurisdictions, the old rule that "equity will not enjoin a libel" remains good law to this day. But even the jurisdictions that allow the entry of a permanent injunction against speech after the defendant has had his day in court and a jury has decided that the enjoined speech is false, consistently hold that a preliminary injunction is a prior restraint. And as the Supreme Court said in Organization for a Better Austin v. Keefe, 402 U.S. 415, 419-20 (1971), in overturning a preliminary injunction against leafleting on First Amendment grounds, "No prior decisions support the claim that the interest of an individual in being free from public criticism of his business practices . . . warrants use of the injunctive power of a court."
Hopefully this temporary restraining order is overturned.
The larger point remains, however. Section 230 remains not just a good, but an important law in protecting third parties from being held liable for the speech of others. The worries that it creates problems in cases such as the first one above seem overblown. Such situations are not only rare, but it seems clear that they can be dealt with by people adding additional details that explain the nature of the content in question. And, in the end, that fits best with the First Amendment. The response to "bad" speech should not be to block it, but to encourage more speech. That's the end result of Section 230, and that should be seen as a good thing.
It should be no surprise, of course, that Viacom has now officially appealed its rather complete loss at the district court level concerning YouTube's liability for users' posting infringing works. What is a little surprising is the level of insane hyperbole Viacom chooses to use in its filing (included in its entirety after the jump) -- where it claims that if the ruling is allowed to stand it, would "completely destroy" the value of content:
If affirmed by this Court, that construction of Section 512(c) would radically
transform the functioning of the copyright system and severely impair, if not completely
destroy, the value of many copyrighted creations. It would immunize from
copyright infringement liability even avowedly piratical Internet businesses.
To put it mildly, this is hogwash. First of all, it's exactly how the system has functioned since the DMCA came into being in 1998. If you see infringing content on a site, you issue a takedown and the site takes it down in order to keep its safe harbors. The idea that it would "completely destroy" the value of content makes no sense at all. First, you have to understand why it makes no sense that YouTube should be liable: it has absolutely no way of knowing, for certain, whether or not specific content is infringing. As it showed in the case, even Viacom itselfhad trouble figuring out what was infringing, and had sued YouTube over a bunch of videos that it had put on YouTube itself. How do you make YouTube responsible for determining such things when even the copyright holder can't figure it out? It makes no sense.
Second, the idea that the value of the work is "destroyed" again makes no sense. After all, the value of any particular content is intrinsic to the content and how any individual feels about it. The value of a piece of content doesn't change if someone puts it up on YouTube. Furthermore, YouTube quickly does remove content when it receives a takedown notice, so if Viacom is that concerned, it can send the takedowns. In fact, that's exactly what it did and the company complied. That's exactly what the law says it should do. On top of that, nothing in the DMCA's safe harbors immunizes those who actually upload the content, who are still very much liable for their own actions.
But the biggest evidence that Viacom's claims are complete and total hogwash is the simple fact that even after the ruling, there has been no "mass destruction" in value of content. As we've pointed out for years, the overall revenue for the entertainment industry continues to go up all this time -- though, perhaps less of it goes to the gatekeepers like Viacom. But those are normal market changes, not anything nefarious. Who knows how the appeals court will rule in the case, but Viacom seems to be going off the deep end with hyperbole in making its own case. They must be hoping that the judges don't do much thinking for themselves.
Back in June we wrote about a somewhat odd copyright lawsuit, involving a guy who has spent many years recording bird sounds. Some of those sounds appeared (without his permission) in an iPhone app called "iBird" and so the guy sued both the developer of iBird and Apple. Of course, he also had only just filed for a copyright on the recordings, which would make it impossible to get any statutory damages. With the initial lawsuit, I noted that it wasn't clear that recordings of birds chirping could even qualify for copyright, but more importantly there was the question of why he was suing Apple, which would appear to be protected by the DMCA's safe harbors, since it wasn't the one who created the app.
Venkat Balasubramani has an update on the case, noting that the late timing of the copyright registration has indeed backfired on the guy, but what's odd is that Apple has not raised the DMCA's safe harbors in its own defense. This seems really strange, and Venkat is also at a loss as to why Apple would not raise such a defense. I'd be curious if anyone here has any ideas why Apple would avoid such an easy "get out of lawsuit" card?
There's been a lot of attention paid on various news sites over the past few weeks to the motions for summary judgment in the MP3Tunes case. If you don't recall, EMI sued MP3Tunes and (separately) its founder, Michael Robertson, arguing that the music locker service violated copyright law, even though it's designed to let individuals store and access their own music -- but not to allow others to access that music. The whole case has been quite bizarre and we're finally getting close to at least an initial ruling on how the court sees things. I was waiting until that ruling came out to cover it, but EMI's latest move is somewhat baffling.
You see, the EFF, Public Knowledge, the Consumer Electronics Association and the Home Recording Rights Coalition teamed up to file an amicus brief. That's nothing surprising and barely noteworthy. Those groups file amicus briefs on all sorts of similar cases having to do with the entertainment industry trying to stretch the interpretation of copyright law in a way that hinders new technologies. What makes things odd is that EMI has filed to have the court bar the brief from being used. The arguments are somewhat silly. Effectively, they argue that the court had asked the parties to keep their own arguments for summary judgment to a minimum (less than 35 pages). However, EMI states, this brief is really just supporting MP3Tunes' position, and thus, giving MP3Tunes a way to get more arguments than the 35-page limit allows.
Of course, it seems like all this really serves to do is to call a lot more attention to the EFF/PK/CEA amicus brief and to make you wonder what the hell EMI is so scared of having the court read about. And, really, shouldn't EMI be focused on staying in business these days, rather than worrying about what folks like the EFF and PK have to say about copyright law? If you want, you can see both the amicus brief and EMI's complaint about it after the jump.
It's always impressive when you see lawyers file lawsuits which suggest they're not entirely familiar with the law. Eric Goldman points us to a lawsuit filed by a Nevada lawyer, Jonathan Goldsmith, suing Facebook and two Facebook users for defamation, due to some mean Facebook comments.
Of course, Section 230 clearly shields Facebook from the actions of its users in defamation cases. As a lawyer, aren't you supposed to be aware of the law? There are some other oddities in the lawsuit as well, such as claiming both slander and libel for the Facebook comments. Normally, slander applies to spoken comments, libel to written. Now, I recall at least one case (in the UK, not the US), where the court suggested online forums were more like slander than libel, but it still seems a bit odd to see it in this case. And, either way, he claims both slander and libel. There are a few other oddities as well, including a claim that the mean comments on Facebook caused him to "seize" advertising on the site. I'm assuming he meant "cease"?
Yet again, it seems like sometimes even when people say mean stuff about you online, which might not be true, it's better to just shrug it off than filing a lawsuit, drawing a lot more attention to the mean things... and anything else that might get attention.
Rose M. Welch points us to a report from Poynter about the site Bedbugregistry.com. As you might have heard, there's been a lot of attention paid to bedbug infestations lately, and that site is often cited by journalists covering the story. According to the Poynter report, hotel owners have often threatened to sue the site because they don't like seeing their hotels on the list. I'm sure they don't, but it's disappointing that the Poynter article doesn't point out that the operator of the site, Maciej Ceglowski, is protected by Section 230. That seems like an important element of the story. As it is, it kind of suggests that a hotel owner could have a lawsuit. While they could file one, it's unlikely that it would get very far, due to the clear safe harbors in Section 230.
In the US, for the most part, we have legal safe harbors that enforce (usually) common sense points about liability into law. The basic idea is that a third party service provider or tool should not be held liable for what users do with those tools. Unfortunately, there are some problems with how this has been interpreted in the US at times, but at least the basics of reasonable safe harbors are there. And this is important. It makes no sense to blame a service provider for actions of users, but oftentimes those third parties are the primary targets of legal action, because they have more money and because it's an "easier" target. Over in Russia, apparently, there are no such legal safe harbors in place, and the biggest Russian internet companies, along with Google, all put out an open letter to the entertainment industry saying that it's time to stop blaming the internet companies for the actions of their users. It seems there have been some lawsuits in Russia against these sites, and they're not happy about it.
Part of the open letter appears to be an attempt to set up, without a legal basis, an agreement for a notice-and-takedown process of sorts. This is a bit disappointing of course. We've had such a notice-and-takedown process in the US for a while, and we've seen that it's quite frequently abused to takedown free speech and fair use content for reasons that have nothing to do with actual copyright issues. At the very least, it would have been better for these service providers to offer a notice-and-notice provision, where the users are notified that a copyright holder believes their use is infringing, letting them respond before the content is just taken down.
