Won't Have Perfect 10's Silly Lawsuits Setting Precedent Anymore: Judge Appoints Receiver For Perfect 10's Assets

from the well,-there-goes-that-one dept

Welp, it looks like the quite long history of Perfect 10 filing frivolous copyright lawsuits and losing (while setting useful precedent) has finally come to a close. A court has now put Perfect 10's assets into receivership to be sold off.

We've written a ton about Perfect 10 over the years. As we've noted, while the company officially styled itself as a porn magazine company, it was an early form of copyright troll, focusing on suing basically every large company imaginable for being somehow kinda partially related to any of Perfect 10's pictures showing up online. As such, Perfect 10 was astoundingly useful in setting some really fantastic and useful precedents concerning intermediary liability protections, and making sure that third parties and platforms weren't held liable for copyright infringement. The key, frequently cited, cases include:

• Perfect 10 v. Google
• Perfect 10 v. CCBill
• Perfect 10 v. Amazon
• Perfect 10 v. Visa

All of them resulted in major losses by Perfect 10, and really useful, citable, opinions that are regularly raised in other cases. There are more such cases as well. In one famous case, a party laid out how Perfect 10 was apparently deliberately setting things up to have more companies to sue, rather than actually doing anything to limit copyright infringement.

In the most recent Perfect 10 case, we noted that Perfect 10 lost big time earlier this year. It had sued Usenet provider Giganews, but the court found that Perfect 10's legal arguments made no sense at all, and sided completely with Giganews. Most importantly, the court upheld the multimillion fee award that the court had dumped on Perfect 10 for filing such a bogus lawsuit. It turns out that Perfect 10 doesn't seem to have that kind of money, so all of its assets are now controlled by a court-appointed receiver.

Pursuant to the terms of the enclosed Order, I am hereby taking possession of all of your "intellectual property," which specifically includes but is not limited to domain names, copyrights and copyright interests, trademarks, trademark interests, and associated goodwill, and related interests, as well as all royalties, rents, issues, profits and income (including any cash) resulting from or generated by such intellectual property.

This reminds me of another famous copyright trolling case, Righthaven (the company that was spun off from newspaper company Stephens Media to shake down bloggers reposting snippets from news stories). In that case, lawyer Marc Randazza beat back Righthaven in court so many times in so many ways that it was just getting silly. Eventually, the court handed over Righthaven's IP and it was eventually "sold" back to Stephens Media as a way to pay the outstanding legal fees.

Feel free to speculate what will be done with Perfect 10's assets.

In the meantime, though, it truly is the end of an era. Perfect 10 has been filing lawsuits going back at least until 2002 (possibly longer...). And it's set so many useful precedents, even as each new filing seemed more pointless than the previous one. So long Perfect 10, and thanks for all those useful rulings in cases you lost.

Filed Under: copyright, copyright trolling, dmca, precedent, receivorship, safe harbors
Companies: giganews, perfect 10

The Internet Is Silencing Artists, According To An Artist On The Internet

from the criticizing-safe-harbors-from-within dept

We recently submitted our comments to the Copyright Office's ongoing study on DMCA safe harbors, but perhaps we should have been a bit more creative. At least that seems to be the plan of the Content Creators Coalition, which has made its submission in the form of a video starring producer T Bone Burnett doing his best Werner-Herzog-without-the-accent impression. It's... quite something. (Amusingly it's also hosted on Vimeo, a site which — like all sites hosting user content — relies heavily on DMCA safe harbors for its existence, and indeed prevailed in a major legal battle over that very thing last year.)

Probably the word most prominent in my mind after watching that is dramatic, with optional prefixes such as melo- and over-. It starts out like this:

In its early days, the Internet was hailed a panacea. A global community — unshackled from corporate, military, or government control ready to equalize and connect the world. One of its early false prophets named it a "Culture of the Mind" that "all may enter without privilege or prejudice". But that's not what we got.

Remember, this isn't a trailer for season three of Mr. Robot — it's a submission to the Copyright Office. There's a bit of a problem with that quote, too, but we'll get to that in a moment. T Bone drones on:

Instead of opening up minds, it has closed them down — becoming a restrictive, abusive place where women, people of color, and anyone marked different are shunned, attacked, and shouted down. 2016 laid bare how cyberspace hasn’t rationalized dialog. It's become a megaphone for propaganda and fake news where it’s easier to demagogue and divide than ever. Dreams of a stronger democracy have given way to foreign hackers and corporate manipulation — a shriveled politics indistinguishable from reality TV.

While some of those problems are certainly real, they are a lot more complicated and far from the primary characteristic of the internet as a whole — but more importantly, what does this have to do with musicians and the DMCA, exactly? (By the way, demagogue is not a verb.)

And for artists and creators, instead of amplifying our voices to lead the fight for change, it undermines and silences us. The Internet — with all its promise and beauty — threatens to destroy what it was supposed to save. We can’t let that happen.

This proceeding is focused on the legal safe harbors in the Digital Millennium Copyright Act – the law that was supposed to balance the Internet’s openness with creators’ ability to earn a living wage from their work. Those safe harbors have failed.

Wow, smooth transition. If I'm reading that correctly, he's saying that artists could have cured or at least mitigated all of society's woes if only they weren't being "silenced" by the internet. The idea that the internet is silencing anyone, much less artists, is frankly just silly — unless of course you're talking about the people who are directly and unambiguously censored by abuse of the DMCA. The safe harbors have failed, by having a very low bar to get content removed and failing to have any meaningful way of preventing or punishing abuse. And yet even despite this, the internet offers the biggest, most powerful and most accessible platform for artists in history.

(Also at this point, let's revisit that quote from an internet "false prophet". The line is actually a "civilization of the mind" and it comes from EFF founder John Perry Barlow's famous Declaration of the Independence of Cyberspace in 1996. You'd think T Bone could have gotten the quote right, but you also have to wonder if he knows that Barlow is an artist himself who used to write lyrics for the Grateful Dead.)

The problems are familiar — they are well described in the record of these proceedings from the broken Sisyphus climb of "notice and takedown" to the gunpoint negotiations and pittance wages forced upon creators by the Google monopoly. The Big Tech ITOPIANS can track us across dozens of networks, devices, and profiles to bombard us with micro targeted ads, but they can’t even identify unauthorized copies of our work and keep them off their own servers and systems. Or they won’t.

Ah, Sisyphus — he who evaded his timely death and was sentenced to eternal fruitless toil. Not a bad metaphor for media gatekeepers and the DMCA, actually. Perhaps T Bone can imagine Sisyphus happy. Or maybe instead of wasting all this time pushing boulders up hills, the industry could have embraced digital distribution from the start and helped new platforms emerge instead of hindering them. As for detecting infringing works, ad tracking is just as flawed as any other "if they can do that, why not this" comparison on that front: the issue is not the technological ability to sort content, but the fuzzy definitions of what's legal and what isn't — especially since, despite T Bone's conflation of the two, "unauthorized" does not automatically mean "infringing". Besides, a mistargeted ad just gets ignored; a mistargeted copyright filter shuts down free expression.

(And by the way, I didn't capitalize "ITOPIANS" like that — that's how it was transcribed in the Coalition's press release. Apparently someone thought it was really, really clever and wanted to make sure you didn't miss it.)

The problem here isn’t technology – creators welcome the digital revolution and its power to connect, amplify, and inspire. A modern recording studio looks more like a cockpit than a honky tonk, and that’s just fine. The problem is business models — designed to scrape away value rather than fuel new creation, focused on taking rather than making. To restore technology’s place as the rightful partner of tomorrow’s creators, we need change.

Oh I see: he wants artists to enjoy all of the huge advantages created by digital technology, both in terms of distributing and creating their music, but not have to adapt to any of the new challenges created by the same technology. Sure, that sounds fair. He's right that the biggest challenge is business models, but to that I say: physician heal thyself.

The safe harbors must be restored — so only responsible actors earn their protection, not those who actively profit from the abuse and exploitation of creators' work.

People don't have to "earn" critical free speech protections by proving they aren't abusing them. That's exactly the opposite of how it works. But I'm impressed by the creativity and gall it took to describe dismantling safe harbors as restoring them.

The false prophets of the internet may have imagined an egalitarian open source creative wonderland – but what we got was a digital playground for a handful of mega corporations and web moguls living fat off the artistic, cultural, and economic value everyone else creates online. And if our democracy becomes stunted and diverse Americans are shut out, I guess these new Galtian Lords would say, "That’s business."

But artists and creators will never bow to that. We will never accept an Internet that turns its back on the vitality, optimism, and hope from which it was born. We will never allow our democracy to become a mere series of pseudo-events designed to manipulate people into spending money.

This, and the line that follows it, is the last quote I'm going to pick on, because it's where T Bone's bizarre attempt to treat art and democracy as more than related but practically synonyms finally coalesces. Because in the next line he commits to this blunt conflation whole-hog and coins a new term (emphasis mine):

Everyone with a stake in the Internet’s success and the health of our creative democracy must work together to make this right.

Well, coined it in this strange context anyway — though in fact "creative democracy" is originally the title of a 1939 essay that ended with a passionate assertion that "the task of democracy is forever that of creation of a freer and more humane experience in which all share and to which all contribute". Now you can twist words and concepts all day to pretend that the internet somehow stifles artists, but be honest: is there anything in the world that has pushed us closer to that democratic goal than the internet, and the communication and content platforms that rely so heavily on safe harbors to exist?

Maybe T Bone and the Content Creators Coalition think differently, but in that case they should at least take this little dramatic exercise off of Vimeo.

Filed Under: copyright, copyright office, dmca, dmca 512, free speech, safe harbors, t bone burnett

Dangerous: Judge Says It Was 'Objectively Unreasonable' For Cox To Claim DMCA Safe Harbors

from the this-is-bad dept

We've been covering the BMG v. Cox case since the beginning, and a bad decision just got made even worse -- and more dangerous. If you've been following the case, you know that it's on appeal right now (and a whole bunch of amici have weighed in), but in the meantime, the judge in the district court, Judge Liam O'Grady, has doubled down on his opportunity to chop up and mock the DMCA's safe harbors by telling Cox it must pay $8 million to BMG in legal fees because its using the DMCA safe harbors as a defense was found to be "objectively unreasonable."

That's crazy, for a variety of reasons, but we'll get there. From the very beginning, this case was a joke, and it's unfortunate that the court didn't realize that early on. The case was filed back in 2014, and we pointed out that it was really BMG (and another publisher, Round Hill Music) acting as a proxy for copyright trolling operation Rightscorp, testing out the wacky legal theory that the DMCA requires that ISPs kick repeat infringers entirely off the internet. No one has ever interpreted the DMCA in this manner. Yes, 512(i) requires a repeat infringer policy, but it had always been widely recognized that that referred to services that hosted content, not network providers (e.g., YouTube is required to have a repeat infringer policy that kicks users off YouTube if they keep posting infringing works, but your ISP shouldn't kick you off the internet for the same thing.)

If that interpretation of the law was legit, you'd think that someone would have tried it in court before -- especially with all the whining from the MPAA and RIAA about how ISPs weren't doing enough to stop piracy. So this was a real stretch as a legal theory.

But, somewhat amazingly -- even after the legal proceedings demonstrated that the lawsuit was really about copyright trolling and exposed some heinously bad behavior by copyright troll Rightscorp -- the case went against Cox and in favor of BMG (Round Hill Music was kicked out of the case early on).

O'Grady made it pretty clear in the case that he's not a big fan of this internet thing, and doesn't see why it's a big deal if someone were to get kicked off the internet. At one point in the proceedings, Public Knowledge and EFF sought to file an amicus brief. Admittedly, many district court judges aren't fans of amicus briefs (they're more usually seen at appellate courts), but O'Grady was so dismissive of this one that it was fairly incredible:

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.

So, yeah. Judge O'Grady then said that Cox wasn't protected by the DMCA at all, which made it easy for the jury to find in favor of BMG and award it $25 million from Cox. Part of the problem was that there was some sketchy behavior by Cox (including some really dumb emails by staff who don't understand the law, but look damning), but none of it should have directly impacted the legal issues, but that behavior clearly influenced O'Grady.

And, now, because of that, O'Grady has awarded legal fees, by arguing that Cox relying on the very same DMCA safe harbors that everyone else relies on and where Cox was the only major ISP that would kick off any user for infringement, was somehow "objectively unreasonable." Think about that for a second. Let's repeat it: Cox's policy was the only one at a major ISP that kicked people off the network for repeat infringement. And every network provider regularly relies on the DMCA safe harbor to protect them from liability. And yet, Judge Liam O'Grady's opinion says that it was "objectively unreasonable." Oddly, O'Grady's opinion here is again entirely focused on the bad behavior by some Cox employees, and not the overall question of whether or not the safe harbor actually works the way O'Grady (and Rightscorp and basically no one else) seems to think it works. Rather than explaining why it's "objectively unreasonable" for Cox to rely on the DMCA's safe harbors, O'Grady basically says that the reliance was unreasonable... because of the bad behavior. That's conflating two separate things. Sanction them for bad behavior if you must, but don't let that cloud the actual legal issue.

The objective reasonableness of a party's position is an important factor in deciding whether to award fees.... In a hard-fought litigation battle such as this one, discovery disputes and fierce briefing are to be expected, and they should not be held too harshly against either party. Nonetheless, there are a few instances in which Cox's advocacy crossed the line of objective reasonableness. In particular, both Cox's attempts to obscure its practice of reinstating infringing customers, and its subsequent assertions of a deeply flawed DMCA defense evince a meritless litigation position that Cox vigorously defended.

[....]

.... Although Cox's DMCA defense cannot be categorized as frivolous or in bad faith, the Court found that "[t]he record conclusively establishes that before the fall of 2012, Cox did not implement its repeat infringer policy. Instead, Cox publicly purported to comply with its policy, while privately disparaging and intentionally circumventing the requirements."... The evidence supporting this conclusion was overwhelming, and it included "smoking gun" email conversations.... The most memorable of these contained Cox's own abuse manager stating: "F . . . the dmca!!!"... Therefore, although Cox's defensive arguments may have been reasonable as an abstract legal theory, when viewed in light of the actual facts of the case, they evince an objectively unreasonable litigation position that was nonetheless vigorously defended.

It's clear that O'Grady is hung up on the bad behavior and statements by Cox employees. And, again, what they were saying was really bad. But the real question is whether or not it actually violated the DMCA. And Cox argued, quite reasonably, that it did not. The DMCA doesn't actually require what O'Grady and BMG insist it does, and no other ISP even goes as far as Cox did (bad behavior or not). So because you have some clueless Cox employees, who were spouting off internally about how much they hate the DMCA (an opinion shared by many) and because they implemented their repeat infringer policy in a way that O'Grady felt wasn't reasonable, suddenly arguing that the safe harbors still should apply (because they should!) is "objectively unreasonable"? That's dangerous.

Again, the earlier parts of the case are already on appeal, so hopefully this will all get wiped out and this order won't matter in the long run either. But if it does stand, it's yet another serious problem that's come out of this particular case.

Filed Under: attorney's fees, copyright, dmca, liam o'grady, objectively reasonable, repeat infringer, safe harbors
Companies: bmg, cox, rightscorp

Already Under Attack In Top EU Court, Privacy Shield Framework For Transatlantic Data Flows Further Undermined By Trump

from the you're-not-really-helping-things,-Donald dept

A year ago, Techdirt wrote about the melodramatically-named "Privacy Shield." Under EU data protection laws, the transfer of EU citizens' personal data is only legal if the destination country meets certain basic conditions for data protection. Signing up to Privacy Shield is designed to allow US companies to meet that requirement. The earlier framework, called "Safe Harbor," was thrown out by the EU's highest court, the Court of Justice of the European Union (CJEU), largely because of NSA spying on data flows. Privacy Shield was hurriedly cobbled together because, without it, the vast flows of data across the Atlantic that occur all the time would be much harder to square with EU laws.

However, since the NSA has not stopped spying on data flows, some in the EU feel that Privacy Shield offers as little protection for personal data as Safe Harbor. This led the Irish civil liberties group Digital Rights Ireland (DRI) last October to ask the EU's General Court -- one of the more obscure courts of the CJEU -- to annul the Privacy Shield framework, arguing that it too lacks adequate privacy protections. Although there are still some procedural matters to be settled first, largely to do with whether DRI has standing to bring this legal action, the case is considered a serious enough challenge to the Privacy Shield framework that the US government is getting involved directly:

The US government has applied to be an intervening party in a challenge by Irish privacy campaign group Digital Rights Ireland against the Privacy Shield transatlantic data transfer pact.

As the article from the Irish Times explains, the US is not alone: also keen to see the framework upheld are the British, Dutch, and French governments, as well as Microsoft and the Business Software Alliance, all of whom have applied separately to join the action. DRI's basic argument is the following:

In questioning Privacy Shield's adequacy, it says its provisions are not actually fixed in US law. The privacy group will also argue that the agreement neither adequately addresses the court's specific objections to Safe Harbour, nor protects citizens' rights provided for under the EU Charter of Fundamental Rights and by the general principles of EU law.

The DRI's case may have just received a boost from an unusual quarter. As Techdirt reported, the President of the United States has signed an executive order that strips those who are not US citizens of certain rights under the Privacy Act. A spokeswoman for the European Commission told TechCrunch that Privacy Shield "does not rely on the protections under the US Privacy Act." But Jan Philipp Albrecht, a Member of the European Parliament, and the leading expert on data protection regulation there, is not so sure that the framework will escape unscathed. He wrote in a tweet that:

If this is true [about the stripping of privacy protections] @EU_Commission has to immediately suspend #PrivacyShield & sanction the US for breaking EU-US umbrella agreement.

The "EU-US umbrella agreement" refers to another recently-agreed deal that puts in place a comprehensive high-level data protection framework for EU-US law enforcement cooperation. The long thread that follows Albrecht's tweet explores to what extent the Privacy Shield framework is likely to be impacted by the new executive order. There's no clear consensus yet on that. But one thing is for sure: the general thrust of Trump's order probably indicates a broader shift in policy that makes it more likely that the CJEU will strike down Privacy Shield just as it struck down Safe Harbor.

Follow me @glynmoody on Twitter or identi.ca, and +glynmoody on Google+

Filed Under: donald trump, eu, privacy, privacy act, privacy shield, safe harbors, us

Perfect 10 Loses Once Again, Sets More Good Copyright Precedent

from the the-weird-gift-that-keeps-on-giving dept

As we've noted, sorta-porn company Perfect 10 really is the gift that keeps on giving. The company claims that it's in the porn business, but in one of the many, many lawsuits it has filed, it was suggested that the company is little more than a pure copyright troll, just looking for companies to sue. This was in a filing made by one of the companies Perfect 10 sued back in 2010:

Perfect 10 is a copyright troll that does not operate a real business and instead seeks to foster the spread of infringing copies of works that it owns over the Internet in order to entrap and shakedown websites and services where copies of its images may randomly end up.

Perfect 10 does not have the employees or attributes of a legitimate business. Today, Perfect 10 is essentially a paralegal service masquerading as a porn company. It is run by its founder, Norm Zada, out of his Beverly Hills home with the help of full and part time employees who are paid primarily to troll the Internet looking for (but not removing) allegedly infringing copies of Perfect 10 images for use in existing or potential future litigation and to draft declarations and other papers.

One of the core elements of a Perfect 10 copyright trolling operation is that it rarely sends legitimate DMCA notices. Sometimes it just sends screenshots of images and basically says "take this down" without ever pointing to the actual location of the content. That's yet another reason why many have argued it's little more than a troll. Someone truly looking to protect its own content would actually follow the DMCA and tell service providers where the content was hosted, rather than tap dancing around such questions... and then filing lawsuits. I'm sure that some who Perfect 10 threatens just settle, but when cases go to court, Perfect 10 not only loses, but loses in impressive fashion, setting all sorts of useful and valuable precedents around the DMCA and how service providers should respond to takedowns. Among the useful cases:

• Perfect 10 v. Google
• Perfect 10 v. CCBill
• Perfect 10 v. Amazon
• Perfect 10 v. Visa

And, then, in 2014, Perfect 10 lost yet again, this time to Usenet provider Giganews. The case there was so egregious that in 2015, Perfect 10 was ordered to pay $5.6 million in legal fees to Giganews for filing such a bogus claim.

Perfect 10 appealed (of course) and the 9th Circuit has now given us yet another smackdown of Perfect 10, affirming the lower court decision, and saying that Perfect 10's theories about Usenet infringement are pretty crazy. One key point in the ruling, that Perfect 10 tried to argue, was that in light of the bizarre (and still nonsensical) Supreme Court Aereo ("looks like a duck") test, Giganews should be found to have been a direct infringer due to its interpretation of "volitional conduct." Specifically, Perfect 10 seemed to argue that Aereo wiped away the need to show "volitional conduct" by the parties accused of infringing. The court isn't buying it:

Contrary to Perfect 10’s contention, this requirement of causation remains an element of a direct infringement claim. In Fox Broadcasting, we explained that “[i]nfringement of the reproduction right requires copying by the defendant, which comprises a requirement that the defendant cause the copying.” ... In using this language, we indicated that causation is an element of a direct infringement claim.

Furthermore, the court points out that Perfect 10's interpretation of Aereo is just wrong:

The volitional-conduct requirement is consistent with the Aereo majority opinion, in which the Supreme Court held that Aereo, a service that streamed broadcast television programming to subscribers over the Internet, “perform[ed] publicly” as defined by the Transmit Clause.... First, the Aereo Court did not expressly address the volitional-conduct requirement for direct liability under the Copyright Act, nor did it directly dispute or comment on Justice Scalia’s explanation of the doctrine. Thus, as one court in the Central District of California subsequently opined, because “[t]he volitional conduct doctrine is a significant and long-standing rule, adopted by all Courts of Appeal to have considered it, . . . it would be folly to presume that Aereo categorically jettisoned it by implication.”

From there, the court makes quick work of each one of Perfect 10's claims, pointing out how each one appears to be divorced from the reality of the law. Perfect 10 seems to be one of the perfectly ridiculous plaintiffs. A key part of this case, for example, is that Giganews regularly pointed out that in order to remove postings from its Usenet servers, it needs the proper Message-ID and, in the rare cases where Perfect 10 passed those along, they were quickly removed. But most of the time, Perfect 10 refused to actually pass along Message-IDs, and seemed to indicate Giganews should still block those images:

we hold that there were no simple measures available that Giganews failed to take to remove Perfect 10’s works from its servers. Giganews presented sufficient evidence that Perfect 10’s proposed method for locating infringing messages was onerous and unreasonably complicated. Indeed, Giganews spent more than 20 hours processing 565 Message-IDs from Perfect 10 because they were not machine-readable. Giganews calculates that Perfect 10’s method would therefore require 354,000 hours of manual work for every 10 million Message- IDs – the number of Message-IDs that Giganews receives every month. Moreover, the record is clear that when Giganews did receive machine-readable Message-IDs, it immediately processed them and subsequently removed the messages from its servers.

There's also the question of "inducement" -- the Supreme Court-invented legal concept that sunk Grokster a little over a decade ago. Once again, there's nothing in what Giganews that comes even remotely close to inducing infringement:

Based on the record, no reasonable juror could conclude Giganews distributed its product “with the object of promoting its use to infringe copyright.”...

Perfect 10 points to entirely inconclusive evidence of any such objective to infringe copyrights. For example, Perfect 10 identifies Giganews’s advertising materials, which state that its product “has built-in MP3 and File Locators that search all Giganews newsgroups for music, pictures, and movies without having to download millions of messages.” Perfect 10 also points to a web page where a Giganews advertisement appears next to text written by another entity, which states that Giganews “provide[s] an uncensored news feed with up to 20 ssl encrypted connection and over 460 days worth of retention. That is over a years [sic] worth of access to downloadable music, movies and games.” However, neither of these advertisements nor any other evidence in the record indicates that Giganews itself promoted its product “with the object” of infringing copyright.

Perfect 10 further argues that Giganews has the object of promoting infringement because it: (1) “offers 25,000 terabytes of copyrighted materials . . . without permission,” (2) “continues to commercially exploit the content of known repeat infringers,” and (3) “advertises that it does not keep track of subscriber downloads, effectively encouraging infringement.” Even if true, none of this conduct suggests that Giganews clearly expressed an intent to promote infringement or took “affirmative steps . . . to foster infringement.”

The court also rejects the "vicarious" liability wackiness that Perfect 10 argues, noting that Perfect 10's theory seems to violate the very basic concept of who has standing in court:

Here, Perfect 10 argues for a rule that would allow a court to hold Giganews liable under a theory of vicarious liability by showing only that Giganews benefits financially from the infringement of another’s works, regardless of whether Giganews received any financial benefit from the specific infringement alleged. Such a rule would allow cases to be built on the rights of owners and the actions of users not before the court. At the very least, Perfect 10’s proposed rule is in significant tension with Article III’s standing requirement. At most, Perfect 10’s view runs counter to the requirement that there be a “causal connection between the injury and the conduct complained of[.]”

Finally, the court upheld the fee award for legal fees from Perfect 10, meaning that it may now be on the hook for many millions of dollars for bringing such a ridiculous lawsuit in the first place. Perfect 10 may, of course, ask the Supreme Court to hear a further appeal, but that seems unlikely to go anywhere. And, in the meantime, we've got another useful precedent sent by a wacky Perfect 10 case.

Filed Under: copyright, dmca, dmca 512, safe harbors, takedowns, volitional conduct
Companies: giganews, perfect 10

RIAA Still Pushing Its Bogus Message Of A 'Value Gap' And 'Fair Compensation'

from the can-we-review-some-history dept

The RIAA is not exactly known for being the most honest of organizations out there, but in an interview given by the organization's General Counsel, Steve Marks, the level of blatant dishonesty is taken to incredible new levels. I'm going to take just one paragraph and break down what a load of total bullshit it is, and hopefully it will demonstrate, yet again, why the RIAA should never be taken seriously in its claims. It's the final question in a short interview with the Hollywood Reporter, and the question is at the top:

What changes do you foresee in the landscape of music law over the next five years?

Issues like the “value gap” and obligations of intermediaries will continue to dominate the legal landscape. Ideally, the Byzantine legal structure today would give way to a system where creators are fairly compensated and competitors are on equal footing. Those who have an interest in music could come together to figure out solutions. While litigation can be an important tool, it often takes a long time and the results are unclear. Solutions between business and industry partners can clear a path through thorny legal issues. The combination of partnership and technology can go a long way to ensuring a healthy music ecosystem.

Let's take this bit by bit.

Issues like the "value gap"....

The "value gap" is a completely made up concept by the RIAA and friends, arguing that internet platforms aren't paying the record labels (not the artists) enough. It's based on a series of out and out lies, including the simply false claim that artists make more from vinyl record sales than from online streaming.

The "value gap" is the RIAA cherry picking misleading numbers to argue that internet platforms aren't paying them enough. Note that they don't make any effort to improve what they're doing -- they're just demanding more money from platforms... just because.

And, really, that's the same issue with the rest of that sentence:

... obligations of intermediaries will continue to dominate the legal landscape.

"Obligations of intermediaries." That's legal speak for "we want everyone else to act as our private police force, and they should automatically block infringing material or we should be able to sue them for billions of dollars." Never mind the fact that the industry can't even keep track of its own copyrights, and has been known to sue over authorized works or that the RIAA itself has a history of falsely claiming infringement on works that were actually authorized -- even in cases that resulted in the bogus takedown of a site that was sent promotional works to post. And yet it expects "intermediaries" (read: Google) to magically know which works are authorized and which are not -- and to face billions of dollars in possible judgments if it guesses wrong.

Ideally, the Byzantine legal structure today...

The reason copyright's legal structure today is so "Byzantine" is because of lobbying by the RIAA and its friends at the MPAA. Every time a new technology comes along, the RIAA flips out and demands a patchwork of add-ons to copyright law to protect its gatekeeper powers, allowing it to extract monopoly rents.

Of course, the "Byzantine legal structure" Marks is whining about here is actually the very one that the RIAA itself lobbies heavily for with the DMCA's 512 notice-and-takedown provisions. The RIAA wanted a way to censor the internet via copyright law, and the DMCA was the trick. The fact that the RIAA no longer likes the deal that it fought for is just a bad joke.

And, let's not even get into the "Byzantine" structure of RIAA label contracts designed to keep artists from actually getting paid... Or, wait, let's dig right into that following the next bit of insanity from Marks.

... give way to a system where creators are fairly compensated...

Wait. The RIAA is asking for "creators" to be "fairly compensated"? Hahahahahahaha. Oh, that's a good one. This is the same RIAA who has worked incredibly hard to screw over artists time and time again to make sure they are not fairly compensated? The same RIAA whose member labels create contracts where artists routinely note that they made $0 in royalties, because the label contracts make it so impossible to recoup the advance that when you ask for an "accounting" of how much money an album has made, the labels just make shit up to avoid paying.

These would also be the very same RIAA member labels who take the vast majority of the revenue from new platforms, leaving just a pittance for artists -- and then whine that it's the platforms not giving them a fair deal. The very same labels that make sure that artists get close to nothing of any money coming in to the label. And, yes, the very same labels who for years pretended that digital music was classified as the same as a CD sale -- with much lower royalty rates than "licensed" music, leading numerous artists to sue just to get what they were clearly owed. The very same labels that many artists have had to sue, just to get a proper accounting of what is owed.

So, I'm sorry, but what a load of bullshit for the RIAA, of all organizations, to claim that it's fighting for "fair compensation" for artists. The RIAA has a decades-long history of screwing over actual artists at basically every opportunity.

... competitors are on equal footing...

Another completely ridiculous claim. The "equal footing" that the RIAA is talking about here is forcing online platforms to all conform to one particular business model -- a totally unsustainable one where an insane percentage of revenue all flows back to the labels (not the artists) despite the fact that the labels fought these platforms and did absolutely nothing to help make them a success. The whole "equal footing" or "level playing field" is really just the RIAA demanding a particular business model and saying that any innovation in business models (even if they're better for actual artists) should not be allowed, unless the RIAA gives its okay. It's basically the "we don't want any innovation" stance.

Those who have an interest in music could come together to figure out solutions.

This is hilarious. For decades, the RIAA has been the major obstructionist party here. It was the internet industry that dragged the RIAA kicking and screaming into the 21st century while people like Marks focused on suing music fans. To now claim that he just wants to "come together to figure out solutions" is laughable. The only "solutions" the RIAA wants are ones where it does none of the work, and it gets all of the money.

While litigation can be an important tool, it often takes a long time and the results are unclear.

Translation: we sued a bunch of fans and that made everyone hate us. Also, we sued a bunch of platforms and lost badly because the law isn't actually what we want it to be.

Solutions between business and industry partners can clear a path through thorny legal issues. The combination of partnership and technology can go a long way to ensuring a healthy music ecosystem.

This is just a repeat of the opening line, basically. It's the RIAA saying that the internet industry needs to solve all of its problems, and what it means is that the recording industry doesn't want to budge an inch, doesn't want to do anything, and just wants the internet companies to give tons of money to the labels and to wave a magic wand and make piracy disappear.

Filed Under: copyright, dmca, dmca 512, fair compensation, intermediary liability, safe harbors, steve marks, value gap
Companies: riaa

Every Website Needs To Re-register With The Copyright Office, Who Can't Build A Functioning System

from the are-you-serious? dept

As we mentioned last month, the Copyright Office -- despite being warned this was a bad idea -- has decided to implement a brand new system for websites to register DMCA agents, and has done so in a way that will undoubtedly fuck over many websites. It's already ridiculous enough that in order to be fully protected under the DMCA's safe harbor rules (that say you're not liable if someone posts infringing material to your website), you need to register a designated "DMCA agent" with the Copyright Office. The idea behind this is that by registering an agent, copyright holders will be able to look up who to send a takedown notice to. And, sure, that makes sense, but remember that this is the same Copyright Office that supports not requiring copyright holders to register their works, meaning that there may not be any legitimate way to contact copyright holders back.

The reason for the new system is that the old system was just ridiculous -- on that everyone can agree. You had to fill out a paper form, sign it, and send it in. The Copyright Office has been way behind on digitizing everything, so moving to a web based system is a good thing. Also, the old system required payment of over $100, while the new one is just $6. That's all good. The problem is twofold: first, the Copyright Office has said that it is throwing out all the old registrations, and if you want to retain your safe harbors, you need to re-register. There's a grace period through the end of next year, but plenty of sites who don't follow the Copyright Office's every move are going to miss this, and will no longer have an officially registered agent with the Copyright Office (it's possible that, should this issue go to court, a platform could reasonably argue that it still did meet the statutory requirements in the original registration, but why force site owners through that hoop in the first place). The second problem, is that this new system will toss out records every three years, so if you forget to renew, you once again can lose your legal safe harbors. This puts tons of websites at serious risk, removing key protections and opening them up to lawsuits from copyright trolls.

Either way, the Copyright Office opened the doors on the new system yesterday, and so I went ahead and re-registered Techdirt. And, let's just say, the Copyright Office has a reputation for being technically clueless, and boy, does it live up to that reputation with its new system -- though, to be fair, as the Copyright Office's General Counsel reminded me on Twitter, it's actually the Library of Congress that built the system. First off, to register a new agent, you need to first register with the Copyright Office's system. As Eric Goldman points out, the system is not designed for individuals or sole proprietorships, even though those people should be able to get DMCA safe harbor protections as well. Specifically, to register, it requires an organization name and a "second contact" name and information. I'm not sure what individuals should do, other than maybe make something up -- though, before you even get started, the system pops up a warning suggesting that you may face criminal charges under the CFAA if you do anything wrong (while it means if you try to hack the system, the wording may confuse many people not familiar with the law). Nice touch.

Oh, and then there's the password system. Like many people, I use a password manager, which also will generate strong passwords for you. I went through the process of filling out my info, and generated a strong password... and I got back an error message. It seems that the Copyright Office has taken what used to be considered best practices, and then took it to an insane extreme: First of all, the US government, in the form of NIST, recently released new guidelines for password policies for any US government websites. And the Copyright Office ignores them, because whoever designed the new DMCA system seems to not give a shit and not be even remotely aware of good security practices these days. Here's what the new rules say:

No composition rules. What this means is, no more rules that force you to use particular characters or combinations, like those daunting conditions on some password reset pages that say, “Your password must contain one lowercase letter, one uppercase letter, one number, four symbols but not &%#@_, and the surname of at least one astronaut.”

Let people choose freely, and encourage longer phrases instead of hard-to-remember passwords or illusory complexity such as pA55w+rd.

So, yeah, nice job Copyright Office for ignoring what you're supposed to do. Second, even if those rules did make sense, by lumping together all of them, and then adding the absolutely ridiculous and bad security practice of saying "must not have any repeated letters, numbers, or special characters," you actually reduce randomness and make passwords less secure. This is just bad security.

To deal with this rule, I generated a much longer password, and then manually went through and removed any repeated letters, numbers or special characters, and made sure that all of the other rules were met. They were. I hit submit. The system rejected it, and gave me the exact same error message. I tried again. Same problem. I kept trying things for about 20 minutes until I figured out what the problem was. You see above, where it says "and special character "!@#$%^&*()""? Well, in my first attempt at a password I had two special characters: ? and >. I incorrectly assumed that when they say "special character" they mean any special character on the keyboard, and not just those limited to the ones above the number line on your keyboard. Once I realized that might be the issue, I still had a problem. And that's because my new password had " as a special character. I incorrectly assumed that was okay because it's in that list above, right? Except, no, it's not. It's just put around those symbols for no reason at all except to fool people. It would be nice if the error message actually told you that you could only use those characters and that the " wasn't included. Would have saved me a lot of time.

Once I finally finished that, the system sent me a confirmation/validation email (good), which I used to confirm my email and log into the system... only to discover that everything I had just done... was not actually registering a DMCA agent. It was just to register your account to use the Copyright Office's DMCA system. So I had to then go and fill out another form to register our DMCA agent (and I won't even get into the fact that once you've activated your account, the message telling you to "click here" to login to designate an agent makes it so that it's not at all where to actually click -- great design guys!).

Finally, once I'm all registered, and despite the fact that I'm very clearly registered in the United States, the system says I'm in Canada. Because, apparently, the genius IT staff thinks that the "CA", which everywhere else means California, means Canada in their own system. Because whatever, nothing matters. So, yes, I eventually paid my $6 and got registered, but lots of people won't and lots of sites are now going to expose themselves to bogus lawsuits. And for those who do get through this process, you may end up in Canada. So anyway, off we go to this new era, in which websites are much more at risk of losing their safe harbor protections, and to make it more fun, the system you need to use to register yourself is buggy as hell with a bunch of bad design practices. It's almost as if they want websites to lose their safe harbors. Considering that the key role of the Copyright Office is to register stuff (the boss of the office is literally called "The Register"), it seems fairly ridiculous that they make it so difficult to register DMCA agents, and then force renewal every three years (while at the same time insisting that any renewal requirement for copyright holders would go against the natural order of things and bring famine and pestilence upon the land).

Filed Under: copyright office, dmca, dmca 512, dmca agent, library of congress, nist, passwords, safe harbors

Would You Be Tempted By This 'Grand Bargain' On Privacy?

from the behold-the-information-fiduciaries dept

Digital privacy and the control of personal data have emerged as two of the main online battlegrounds in recent years, as the flood of Techdirt posts on the subject attests. One of the central questions is how we can use global online services like Facebook and Google without surrendering control of the information we provide them. The US and the EU take contrasting approaches here, both of which have attracted plenty of supporters and detractors.

But what about alternatives: might there be another way to tackle this crucial subject that is effective and reasonably fair to all? Jack M. Balkin and Jonathan Zittrain, respectively professors at the law schools of Yale and Harvard, believe there is. Together, they've written an article that appears in The Atlantic, entitled "A Grand Bargain to Make Tech Companies Trustworthy," while Balkin has published a more rigorous 52-page version for UC Davis Law Review (pdf). Their starting point is the fact that many of the problems encountered with digital privacy have already been solved in the analog world:

Doctors, lawyers, and accountants ... have to keep our secrets and they can't use the information they collect about us against our interests. Because doctors, lawyers, and accountants know so much about us, and because we have to depend on them, the law requires them to act in good faith -- on pain of loss of their license to practice, and a lawsuit by their clients. The law even protects them to various degrees from being compelled to release the private information they have learned.

These are examples of "fiduciaries", "a person or business with an obligation to act in a trustworthy manner in the interest of another." The idea of Balkin and Zittrain is to create a new class of "information fiduciaries" who are similarly permitted to work with our personal data, on the condition that they do not use it against our interests. For example:

Google Maps shouldn't recommend a drive past an IHOP as the "best route" on your way to a meeting from an airport simply because IHOP gave it $20. And if Mark Zuckerberg supports the Democrat in a particular election, Facebook shouldn't be able to use its data analysis to remind its Democratic users that it's election day -- while neglecting to remind, or actively discouraging, people it thinks will vote for Republicans.

That sounds an interesting approach, but the tricky part, of course, is drawing up what exactly the responsibilities of these new information fiduciaries should be -- and what they should get in return. Balkin and Zittrain propose something they dub a "grand bargain". Here's what the online services gathering our data would promise:

They would agree to a set of fair information practices, including security and privacy guarantees, and disclosure of breaches. They would promise not to leverage personal data to unfairly discriminate against or abuse the trust of end users. And they would not sell or distribute consumer information except to those who agreed to similar rules. In return, the federal government would preempt a wide range of state and local laws.

And here's something else that those signing up to this code would get by way of recompense:

Congress could respond with a "Digital Millennium Privacy Act" that offers a parallel trade-off to that of the DMCA: accept the federal government's rules of fair dealing and gain a safe harbor from uncertain legal liability, or stand pat with the status quo.

In other words, alongside the DMCA, a new DMPA. So what do Techdirt readers think: is that a bargain you'd accept?

Follow me @glynmoody on Twitter or identi.ca, and +glynmoody on Google+

Filed Under: fiduciary responsibility, grand bargain, privacy, safe harbors

Former UMG Exec: Major Label Music Should Cost More And DMCA Safe Harbors Should Be Destroyed

from the st(r)eaming-pile-of-horseshit dept

If you're going to argue against YouTube, Spotify, etc. and the supposed wholesale screwing of artists, it helps if:

A. You're not a former member of an entity with decades of experience in screwing artists, and

B. You have some grasp of basic economic concepts.

Paul Young, a former director of licensing for Universal Music Group, has an op-ed posted at The Hill decrying the unfairness of streaming services and the wrongness of the DMCA. But any point he's trying to make is buried under ignorance and the demand that some artists be treated more equally than others.

The music community’s grievances are the following: (1) The DMCA allows internet service providers to build ad-based businesses built upon infringing content that the artists cannot effectively police through “notice and take down” procedures; (2) If and when service providers pay the artists, it’s on the providers’ hopelessly complex terms, resulting in payments that offer fractions of pennies per view; (3) Service providers offer “free” teaser music to the public when copyright owners should have the absolute right to control distribution of their music.

(1) The DMCA sucks, but it sucks the way studios and labels wanted it to. Now they don't like it and they want to change it to suck in a different way. They're also arguing for "notice and STAY down," which works out great for labels/studios… unless they're inadvertently targeting their OWN site with unvetted DMCA notices.

(2) "Hopelessly complex terms" are included in almost every royalty agreement. Service providers don't have a monopoly on this behavior.

(3) If copyright owners want "absolute control," they're free to pull their music, movies, etc. from services they don't like. Not many have, because not many are willing to give up this revenue stream they constantly claim isn't paying enough. As for the artists themselves, they have no "absolute control" -- not if they're signed to a label. Young may be writing about screwed artists, but he's really only interested in protecting the "rights" of gatekeepers.

He confirms this by claiming major labels deserve to be treated better than other copyright owners.

Free music streaming is fair only for original, home-based music. However, what the public streams mostly comprises of premium, professional content. This content is expensive to create, risky to market and requires many behind-the- scene professionals.

It's OK for service providers to screw the little guy. But don't mess with the majors. They have oh-so-many mouths to feed -- mouths that are more deserving of revenue than creators that don't cut them in on the deal. Young wants a better deal for artists, but with a caste system attached.

Here's more:

Every minute, 400 hours of footage is uploaded to YouTube, much of it synched to copyrighted music. [Note: citation needed.] This gives YouTube a distinct advantage over Spotify, Tidal, Apple Music and other services that do not offer user-generated streaming of works they do not control.

Much of this YouTube footage is monetized with paid ads. YouTube retains a minimum of 45 percent of this revenue, at prices it sets (but does not reveal), irrespective of the content’s creation costs.

Major label music should "pay" more -- whether it's a premium in subscription fees or a larger cut of advertising revenue payouts. Why? Because it costs more to make. But production costs have little to do with pricing -- and that includes advertising revenue.

If we lived in Young's world, tickets to "Paranormal Activity" (production budget: $450,000) would be $5 and tickets to "Avatar" (production budget $425,000,000) would be $4,700. [Productions costs taken from here.] Buying My Bloody Valentine's "Loveless" would bankrupt music fans just as certainly as it nearly financially destroyed the label that released it, while Owl City's basement-produced hit album could presumably be had for a handful of pocket change.

Young -- and the label he worked for -- appear to believe the internet owes them a living. But just them. Not the rest of these shabby artists the labels are unwilling to gatekeep for.

Once Young has finished deliberately misunderstanding how markets work, he moves on to the point of his op-ed, which begins with him recycling the stupid "built on the backs of artists" trope that presumes no service provider could ever become successful without engaging in copyright infringement. Then he goes right off the rails.

I would argue for stronger, industry-wide measures: a complete repeal of the safe harbor provisions of the DMCA and a prohibition on any unauthorized uploading of the property of others.

The first part is insane. Young actually wants service providers to be fully responsible for the actions of their users. Like the ongoing attacks on Section 230 of the CDA, this is a very lazy, very dangerous attempt to paint targets on the backs of those who have money, rather than perform the more difficult work of targeting the users who actually commit copyright infringement, make defamatory statements, etc.

This line of thinking says labels and studios need do nothing more than bitch loudly and expect everyone else to solve their problems -- whether it's websites, legislators, or internet service providers. This is how they "protect" their artists. By complaining stupidly and demanding the internet be torn apart and rebuilt to their specifications, damn the collateral damage.

The second part is just moronic. Every site prohibits unauthorized uploadings. Active efforts are made to police uploaded content and any site that wants to stay alive for long sets up a DMCA agent to respond to takedown notices. But it's never enough. Young apparently feels current prohibitions just aren't prohibitive enough, as though there were a magical tech solution somewhere that might prevent any unauthorized uploading from taking place ever again, if only service providers weren't so busy raking in billions on the backs of major label artists.

The whole op-ed is an embarrassment. But, unfortunately, it's par for the course in major label/studio arguments. It's worse than the blind leading the naked. It's the ignorant leading the angry. It's short-sighted rent-seeking by people who somehow think they can force more revenue out of service providers by destroying the protections that have allowed them to prosper.

Filed Under: copyright, dmca, major labels, paul young, safe harbors, takedowns
Companies: umg, universal music group

NRA Trademark Complaint Over Yes Men Parody Takes Down 38,000 Websites

from the because-internet-madness dept

You may have seen last week a website called ShareTheSafety.org, which was an impressively detailed parody site, pretending to be from the National Rifle Association (NRA) and gunmaker Smith & Wesson about a "buy one, give one" handgun program -- where it claimed you'd buy a handgun, and a free handgun would then be sent to an inner city individual "in need" of a gun. The parody was deep and thorough -- including setting up another domain, NRApress.org, in order to post a single press release about this program, and which cleverly is designed with actual links to actual NRA press releases and, if you just go to the main domain, it redirects to the NRA's actual press site. The site definitely fooled a few people, and there were lots of questions popping up on Twitter about whether or not it was real or parody.

Of course, a day or so after it started spreading, it was revealed that famed pranksters The Yes Men were behind it. They also posted a promo video and a fake press conference announcing the program (the fake press conference being a fairly common Yes Men trope).

Not surprisingly, the NRA was not pleased with all of this, and apparently sent some sort of takedown first to CloudFlare, which passed on the notice to the hosting company Digital Ocean. Digital Ocean then passed along the notice to another company, Surge, which is a platform allowing individuals to build static web pages pretty quickly and easily. The Yes Men, it appears, used Surge. It appears that the NRA argued that the site was a trademark violation.

Two important points: (1) unlike all sorts of other content, there is no official legal "safe harbor" for platforms hosting trademark infringing content. CDA 230 explicitly exempts "intellectual property," in part because of the DMCA, but the DMCA only covers copyright, not trademarks. There are, however, cases such as Tiffany v. eBay that says sites can still be protected, though it helps to take action to stop infringement. (2) There is a pretty clear and widely accepted parody defense to trademark infringement, which almost always finds the use of trademarks in parody protected.

Either way, it appears that Digital Ocean freaked out and... took all of Surge down, meaning that 38,000 websites disappeared in the blink of an eye, because the NRA couldn't take a parody, and various platforms kinda flipped out over possible liability over trademark infringement. Surge claims that it had responded to Digital Ocean within 22 minutes of first receiving the notice, and Digital Ocean had told it to "counter claim" to stop the site from being taken down -- but then changed its mind almost immediately and took down the entire site.

After quite a bit of public discussion, eventually Digital Ocean turned Surge back on, but the Yes Men parody site remained down. A few hours later, that site also came back online.

However, as Parker Higgins noted in a rather epic tweetstorm, it's easy to point the blame finger at Digital Ocean which shut down those 38,000 websites over a questionable trademark claim from the NRA, but the problem here is really more structural, with the law and how we handle intermediary liability issues for platforms and the user generated content they host. With copyright, the DMCA creates incentives for censorship (take down to get protected), but at least there's a clear process laid out, that includes limits. With trademark, without any official protections, you can see why Digital Ocean would have strong incentive to just take Surge down. It doesn't want to face liability for infringement.

This is why we talk so much about Section 230 of the CDA and the importance of the widespread immunity it creates for platforms. It's not so much because it helps the companies who run those platforms, but rather because it protects the free speech of the individuals who use those platforms. Without those protections, the default response from many platform providers is "take it all down." It's a recipe for censorship. It's a recipe for shutting down controversial speech or different ideas or even just the places one can go to speak those ideas. And, no matter what you think of the NRA or the Yes Men, you should be concerned about the 37,999 other sites that were down for a while, all because a big trade group wasn't happy with a parody.

And, as Higgins notes, this is not a new situation. In 2010, Homeland Security took down 73,000 blogs, because a single one hosted terrorism related material. And in 2012, a copyright takedown notice from publishing giant Pearson took down 1.5 million education blogs, because just one of them hosted content that Pearson thought was infringing. You can argue that those were mistakes, and once they got publicity, the sites were put back up, but that's not really the point, is it? The fact that this content got taken down at all should be a massive concern. And, yeah, the big numbers make headlines and get put back up, but what about the case where it's a shared server with 2, 3 or 8 accounts? Those don't get attention and thus there's much less pressure to ever put them back up.

Notice and takedown style setups are a real problem, not just when they're abused, but because of the way the internet works. Having much stronger, Section 230-style provisions protecting sites dealing with copyright and trademark claims would do a much better job protecting freedom of expression online.

Filed Under: censorship, dmca, free speech, immunity, intermediary liability, parody, safe harbors, take downs, trademark, yes men
Companies: cloudflare, digital ocean, nra, surge, yes men