Feds Response To Rojadirecta Demonstrates How S.978 Can Be Abused To Put People In Jail

from the in-their-own-words dept

We've had a bunch of posts about the potential unintended consequences of the anti-streaming law S.978 from Senators Amy Klobuchar, John Cornyn and Christopher Coons, and how it could be used to put people in jail for up to five years for merely embedding videos from YouTube, or for lipsynching. Supporters of the bill keep trying to claim this isn't true, and point out (accurately) that this is not what the bill is targeted at. It's true that this is not the target of the bill, but could it be used that way? Absolutely.

Supporters of the bill again point to the key provisions that would make the embedding of a video liable under the law, to claim that my statements are an exaggeration. Specifically, they highlight that a public performance (i.e., embedding of the video) is only a felony if "(1) it is willful (knowing and intentional) infringement (2) for commercial advantage or private financial gain (3) involving 10 or more performances within 180 days (4) that cause more than $2,500 in loss to the rights holder." As some supporters of the law state, embedding YouTube videos does not meet that threshold.

That's incorrect. The public performance is clear. Embedding on a website qualifies as a public performance due to the ridiculously broad and vague description of what constitutes a public performance under the law. Now, on to the other points. We can now support many of them (the ones that supporters of the law claim are impossible to show) with the Justice Department's own words, thanks to the recent filing against Rojadirecta's petition to retrieve its domain.

First up... willful infringement. The government opens by claiming that to establish "willfulness" you only need to show that the defendant "recklessly disregarded the possibility" that embedding the video might by infringing. Not only that, but it even suggests that all it needs to show is willfulness in the "intent to copy," rather than the intent to infringe.

Although the Second Circuit held in 1943 that willful intent in the criminal copyright context need only be shown as to the intent to copy the works, and not as to the intent to infringe the copyright... recent decisions in the Second Circuit in civil cases have made clear that "[t]he standard is simply whether the defendant had knowledge that its conduct represented infringement or perhaps recklessly disregarded the possibility."

Got that? The government believes that if you had willful intent just to copy the content -- as everyone does if you embed a video -- then willfulness can be established for criminal cases. If they bring in the standard for civil cases, then all they have to show is that you didn't pay attention to see if the video was covered by copyright law, and thus "recklessly disregarded the possibility." In other words, the government makes it clear that the bar here is low. Very, very low. Pretty much anyone who embeds a video has taken a proactive step. Willful? Check.

Next up is the big one. Personal or financial gain. This is the one that supporters of the bill insist is why my points are not valid. But, again, let's see what the government itself has to say in the Rojadirecta filing, in proving financial gain. Here, the government makes it clear that even if you don't get direct financial gain from the video, if you put any ads around it, even the automated AdSense ads that earn nothing, they have enough to nab you for financial gain:

As an initial matter, Title 17, United States Code, Section 506(a) "does not require that a defendant actually realize a commercial advantage or private financial gain. It is only necessary that the activity be for the purpose of financial gain or benefit.".... Moreover, courts have held that "[f]inancial benefit exists where the availability of infringing material 'acts as a "draw" for customers.'" ... It appears that Puerto 80's revenue and profitability are directly dependent upon increases in user base and enhanced Internet traffic to the website. Thus, even if Puerto 80 does not directly profit by receiving payment from the sites to which it links that stream the content, in at least some sense, Puerto 80 apparently benefits financially from making available copyright protected works on the Rojadirecta website.

So there you have it, in the government's own words. If you have any ads on your website, they can claim that the embed "acts as a draw," and they've got enough to prove financial gain. It apparently doesn't matter if you earn pennies from it, or if the money that comes in doesn't even cover your basic costs:

the Government's investigation has revealed that the CEO of Puerto 80, the owner of the Rojadirecta Domain Names, has in fact received thousands of dollars since at least October 2005 from Google AdSense, a free program that allows website publishers to earn revenue by displaying advertisements that are likely to be relevant and of interest to users of those websites.

Okay, so let's start at October 2005, and the domain was seized on February 1, 2011. By my count, that's 73 months. Note, carefully, that they claim "thousands" of dollars earned from AdSense. Not even "tens of thousands" of dollars. At most, then, they seem to be saying he earned $19,999 (though, I would imagine they'd round up in that case). But to give the government the benefit of the doubt here, let's take that number as the absolute maximum. That would mean, at a maximum, Rojadirecta earned a whopping $273.96 per month. For a popular website. I can tell you from first hand experience (and Techdirt gets less traffic than Rojadirecta) that it costs a hell of a lot more than that in basic bandwidth costs to run a site that gets this kind of traffic.

To claim that this is "financial gain," is laughable. But, apparently it's good enough for the feds in this case. And the government's own filing clearly supports my claims -- which supporters of the bill claimed were laughable -- that the government can and will claim that any advertising, no matter how little, represents financial and personal gain. Financial gain? Check.

Okay. Involving 10 or more performances in 180 days. While I'm sure some videos don't get that many, this is not a high threshold to reach -- especially if the feds themselves view the embeds a couple times. 10+ performances? Check.

Finally, that cause more than $2,500 in loss to the rights holder, again this is incredibly easy to show. Given the industry's history of massively exaggerating its "losses," combined with the feds seeming willingness to completely take the industry's word on such losses, does anyone legitimately believe that the feds won't have an easy claim of $2,500 in "loss" to the rightsholder, should they wish to go after someone? $2,500 loss? Check.

So, there you have it. Using the Justice Department's own words, it's not difficult to see how S.978 can be abused to go after a very large number of people who embed a YouTube video that includes some infringing content (which can include an awful lot of videos).

Filed Under: amy klobuchar, chris coons, copyright, criminal, john cornyn, rojadirecta, s.978, streaming

Tons Of YouTube Users Putting Up Videos In Protest To S.978

from the good-for-them dept

We've been talking a lot about Senate bill S.978, from Senators Amy Klobuchar, John Cornyn and Christopher Coons, which would adjust the criminal copyright statutes to make some forms of linking/embedding/streaming a felony for which people could face 5 years in jail. As we've noted from the beginning, the really scary part is the ignorance of people supporting this bill, in ignoring how it could make tons of people liable. They insist that there's no problem here because (a) the bill requires the streams/embeds to be for commercial purposes and (b) because the "value" has to be greater than $2,500. What they ignore (despite plenty of people pointing it out) is that it's not hard for people to show that something is done for commercial purposes. If you have ads on your site, even if they make you pennies, you're "making money." And the "value" of the work can easily be estimated or exaggerated at over $2,500. Again, no one is claiming that the feds are suddenly going to go after your average YouTube embedder, but the problem with this change to the law is that it could be used that way. Federal prosecutors have made use of ambiguous or questionable laws like this in the past, such as attempts to misuse the CFAA bill, which is designed for those who break into computer systems, against people like Lori Drew who was mean to a teenager on MySpace.

We've noted that the bill is getting more attention of late, and it appears that the YouTube community has awakened to the problems with it. If you now do a YouTube search on s978, there are a rapidly growing number of results, with plenty of people speaking out against the bill, in part due to claims and some videos from YouTubers related to worries from video gamers.

Tragically, going through a bunch of the videos... nearly all of them gets the facts wrong in some manner (sometimes getting nearly all the details wrong). I worry about that, because it allows politicians to brush aside the very real concerns about the unintended consequences of the bill. Also, some of the incorrect statements seem to lead to people saying that the bill won't pass because "something that stupid can't pass." And, indeed, no bill is going to pass that will force all these people to take their videos down or to fine them for old videos as some have suggested. The risk is in how the bill could be used by federal prosecutors to go after people embedding certain videos, and then using the letter of the law (though clearly not the spirit) to go after people.

It's good to see so many people speaking out, but it would be better if they spoke factually about the bill, rather than running with some of the wilder assumptions that people seem to be making.

Filed Under: amy klobuchar, christopher coons, copyright, felony, john cornyn, protests, s.978, streaming, video gamers

Video Gamers Realizing Streaming Criminalization Bill Might Make A Lot Of Them Into Criminals

from the a-joke-of-a-bill dept

We've been covering just what an awful bill S.978 is. That's the anti-streaming, anti-embedding bill from Senators Amy Klobuchar, John Cornyn and Christopher Coons, which would allow law enforcement to seek jail time against people for streaming infringing works. As I've explained before, the clear intent of the bill is to go after sites that are streaming TV and movies. And the method to do so is to make a pretty small change to the criminal side of copyright law. Criminal copyright law was limited to reproduction and distribution among the various "rights" given to copyright holders. Civil law covers many more. This bill seeks to add "public performance" to the list of things that can be considered criminally infringing, potentially sentencing people to five years in jail.

The problem is that "public performance" is not at all well-defined. And while the bill does require that the effort be done as a commercial enterprise to be criminally liable, the fact that pretty much anyone can have AdSense or simple ads on their website makes nearly any website a commercial operation these days. And, yes, there have been cases where people have used simple ads, even if they make a few dollars total, as evidence of a "commercial" operation.

And that's a huge problem, because this bill, if it becomes law creates a massive liability for pretty much anyone who embeds or streams anything. The backers of the bill claim it's clearly not intended for the FBI to go bust down the door of someone singing along with their favorite song in a video... but it's entirely possible that the law could be used that way, and that's why people should be concerned about it. We've seen time and time again that federal prosecutors will toss in charges on questionable laws like these when they're going after people for something else and don't have enough evidence. The risk that this law will be abused is quite high.

Thankfully, more and more people are recognizing this. Dennis S. was a first of a bunch of you to note that the video gamers have jumped onto this cause in a big bad way, starting with a great overview of the problems with S.978 for video gamers who show footage from video games, and also points us to a YouTube video of a gamer explaining why people should be worried. That video doesn't quite have all the legal details straight (which is too bad), but it is generating attention, with over 400,000 plays start to finish (for a 17 minute video). Hopefully many of the gamers are making their voices heard among politicians.

Filed Under: copyright, criminal law, public performance, streaming, video games, youtube

Senators Unconcerned About Massive Unintended Consequences Of Criminalizing People For Embedding YouTube Videos

from the shame-on-them dept

This is really no surprise, but the same Senate Judiciary Committee that unanimously approved the PROTECT IP Act, despite worries from internet experts and major media about how it would break the internet, has now also unanimously approved the anti-internet streaming bill that makes it a felony to stream certain videos online -- potentially putting people in jail for embedding YouTube videos or just putting up YouTube lip synching videos.

What's really troubling here is that the media and plenty of concerned citizens have directly raised the issues about the unintended consequences of this law. And while Senators Amy Klobuchar, John Cornyn and Christopher Coons continue to insist that (of course) the law is not intended to be used against such people, they have made no move to fix the bill. Even supporters of this bill, who insisted that we were wrong about what the bill allowed, eventually conceded that our argument was accurate and that this bill could be used to put people in jail for embedding a YouTube video or doing a lip synch video.

And that's a huge, huge problem. Of course, no one thinks the bill is for that purpose directly or that it's going to be widely used for such purposes. However, the bill, as written, clearly allows law enforcement to charge people with a felony for that, assuming it meets a few other conditions. But those conditions are pretty minimal (ads on your page? you're in trouble...). The risk here of abuse is a serious risk, and it's incredibly troubling that Klobuchar, Cornyn and Coons failed to change or adapt the bill, and worse that the rest of the Senate Judiciary Committee allowed the bill to move forward in such a broken state. They were clearly made aware of problems with the bill, but directly chose not to make any changes. How do you explain that other than incompetence or corruption?

Filed Under: amy klobuchar, christopher coons, copyright, felony, john cornyn, performance, streaming

As Pandora Goes Public, How Come No One Is Pointing Out That It Misled The Press About Being Profitable?

from the the-misleading-state-of-startups dept

We mentioned this earlier, but with Pandora scheduled to go public this week, it seems to bear repeating. Over the last couple of years, Pandora, which is a service that I'm a fan of, has repeatedly told the press that it is profitable. You can see various reports on its profitability from TechCrunch, Mashable, Hypebot and News.com -- all generally good publications that don't get easily tricked. Yet, when the company filed to go public, it became clear that it wasn't profitable. Not only that, but it wasn't close to profitable and might never be profitable.

This really shouldn't be a surprise. If you knew anything about typical ad rates and the costs associated with (a) streaming bandwidth and (b) the licensing details for streaming music, the math really didn't add up. And it's just now, on the eve of what is likely to be a very successful IPO, that more people are realizing that the company is basically a money losing machine, and that its revenue doesn't cover its basic expenses:

There is a fundamental problem with Pandora Media's business model: the more its product is used, the more money it loses. That's the opposite of what makes a company viable in the long term. Nevertheless, the online music service is asking public shareholders to finance its growth so it can draw more listeners, increase usage and ... lose more money, presumably.

This is unfortunate on multiple levels. The biggest issue here is, not surprisingly, the ridiculously high costs of the licenses that Pandora has to pay. Even though plenty of folks have found that Pandora is an excellent source to discover new music, and has turned many people (myself included) on to new artists we'd never have heard of otherwise, the recording industry still demanded ridiculously high royalty rates, which it eventually extracted from Pandora. Oddly, at the time of the agreement, Pandora cheered on the deal saying that the rates made sense (and then used the deal to raise a lot more money). But with the details showing that the costs are keeping the site unprofitable, and may fundamentally make it so that the site can't be profitable, shouldn't we be questioning how reasonable those rates are? And, while we're at it, can we question the earlier claims of profitability from the company to the press? Lots of private startups make this sort of claim to the press, and they never seem to get called on it, which is why it's unfortunate that no one seems to have challenged Pandora on its claims.

Filed Under: music, profitability, streaming
Companies: pandora

People Realizing New Anti-Streaming Criminal Copyright Bill Could Mean Jail Time For Lip Synchers

from the unintended-consequences dept

We recently wrote about the horrible bill introduced by Senators Amy Klobuchar, John Cornyn and Christopher Coons to extend criminal copyright law to include "public performances" as being potentially criminal. As we explained at the time, current copyright law is split into civil and criminal parts, with most violations being civil in nature. But this new bill -- unfortunately recommended by White House Copyright Czar Victoria Espinel -- would extend the criminal provisions to include "public performances." Supporters claim that the lack of a "public performances" provision in criminal copyright law was a "loophole" or an oversight. But that's incorrect. There are good reasons why public performances aren't covered by criminal copyright law, in that it rarely makes sense to consider them criminal issues.

Yet, because the entertainment industry is freaking out about sites that embed and stream infringing content, and want law enforcement to put people in jail over it, rather than filing civil lawsuits, this move was made to extend criminal copyright law. However, the idea and the suggestion were done with very little thought towards what this really means in an internet age, when almost everything you do online could be considered "a public performance." We already pointed to one possibility: that people embedding YouTube videos could face five years in jail. Now, others are pointing out that it could also put kids who lip sync to popular songs, and post the resulting videos on YouTube, in jail as well.

Now, of course, all of the supporters of this bill insist that's just crazy talk. After all, this bill is not intended for that purpose at all. It's solely intended to go after "criminals" who are doing these things for profit:

The new law will not target “individuals or families streaming movies at home,” said a statement from Klobuchar. She said the bill will instead target “criminals that are intentionally streaming thousands of dollars in stolen digital content and profiting from it.”

That's nice to say, and I'm sure she means it. But this shows a massive misunderstanding of how the internet works. After all, plenty of people doing these kinds of videos may put some ads around them, and plenty of them get to be really, really big. And, as we've seen with ICE's domain seizures, they consider any use of advertising, even if it makes a pittance, to be "profiting from infringement." These days, everything has ads on it, and it's easy for anyone to sign up for a simple ad account and make a few bucks here and there for your activities online.

And that's the problem. While I'm sure no one supporting this bill thinks it'll be used in this manner, and I'm sure law enforcement has no interest or intention to go after lip-syncing teens, we've all seen how laws like this get stretched and used to bring people up on charges, when no other law applies. Remember the Lori Drew case? That involved the feds stretching a "computer hacking" law to claim she "hacked" MySpace by creating a fake account on the service, allowing them to charge her with a felony. Similarly, we've seen officials charge people with wiretapping for merely wearing a helmet cam while riding a motorcycle.

The point is that when law enforcement wants to charge someone with a felony where there's no obvious match, they'll often stretch laws like this to find something they can use. And this extension of criminal copyright law to include a "public performance" seems ripe for misuse. If Klobuchar and the others are serious about this, they should go back to the drawing board and rewrite the bill so it's not nearly so broad and won't open up so many potential unintended consequences.

Filed Under: copyright, criminal law, lip synching, public performance, streaming, youtube

Yet Another Company Rigs Up A Silly Technical Setup To Let You Watch Broadcast TV On Your Mobile Device

from the legality's-a-mess dept

And here we go again. Peter Kafka has the details of a new company, called Bamboom, which will let people stream broadcast TV to their iPads, and which must be waiting for the inevitable lawsuit. The idea appears to be a mix of ivi and Zediva.

If you remember, ivi is the company that wants to stream broadcast television, and is claiming it's legal based on a questionable interpretation of current copyright laws -- an interpretation that (so far) the courts aren't buying. Zediva, on the other hand, is offering streaming DVDs by literally placing DVDs in DVD players and streaming just that one copy to users, relying on the Second Circuit court's ruling in the Cablevision case to suggest that if you can do something legally in your living room, it should also be legal to be done at a hosting center. In other words, it's arguing that the length of the cord shouldn't matter. If a DVD player is in your home or in a data center a few miles away, does it matter if the process (put DVD in player, watch on screen) is the same? The MPAA has sued and Zediva is currently fighting that lawsuit (with some impressive legal horsepower).

Bamboom basically appears to be using both of these arguments. It's streaming broadcast TV only, and is also assigning a single antenna to each user who is streaming.

The company is still going to get sued, of course. The TV companies wouldn't have it any other way. But, really, all it demonstrates is how ridiculous the laws are here. This company has to set up a ridiculously convoluted technical system that is not at all efficient and is downright wasteful, just to provide a simple service that is technically easy to provide if legal complications didn't get in the way. I don't think the service is particularly useful (do people still watch broadcast TV?), but that doesn't mean it should be illegal.

Filed Under: broadcast tv, copyright, mobile, streaming, tv
Companies: bamboom, ivi, zediva

Senators Want To Put People In Jail For Embedding YouTube Videos

from the not-understanding-the-technology dept

Okay, this is just getting ridiculous. A few weeks back, we noted that Senators Amy Klobuchar, John Cornyn and Christopher Coons had proposed a new bill that was designed to make "streaming" infringing material a felony. At the time, the actual text of the bill wasn't available, but we assumed, naturally, that it would just extend "public performance" rights to section 506a of the Copyright Act.

Supporters of this bill claim that all it's really doing is harmonizing US copyright law's civil and criminal sections. After all, the rights afforded under copyright law in civil cases cover a list of rights: reproduce, distribute, prepare derivative works or perform the work. The rules for criminal infringement only cover reproducing and distributing -- but not performing. So, supporters claim, all this does is "harmonize" copyright law and bring the criminal side into line with the civil side by adding "performance rights" to the list of things.

If only it were that simple. But, of course, it's not. First of all, despite claims to the contrary, there's a damn good reason why Congress did not include performance rights as a criminal/felony issue: because who would have thought that it would be a criminal act to perform a work without permission? It could be infringing, but that can be covered by a fine. When we suddenly criminalize a performance, that raises all sorts of questionable issues.

Furthermore, as we suspected, in the full text of the bill, "performance" is not clearly defined. This is the really troubling part. Everyone keeps insisting that this is targeted towards "streaming" websites, but is streaming a "performance"? If so, how does embedding play into this? Is the site that hosts the content guilty of performing? What about the site that merely linked to and/or embedded the video (linking and embedding are technically effectively the same thing). Without clear definitions, we run into problems pretty quickly.

And it gets worse. Because rather than just (pointlessly) adding "performance" to the list, the bill tries to also define what constitutes a potential felony crime in these circumstances:

the offense consists of 10 or more public performances by electronic means, during any 180-day period, of 1 or more copyrighted works

So yeah. If you embed a YouTube video that turns out to be infringing, and more than 10 people view it because of your link... you could be facing five years in jail. This is, of course, ridiculous, and suggests (yet again) politicians who are regulating a technology they simply do not understand. Should it really be a criminal act to embed a YouTube video, even if you don't know it was infringing...? This could create a massive chilling effect to the very useful service YouTube provides in letting people embed videos.

Filed Under: amy klobuchar, christopher coons, copyright, felony, john cornyn, performance, streaming

With A Choice Between $100 Million In Cash & Fantasyland, The Labels Choose Fantasyland

from the revenue-vs.-piracy dept

I keep having the same conversation over and over again with people in the recording industry. A few days ago, I met with the head of a record label that is doing all sorts of cool and innovative experiments (both on the business model and with technology) and he still kept saying "but we gotta stop people from stealing." The problem, as always, is that they seem so focused on infringement that they miss the bigger picture: What does it actually mean for revenue? These are two separate questions, and the labels seem to prioritize the wrong one. They want to stomp out infringement at any cost, even if the net benefit is minimal.

If record labels were given a choice whereby they could support a new revenue stream that would bring in, say, $100 million without them having to do anything... vs. getting no such revenue and playing whac-a-mole with a few more "pirate sites," just making them move elsewhere and not actually get anyone to buy anything, they'd have to be crazy to not go with the $100 million option.

It appears they're crazy.

Google was clear, when it launched its Google Music, that it wanted to do much, much more, but that the things it wanted to do required licenses from the labels. However, the terms the labels offered were completely unacceptable. Now it's being reported that Google offered $100 million to the labels, and a key sticking point was that the labels wanted Google to wave a magic wand, figure out who was "pirating" music, and stop it. In other words, $100 million vs. Fantasyland. And the labels went with Fantasyland.

Filed Under: licenses, music lockers, streaming
Companies: google