Tag Archives: copyright

DIRECT REPORTING: Tenenbaum oral argument

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A few hours ago, I attended oral arguments here in Boston before the First Circuit Court of Appeals in Sony BMG Music Entertainment v. Tenenbaum (Wikipedia backgrounder, appellate briefs here).  To summarize, several record labels sued Joel Tenenbaum for sharing music files on a peer-to-peer service, and Tenenbaum lost at trial.  However, trial court Judge Nancy Gertner reduced the jury verdict of $675,000 against Mr. Tenenbaum down to $67,500.

Both sides appealed.  The labels framed the sole issue on appeal as:

Whether the district court erred by holding that the jury’s award of $22,500 per work for willful infringement of 30 copyrighted works violated the Due Process Clause, even though that award is well within the range of statutorily prescribed damages awards for willful copyright infringement and even within the statutory range for non-willful infringement.

In contrast, defendant Tenenbaum framed the issues as:

1. Is the award of damages against the defendant unconstitutionally excessive?

2. Was the jury properly guided by the trial judge’s instructions?

3. Does the statute under which the defendant was prosecuted apply to individual noncommercial consumers?

4. Does 17 U.S.C. § 504(c) remain operative in the wake of Feltner v. Columbia Pictures Television, Inc., 523 U.S. 340 (1998)?

Today’s hearing took place before a three-judge panel consisting of Chief Judge Sandra L. Lynch, Judge Juan R. Torruella, and Judge O. Rogeriee Thompson.  In addition to the plaintiffs and defendants, the United States (as intervenor) and the Electronic Frontier Foundation (as amicus curiae) presented oral arguments.

Based on the judges’ questions and demeanor at oral argument, my impression is that Joel Tenenbaum faces an uphill battle and is likely to lose his appeal.  I don’t have a transcript of the proceedings, but the following stands out from my notes and memory.

Chief Judge Lynch clearly had no tolerance for the defense’s contention that “no one thought” the statutory penalties for copyright infringement would ever apply to “consumers”.  She pointed out that the statute appeared to apply to consumers, eliciting a concession from Tenenbaum’s counsel that statutory copyright penalties were not facial unconstitutional.  This left the defense with little more than a half-hearted argument that the jury verdict was improper here because the copyright statute originally contemplated damage calculations by judges.

Judges Torruella and Thompson seemed somewhat more suspicious of the record labels’ arguments, but it was unclear whether these suspicions would help Tenenbaum win his case.  Judge Torruella asked the labels’ lawyer whether “lost sales” would provide a useful measure of damages, to which he replied that damages should be commensurate with the “lost of value of the copyright”.  He argued that file-sharing in the aggregate caused enormous economic losses to the labels because it essentially put the music “in the public domain.”  (Why Joel Tenenbaum should be personally responsible for the actions of thousands or millions of other file-sharers remained the obvious question he never managed to answer.)

For her part, Judge Thompson questioned whether appellate courts could ever find that a jury for statutory damages in a copyright infringement action to be excessive if it fell within the statutory range ($750 to $150,000 per work infringed).  The labels’ counsel did concede copyright damage awards were “not immune from Williams [Philip Morris USA v. Williams, 549 U.S. 346 (2007)] review” but maintained that such a problem would be “rare” and that this was not that case.

We likely won’t have the First Circuit’s decision for several months, so there’s still plenty of time to speculate about what the outcome will be.  I’ll continue posting as I have additional thoughts.

Update 4/5/2011:

Covering file-sharing appeal

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I’m going to be attending oral arguments here in Boston before the First Circuit Court of Appeals in the Sony BMG Music Entertainment v. Tenenbaum case (Wikipedia backgrounder) later this morning.  Appellate briefs are available here, summary from the defendant’s perspective here.

Check back later today for more commentary and analysis.

Pandora’s (copyright) box

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It’s no secret that copyright law is ridiculously complicated and in bad need of reform.  In case anyone needed reminding, paidContent covered Pandora’s CEO Joe Kennedy’s recent speech at the NARM music conference in San Francisco.  The article’s headings say it all:

  • “The complexity of international copyright limits Pandora’s business.”
  • “How huge damages in copyright law have skewed business relationships.”
  • “Our definition of ‘copies’ might need to change for the digital age.”

That’s a pretty good summary of precisely where copyright law has gone wrong.  Be sure to check out the full article.

Head in the cloud

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Amazon launched its Cloud Player yesterday which, as Wired explains,

can stream your music library to any web browser or Android mobile device. Cloud Player also allows you to download files and create playlists through its web-based interface.

So Amazon lets you store your music on a remote hard drive and stream it to local devices?  Sounds pretty straightforward.  Of course, the record labels don’t think so.  From Ars Technica:

We wondered aloud how Amazon managed to strike such an impressive licensing deal with the record labels, given the fact that Apple seems to still be working out the details for its own digital locker service. It turns out that Amazon hasn’t struck a deal, and seems to be hoping that the record companies will be the ones to blink.

“[W]e do not need a license to store music in Cloud Drive,” Griffin added in an e-mail to Ars. “The functionality of saving MP3s to Cloud Drive is the same as if a customer were to save their music to an external hard drive or even iTunes.”

That’s certainly not what the music industry seems to think, though—at least in regards to Cloud Player. In an interview with Reuters, Sony Music spokesperson Liz Young said the company hoped for a license deal but that it was keeping its “legal options open.”

Amazon certainly has made a gutsy play here.  The major labels are currently embroiled in a lawsuit against MP3tunes for providing essentially the same service as Amazon.  According to an amici curiae brief (PDF) in that case, the primary legal issue turns on whether or not Internet streaming necessarily constitutes a “public performance” (which would violate copyright owners’ rights unless licensed).  There is a powerful argument that it does not:

MP3tunes does not transmit music to the general public, nor to all of its subscribers. A particular work in a particular locker will only be transmitted to a user who has placed it there—in other words, after he or she has averred to MP3tunes that she either legally owns the file and have uploaded it to her locker, or that she has legal authorization to access the file on the Web and has sideloaded it into her locker. The subset of MP3tunes users who have uploaded or sideloaded any one particular track (and thus have stated to MP3tunes that they are authorized to do so) still falls far short of the “public” required by the transmit clause.

Of course, the simple fact that it has become necessary to make this legal argument illustrates just how broken copyright law is.  The statute is long, complicated, and muddled enough to lend at least some plausibility to virtually any argument imaginable.  Even an argument claiming that storing one’s own music on a private, password-protected server for convenience violates the letter (if not the spirit) of copyright law.

Stay tuned…

Updated 3/31/2011: Ars Technica has a follow-up piece today that quotes from their interview with MP3tunes’ CEO Michael Robertson (bio from his blog):

The word “streaming” and the word “download” are nowhere in copyright law.  It may be a very logical, common sense position, but all that matters is what the law says. Can you store your own music? Can you listen from anywhere? What if your wife or kids want to listen to it? All those things are completely unchartered [sic] territory.

Of course, as we routinely point out around here, “logic” and “common sense” have absolutely nothing to do with the current state of U.S. copyright law.

The fair use dragon

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Justin Levine over at Against Monopoly points us to a controversy at the recent San Francisco International Asian American Film Festival and reminds us that many content owners believe that fair use in U.S. copyright law is about as real as a mythical fire-breathing creature.

John Diaz of the San Francisco Chronicle explains:

"Slaying the Dragon: Reloaded," a compelling new documentary that critiques the portrayal of Asian women in U.S. visual media, has drawn protests from an unlikely quarter. It wasn’t from Hollywood, which was deservedly scoured for its depiction of Asian women in films from "Rush Hour 2" to "Sex and the City." It wasn’t from conservative commentators claiming political correctness run amok.

Instead, the objection to the documentary by Elaine Kim, a UC Berkeley professor of Asian American studies, emerged from six Asian American filmmakers just before its premiere last week at the San Francisco International Asian American Film Festival. Their complaint: that she used clips of their work without seeking their permission.

Never mind that fair use is written into the copyright statute and explicitly allows for “criticism” and “comment” and “scholarship.”  Never mind that Kim’s documentary seems to fall well within the guidelines laid out by the Documentary Filmmakers’ Statement of Best Practices in Fair Use – and that four separate companies write errors-and-omissions insurance for filmmakers based on the Statement guidelines.

No, the owners of films being criticized by Kim want to get paid:

The documentary addresses images of Asian American women in film, and while that is a worthy subject for a documentary and we respect Ms. Kim’s skills, as filmmakers, we do not consider this "fair use." Every filmmaker knows that he or she has to ask permission before using any intellectual property not belonging to him/her.

Using a clip of our films for review or promotional purposes is standard; however, using it in a documentary to illustrate that filmmaker’s point of view is a creative choice by the documentarian and therefore not subject to fair use.…We feel that Ms. Kim should either license our film footage properly for use in her documentary or remove it before the documentary’s world premiere at the upcoming San Francisco International Asian American Film Festival.

The Chronicle reporter was shocked, though readers of this blog shouldn’t be (unfortunately):

For me, as a journalist and champion of free expression, the upshot seemed clear: You cannot give the targets of social commentary the ability to veto it. Does anyone think for a second that the copyright holders of "Rush Hour 2" [which includes a scene where Chris Tucker and Jackie Chan are presented with a buffet of scantily clad Asian women] would consent to allow scenes of that movie to appear in Kim’s documentary at any price?

Kim did end up screening the movie at the festival, but

Kim deleted the clip from "The People I’ve Slept With."

"We did not remove the clip because we were concerned it was not fair use," Kim emphasized in an e-mail. "We removed it because we do not have the time or resources to fight against a filmmaker that personally attacked us and was being unreasonable."

Given the brutal economic and personal realities of litigation, Kim probably made the “right” choice.  Even if she found lawyers to represent her for free, fighting this in court would probably consume a large portion of her personal time and energy for years.  I certainly don’t blame her for her apparently rational choice.

Nevertheless, let us be clear:  this is what happens when copyright law is written to give one side (i.e., copyright owners) sweepingly clear rights but the other side (i.e., fair users) only an amorphous defense.  You don’t get copyright as “an engine of free expression”, as the Supreme Court continues to think.  You get censorship by people who think that fair use is a fairy tale.

Status update: P2P still in litigation

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Nate Anderson at Wired reminds us that “the first file-sharing case in the US to go all the way to trial is still going”:

Filed on April 19, 2006 and progressing through a remarkable three trials, the recording industry case against Minnesota resident Jammie Thomas-Rasset continues to burn through cash and judicial attention.

Thomas-Rasset was at first hit with a $222,000 fine in 2007, which was set aside in 2008. Another jury trial in 2009 ended with a $1.92 million judgment, which was set aside in 2010. In November 2010, a third trial ended with a $1.5 million verdict, which the judge is unlikely to allow (his previous orders suggested that a few thousand dollars per song would be the maximum permissible damages). At the moment, both sides are still arguing over the appropriateness of that $1.5 million damages award.

Almost five years.  Three trials (so far).  What a colossal waste of economic, judicial, and personal resources.

The quality of music in a post-Napster world

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David K. Levine over at Against Monopoly pointed me to a recent paper (PDF) by economist Joel Waldfogel at the University of Minnesota titled “Bye, Bye, Miss American Pie? The Supply of New Recorded Music since Napster”.  As the title implies, Waldfogel investigates the effects of Napster (and its file-sharing progeny) on the music industry:

Economists generally agree that monopolies are bad. Governments grant some of the basic textbook examples of monopolies for intellectual property, in the form of patents and copyrights. Their bad effects – allowing prices above marginal costs and therefore restricting the supply of output – are thought to be justified by their incentive effects on production. But apart from introspection and anecdotes, we don’t really know much about the effects of remuneration incentives on production in the music industry.…Does the prospect of greater rewards bring forth more music? If so, then the past decade, when the ability for sellers to generate revenue from recorded music has fallen as much as half, should be a dry period for music. This is the question we address in this study. [emphasis added]

Noting that other studies have found undiminished musical output (in terms of volume) in the post-Napster world, Waldfogel attempts to measure musical quality using “a time-constant quality threshold based on critics’ retrospective lists of the best works of multi-year time periods”:

Using indices collectively covering the period since 1960, we document that the annual number of new albums passing various quality thresholds has remained roughly constant since Napster, is statistically indistinguishable from pre-Napster trends, and that album supply has not diverged from song supply since iTunes’ revival of the single format in 2003. We also document that the role of new artists in new recorded music products has not diminished since Napster. [emphasis added]

Waldfogel’s findings will unquestionably prove controversial in many circles.  And, to be sure, copyright policy may be based on considerations other that mere economic efficiency (e.g., John Locke’s labor theory or artists’ moral rights).  If Waldfogel’s findings are verified and generally accepted on their own terms, however, the economic policy implications seem clear:

It is easy to see that file sharing simply increases welfare. Producers lose, but their losses – when consumers steal things they used to pay for – are all transfers to consumers, who now enjoy greater surplus (the price they had formerly paid plus the former consumer surplus). In addition to the transfers from producers to consumers, file sharing also turns deadweight loss – circumstances in which consumers valued music above zero but below its price and therefore did not consume – into consumer surplus. In a purely static analysis, eliminating intellectual property rights benefits consumers more than it costs producers and is therefore beneficial for society.

Secondary liability, approaching the limit

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The Seattle Times reported a few weeks ago that Microsoft “is pushing Washington legislators to pass a law making it illegal for manufacturers that use pirated software to sell goods in the state”:

The proposed legislation would create a legal cause of action by making manufacturing companies liable for damages, and it would give the state attorney general and companies the right to pursue injunctions in civil court to stop the manufacturers’ goods from being sold.

For example, if a large Washington store sold T-shirts made from a company in China and the Chinese company uses pirated copies of Excel at an office in Shenzhen, Microsoft could seek an injunction to prevent the manufacturer from supplying T-shirts to be sold in Washington state.

This represents a sweeping change to current intellectual property law. It is one thing to grant monopolies via copyright for “limited Times” in order “To promote the Progress of Science and useful Arts”. It is another thing entirely to extend copyright’s monopoly over physical objects alleged to have been manufactured in another country with the help of pirated software and thus to hold the buyers of those physical objects legally responsible.

To put it concretely:  this isn’t holding the buyers of obviously stolen TV’s out of the back of a pickup truck legally responsible for their purchases.  This is holding GM, maker of that pickup truck, legally responsible because the Chinese manufacturer of one of the parts in the truck’s engine used a pirated copy of Microsoft Outlook to receive emailed purchase orders from GM.

Now that’s secondary liability.

Hat tip to Groklaw, where I ran across this story earlier today.  If you’d like to read more about this, Pamela Jones has written rather extensive commentary, including a hypothesis Microsoft is pushing for this and similar laws in other U.S. states in order to unleash a “litigation storm against Linux” — including derivatives like Android:

The law would make it possible for Microsoft to block Android sales in whatever state passed such laws if it could find some tie between the Android product and some manufacturer of a contracted part in China or wherever who happened to use a pirated version of Microsoft Word — not to make the part but to write up an ad for it. Ephemeral, much? But can you imagine how much litigation could spring from a law like this? How little it would take to keep litigation in the air forevermore? And you don’t have to even prove infringement in China, just allege it to initiate proceedings.

Of course, Jones is quick to note that the state of Washington’s “protections” do not extend to companies like Red Hat that profit from selling open source support and services.  Under the law, software companies with proprietary licenses like Microsoft

can sue in civil court and the Attorney General can go after the “wrongdoer” US company, if a notice is sent and no amelioration occurs. But if the violation is of an *open source license*, the victim can’t sue anyone under the bill, and the Attorney General does nothing for you. It’s an exception to the law.

Monopolizing orphans

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As numerous outlets are reporting, a federal judge rejected the proposed Google Books Settlement (Wikipedia backgrounder) yesterday, citing a number of concerns:

  1. “Adequacy of Class Notice”
  2. “Adequacy of Class Representation”
  3. “Scope of Relief Under [Federal Rules of Civil Procedure] Rule 23”
  4. “Copyright Concerns”
  5. “Antitrust Concerns”
  6. “Privacy Concerns”
  7. “International Law Concerns”

In this post, I want to comment just on #5 since the court’s discussion of this point focused on the orphan works problem, an issue I analyzed at length just last summer in a journal note (PDF here).

In brief, “orphan works” are creations protected by copyright law but with unclear ownership.  Prospective users of orphan works are in a bind because they cannot ascertain who to ask for permission yet still face the prospect of substantial penalties if an owner eventually surfaces and sues for copyright infringement.  As a result, orphan works remain in legal limbo and rarely are used to their full economic and/or cultural potential.  Orphan works include many (though certainly not all) books that were published during the 20th century (still under copyright) but are now out of print (unclear ownership).

Google sought a way out of this legal limbo so that it could put such books in its database.  Specifically, Google sought to escape the orphan works problem by leveraging the “opt out” structure of this class action lawsuit.  One of the ways that class action lawsuits “work” is by binding a group of people — including those who could have “opted out” of the litigation by filing their own lawsuits but didn’t — to the outcome of the class action.  Here, Google wanted the owners of orphan works (who by definition would not be “opting out”) to be bound by the terms of the settlement.  This would have allowed Google to digitize and distribute those orphaned works.

Writing for the Southern District of New York, Judge Denny Chin expressed concern that the proposed settlement would have given Google too much power over orphan works:

The ASA [Amended Settlement Agreement] would give Google a de facto monopoly over unclaimed works. Only Google has engaged in the copying of books en masse without copyright permission.  As the United States observed in its original statement of interest: “This de facto exclusivity (at least as to orphan works) appears to create a dangerous probability that only Google would have the ability to market to libraries and other institutions a comprehensive digital-book subscription. The seller of an incomplete database — i.e., one that does not include the millions of orphan works — cannot compete effectively with the seller of a comprehensive product.” And as counsel for the Internet Archive noted, the ASA would give Google “a right, which no one else in the world would have, . . .to digitize works with impunity, without any risk of statutory liability, for something like 150 years.”

(internal citations omitted, emphasis added).

While I certainly share the court’s concern with the prospect of a Google monopoly over orphan works, I also find it rather ironic that the court cited monopoly as one of the “problems” that prevented it from approving the settlement.  After all, copyrights are themselves monopolies; they prevent non-owners from using copyrighted works in a whole host of ways (subject to fair use and certain — often technical — exceptions).  Indeed, courts straightforwardly enforce copyright monopolies every time a copyright owner wins an infringement lawsuit.

If monopolies are such a problem, why do we allow them as the foundation of copyright law?  There are policy-based answers, of course, but it seems strange that Judge Chin didn’t engage in any real policy analysis except to say:

The questions of who should be entrusted with guardianship over orphan books, under what terms, and with what safeguards are matters more appropriately decided by Congress than through an agreement among private, self-interested parties.

Of course, many would argue that U.S. copyright law and policy essentially is “an agreement among private, self-interested parties” that simply gets ratified by Congress.  Perhaps the litigants here made the mistake of picking the wrong forum.

Living by the sword

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I’ve covered the antics of Righthaven, a copyright-enforcement entity that sues first and asks questions later, before.  From their activities over the past year, it seems clear that Righthaven thinks (at least, it loudly says) it fighting the good fight by vigorously enforcing copyrights in news stories.

Ironically, Steve Green at the Las Vegas Sun thinks that Righthaven is undermining newspapers’ case for copyright protection:

One year ago, U.S. newspapers and broadcasters could feel confident they controlled the news content they created….Then along came Righthaven LLC of Las Vegas, the self-appointed protector of the newspaper industry from such news sharers.

Some 250 Righthaven lawsuits later, Righthaven’s startling achievement is that newspapers now have less — not more — protection from copyright infringers.

Steve’s full analysis is well worth reading, as is his cogent summary of highlights from recent Righthaven-related cases.

Personally, I find this idea that Righthaven may be hurting copyright owners more than helping quite compelling.  Copyright law is often ambiguous, and the precise line between infringement and fair use is unclear.  Whatever else can be said about the merits of a typical Righthaven lawsuit, the sheer number of cases is forcing courts to take a hard look at the policies underlying copyright law and to provide some much-needed clarity.  Insofar as Righthaven’s tactics are, in practice, little better than bullying, judges seem to be doing every thing they can to skew that clarity in favor of Righthaven defendants — and away from established news publishers.

It is ironic that Righthaven’s own actions are starting to set precedents that are undermining the legal foundations for copyright’s protection of news stories.  If I were a publisher with an expansive view of copyright law, I’d be furious at Righthaven.