26 May 2011

One Breach To Compromise Them All


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Image: Demon Dog by Samuel Cockman on Flickr

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This is a watchdog. A very cute one.
Its job is, nevertheless, to bark to alert its owner of an intruder’s presence and scare away the intruder.

France, the country which advertised the three strikes rule on a large scale and did eventually adopt it, has also a watchdog.
A dog to watch for file-sharing and online piracy of any kind.
Not a very cute one.

In fact, the French government represented by HADOPI, the executive agency established to enforce the three strikes rule, has commissioned the private company Trident Media Guard (TMG) to scan file-sharing networks and gather the IP addresses of alleged copyright infringers.

However, this watchdog was hacked and suffered a massive

Data Breach

some ten days ago.

I found the information about the breach on Ars Technica which have been continuously covering (click and click) the issue.
It appears that not only the unguarded servers were TMG’s Achilles’ heel. Their anti-piracy software was full of faults as well.

What a negligence, huh?

But that would not be all!

Imagine that this poorly managed company, empowered by the order of a special government agency and, employing a software that would very likely fail during a diligently conducted acceptance test, has the means to count your three strikes and

Send You Off

the digital playground?

The good news is that HADOPI must have considered this state of affairs unacceptable and has thus (temporarily) suspended TMG’s authorisation to collect the IP addresses of French Internet subscribers.

If the Court of the European Union follows Advocate General’s opinion in Scarlet vs SABAM, it could rule such Internet scanning outdated.

Either way, TMG’s data breach did its deed – it managed to harm the three strikes policy’s image and to (hopefully) ultimately and entirely compromise it.

6 May 2011

VPR v John Does: IP Subscribers ≠ Copyright Infringers


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Anonymous-Suit-black High Resolution PNG (2404 x 3890)photo © 2010 OperationPaperStorm | more info (via: Wylio)

Who remembers Depeche Mode’s People Are People?
It basically says that people are different: they are different colours and have different needs.
In a more or less similar spirit, a court order issued by the Honourable Harold H. Baker, justice at the United States District Court for Central Illinois, says that people are different from IP Addresses.
Not that we did not know it, but now it is official.

I guess that, during the last couple of months, you have obtained knowledge of the much criticised mass litigation conducted by (alleged) right-holders in Europe and, particularly in the United States.

In fact, one could speak of an

Emerging Business Model

that had some success, but now seems to have been dampened.

Why? What happened?

VPR, a Montreal-based producer of adult entertainment content (claimant) filed a complaint against 1,017 John Doe defendants who had allegedly involved in file-sharing. Claimant was not aware of the identity of the alleged infringers, but was in the possession of their Internet Protocol (IP) addresses. Since Internet Service Providers (ISP) assign IP addresses to their subscribers, claimant moved to obtain so-called Doe subpoenas directed to the ISP with the clear aim to determine the identity of the Does.
ISP would have been under an obligation to reveal their subscribers’ identity, had claimant only been granted the subpoenas.

Yes, you may trust your eyes:

His Honour denied

claimant’s motion in an outright manner.

Justice Baker reasoned upon his order citing a press article which reported how a family was falsely raided by federal agents after a neighbour of that family had misused their WiFi connection to share illegal material. Not surprisingly, the agents had obtained a Doe subpoena prior to the raid.

Having carefully scrutinised the list of IP addresses attached to VPR’s complaint, His Honour found that it suggested, in at least some instances, a disconnect between IP subscribers and copyright infringers and that such disconnect could occur in another family or individual entering into a conflict with the law.
He thus refused to assume responsibility for causing harm to (very likely) innocent Internet users.

I say Justice Baker’s approach

Deserves Acclaim

Why?
Because mass-litigation conducted by copyright trolls relies on the speed kills principle: the proceedings must go fast, involve thousands of defendants and be cheap. Claimants seek to identify their victims and serve them with settlement agreements to make them pay amounts that undercut the cost necessary to procure legal defence. The victims must be put under pressure and have no or just very little time to react.
Hence, every obstacle on the way to a settlement agreement may prove decisive for a copyright troll’s business model.
Justice Baker’s dismissal is such an obstacle and it can make the Canadian copyright troll drop its claims.

Therefore, three cheers to His Honour and his responsible finding.
After all, IP subscribers and copyright infringers are not necessarily the same.

Or have I missed something?

24 February 2011

The Images Of Your Fairness


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All Rights Reserved*photo © 2009 Paul Gallo | more info (via: Wylio)

I bet you are pretty much familiar with the sign above, are you not? On the Internet, you can see it almost everywhere, but particularly with respect to images.  Why is this so? Well, it indicates that the work it applies to is protected by copyright. Nevertheless, rights in images are just too often infringed and misappropriated on the Internet.
This is not surprising, since images, photographs and pictures are considered impressive addenda especially to weblogs. The famous blogger Mack Collier has written a blog post on the marketing power of pictorial content. However, I will leave the marketing to Mack and stick to my last, that is the legal perspective of utilizing images on weblogs.
I would start addressing this question:

What is the legal nature of images?

Images or photographs represent a protected subject matter under copyright law. They are works. Generally, works must fulfil some requirements in order to qualify for copyright protection, but the threshold relating to images has often been said to be rather low.
The British, for instance, have never scrupled to place every variety of photograph within copyright. Once produced with a sweat of the brow, a photograph needs not show an artistic quality.
Albeit not identical, the test under US law is similar to the one under UK law. It differs in that it requires a minimal degree of creativity.
Authors’ rights systems such as France and Germany tend to give copyright only to photographic works, that is the results of careful and distinctive arrangement, involving an element of aesthetic judgment.
But be cautious – in those jurisdictions the law on unfair competition provides for a “catch-all” protection, hence even images that do not qualify for copyright protection are not free-for-all.

What does the copyright protection of images mean?

Copyright owners (or right holders) are granted exclusive economic and moral rights in their works. While moral rights seek to protect certain non-pecuniary interests of authors, the economic rights enable them to control the economic exploitation of their works. In my view, the most important economic rights relating to images on the Internet are

– the right to make copies of the image;
– the right to distribute such copies to the public, and
– the right to communicate the copies to the public by means of an electronic transmission.

The general rule is that, whoever undertakes one of the above activities without author’s or right holder’s permission, is liable of copyright infringement. As a consequence, an infringing user is likely to be liable for tort or, depending on the jurisdiction, even for a criminal offence.
I wrote “the general rule” above, because copyright legislations usually seek to strike a fair balance between copyright owners’ and users’ interests. Hence, in some occasions even the unauthorized use of copyrighted images would not result in an infringement – it could be prejudiced by doctrines of limitation.

What are the limitations or defences you may rely upon with respect to images?

While Internet users under an author’s right jurisdiction may rely on narrowly statutorily defined limitations, users in either the United Kingdom or the United States are bound to the underlying notion of fairness.

In other words, if a user under an author’s right jurisdiction copies, distributes or communicates an image on the Internet and such copying, distribution and communication to the public falls within a statutory limitation, it is exempt and does not constitute infringement.
By contrast, a user in the US may benefit from a general fair use defence when accessing and using images. Fair use covers different purposes and applies to both commercial and non-profit use. A user in the UK may rely on something that is half-a-way between the author’s right and the US systems. UK copyright law is akin to author’s right laws in that it provides users with a defence, if their use relates to statutorily defined purposes. By the same token, it shows  similarities with US law in that there is a requirement that such use be fair. The defence under UK law is referred to as fair dealing.

How can you apply the limitations or defences to your use of images online?

Applying the limitations or defences to images will not each time be easy. For instance, the limitations under the laws of France and Germany as well as the fair dealing defences under UK law are comparatively narrow and are enumerated exhaustively. The US fair use doctrine, albeit not exhaustively legislated, also covers just specific purposes.
One could summarize those to the following:

– private or individual use (author’s law systems only);
– criticism, analysis, cultural discourse;
– news coverage and
– research.

Which of the above would be beneficial to a blogger? Hmm, not many. The private or individual use, for instances,  applies only to the act of copying, whereas the copied image may be used only within the private sphere. Uploading an image on a weblog is far more than just copying and once put on a weblog, the copied image leaves the private and enters the public sphere.
If you upload images on your blog for the purpose of criticism and analysis, then your outlook is bright. The same is almost true with respect to news coverage: unfortunately, using images for that very purpose does not qualify as fair dealing under UK law. Researchers among the bloggers (and I would figure myself belonging to them) have again good perspectives and, given their fairness, may rely on limitations and defences in all of the abovementioned jurisdictions.

Well, not very promising, huh? There must be another way to design your blog with pictures in a compliant and lawful manner.

What do you know about Creative Commons?

Creative Commons (CC) licenses were developed to create a more flexible copyright model, replacing “all rights reserved” with “some rights reserved”. Among them there are some which are rather permissive, thereby requiring a mere attribution to the author of the work. Others are really restrictive and forbid modifications to and/or commercial use of the work. In any case, the CC licenses call upon the fairness of the users.
You can search for images licensed under a CC license on Flickr or access them directly via Wylio.

Final thoughts

As you could see, there are some ways to lawfully access even “all rights reserved” photographs and communicate them on your blog. Besides there are innovative and culture distribution friendly license models that also allow you to use pictorial content on the Internet, albeit with “some rights reserved”.
What you should bear in mind is to be fair towards the authors and copyright holders, because the pictures on your blog represent the images of your fairness!

 

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8 February 2011

Football Without Frontiers?


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DSC00926photo © 2010 Ben Sutherland | more info (via: Wylio)

Football is a very valuable industry in England and Europe in the first place and it is responsible for generating billions. However, what makes football really big is its connection with television. It was the television broadcast that brought the football of England’s Premier League to the world at large. Football without frontiers, indeed.

Football and television broadcast rights – this is the subject of this blog post. If you are a football fan and watch the broadcast of the Premier League, you have certainly heard of the proceedings brought by the Football Association Premier League (FAPL) against the QC Leisure (et al) and Media Prtocetion Services Ltd against the brave publady Ms Karen Murphy. The High Court of Justice of England and Wales has recently referred those proceedings to the Court of Justice of the European Communities (Court) where few days ago Advocate General Juliane Kokott delivered her opinion.

The facts

FAPL markets the copyright for the live transmission of its football matches. It essentially grants its licensees the exclusive right to broadcast and economically exploit the matches within their broadcasting territory, generally the country in question. In order to safeguard the exclusive rights of other licensees, those Licensees are at the same time required to prevent their broadcasts from being able to be viewed outside their broadcasting territory. BSkyB is such a licensee of FAPL for the UK and offers its sports feed to pubs against £7,200 a year. NOVA is the licensee for Greece and offers its sports feed to bars or pubs at about €1,080 (£700) a year. Both BSkyB and NOVA use a conditional access technology and have a “footprint” extending beyond the territorial limit of the licences they enjoy from FAPL. Any person within a broadcaster’s “footprint” who has the appropriate satellite dish, decoder box and decryption card is technically capable of viewing the programmes provided by that broadcaster as part of its broadcasting service.
Not surprisingly, proactive undertakings (such as QC Leisure) import decoder cards from abroad, in the present cases from Greece and Arab States, into the United Kingdom and offer them to pub owners (such as Karen Murphy) then at lower rates. The FAPL is attempting to stop that practice since it undermines the viability of the services they provide.

The claims

Basically, claimants asserted that the use of foreign decoder cards in the UK to access foreign transmissions of live FAPL football matches committed an offence under Section 297 of the Copyright Designs and Patents Act 1988 (CDPA) and involved an infringement of their rights under Section 298 CDPA as well as their copyrights in various artistic and musical works, films and sound recordings embodied in the Premier League match coverage. Further and since BSkyB has the exclusive right to broadcast the football matches in question for reception within the UK, it demanded the “applicable” payment being the subscription which would be payable to BSkyB if Karen Murphy had contracted to receive BSkyB’s service rather than the NOVA service from Greece.

The defences

Since Sections 297 and 298 of the CDPA were introduced to transpose Directive 98/84/EC the defendants pleaded that the purpose of the Directive is not, as the claimants contended, to give to service providers of lawful decoder cards a right to control their circulation or place of use and so divide the single European market into zones with differential pricing. On the contrary, the purpose of the Directive is to facilitate the undistorted operation of the single market by giving to service providers a Community-wide right to suppress the manufacture of and commercial dealings in cards which give access to protected services for, and further to remove obstacles to the free circulation of cards which might previously have arisen from pre-existing provisions of national law. Further defences were based, inter alia, on the fundamental freedoms under the EC Treaty as well as on Article 81 EC.

The questions referred to the Court

Following the referance for a preliminary ruling consisting of an unusually high number of questions (more than 20 relating to both cases) the Court joined the two cases. The referred questions asked the Court to interpret the Directives 98/84/EC, 93/83/EC and 2001/29/EC as well as Articles 28 and 30, 49 and 81 EC.

Advocate General’s opinion

After having undertaken a remarkable dissection of Community law dealing with copyright and broadcasts, Advocate General Juliane Kokott concluded that the decoder cards sold outside, but used within the UK did not constitute “ilicit devices”. Nevertheless, member states, Kokott wrote, were at liberty to by means of national law prevent the use of such cards, when they were obtained on the grounds of false personal data. The same would also apply to acquirers purporting private use, but deploying decoder cards on commercial scale. Kokott further opined that, a copyright work (=football match) is not communicated to the public by wire or wireless means, within the meaning of Article 3(1) of Directive 2001/29, where it is received or viewed as part of a satellite broadcast at commericial premises (=pub) or shown there, free of charge, via a single television screen and speakers to members of the public present in those premises. Not less important for the present cases, the freedom to provide services under Article 56 TFEU (previously Article 49 EC) precludes provisions which, on grounds of protection of intellectual property, prohibit the use of conditional access devices for encrypted satellite television (=decoder cards) in a Member State (=UK) which have been placed on the market in another Member State (=Greece) with the consent of the holder of the rights to the broadcast (=FAPL). The latter is despite any false personal data at acquisition or individual agreements to use the decoder cards only for domestic or private use. However, the freedom to provide  services is no magic bullet: it may be prejudiced by national rules, which allow rights holders to a broadcast to object to its communication in a pub, provided that the restriction of freedom to provide services stemming from the exercise of that right is not disproportionate to the share of the protected rights to the broadcast.
In the end the Advocate General delivered her mostly relevant conclusion: FAPL’s license agreements with content providers such as BSkyB or Nova that provide for territorial exclusivity and ban the export of decoder cards to other member states of the EU are incompatible with Article 101(1) TFEU (previously Article 81 EC) , since such licence agreements are liable to prevent, restrict or distort competition.

My two cents

If  the decision of the Court in those combined cases follows the opinion of Adovace General Kokott, then it will very likely be 2011’s landmark decision par exelance!
Especially the economical impact has the potential to be nothing less than disruptive. What seems to be an ease for viewers and supporters may soon dramatically lessen the quality offered by the FAPL and the clubs participating in it, as they will encounter unexpected difficulties to maintain there way of working. Where do you think does the money for the recent truly vertiginous football transfers come from? 75 Millions for Cristiano Ronaldo? You better forget about that!

What should we expect if the Court decides the cases in the affirmative? Will it mean the end to a football without frontiers or will it be rather its long awaited redemption from commercialism and recollection of true values?

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4 January 2011

Warden calls DMCA for help against briskly Glider


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Blizzcon 2008photo © 2008 Oracio Alvarado | more info (via: Wylio)

I must take the chance to win World of Warcraft (WoW) players as readers of the Reguligence Weblog! Believe it or not, but in MDY Industries vs Blizzard Entertainment and Vivendi Games the US Court of Appeals for the ninth Circuit delivered an interesting decision that deals with some copyright aspect of this successful role-playing game. In particular, the Court had to determine whether MDY’s level-up enabling software called Glider infringed Blizzard’s copyright and other rights under DMCA’s sections 1201 et seq.

Everyone who has played either of Blizzard’s computer games knows that they are based on a so called “leveling-up“. The latter is both, desirous and quite time-consuming for players. Since Glider’s purpose is to play WoW for its owner and level him or her up, it represents an add-on computer game bot to WoW. On the grounds of their End User License Agreement (“EULA”) and Terms of Use (“ToU”) as well as on the introduction of Warden, an anti-bot technology, Blizzard served MDY with a cease-and-desist letter demanding that MDY immediately ceased selling Glider. As a response, MDY brought an action for declaratory judgment to establish that Glider does not infringe Blizzard’s copyright or other rights.

In the first instance the District Court for the District of Arizona found MDY liable for secondary copyright infringement, violations of DMCA §§ 1201(a)(2) and (b)(1), and tortious interference with contract.

However, the 9th Circuit reviewed de novo and found that

  • the ToU’s forbiddance against bots were covenants rather than copyright-enforceable conditions, hence MDY did not infringe Blizzard’s copyright, and
  • since Warden effectively controlled access to WoW’s dynamic non-literal elements, MDY was liable under § 1201(a)(2) with respect to WoW’s dynamic non-literal elements.

In spite of the above, the 9th Circuit denied MDY’s liability under § 1201(b)(1) for Glider’s circumvention of Warden since Warden did not effectively protect a right of Blizzard under the Copyright Act.

The Court reasoned this result with the textual differences between §§ 1201(a) and (b).

§ 1201(a)(2) prohibits the circumvention of a measure that “effectively controls access to a work protected under this title,” whereas § 1201(b)(1) concerns a measure that “effectively protects a right of a copyright owner under this title in a work or portion thereof.”

Accordingly, the 9th Circuit read § 1201 (a) as extending a new form of protection distinct from traditional copyright infringement, i.e., the right to prevent circumvention of access controls to copyrighted works.

Finally, why is this decision of a legal significance?

I suggest that we honour it for its clear-cut between § 1201’s two distinct types of claims.

Last but not least, it should read like a warning to all developers of computer game bots: creators of computer games are given an extra weapon to fight you!

 

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12 December 2010

Of Media Cats and Pirating Mice


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The cases on copyright infringement where P2P is involved are endless, virtually interminable. Within this variety of cases, there are those concerning unsecured WiFi connections. Some jurisdictions like Germany have already developed an authority, thus providing for a better legal certainty. Others, like England and Wales, appear to be in a process to establish theirs.

About a week ago, the England and Wales Patents County Court, presided by Judge Birss, delivered a judgment in such a case. The claims were brought by ACS:Law.

Anyway, why is this worth mentioning?

Well, this is a law firm currently having to deal with a Solicitors Disciplinary Tribunal as a result of the numerous complaints against their methods of work, in particular the dunning letters that firm is known to send to alleged intellectual property infringers.

But back to facts: claimant, assisted by a specialist data monitoring company, did identify eight individuals and accused them to have uploaded “R 18 restricted” films through peer to peer file sharing networks. The defendants, so the Particulars of Claim, “have operated, at the time of the identified infringement an internet connection router that was not secured either adequately or at all, so as to enable another to carry out an act of copyright infringement of the claimant’s Work via the internet connection of the defendant.” Put it another way, the defendants were all owners of WiFi access points that they had not secured. In claimant’s view, these “defendantswere liable for authorising others to infringe the right owners’ rights in the above films.

Since a copyright case can be brought by the owner of copyright or an exclusive licensee and claimant is neither of these, judge Birss started his judgment expressing some doubts as to claimant’s right to be a claimant in the fist place. The court then admitted to be aware “of no published decision in this country which deals with this issue in the context of copyright infringement.” Nevertheless, the court did not upheld claimant’s plea that “allowing others to infringe” equated “authorising others to infringe”. Not even the authority of the German Federal Supreme Court in the case “Sommer unseres Lebens”, stating that owners of unsecured access points have a duty to safeguard their devices to prevent others from using them without permission, was capable of proving persuasive to His Honour. He mentioned the German case “simply as an illustration of the complex and significant legal issues arising.”

So, what is the moral of the story? It seems that under the jurisdiction of England and Wales and, assumingly, under that of the entire United Kingdom, owners of unsecured WiFi internet connections should not be held responsible for any copyright infringement that third parties might cause over that connections. Judge Birss’ reasoning is in fact a very simple one: section 16 (2) of the Copyright, Designs and Patents Act requires that one, without the licence of the copyright owner, does any of the acts restricted by copyright or authorises others to do them. Falcon vs Famous Players is still an authority in terms of “authorisation” and accordingly, “authorise” means to sanction, countenance or approve, or alternatively to grant or purport to grant to a third person a right to do an act. No doubt, an owner of an unsecured WiFi connection does none of the foregoing.

Frankly, one should take the above cum grano salis since the Patents County Court is just a lower court in the judicial system of England and Wales. Nonetheless, this court’s decision clearly addresses the legal weak point in claims aiming to rather generate earnings than to prevent abuse.

 

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8 July 2010

Men infringing copyright at work


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Do you come from a land down under? Where music labels are keen to plunder?

I guess my readers will excuse this little joke with Men At Work’s “Down Under” lyrics, but it fits quite good in the context of this posting. I believe it is needless to introduce “Down Under” – you hardly cannot know the unofficial anthem of Australia!
Despite its fame, since yesterday it is official – Men At Work’s song has been found to infringe the copyright in “Kookaburra”, a camp fire song written by Marion Sinclair in 1934 and currently owned by Larrikin Music Publishing Ltd Pty.
“Down Under” was written and composed in 1978 by Colin Hay and Ronald Strykert, members of Men at Work, and was first published in about 1979. In 1981 the song was re-recorded for Men At Work’s “Business as Usual” album.

 

Men At Work. Courtesy to Simon Alenka.

In 2007 Larrikin became aware that two bars of “Kookaburra” were reproduced once in the flute riff contained in the 1979 sound recording of “Down Under” and three times in the one of 1981. Alleging that “Down Under” infringed their copyright in “Kookaburra”, Larrikin started proceedings against Colin Hay and Ronald Strykert  as well as against EMI Songs Australia and EMI Music Publishing Australia, being the owner and licensee of copyright in “Down Under”. Larrikin further demanded a 60% share of the earnings “Down Under” has made since 1982.

On trial, Justice Jacobson accepted that the songs were objectively similar. Jacobson J based this finding on the cases of, inter alia, Francis Day & Hunter vs Bron and Austin vs Columbia Gramophone Co Ltd. Accordingly, objective similarity of musical works was not to be determined by a note for note comparison but by the eye as well as by the ear. Jacobson J further found that the portion reproduced in “Down Under” constituted a substantial taking from “Kookaburra”. Justice Jacobson achieved this finding referring to the judgment in Ice TV Pty Ltd v Nine Network Australia Pty Ltd, pursuant to which the determination of “substantial part” should be qualitative rather than quantitative.

Curiously, Larrikin did not claim damages for past performance on the ground of copyright infringement, but on passing off that in Australia is legislated in the  Trade Practices Act of 1974 and the Fair Trading Act 1989. In these proceedings, however, the court did not assess the quantum of damages or royalties to be paid to Larrikin.

In its very recently delivered ruling, Jacobson J referred to Larrikin’s 60% demand on “Down Under”‘s earnings as “excessive, overreaching and unrealistic”. Instead, his Honour ordered EMI to pay a percentage interest amounting to 5%.

Why is this case of any relevance at all?

Access to copyright works has never been so convenient as in the information society of today. Albeit inspiring for creators of later and ostensibly independent works, such access may turn to a risk for such creators. I am convinced that this Kookaburra decision shall be a far-reaching one and shall influence the judiciary in other common law jurisdictions such as England and Wales, New Zealand and Canada. Some aspects might be persuasive also for US Justices, although I guess that this very case would be decided by an US court rather on the grounds of fair use as “Down Under” is transformative to “Kookaburra”. My message to creators would be then: be cautious, if you are keen not to infringe copyright law at your work.

 

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25 June 2010

Do not misappropriate the law, guys.


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Locked books. Courtesy to presscafe.org

It has been a long time since I wrote my last posting related to Bulgaria. During the last days, however, a police campaign or even a raid directed against the online content provider www. chitanka.info (chitanka meaning an alphabet book in Bulgarian) achieved a huge medial attention and, particularly, that of the Bulgarian blogosphere. While the police claimed a success over a group engaged in “Internet piracy”, journalists and bloggers saw an attack against the knowledge society in Bulgaria.

What was the problem in the first place?

Chitanka.info had digitised numerous printed books and made them available on the Internet to the world at large. In legal terms, chitanka.info had copied and adapted (mainly literary) works and subsequently communicated those to the public. On the grounds that, the foregoing acts represented acts restricted by copyright law, publishers and right owners’ associations argued that chitanka.info had infringed the copyright in the works, because they acted without the consent of the respective copyright owners. Apparently, these very right owners instructed the police to raid chitanka’s premises and to seize the equipment hosting the arguably infringing materials.

 

Top police investigator Yavor Kolev seizes one of chitanka's servers. Courtesy to bnews.bg

The operators of chitanka.info raised several defences, some of which were legal by their nature and some that were not. Regarding the latter they argued that their offering addressed school kids and thus served to satisfy primary educational needs. They further argued that some of the books they offered to download represented sold-out editions, not re-published since then and thus no longer available in bookstores. Eventually, they stressed on the misery reigning in public libraries and on the fact that today’s consumers demanded an online access to books, but publishers yet failed to (legally) satisfy this demand. Chitanka.info’s legal defences grounded on Art 24 (9) of the Bulgarian Act on Copyright and related Rights (Copyright Act) and on the fact that their offering was merely altruistic as it did not depend on a payment.

I would like to focus on chitanka.info’s legal defences in this posting. Art 24 deals with the free (fair) use of works for which users neither need tot obtain the copyright owners’ consent nor owe they any payments in connection with thei use of those works. Subsection 9 of this Article regards – as the Bulgarian and hence legally binding version of the act calls them –  the “publicly accessible” libraries. Please observe that the English translation of the act accessible via the link above refers to “public libraries”. This ostensibly unimportant distinction, displayed by the translation and of later relevance, might prove decisive for chitanka.info’s case.

To the best of my knowledge, neither the Bulgarian Copyright Act nor other legislation in force in Bulgaria defines the term of a “publicly accessible” library. By contrast, the Bulgarian Public Libraries Act delivers a definition of the term “public library”. Accordingly, a library needs to comply with certain requirements set out in Art 8 of said act, in order to be deemed a “public library”. There is no doubt that chitanka.info does not comply with those requirements. The Public Libraries Act was, however, delivered in 2009, whereas Art 24 (9) of the Bulgarian Copyright Act was last amended in 2005.

The issue suggests a few logical questions:

  • What did the lawmakers have before eyes when they drafted the Public Libraries Act?
  • Did they consider the “publicly accessible” libraries as mentioned in the Copyright Act, and
  • Are public libraries to be equated with publicly accessible libraries at all?

Depending on the answer of these questions, there might be following solution approaches:

  1. The terms public library and publicly accessible library are identical. Since chitanka.info does not qualify as a public library it likewise fails to qualify for the limitation under Art 24 (9) granted to publicly accessible libraries.
  2. The terms are not identical and the lawmakers did not intend to curtail the limitation under Art 24 (9) to only public libraries. Moreover, the limitation should apply to any library that is publicly accessible. Chitanka.info would then qualify for the safe harbour provided by Art 24 (9). Public libraries would qualify as well as they are by their definition “publicly accessible”.

It will be up to a court of competent jurisdiction to decide somehow or other. I personally would support the second solution approach as I am of the opinion that copyright law is misappropriated when used to prevent the spreading of information, particularly for educational purposes. My friendly piece of advice to the police would then read: do not misappropriate the law, guys.

 

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1 April 2010

ISO Hunted Down


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Stories involving file-sharing networks and copyright enforcers have become easily predictible: the latter commence court proceedings against the former and after a lengthy judicial argy-bargy (almost always) prevail thereby having the enabling network shut down. Unfortunately for all file-sharers among my readers, this post tells a story that makes no exception to the foregoing. It is dedicated to isoHunt and its legal battle against Columbia Pictures and its yesterday’s announced probable death.

 

Courtesy to Ars Technica

The first proceeding in which isoHunt and its founder Gary Fung took the role of the defendants commenced somewhere in 2006 and has brought some legal clouds over that network. Notwithstanding, in this post I would like to more properly address the last ruling of the US District Court for the Central District of California which is capable to eventually provide the defendants with their Hemlock cup.

In the instant case claimants had moved for a summary judgment against the defendants on the grounds that defendants’ users have infringed claimants’ copyrights and defendants are therefore liable for such infringement under the theories of inducement, contributory infringement, and vicarious infringement. Not surprisingly, Judge Wilson granted claimants’ motion for a summary judgment. What makes this ruling noteworthy is Court’s profound discussion of the torrent technology concerned and its findings on defendants’ liability.

A good starting point in the discussion could be made by the fact that the ruling in question was delivered by the Honorable Stephen Wilson – the judge who presided over the original Grokster case. Whether therefore or not, but his Honour seems somewhat exerted to make as many references to the Grokster cases as only possible. Thus, in his view, defendants’ torrent sites, albeit demonstrating a unique download process, represent an evolutionary modification of traditional “peer-to-peer” sharing sites such as Napster and Grokster. They would only differentiate in that the files, awaiting to be shared, are hosted locally on the file-sharers’ computers and not on a centrally operated server. In order to accesss the files, the file-sharers would need a “library” that maintains an index of torrent files available to download. These files do not contain copyrighted materials themselves, but the data used by a torrent client to retrieve copyrighted materials through a peer-to-peer transfer. Such files have been previously uploaded by (other) users who host the copyrighted materials locally. Once a user downloads a given content file, he also becomes a source for future requests and downloads.

In its liability analysis the Court found that defendants’ inducement liability was so overwhelmingly clear, and that a discussion on the remaining two liability theories, ie secondary and vicarious liability, would be unnecessarily duplicative.

The Court stated that claimants have used IP-address data to locate defendants’ users and show that particular infringing downloads took place in the United States. Further, claimants have provided, in Court’s view, sufficient evidence that, contrary to defendants’ wholly unsupported (arg!) assertions, torrent files downloaded from defendants’ sites correspond to and automatically cause the downloading of claimants’ copyrighted materials.

In determining defendants’ inducement liability, Judge Wilson quoted one of US Supreme Court’s dicta in MGM vs Grokster, according to which “one who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties.” In citing the Supreme Court in Grokster anew, the Court stated that the classic instance of inducement was by advertisement or solicitation that broadcasts a message designed to stimulate others to commit violations. By the same token, claimants, in Court’s determination, presented a variety of undisputed evidence that defendants disseminated a message “designed to stimulate others” to commit infringements. Thereafter, the Court found, defendants’ liability for inducement was no longer open to any doubt. Moreover, claimants engaged in “purposeful, culpable expression and conduct” aimed at promoting infringing uses of the torrent websites.

In a next procedural step, the defendants had raised a defence based on the Digital Millenium Copyright Act (DMCA) that favours providers of certain internet services. However, upon stating that claimants had established defendants’ knowledge of their users’ infringing activities and, as defendants (i) failed to show they were not aware of facts or circumstances relating to infringement, and as defendants (ii) failed to evidence that they had removed the infringing material once they became aware of an infringing activity, the Court dismissed the defence and denied claimants’ entitlement to statutory safe harbour under the DMCA.

In its conclusion, the Court once again quoted Grokster and ruled that defendants’ technology is nothing more than “old wine in a new bottle”, consequently the outcome in the instant case could only be the same as in Grokster.

In my personal view, the above ruling is in full compliance with the currently applicable US legislation and judicial authority. Notwithstanding, developments such as in this case show at least two things. First, there is an ever-growing demand to access copyrighted material online and the shutdown of, say, Grokster did not prevent the establishing of isoHunt and Pirate Bay and it is very likely that their shutdown shall be accompanied by new creations in the file-sharing realm. Second, the rights’ owners should more extensively and, within the boundaries of applicable law, consider opportunities that employ the new technologies and lead to, maybe less excessive, but still good earnings, instead of prosecuting its own prospective customers.

 

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20 March 2010

How to hit a misappropriating fly on the wall


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My fly on the wallphoto © 2009 Clare Bell | more info (via: Wylio)

Imagine you were a farmer and invested lots of time and effort to sow seeds and watched the crops grow. Now imagine another farmer who attempted to harvest your crops without having invested any time and labour therein. Would you allow such farmer to reap your crops? You most probably would not.

In a very recent case , the New York District Court for the Southern District had to deal with a question pretty much like the one above. The claimants Barclays Capital Inc, Merril Lynch, Pierce, Fenner & Smith Inc and Morgan Stanley & Co Inc accused the defendant theflyonthewall.com of copyright infringement and of hot-news misappropriation relating to claimants’ recommendations that claimants have researched for their paying clients.

In particular, the claimants accused the defendant to have undertaken a regular, systematic, and timely taking of claimants’ hot-news and to have disseminated them through unauthorised channels of electronic distribution before the claimants had an opportunity to share these recommendations with their clients.

As for the claim regarding copyright infringement,  defendant did not dispute ther arrangement therein. As for the claim relating to hot-news misappropriation, however, defendant contested its liability thereunder.

Not surprisingly, the Court found defendant liable in both instances.

This ruling, albeit delivered by a lower court, is, I believe, remarkable for Court’s dissection of the law of unfair competition and, misappropriation, in particular. The Court started with INS vs AP, went through Cheney Bros vs Doris Silk and Capitol Records vs Mercury Records and ended up with NBA vs Motorola. A very important thing in my view, is Court’s dedication to the question as to whether federal law preempted  forms of state-law misappropriation, and particularly,  misappropriation of time-sensitive “hot news”. The Court further cited a “mysterious footnote” from Feist, according to which the protection for “hot news” should not be sought under copyright law, but under an INS-type misappropriation theory.

Finally Justice Denise Cote spent some considerations on the public policy. Besides the value of claimants’ hot-news to the market, she thereby noted that such recommendations were not mere objective facts, but rather, subjective judgments based on complex and imperfect evidence and could therefore attract copyright protection. With respect to public’s interest to access financial information on reasonable terms, the Court stated that a balance need be struck between establishing rewards to stimulate socially useful efforts on the one hand, and permitting maximum access to the fruits of those efforts on the other. However, no other was the purpose of the INS-tort or the one of the traditionally accepted goal of intellectual property law – and this is – to provide an incentive for the production of socially useful information without either under- or overprotecting the efforts to gather such information.

Put it all together, the 89 pages long ruling of the New York District Court for the Southern District definitely hits the misappropriating fly on the wall. Bearing its unique dissection of the US law of unfair competition, this ruling and any acompanying comments should be communicated to as many practitioners or just people interested in the matter as only possible.

 

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