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New Zealand rethinks “3 strikes” copyright law

nsims — Wed, 25 Mar 2009 04:21:57 +0000

New Zealand copyright protesters

New Zealand’s government announced this week that their proposed “three strikes”/”graduated response” copyright law would not go into effect, and would be rewritten from the ground up.The law, which would have required ISPs to cut off internet access to users who had been accused of copyright infringement three or more times, had already been delayed from its initial effective date in February after stalled implementation negotiations and public protests caused lawmakers some concern.

Of particular note to those interested in U.S. copyright issues, Google submitted comments arguing that Internet disconnection is a disproportionate response to unproven allegations of copyright infringement. New Zealand recording industry groups had argued that the evidence of infringement they provide to ISPs is highly reliable, but Google’s comments cite to a 2006 report (summary here) that showed up to 30% of takedown notices Google received “presented an obvious question for a court”, and over half of requests to remove links appeared to be from businesses targeting competitors. Obviously, many of the takedown requests that Google fields are not from official industry groups, but given that U.S. industry group representatives have likened innocent infringers to dolphins inevitably caught in fishing drift-nets, New Zealand ISPs and consumers had good reason to be concerned.

Image credit – “Dare not write, dare not speak, dare not feel” CC by-nc Fertala

The PRO-IP Act

admin — Mon, 10 Nov 2008 14:45:00 +0000

by Holly Lance, MTTLR Associate Editor

It may be time to quit that nasty BitTorrent habit. On October 13th, President Bush signed into law the PRO-IP Act (Prioritizing Resources and Organization for Intellectual Property Act of 2008), which greatly increases the power of the federal government to protect copyright and trademark owners.
Some of the big changes coming down the pipe:

A court can take away your computer if you download illegally – §102 of the Act specifies that during a civil action, a Court may order the impoundment of all copyrighted material and the means by which the material can be reproduced, as well as all documentation regarding the creation, sale, or receipt of these materials.
Counterfeiters could pay up to $2 million in damages – §103 raises the range of statutory damages available considerably, with the new maximum fine being $2 million, doubling the current $1 million max.
Harsher criminal penalties for infringement – §205 punishes infringers with jail time (up to life) if someone is seriously injured or dies as a result of the trafficking of counterfeit goods or services.
There will be an “IP Czar” – §301 creates the position of an Intellectual Property Enforcement Coordinator (appointed by the President and confirmed by the Senate), who will be in charge of an interagency intellectual property enforcement committee and will help facilitate coordination between agencies.

The law originated in the House last December (introduced by Rep. John Conyers (D-MI)), and passed in the House by a very large margin in May. A similar bill was introduced in the Senate by Senator Patrick Leahy (D-VT), and passed in the Senate unanimously and the House by a large margin (90.3% by both Democrats and Republicans). While many criticize the PRO-IP Act as harsh, the version that Bush signed has actually been toned down considerably, as previous proposals included much higher statutory damages, creation of a new federal agency, and giving authority to the DOJ to sue on behalf of copyright holders.

Image Pirate Mona by Kim P. Used under a Creative Commons BY-NC-SA 2.0 license.

As expected, the RIAA and MPAA are quite pleased with the new law. The National Association of Manufacturers is happy too, and President John Engler calls the PRO-IP Act “a shining example of a bicameral, bipartisan effort to advance legislation to protect our consumers, jobs and businesses from intellectual-property piracy and counterfeiting.” Copyright infringement and counterfeiting are serious problems, and this Act represents a major step by the government in protecting IP owners. The RIAA and MPAA have been particularly concerned about P2P networks for several years, and if this Act is strongly enforced, it will give owners more tools for suing infringers and provide more federal oversight. In a tough economy like this, the Act can serve to bolster U.S. businesses, which lose $200-$250 billion and 750,000 jobs annually due to infringement and counterfeiting (or maybe not).

Not everyone is happy about the PRO-IP Act. Public interest groups like the Electronic Frontier Foundation and Public Knowledge criticize that the Act “amplifies copyright without protecting innovators or technology users” and “adds more imbalance to a copyright law that favors large media companies.” These groups are worried that the Act is unnecessary, will curtail legitimate fair use, and impose fines and seizures that are much too severe. Even the DOJ expressed its concern about the creation of an “IP Czar” and felt that such an enforcer would undermine the DOJ’s independence.

It is hard to say at this point what will become of the PRO-IP Act. Obviously a lot will depend on who is to become the first “IP Czar”, which will likely be decided by the next president. Obama’s campaign plan already included the creation of a “Chief Technology Officer”. This Business Week article speculates that possible candidates for the position include Vint Cerf, Steve Ballmer, Jeffrey Bezos, Ed Felten, while the Wall Street Journal shows that some believe Google Chief Executive Eric Schmidt wants the job. One factor that may influence the decision is Obama’s recent battle against major copyright holder NBC, which took down a popular YouTube video mocking a McCain victory. His official stance is that there is a “need to update and reform our copyright and patent systems to promote civic discourse, innovation and investment, while ensuring that intellectual property owners are fairly treated.” John McCain also seems to have a personal sympathy for fair use of copyright materials, as evidenced by this letter from his campaign to YouTube, which bemoans the “overreaching copyright claims” that have “silenc[ed] political speech” and wants to give campaigns special treatment. Ironically, the letter is dated October 13, 2008, the same day that Bush signed the Act. McCain also openly “supports efforts to crack down on piracy, both on the Internet and off.” While it seems like Obama may be more friendly to reform, keep in mind that it was Democrats who initiated the bills in both the House and the Senate. Obama will likely present a more “fair use”-friendly “IP Czar”, but the real question may be if he or she can get past the Senate.

RIAA Defendant Challenges Statutory Damages – Problems of Proof and Availability as Reproduction

admin — Mon, 29 Oct 2007 13:53:00 +0000

by: Nancy Sims, Associate Editor, MTTLR

In 2003, the RIAA began a campaign to protect the music of its members by bringing infringement suits directly against individual users of file-sharing software.¹ In the four years since, the RIAA has approached over 20,000 individuals regarding file-sharing activities,² but few related cases have reached the courts because most targets of such suits settle.³ A few individuals have challenged file-sharing charges,⁴ and some have even been awarded attorney’s fees.⁵ In the first jury trial in an individual-defendant music filesharing case,⁶ recently held in Northern Minnesota,⁷ the jury found defendant Jammie Thomas liable for 24 counts of infringement, and awarded statutory damages of $9,250 per song, for a total of $222,000 in damages.⁸ Thomas and her lawyer soon announced their intention to appeal the verdict.⁹

Thomas and her defense team initially announced that her appeal would focus on jury instruction no. 15,¹⁰ which stated that the act of making files available on a peer-to-peer network was infringement of the distribution right, “regardless of whether actual distribution has been shown.”¹¹ Other commentators agree that this is a key, and legally unsettled, issue.¹² However, it appears that Thomas and her team have tabled the direct challenge to the jury instruction for now.¹³ They instead filed a notice of remittitur, asking that the jury award be reduced as grossly excessive in violation of the Due Process clause.¹⁴

As Thomas’ motion acknowledges,¹⁵ case law and legislative history show that deterrence and punishment are legitimate purposes of statutory damages.¹⁶ Thomas claims, however, that the punitive damages must be limited under substantive due process analysis.¹⁷ Thomas argues that BMW of North America v. Gore¹⁸ and State Farm v. Campbell¹⁹ are applicable to “any grossly excessive monetary award that is imposed for the purposes of punishment and deterrence.”²⁰ Since no damages were shown, Thomas argues, the full amount of the award should be considered punitive.²¹ This is at least somewhat supported by statements of one of the Thomas jurors that they wanted to “send a message” by choosing the amount they did, “that you don’t do this, that you have been warned.”²²

Thomas also argues in the alternative that even if Gore and Campbell are not applicable to statutory damages, the award can be reviewed to determine whether it is “so severe and oppressive as to be wholly disproportioned to the offense and obviously unreasonable.”²³ This assertion gains some support from class action cases: courts have sometimes refused to grant class certification where aggregate statutory damages would not be punitive, but might be grossly disproportionate to the harms caused.²⁴ Although courts prefer to grant class certification even in the face of such difficulties, they acknowledge that they can reduce damages if necessary under due process.²⁵

Both of Thomas’ arguments depend on the judge making some sort of calculation of proportionality of awarded damages to actual harms. Thomas’ motion suggests that record companies’ recoup approximately $0.70 of the average $0.99/song price of online music sales, and argues that, “pretending that defendant’s downloading went to someone other than plaintiffs’ agents,” the total damages for the 24 files in question would have been $16.80.²⁶ Citing Gore and Campbell, they suggest that 10 times actual damages should be the maximum cap on statutory damages, for a maximum award in this case of about $151.20.²⁷ Alternatively, they point out that plaintiffs acknowledge that the price of an individual CD is about $20, and contend that, even if this much higher amount is the actual damages suffered by plaintiffs, the ratio of actual to statutory damages still far exceeds that suggested in Gore and Campbell.²⁸

A major justification of statutory damages is that they are provided for when actual damages are difficult to prove or calculate.²⁹ It is clear in this case that actual damages are difficult to prove for both parties, and that this fact cuts against arguments on both sides. Thomas’ calculation of the actual damages appears to be based on an assumption that at most one person other than the plaintiffs’ representatives downloaded any of the files she made available.³⁰ It is unlikely that she can prove this. On the other hand, even assuming that the recording industry does suffer actual damages of $20 per download, each song would have to have been downloaded 462 times to make the $9,250 per song award exactly proportionate. Such a volume of downloading was not shown in the trial, with jury instruction no. 15 allowing for judgment against Thomas regardless of proof of actual distribution.³¹ With no knowledge of the actual number of downloads (if any), the question of proportionality will be a difficult one for the judge to resolve. Since Thomas’ motion to reduce the damages obliquely revolves around the question of actual damages, which have not been proven, further appeal or retrial seems likely.

¹  Electronic Frontier Foundation, RIAA v. The People: Four Years Later 2 (2007), available at http://w2.eff.org/IP/P2P/riaa_at_four.pdf.
²  Id.
³  Id. at 6.
⁴  See Atlantic Recording Corp., et al. v. Tanya Andersen, No. 05-933 (D. Ore 2005) (resolved when parties stipulated to a dismissal with prejudice).
⁵  Capitol Records, Inc. v. Foster, 2007 U.S. Dist. LEXIS 29131 (W. D. Okla. 2007) (finding defendant was prevailing party after a court-ordered dismissal with prejudice, and awarding fees), order available at http://www.eff.org/files/filenode/Capitol_v_Foste/order_granting_fees.pdf), reconsideration denied by Capitol Records, Inc. v. Foster, 2007 U.S. Dist. LEXIS 33227 (W.D. Okla., Apr. 23, 2007); but see Interscope Records v. Leadbetter, 2007 U.S. Dist. LEXIS 65955 (W. D. Wash. 2007) (denying fees when record company voluntarily dismissed case against defendant.
⁶  Eric Bangerman, First RIAA trial gets under way with jury selection, opening statements, Ars Technica, Oct. 2, 2007, http://arstechnica.com/news.ars/post/20071002-first-riaa-trial-gets-under-way-with-jury-selection.html; 16-2 Mealey’s Litig. Rep. Intell. Prop. 24 (2007).
⁷  Capitol Records Inc., et al. v. Jammie Thomas, No. 06-cv-1497 (D. Minn. 2007)
⁸  Special Verdict Form at 2-8, Capitol v. Thomas, available at http://www.muddlawoffices.com/RIAA/Virgin%20Thomas/100%20Special%20Verdict%20Form.pdf; 16-2 Mealey’s Litig. Rep. Intell. Prop. 24 (2007).
⁹  Eric Bangerman, Thomas to appeal RIAA’s $222,000 file-sharing verdict, Ars Technica, Oct. 8, 2007, http://arstechnica.com/news.ars/post/20071008-thomas-to-appeal-riaas-222000-file-sharing-verdict.html.
¹⁰  Id.
¹¹  Jury instructions at 18, Capitol Records Inc., et al. v. Jammie Thomas, No. 06-cv-1497 (D. Minn. 2007), available at http://blog.wired.com/27bstroke6/files/jury_instructions.pdf.
¹²  Bangerman, supra note 9; Fred von Lohmann, Capitol v. Thomas: The Key Appeal Issue, Deeplinks, Oct. 9, 2007, http://www.eff.org/deeplinks/2007/10/capitol-v-thomas-key-appeal-issue.
¹³  Bangerman, Appeal in RIAA case to focus on “unconstitutionally excessive” punishment, Ars Technica, Oct. 15, 2007, http://arstechnica.com/news.ars/post/20071015-appeal-in-riaa-case-to-focus-on-unconstitutionally-excessive-punishment.html
¹⁴  Id.
¹⁵  Motion for Remittitur at 2, Capitol v. Thomas, available at http://blog.wired.com/27bstroke6/files/remittiturMot.pdf [hereinafter Motion for Remittitur].
¹⁶  Cable/Home Communication Corp. v. Network Productions, Inc., 902 F.2d 829, 852 (11th Cir. 1990) (citing Warner Bros., 877 F.2d at 1126). See also Fitzgerald Publishing Co., 807 F.2d at 1117; F.W. Woolworth Co., 344 U.S. at 233.
¹⁷  Motion for Remittitur, supra note 15 at 7, (citing Mo. Pac. Ry. v. Humes, 115 U.S. 512, 523 (1885))
¹⁸  BMW of N. Am. v. Gore, 517 U.S. 559 (1996).
¹⁹  State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408 (2003).
²⁰  Motion for Remittitur at 9.
²¹  Motion for Remittitur at 11.
²²  David Kravets, RIAA Juror: ‘We Wanted to Send a Message’, Threat Level, Oct. 9, 2007, http://blog.wired.com/27bstroke6/2007/10/riaa-juror-we-w.html.
²³  Zomba Enterprises v. Panorama Records, Inc., 491 F.3d 574 (6th Cir. 2007) (citing St. Louis, I.M. & S. Ry. Co. v. Williams, 251 U.S. 63, 66-67 (1919)).
²⁴  Murray v. New Cingular Wireless Servs., 232 F.R.D. 295, 303 (D. Ill. 2005) (citing In re Trans Union, 211 F.R.D. at 347-5).
²⁵  Id. at 304 (citing Parker v. Time Warner Entm’t Co., L.P., 331 F.3d 13, 22 (2d Cir 2003)).
²⁶  Motion for Remittitur at 2.
²⁷  Id.
²⁸  Id. at 3.
²⁹  Cable/Home Communication Corp. v. Network Productions, Inc., 902 F.2d 829, 850-51 (11th Cir. 1990) (citing F.W. Woolworth Co. v. Contemporary Arts, Inc., 344 U.S. 228, 231-33 (1952); Warner Bros. Inc. v. Dae Rim Trading, Inc., 877 F.2d 1120, 1126 (2d Cir. 1989)).
³⁰  See Motion for Remittitur at 2.
³¹  Motion for Remittitur at 3.