Law Test 3 - Infringement: Third Party Liability

OSPs defined

- "An entity offering the transmission, routing, or providing the connections for digital online communications, between or among points specified by a user, or material of the user's choosing, without modification to the content of the material as sent or received." (aka how you get your internet) - exs: Comcast, Verizon, AT&T, JMU - key part of this definition is that these internet providers are simply transferring without modifying

In re Aimster Copyright Litigation

- Aimster was a system used to exchange music and other files over the AOL instant messaging system and over the internet - used a revised "Sony" test to find contributory infringement - 7th Circuit disagrees with Napster ruling that actual knowledge of specific uses is a sufficient condition for a ruling of contributory infringement - 7th Circuit wants a revised Sony test that would permit a service provided to avoid liability if it demonstrates actual, not merely potential, non-infringing uses of its service - once non-infringing uses shown, test requires cost/benefit analysis to show how costly to remove non-infringing uses (this means if it costs tons of money to remove non-infringing uses; then the software must be mostly for non-infringing uses and the court will not find them liable of contributory infringement) - Aimster introduced no evidence to show non-infringing ways its software could be used

Metro-Goldwin-Mayer Studios, Inc. v. Grokster, Ltd.

- Grokester and Streamcast are software that were trying to do what Napster was doing. The difference is they were hoping to avoid liability by creating a decentralized index of files where each user maintained their own index of files that they could share with others. Supreme Court found plenty of intent of infringement but did not rule contributory infringement - Supreme Court ruled that distributors of Grokster and Streamcast MAY be liable for infringement if their products encourage consumers to illegally swap copyrighted works - SC unanimously remanded the case back to the 9th circuit saying that the appellate court had misapplied Sony decision by focusing only on technology and not the business model that the technology served

Future of P2P and Sony doctrine

- Grokester provides copyright owners new avenue for protecting rights where they can show that purveyors of technology are purposely seeking to profit on infringing acts of users - Grokester did nothing to clarify ambiguities from Sony case (when is a non-infringing use deemed "substantial" or "commercially significant"?) - Betamax was mostly put to legal use and the harm to the copyright holders was minimal - P2P technology overwhelming used to infringe and impose real damage to music industry

A & M Records v. Napster

- Napster released free software that allowed users to directly connect with one another via the internet. (P2P networking) Napster also allowed copyrighted MP3 files on local user machines to be copied onto other user machines. They even had an indexed list of all the files making it easy for users to copy files. - holds Napster liable for contributory infringement - holding based on Napster's knowledge of and material contribution to infringing activities of its users - Court acknowledged that Napster may be capable of use in non-infringing ways, but Napster's knowledge of the infringement is key

*** Notice and take down

- OSPs must designate an agent to receive notices of alleged infringement from copyright owner, by filing with U.S. Copyright Office and by posting agent's name and address (including email) on a publicly accessible website - after receiving a notice, OSP must respond quickly to remove or disable access to the material that is claimed to be infringing - ex: happens often on YouTube

System caching (OSP safe harbor)

- OSPs not liable for intermediate and temporary storage of material posted online by another person as long as storage is carried out through automatic technical process and the OSP adheres to industry standards for refreshing, reloading and updating the material and does not interfere with password protection and other security measures - OSP must comply w/ notice and take down measures

Information location tools (OSP safe harbor)

- OSPs not liable for referring or linking users to an online location containing infringing material, or for providing the means to locate infringing material such as a directory, index or search engine - notice and take down provisions apply to this sub section as well

In re Verizon Internet Services, Inc

- RIAA tried to use §512(h) to unearth individuals who were engaged in infringing peer-to-peer file sharing - Verizon refused to give up the names, arguing that 512(h) did not apply to situations where OSP was a mere conduit for arguably infringing transmissions - Court of appeals agreed with Verizon that subpoenas to identify infringers should not extend to those simply using the materials; might work if the OSP is involved in storage of the material on its website but not in its capacity of transmitting data

Sony Corp. v. Universal City Studios, Inc.

- Sony makes Betamax which is similar to a VHS where you can record shows for off-air and play them back later. Universal goes after Sony as a contributory infringer for allowing their consumers to record Universal's shows and movies on the Betamax - holding that Sony is not liable as contributory infringer for off-air taping done by Betamax owners - SC holds that manufacturers of staple articles of commerce (meaning manufacturers of VHS, tape recorders, etc) that are suitable for substantial non-infringing uses, cannot be held as contributory infringers (this is now known as "Sony" test) - Sony had knowledge of possible infringing uses but less certainty of its use in that way

Liability for activities of online service providers

- Title II of Digital Millennium Copyright Act (DMCA) limits liability for OSPs for copyright infringement - exemptions add to defenses for OSP under copyright law - act creates safe harbors for specific OSP activities - exempted from liability if activity falls within safe harbor - overall the act provides greater certainty for OSPs, immunizing them from inadvertent liability that may arise from the nature of the Internet

Transitory digital network communications (OSP safe harbor)

- as long as someone other than OSP initiates a transmission and chooses its recipients and the OSP doesn't interfere with the content, then the OSP is not liable for this transmission - applies to transitory reproductions as long as are not maintained on the system or network for longer than necessary - longer than necessary for transmission, routing or provision of connections (we know 14 days is ago but that's all we know)

Elektra Records Co. v. Gem Electronic Distributors, Inc. (contributory infringement)

- easiest cases for liability are those in which the related defendant has actual knowledge of and comes the closest to directly participating in the infringement - Gem is a store that sells tapes and for a fee would loan out pre-recorded tapes with copyrighted musical works. Around the store there were stations where you could duplicate tapes. The customers would buy blank tapes from Gem, loan a pre-recorded tape, and use the stations to make copies. Gem supplied all the means necessary, the only thing they didn't do was directly making the copies so there is clearly contributory infringement

Peer to Peer (P2P) challenge

- instead of machines connecting to a single server (ex: smad students connecting to smadmax) there are machines connecting to each other - rise of the MP3 player and the rise of Peer to Peer networking brings up new infringement issues

Contributory infringement

- one is held liable for actively aiding another to infringe copyright - actively induced the infringement - with knowledge of the infringement, supplied the means to infringe but aren't the one who actually did the infringing

Infringement: Third Party Liability

- person can be held liable as a related defendant for the infringing activities of another - not expressly recognized in the 1976 act - 2 types: contributory infringement and vicarious liability

Lenz v. Universal Music (9th Circuit, Decided Sept., 2015)

- prior to this case, takedown notices were being sent out left and right with little oversight - Lenz posts a 29 second video on YouTube of her toddler dancing to Prince and Universal Music sends a takedown notice to YouTube saying it violates their copyright. Lenz sues - 9th circuit decides DMCA requires copyright holders to consider fair use before sending a takedown notice - Lenz wins because it was considered by 9th circuit as fair use

Fonovisa, Inc. v. Cherry Auction, Inc.

- the classic vicarious liability case - Cherry Auction owns a flee market. Fonovisa owns the copyright to a lot of Latin music recordings. Vendors at the flee market were selling counterfeit music recordings and there is no doubt that Cherry Auction had knowledge of this bc years prior they got in trouble. Nevertheless, they did nothing about it and continued to benefit financially from these vendors. - flea market owner held vicariously liable for vendors' sales of counterfeit records - rationale for liability in these cases is based on the right or power to control the infringing acts while financially benefitting from them

Perfect 10, Inc. v. VISA Int'l Service Assoc.

- when defendant's knowledge and control over infringing activity is less pronounced, case for contributory liability is correspondingly weaker - court will not hold credit card companies liable for infringement when their customers purchase infringing material online; so not contributory liability

Subpoena to Identify Infringers

- §512(h) of DMCA allows any copyright owner who has served notice on an OSP to obtain court order requiring OSP to identify the individual subscriber who infringed

To qualify for exemptions:

1 - OSP must adopt, implement and inform subscribers and account holders of its policy providing for termination of users who are repeat infringers 2 - OSP must have adopted standard technical measures used by copyright owners to identify and protect copyrighted works

Liability for activities of OSPs are limited in 4 safe harbors

1 - transitory digital network communications 2 - system caching 3 - information residing on systems networks at the direction of users; and 4 - information location tools

Information residing on systems or networks at direction of users (OSP safe harbor)

Limits the liability for "hosting" services if OSP: 1 - does not know that the material is infringing; 2 - is not aware of information from which the infringing nature of the material is apparent; 3 - if OSP acquires information about infringement, it acts expeditiously to remove or block access to the material; 4 - does not obtain financial benefit directly attributable to the infringing material while having the ability to control it; and 5- complies with notice and take down provisions

LOA is a typical major provider of Internet access. Users pay LOA a monthly fee, and LOA provides those users with access to email and the the World Wide Web through its own network. For an added fee, LOA also allows users to store up to one gigabyte of information on LOA's servers. LOA has adopted and publicized its policy of terminating any users who repeatedly use its service to engage in copyright infringement, and has an agent designated to receive and review takedown notices. LOA does not interfere with content owners' attempts to use standard technology protection measures. Alice is an LOA user who frequently engages in illegal music filesharing, but has never been accused of copyright infringement. Alice transmits infringing music files back and forth to other users via email, all the while using LOA as her ISP. Alice's emails, and attachments are archived on LOA servers for five (5) days. At no time does any copyright holder become aware of Alice's conduct, nor does her conduct give rise to any suspicion. Which of Alice's actions can render LOA liable for damages?

Neither Alice's email transmissions with infringing attachments nor LOA's archiving of those emails.

Stealio Co. is a technology company that developed a hot new computer software application called VidCap. VidCap allows Internet users to easily select and download screenshot images from streaming videos. If a user is watching a streaming video on a site such as YouTube, and the user has installed VidCap, the user need only click on the computer screen as the desired images appears, and VidCap automatically downloads a high-quality JPEG image file to the desktop of the user's computer. The primary use of VidCap is to create bootleg movie posters. Stealio promotes the VidCap application to users, running advertisements that state: "Why pay for pricey movie posters when you can create your own--for free--using VidCap?" G-M-G, a major motion picture studio, has filed a copyright infringement suit against Stealio. G-M-G argues that Stealio is liable on a theory of inducement. Will G-M-G prevail?

Yes, because there is clear evidence that Stealio had knowledge of VidCap's infringing uses and that Stealio actively encouraged the application's infringing uses. (this is a contributory liability case)

Vicarious liability

can be held liable for infringing if supervise or have power to supervise the acts of infringement and benefit or stand to benefit financially from the infringing acts

Vicarious liability rises in cases where ________

defendant has the right or power to supervise the acts of the direct infringer, and has a financial stake in the infringing acts, even though the defendant has no knowledge of, or did not directly participate in the infringing acts

Issue with subpoenas to identify infringers

whether this section can be used only to identify subscribers who have posted infringing material, or can be expanded to also include subscribers who have used the OSP to download that material (i.e. simply using the OSP as a conduit)