I’ll be reading this decision, issued today, more carefully in the next day or two, but my first impression is that it’s a win for supporters of the DMCA safe harbor statute based on various legal rulings, and a loss for Youtube based on the really dumb behavior of Youtube’s founders. Of course, these guys didn’t know, back in 2005, that seven years later the courts would be judging whether they were aware that they were hosting copyrighted videos. If they had known, they might not have emailed each other comments like these:
“[W]e need views, [but] I’m a little concerned with the recent [S]upreme [C]ourt ruling on copyrighted material”
“[S]ave your meal money for some lawsuits!”
“concentrate all of our efforts in building up our numbers as aggressively as we can through whatever tactics, however evil”
“our dirty little secret . . . is that we actually just want to sell out quickly”
And there’s more like that. Ouch!
In the future companies with Youtube-like businesses will, one hopes, not create evidentiary grist of this sort for content owners to use in lawsuits against them. So, this case may turn out to be a great lesson for the online industry (careful what you say), and an expensive lesson for Google, which will likely have to add some dollars to the $1.65 billion it paid for Youtube in 2006.
A decision in Jagex v. Impulse Software, issued by Massachusetts U.S. District Court Judge Gorton in August, has some interesting (albeit not nonobvious) lessons for software developers seeking to protect their websites from copying or reverse engineering. The decision arises in the context of a preliminary injunction – a request by Jagex to provide it with legal relief at the outset of the case, before discovery or trial – so Jagex may yet prevail in this case, particularly since most of the reasons the court denied it relief that this stage can be corrected before the case progresses much further.
The plaintiff, Jagex operates an online role-playing game called “Runescape.” Runescape is a “massively multiplayer online role-playing game” (MMORPG for short, but we’ll just call it “the game”).
Impulse offers online cheat tools – software that lets users advance through the levels of the game without actually playing the game. Moving to higher and more challenging levels is the goal of the game, and the Impulse software allows users to reach those hallowed grounds without investing the time and effort the game expects users to endure. And, it is possible to invest a great deal of time and effort with this game – Judge Gorton noted that the top three Runescape players averaged about 20,000 hours of playing time.
You’re out cruising garage sales on a hot summer Sunday morning when you spot an unopened copy of AutoCAD sitting on a card table for $40 – 40 buckeroos for a program people spend $700 for new. Yeah, it’s a couple of versions back, but you figure you can get $340 for it on eBay, and not break a sweat. You buy it from the clearly clueless seller, and the next thing you know you’re watching bids come in at over $300. Except that Autodesk, proud owner of this high-end computer aided design program, objects. You don’t own that program, they say, we licensed it to the original seller, and she had no right to sell it, no right at all. You are infringing our copyright by reselling the software, so take it off eBay right now, Autodesk’s lawyers insist in a hand delivered, “sign-here-to-acknowledge-receipt-sir” letter. In the meantime, they’ve sent eBay a DMCA take-down notice and eBay has killed your sale.
Despite all the hoopla, this week’s copyright decision in Viacom v. YouTube (link on Scribd) was predicatable – a decision in the opposition direction would have been a shocker. Viacom accused YouTube (owned by Google) of massive copyright infringement. The court dismissed the case on summary judgment in favor of YouTube.
Of course, there is no question that copyright infringement is taking place on YouTube every instant of the day. The court noted that video is being uploaded to YouTube at the rate of 24 hours per minute. My calculator tells me that this is over 12.6 million hours of video per year. It’s no secret that people are uploading copyright material at a fantastic rate – a search of YouTube will find that almost any popular song can be located. it’s a simple matter to download the clip (either video of just audio), and share it with friends or on peer-to-peer networks. YouTube “ground zero” for online copyright infringement.
However, as I’ve noted in the past, the Digital Millenium Copyright Act – the DMCA – is a federal law that protects publishers such as YouTube as long as they follow the DMCA’s “notice and take-down” procedures (aka “whack-a-mole”), which YouTube has faithfully done. Thus, YouTube was able to claim that it followed “the letter of the law” and therefore its conduct fell within this statutory safe harbor.
Southern District of New York Federal District Court Judge Louis L. Stanton rejected Viacom’s argument that YouTube was aware of, and ignored, massive copyright infringement by YouTube users. The DMCA, the judge held, does not permit Viacom to establish liability based on “a general awareness that there are infringements.” The DMCA requires specific knowledge, and when YouTube had that knowledge (usually based on notice from Viacom), it “took down” the copyrighted work.
The atmospherics of the case were also helpful to YouTube. Unlike music sharing sites like Grokster, which were shown to have been aware of infringement but turned a blind eye to it (SeeMetro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913 (2005)), there were very few “smoking gun” emails uncovered by Viacom in discovery, so YouTube was able to credibly argue that it was not encouraging or turning a blind eye to infringement. (more…)
When I wrote about the trial judge’s remittitur order in the Jamie Thomas case last week, I didn’t mention that a legal aspect of remittitur is that the plaintiff may accept it, or reject it and demand a new trial. I now understand that the plaintiff in this case has not accepted the judge’s remittitur, and has informed the court that it elects instead to proceed with a new trial. This would be the third trial in this case, since the first was set aside by the judge following verdict. Obviously, this decision is a matter of principle, not finances, since the cost of the new trial alone will likely exceed the damages offered by the judge. However, this case, like the Tenenbaum case in Boston, is all about principle, and very little about hard, cold cash.
Out of more than 30,000 cases filed against downloaders by the record companies only two end-user download cases have gone to trial and judgment: the Tenenbaum case in Boston, and the case against Jammie Thomas-Rassett in Minnesota.
In the second case, the jury awarded the copyright owners $2 million for downloading (and allegedly distributing) 24 songs. The federal judge to whom the case is assigned has now lowered that amount to $2,250 per song (the legal term of the judge’s action is “remittitur”).
Some quotes from the Thomas-Rassett January 22, 2010 decision:
After long and careful deliberation, the Court . . . remits the damages award to $2,250 per song – three times the statutory minimum. The need for deterrence cannot justify a $2 million verdict for stealing and illegally distributing 24 songs for the sole purpose of obtaining free music. . . . although Plaintiffs were not required to prove their actual damages, statutory damages must still bear some relation to actual damages.
. . . This reduced award is significant and harsh. It is a higher
award than the Court might have chosen to impose in its sole discretion, but the decision was not entrusted to this Court.
. . . Thomas‐Rasset argues that the ratio of the statutory damages award to actual damages in this case, when measured in songs, is 1:62,015. She bases this calculations on a cost of $1.29 per song online.
. . . Thomas‐Rasset asserts that, at most, she was a single mother who merely downloaded and shared music when she had already lawfully bought CDs of much of that music and had no commercial motive to infringe.
. . . The need for deterrence cannot justify a $2 million verdict for stealing and illegally distributing 24 songs for the sole purpose of obtaining free music.
. . . The Court will not substitute its judgment for the judgment of the jury. Rather, it will remit the award to the maximum amount sustainable by the record, so that the statutory damages award is no longer shocking or monstrous.
It will be interesting to see if this decision has any impact on Judge Nancy Gertner, the federal judge assigned to the Tenenbaum case in Boston. In that case, the jury awarded $22,500 for each work infringed, and a motion for remittitur is pending.
Here is a link to the full opinion in Thomas-Rasset:
This song is Copyrighted in U.S., under Seal of Copyright # 154085, for a period of 28 years, and anybody caught singin it without our permission, will be mighty good friends of ourn, cause we don’t give a dern. Publish it. Write it. Sing it. Swing to it. Yodel it. We wrote it, that’s all we wanted to do.
Final judgment in Sony v. Tenenbaum entered by Judge Nancy Gertner today. The 30 day appeal clock starts to run. Should be interesting to see what the First Circuit does with this one, although I suspect that the betting is heavy in favor of quick affirmance.
A few choice quotes from Judge Gertner’s opinion, which is provided in full below on scribd.com.
“the Court, deeply concerned by the rash of file-sharing lawsuits, the imbalance of resources between the parties, and the upheaval of norms of behavior brought on by the Internet, did everything in its power to permit Tenebaum to make his best case for fair use.…The Court did what it could to focus the issue, notwithstanding what can only be described as a truly chaotic defense.”
…
Tenenbaum “tailor[ed] his fair use defense to suggest a modest exception to copyright protections,” he “mounted a broadside attack that would excuse all file sharing for private enjoyment. It is a version of fair use so broad that it would swallow the copyright protections that Congress created, defying both statute and precedent.”
…
“As this Court has previously noted, it is very, very concerned that there is a deep potential for injustice in the Copyright Act as it is currently written. It urges – no implores – Congress to amend the statute to reflect the realities of file sharing. There is something wrong with a law that routinely threatens teenagers and students with astronomical penalties for an activity whose implications they may not have fully understood. The injury to the copyright holder may be real, and even substantial, but, under the statute, the record companies do not even have to prove actual damage. “Repeatedly, as new developments have occurred in this country, it has been Congress that has fashioned the new rules that new technology made necessary.” … It is a responsibility that Congress should not take lightly in the face of this litigation and the thousands of suits like it.”
The First Circuit’s decision upholding the RIAA’s challenge to Judge Gertner’s decision to permit webcasting of a motion hearing in the RIAA v. Tenenbaum case was issued on April 16, 2009, very shortly after oral argument.
The First Circuit, interpreting a D. Mass. Local Rule, held that U.S. District Judge Nancy Gertner’s interpretation of the local rule concerning photographing recording and broadcasting of courtroom proceedings was “palpably incorrect”.
This result is quite disappointing for many people who had hoped that the First Circuit would hold that Massachusetts District Court Judges have have the discretion to webcast court proceedings in their courtrooms, and that this would be a first step toward allowing the public to view federal district court civil proceedings. The decision will, many hope, lead to a change in the pre-Internet Age Rule that was found to prohibit the webcast.
Here is the First Circuit’s recent decision upholding a preliminary injunction in a copyright case out of D. Puerto Rico. The sole issue on appeal was the holding on substantial similarity. The products were stuffed animals, specifically, frogs. Or, more specifically, the Puerto Rican tree frog, the Coqui. I’ve tried to find a picture of the defendant’s stuffed animal frog with no luck.
Massachusetts U.S. District Court Judge Nancy Gertner issued an order permitting the webcast of a scheduled in-court motion hearing in the RIAA/Tenenbaum copyright downloading case. The RIAA challenged the order, arguing that a federal rule prohibits the webcast. Here is yesterday’s audio of the First Circuit oral argument, with Harvard Law Prof. Charles Nesson arguing for Tenenbaum.
Interesting fact from the article: On YouTube alone ten hours of video content are put online every minute of every day, more than 250,000 clips per day.
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ing the RIAA’s challenge to Judge Gertner’s decision to permit webcasting of a motion hearing in the RIAA v. Tenenbaum case was
