by Lee Gesmer | Sep 15, 2006 | Copyright
Copyright. Sometimes it just seems like the law is full of traps. Miss a filing deadline, fail to make the proper objection or motion in court, leave the many forms of “magic language” out of an agreement – any of these, and countless more, can result in disaster.
Our firm has recently seen two clients pay over $500,000 to buy their way out of what I call the “work for hire” trap. Both clients are software companies. In the first case, the client hired an independent contractor to develop its product, and failed to get a written assignment of ownership from him. After leaving under adversarial circumstances, the contractor claimed that he, not the company, owned the product. The second case involved similar facts, but the independent contractor/programmer worked for a small agency, and after several years the agency asserted ownership of the programmer’s work. Again, no written assignment, and again, a multi-hundred thousand dollar settlement to avoid litigation and get what the company should have owned outright.
In both cases the companies could have argued that they had an “implied license” to use and sell the software (since in neither case did the contractor warn the company of his ownership claim while the work was being done), but the implied license doctrine is messy, to say the least. What investor or purchaser wants to be told that the company it is investing in or buying doesn’t own its software, and that it has an “implied license” from a hostile former programmer? ‘Nuff said.
Here are “the rules” of work for hire under the Copyright Act:
First, the easy case: if the developer is truly an “employee” (works full time, at direction of employer, employer withholds taxes), and the work is within the scope of her employment, the employer owns the programmers work. In this context the disputes that usually arise are over the “scope of employment” question – when the employee works at home evenings or weekends, was the invention within the “scope”? Any ambiguities in this situation are usually resolved be a well written employment agreement that draws this line contractually.
Second, if the developer is an independent contractor (working for you directly or through an agency), you must get a written assignment. The assignment can be complicated and wordy, but it can also be as simple as one sentence: “I, John Doe, for good consideration, receipt of which is acknowledged, do hereby assign to Corporation all title and interest in the intellectual property I have created for Corporation.”
Leave out any mention of “work for hire” unless you are sure that the work falls into one of the nine narrow work for hire categories set forth in the Copyright Act (for example, a translation or an atlas). If the contractor is working on one of these items, then the contractor can agree in writing, before work is commenced, that his work is a work for hire. Note that a computer program developed by a contractor can never be a work for hire, because computer programs are not one of the nine categories.
Because of the legal technicalities associated with the work for hire doctrine as applied to independent contractors, any reference to a work for hire is both unnecessary and possibly dangerous. What if the contractor agrees that the computer program she is writing is a work for hire? Does this technically deficient agreement (since computer programs don’t fall under work for hire) undermine the “employer’s” ownership? Who needs to worry about these technicalities? The solution, plain and simple, is to get a blanket assignment. An assignment covers all bases: whether the developer is an employee or an independent contractor, and whether her work falls within the nine work for hire categories or not, the assignment transfers ownership.
Avoid the work for hire trap, and with one important caveat, get an assignment.
The caveat is that a non-employee may be able to terminate the assignment after 35 years.
by Lee Gesmer | Aug 10, 2006 | Copyright, Miscellaneous
[Update:] Matt Mattari sent me a link to his article on this topic, which was published in the Harvard Journal of Law & Technology before the publication of the decision. Click here to read the article (pdf file).
Here is a link (pdf file) to the federal district court decision in the C.B.C. Distribution and Marketing Inc. v. Major League Baseball Advanced Media and Major League Baseball Players’ Association case, issued on August 8, 2006.
Quoting from the decision:
The court finds that the undisputed facts establish that the players do not have a right of publicity in their names and playing records as used in CBC’s fantasy games and that CBC has not violated the players’ claimed right of publicity. The court further finds, alternatively, that even if the players have a claimed right of publicity, the First Amendment takes precedence over such a right. The court further finds that the undisputed facts establish that the names and playing records of Major League baseball players as used in CBC’s fantasy games are not copyrightable and, therefore, federal copyright law does not preempt the players’ claimed right of publicity. Additionally, the court finds that the no-challenge provision of the 2002 Agreement between CBC and the Players’ Association and the provision of this Agreement which prohibits CBC from using players’ names and playing records after the expiration of the Agreement are unenforceable based on public policy considerations. The court finds, therefore, that declaratory judgment should issue in CBC’s favor. As such, the court will order the Players’ Association and Advanced Media to refrain from interfering with CBC’s fantasy games in the manner proscribed by this court’s decision.
The case contains a very extensive and thoughtful analysis of the issues, particularly the right of publicity and copyright issues. An appeal appears likely.
by Lee Gesmer | Aug 7, 2006 | Copyright, DMCA/CDA, What Were They Thinking
One of the risks of sending a legal demand letter to someone in the Internet age is that they will post it on the web and ridicule you. That’s what happened when the Baker & McKenzie law firm sent the very popular web site Boing Boing a letter warning it not to broadcast the World Cup competition, and containing the ominous threat that it would have its “agents actively monitor your website and others to identify unlawful activity.” Boing Boing published the letter here. (The letter is an image, so you may have to print it to read it).
Is a preemptive strike like this legally effective? Almost certainly it is not, except as a warning to the web site owner itself not to publish video or audio from the Cup. However, no sane, established web site owner would do so even without such a warning, since the site owner would risk significant damages (and particularly “statutory” damages – aka punitive damages) of up to $150,000 per infringement ). The far greater likelihood is that a third party will publish the audio or video (on a video site such as YouTube.com, for example, where videos of the Cup continue to be rampant), and that it was publications of this nature that Baker & McKenzie was targeting.
However, the owners of the World Cup broadcast rights must give notice after the fact under the strict procedures described in the DMCA (at least in the U.S., where Boing Boing is based). A preemptive, “before the fact” letter gives the copyright owner no greater rights than if it had not sent it at all. The owner of the Cup broadcast rights would still have to go through the “after the fact” notice and “take down” procedures mandated by the DMCA.
Back to my original point, when you send these demand letters (which by their nature often are extreme examples of “lawyer-speak”), you do risk public ridicule on the Web, and people will often try very hard to effect this. One of my all-time favorite examples of this is “The Rocket Formerly Known as Black,” which is quite funny, and seems to have taken on a life of its own.
by Lee Gesmer | Aug 4, 2006 | Copyright, DMCA/CDA
An interesting article in Business Week on the copyright issues raised by YouTube’s tremendous success.
When YouTube Inc. was sued on July 14 for copyright infringement, the shock wasn’t that the video-sharing service was being yanked into court. Questions had been swirling for months about whether the upstart, which now dishes up 100 million daily videos, was crossing copyright boundaries by letting its members upload videos with little oversight. continue . .
YouTube has a strong answer to this complaint based on the Digital Millennium Copyright Act (pdf file), which allows publishers like YouTube to avoid copyright liability for infringements posted by third parties, so long as an infringement is taken down after notice to the publisher.
by Lee Gesmer | Nov 27, 2005 | Copyright
Copyright.
“Imagine the cultural impact of putting tens of millions of previously inaccessible [books] into one vast index, every word of which is search able by anyone, rich and poor, urban and rural, First World and Third, en tout langue — and all, of course, entirely for free.”
Eric Schmidt, Google CEO
“Mr Schmidt fails to mention that Google’s intent . . . is to make even more money. . . . Can it be so greedy that it seeks to bolster it profits by freely exploiting the rights of publishers and authors?”
Patricia Schroeder, President, American Association of Publishers
The legal controversy over Google’s plan to use a proprietary high speed scanning process to copy (to start with) the entire book collections in the libraries at Michigan, Stanford, Oxford, the New York Public Library and Harvard, whether or not a particular book is under copyright, and to require copyright owners to notify Google if they wish to “opt out” of this program, has reached fever pitch. Indeed, its easy to see why. In almost every case until now, copyright litigation has implicated the legal rights of one copyright owner and one alleged infringer. In the few cases to involve broader rights, such as the Napster/Grokster line of file sharing cases, it was easy for anyone with a moral compass to conclude that wholesale copying and distribution of copyrighted music (or the encouragement of same) was wrong, and was a violation of the copyright laws.
Google’s is not threatening to Napsterize the book publishing industry, but its chutzpah is breathtaking: “Google Book Search” (f/k/a Google Print) proposes to scan every book, in every language, in-print or out-of-print, in-copyright or out of copyright, and make it freely searchable. If the copyright owner gives permission, make available for Internet searches the full page on which a search result appears, and adjacent pages. If Google doesn’t have the copyright owner’s permission, present only a “snippet” from the book to searchers using Google.
Whew! You would be hard pressed to come up with anything to make the book publishing industry angrier (short of outright Napsterization), and Google’s proposal has had a predictable effect (although its not clear whether the Googlers in Mountain View anticipated that their altruistic undertaking would result in copyright infringement lawsuits brought by both the American Association of Publishers and the Author’s Guild).
Here’s my view on the debate over the legality of Google’s on-again/off-again project. For the views of numerous other academics and observers (and more than you could possibly ever want to know about this issue, unless you are a lawyer for one of the sides in these lawsuits and are trolling for arguments), read here and here.
First, just as was true for many people when the peer-to-peer music file sharing issues first arose, there’s a lot of emotion over this issue. We are all consumers of information, and what consumer wouldn’t want “one giant electronic card catalogue that makes all the world’s books discoverable with just a few keystrokes by anyone, anywhere, anytime”? (Google’s Schmidt again). However, unless the courts rewrite the law (as Lawrence Lessig suggests), the legality of Google Book Search is going to be decided under the law as it exists today, not based on what’s good for the planet or Utopian philosophies of copyright law.
Second, I suspect that what’s really keeping the publishers and authors up nights is this question: who’s going to have control over this compilation of data? Sure, it’s “Do No Evil”-Google today, but who might have the resources to do the same thing, even on a smaller scale, in the future? And remember, the future is a long time. One can imagine the great-to-the-nth descendants of today’s publishers cursing their literary ancestors for allowing Google to take the first step down the slippery slope that leads, who knows where?
And, if that’s not enough to keep a good capitalist publisher awake nights, how long will it before the entire estimated 20 million books can be copied onto some kind of high capacity optical/nanotech data storage (blah, blah, woof, woof) DVD? Fifty years? Less? What’s to stop some Google employee who only pretended to buy this “do no evil” stuff from stealing this collection someday, and selling a copy to a wealthy collector? What if Google goes bankrupt (stranger things have happened), and the compilation is sold to . . . . ? (complete the sentence yourself, Constant Reader – your imagination is almost certainly better than anything I could provide).
Bottom line: for the publishers, this is the Battle of the Somme and the Battle of Normandy rolled into one. For the publishers, lose here, and the consequences are too horrible to imagine. Or at least they so imagine.
Now, the dry legalities. There is no question that Google is making literal copies of copyrighted works. Not only do they not deny it, they boast about it. By doing so, they are violating the first of the six “exclusive rights” that belong to a copyright owner, the right to “reproduce the copyrighted work.” Accordingly, Google must fall back upon the copyright “fair use” doctrine, which states:
[T]he fair use of a copyrighted work, including such use by reproduction in copies . . . for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright. In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include-
(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;
(2) the nature of the copyrighted work;
(3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and
(4) the effect of the use upon the potential market for or value of the copyrighted work.
This statute may appear reasonably straightforward on its face, but of course in application it’s not. The courts have applied these factors in many different contexts, and reversals by appellate courts (including SCOTUS on many occasions) has proved that applying them in a given case is no simple matter.
It is almost inconceivable that any court would give Google summary judgment in this case (although the same is not true if the publishers/authors move for summary judgment). Assuming a trial, what kind of evidence might the jury expect to hear in the copyright “trial of the century” ? Well, on the first factor, start with evidence of Google’s expected profits from this project, including all internal memos and analyses by Google projecting its business plans for Google Book Search, as well as Google’s contracts with the universities, one of which has already been made public. I’d be surprised if the publishers can’t show that Google Book Search is motivated by commercial interests. On second factor, the jury will learn that many of the copyrighted books involved are works of fiction, which are granted far stronger protection than factual works.
On the third factor, consider that although Google claims it will display only “snippets,” it is copying the full text of the works, and the publishers/authors have no guarantee that Google will forever comply with its promise. What will the jury focus on, the amount and substantiality of the material copied, or the substantiality of the material displayed in a single search? Finally, the fourth factor, which focuses on the effect on the potential market or value. What effect might a compliation of this magnitude have on the market if Google lost control of all or even a part of it, a concern that is far from hypothetical, and that the publishers/authors are likely to press aggressively?
Bottom line: while as a consumer I would love to have access to a fully stocked Google Book Search, as a lawyer I would place my bets with the copyright owners. I do not agree with Jonathan Band’s argument that the Ninth Circuit’s decision in Kelly v. Ariba Soft is controlling, or even persuasive precedent in this case. Arriba held that an online database of photographs, displayed as thumbnails and linked to the original web site that hosted the photo, fell within the fair use exception. The most significant difference, of course, is that in that case the copyright owners had freely put their works on the Internet themselves, and Ariba made copies only for the purpose of providing a directory for them.
When the publishers and authors first filed suit my water cooler prediction was that Google would back down. Since then, Google has made aggressive statements to the press, asserting that it believed in its position, and that it would take this case through the courts. Frankly, I don’t believe it, and I expect to see some form of out-of-court resolution that can be held up as a victory for both sides, but which is far less than Google Book Search as it was originally conceived.
by Lee Gesmer | Nov 9, 2005 | Copyright
Copyright. Copyright law is often called the “metaphysics of the law,” as judges labor to decide whether one work is enough like another to constitute copyright infringement. Often this involves arcane legal tests that few people, beyond copyright lawyers, care to think about. But, most of us read novels, and when one writer says, “your novel is so similar to my novel that it infringes my copyright,” we think, “that’s not so hard, I can decide that!” And, when one of the books is The Da Vinci Code (ranked 44th in books at amazon.com two and one-half years after publication), the chances are good that you, patient reader, have read one of the books that was the subject of just such a case. To see how a New York federal district judge decided the case in which Lewis Purdue, the author of Daughter of God and the Da Vinci Legacy, accused Dan Brown, the author of The Da Vinci Code, of copyright infringement, click here.
by Lee Gesmer | Jul 21, 2005 | Copyright
Copyright. Sexy: Internet file sharing systems, Grokster, sampling, The Wind Done Gone, fair use, the legal standard for non literal infringement of computer source code.
Not sexy: copyright protection for parts numbering systems.
Yet, believe it or not, from time to time clients do ask whether parts numbering systems are protected.
Lewis Clayton at Paul Weiss has written an article (published in the July 8, 2005 issue of the National Law Journal), discussing several recent cases dealing with parts-numbering systems and the “merger doctrine” under U.S. copyright law.
by Lee Gesmer | Jul 14, 2005 | Copyright, DMCA/CDA
Copyright, Digital Millennium Copyright Act. Quick now, what’s a good legal strategy when you’re involved in a bitterly contested trade secret, copyright and trademark case? Sue the lawyers on the other side, accusing them of hacking, of course. At worst, you’ll distract them and knock them off their game; at best, you’ll force their disqualification, pushing them out of the case and making your opponent go to the expense and inconvenience (not to be underestimated) of hiring new counsel and and getting them up to speed on the case.
And, it doesn’t matter that your suit may be borderline or even frivolous. Every experienced lawyer knows that in the American legal system the risks of being sanctioned for bringing a frivolous suit are only slightly higher than finding a hundred dollar bill on a Times Square sidewalk during lunch hour.
So, what happened here? First, there is an underlying trademark and trade secret suit between the similarly named “Healthcare Advocates” and “Health Advocate” that is of no particular interest to anyone except the parties. One of the issues is whether Healthcare published its alleged trade secrets on the Internet in the late 1990’s. Health Advocate, the defendant, is represented by the Harding Earley law firm, the lawyers who are at the receiving end of the lawsuit in question.
Seeking to investigate Healthcare’s publications on its Internet site in the late ’90’s, Harding Earley used the Internet Archive’s “Wayback Machine” to research Healthcare’s old web sites. The Wayback Machine (described in detail by Wikipedia here) is a remarkable Internet resource. Recognizing that old web pages disappear and that the early days of the Internet would be lost if they weren’t preserved, in 1996 the Wayback Machine began archiving the Internet for posterity, and thus far it has archived a petabyte of data – (the equivalent of 500 billion pages of standard printed text. (It’s also worth mentioning that the Internet Archive includes live music. The “live music archive” section of the site contains 2,886 live performances by the Grateful Dead. If you can’t wait to get started, click here).
If you own a web site and for some reason you don’t want to be archived by the Wayback Machine, you can opt out. The Wayback Machine permits website administrators to use the voluntary SRE (Standard for Robot Exclusion) to identify files or directories that cannot be “crawled” and indexed. Exclusion is accomplished by inserting a file called robots.txt on a web server. According to Internet.org this not only prospectively excludes a site from being crawled, but will “exclude any historical pages from the Wayback Machine.”
To return to our story, the case against Health Advocate was filed in 2003. Healthcare had been operating a website since 1998. In early July 2003, the robots.txt instructions were inserted by Healthcare. The next day (coincidence?) Harding Earley used the Wayback Machine to access Healthcare’s website material. Harding Earley hit the Healthcare site (using the Wayback Machine) very aggresively, and the robots.txt instruction failed to completely bar Harding Earley from accessing this material, nor did it warn the lawyers that the Healthcare material was “off limits.” The Harding Earley lawyers admit, however, that they had to “hit” the Healthcare URL repeatedly in order to gain access to it.
Fast forward two years, leaving out unimportant details. In early July 2005, based on the conduct described above, Healthcare filed suit against Harding Earley in the United States District Court for the Eastern District of Pennsylvania, Healthcare Advocates, Inc. v. Harding, Earley, Follmer & Frailey.
Most of Healthcare’s claims against the lawyers are hardly worth discussing (Trespass? Intrusion Upon Seclusion? Yeah, right…).
The only claim that might have merit is that Harding Earley violated the Digital Millenium Copyright Act (DMCA). Section 1201(a) of the DMCA states: “No person shall circumvent a technological measure that effectively controls access to a [copyright] work protected under this title.” Healthcare claims that robots.txt is a technological measure that controls access to the archived copies of its web site, and that the Harding Earley law firm circumvented that measure.
There are several problems with this argument. First, it’s not clear that Harding Earley took any affirmative steps to “circumvent” robots.txt, or that the law firm was even aware that Healthcare had attempted to restrict access to the material. In other words, Harding Earley did not use some form of de-encryption technology (common to DMCA claims). Did creating an automated script to hit the site repeatedly constitute circumvention under the DMCA?
Second, the DMCA defines a technological measure as one that “effectively protects a right of a copyright owner . . . if the measure, in the ordinary course of its operation, prevents, restricts, or otherwise limits the exercise of a right of the copyright owner under this title.” It’s not certain that the Standard for Robot Exclusion (implemented by robots.txt), a voluntary protocol, meets the DMCA’s definition of a technological measure. Moreover, the fact that the law firm got access simply by accessing the URL may suggest that the technological measure was not “effective.”
Third, since the archived website was accessed in connection with discovery in pending litigation, there may be no claim for copyright infringement. Absent the potential for copyright infringement, at least one case decided under the DMCA (Chamberlain v. Skylink) suggests that mere access to protected content may be insufficient to trigger the DMCA. As the Court noted in that case, the DMCA provides an additional avenue of protection for copyrightable content, but does not create a new property right.
Fourth, the lawyers can argue that it is significant that the web site content in question was fully and publicly accessible for five years. They may be able to argue that the the content was effectively licensed to the public or placed in the public domain when it was originally put on the web site, undermining the argument that the defendant’s access to it was in some way unauthorized.
Fifth, the plaintiff’s DMCA claim is clearly not what was contemplated by the law. The DMCA has traditionally (to the extent that term can be used for a statute of relatively recent vintage) been used to protected encrypted content, not external locks used to limit access to that content. Aggresive use of the DMCA in unanticipated ways is nothing new, but thus far has failed. Plaintiffs have unsuccessfully attempted to use the DMCA to prevent the sale of aftermarket printer cartridges and software codes embodied in garage door openers. We predict a similar conclusion is the likely outcome in this case.
Lastly, it’s worth noting that plaintiff’s theory, if successful, would discourage archivists like the Internet Archive from using voluntary measures like robots.txt upon pain of creating a DMCA violation if the measure fails, and therefore would open a host of copyright issues for the Archive that could endanger its existence.
Thanks to Joseph Laferrera, who has written a number of insightful articles on the DMCA (Court Limits Reach of DMCA – The Chamberlain Case and Court Preserves Aftermarket Competition Under the DMCA – The Lexmark Case), for his assistance in preparing this piece.
For some additional interesting commentary on this case by Rebecca Bolin, see LawMeme, here.
by Lee Gesmer | Jul 12, 2005 | Copyright
Following the Supreme Court’s June 27, 2005 decision in MGM v. Grokster I wrote a short article about the case, in the style of a client consulting a lawyer about a file-sharing system.
Attorney: Judy, what brings you to my office today?
Client: John, I have an exciting idea, and I want to run it by you to make sure it passes legal muster. I’ve been involved in indie music and film for years; I have hundreds of contacts in the entertainment industry. People don’t realize what a huge body of uncommercialized work is out there! I’ve developed the most radical peer-to-peer file-sharing software you can imagine. It makes Napster, Grokster, Morpheus and all of the others look medieval by comparison. I think that musicians and video producers will contribute their works to this network to get publicity. My revenue model will be based on banner advertising. It’s perfect! I have no cost of inventory – my only costs are computers, networking, and sales commissions for my ad reps. The best thing is that although anyone can put their files on my network, the technology creates proprietary file structures, so that people can’t grab my files, convert them into MP3s, and publish them on a competing system.
Attorney: Judy, this sounds very promising. However, there are some legal issues that we should discuss. You know that on June 27th the Supreme Court issued its decision in the Grokster case?
Client: I vaguely knew that something was pending before the Supreme Court, but I’ve been too busy with my programmers to read the news this week. How does this case affect me?
Attorney: Well, the Court held that MGM could proceed with its copyright case against Grokster, and reading the decision it seems a forgone conclusion that the lower court will find that Grokster violated the copyright laws. The Supreme Court didn’t buy Grokster’s argument that it shouldn’t be held liable for contributory infringement because there were potential noninfringing uses for its software. So, is there any chance that people could rip copyrighted music or videos, convert them into your format, and use your network to engage in illegal file sharing?
Client: I suppose there is; I really can’t control that. Am I participating in copyright infringement if copyright pirates take advantage of my system, even if I don’t illegally copy files myself? We would never condone or participate in that kind of conduct, but I don’t see how we could stop it from happening.
Attorney: You may not have to. The facts in Grokster were pretty extreme. The evidence showed that at least 90% of the files available on Grokster’s system were unauthorized copies. Also, Grokster made some serious mistakes – there was evidence that they actively encouraged infringement …
Client: Wow, they really dug their own grave …
Attorney: …. they held themselves out openly as an alternative to Napster, made no effort to filter copyrighted material, didn’t block users who shared copyrighted files, and they even rejected an offer to help them monitor and reduce infringement.
Client: Interesting. Did the Court announce some kind of rule or holding that I can use as a guide for my company?
Attorney: They did. They said, and I quote, that it is illegal to distribute a device (including software), “with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement.” If you do that, you will be liable for acts of infringement by third parties who use your software.
Client: Well, I certainly can control what my company says. I’ll be careful never to indicate to the public that the purpose of my system is to copy unauthorized works
Attorney: Well, be careful Judy. Any internal emails, business plans or other communications would also show your intent, not just statements to the public.
Client: Thank you, I understand that John. But what does the Supreme Court mean when it talks about “fostering infringement”? Attorney: “Affirmative steps taken to foster infringement,” to use their exact language.
Client: What do they mean by that? Could the old media companies claim that I am fostering infringement simply by making this system available, despite my good intentions? After all, simply starting this file sharing system is an “affirmative step,” right?
Attorney: Yes, but it appears the Supreme Court wanted to avoid discouraging the creation of the kind of system you’re describing. They specifically stated, and again I quote, “mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability.” They emphasized that illegality requires “purposeful, culpable expression and conduct,” and that they did not want to discourage innovation.
Client: Well, that sounds good. But you said that in Grokster the Court was influenced by the fact that only 10% of the files shared were “legal,” and the rest were infringing. As a practical matter, I can’t prevent my system from being taken over largely by illegal file sharers. What if my system ends up the same way?
Attorney: Taking the Supreme Court at face value, there is no per se illegality based on percentages alone. As long as you have the proper “intent,” the fact that your system is used for illegal purposes shouldn’t be a problem.
Client: Hmmm … if that’s the case, what’s to stop someone from coming up with the next generation of Napster or Grokster, hiring good lawyers to make sure they behave properly and don’t express illegal intentions, and then sit back and get fat and happy on advertising fees while illegal file sharers take over and expand their system?
Attorney: Nothing, that I can see from this case. Someone might be able to get away with a scheme like that. It almost goes without saying that they’d have to be able to fight off attempts by the media companies to expand the ruling in Grokster and shut them down, so a large litigation budget would be essential.
Client: What else could such a company do to be on the safe side?
Attorney: Well, like so many Supreme Court cases, the decision is very complex, and there are depths we may not have time to go into now. Although all three judges agreed on the ultimate ruling (reversing the lower court ruling in favor of Grokster), there are three different opinions, each joined in by three of the nine justices, so there are three factions within the nine member court. There are areas of disagreement, and one can see some complex cross-currents running through the three opinions that suggest that not all issues related to file sharing and copyright law have been resolved. That said, there are a few things you can do to be conservative. First, believe it or not, the Court thought the names of the services suggested their bad intent. For example, “Grokster” was derived from “Napster,” suggesting an illegal service. So, a file sharing service should have a neutral name. Second, I’d be somewhat concerned if someone knew that their system had been hijacked and did absolutely nothing to curtail the situation. So if it’s technically possible and financially feasible, use some filtering technology to minimize illegal file sharing. There’s more, but ….
Client: That’s OK John, I’ve heard enough for today. This has been much more educational than I anticipated. This conversation we’ve just had is attorney-client privileged, of course?
Attorney: Of course Judy. Best of luck on your new venture. Let me know if you need any further assistance, and don’t forget to give me the URL.
