by Lee Gesmer | May 29, 2013 | Copyright
Click here for Part 1 in this series of posts, here for Part 2.
In Parts 1 and 2 of this series of posts I discussed how Aereo designed its broadcast-TV-to-Internet system to fit within the ruling established by the Second Circuit in the Cablevision case anticipating that it would be sued for copyright infringement by a group of broadcasters.
INNOCENCE ABROAD
(IN SEARCH OF A COPYRIGHT)
Thomas Nast’s illustration in Harper’s Weekly
January 21, 1882, p. 37.
The broadcasters did file suit against Aereo, and in the Second Circuit, the very circuit in which Cablevision is controlling law and the circuit in which Aereo, not coincidentally, first offered its service. Home territory, in a manner of speaking. As expected, Aereo wrapped itself in Cablevision, and the district court ruled that Aereo’s “one antenna-one viewer” system did not violate the broadcasters’ public performance right under the Copyright Act. On this basis the district court denied the broadcasters’ request for a preliminary injunction that would have forced Aereo to stop operations in the Second Circuit, at the very least.
The broadcasters appealed this ruling to the Second Circuit, which upheld the district court. The Second Circuit held that its holding in Cablevision controlled the outcome in Aereo, and set out four conditions that needed to be considered in evaluating a challenge to a rebroadcast system such as Aereo’s based on the copyright public performance right:
First and most important, the Transmit Clause [of the statutory definition of public performance] directs courts to consider the potential audience of the individual transmission. If that transmission is “capable of being received by the public” the transmission is a public performance; if the potential audience of the transmission is only one subscriber, the transmission is not a public performance, except as discussed below. Second and following from the first, private transmissions – that is those not capable of being received by the public – should not be aggregated. It is therefore irrelevant to the Transmit Clause analysis whether the public is capable of receiving the same underlying work or original performance of the work by means of many transmissions. Third, there is an exception to this no-aggregation rule when private transmissions are generated from the same copy of the work. In such cases, these private transmissions should be aggregated, and if these aggregated transmissions from a single copy enable the public to view that copy, the transmissions are public performances. Fourth and finally, “any factor that limits the potential audience of a transmission is relevant” to the Transmit Clause analysis.
Aereo satisfied this four-factor test. Its system relies on individual transmissions that can be received by only one subscriber. These individual or “private” transmissions are not generated from the same copy of the work, but rather from the “unique copies” that are created for each subscriber. The transmission of these separate copies should not be aggregated for purposes of determining whether Aereo was violating the broadcasters’ public performance rights. Thus, the fact that Aereo might be transmitting 50,000 individual copies of the Super Bowl at the same time does not turn its rebroadcast system into a public performance.
The broadcasters fought valiantly, but without success, to distinguish Aereo from Cablevision:
- The court rejected Aereo’s argument that Cablevision should be distinguished because Cablevision had a license to retransmit programs and Aereo had no license. The presence or absence of a license was irrelevant to the rationale of the Second Circuit in Cablevision.
- It refused to accept the broadcasters’ argument that Aereo should be distinguished because Aereo’s system was analogous to a cable system, whereas the Cablevision system was more like a VCR. The Cablevision decision was not influenced by the fact that the system was comparable to a stand-alone VCR.
- The broadcasters’ argument that Cablevision engaged in time-shifting that broke the chain of transmission, while Aereo facilitated near-real time retransmission, likewise failed to provide a basis for distinguishing the Aereo system from Cablevision’s network-DVR.
As the Second Circuit noted, the broadcasters’ arguments boiled down to an attempt to persuade the court to overrule Cablevision, something the Aero court lacked the authority to do.* The broadcasters have filed a request for en banc review of the case which, as of the time of this post, has not been acted on. Cablevision remains the law of the Second Circuit, and it controlled the outcome of the broadcasters’ suit against Aereo, at least at this stage of the case.
*The circumstances under which a federal appeals court panel may overrule a decision of an earlier panel are sharply limited.
Fox Television Stations v. BarryDriller
While the Aereo case has come to at least a temporary conclusion in the Second Circuit (pending a ruling on en banc review), a similar case is pending in the Ninth Circuit. In Fox Television Stations v. BarryDriller (C.D. Cal. Dec. 27, 2012),* the California district court rejected the rationale of Cablevision and Aereo, and enjoined a “technologically analogous” broadcast system on the very grounds rejected by the New York federal courts. Like Aereo, the system at issue used mini-antennas, a transient buffer copy and unique copies of programs.
*For an explanation of why the defendant company named itself “BarryDriller” see this article on paidcontent.com.
However, after reviewing Cablevision, the district court found that Cablevision “is not the only possible reading of the statute.” The court found that the copyright statute does not, by its terms, require that a public performance be received from the same transmission, the central holding in Cablevision: “the concern is with the performance of the copyrighted work, irrespective of which copy of the work the transmission is made from. … Cablevision’s focus on the uniqueness of the individual copy from which a transmission is made is misplaced.”
Will the Supreme Court Take This Case?
BarryDriller case is on appeal to the Ninth Circuit Court of Appeals. If that court upholds the district court and the Second Circuit either declines to review Aereo en banc or upholds the Second Circuit panel decision, there will be a split of authority between the two circuits, making these cases strong candidates for Supreme Court review. While the Supreme Court accepts only about 1% of cases appealed to it, and infrequently reviews copyright matters, the importance of this issue,* and a clear circuit split, would give the cases a good chance for Supreme Court review.
*As the broadcasters said in the first sentence of their en banc petition, “A recent … decision of this Court raises a question of exceptional importance; it effectively overturns a congressional mandate that is the foundation for much of the current system for delivery of television programming.”
And, there a prospect of additional circuit splits over the Cablevision issue as Aereo introduces its service in 
additional markets throughout the United States and is sued in one or more of those circuits, which would only increase the likelihood of Supreme Court review. The imminent release of Aereo in Boston would give the broadcasters a chance to present their arguments to the Massachusetts federal courts.
In the next, and last, post in this series, I’ll discuss the widespread criticism of Cablevision and Aereo, which will be presented to additional circuits should Aereo be sued in other circuits. And ultimately, perhaps, before the Supreme Court.
Click here to go to Part 4 in this series of posts.
by Lee Gesmer | May 21, 2013 | Copyright
Only one thing is impossible for God: to find any sense in any copyright law on the planet.
– Mark Twain’s Notebook, 1902-1903
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Click here to see Part 1 of this series of posts.
In part 1 of this series I described how Aereo’s technology allows users to watch, record and access broadcast TV over the Internet. At the heart of this system is the use of a set of dime-sized antennas assigned to each subscriber, short buffering in RAM for retransmission and the creation of a unique per-subscriber copy of each broadcast the user wants to record for later viewing.
Why did Aereo construct its system this way? Why not one antenna and one copy of each broadcast? Aren’t the thousands of antennas and thousands of personal copies expensive and unnecessary? The answer is that they may be expensive and technically unnecessary, but they are essential to Aereo’s ability to avoid broadcaster claims of copyright infringement. In fact, this Rube Goldberg system was designed to fit the legal parameters of a case decided by the Second Circuit in 2008. And, it is no accident that Aereo first released its service in New York, which falls in the Second Circuit, drawing a lawsuit by the broadcasters in the same circuit that had decided the 2008 case.
The case that Aereo based its design on is the Second Circuit’s famous (or, to the broadcast industry, infamous) decision in Cartoon Network v. CSC Holdings, usually referred to as the Cablevision case. In Cablevision the broadcasters tried to enjoin Cablevision—a cable operator with a license to retransmit cable programming to its paying subscribers—from introducing a remote storage digital video recorder (network-DVR) that would allow Cablevision customers who did not have a TiVo-like set-top DVR to record cable programming and receive playback through the cable system itself, or from “the cloud.”
Cablevision’s network-DVR system is itself something of a Rube Goldberg creation. Cablevision’s network-DVR utilizes a complex buffering and storage technology that splits a licensed cable broadcast feed into two streams, one of which includes a “buffer” copy directed to a router where it is stored in RAM for no more than 1.2 seconds as the router looks to see if any customers have asked that the program be recorded for them. If a customer has asked for the program to be recorded, the data is stored on a Cablevision hard drive storage area maintained by Cablevision and assigned solely to that customer, where it is available for later replay, much as it would be if it had been stored on a set-top DVR. If there is no “record” request from a subscriber, the data in the revolving buffer is not retained.
For example, if 50,000 Cablevision customers recorded the Super Bowl, Cablevision would create 50,000 copies, one for each customer. If a customer wanted to play back the program, Cablevision would transmit the specific copy created for that customer. No one else could access that copy.
The broadcasters filed suit in federal court in the Southern District of New York, claiming copyright infringement. In 2007 the district court judge, Denny Chin, enjoined Cablevision, but the Second Circuit issued a controversial decision reversing Judge Chin and rejecting the the broadcasters’ copyright challenge based on some highly technical interpretations of copyright law.*
*Ironically, Denny Chin, the district court judge reversed by the Second Circuit in Cablevision, was later elevated to the Second Circuit, and became a dissenting judge on the 3-judge panel that decided Aereo in 2013.
Cablevision’s Buffered Copies Do Not Meet Copyright Law’s Fixation Requirement
First, the Second Circuit held that the 1.2 second buffered copy was not an infringing copy because it was not embodied “for more than a transitory duration.” A 1.2 second copy does not, the court held, satisfy copyright law’s “fixation” requirement,* and therefore the buffered copy did not qualify as a “copy” under the Copyright Act’s definition of that term. However, the court did not state how long a copy wold have to be embodied to be more than transitory, and its holding arguably conflicts with the 9th Circuit’s 1993 ruling in MAI Systems v. Peak Computer, which held that copying, for purposes of determining copyright infringement, includes the transfer from a permanent storage device (such as a hard drive) to RAM.
*”A work is ‘fixed’ in a tangible medium of expression when its embodiment in a copy or phonorecord, by or under the authority of the author, is sufficiently permanent or stable to permit it to be perceived, reproduced, or otherwise communicated for a period of more than transitory duration.” 17 U.S.C. §101.
Transmission of a Unique Copy to a Single Subscriber Is Not a “Public Performance”
In addition to making a copy, one of the exclusive rights of a copyright owner is the right to authorize a “public performance” of a work. This right is found in a section of the copyright statute that includes a provision known as the “transmit clause,” which states that to perform a work “publicly” includes:
to transmit … a performance or display of the work … to the public, by means of any device or process, whether the members of the public capable of receiving the performance … receive it in the same place or in separate places…, at the same time or at different times. 17 U.S.C. §101.
The most controversial holding in Cablevision was the Second Circuit’s conclusion that the word “performance” did not refer to the performance of the underlying work being transmitted but rather the transmission itself. The court held that “the transmit clause directs us to examine who precisely is capable of receiving a particular transmission of a performance.” The court concluded that because Cablevision’s network-DVR required each transmission to be made to a single subscriber using a unique copy saved by that subscriber, the potential audience for a network-DVR playback transmission is limited to the single subscriber, and therefore the transmissions are not performances to the public.
In other words, for purposes of the “public performance” right the 50,000 copies of the Super Bowl (each of which has been “saved” to a separate directory by a single subscriber) should not be aggregated for purposes of determining whether Cablevision is engaged in a “public performance” of the Super Bowl.*
*Making individual copies for each subscriber in this manner requires thousands of terabytes of hard disk storage. The ability to provide this storage at low cost is a consequence of “Kryder’s Law,” which holds that magnetic disk storage density doubles every 13 months, a rate faster than the doubling of semiconductor chip performance according to Moore’s law.
It is this “unique copy” test that became critical when the broadcasters challenged Aereo in the Second Circuit.
Subscribers, Not Cablevision, Exercise the Volitional Conduct Necessary to Make a Stored Copy For Later Viewing
Third, the Cablevision network-DVR does save a copy for each subscriber that requests it, and these copies clearly do meet the copyright statute’s fixation requirement. However, the Second Circuit focused on the “volitional conduct” that caused the copy to be made, and held that while Cablevision created and maintained a system that allowed a copy to be made, it is the customer’s conduct in ordering the system to make a copy—”the person who actually presses the button to make the recording”—that causes the copy to be made. The Second Circuit analogized Cablevision to a store proprietor who charges customers to use a photocopy machine on the store’s premises, in which case (in most circumstances) it is the customer, not the store owner, who makes the copy for purposes of determining direct liability under the Copyright Act.*
*The court emphasized that the conduct Cablevision engaged in would better be analyzed under principles of contributory infringement. However, Cablevision had not pursued that theory of liability.
. . .
Clearly, the Cablevision network-DVR was designed to avoid copyright liability, not to achieve technical efficiency. And, if the Second Circuit’s three legal holdings strike you as threading the needle through some very tight legal loopholes, you are not alone. The case has its supporters, but their support is mostly based on copyright policy – why shouldn’t people who are paying for cable service that is being transmitted to them by the cable company under license be able to “time shift” their viewing of cable shows using a network-DVR, just as they can using a set-top DVR? However, strictly as a matter of copyright law each of the three conclusions has suffered scathing criticism by copyright law scholars—particularly the public performance and the “volitional conduct” holdings.
Nevertheless, this decision remains the law in the Second Circuit – copyright law’s most influential circuit. And, it didn’t take long for enterprising entrepreneurs to see how they could stretch this precedent even further, leading to the Second Circuit’s April 1, 2013 decision in WNET V. Aereo. In fact, Cablevision may have opened the door to creative destruction in the television industry. I will discuss Aereo in Part 3 of this series of posts.
Click here to continue to Part 3.
by Lee Gesmer | May 17, 2013 | Copyright
Whenever a copyright law is to be made or altered, then the idiots assemble.
– Mark Twain’s Notebook, 1902-1903
______________________
Aereo is coming to Boston, and to 20 other cities before the end of the year.
Aereo is a company that has developed a system that captures over-the-air television (broadcast TV) and retransmits it to subscribers over the Internet. Subscribers are able to watch broadcast TV on their computers, tablets and smart phones. Even better, Aereo acts as a remote digital video recorder (a remote DVR) so subscribers can record programs and stream them at another time. Aereo launched in New York City in early 2012, but it has announced that it is expanding to 21 other cities in 2013.
Is this a problem for broadcasters? You bet it is. Cable companies pay broadcasters such as CBS, ABC, NBC and FOX for the right to retransmit their shows to cable subscribers. If people can access broadcast TV at Aereo’s rates (which are far less costly than cable rates), it may mean fewer cable subscribers and reduced network revenues. According to the New York Times, the use of Aereo and copycat services has the potential to cost the networks retransmission fee revenues of more than $2 billion/year, an amount projected to grow to $6 billion/year by 2018.
The broadcasters are not taking this lying down. Claiming copyright infringement they sued Aereo in federal district court in New York. However Aereo successfully defended against the broadcasters motion for a preliminary injunction before the district court and the influential Court of Appeals for the Second Circuit.* CBS has threatened to sue Aereo anywhere it offers its service, and the broadcasters are almost certain to appeal the Second Circuit decision to the Supreme Court. Simply put, this has the potential to be a nation-wide litigation free-for-all.
*The case may not be over in the Second Circuit. Aereo has petitioned for the case to be heard en banc.
In order to understand the copyright issues involved in Aereo’s service we need to step back and look at three cases, one of which is an important copyright law precedent from the Second Circuit, and two of which involve Aereo’s or Aereo-like technology. First, however, it is important to understand how Aereo provides its service.
Aereo: Thousands of Tiny Antennas, and a Separate Copy of Recorded Programs for Each Subscriber
Imagine, for a moment, that you captured TV broadcast signals that are transmitted through the airwaves, transcoded them to make them available over the Internet, stored them on a server and streamed the shows to people who accessed a website you created for this purpose. Limited only by bandwidth, thousands of people could watch broadcast TV on their computers, tablets or smartphones by accessing your site. You would have allowed viewers to bypass cable service. And, you could allow users to watch the television shows at times convenient to them. 
Would this violate copyright law? You bet it would. Copyright owners have the exclusive right to public performances of their works, and you would be violating this right. The federal courts have made clear that retransmission of copyrighted television programming by streaming it over the Internet constitutes a “public performance” in violation of the Copyright Act. The broadcasters woud be able to shut you down in a New York minute.
Aereo, however, makes broadcast TV available to its subscribers. And, to make matters even worse (for broadcasters), it allows them to “record” programs and watch them later – in other words, to “time shift” TV broadcasts using Aereo’s remote DVR.
tiny antennas on circuit boards
Exactly how it implements this is important to the legality of its service, so here goes.
The technical features of Aereo’s service are unusual, to say the least. One Second Circuit judge described them as “a sham . . . a Rube Goldberg-like contrivance, over-engineered in an attempt to avoid the reach of the Copyright Act and to take advantage of a perceived loophole in the law.” (Aereo Dissent).
First, rather than have one antenna to capture over-the-air broadcasts, its system allocates two “unbelievably small” (Aereo’s description) antennas, attached to antenna boards, to each customer. Each of the antennas is able to receive TV broadcast signals. Every Aereo subscriber is assigned a pair of these dime-sized antennas to handle that subscriber’s live feeds and recordings. One antenna is used to receive a show that can be streamed to the customer in near-real time. If the customer chooses to watch the show as it is broadcast it is stored for six or seven seconds on Aereo’s servers before it is digitized and streamed to the user, so the user is watching the broadcast with a slight delay. The second antenna is used to receive broadcasts that are recorded for later viewing.
Aereo’s “Unbelievably Small” Antenna
Massive cloud-based storage handles the storage of TV programs for subscribers who wish to “record” broadcasts for later viewing. However, Aereo does not store a single copy of a particular broadcast. It creates a unique copy of the program for each subscriber, which is saved on Aereo’s hard drives; only the subscriber assigned that disk space or directory can access that specific copy of the program for later viewing.
For example, if 50,000 Aereo subscribers are watching the Super Bowl as it is broadcast on CBS the broadcast is received by 50,000 personal so-called “watch” antennas and stored for several seconds individually on Aereo’s servers before being transmitted to subscribers. If these 50,000 Aereo subscribers choose to record the game as well, it is received by the 50,000 “record” antennas and stored on Aereo’s servers in 50,000 separate directories, each directory and recording being assigned to an individual Aereo subscriber and available for replay at the request of the subscriber.
**For a more detailed explanation of Aereo’s technology, with pictures of the components, see Inside Aereo: new photos of the tech that’s changing how we watch TV (Gigaom.com).
As discussed later in this series of posts, these features—the use of massive “antenna farms” utilizing small antennas and duplicative, individualized storage on Aereo’s servers—are what allowed Aereo to persuade the Second Circuit that its system was not being used to infringe the broadcasters’ copyrights. The extent to which other courts around the country, and perhaps the Supreme Court, will agree remains to be seen.
My next post will discuss the Cablevision case, which gave Aereo the legal protection it needed to create this “Rube Goldberg” system, and how it used its design to claim that its service does not violate broadcaster copyright rights.
Click here to go to Part 2.
by Lee Gesmer | May 15, 2013 | Copyright
Aereo captures over-the-air television broadcasts and streams them to Aereo subscribers over the Internet. While the broadcasters claim this is copyright infringement (unauthorized public performance), Aereo has created an “antenna-farm” system designed to avoid allegations that its rebroadcast is a public performance under U.S. copyright law. CBS Broadcasting and other broadcasters brought suit for copyright infringement in federal court in New York. However, Aereo convinced both the federal district court and the Second Circuit Court of Appeals that Aereo does not violate copyrights in the broadcasts. (Aereo shows “how it works” here).
Aereo rolled out its first implementation in New York, and the Second Circuit “test case” was decided there. Now, Aereo plans to launch its service in 22 cities before year end. Boston is scheduled to launch on May 30th. Apart from the legalities of the underlying copyright claim, this raises the question whether the broadcasters can re-challenge the Aereo service as it launches in new locations outside the Second Circuit (which is comprised of New York, Connecticut and Vermont). Unfortunately, federal law in the U.S. is not always uniform. For example, Aereo may have prevailed in the Second Circuit (i.e., New York), but the broadcasters may be able to successfully challenge Aereo in the First Circuit (Boston) when it launches here, and perhaps get a different result. In fact, according to Aereo CBS has threatened to do just that, stating (after losing in New York), “we will sue in Boston.”
Aereo, whose legal acumen should not be underestimated, does not want to wait to be sued in Boston (or anywhere else in the U.S.), at least not by CBS Broadcasting or CBS’s affiliates. On May 6th it filed a preemptive suit in the Southern District of New York, asking that court to enjoin CBS from filing what Aereo calls “duplicative follow-on suits” or “do overs.” Its new lawsuit was assigned to the same federal district court judge that refused to enjoin Aereo’s system in the first place.
After reviewing Aereo’s complaint, it seems that this suit is tactical rather than strategic.
The suit names 12 defendants in cities where Aereo intends to offer its service, but they are all owned by or are affiliates of CBS Broadcasting. Aereo asserts that CBS’s New York lawsuit sought a nationwide injunction against Aereo, and therefore the outcome of the New York suit governs the nationwide legal relationship between Aereo and CBS, including CBS subsidiaries and affiliates. CBS should not, Aereo argues, be entitled to relitigate the same issue in another federal court.
CBS may be the most aggressive Aereo plaintiff, and it is possible that Aereo believes that by excluding CBS from follow-on cases it will weaken the plaintiff side of the case. But even if CBS is precluded from filing suits outside the Second Circuit (not a foregone conclusion), that will leave several large broadcasters free to file suit in those districts. For example, even though NBC, ABC, PBS and Fox were parties to the New York case, they are not named in Aereo’s declaratory judgment suit. Even if they were added to the suit, it should not be difficult for the broadcasters to find a broadcaster that was not a party to the New York case to carry the flag for them outside of New York. The broadcasters’ strategy may be to challenge Aereo in every federal circuit that Aereo enters, obtain at least one favorable decision (which shouldn’t be hard to do — the Second Circuit’s Aereo decision is controversial and vulnerable to a different interpretation of the law),* and seek Supreme Court review when a split in the circuits develops.
*A federal district court in California has already ruled that an Aereo-like system violates broadcaster copyrights. (Fox v. BarryDiller, CD Cal. 2012).
The bottom line is that the Second Circuit decision favoring Aereo was, as far as the broadcasters are concerned, a battle, not the war. I anticipate that the broadcasters will ultimately prevail, and that Aereo’s attempt to block additional suits by CBS will turn out to be a minor impediment in the broadcasters’ campaign to have Aereo’s “antenna farm” system of rebroadcast declared illegal under U.S. copyright law.
by Lee Gesmer | May 9, 2013 | Copyright
Let me begin with the bottom line: this was a excellent course. If Professor Fisher offered another course (such as trademark or Internet law, two areas identified on his online bio), I would not hesitate to take it or audit it.
Background
edX is a collaboration formed by Harvard and MIT to produce “Massive Online Open Courses,” or “MOOCs.” (I will use the phrase “online courses” as well as “MOOC”). edX is something of a latecomer to the still-new world of MOOCs. The leaders to date (with the most courses), are Coursera and Udacity. However, there are many “smaller” and legacy offerings. (See 750 1300 Free Online Courses From Top Universities). My impression is that until edX, Coursera and Udacity arrived, most online courses were nothing more than hit-or-miss video recordings of classroom lectures. They were not produced with an online audience in mind, and often suffered from poor production quality. Listening to the professor discuss homework assignments, papers, exams, office hours and teaching assistants–none of which are relevant to viewing the lectures online–was frustrating.
Until recently online courses tended to focus on the hard sciences, and I hadn’t come across any legal courses. This changed when, late last year, I received an edX email notice for “HLS1x Copyright.” Or, as it came to be known, “CopyrightX.” Here are some excerpts from the course description I received:
HLS1x Copyright, an experimental course offered on edX, explores in depth the law, theory, and practice of copyright. Approximately two thirds of the course focus on the copyright system of the United States; the remainder is devoted to the laws pertaining to copyright and “neighboring rights” in other countries. Considerable attention is devoted to the relationship between copyright law and creative expression in a variety of fields: literature; music; film; photography; graphic art; software; comedy; fashion; and architecture. The course commences on January 28, 2013, and lasts for 12 weeks. . . .
Applicants [must be] willing to devote eight hours per week to learning and discussing the material.
Several methods of instruction are used. Participants watch pre-recorded lectures, engage in interactive live webcasts of events in which guest speakers address especially controversial issues, discuss legal problems in online forums, and (most importantly) participate once a week in an 90-minute online seminar. Those seminars are taught by teaching fellows, all of whom are currently students at Harvard Law School.
At the conclusion of the course, each participant takes a three-hour exam (72 hour take home exam), designed to assess his or her knowledge of copyright law and policy. Those exams are graded by the teaching fellows. Participants who receive passing grades are to be awarded certificates of completion and provided written assessments of their degree of proficiency.
COURSE INSTRUCTOR
William Fisher III
Professor Fisher received his undergraduate degree (in American Studies) from Amherst College and his graduate degrees (J.D. and Ph.D. in the History of American Civilization) from Harvard University. Between 1982 and 1984, he served as a law clerk to Judge Harry T. Edwards of the United States Court of Appeals for the D.C. Circuit and then to Justice Thurgood Marshall of the United States Supreme Court. Since 1984, he has taught at Harvard Law School, where he is currently the Wilmer Hale Professor of Intellectual Property Law and the Director of the Berkman Center for Internet and Society.
What a great opportunity! When I was in law school there was no course on copyright law. I could make up for that omission now.
I realized that by limiting the enrollment to 500 students, requiring participation in online seminars (which, due to the anticipated world-wide student body would take place at times quite inconvenient for people in U.S. Eastern Standard Time), asking people to take a three-hour exam and awarding passing students a certificate of completion, this MOOC was making a serious effort to set itself apart. Most MOOCs have no enrollment limits (tens of thousands of people register), so limiting the course to 500 students alone sent a message that this course would be different.
Unfortunately, I didn’t get to find out just how different the course would be. The application was concise, and included demographic information and a short essay on why the applicant wanted to take the course and could contribute. I applied, but was not selected. I didn’t take it personally, since it’s likely that the applicants numbered in the tens of thousands.
Still curious, I resolved to “audit” the course using the lectures that were posted on Youtube. I didn’t participate in the weekly online seminars, nor did I take the three-hour exam or earn a “certificate of completion.” I watched the pre-recorded lectures and read some (but by no means all) of the associated reading materials, which were extensive. I watched two of the six “Special Events” in full, and parts of the remaining four events. And, I didn’t view the lectures or the Special Events in sync with the class—I watched them in late March and April.
The list of lectures, with links to the videos on Youtube, is here. The list of reading materials here. And, the list of Special Events (with links to Youtube), here.
Observations on the Course
Other than CLEs, the last time I sat in a classroom and listened to academic lectures was 1979 – my last year of law school. And, frankly, I’m not sure there were many academic lectures in law school similar to what Professor Fisher presented in this course. So, it took me some effort to adjust to the format of this course. As I discuss below, this was not education disguised as entertainment to make it easier to digest—this was education served “neat.”
First, and perhaps most importantly, since I was just auditing the videos I had no interaction with other students. That made it more difficult, since I had no external motivation to watch each lecture. I’ve heard it said that the best motivator to showing up at the gym at 7:00 a.m. is knowing your workout partner will be expecting you. However, I had no external pressure to keep up with the course.
Motivation to complete an online course is not a trivial concern. At this early stage in the evolution of online courses the drop out rate is extremely high—as high as 90% in many courses. The high non-completion rate may be due to the curiosity factor—people are registering for these courses just to see what a “MOOC” is all about, but with no intention of taking the full course—or it may be a question of self-motivation. I haven’t seen any statistics on what percentage of the 500 students enrolled in CopyrightX took the final exam, or what percentage passed the course. It would be interesting to see if the use of a selection process and online seminars led to a high completion rate.
The best motivator for CopyrightX was probably the knowledge that you are 1 of 500 people selected for the course and are expected to participate in the online forums and take the final exam. I wasn’t able to kibitz with other students, exchange ideas or ask questions. And, I have no way of knowing how much value that would have added to the course.
I confess that when I first began watching the lectures I found them a bit tedious. The lectures are comprised primarily of an upper-body shot of Professor Fisher in a dark sports coat that blends into a black background. He is often looking off-camera, presumably at an outline of the lecture. In other words, this was a visually non-stimulating format. The course was given in tandem to Harvard Law School students, but this was not a course where you saw the professor walking around in the front of a lecture hall and could see that students were present. So far as I could tell, the online course videos were shot in a studio specifically for the MOOC. Whether the law students taking the course for credit had live lectures, or were expected to watch the online lectures independent of the online lectures, I don’t know. However, I do know that you would be hard-pressed to find a less visually stimulating form of presentation:
Professor Fisher, CopyrightX, Harvard Law School
Prof. Michael Sandel, Justice, Harvard
After a while I adjusted to this format. Professor Fisher is a serious scholar, and he was not there to put on a teaching show (see Michael Sandel, image right), perform classroom tricks (see Walter Lewis, image right), or make any effort to entertain in order to hold the interest of the students. This was hard core, Harvard Law-style lecturing, nothing more, nothing less. No jokes, no anecdotes, not even much movement; just a fire-hose of concentrated information presented in a narrow dynamic range.
Unlike MOOCs such as those on Coursera, there was no attempt to break up the videos into small segments and intersperse quizzes to maintain the viewer’s attention. For example, Coursera explains its pedagogy as follows:
A key factor in the design of the Coursera system is the extensive use of interactive exercises, which we believe are critical for student engagement and learning. Even within our videos, there are multiple opportunities for interactions: the video frequently stops, and students are asked to answer a simple question to test whether they are tracking the material. This strategy has value not only in maintaining student focus and engagement. Research shows that even simple retrieval questions have significant pedagogical value.
Prof. Walter Lewis, Physics, MIT
I had started a couple of Coursera MOOCs out of curiosity, just to see how Coursera implemented this teaching style. It was interesting to see that edX was not, at least in this course, using Coursera’s pedagogical approach to online learning.Professor Fisher’s CopyrightX videos had no “interactive exercises” and no “retrieval questions.” It had no cute sketches, like Udacity sometimes has (image lower right). Whether this will be true for all edX courses I don’t know, but it was for this one. I adjusted to the style of the course and this didn’t bother me, but I can imagine that some people might have difficulty with this approach.
I also wondered, as I progressed through the course, whether the course would be accessible to someone who was not a lawyer or a second or third year law student. The course was presented as a law school course for students at Harvard Law School, not an introductory course on copyright law for non-lawyers. The course made frequent reference to complex statutes, treaties, cases and law review/journal articles, many of which were made available on the reading list. The online lectures made no accommodations for non-lawyers. I question what someone who had no previous legal education would have made of this massive amount of sophisticated legal material.
Coursera
As far as the substance of the course goes, it was quite broad. A full list of topics covered is provided in the schedule of lectures. After beginning with international copyright treaties (not the best topic to launch the course with, in my opinion, given how complex and arcane this topic is), Professor Fisher moves through a wide range of topics, including each of the exclusive rights granted by statute, the idea-expression dichotomy, copyright formalities, authorship, fair use and remedies. In fact, there are few topics he doesn’t at least touch upon.
The course often departs from an exposition of “black letter” law to address the philosophical and historical origins of copyright law, the economic rationale for various aspects of the law (or lack thereof) and Professor Fisher’s own views on copyright policy. Professor Fisher also contrasted U.S. copyright laws with the copyright laws and policies of other countries, with most of the focus on the EU. In other words, the course aspired (and I think succeeded) in questioning how aspects of copyright law have evolved to where they are today, and how the law could be improved. Professor Fisher appears to have strongly held beliefs in that regard, which he presented in his cerebral, mild-mannered style.
Slide from CopyrightX re Copyright Terms
One thing the course made clear is that copyright law is a vast topic. Professor Fisher acknowledges this often, cutting off topics at a certain point and suggesting that students read statutes, cases or articles cited in his Copyright Map (discussed below) for more detail or greater understanding. One gains an understanding, as the course progresses, for just how complex copyright law is, particularly when the Internet (which knows no borders) is layered on top of a world-wide system of copyright laws that is highly parochial. (See, for example, Pandora CEO: The Complexity Of International Copyright Law Is A Big Problem; and Want To Get A Sense Of Just How Complex And Confusing Copyright Law Really Is? by Mike Masnick). His discussion of copyright duration and termination rights was a valiant attempt to bring clarity to one of the most confusing areas of the law (see one of his many slides on this topic, left).
Each weekly topic in the course consisted of between three and six videos, ranging in length from 15 minutes to 50 minutes each. I would estimate the weekly videos ran, on average, between one and one-and-one-half hours. Professor Fisher has created an outline that he calls Maps of Intellectual Property using MindJet. When you download a pdf file created with MindJet from his site the file has a built-in “MindJet Player” that allows you to view an expandable outline, or “map.” Here is the top level of the Copyright Map, which he used extensively during his lectures:
Top-Most Level of Prof. Fisher’s Copyright Map
Each of the six peripheral boxes on the map is the top level of a large outline containing many sub-topics (along with statutory, case and journal citations). As long as there is a “+” symbol beside a topic, clicking the “+” will lead to more content. For example, here is part of the outline that expands out of the major topic heading, “What Is Protected”:
Copyright Map, Expanded
I haven’t explored this outline in full, but from what Professor Fisher demonstrated it seems that it is very large, and includes many subsections that he didn’t have time to go into in the course. It also appears that he updates it often.
Professor Fisher also used traditional powerpoint screens, such as this example, discussing the Grokster decision:
And, he used more elaborate color graphics such as this one, which illustrates the overlapping principles of fair use:
I soon realized that I couldn’t watch these lectures like one would watch a TED Talk. This was nothing like sitting in a law school classroom, where lectures are broken up by student questions and discussions, or the socratic dialog method of teaching. Apart from the Special Events (which did not seem intended to closely follow the lecture topics), this was just a straight lecture format.
While I assumed that I knew enough about copyright law that this would be nothing more than a refresher course, that proved to be anything but the case; there was a lot of information that was either new to me, or presented in a manner that required me to rethink my understanding of the topic. I realized that I had to fall back on something I haven’t done in a classroom for 34 years – taking notes. I created a new Evernote file for each lecture topic, and took notes on the lectures. I think that helped me retain far more than I would have had I simply watched the lectures, but it slowed down the time it took to watch a video lecture.
There were also one or two times when I thought Professor Fisher may have given the wrong impression of how the courts treat a particular copyright law doctrine, but of course I had no one with whom I could discuss this, and no means of raising the point with Professor Fisher.*
*note: Professor Fisher may have mispoken when he stated that Stevie Ray Vaughn was “one of the few guitarists better than Hendrix himself.” (Lecture 3-3 at 10:12).
I found the six Special Events—all of which focused on guest speakers—the weakest part of the course. Ironically, unlike the studio-produced video lectures, these were classroom events, and you could see that the students enrolled in the course were present. In his introductions of the guest speakers Professor Fisher addressed both the online and classroom students, and the speakers answered questions from both audiences.
Harvard Law Professor Larry Lessig gave what appeared to me to be his standard “remix” copyright presentation, which has been published on the web many times before. His presentations (which make extensive use of his “patented” “Presentation Zen” slide style) are excellent, but he didn’t add much (if anything) to his stock deck.
The Special Event I found most interesting featured Robert Darnton and John Palfry discussing the Digital Public Library of of America, which went “live” in April. The legal challenges the DPLA faces are significant, and they are discussed frankly during the presentation and discussion at this event.
Brewster Kahle, founder of the Internet Archive, was a no-show for this event, which was disappointing. By archiving vast swathes of the Internet from 1996 to present Kahle has been center-stage at the creation of the largest repository of online Internet resources available to the public. It would have been interesting to hear his thoughts on the copyright challenges faced by the Internet Archive, the Google Books project, and now the Digital Public Library of America.
I watched parts of each of the remaining four Special Events, but they didn’t hold my attention, which is not to say they may not have been the most interesting part of the course for some of the students.
Coda
As I said at the opening of this post, this was an excellent course for people interested in a scholarly, detailed review of copyright law. I have been unable to find any comparable elucidation of copyright law on the Internet, and I suspect there are only a handful of copyright practitioners in the U.S. that could pull off the tour de force that Professor Fisher does in this course. There is room, in the emerging world of MOOCs, for courses presented in this style, as well as courses in the more relaxed style of Coursera and Udacity. I hope that Professor Fisher and edX decide to create similar programs for trademark and Internet law.
[Note: As Professor Fisher would make sure you knew if you watched the CopyrightX course, the CopyrightX online videos are protected by U.S. copyright law. The online lectures for CopyrightX are subject to the Creative Commons Attribution-Noncommercial-Sharealike 2.5 License. The screenshots I’ve used from the lectures are subject to this license.]
[Update July 18, 2013]: Here are some additional online reviews of Copyright X:
Here a link to a post at the Berkman Center providing statistics on graduation and exam passage rates. 193 of 500 students enrolled (38.6%) earned graduation certificates. Not surprisingly (this was a tough course), the highest completion and exam passage rates were students who already had a J.D. degree.
[Update December 18, 2013]: Prof. Fisher’s updated evaluation of the 2013 course, and plans for the 2014 version (retrieved 12-17-13)
by Lee Gesmer | Apr 30, 2013 | Copyright
The recording companies have consistently maintained that the Digital Millennium Copyright Act’s (DMCA) notice-and-takedown regime does not apply to pre-1972 works. However, the law on this arcane issue has been scarce. In Capital Records v. MP3tunes (SDNY 2011), the court ruled that pre-1972 works were covered by the DMCA. After this decision the recording companies decided to make their argument in state court. Their strategy paid off – the New York State intermediate appellate court (the New York Supreme Court, Appellate Division), has issued a decision contrary to MP3tunes. In UMG Recordings v. Escape Media (often referred to as the Grooveshark* case), the court held that “Congress intended for the DMCA only to apply to post-1972 works.”
*Grooveshark is a music streaming service that allows users to upload sound recordings. According to Wikipedia, Grooveshark streams over one billion sound files a month.
The Grooveshark case arises out of two legal oddities: first, Congress did not extend copyright protection to “sound recording” until it passed the 1972 Copyright Act (the effective date of protection being February 15, 1972); and second, before 1972 copyright was subject to state law. The upshot of this is that although the federal courts have exclusive jurisdiction over most copyright law claims, pre-1972 sound recordings are an exception. Claims for breach of pre-1972 sound recordings can be brought in state court and decided under the antiquated state copyright laws.*
*Pre-1972 sound recordings remain protected under state copyright laws. All post-1972 copyrighted works are subject to federal copyright law. Under current law, state law jurisdiction over pre-1972 sound recordings continues until 2067, at which time all state protection will be preempted by federal law and pre-1972 sound recordings will enter the public domain. Yes, this is bizarre and inexplicable. If this strikes you as bizarre, you are normal.
Clearly, as I stated in the title of this post, this holding has the potential to blow open a hole in the DMCA system of safe harbors. For example, is Google now liable for every pre-1972 sound recording uploaded to Youtube, if the owner of the copyright files suit in New York state court? Must Google review every upload by a user to ensure that it is not a pre-1972 sound recording (a well-nigh impossible task)? Can New York state law trump federal law for sound recordings under the DMCA for the next 54 years?
This decision is only one step in this ongoing case. The trial court must now determine whether Grooveshark is liable for copyright infringement under the theory of secondary liability (since Grooveshark’s users, not Grooveshark, posted the pre-1972 sound recordings). However, there is little or no legal precedent upon which to base secondary liability for state copyrighted works. There is also the question of whether a small company like Grooveshark can afford this ongoing litigation, or whether the case will force it to fold.
This decision creates a new element of uncertainty under the DMCA, a statute that recently had been clarified by the federal courts. Ten steps forward, five steps back.
UMG Recordings v. Escape Media (Grooveshark) (April 23, 2013)
by Lee Gesmer | Apr 28, 2013 | Copyright
Assume I were to take a well-known, in-copyright work of art, modify it in a variety of ways and publish the results as a coffee table book. To make this thought experiment easy, assume that the Statute of Liberty is covered by a U.S. copyright registration today—in fact, the Statue of Liberty was registered with the U.S. Copyright Office in 1876, but its registration has long-since expired. Assume I took 30 photographs of the Statue and published my book with the images modified in various ways. For example, I created collages, altered the face of the Statue and superimposed various objects on the Statue. Instead of holding a torch and a tablet, in one picture she is holding a photo of the head of Osama Bin Laden, and in anther she is holding a day-glo image of the World Trade Center buildings. In some cases I used only parts of the Statue, and in others I painted objects that obscured the face. You get the idea.
Would the sculptor be able to assert copyright infringement, or would my book be protected by the copyright doctrine of fair use? The legal question, more precisely, would be: is my use of the Statue sufficiently transformative to qualify as fair use?
An issue like this faced the Second Circuit Court of Appeals in a much-watched case, Cariou v. Prince. The court released its decision last 
Thursday, reversing a Southern District of New York District Judge’s decision that 30 images copied from Patrick Cariou’s Yes Rasta book of photographs of Rastafarians in Jamaica and modified and recontextualised by “appropriation
artist”* Richard Prince were not covered by the fair use defense to copyright infringement. The district court’s rationale for rejecting the fair use defense was that Prince’s works (contained in a collection entitled “Canal Zone”) `did not comment on, or critically refer back to, Cariou’s original works. The Second Circuit rejected this reasoning, holding that “the law imposes no requirement that a work comment on the original or its author in order to be considered transformative.”
*”Appropriation art” refers to taking photographs and other images that others have produced and incorporating them into paintings and collages that the appropriation artist then presents, in a different context, as his own.
The Second Circuit’s reversal of the district court did not come as great surprise. Prince had a seemingly strong argument that the district court had ignored established fair use principles, and had issued an injunction ordering the destruction of Prince’s works without weighing any of the free speech interests at issue. Nevertheless, the case is likely to be viewed as an important precedent in the area of fair use as applied to appropriation art. The heart of the court’s rational was stated as follows
[O]ur observation of Prince’s artworks themselves convinces us of the transformative nature of all but five, which we discuss separately below. These twenty-five of Prince’s artworks manifest an entirely different aesthetic from Cariou’s photographs. Where Cariou’s serene and deliberately composed portraits and landscape photographs depict the natural beauty of Rastafarians and their surrounding environs, Prince’s crude and jarring works, on the other hand, are hectic and provocative.
The court found that the the “composition, presentation, scale, color palette, and media are fundamentally different and new compared to the 
photographs, as is the expressive nature of Prince’s work.” The court stated that “[T]he fair use determination is an open-ended and context-sensitive inquiry.” If the original work “is used as raw material, transformed in the creation of new information, new aesthetics, new insights and understandings – this is the very type of activity that the fair use doctrine intends to protect for the enrichment of society.”
The Second Circuit concluded that 25 of the 30 Prince images were transformative as a matter of law, requiring no further fact finding (and no trial) on remand. It sent five pictures back to the lower court judge to decide whether they violated Cariou’s copyrights under the legal standard set forth in the opinion. One of the judges on the three-judge panel dissented from the majority’s decision to assess the transformative nature of some of Prince’s works, but not others, and argued that all of the works should be remanded to the district court for analysis under the proper legal standard.
Of course, the key question in cases involving “appropriation art” is how a judge or jury is to determine whether the appropriated work is sufficiently transformative. The “gray area” in cases of this sort can be large, and highly subjective. What one judge or jury may conclude is transformative, another may not, making it difficult to eliminate all risk when publishing works of this sort. Judges and juries who may have little of no art experience will be asked to make judgments as to whether a piece of appropriation art uses a sufficiently “different aesthetic” or whether it is something “new and different” than the original work. Moreover, the willingness of the Second Circuit to decide the issue of fair use as to 25 of the 30 works without providing Mr. Prince with a jury trial may encourage trial judges to decide appropriation art cases on summary judgment, adding to the trend away from jury trials in copyright cases.
Left: Patrick Cariou, Photograph from Yes Rasta. Right: Richard Prince, Graduation
Cariou v. Prince (2nd Cir. April 25, 2013)
[The images on this web page are from Richard Prince’s work, “Canal Zone.” All photos at issue in the case, both the originals and the “transformed” works by Richard Prince, are available on the Second Circuit website, here.]
by Lee Gesmer | Apr 21, 2013 | Copyright
The copyright content industry has launched two no-holds-barred legal challenges against non-piratical websites that host third-party videos. That is, service providers whose intent is not obviously to induce or encourage copyright infringement and that follow the “notice and take down” rules of the Digital Millennium Copyright Act (DMCA). Until last Thursday the outcome had been a complete loss for the content industry in one case, UMG v. Veoh (9th Cir. 2013). In the second case, Viacom v. YouTube, the content owners were hanging on by their fingernails following an adverse summary judgment ruling by Southern District of New York District Court Judge Louis Stanton in 2010, followed by a largely (but not entirely) affirming decision by the Second Circuit in 2012. However, following Judge Stanton’s post-remand decision, issued on April 18, 2013, the content owners are left with a complete loss in the second case as well. Absent another appeal to the Second Circuit, Viacom v. YouTube is over.
The outcome of these two cases in the influential Second and Ninth Circuits is not only a loss for the copyright owners, but a significant level of clarification as to what hosting sites such as YouTube and Veoh should do to ward off future attempts to pierce the copyright liability safe harbors created by the DMCA.
The conclusion of the YouTube case (assuming no further appeal) is particularly significant. When Google purchased Youtube for $1.65 billion in 2006 it took a huge legal risk that it would be responsible for copyright infringement damages of as much as six times that amount.*
*Viacom alleged infringement of 63,060 video clips. Assuming the videos had been timely registered, at the maximum statutory damages of $150,000 per clip, the theoretical damages in the case exceeded $9.4 billion.
Last week’s district court decision shows that Viacom did not come close to prevailing on the issues that were the subject of the Second Circuit’s remand.
Did YouTube Have Knowledge or Awareness of Specific Infringements? The Second Circuit instructed the district court to determine whether YouTube actually knew of (or was willfully blind to) specific instances of infringement of video clips at issue in the case, or whether there were facts or circumstances indicating such specific infringement. Viacom was unable to do so. In fact, Viacom admitted that “neither side possesses the kind of evidence that would allow a clip-by-clip assessment of actual knowledge.” Judge Stanton rejected Viacom’s argument that the burden fell on YouTube to prove lack of knowledge (in effect to prove the negative), stating that the foundation for this argument was an “anachronistic,” pre-DMC concept. Given the DMCA’s statutory scheme—which places the burden on copyright holders to provide a statutory “take down” notice—the burden of showing that YouTube knew of or was aware of specific infringements could not be shifted to YouTube to disprove.
Did YouTube Willfully Blind Itself to Specific Infringement? The Second Circuit held that “the willful blindness doctrine may be applied, in appropriate circumstances, to demonstrate knowledge or awareness of specific instances of infringement under the DMCA.” This may have been the most controversial aspect of the Second Circuit’s 2012 decision. Not only is the doctrine vague, but it seems inconsistent with the DMCA’s “notice-and-takedown” procedure. The Second Circuit’s holding suggests that awareness of specific infringement may lead to infringement liability even in the absence of a take-down notice.
On remand Judge Stanton construed the Second Circuit’s holding narrowly: he held that “willful blindness” required blindness to “specific and identifiable instances of infringement.” He found that the specific locations of the infringements (the URLs) were not provided, and YouTube had no duty to look for infringing clips, even among a number as small as 450 clips. Nevertheless, the fact that the Second Circuit imported a “willful blindness” standard into the DMCA remains one of the most troubling “here be dragons”* aspects of the DMCA, and is the most obvious basis for an appeal by Viacom.
*”Here be dragons” refers to the medieval practice of putting dragons, sea serpents and other mythological creatures in uncharted areas of maps. As noted above, parts of the DMCA still remain unexplored. They are “terra incognita.”
Did YouTube Have the “Right and Ability to Control” Infringing Activity? By this point in the decision Viacom was no longer hanging on by its fingernails, it was in free fall. Judge Stanton reviewed the precedents in which service providers have been found to control infringing activity (Perfect 10 v. Cybernet Ventures (service provider provided detailed instructions regarding layout, appearance and content); Metro-Goldwyn-Mayer Studios v. Grokster (“purposeful , culpable expression and conduct” might rise to level of control under DMCA)),* and found that YouTube’s conduct satisfied neither of these standards. YouTube’s decision to exclude whole movies and TV shows, nudity and pornography, along with several other content catagories, did not rise to the level where YouTube had the right and ability to control infringing activity.
*The “purposeful, culpable expression and conduct” standard is another troublesome interpretation of the law in the Second Circuit. However, It shouldn’t be difficult for service providers to stay on the safe side of this line by avoiding the types of encouragement or inducement of infringing behavior that typified Grokster and similar cases.
Did Youtube Improperly Syndicate Clips to Third Parties? YouTube did deliver some video clips to Verizon Wireless, but they were not the clips-in-suit. Apparently some clips-in-suit were provided to Apple, AT&T and others, but this was done at the direction of users in order to enable people to access the videos in various mobiles formats. The court found this process is protected under the DMCA
Implications of YouTube and Veoh. The online copyright infringement liability provisions of the DMCA comprise a singularly complex set of rules for online copyright infringement where the offending works are posted by third parties. This amendment to the Copyright Act was signed into law in late 1998, before music and video sharing were even a twinkle in the eyes of Internet entrepreneurs. The first music file sharing system, Napster, was not released until mid-1999, and YouTube not until 2005. Neither Congress nor the copyright content industries foresaw these technologies and their impact in 1998. As a result, interpretation and application of the DMCA has been a legal battleground for the last 13 years. At first, lawsuits by the copyright content industry were like taking candy from babies—early entrepreneurs lacked the legal sophistication to avoid liability for copyright infringement, and they were easily mowed down by industry lawsuits. The Napster (2001), Aimster (2003) and Grokster (2005) cases are representative of “the early years” of DMCA litigation. The second generation cases—Veoh and YouTube, present a completely different picture. Today, it’s hard to imagine that anyone with competent legal representation would make the mistakes made by Napster, Aimster and Grokster. While, as discussed above, the “here be dragons” label may still apply to some parts of the DMCA safe harbor map, the YouTube and Veoh cases have illuminated enough of the map that online service providers can stay well clear of potential liability for third-party content, and last week’s decision in YouTube only adds to this body of knowledge.
by Lee Gesmer | Apr 16, 2013 | Copyright
Copyright owners who wish to file mass copyright suits based on a “BitTorrent Swarm” joinder theory—cases in which dozens (sometime hundreds) of anonymous defendants are joined in a single suit and then identified by serving subpoenas on their ISPs—are not welcome in Massachusetts.
I’ve written about the phenomenon of BitTorrent swarm mass copyright suits before, but it looks like the door has been all but closed to these cases in the District of Massachusetts. As a reminder, here’s how these cases work.
Assume you are the CFO of an adult movie publisher. Sales aren’t doing very well (given all the free porn on the Internet), and you’re under pressure to increase revenues. You hear about a gambit used by some other adult movie companies, and you decide to give it a try.
You know your movies are being downloaded from the Internet, infringing your copyrights. You sue a group of downloaders, all of whom are part of the same “Bit Torrent Swarm,” as “Does”—that is, anonymous defendants whose names will be substituted into the suit at a later date. You contend that the fact they are part of the same “swarm” justifies joining them all in a single case.*
*This argument relies on Rule 20(a)(1)) of the Federal Rules of Civil Procedure, which allows multiple defendants to be joined in a single case where the claims arise “out of the same transaction, occurrence, or series of transactions or occurrences.” The plaintiffs in this line of cases argue that the members of the same BitTorrent swarm fall under this rule, and therefore are properly joined.
This is is very efficient for you, since if you filed a separate suit against each defendant you’d have to pay a $350 filing fee in each case, while one suit against multiple defendants requires a one-time filing fee of $350. Not only do you save the cost of multiple filing fees, but you achieve economies of scale in the litigation itself by minimizing court appearances, consolidating discovery, and possibly conducting a single trial.
After filing suit* you request a subpoena from the court ordering the downloaders’ ISPs to disclose the downloaders’ names and addresses to you. Then, before you substitute each downloader’s real name into the lawsuit (thereby, presumably, causing the downloader no end of public scorn and humiliation), you let him or her know the suit is coming and settle each claim for five thousand dollars. Five grand here, five grand there, pretty soon you’re talking real money.
*Here is an example of a complaint showing how the anonymous defendants are identified by IP address.
Sounds too good to be true, and in Massachusetts it may be. Apart from the fact that a lot of defendants don’t roll over as easily as you might hope (“either I pay you five grand or you’re gonna tell my old lady and my employer? That’s an easy choice, dude. Can I give you their numbers?”), the Massachusetts federal judges just don’t cotton to this use of the courts. Last Fall I posted on an October 12, 2012 decision by U.S. District Court Judge William Young, who ruled that Third Degree Films could not sue 47 “Does” in one case and then use the court’s subpoena power to discover their identities. He held that Third Degree Films would have to file a separate lawsuit against each defendant. Third Degree could not use Rule 20 joinder to create a “low-cost, low-risk revenue model for the adult film companies.”*
*An earlier decision by Judge Young in this case is here.
At almost the time, on October 10, 2012, Massachusetts U.S. District Court Judge Richard Stearns dismissed a mass copyright infringement case (New Sensations, Inc. v. Does 1-201, Sept. 21. 2012), ordering that the cases be defended and litigated in separate causes of action. The same month Massachusetts U.S. District Court Judge F. Dennis Saylor issued a similar order in Third Degree Films v. Does 1-72 and Massachusetts Chief Magistrate Sorkin issued an order to show cause in a mass copyright case against 29 anonymous defendants. (Discount Video Center v. Does 1-29). In something of an understatement, Magistrate Sorkin noted that the “landscape has changed in several material respects” when it comes to the issue of joinder in mass copyright cases.
More recently, Massachusetts U.S. District Court Judge Mark Wolf signaled solidarity with these judges, questioning the right of adult film companies to use “mass copyright infringement lawsuits” to identify anonymous Doe defendants “intending to send demand letters and achieve prompt settlements for limited amounts rather than intending to actually litigate the claims asserted.”
In one case (Exquisite Media v. Does 1-35), Judge Wolf ordered the film company to address, by January 31, 2013, the legal issues implicated by Exquisite’s joinder of 35 anonymous defendants in one lawsuit (an “order to show cause”). Exquisite failed to respond, and on April 12th,Judge Wolf dismissed the case as to all 35 Does. In a second case assigned to Judge Wolf, Kick Ass Pictures v. Does 1-25, the movie publisher filed Doe suits against 25 anonymous defendants. Again, Judge Wolf issued an order to show cause. Kick Ass, like Exquisite Media, failed to respond, and on April 12th Judge Wolf dismissed this case as well.
The message is clear: the District of Massachusetts is not a receptive venue for adult film companies seeking to file mass copyright cases joining multiple defendants based on the BitTorrent swarm theory.*
*This post has not attempted to collect every mass copyright BitTorrent case in Massachusetts.
by Lee Gesmer | Apr 1, 2013 | Copyright
Do you think U.S. copyright law protects the author of this news snippet from copying? –
Job seekers can roll the dice to land work at another of the four casinos coming soon to Ohio. Hollywood Casino Toledo has posted more than 600 job listings on its website this week. . . . restaurant workers, slots and table games supervisors, groundskeepers and security officers. The casino is scheduled to open in the spring with . . .
How about this one? –
The military intelligence complex an hour outside Washington where the WikiLeaks case goes to court this week is known as a cloak-and-dagger sanctum off-limits to the public — a reputation that’s only partly true. . . . low-level clearance and a Lady Gaga CD. The prosecution can only hope that their arguments, or the evidence, will reveal the secrets of how, . . .
Would it make a difference if you knew that the 58 words in first excerpt are taken from a 109 word article, and the 61 words in the second article from a 540 word article, and that both articles were (as they appear) factual news pieces?
People constantly ask “how much can I copy and be safe” under copyright law? Thirty seconds from a several minute piece of music? 10% of a news article?*
*The “10% rule” and “30 second rule” have become the equivalent of legal urban legends. Neither has a basis under U.S. copyright law.
The answers to these questions are most often determined by application of the copyright doctrine of “fair use,” which is codified in the Copyright Act in 17 U.S.C. § 107. The question of whether 13 news excerpts (including the two above) copied from Associated Press violate AP’s copyright or are protected by fair use is the issue facing Judge Denise Cote, a highly experienced federal trial judge in the Southern District of New York in The Associated Press v. Meltwater US Holdings, Inc.
Fair use is a frequently litigated issue, and the outcome in any given case can be notoriously unpredictable. As the U.S. Copyright Office puts it, “The distinction between what is fair use and what is infringement in a particular case will not always be clear or easily defined.” This is something of an understatement. It’s not for nothing that copyright law has been described as one of the most metaphysical areas of the law, requiring distinctions that are very subtle and refined. Some cases involving fair use are black and white, but fair use is an ad hoc, case specific doctrine, and in many cases the outcome is often more in the eye of the beholder (usually the judge) than in the law books.
In the Meltwater case the defendant, Meltwater US Holdings, operates an online news clipping service similar to traditional, paper-based news clipping services. Meltwater scans 162,000 online news websites daily (who know there were so many?) and indexes and archives their content. AP holds the copyright to many of the news articles copied by Meltwater.
Meltwater’s paying customers provide it with keywords. If an article contains a hit, Meltwater sends its customer verbatim excerpts of the article, typically consisting of the headline, the lede (the opening sentence), a “Hit Sentence” (based on the search criteria) and a link to the original article. Customers can receive daily reports or do ad hoc searches. However, discovery showed that subscribers click-through to see the original article less than 1% of the time.
Meltwater did not seriously deny that it copied the 13 verbatim excerpts at issue and provided them to its subscribers in this manner. Depending on the length of the original AP article, the amount copied (based on word count) ranged from 4.5% to over 60% of the AP article. Nor did Meltwater argue that the AP articles were not protected by copyright law. Meltwater’s defense centered on its argument that it was protected from AP’s claim of copyright infringement under the doctrine of fair use.
This defense was soundly rejected by Judge Cote, who found that Meltwater had put the excerpts of the AP articles to commercial use (Meltwater and AP are competitors), that Meltwater’s use of the AP articles cheapened the value of AP’s work, that by copying the title, lede and materials surrounding the targeted keyword Meltwater had copied a qualitatively significant part of the AP articles (the “heart of the story”), and that Meltwater’s use of the AP stories was not transformative.*
*Transformative use is often an important consideration under the fair use doctrine. The judge did find that the fact that the material copied involved current news was a factor that favored Meltwater under the four-part fair use analysis.
The judge also rejected Meltwater’s contention that it is a search engine (akin to Google), noting (among other things) that Meltwater is a for-pay subscription service (Google is free, although it is advertiser supported), and that the click-through rate on Google News is over 60%, compared with a click-through rate of under 1% for Meltwater, suggesting that Meltwater does not perform a search function, but actually provides the information sought by its subscribers.
This decision is an important fair use precedent for news aggregators, but it is likely to be limited (if upheld on appeal) to cases involving verbatim copying of qualitatively important news content. Other public (non-subscription) news aggregators are much more careful about how much they copy. Sites such as Drudge Report and The Huffington Post are careful to provide very brief descriptions of news articles (including AP articles) to which they link. In the meantime other subscriber-based closed systems like Meltwater (who may have already heard from AP and might have been awaiting this ruling before deciding which way to jump) will need to refine their systems in light of this decision, or risk defending their position in court, with Meltwater as a precedent.*
*The Southern District of New York is one of the busiest, and most influential, courts in the U.S. when it comes to copyright law.
While Meltwater may be planning an appeal and hoping the Second Circuit will see the case more favorably toward Meltwater, at present it is in a legally awkward position, to say the least. The 13 articles AP sued on are only the tip of the iceberg, and if Meltwater chooses to continue to distribute excerpts from AP articles it risks multiplying its damages by as much as $150,000/infringement if AP registers its articles with the Copyright Office (as it did with the 13 articles at issue in the case). If the court orders an injunction Meltwater will be able to appeal the injunction while the issue of damages goes to trial, but even that will shut Meltwater down (at least as to AP articles) for the year or so it takes for the Second Circuit to hear and decide the case. It customers may cancel their subscriptions and demand refunds (or stop purchasing subscriptions) if AP news excerpts are excluded from Meltwater’s service. So, if AP articles are important to Meltwater (as they appear to be, based on the decision), it is in a tight spot.
Of course, Meltwater has a theoretical workaround to the outcome in this case, albeit it won’t be able to use its web crawler to implement it. Meltwater would have to rely on its employees to review AP articles and summarize them using language original to Meltwater rather than AP. However, this expensive, labor-intensive alternative would undermine Meltwater’s business model, which relies on a low-cost, computer-automated process.
The decision also addresses Meltwater’s argument that AP’s failure to use the Robot Exclusion Standard (robots.txt) constitutes implied consent (it does not), that AP has engaged in copyright misuse (it has not), and that AP’s claims are barred by equitable estoppel (they are not). However, clearly the heart of this decision is the court’s ruling on fair use.
The Associated Press v. Meltwater US Holdings, Inc.
by Lee Gesmer | Mar 20, 2013 | Copyright
Last week I published a post on the lawsuit challenging the “first-sale” doctrine in the context of digital files. On Tuesday the Supreme Court issued a decision holding that the first-sale doctrine applies to copies of copyrighted works lawfully made abroad.
To understand the facts of this case picture this scenario.
You are a student in Thailand, and you use English-language textbooks in your studies there. You see that the textbooks are not pirated copies—they are legal copies, authorized for foreign publication. When you come to the United States to continue your education you see the same textbooks are sold at much higher prices. Why not get ahold of some of the books being sold in Thailand and sell them at below-U.S. prices but above Thailand prices? There is money to be made there!
Math student Supap Kirtsaeng recognized this arbitrage opportunity. He asked his family in Thailand to buy copies of foreign edition English language textbooks at Thai book shops and ship them to him in the U.S. He sold the textbooks on EBay, reimbursed his buyers and pocketed the difference. He was successful to the tune of almost a million dollars in sales and $100,000 in profits. However, the fact that Kirtsaeng was undercutting U.S. prices infuriated book publisher John Wiley & Sons, Inc., which sued Kirtsaeng in U.S. District Court in Manhattan, arguing that Kirtsaeng violated its copyright rights by reselling books manufactured and sold abroad. The district court and the Second Circuit agreed with Wiley, and awarded damages that, if upheld, would have cost Kirtsaeng far more than he had earned.
On Tuesday, in a Cinderella victory, the Supreme Court reversed, holding that the “first-sale” doctrine protected Kirtsaeng against Wiley’s claims of copyright infringement.
This case came down to a thorny issue of statutory construction under the first-sale doctrine, which provides that “the owner of a particular copy or 
phonorecord lawfully made under this title . . . is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord.” 17 U. S. C. §109(a). Kirtsaeng claimed that the first-sale doctrine protected him. Wiley argued that the books, printed in Thailand under a license from Wiley, were not made “under this title,” and therefore Kirtsaeng could not lawfully resell them. In other words, Wiley argued that there was a geographical limitation on the first-sale doctrine.
The Court’s opinion (written by Justice Breyer) involves some hair-splitting statutory analysis and a good deal of legislative and historical analysis in support of its conclusion. The bottom line is that a six-Justice majority found Wiley’s geographical limitation argument unsupportable under the statute, and concluded that there is “no basic principle of copyright law that suggests that publishers are especially entitled to . . . charge different prices for the same book in different geographic markets.”*
*The Court also took into consideration the “practical copyright-related harms with which a geographical interpretation would threaten ordinary scholarly, artistic, commercial, and consumer activities.” How would used book stores and libraries (for example) know that they had the right sell or loan books that had originated abroad?
The Court dismissed its 1998 dictum in Quality King v. L’Anza Research International that copies made by a British publisher would not be “lawfully made under this title,” stating, “is the Court having once written dicta calling a tomato a vegetable bound to deny that it is a fruit forever after?”
The implications of a decision legalizing the importation of “gray market” copyrighted works created outside the United States are significant for publishers, but this battle may be far from over. There can be little doubt that the U.S. publishing industry is strategizing over how restrict the importation of copyrighted works in light of this decision. In fact, Justice Kagan wrote a concurring opinion outlining at least one option: since the Supreme Court’s decision interprets a federal statute (the Copyright Act), the law can be amended to prohibit the importation of foreign-manufactured copyrighted works, but to avoid some of the collateral harm that influenced the Court’s decision. However, opposition to such a change in the law is already ready to do battle.*
*See Owners Rights Initiative.
Sellers might also attempt to restrict importation by licensing (rather than selling) their products, a strategy that has been somewhat successful under U.S. law in the case of software. (For a post discussing this issue see here). On this strategy the line between digital and physical goods blurs—for example, even now Amazon uses licensing to /restrict the purchase of territorially licensed e-books from outside the U.S. And, whether a license would be recognized under the laws of foreign countries where the transaction first takes place (and when the transaction is arguably a sale) remains open to question.
Every Supreme Court opinion generates massive press coverage. For a partial collection of articles and posts see this collection at SCOTUS blog. I also recommend Terry Hart’s discussion on Copyhype and Margot Kaminski’s post on Concurring Opinions, both of which contain valuable observations about how Congress and the publishing industry might respond to this decision.
Kirtsaeng v. John Wiley & Sons, Inc.
by Lee Gesmer | Mar 14, 2013 | Copyright
Last week’s New York Times article on digital resales, Imagining a Swap Meet for E-Books and Music, is a reminder that U.S. District Court Judge Richard Sullivan’s decision on the pending cross-motions for summary judgment in Capitol v. Redigi can be expected quite soon. The motions were argued on October 5, 2012 (transcript), and six months is a fairly long time for a judge to decide motions of this sort. (For my earlier blog post on this case see Redigi Case Poses A Novel Copyright Question on the Resale of Digital Audio Files – Is “Digital First Sale” Legal?)
Ever since copyright protection began to be applied to software in the early 1980s the industry has complained that the law lags behind the technology. The Redigi case is another example of this lag. The hearing transcript illustrates the difficulty of applying copyright law to new digital technologies, as the lawyers and the judge stuggle to find an analogy that will help them apply the copyright “first sale” doctrine to the Redigi “forward and delete” system.
The Redigi System. To briefly recap, Redigi can be used to copy (reproduce, migrate, transport, all verbs used by the parties) an iTunes file from a consumer’s computer to a Redigi server (aka the “cloud”), during which process it deletes the file from the owner’s computer. The file, although located on Redigi’s servers, remains accessible only by the original owner until it is purchased by a customer of Redigi, at which point it can be accessed only by the purchaser, who may stream it from the Redigi server or download it to the purchaser’s computer. Either way, the original owner (or more precisely Apple licensee) loses all rights to the file.
The “First Sale” Doctrine. The legality or illegality of this system rests on the court’s interpretation of the copyright statute’s “first sale” doctrine, which states as follows:
Notwithstanding the provisions of section 106 (3), the owner of a particular copy or phonorecord lawfully made under this title, or any person authorized by such owner, is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord. 17 U.S.C. 109(a).
“Phonrecords,” in turn, are defined as:
material objects in which sounds . . . are fixed by any method now known or later developed, and from which the sounds can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device.
It is the “first sale” that allows the purchaser of a copyrighted work—such as a book, record, tape, CD or DVD—to resell that physical copy without violating the rights of the copyright owner. Hence, the existence of (for example) used bookstores, whether brick-and-mortar or online. However, Capitol argues that the first sale doctrine is limited to copyrighted works embodied in physical objects (paper, records, tapes, CDs, DVDs). It does not, Capitol claims, apply to digital files. In the case of Redigi the sale of a digital copy, Capitol argues, involves not the transfer of a “particular copy,” but rather the “reproduction” of the electronic file on the Redigi cloud. And reproduction, Capitol rightly argues, is an exclusive right of the copyright holder which is not protected by the first sale doctrine. By reproducing a copyrighted file on a Redigi server Redigi violates that right.
Redigi responds that the transmission of a digital work that is simultaneously deleted from the sender’s computer is the digital equivalent of giving, lending, or selling a book, consistent with long-standing copyright law under the first sale doctrine. The key factor, it argues, is that the original owner has no further rights (and no access) to the file once it has been sold.
The Summary Judgment Hearing (and the Star Trek Transporter). Judge Sullivan will have to decide which side is correct, and the summary judgment transcript shows how the judge and the parties have struggeled to fit Redigi’s system under the Copyright Act’s first sale doctrine:
Judge Sullivan: I guess [Redigi is] saying it’s not a copy, right? They’re saying that [the actual file] it’s transported from one place to another, . . . I’m not a Trekkie, but I kept thinking it’s the difference from Captain Kirk going from the Enterprise to the planet through that transporter thing, where he’s not duplicated, to the cloning where there’s a good and a bad Captain Kirk where they’re both running around. I think one is a copy and the other is — the other was transported and it’s only one Captain Kirk. (Transcript pp. 9-10).
Redigi’s lawyer (possibly in jest, it’s hard to tell): one of the examples I was thinking of was Willy Wonka. Remember when they put Tommy on the stage. They beamed him, and you saw the particles go across the top and, boom, there he was, miniaturized, but still him in that TV. What’s so hard to believe?*
*Redigi’s lawyer also described the process as “like a train. . . . Redigi grabs the file on the [customer’s local] hard drive and . . . pulls it in a matter of seconds to the cloud hard drive”
Perhaps the best analogy came from Judge Sullivan, where he described Redigi’s process as “if I combined my photocopier and my shredder so that I made a photocopy and the original, instead of coming out of the bin where I can pick it up, goes straight to the shredder. The two don’t exist at the same time, but it seems to me the other one is still a copy.” Redigi objected to this analogy, which is harmful to its position, but was challenged to distinguish it.
Judge Sullivan knows this is an important case: it is the first of its kind, and many eyes are watching. He also knows there is a good chance the losing party will appeal his decision to the Second Circuit Court of Appeals. He made it clear that his job is to apply the copyright statute, not make copyright policy—that would be up to Congress. At the same time, he is obviously struggling with the implications of Capitol’s position. The first sale doctrine has been a mainstay of U.S. copyright law since it was first established by the Supreme Court in 1908, and it seems intuitively unfair that it should not be expanded to encompass digital works.*
*In fact, a recent court ruling on this issue by the Court of Justice of the European Union held that held that a licensor of software made available for download over the Internet may not prevent the resale of perpetual licenses by its licensees. (UsedSoft GmbH v. Oracle International Corp., July 12, 2012), setting up the possibility that U.S. and E.U. law will differ on this issue. Unfortunately, Redigi and other potential resellers do not have the option of escaping more restrictive U.S. laws by moving their businesses to Europe, since the Court of Justice held that the first sale must occur within the European Union.
Nevertheless, under the current statute the Redigi case requires the court to identify the “phonorecord” in which the iTunes files are fixed, and determine whether Redigi is enabling the sale of that phonorecord. Capitol argues that the phonorecord is the hard drive, just as the material object in which the letters of a book are fixed is the printed page.
At the heart of Redigi’s response lies its assumption that the bits themselves are the phonorecord, and that its technology enables the transfer to the Redigi cloud of the specific bits the user downloaded from iTunes. However, although neither party seems to have argued the point,* as a technical matter Redigi seems to have the losing end of this argument. A digital file (such as an MP3 of AAC file) is nothing more than the alteration of the polarities of a magnetic medium (in the case of a hard drive) and the storage of electrons in the case of flash drives. In the case of a hard drive the only thing that is transfered is the set of instructions that set the magnetic polarities; in the case of a flash drive the electrons in the first user’s drive are not physically transferred to the Redigi cloud. Thus, Redigi’s argument that it “migrates” the file seems to have missed the mark as a technical matter. The most reasonable interpretation of the statute leads to the conclusion that the hard drive or flash drive is the “phonorecord” or “material object” in which “sounds are fixed,” and Redigi’s system does not involve the resale of the drives.
*The parties submitted expert affidavits, but they are so heavily redacted that it is impossible to know whether this argument was made. However, during oral argument Capitol’s lawyer stated that he did not “think it’s necessary to delve into the technology.”
While this conclusion will almost certainly leave many people deeply dissatisfied, Judge Sullivan is likely to conclude that a clear application of the law extending the first sale doctrine to digital files must come from Congress, not from the courts. Of course, Congress may take no action on this issue for years (if ever), leaving the legality of resales of digital works in limbo or, if Capitol’s position becomes case law, illegal.
An exchange between the judge and Capitol’s lawyer shows that the first sale doctrine is not a complete dead letter in the context of digital files, at least in theory. During the preliminary injunction hearing a year ago the judge asked Capitol’s lawyer whether the first sale doctrine would permit him to sell his iPod to his law clerk. Capitol responded that this would be permissible. (I discussed this exchange toward the end of my first post on this case). The judge raised this hypothetical again in October, and this time Capitol’s lawyer backed away from it:
Judge Sullivan: . . . last time we were here . . . I asked you if I could sell my iPod to somebody and you said I could.
Capitol’s Lawyer: Yes, and you know, it’s interesting you say that because I would actually have to say that I think that answer probably was not a correct one.
Clearly, Capitol’s lawyer did answer this question incorrectly the first time, at least from the perspective of his client. One can imagine someone who repeatedly copies his 10,000 song iTunes music collection to an iPod or a very inexpensive portable player, and sells the player and the entire collection for 10 cents on the dollar, hypothetically depriving the record industry of $10,000 in revenues with each sale. However, this begs the question of whether the original purchaser could use the first sale doctrine to justify the sale of the original device to which he downloaded these files (perhaps an inexpensive computer). It seems likely that he could under the first sale doctrine, but no court has ruled directly on this issue.
Fair Use Confusion. A surprising amount of the argument in this case seems to have confused principles of fair use with issues associated with first sale. For example, at one point Capitol’s lawyer was asked whether cloud storage alone (without an associated sale) violated the Copyright Act. Capitol’s lawyer, more cautious this time, answered that Capitol didn’t challenge cloud storage in this case. The correct answer seems to be that cloud storage alone (without resale, and without allowing third-party access) is protected by fair use, and Capitol seemed to acknowledge this (describing it as “pure storage”).
Redigi’s lawyer, for his part, improperly interjected issues of fair use when he argued that since a downloaded music file can be moved around on the users hard drive (from one directory to another, for example), it must be permissible for the user to upload the file to the Redigi cloud drive: “why is it okay to move files on my own hard drive and that doesn’t violate the [reproduction right], but to move my file to a cloud does violate reproduction? It doesn’t seem to make sense to me.” However, this argument ignores a basic principle of fair use, specifically that the use be non-commercial. The Redigi system moves the file not for the convenience of the person that downloaded the file from iTunes, but for the commercial purpose of selling it.
A Tactical Error By Redigi Early in the Case. As an aside, it seems unfortunate that Redigi dug itself into a legal hole by admitting, earlier in the case, that the customer’s local file is deleted. If “File A” is deleted, then “File B” must, by logic, be something other than File A (a copy or reproduction), and not the result of a “migration” from the Redigi customer’s hard drive to the Redigi cloud. Capitol argued that this judicial admission was fatal to Redigi’s attempts to describe its process differently at this point in the case, and the judge seemed receptive to Capitol’s argument that this was a binding admission, stating that Redigi “admitted certain acts that are going to be fatal.”
As I noted at the beginning of this post, it’s been six months since summary judgment was argued, and that’s a long time. It’s dangerous to try to interpret a judge’s comments during oral argument, and judges are known to disfavor, during oral argument, the side they ultimately rule for. However, I think that the judge in this case is likely to feel bound by a strict reading of the statute, and to rule in favor of Capitol. We shall know soon.
October 5, 2012 Transcript of Summary Judgment Hearing
