Law and Information

Late, very late, but hopefully not too late — finally online available some thoughts on Grokster by Harvard Law School Clinical Professor John G. Palfrey, Jr. and me. It’s a piece written for a non-U.S., non-IP-law-audience with a general interest in the topic. Here’s the abstract:

Ian Brown points to a communication by the European Commission, announcing a “recasting” (see p. 7 for a definition) of EU Copyright Law as part of the Lisbon program aimed at regulatory simplification. According to the UK Patent Office’s website, the review will focus on levies applied to equipment and media used for private copying, term of protection for sound recordings, and includes a review of co-written and musical works.

BNA’s Internet Law News draws my attention to an interesting executive summary of a forthcoming report on takedown notices under sec. 512 of the DMCA authored by Jennifer M. Urban and Laura Quilter of the Samuelson Law, Technology, and Public Policy Clinic at University of California, Berkeley. Among the findings (analyzing 876 notices submitted to the Chilling Effects Project; read more on the methodology on p. 6 et seq.):

• “Thirty percent of notices demanded takedown for claims that presented an obvious question for a court (a clear fair use argument, complaints about uncopyrightable material, and the like);
• Notices to traditional ISP’s included a substantial number of demands to remove files from peer-to-peer networks (which are not actually covered under the takedown statute, and which an OSP can only honor by terminating the target’s Internet access entirely); and
• One out of 11 included significant statutory flaws that render the notice unusable (for example, failing to adequately identify infringing material).”

In addition, the researchers found that over half of notices sent to Google to demand removal of links in the index were sent by businesses targeting apparent competitors, and that over a third of the notices targeted sites outside the United States.

The International Herald Tribune’s weekend edition features an interesting article by David Goodman entitled “Consumers fight copy protection.” You will find references, inter alia, to a Berkman Center study on the EU Copyright Directive I co-authored with Michael Girsberger.

Read this – no comments from my side… (find an inofficial English translation of the draft implementation here.) As my friend Mike puts it: Good luck, Switzerland, on the negotiations of the bilateral trade agreement with the U.S.

INTERNATIONAL INTELLECTUAL PROPERTY ALLIANCE 2005 SPECIAL 301 SPECIAL MENTION SWITZERLAND

The Federal Copyright Act of 9 October 1992 as amended is currently undergoing further revision in order to implement the WIPO Copyright Treaty (WCT) and WIPO Performances and Phonograms Treaty (WPPT) into Swiss law. IIPA is concerned with the way in which the two treaties are being implemented in the country. The Swiss Federal Institute for Intellectual Property continues to delay the implementation of the WIPO Copyright Treaties. In September 2004 a draft implementation was released, but is problematic in several respects: it has an overly broad private copying exception (indeed the current exception is problematic and certain groups argue that downloading infringing copies of copyright works from peer-to-peer (P2P) networks is legal in Switzerland); inadequate protection of technological measures (including over-broad personal use exemptions); and burdens on rightholders employing technological measures (including labeling obligations).

Furthermore, the Swiss government should seek to make the use of P2P networks for copyright infringement more difficult. SAFE (the Swiss Anti-Piracy Federation) continues to investigate portal sites, which are generally hosted by foreign providers. In March 2004, police (cooperating with SAFE and the German Anti-Piracy organization [GVU]) raided the home of the Swiss creator of an eDonkey portal offering an extensive number of links to movies, cartoons, PC and console games, software, books and pornography (averaging 220,000 visitors per day). This individual will be prosecuted for copyright offenses, the first such prosecution against the creator of a portal for a P2P network in Switzerland.

For the fifth time within two months I’m finding myself back in Cambridge, Mass. You can’t imagine how much I love this place. There are many reasons why I think Cambridge is among the most exciting and inspiring places to be. One reason, of course, are the many wonderful friends and colleagues that have been working and living here. Take as one prominent example my brilliant colleague Derek Slater, Fellow at the Berkman Cente and EFF affiliate with whom I had the pleasure to work on a couple of projects. He has just posted two interesting podcasts on his blog. In the first piece, Derek reports about the P2P litigation summit he participated in, arguing that we have to learn more about – and from! – the stories of the people that got sued by the recording industry. In the second podcast, Derek provides a big-picture analysis of possible (technological, business, and policy) approaches to the file-sharing problem. In essence, he makes a strong case why policy-makers should not take drastic measures (such as, e.g., compulsory licensing systems or, as the worst-case scenario, mandatory DRM schemes) to address the current digital media crises. Rather, policy-makers may be well advised to trust in the evolutionary power of market mechanisms on the one hand (emerging business models, in fact, might address the problem) and to focus on the reform of the DMCA and certain procedural protection measures on the other hand.

Natali Helberger, Institute for Information Law, University of Amsterdam, has written yet another good piece on Digital Rights Management from a Consumer’s Perspective.

Nice op-ed by Tim O’Reilly in today’s NYTimes. Tenor: “Obscurity is a far greater threat to authors than copyright infringement,” and: “I’m sorry to see authors buy into the old-school protectionism of the Authors Guild, not realizing they’re acting against their own self-interest. Their resistance can come only from a failure to understand the nature of the program. Google Library is intended to help readers discover copyrighted works, not to give copies away. It’s a tremendous service to authors that will help them beat the dismal odds of publishing as usual.”

Boston Globe correspondent Siddhartha Mitter wrote a nice article on audioblogging and MP3 blogs. I’m quoted in the piece (thanks to JP for the pointer). Siddhartha invited me to comment on the current legal outlook for MP3 blogs, asking whether there are any signs on the horizon that MP3 blogs will soon be tested by litigation. The short answer is: I don’t know for sure. The long answer I provided is the following:

I cannot foresee the entertainment industry’s next move and predict whether they will be targeting mp3blogs or not. However, we might identify some of the elements that RIAA and IFPI are likely to consider before taking legal actions against mp3 sites.

1) Economic significance: From a business perspective, it is currently unclear as to what extent mp3 blogs have negative impacts on, say, CD or online sales. First, mp3blogs are operating on a small scale compared to p2p networks. Second, they are often designed as “sampling” or “promotional” tools, linking to legitimate sources where tracks can be purchased legally. Third, mp3 blogs often promote non-mainstream, niche-music. Fourth, mp3 blogs often make available songs for a limited time only — and often take tracks down when rightsholders complain. Fifth, it’s already hard to make causal connections between large-scale file-sharing on p2p networks and incline in CD sales — and, consequently, even harder to establish causality in the case of small-scale mp3 blogs. While the economic effects of mp3 blogs are unclear, litigation for sure is expensive.

2) Open legal questions: Besides economic considerations, the industry is likely to consider the specific legal situation surrounding mp3 blogs. Two aspects must be distinguished: First, the legality of making available tracks on mp3 blogs. Second, the question whether downloading songs from mp3 blogs is legal or not. In both cases, fact-specific questions remain open, which, naturally, might affect the legal analysis. However, here’s my take on it.

— As to uploading: Certainly, uploading of copyrighted materials tends to be illegal where rightsholders haven’t given authorization. However, I would argue that a fair use defense is more promising in the case of mp3 blogs as compared to p2p file-sharing networks, at least to the extent that the relevant mp3 blog is entirely non-commercial and — due to the above-mentioned sampling/promotional effect — might only (if at all) have a minimal impact on any potential market.

Further, one should note that mp3 blogs by no means only provide infringing materials. In many cases, mp3 blog operators upload songs with authorization from rightsholders — esp. from indie labels, unknown bands, etc. — or “teasers” released by record labels.

— As to downloading: As a baseline, downloading of copyrighted material without rightsholder’s authorization infringes copyright law. But users of mp3 blogs again might have a significantly stronger fair use defense than p2p downloaders. It seems likely that users can often make a reasonable argument that they used the mp3 songs for sampling or other noncommercial personal use only – imagine a case where the downloader can prove that s/he later deleted the track downloaded from the mp3 blog and purchased the relevant CD based on the sample made available on the mp3 blog.

In sum, it would probably be more promising to make a fair use defense in case of mp3 blogs. However, keep in mind that fair use is an ad-hoc and highly-fact specific defense and therefore almost impossible to apply to abstract cases.

3) Practical considerations: There are practical considerations, too. It might be more difficult to identify mp3 blogs than p2p networks, it might be much more difficult to identify potential infringers as in the p2p scenario, etc. Further, the recording industry has always seen litigation as part of an educational campaign. One might doubt what legal actions against mp3 blogs might add to this.

Regardless, I assume that RIAA and IFPI are closely monitoring the emergence and further development of mp3 blogs and might be ready to react in specific cases where mp3 blogs clearly and significantly infringe copyright, or to react more broadly when mp3 blogs will develop and get economically significant.

So, that’s my take on it. What’s your legal outlook?

The Berkman Center’s wonderful Executive Director John Palfrey was kind enough to comment on my earlier post regarding the IPR-Enforcement Directive No. 2. It doesn’t come as a surprise that I share John’s fear that the vague “attempting, aiding or abetting and inciting”-standard as set forth in the proposed directive is very likely to cause much headache by increasing legal uncertainty in the current quicksilver technological environment. I’m convinced that it would have negative impacts on entrepreneurship and innovation for exactly the reasons JP mentions. In an email, our friend Mike McGuire at GartnerG2 points out that this sort of legislation – also causing uncertainty among VCs – could imperil the efforts of innovative technologies and services such as Weed, PeerImpact, playlist services, etc. that are just starting to hit the market.

However, it’s also important to note that the Commission’s proposal is only the beginning of a long conversation. Given the success of our colleagues in fighting criminal provisions in the context of the IPR Enforcement Directive No. 1 and, most recently and more generally (although not directly linked), in the case of the Software Patents Directive, I’m still hopeful that the proposed standard will not become law in Europe. Fingers crossed.

As to John’s question about the “health and safety”-rhetoric: This goes back to the 1998 Green Paper on the fight against counterfeiting and piracy in the single market (at p. 5):

Obviously, the authors had different things in mind than online piracy of digital content. Consider, for instance, counterfeiting of pharmaceutical products or the like. Indeed, the proposed directive and framework decision would apply to any infringement of any IP rights as provided by EU legislation and/or by member state laws, including:

• copyright,
• rights related to copyright,
• sui generis right of a database maker,
• rights of the creator of the topographies of a semiconductor product,
• trademark rights,
• design rights,
• patent rights, including rights derived from supplementary protection certificates,
• geographical indications,
• utility model rights,
• plant variety rights,
• trade names, in so far as these are protected as exclusive property rights in the national law concerned.