Fordham International Intellectual Property Conference, Copyright Panel: Infringement & Remedies - Fordham Intellectual Property, Media & Entertainment Law Journal
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Fordham International Intellectual Property Conference, Copyright Panel: Infringement & Remedies

Fordham International Intellectual Property Conference, Copyright Panel: Infringement & Remedies

Fordham International Intellectual Property Conference
Copyright Panel: Infringement & Remedies
[Moderator: Michael Shapiro]

– Not a verbatim transcription —

[Shira Perlmutter] Around the world the idea of more ISP interaction is gaining traction. About 80% of online infringement is P2P. This is left generally untouched since the DMCA passed in 1998 — alot has changed.

ISPs have a critical role in this: they have a relationship with subscribers. It is in their long term interest, because they are partnering with content industries on new services. The major uploaders are alos the biggest bandwith hogs.

Focus on collaboration — nothing requires reopening DMCA or e-commerce directive.
Overall goal is to find an effective solution. It is beginning to emerge in US through private negotiations. Outside US through legislative proposals. Three-strikes model (graduated response). After several notices, the user will have meaningful consequences. The most common consequence being discussed is a termination of service.
In some countries, private deals emerging — they include some form of graduated response. Some nations also involve government pressure as a backup. Here, there has not been movement. Government involvement is a way to ensure level playing field for ISPs, no competitive disadvantage.

Privacy concerns are not a problem. Enforces existing terms of service. Avoids the need for individual lawsuits. Gives users opportunity to stop violating the law without consequences. Reports show a large percent of users would stop after a warning — almost all would stop after two. The ability to challenge notices is being built in in some places.

Places where this is happening:
Legislation. France – Creation and Internet Law. Allows agency to send 2 notices, then order a stop of internet service for a period of months.
Korea — passed legislation that will allow graduated response.
New Zealand — had passed a law from last government, which has been held off from in the new government.
US — in the DMCA there is a termination of user provision, but as a condition of safeharbor, not a requirement.

Consultations going on in the UK.
In Japan, and Hong Kong.
Finland, Spain, Italy, Netherlands
Belgium court has ordered ISP to make P2P impossible, found filtering to be adequate.
— — —
[Nils Bortloff]
Manager of U2 is a big fan of graduated response
Music fans have the ability to easily download, most from illegal sources.
Illegal use eats up 70% of ISP bandwidth. So ISPs also should be concerned; they want to roll out paid services.
Increased production risk for record companies.
Limited enforcement of rights: Only for large scale infringement. more than 3000 tracks online.

ISP consumer protection program. (1) First warning. 70% will refrain from the illegal activity. (2) Second warning. 90% refrain. (3) Technical measures: temporary suspension // combination: filtering, port blocking, URL blocking.

We need governmental support, we need real sanctions, …
Data protection vs. protection of property. Must be balanced.
Counting on Promusicae v. Telefonica [Case C-275/06] and LSG v. Tele2 [Case C-557/07].
Only real sanctions provide deterrence.
Prevention instead of penalties; The fans are still on the legal path, plus they don’t have to pay legal fees.
For ISPs, the reduction of overloaded bandwidth is good.
For rights owners, also good. Chance of legal exploitations.
For citizens, less exposure to liability; less burden for prosecutors, courts.
– – – –
[Stanley Lai]
Safe Harbors in Asian countries:
In Hong Kong there is a proposed safe harbor. In Malaysia, there is a hybrid system.

Graduated response laws controversial. A challenge to implement.
New Zealand 92A didn’t really work because it was past administration.
S.Korea just passed a bill to come into force Sept 2009.

Imposition of Secondary Liability. the standards vary.
Malaysians talk about “causing another person to do”
Section 86 of Thai Penal Code.
Article 22(3) of China’s Regulations on the Protection of Information Network dissemination Rights.
Singapore: Odex v. Pacific Internet Ltd. [2007 SGDC 248]; [2008 SGHC 35], filesharing case. Agent of copyright owner could not apply for pre-action discovery to identify file-sharers.
IFPI v. Yahoo case.

Safeharbors don’t necessarily discriminate on the type of content. Not sure if the three-strikes law in its current form will make difference.
ISPs may decide to take down rather than face the fight.
People may be concerned by the over-reliance on evidence and allegations by rights holders.
– – – – – –
[Justin Hughes]
Five years ago wrote an article saying “these issues are all settled” — and it is interesting seeing that it turned out to be completely wrong …

Should ask ISPs to take “responsibility” not more “liability”
Assume responsibility to comply with the DMCA, to limit the liability. Why reassess the responsibility now?
It is a quadrant of technological change, business changes…

Technological changes:
There have been technological determinists who say that tech will make enforcement impossible.
Transmissions ISP — if you look back at the E-commerce directive and the DMCA, there was no thought that ISPs could know what was going through the pipes in real-time. Since then we have heard of packet inspection. Now we can know what is on the pipes in real-time.
There has been some controversy; Some of the filtering tech used it is a question of how inspected (header, or deep-packet).
Disputes surrounding whether BitTorrent traffic has been throttled. No question that this already happens. Their ability to do this has nothing to do with deep-packet inspection, only traffic patterns.

Business Models changing — ISPs suddenly find their business interests aligned with content industry. It is this traffic that consumes most of their bandwidth.
This is a big problem in the US. In 1995, AOL moved from metered charging to all-you-can-eat. Now, can the ISPs move back to metered? NO! Because they may open themselves up to vicarious liability!

Hosting: In the past 5 years, a shift in tech. With filtering, now it is possible to ID where an audio-visual work comes from, whether an owner wants to get paid from it or not.
10 years ago the policy argument made was like defamation — can’t be sure, so you don’t want ISP to be a censor. Now, it has changed. Now argument is copyright materials looks like porn. Capable of detection and filtering, so why not?

What has also happened is that it is clear for which web sites are copyright exploiting sites. For these, courts find them and shut them down. Ex. Baidu case. China has been enforcing.
– – – – – –
[Carey Ramos]
There has been a series of infringement cases culminating in Grokster in 2005. Since then, the issues have continued to be litigated.
Napster was centralized. Easy to establish knowledge of songs on the service. Grokster and Streamcast were decentralized. They argued they didn’t know what users were trading. Judge reasoned in the Sony Betamax case, you had to demonstrate actual knowledge of specific instances by users of the product. In Grokster, S.Ct. created new theory, if actively promoting the infringing use on the site.
Then the case was remanded to district court. Sought a permanent injunction against Streamcast. Judge then said you have to use eBay standard (patent inducement standard). Court said you are only entitled to an injunction against the actual inducement! Now that the users don’t have to be educated on how to use for infringement, can’t enjoin! Special master appointed to determine if filtering was feasible.
Streamcast went out of business, but the state of the law was left unclear…

Where you can prove damages, case against Bertelsman: not enough to prove that songs were on peoples hard drives and on lists, but needed to prove actual distribution. Judge said that the circumstantial evidence could be used for damages.
The answer is what Judge Patel said: can you show through circumstantial evidence that they were actually being distributed? For individuals it will be much tougher.
– – – – – –
[David Carson]
Cablevision case: Direct infringement case; controversial. S.Ct. deciding now whether to take. The Court does not take many copyright cases. the court has agreed to take one this year already: Reed Elseviere – a question about sec. 411(a). A post-Tasini class action lawsuit.

CNN v. CSC Holdings. Solicitaor General invited to file brief on whether S.Ct. should take the case; No idea what position they will take…
The case involves a remote DVR system (“RS-DVR”). Part of the signal sent to subscribers, while at the same time a part is sent to a buffer. If subscriber decides to record, the buffer copy is saved. Questions: Is the buffer copy sufficiently fixed to be a “copy”? Who makes the copy? Is playback a public performance?

17 U.S.C. 106(1), Exclusive right to make copies. But it must be “fixed”. To be “fixed” — has to exist more than a transitory duration. Was the buffer copy existing for long enough?
2d Cir. said there was embodiment. However, it was not more than transitory.
But how long enough? the court gave no guidance.

Server copies: Cablevision provided the system, but in each case, the consumer pressed the button and started the copying. 2d Cir. drew on Netcom case, said that there needed to be “volition” — and Cablevision had no volition.

Public Performance: definition requires transmission to the public. Definition of “public” in sec.101 included people in different places, at same time or different times.
Court concluded that you have to look at particular transmission and determine what the potential audience for each is. Here, the transmission comes to the one subscriber only. It is a private performance; no infringement.

It must have been the policy choices driving the decision…
– – – – – –
[Allen Dixon]
Trying to enforce rights in face of data protection rules in the EU…
In Europe facing big hurdles for legal actions because data is protected! In the European charter there are fundamental rights — personal data protected, private life; Fundamental right to property, and effective judicial protection of that property.
Packet header information: Every bit of info on the internet has an IP address associated with it (sender and receiver).
The basic point is that ISPs assign the number, and it contains info about the computer — but the info on who uses that IP address is kept by the ISP.
Data protection rules cover identified or identifiable persons. Question is “is it an identifiable person?”
Restrictions on use of data, i.e., Have to have a legitimate use.
Additional restrictions of use for ISPs.

Fairly easy for notice & takedown. don’t have to know who person is. But when doing evidence collection for lawsuit, you need it! Who the ISP is, who is transferring files. Different countries have different effects.

A legitimate reason for data collection is being infringed upon. Sometimes rightsholders have to go to court to get permission.
Promusicae case waffled on issue — said you have to respect both privacy rights and IP rights, but EU rights don’t force either, so figure it out by yourselves…

Is the status quo working? Would a code of practice help? Is a legislative fix needed? Is a WTO TRIPs enforcement case required?
– – – – –
[Jerome Reichman] Willing to have reverse notice and takedown in the graduated response model? Can there be corrective legislation for the public performance issue (referring to Cablevision 3rd prong)?

[Shira] We have tried to get ISP involvement without government, not trying to get them to encourage.

[David] Not aware of any proposals to amend the law. If S.Ct. takes case we’ll know.

[Bridges] E-commerce companies, investors, innovators, etc. Created confusion because certain actions
Myer v. Holley, 537 U.S. 280 (2003) — when talking about federal statutory tort, we don’t take vicarious liability past where you traditionally found it. Now an unreality because we don’t take these principles from other aspects of law…
Maqking available issue: to what extent has it come into the copyright act. concerned about 106(3) distribution right. Arguably, the distribution right does not apply to the Internet at all! Courts have focused on if you need a transmission…but the statute says “copies or phonorecords to the public by sale or other transfer of ownership, renting leasing or lending”– which means material objects!
Interestingly in Art.6 of WIPO treaty, it applies only to physical copies. This area has not been explored.

[moderator] Does it bother you that Tasini talked about it?

[] In Tasini, it was assumed, without deliberation. In Grokster, the court went through eleborate analysis on “deemed distribution” but never addressed the “copies or phonorecord” part of the statute.

[Shira] The definition of distribution right in the WIPO treaty was made specifically so that it did not conflict with US distribution right.
– – – – –
[Question] Issue of equitable access to information?

[Ramos] This is the lesson: In the last 10 years, the record companies have been seriously injured by piracy. We are the losers because the number of artists have been cut due to the loss of funding. There would be much more expressive content if artists are able to be compensated. Artists would not be producing the content that we have has in the last 50 years without the ability to be compensated.

[Dixon] It is a fundamental right in Europe. Talking about any internet wrong, the data privacy laws effect that. How do we practically balance these issues?

[Question] Have you seen how many bands there are out there? It has nothing to do with copyright protection. Absurd to suggest that piracy has led to less expressive content.
Also the solution of graduated response sounds impractical because this suggests you care about your home connection and don’t want to go to Starbucks or use a University connection …

[Shira] There are a lot of issues, but what we are trying to do is find a practical and pragmatic solution.
Much better if it doesn’t involve litigation.

[Question] Can we mve one step further. Why not have a negligence standard?
Can we ask copyright owners?
Should we let private parties negotiate or involve government?

[Hughes] We should think of copyright laws in relation to other laws — for example tort law. We should think about it as the “least cost avoider” — impose the cost on the most efficient party. It cant be just the ISP itself, there needs to be interaction for filters to be built.
One problem is that tort law doesnt involve free-expression issues. Whatever position applied to spam filters should be the same position applied to copyright.
There is a big issue with the filters — need to be sufficiently lenient to do reasonable fair uses. Need more transparency, but not necessarily government regulation.

[Bridges] Many judges have begun to look at negligence as the standard. It is fine to go that way, but we do not need a statute for a negligence regime. Common law principles involved if we go all the way … Can’t pick and choose the best of both.

Jason Lunardi