Articles

TEST - edited by Angel

Jan 18, 2017

By: Neil J. Rosini, Michael I. Rudell

TEST

Interpretation of Digital Millennium Copyright Act
 Alarms Service Providers

 

     Content owners have been long exasperated by the notice-and-takedown procedure of the Digital Millennium Copyright Act (DMCA) (17 U.S.C. §512(c)(1)). It's designed to give them a means of eliminating infringing content uploaded by users to Internet sites while providing eligible online service providers (OSPs) a safe harbor from infringement liability if they dutifully respond to takedown notices and bar repeat infringers. But even when infringing content is removed in response to a takedown notice, an identically infringing upload by the same infringer often will reappear—even at the same site. The experience for content owners has been likened to the arcade game Whac-A-Mole in which the hammering of one pop-up rodent is followed immediately by new pop-ups waiting to be hammered.

 

     A recent decision by Judge Raymond J. Lohier, Jr. in the U.S. Court of Appeals for the Second Circuit (EMI Christian Music Group v. MP3tunes and Michael Robertson, Nos. 14-4369-cv(L), 14-4509-cv (XAP), originally decided Oct. 25, 2016 and amended December 13, 2016) has gladdened the hearts of content owners. It not only endorses the plaintiffs' key copyright infringement claims against Michael Robertson, founder and chief executive officer of MP3tunes, LLC, but also may broaden the ways in which online service providers can lose the DMCA's safe harbor protection either by not implementing a repeat infringer policy with a sufficiently wide net or by demonstrating willful blindness to infringing activity involving entire categories of copyrighted works.

     Facebook, Google, Twitter, Pinterest, Yahoo!, Ebay and others have reacted with alarm, filing last month an amicus brief seeking a rehearing en banc in which they say "the panel's ruling threatens to undermine settled understandings about how the DMCA operates and what OSPs must do to retain its protections."  That petition has been denied.[1]

 

The Facts

 

     Starting in 2005, MP3tunes offered a "locker storage" service for a fee that enabled users to put music on its server and access it from multiple devices. Its second website called sideload.com allowed users to search for free music on the Internet and then "sideload" a copy directly to MP3tunes lockers without storing it on a home computer. Each sideload automatically submitted the same track to the sideload.com searchable index "for others to experience." Users, who also could upload songs from their own collections to the sideload.com index, and even MP3tunes staff members, were encouraged to expand what the index had to offer.

 

     The problem was that much of that free music infringed copyright, and two categories of infringing music in particular were central to Judge Lohier's decision. The first was of recordings from major labels formatted as MP3s prior to 2007; copyright owners didn't make those recordings available to the public in that format until that year. The other category comprised recordings by the Beatles, which were not legally made available online until 2010. Much of that illicit music found its way to the sideload.com index and from there to MP3tunes.com lockers prior to those pivotal dates. And MP3tunes.com told users that its actions were legal because sideload.com did not "store any music, but rather link[ed] to files publicly available [in] other places on the net."

 

     In defense, Robertson insisted that MP3tunes had "adopted and reasonably implemented… a policy that provides for the termination in appropriate circumstances of subscribers and account holders of the service provider's system or network who are repeat infringers" in compliance with 17 U.S.C. §512(i)(1)(A). Further, a provision of the DMCA expressly disclaims any affirmative duty of an OSP to monitor its service or seek facts indicating infringing activity as a condition of safe harbor protection (see §512(m)(1)).

 

     Robertson also denied that MP3tunes had shown willful blindness to infringing uses forbidden by §512(c)(1)(A) of the Copyright Act. That provision allows an OSP to escape liability only if it does not have actual knowledge of infringement; or in the absence of such actual knowledge, is not aware of facts or circumstances from which infringing activity is apparent; and upon obtaining such knowledge or awareness, acts expeditiously to remove, or disable access to, the infringing material. Failure to act notwithstanding awareness of those facts and circumstances is called "red-flag knowledge" or "willful blindness."[2]

 

 

The Repeat Infringer Issue

 

     A repeat infringer policy is crucial for content providers; without it the safe harbor dries up whether or not the service provider shows willful blindness to infringement. 17 U.S.C. §512(i)(1)(A). Accordingly, the appellate court focused on whether the repeat infringer policy of MP3tunes satisfied the statute.

 

     The plaintiffs argued that MP3tunes never reasonably implemented a repeat infringer policy because it "did not even try to connect known infringing activity of which it became aware through takedown notices to users who repeatedly created links to that infringing content in the sideload.com index or who copied files from those links." The plaintiffs also pointed to evidence that MP3tunes executives personally sideload songs from "blatantly infringing websites. "

 

    On a motion for summary judgment which the defendants won, the trial court held that a user who downloads or copies songs from third-party sites for their personal entertainment could not be a "repeat infringer" within the meaning of §512(i)(1)(A) of the DMCA, and that a repeat infringer policy had been reasonably implemented by the defendants given that MP3tunes terminated accounts of 153 users who allowed others to access their lockers and copy music files without authorization.

 

    The appellate court disagreed. It rejected the lower court's limit on a "repeat infringer" to those who upload infringing material, and held that "all it took to be a 'repeat infringer' was to repeatedly sideload copyrighted material for personal use," whether or not the user knows his or her actions infringe copyright. The appellate court also held that a "jury could reasonably infer from [the]…evidence that MP3tunes actually knew of specific repeat infringers and failed to take action."

 

     Alternatively, a jury "could have determined that MP3tunes consciously avoided knowing about specific repeat infringers using its services even though the infringement was rampant and obvious." The plaintiffs could demonstrate "that MP3tunes's failure to track users who created links to infringing content identified on takedown notices or who copied files from those links evidenced its willful blindness to the repeat infringing activity of its users." (Emphases added.)

 

     The court even cited against MP3tunes its termination of those 153 users: "requiring MP3tunes to extend that policy to users who sideloaded infringing content may not be an unreasonably burdensome request" by comparison to terminating users for allowing unauthorized access to lockers. And doing so would not require MP3tunes to monitor users or affirmatively seek facts about infringing activity because "it already had adequate information at its disposal in the form of takedown notices provided by EMI as to which links were allegedly infringing"; MP3tunes simply would have had to "connect that information to known users."

 

The Willful Blindness Issue

 

     At trial, the jury found that MP3tunes had knowledge of four categories of infringing files including sideloads of MP3s before January 2007 and works by the Beatles. But the trial court overruled the jury with respect to those two categories on the basis that barring MP3tunes from the safe harbor would require the defendants to actively conduct routine searches and eliminate material likely to be infringing—i.e., to "actively monitor." The appellate court again disagreed and reinstated the verdict because the jury could have concluded MP3tunes showed willful blindness to facts and circumstances that make infringement obvious.

 

     First, even if MP3tunes had no "amorphous" affirmative duty to monitor its servers for infringement, it could have removed or disabled access to the pre-2007 songs as a "time-limited" and "targeted" duty once it had "knowledge or awareness" that they were on the site. Similarly, the jury could have determined that MP3tunes "had red-flag knowledge of, or was willfully blind to, the infringing nature of the Beatles tracks on its servers and failed to 'act expeditiously' to remove them." It also could have found that MP3tunes was designed to facilitate infringement due to its active encouragement of infringement by users as well as personal downloads of infringing recordings from sideload.com by Robertson and MP3tunes executives.

 

OSPs Are Alarmed

 

     In their amicus brief seeking en banc review of Judge Lohier's decision, the online service providers expressed concern that the certainty of the DMCA safe harbor would be jeopardized by three holdings that weren't necessary to the outcome of the decision.

 

     First, the OSPs argued against holding MP3tunes accountable for having knowledge of users who copied infringing files as opposed to holding it accountable only for knowing about users who created links to those files[3].

 

     Another "sharp departure" in the OSPs' view was requiring them to search for categories of infringing works—such as MP3s sideloaded before 2007 in the case of MP3tunes—in contrast to the rule that there is no "affirmative duty to investigate potential infringement in the absence of specific evidence suggesting that a particular file might be infringing."

 

     Third, the decision could be read to suggest that an OSP has red-flag knowledge of infringement when it merely knows that a particular type of distribution of a class of works is "never authorized"—such as Beatles recordings before 2010. Under that rule, OSPs "would have to know the copyright status of every movie, book, article, photo, video, and map that might appear on the Internet" and compare them to "billions of takedown notices, or…act on the basis of rumor, speculation, or general knowledge about the distribution practices of specific copyright owners"—an "impossible burden."[4]

 

Conclusion

 

     If the OSPs make changes as a result of Judge Lohier’s decision, the Whac-A-Mole experience of content owners won't be eliminated, but the moles may be reduced in number and hammered more efficiently.[5]

 



[1] The denial came on December 13, the same day Judge Lohier amended his original decision.

[2] In its 50-page decision, the Second Circuit addressed other issues relating to Robertson's liability and damages, most of which were resolved against him; they were not raised by the amici brief.

[3] The OSPs complained that this statement could be read to suggest that anyone coming into contact with content later alleged to be infringing—"including those who merely access it or refer to it using a hyperlink" and have never been identified as infringers in a takedown notice—must be identified by online service providers as repeat infringers. Their concern was addressed in part by the court’s amended decision which clarified that mere streaming –presumably including mere accessing – was not being addressed.  However, the risk of OSP liability for knowledge of users who download infringing content – in addition to those who upload it or create links to it –remained intact.

[4] This concern also was partially addressed by the amended decision, which clarified that a mere assertion by a copyright holder that “distribution of its works is ‘never authorized’” would not create red-flag knowledge.

[5] Defendant Robertson’s December 27 petition for a rehearing is still pending as of January 4, 2017.