Intellectual Property Part 2 Copyright and Fair Use CS 340 Spring 2013

© Copyright review Term of protection: Protects “(1)original (2)works of authorship (3)fixed in any tangible medium of expression” Does NOT protect ideas, facts, or common knowledge. Holder’s exclusive rights: Reproduce Distribute Derivative Perform/display/transmit Term of protection: Author: life + 70 yrs Work for higher: lesser of 95 after pub or 120 after creation We’re buying a physical copy, but what’s valuable are the ideas, characters, and the creative expression contained inside Buying the right to use, for personal purposes Compare and contrast with physical property

Fair Use (study pages 108-110) An exception to copyright (and only copyright…) Began as a judicial doctrine (from cases) “Allows uses of copyrighted material that contribute to the creation of new work and issues that are not likely to deprive authors/publishers of income for their work." Possible fair uses: "criticism, comment, new reporting, teaching, scholarship, or research."

Fair Use Balancing Promoting production of useful work (by granting copyright) Encouraging the use and flow if information (by limiting copyright)

Sony v. Universal Studios case 1984, the betamax http://www.law.cornell.edu/copyright/cases/464_US_417.htm ISSUE: was Sony liable for contributory copyright infringement by distributing a device that is capable of copyright infringement? STD: looked at whether the device was capable of substantial non-infringing uses.

Sony cont’d Applied the 4 factor fair use test the situation of recording of a film broadcast on TV for later personal viewing. Purpose and character of the use. Private Idea of mere time-shifting Nature of copyrighted work Usually creative

Sony cont’d Amount and substantiality of portion used Ideally whole Effect of use on potential market Not clear that there was a harmful effect Seen as increasing audience and given bigger market for ad revenues

Fair Use Reflection Questions, p. 110 Imagine that an instructor in a college course on computer ethics wants to provide students with Bruce Schneier’s Wired article. Rather than direct students to the Web site where it is posted, she makes copies and hands them out in class. Is this fair use? Imagine that an instructor in a college course on computer ethics is using a textbook other than this one but wants to provide this chapter to students as a supplement. The instructor makes a PDF copy of the chapter (not the whole book) and posts it on a public Web site. Is this fair use? What if the instructor decides to place the PDF on a password-protected site rather than a public one, so only her students can access the article? Is this more likely to be considered fair use? Ethics in a Computing Culture

Kelly v. Arriba Soft Corporation (9th Cir. , 2003) http://openjurist Facts: Professional photographer sues search engine operator for indexing his images. In the process, thumbnails were created and stored on the Arriba Soft’s server. Issue: Do these unauthorized copies of his images violate Kelly’s copyright? Ct analysis: 4 factor fair use analysis Holding: transformative

Galoob v. Nintendo (9th Cir, 1992) Game genie case. Users can modify existing games (extra lives, invincible char., unlimited ammo, etc.). Issue: Is this a derivative work? Ct Analysis: Holding:

Intellectual Property Part 2 The Music Cases CS 340 Spring 2013

RIAA v. Diamond Multimedia The Diamond RIO mp3 player case RIAA sued for an injunction (sale and mfg) against Diamond RIO as device did not prevent copyright infringement RIAA claims unlawful device as consumers could make & download illegal mp3 files and use them on the player. Ct denied injunction; affirmed “space shifting” as a fair use

The Napster case Who is Shawn Fanning? Video resource: http://www.youtube.com/watch?v=CSpzW8bkkPc How Napster worked? Modified peer-to-peer Revenue generation? Success of Napster: Registered users after 1 yr of operation?

Napster’s position DMCA safe harbor for search engines Many songs traded were not copyrighted & others fell under fair use Sampling Space-shifting Service was akin to the device in Sony, capable of substantial non-infringing use 4th factor, market: sales increased during Napster

RIAA’s burden For contributory or vicarious infringement must show direct infringement by 3rd party. Shown 87% of files in violation That the labels control 70% of files available through Napster. RIAA showed Napster tried to remain ignorant of users’ identities. RIAA gave actual knowledge of 12000 infringing files.

RIAA’s position Napster is not a search engine That Napster materially contributed to the infringement Napster had direct interest req. First Amend challenge not relevant Plaintiff’s shown irreparable harm

Opinion Pieces Dear Hollywood Studios: If You Hold Digital Downloads Hostage, the Pirates Win http://www.wired.com/entertainment/hollywood/magazine/16-03/st_essay Music piracy 'down' as revenues rise for first time since 1999 (Feb 2013) http://www.bbc.co.uk/news/technology-21601602 Would the Bard Have Survived the Web? http://www.nytimes.com/2011/02/15/opinion/15turow.html?_r=2&emc=eta1

MGM Studios, Inc. , et. al. v. Grokster, Ltd. , et. al MGM Studios, Inc., et. al. v. Grokster, Ltd., et. al. US S Ct 2005 case study in book: pp. 142-144 Grokster distributed free software that utilized peer to peer networks to allow users to obtain files. big use was to share unauthorized, copyrighted music and video files A group of copyright holders (led by MGM) sued for an injunction on Grokster for their users' copyright infringement claiming that Grokster "knowingly and intentionally distributed their software to enable users to reproduce and distribute the copyrighted works in violation of the Copyright Act, 17 U.S.C. § 101"

Grokster cont’d (2) Factual record of case showed that: Grokster used "no servers to intercept content of requests" or to "mediate the file transfers" Grokster therefore does not "know when a particular file is copied" MGM showed that "90% of files available for download on the  . . . system were copyrighted works." Grokster stipulated that most  downloads using the system involved unauthorized, copyrighted works and that use was the "primary" use. Grokster marketed its software as a "napster alternative" From ads: "#1 alternative to Napster" "[w]hen the lights went off at Napster ... where did all the users go?" Lots of facts in record showed that "principal object was use of their software to download copyrighted works." Grokster obtained ad revenue from ads that its users were exposed to MGM claims Grokster should be liable as a contributory infringer and should have vicarious liability for infringement.

Grokster cont’d (3) Lower ct ruling: At the Court of Appeals, Grokster would be "found liable as a contributory infringer when it had knowledge of direct infringement and materially contributed to infringement." But under Sony as their product was capable of "non-infringing uses", and that the "decentralized nature" of their product meant that Gokster had no actual knowledge as required. S. Ct issue & holding: "The question is under what circumstance the distributor of a product capable of both lawful and unlawful use is liable for acts of copyright infringement by third parties using the product.  We hold that one who distributes a device with the objective of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties."

Reconciling Sony & Grokster Supreme Court said that Sony case did not prohibit secondary liability for infringement for the distribution of a commercial product fair use exception in Sony granted for the time-shifting No evidence in Sony that Sony promoted unlawful use "because the VCR was capable of commercially significant non-infringing use, We held the manufacturer could not be faulted solely on the basis of distribution." Sony "barred secondary liability based on presuming or imputing intent to cause infringement solely from the design or distribution of a product capable of substantial lawful use" cannot impute intent from mere distribution need "statements or actions directed to promoting infringement"

BMG MUSIC v. Gonzalez (7th Cir, 2005) *Case decided after MGM. Gonzalez download copyrighted stuff using KaZaA, and contends that her actions were fair use. Facts from opinion: she got 1,370 songs during a few weeks kept them on computer until caught Gonzalez claims she was "sampling" the copyrighted works to determine what to actually purchase. Because this is a review of a summary judgment court must assume her statements were true. She owned some of the music, later purchased some, but kept copies of it all. Some she never owned but kept these illegitimate copies BMG is seeking statutory damages for 30 songs. ($22,500)

BMG v. Gonzalez holding Court of Appeals rejects claim and finds for BMG. Ct held: "downloading full copies of copyrighted material without compensation to authors cannot be deemed fair use" court likened her behavior to a shoplifter who takes "30 compact discs, and plans to listen to them at home and pay later for any he liked."

Case: Sony BMG Antipiracy Rootkit Do you agree with security expert Bruce Schneier’s opinion? “The only thing that makes [the rootkit that Sony BMG included on their CDs to prevent piracy] legitimate is that a multinational corporation put it on your computer, not a criminal organization.” Should it be illegal for someone to convert the CDs they purchased into MP3 files, then use them in their personal music players? Ethics in a Computing Culture

Case: Sony BMG Antipiracy Rootkit (continued) Should it be okay for antivirus companies to distinguish between rootkits from major corporations and rootkits from criminals? Would allowing the former but denying the latter be fair? Is it ethical for one to remove the rootkit that Sony BMG installed on your computer without their permission? Furthermore, would it be ethical to break the DRM lock on a Kindle book? Ethics in a Computing Culture

Eroding Fair Use and First Sale Doctrine of first sale: states authors are not entitled to a second royalty The challenge of loaning e-books Digital rights management (DRM): a collection of technologies that work together to ensure that copyrighted content can be only viewed by the person who purchased it Digital Millennium Copyright Act (DMCA): law passed by US Congress in 1998 to deal with modern copyright issues Anticircumvention clause: “No person shall circumvent a technological measure that effectively controls access to a work protected under this title.” Ethics in a Computing Culture

Capitol, Virgin Records v. Thomas Notable as first case w/ jury trial. Facts: from class. Judgments: First trial, 2007, $222k fine for 24 songs New trial ordered for manifest error of law (the make available theory) Second trial, 2009, $1.9 million dollars against Thomas Reduced to $54,000: http://news.cnet.com/8301-31001_3-20081934-261/jammie-thomas-judgment-lowered-from-$1.5-million-to-$54000/

Other Music Cases RIAA, Sony BMG v. Tenenbaum (US District Ct Boston 2009) 2nd jury trial; 31 songs shared on KaZaA; $675,000 award; reduced to $67,500 (2010); Under appeal from both sides. http://www.pcworld.com/article/200850/judge_cuts_filesharing_fine_to_67500.html The Pirate Bay Four http://torrentfreak.com/the-pirate-bay-trial-the-verdict-090417/ Compare with individual file sharer case in Sweden 2/20/11: $7 per song http://torrentfreak.com/file-sharer-cant-believe-his-luck-with-7-per-track-fine-110220/ The Harper case http://blog.wired.com/27bstroke6/2008/10/judge-rejects-m.html Now a college student, used KaZaa as a 14-16 y.o. Innocent offender: $200 per song damages http://www.wired.com/threatlevel/2010/09/supreme-court-riaa/ The LimeWire case http://www.nytimes.com/2010/05/13/technology/13lime.html Shutdown: http://www.nytimes.com/2010/10/27/technology/27limewire.html

New Strategy by the Music Industry In 2009, RIAA announced it would cease chasing after “new” individual infringers and instead work with ISP’s to stop the downloading. Current cases would continue. See: http://www.foxnews.com/scitech/2012/03/17/us-isps-become-copyright-cops-starting-july-12/ And: http://www.nbcnews.com/technology/technolog/net-providers-begin-warning-illegal-downloads-1C8543845

Kim Dotcom, Megaupload & the new Mega site Cloud based storage sharing To Dotcom, the concept is very simple. "If someone sends something illegal in an envelope through your postal service," he says, "you don't shut down the post office." U.S. wins appeal in battle to extradite Kim Dotcom: http://www.usatoday.com/story/tech/2013/02/28/kim-dotcom/1955589/