So sayeth the Honorable Philip Pro of the District of Nevada. (source)
Public Knowledge proposes some ideas for how to fix copyright. (source)
Curb abuses of DMCA takedown notices. The best part of this is is that they propose broadening the penalties for bogus takedowns. I think this is a pretty good idea, as I have seen my share of DMCA takedown requests that targeted clearly fair use or were used to simply take down material that the requester did not like (for example, alleged defamation). I think it goes a little too far in seeking to penalize parties who use automated scripts to send takedown requests. While I appreciate that such a scattergun approach creates collateral damage, I also can see how copyright owners are fighting such a game of whack-a-mole, that I wouldn’t support this idea without some give-back to the content producers. The rest of the proposal seems pretty spot on.
Another proposal is to shorten copyright terms. I’m fully in favor of that. The continuous extension of copyright terms, to a now absurd length of “life of the author plus 70 years” is a threat to a robust public domain. These guys suggest trimming it to “life plus 50.” I actually think this is not radical enough. I think that copyright should be limited to an initial term of 25 years with a renewal period (sort of like the old act handled things) with the author or his heirs only being able to assign the initial period.
The best part is the proposal to strengthen fair use. Right now, if you are accused of copyright infringement and you have a viable fair use defense, it usually is still worth it to settle. Fair use is the compromise we make between free speech and protecting the rights of authors. PK suggests that statutory damages (and attorneys fees awards) in fair use cases should be reduced (or eliminated), even if the infringer loses on that defense. However, the alleged infringer must have had a good faith belief that he was engaged in fair use. Actual damages would still be available. I love this idea. This removes the chill that currently hangs over building upon prior works. Again, though, I think they should go further. I believe that if a copyright defendant wins on a fair use defense, that defendant has done us all a public service. Therefore, I believe that if someone wins on fair use, there should be a strict requirement that the losing plaintiff pays the defendant’s attorneys’ fees as well as some kind of statutory damages penalty. I’m all for enforcement of copyright, and I’m certainly not a copyright minimalist. However, I believe that fair use needs a much thicker spine.
Read the rest here.
Artist Maya Hayuk of Brooklyn filed a complaint against RCA Records and Sony Music alleging that several aspects of her mural “Sunshine” were incorporated into the music video for “I Only Wanna Give It To You” by Elle Varner.
In her complaint, Hayuk states that she her career includes more than 75 group an solo gallery shows, installations, and murals throughout the U.S. and several countries. Her work has been licensed for use on several different goods, and she normally commands “premium fees and royalties” for their use in commercial settings.
According to the complaint, Hayuk originally created the mural for a music video, also called “Sunshine,” for a video by recording artist Rye Rye and M.I.A. In that music video, the artists rap in front of her mural. Hayuk claims, however, that she did not authorize the use of her mural in Varner’s video.
One of the most often-cited cases involving “incidental use” of artwork is Ringgold v. Black Entertainment Television, Inc., 126 F.3d 70 (2d Cir. 1997). In that case, a television show used a copyrighted poster as a piece of set decoration. In one scene, the poster was partially visible for 26.75 seconds. There was nothing in the show that called attention to the poster. It was never referenced, discussed, nor focused upon. The Defendant argued that this mere glimpse of a poster was a de minimis use or fair use. The Second Circuit, reversing the lower court, held that 26.75 seconds was enough to overcome the de minimis use defense. With respect to fair use, the Second Circuit held that the use was not allowed under that doctrine because there was no transformative element to the use.
The video at issue in this lawsuit differs from other similar suits in that the mural does not merely appear in the video as an incidental use, but that it includes scenes incorporating “videographic reproductions of Hayuk’s Sunshine.”
Indeed, the video seems to be aesthetically based upon the mural. The performers wear the same bright colors and patterns featured in the mural, with several scenes cutting to Varden dancing and singing in front of a brightly colored bed that looks similar to the mural, walking through a line of actors carrying boxes of similar colors, and, one of the biggest similarities, colorful circles that seem to be pulled right from the mural indicating cuts between scenes. While previous cases have dealt mainly with artists’ work being used in the background in movies, television shows, and music videos without permission, the difference here is that the music video director seems to have used the mural as the aesthetic basis for the video.
Because the mural seems to dominate the overall theme of the video rather than appearing just for a moment, it seems the claim has some traction.
Watch the video in question below.
By J. DeVoy
In the past few weeks, the MPAA and RIAA have been humbled by the defeat of SOPA and PIPA in Congress. Eric Goldman has posted a letter that Paramount has apparently sent to various academics, seeking to open a dialogue about piracy and exchange ideas about how to address it. The letter seeks to include students in the discussion as well.
The copyright abolitionist community’s plaintive cry is always that the big bad evil content creators need to change their business models. Nobody denies that this is true, and the MPAA has a better track record on innovation than the RIAA (and I contend that the porn industry has the best record on that issue, but that’s neither here nor there). I look forward to seeing whether any academics and students take Paramount up on its offer. Some have had good ideas in the past, such as Voluntary Collective Licensing (though there would have to be some adjustments before taking it to market).
Arriving at solutions that are cost-effective, viable and efficacious is difficult. Criticism, however, is easy.
The supreme court has ruled in Golan v. Holder that works that enter the public domain may be pushed back under the cover of copyright protection. (source)
This is an absolute abomination. No surprise that our “wise latina” on the Court went with the majority.
The indictment tells the story of cyberlockers in a perfect narrative — how the owners of the site knew that their site was a massive clearinghouse of stolen content, they profited from it, and they did whatever they could to mask it.
The charges include Racketeering, conspiracy to commit copyright infringement, and money laundering.
It looks like the Department of Justice cooperated with foreign law enforcement to actually take the owners of the site into custody. (source)
By J. DeVoy
A significant portion of the blogosphere – or at least what I read of it – acts under cover of anonymity. I think this is important, especially given the candid statements these authors make about political matters and issues of public concern – particularly because these sentiments are far outside the mainstream. In some cases, their voices cannot be heard elsewhere. Society cannot grapple with the truth. When this ultimately has career consequences, or some psychotic antagonist gets too close to the writer’s identity, he can pull the plug immediately, and then work to purge his writings from Google’s cache and the internet archive – leaving it as if he never existed.
Part of blogging is borrowing – ideas, links, inspiration – and sometimes copying outright, things like images and large chunks of copyrighted (or copyrightable) works. While possibly frivolous or fair use, such copying could be infringement – and carry a frightening $150,000.00 price tag. Wordpress and Moniker might not reveal your personally identifying information to some scrawny basement virgin who is outraged that you advocate cheating on your girlfriend, and provide specific instructions for doing it, that he demands your name so he can send you a very erudite e-mail. Colorable legal demands with a screen shot and copyright registration or application, though, tend to go a lot farther, and an anonymous author’s cloak of anonymity is looking awfully threadbare. This even bigger pisser comes if the writer is not even liable for the copying, and a full article or image is left by some unknown third party in the site’s comments. (By the way, this is an excellent way to torpedo blogs you dislike.) Another option is to create a special purpose business entity to run the blog, such as a LLC, but this requires money, attention, and a public filing with the secretary of state – things that defeat the purpose of anonymity, and even at just a few hundred dollars a year, are not worth the benefit to most anonymous bloggers.
Having established the value – and fragility – of anonymity, the question turns to how one can preserve it and inoculate against liability for copyright infringement. Technically, this is impossible, and may carry a substantial penalty. I do not recommend this, but it warrants consideration from an academic standpoint because copyright trolling is real and unlikely to simply disappear.
The Digital Millennium Copyright Act (“DMCA”) requires online service providers, including blogs, to register a designated agent with the copyright office to receive the statute’s protections. 17 U.S.C. § 512(c)(2). The process for registering this agent, known as an “interim designation,” is governed by the Code of Federal Regulations, and available here. While the DMCA was passed in 1998, we are still working off of interim regulations – but proposed final rules are pending, and open for comment under the APA until November 28, 2011.
This raises a few issues. First, the designated agent must provide his or her full legal name, address, e-mail address and phone number, and for this information to be included on the designator’s website. The precedent that has grown up around the DMCA requires only substantial compliance with the statute in order to enjoy its protections. See Wolk v. Kodak Imaging Network, Inc., 2011 U.S. Dist. LEXIS 27541 *18-19 (S.D.N.Y 2011) (noting appearance of DMCA agent’s contact information on website and granting safe harbor partly based thereon); Perfect 10, Inc. v. Amazon.com, Inc., 2009 U.S. Dist. LEXIS 42341, *20-21 (C.D. Cal. 2009) (holding that failure to provide email address was insubstantial, but only where the agent’s name, address, and telephone number were published on website); see also H.R. REP. 105-551 (II) (1998), at 55-56 (giving examples of insubstantial departures, such as “misspelling a name, supplying an outdated area code if the phone number is accompanied by an accurate address, supplying an outdated name if accompanied by an e-mail address that remains valid for the successor of the prior designated agent or agent of a copyright owner”).
The question then becomes whether using an assumed name for the DMCA agent allows for substantial compliance. There are two ways of approaching this: On one hand, so long as the address, phone number and e-mail address reach an actual person who can remove infringing content as required by statute, there’s a colorable argument for substantial compliance. Moreover, there is a significant First Amendment interest in anonymity that should not necessarily be trammeled if the DMCA’s goals are still being effected, with take-down notices being received and honored by an agent, even if misnamed. Simultaneously, how can there be substantial compliance when the agent is not who the agent claims to be? This is not a case of the actual agent leaving, with someone else standing in his place and still reachable by the designation form’s contact information. To the contrary, a false name for an agent gives rise to the inference that the designator was misrepresenting the agent’s true identity to the copyright office – potentially a felony and criminally false statement under 18 U.S.C. § 1001.
Now, an anonymous site could use an actual person as its DMCA agent, no pseudonyms needed. This chips away at the author’s anonymity, though, and may bring unnecessary problems onto the DMCA agent. Those of us who remember what transpired between Roissy and Lady Raine know not to underestimate the psychosis of e-stalkers, nor the damage they can cause. The relationship between the DMCA agent and his acquaintances/friends, as seen on twitter, facebook or ascertained by other means, would be analyzed and reverse-eningeered until the anonymous blogger’s identity was known. (Or, worse, thought to be known, leading to a false allegation of authorship.) In a more extreme context, this may arise in litigation – since the DMCA agent’s identity is known, and he or she surely had contact with the blog’s anonymous author, the agent is a subpoena target.
The same issues present themselves if one tries to designate an agent as a representative of the blog, whether anonymously or through a separate party under his or her true name. Designating an agent under a false name calls into question whether the designation of a DMCA agent substantially complies with the statute, and is another avenue for the designator to risk felony conviction under 18 U.S.C. § 1001. Having a third party act as the blog’s representative raises the same issues above, potentially jeopardizing anonymity and giving opponents a good target for harassment and discovery, in the event of litigation – or applying enough pressure that he or she crumbles. Using someone else as a representative of an anonymous blog can create other headaches. If the relationship is unclear, the third person’s representations as an authorized actor for the blog (an informal, unorganized entity as it may be) can be used to cloud any claims the author has to the blog’s copyrighted material, trademarks and associated goodwill, and other assets. Even if the representative for the blog served no other purpose but to authentically designate a DMCA agent, the question of what relationship that person had with the blog should come to an inquisitive litigant.
There are narcissistic reasons not to use an outsider as a designator, too. Namely, he or she will be accused of writing the blog. All credit could be given to someone who may not be able to string a sentence together, but stepped in to serve a ministerial function. Where’s the justice and glory in that? Depending on the blog, too, one must wonder about the person who would volunteer to be the designator and to have his or her name publicly attached to controversial, politically incorrect content. It works well for some people – but not the majority.
There are definite risks and problems associated with running an anonymous blog and trying to achieve safe harbor protections under the DMCA. These risks, however, must be weighed against the sheer volume of service providers with registered agents. Final rules for agent designation may close the loopholes that could make an anonymous registration with the copyright office feasible (even if legally improper), and possibly even substantially compliant with the DMCA. The risks being an ineffective DMCA registration, though, and running up through criminal liability, likely do not warrant the effort required to attempt outwitting the DMCA.
Since my firm is handling this litigation, I will keep my comments somewhat neutral.
Our old friend, Righthaven was ordered to pay $34,000 to a guy they wrongly sued. Righthaven didn’t pay. Righthaven begged the court to excuse it from paying. The Court told it to pay or it post a bond for that amount. Righthaven filed an “urgent” motion with the 9th Circuit Court of Appeals. (here)
We, naturally, opposed the urgent motion. Opposition here.
I need not comment where others have done such a good job.
Ken at Popehat gives us an homage to “A Few Good Men,” with Oh, Well, If It’s An URGENT Motion, That’s TOTALLY Different.
Steve Green at Vegas Inc. provides a less opinionated, but very informative article. Righthaven facing fraudulent transfer claim.
We jump back over to the opinionated side of the coin with Mike Masnick, over at Techdirt, and his Righthaven Still Trying To Avoid Paying Any Legal Fees Of Those It Illegally Sued.
By J. DeVoy
In a stunning revelation sure to be devastating to freetards everywhere, not everyone who creates copyrightable work is Lars Ulrich or some ponytailed douchebag driving a BMW 7-series while demanding that the RIAA sue more people so his fat, dumb and entitled daughter can have a pony. The common plea from the anti-enforcement community can be summarized as: “How can you sue PEOPLE?!”
Well, it’s easy – people commit piracy. We don’t let thieves and rapists off the hook because they’re people. And while copying files is not analogous to either of those crimes, it is still an unlawful act, and one committed by individuals. In fact, there is no one better to sue, and more deserving of a lawsuit, than the individual infringer.
Here’s an example why. Athol Kay wrote a book about how to save and improve your marriage. He’s been writing a blog for at least a few years now, and consolidated all of his knowledge into an impressive tome about how to keep your wife thin, happy, and sexual. Pretty important stuff if you ask me, or even if you just don’t want to be one of the nearly half of married men who get financially pwned by divorce. He sold a PDF copy for a modest sum of money – $10 – that let him keep a decent chunk of change for himself.
Kay knew that piracy of his book was inevitable. He possibly even bought into the meme that free content generated sales. He thought it would balance out because people would pay the $10 in recognition of his work in compiling a sizable and massively important book. He was wrong.
40,000 illegal downloads later, Kay is out about $300,000 in royalties that he would have earned if people had purchased his book legally. He did everything the freetards told him to – he optimized his model for portability and low cost, efficient sales. He still got screwed by the basement dwelling turds who think everything should be free because the creator has not exhausted every last possible option in protecting his intellectual property.
To be fair, I would not have advised Kay to distribute a PDF copy of his book. But he made a business decision with his eyes open. He did not recognize, however, the extent of piracy for such a niche book. Kay also recognizes that not every one of those 40,000 downloads would have translated into a sale.
Now I know that if people actually had to pay for the book, 40,000 extra people wouldn’t have purchased it, but if even 10% of them did, that’s still a fair chunk of change and to be completely blunt… I deserve it. (source.)
Indeed he does, and the Constitution itself even says so, as it empowers congress:
To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries. U.S. Const., Art. I, Section 8, cl. 8
Not everyone who benefits from copyright laws is some fat cat raking in millions of dollars. In fact, few are. Most are just regular guys who had an idea, poured their heart and soul into creating it, and hope to get a return on investment for being smart and motivated enough to see their vision through to completion. I’m sure Kay is flattered that so many people want his book. But warm fuzzies don’t put food on the table – money does. If creators cannot get it on the front end with sales, they’ll recoup it on the back end with litigation.
UPDATE 10/21 – As Mike Masnick and others point out, including Kay, his initial figures were way off due to illusory downloads stated in order to generate interest in the files. His estimates were off, as were the stated lost profits. Sorry, I was busy.
I don’t know about anybody else, but I always feel like the nerd invited to eat lunch with the popular kids with the USSC hears an IP case. Yesterday, the Big Dogs heard a nifty little First Amendment Copyright case that I honestly don’t know how to feel about yet. But pay attention to this one, kids. It’s a doozy. Source 1. Source 2.
Golan v. Holder is the name of this little gem and it centers around a conductor who can’t afford to play Peter and the Wolf anymore thanks to Congress yanking it (and myriad other foreign works) back from the public domain. Google, the ACLU, and the American Library are calling this an abject disaster that violates the First Amendment. The government and the MPAA say this is necessary to protect US authors overseas. And something or other about the Berne Convention. Imma go find Peter and the Wolf on YouTube right now and listen to it. Twice.
A recent addition to what could be the next tsunami of copyright suits, Jim Peterik of 1982 Survivor fame is contemplating getting the rights back for the gloriously awesome song “Eye of the Tiger”. Source.
Termination rights are covered in Title 17. Long story short, if you licensed or assigned your copyright to someone after Jan. 1, 1978, you (or your heirs) can terminate that license or assignment after 35 years (provided you gave proper notice). Do not pass go, do not collect $200. The basis for termination has been around for awhile, but no one really cared about it because…well….there seemed to be a tendency to go all Scarlet O’Hara and say “Well, I won’t think about it now. I’ll think about it tomorrow”. Fiddle dee dee! Welcome to tomorrow.
by Vaughn Greenwalt
The latest criticism of mass-copyright litigation follows the same mantra of previously-pissed patrons: “I know I stole your porn but I’ll be embarrassed if anyone finds out so you can’t sue me!” Cut the crap already, “shame” is not a legal defense.
Lets play fact or fiction with the latest misleading article which was, oddly enough, endorsed by the EFF:
1. FACT: “The lawsuits name ‘Doe’ defendants until they can unearth the true identities of those accused of downloading porn through their Internet providers.”
Naming Doe defendants is the only way to bring suit against thieves who steal Copyright protected works over the Internet. The identities of those thieves is only ascertainable once the personally identifiable information associated with the thieves Internet Protocol address (“IP address”) has been subpoenaed.
The industry isn’t blackmailing thieves with the prospect of naming a Doe defendant, it is the only legal course to obtain requisite discovery.
2. FICTION: “The adult entertainment industry has dubbed [John] Steele the ‘Pirate Slayer.’ Steele calls the lawsuit a simple defense against copyright theft.“
Fact: Steele named himself “Pirate Slayer,” and most of the industry mocks him. When he showed up to a conference wearing a badge that said “Pirate Slayer,” he immediately gained the nickname “Buffy.” That’s what the adult entertainment industry calls him — Buffy. And it isn’t a compliment.
Every studio has separate and distinct legal counsel and thus a separate and distinct legal strategy. While I cannot speak to the strategy employed by Mr. Steele, I can speak to the strategy employed by the Editor of this blog – it is anything but simple.
Without violating my ethical duty of confidentiality and privilege, I have been in many a meeting in which special emphasis was placed on “doing it right.” Efforts to safeguard the privacy of the defendants, fairness to the defendants, an opportunity to defend before being named as a defendant, and forewarning of the suits before suits were filed. In addition, some studios offered amnesty to those who sought to protect their privacy.
3. FICTION: “The intent of these lawsuits is to get peoples’ identifying information and attempt to extort settlements out of them” – Corynne McSherry, EFF’s Intellectual Property Director.
Ms. McSherry’s dogmatic whining borders on mental illness. Perhaps she should look up the definition of “extortion.” Words mean something. This word means to obtain money or property to which one is not entitled by threats or coercion. When a copyright owner seeks redress under the copyright act, the copyright owner is seeking restitution in a manner specifically authorized under the law. McSherry should not use big words without supervision if she doesn’t know what they mean.
Copyright’s purpose is to foster the creation of creative works. The music industry has already been economically gutted thanks to the likes of Napster, Kazaa and Limewire; the porn industry is seeking to avoid that very same fate. If protection is weakened so too is the drive to create and thus all suffer (even those of us who enjoy it late at night while our partner is sleeping). If copyright protected content is freely distributed among torrenters, then studio membership is impacted, which then impacts studio revenue, which then impacts studio quality and quantity, which then in-turn further impacts studio membership, which ultimately impacts the studio’s very existence.
I hope the EFF recognizes the difference between dissent and disloyalty (I really love you guys!). However, I find it odd that the Director of Intellectual Property is tossing grenades at those who would seek to protect their own Intellectual Property.
4. FICTION: “The so-called “mass copyright” cases all follow the same format: an adult film company sues scores of anonymous defendants, alleging a particular movie was pirated using the popular file-sharing technology BitTorrent. The number of defendants can be staggering, dwarfing the scope of the music industry’s lawsuits; there were 2,100 Does named in one recent San Jose case, and 23,000 in the largest thus far in Washington, D.C.”
As referenced above, every porn studio has independent legal counsel complete with independent legal strategy, while some attorneys may look for the quickest and most efficient way to make a buck for their clients, others, like my Editor, do not.
Some attorneys, while legally proper to sue 23,000 defendants in a single suit, put their law clerks through WEEKS OF PURE TORTURE to determine the location of the individual IP addresses and group them based on state and federal judicial district. Once determined, suit is brought against them in their home state and district and regularly reduces the number to less than 100 Doe defendants in any single suit.
Again, some attorneys take great pain to make litigation fair for thieves.
5. FACT: Mark Lemley is… eh…. brilliant?
I have been to many symposiums where Mr. Lemley has proposed theoretically brilliant additions to U.S. Intellectual Property Law. I have witnessed, in sheer awe, his ability to dismiss, answer and be condescending all in a single sentence.
However, Mr. Lemley’s brilliant theoretical ideas are not so brilliant when it comes to actual litigation and practice . Incredibly, Lemley provided a brilliant addition to the subject article regarding the porn industry’s torrent suits: “… it made people at the margins nervous about file sharing… people are going to think twice about doing this.” Lemley is absolutely correct in his assessment. THIS is the ultimate goal of the porn industry’s torrent litigation; not to shame the pron-viewing public (honestly, isn’t that all of us?) for their lunch money, but to deter the theft and infringement of their Intellectual Property.
The simple answer to EVERY concern opponents of mass-copyright litigation has is incredibly simple: Theft is theft – no matter the medium. STOP STEALING SHIT AND YOU WON’T HAVE TO WORRY ABOUT IT!!!!
By J. DeVoy
Yesterday, the District of Colorado dismissed Righthaven LLC’s copyright infringement lawsuit against Leland Wolf and the It Makes Sense Blog in Righthaven LLC v. Wolf et al., Case Number 1:11-cv-00830. The Wolf case was the only active matter in Righthaven’s 57 cases filed in the District of Colorado, as the more than 35 cases that were ongoing when Wolf moved to dismiss Righthaven’s lawsuit were stayed pending the outcome in Wolf. (The approximately 25 other suits presumably settled.) Leland Wolf and the It Makes Sense Blog were represented by Randazza Legal Group and Contiguglia / Fazzone P.C.
The Court’s Order, authored by Judge Kane, is available here. Judge Kane summarizes his Opinion and Order in this opening paragraph:
The issue presented in this case, whether a party with a bare right to sue has standing to institute an action for infringement under federal copyright law, is one of first impression in the Tenth Circuit. After considering the parties’ written and oral arguments and analyzing the constitutional underpinnings of federal copyright law, the legislative history of the 1909 and 1976 Copyright Acts, and the meager precedent available from analogous situations in other Circuits, I hold that the answer to that question is a forceful, yet qualified, “no” and GRANT summary judgment to Defendant Leland Wolf. Furthermore, pursuant to 17 U.S.C. § 505, Righthaven shall reimburse Mr. Wolf’s full costs in defending this action, including reasonable attorney fees.
Apparently Judge Kane has ordered Righthaven to show cause by October 7 why its other cases should not be dismissed in the wake of this ruling. (Source.)
More coverage available at:
By J. DeVoy
This is the trailer for The Girl With The Dragon Tattoo. It was a popular book, so naturally I neither read nor cared about it. Trent Reznor of Nine Inch Nails fame scored the movie, which includes a cover of Led Zepplin’s Immigrant Song, performed with Karen O of the Yeah Yeah Yeahs.
Never to be outdone, Disney promoted its Thanksgiving offering, The Muppets, with an advertisement spoofing The Girl With The Dragon Tattoo’s, titling it “The Pig With The Froggy Tattoo.”
Perhaps internet memes and user-generated content have come full circle to influence the muppets’ formal marketing.
Still, it’s not quite as good as this classic:
By J. DeVoy
The Second Circuit dealt a body blow to the first purchase doctrine (aka first sale doctrine) in Wiley v. Kirtsaeng, a case about resold textbooks manufactured and obtained overseas – though subject to U.S. copyright registrations – and resold stateside. The Second Circuit held that such transactions are not covered by the first purchase doctrine – codified in 17 U.S.C. § 109(a), and allowing the resale of copyrighted works by their first purchaser without royalty payments to the owner
- in part because because it would render 17 U.S.C. § 602(a)(1) (barring importation of copyrighted works obtained outside the U.S. without owner’s permission) a dead letter. (Op. at 15-16.)
The majority’s opinion can be summarized with this money quote from page 17:
In sum, we hold that the phrase “lawfully made under this Title” in § 109(a) refers specifically and exclusively to works that are made in territories in which the Copyright Act is law, and not to foreign-manufactured works.
The EFF contends that this harms free expression and consumer rights. I don’t necessarily disagree, and align with the EFF far more often than not. Pragmatically, though, the law is the law, and while one can observe the desirability in changing legislation to accord greater protections for free speech and open communication, it is not inconsistent to observe what one is allowed to do under existing statutory schemes. Thus, I play the devil’s advocate; first, because that is why I went to law school, and second, because Satan is awesome (source: the entire genre of black metal).
The clear and mechanical way to circumvent the first purchase doctrine under the Second Circuit’s new precedent is simply to manufacture copyrighted works outside of the United States, and in countries known for their cheap labor, rather than robust IP laws. It would also be best to ensure that there are no IP treaties potentially giving a defendant a toe-hold for claiming the manufactured works are “made under” the Copyright Act.
This result would kill the resale market. On one hand, this comes about two decades too late, as VHS and DVD releases are increasingly uncommon. At the same time, though, this allows content producers who do release such physical media to keep a leash on every copy they sell and ensure they receive a royalty on every subsequent sale of the material.
One must then query what constitutes “manufacture” of a file that is merely downloaded from a server onto a consumer’s hard drive, rather than physical media. In Wiley, the term “manufacture” was constructed in a fairly literal sense that encompassed the book’s printing and binding outside of the US. The closest analogue would be a whirr of storage media queueing up and transferring a large media file to an individual downloader. If the servers are located in the USA, then the first purchase doctrine applies. But, if the downloaded files originate from servers located in scofflaw nations like Malaysia, then it’s a different story. If the “manufacture” analysis is pushed farther up the pipeline, a serious factual inquiry exists as to where the final work is “manufactured,” and exactly how much effort is needed from extraterritorial sources to remove a video from the Copyright Act.
The advantage of taking this route digitally is the ease with which producers can find their content being resold by others. Admittedly, these resales are a minute piece of the free content pie plaguing mainstream and adult media, but they exist, and will become a larger share of infringements as legal action against one-click hosting sites, torrenters, torrent sites and even tube sites brings their respective unauthorized distribution of copyrighted content to heel. By manufacturing products overseas – and going through the effort to determine at exactly what point a downloaded file is deemed “manufactured” so that point may be reached outside the Copyright Act’s clutches – opens a new stream of infringement monetization.
A caveat to this: The Ninth Circuit (i.e., California/Nevada/Washington/Arizona) has came to a different conclusion than the Second Circuit in Omega S.A. v. Costco Wholesale Corp, 541 F.3d 982 (9th Cir. 2008). In that case, the Ninth Circuit held that the first purchase doctrine, 17 U.S.C. § 109(a), applied to foreign-manufactured items that were sold in the U.S. with the copyright owner’s permission. Thus, the Ninth Circuit’s view does create some extraterritorial application of the first purchase doctrine. In contrast, the Second Circuit’s view considers all private resales of foreign-manufactured goods to be in derogation of the legitimate copyright owner’s exclusive right of distribution.
This division may play out in several ways. First, the Supreme Court could reconcile the circuit split on the issue. Given the 9th Circuit’s record on Supreme Court appeals, I find it unlikely – though possible – that its view would prevail. In the alternative, the applicability of 17 U.S.C. § 109(a) to foreign-manufactured goods may be a question with slight jurisdictional wrinkles, similar to the award of attorneys’ fees under the Copyright Act. Similarly, the point at which “manufacture” occurs, especially digitally, may be subject to disagreement between the Circuits.
What is clear, though, is that the Second Circuit has torn open wide a new vein for content monetization. How it will be taken advantage of, and when – as the content resale market has always existed, but is superseded by piracy now – remains to be seen. Unless the Supreme Court or Congress (lol) does something, though, copyright law now is more royalty-friendly within the 2d Circuit.
Prior discussion of the first purchase doctrine’s use in porn is available here.