Finally, someone uses “IP Troll” properly

January 9, 2013

Lee Cheng, Chief Legal Officer of online retailer Newegg, said:

“A troll is a type of entity that doesn’t sell a product, or transfer value of any sort. All they offer is the right to not be sued. It’s protection money. To put it bluntly, it’s extortion.” (source)

Righthaven produced nothing but lawsuits. The term is properly applied to them. Porn companies, record companies, and other companies trying to stop infringement, or trying to recoup losses from infringement are not properly so-labeled.


Primer On the Law of User-Generated Content

September 1, 2012

This blog often features articles on developments in § 230 of the Communications Decency Act, or the Digital Millennium Copyright Act, but the significance – and nuance – of such rulings may not be immediately appreciable to many readers.  Hopefully such posts are helpful to lawyers.  However, they are important to non-lawyers and even only casual users of the Internet.  In order to provide retroactive context to those articles and background for future ones, we provide this brief history of Internet-related laws.

In the two decades since the Internet reached large-scale consumer adoption, its role in business, recreation and every facet of life has been largely taken for granted.  However, it interacts with the law in a number of ways that some might not expect.  With services such as Google, Facebook and YouTube thoroughly integrated with every facet of life – with established brands as banal as Tide laundry detergent vying to be “liked” by you on facebook, to political campaigns posting videos directly to the user-generated video site – that it is easy to overlook the patchwork of federal law that allows the internet to operate.

Federal law embraced the internet with some of its existing measures, such as the Cable Privacy Act of 1984, 47 U.S.C. § 551 (requiring cable companies – which have today become internet service providers including Time Warner and Comcast – to provide notice to subscribers before turning over personally identifying information pursuant to a lawful subpoena).  This law remains particularly significant in protecting anonymous activity and speech online, ranging from blog comments to the use of BitTorrent – all of which can be done without behind an IP address until the user’s internet service provider is subpoenaed and provides notice to its customer that his or her personally identifying information will be produced unless the subpoena is quashed.

Criminal law has also been instructive in shaping the law of the internet.  The Stored Communications Act, 18 U.S.C. §§ 2701-2712, prohibits service providers such as Google and Facebook from turning over users’ passwords and internal messages (such as messages and chat logs from one Facebook user to another) without a court order.  Additionally, hacking – a topic given great attention in the 1990s, but still persisting today – was made punishable with both criminal and civil penalties by 18 U.S.C. § 1030.

Perhaps the greatest tool of all for the internet, though, has been Section 230 of the Communications Decency Act, 47 U.S.C. § 230.  Section 230 immunizes service providers like Yahoo and Google for the acts of its users.  When someone opens a blogspot blog that allegedly defames someone, it is not Google’s fault – rather, liability falls on the shoulders of the blog’s author.  Similarly, message board operators are not liable for the torts of their users who may post tortious material to the website.  If they were, services such as Yahoo’s finance message boards and (unintentionally hilarious) Yahoo Questions would have never taken off.  This protection is not vitiated if a web service edits or deletes a user’s submission. 47 U.S.C. § 230(c)(2).

While courts have consistently upheld § 230’s protections for online service providers, the law has not been an absolute shield.  Where a site creates its own content that is tortious, then the service can be held liable.  Similarly, if the site requires a user to post tortious material as a condition of using its service, then the site is not afforded § 230 protections. Fair Housing Counsel v. Roommates.com LLC, 521 F.3d 1157, 1166 (9th Cir. 2008)  (“By requiring subscribers to provide the information as a condition of accessing its service, and by providing a limited set of pre-populated answers, Roommate becomes much more than a passive transmitter of information” and thus not entitled to § 230’s immunity).  For pure social media sites, § 230 provides valuable immunity against litigation from angry parents and the thin-skinned.  In states with strong anti-SLAPP statutes, § 230 has worked in tandem with these laws to create a fortress around internet companies, protecting them from common law claims and requiring parties with attorneys foolish enough to bring these claims to pay the companies attorney’s fees in most cases. (California and Seattle, where numerous social media companies are based, allow defendants to recover attorneys’ fees incurred in successful anti-SLAPP motions).

There is, however, one hole in § 230 – it expressly does not apply to intellectual property claims. 47 U.S.C. § 230(e)(2).  Thus, online service operators were potentially liable for hundreds of thousands of dollars in damages if their users copied and distributed copyrighted content on their sites.  In 1998, however, Congress enacted the Digital Millennium Copyright Act (“DMCA”) to combat this problem. 17 U.S.C. § 512.  Within this legislation, Congress granted certain entities, such as internet service providers, immunity from infringement as transitory networks where the infringing data does not reside – but it imposed burdens onto both web hosts, web sites and even right holders.

For most self-hosting bloggers and other internet users, the DMCA is fairly straightforward.  The service provider must register an agent to receive DMCA notices with the U.S. Copyright Office for $105, which is listed in an online registry of DMCA agents.  When receiving a proper DMCA take-down notice under 17 U.S.C. § 512(c)(3)(A), the service operator must remove the infringing content within a reasonable period of time, or risk being held liable for infringement.  The DMCA take-down process requires rights holders to seek out instances of infringement and send notices to infringers, but unlike a lawsuit for infringement, does not require the right holder to obtain a copyright registration certificate (or, in some circuits, merely an application).

While many small website operators do not comply with the DMCA, rights holders often send DMCA-compliant take-down notices, which are honored with the removal of allegedly infringing content.  For large services that stake their entire existence on user-submitted content, however, complying with the DMCA becomes remarkably more complicated.  For a service such as YouTube (or, more in your author’s practice area, a “tube site” containing pornography) the DMCA takes no complex new dimensions that are still unsettled despite the DMCA being more than a decade old, and the user-generated segment of web entertainment not being significantly younger.

For instance, the Second Circuit’s recent decision in Viacom v. YouTube, vacating many of the Southern District of New York’s 2010 conclusions about how the DMCA operates,  has created significant uncertainty about the meaning of 17 U.S.C. § 512(c)(1).  For a service such as a large “tube” site, particularly one that monitors its submissions to avoid unlawful or inappropriate content, there is a question as to what is required in addition to a DMCA take-down notice to constitute “actual notice” of infringement, or “facts or circumstances from which infringing activity is apparent.” Id.  The Second Circuit’s decision also re-opens the question of what constitutes the “right and ability” to control infringing material: Namely, whether this standard is contiguous with the same standard articulated in the doctrine of vicarious copyright infringement, or subject to a different, DMCA-specific standard as previously found by the Southern District of New York (requiring “specific knowledge” of infringement in order to have the right and ability to control it).

The DMCA contains additional twists and turns for both service operators and rights holders.  If a service provider has users who consistently engage in copyright infringement, it must ban them in accordance with an established, publicized policy to terminate these repeat infringers. 17 U.S.C. § 512(i).  Additionally, there is a question as to what constitutes an effective termination – while banning by e-mail address may satisfy the procedural requirements of this provision, the ease of creating new e-mail addresses ensures that this action would fall short of substantively fulfilling it.  Service operators must also act as an ombudsman for counter-notifications seeking the reinstatement of non-infringing content under § 512(g)(3).

For right holders, fair use of the copyrighted work must be considered before sending a takedown notice. § 512(c)(3)(A) (requiring “good faith belief” of infringement and signing of notice under penalty of perjury).  Failing to satisfy this requirement, or sending a DMCA take-down notice that is otherwise improper – such as to remove critical, non-infringing material, or to assert the rights of a third party who the notice-sender does not represent – makes the misrepresenting notifier liable for the uploader’s damages, costs and attorneys’ fees under § 512(f). (Similarly, a misrepresentation in a § 512(g) counter-notification also triggers the penalties of § 512(f)).  Counterbalancing this restriction, though, is the right holder’s power to issue a federal subpoena under § 512(h) – again, without even a copyright registration – in order to identify an infringer.  While this provision of the DMCA is infrequently used, the jurisprudence of § 512(h) is a fascinating sub-topic for another time.

However, the DMCA provides no protection for trademark infringement committed by a third party.  While proposed laws like PIPA and SOPA addressed the full theater of potential intellectual property infringement, the DMCA protects only against copyright infringement liability.  Thus, a novel theory from plaintiff’s attorneys is that a third party’s use of a trademarked name in an internet posting constitutes trademark infringement and unfair competition under 15 U.S.C. §§ 1114 and 1125.  While this is a frivolous claim to bring against a service provider, it can be pled to avoid a motion to dismiss in jurisdictions without robust anti-SLAPP statutes that allow for the inclusion of evidence in anti-SLAPP motions.  This leads to summary judgment and, in many cases, settlement – a detriment to the companies falling prey to these questionable suits.

Acting in conjunction, federal criminal, telecommunications and copyright law has created an ecosystem ripe for enormous online commerce.  Without these laws, the multi-billion dollar companies that dominate the internet likely would not exist.  While the ecosystem is still in flux, and will be as both technology and IP laws change, services such as Facebook, YouTube, Pinterest and Tumblr are here to stay.


ABA Journal Magazine Tackles Righthaven in May 2012 Issue

April 23, 2012

By J. DeVoy

Remember Righthaven?  While it has been stripped of its intellectual property and claims against it keep piling up, the fat lady has not yet sung – and the ABA has noticed.

The May 2012 ABA Journal’s cover story is the aftermath of Righthaven.  Eriq Gardner, who Righthaven once sued for posting an image of an exhibit from one of its court pleadings, examined both sides of the copyright enforcement equation.  Marc Randazza and Ron Coleman are quoted in the lengthy piece, which centers on Righthaven but touches on the RIAA’s litigation campaign, the mass-joinder suits brought by porn studios, and the realities of plaintiff-side copyright enforcement.

Righthaven’s CEO, Steven Gibson, is quoted with the following observation:

“One of the questions for the article is why is it so difficult for copyright owners to hire competent copyright litigation counsel?” he said. “There’s not a lot across the country. Definitely not like personal injury lawyers. You can’t go into the phone book and find a listing. Why is it this difficult? Why isn’t there more copyright litigation?”

Yet, even with Righthaven.com no longer belonging to Nevada’s Righthaven LLC, he is optimistic about the venture’s future.

“Righthaven remains the vehicle for dealing with infringements on the Internet,” Gibson told me recently.

A motion by the EFF seeking personal sanctions against Gibson at a rate of $500 per day is still pending as of this writing.

The problems of online copyright infringement and enforcement are real, and few would argue that there is not some useful role of copyright in society.  These controls, however, cannot and should not completely gobble up protected speech – especially since the 1976 Copyright Act codified fair use in 17 U.S.C. § 107.  Even allowing breathing space for hilarious derivative works, much work needs to be done with respect to fighting infringement, even as the law for doing so remains in flux.


Potential DMCA Game Change in 2d Circuit Ruling on Viacom v. YouTube

April 5, 2012

By J. DeVoy

The Second Circuit released its opinion in Viacom v. YouTube today, partially vacating  the Southern District of New York’s order granting summary judgment in favor of the online video service.  Ultimately, the case is to be remanded to the district court for fact-finding on whether YouTube had knowledge of infringement, had the right and ability to control infringing content, and YouTube’s willful blindness.

Almost as soon as the Court starts writing, it delivers the gut punch:

Although the District Court correctly held that the § 512(c) safe harbor requires knowledge or awareness of specific infringing activity, we vacate the order granting summary judgment because a reasonable jury could find that YouTube had actual knowledge or awareness of specific infringing activity on its website. We further hold that the District Court erred by interpreting the “right and ability to control” infringing activity to require “item-specific” knowledge. (Opinion at 2)

While the Second Circuit held that YouTube qualified for DMCA protections under § 512(c), the easy work of the opinion ends there.  What follows are a range of questions that the Second Circuit believed needed to be supported by more facts – potentially changing the landscape for user-generated content.

The Second Circuit is not interested in relegating the operators of user-generated content services to constantly policing their sites for infringement, and believe that § 512(c)(1)(A) does not require this conduct:

Under § 512(c)(1)(A), knowledge or awareness alone does not disqualify the service provider; rather, the provider that gains knowledge or awareness of infringing activity retains safe-harbor protection if it “acts expeditiously to remove, or disable access to, the material.” 17 U.S.C. § 512(c)(1)(A)(iii). Thus, the nature of the removal obligation itself contemplates knowledge or awareness of specific infringing material, because expeditious removal is possible only if the service provider knows with particularity which items to remove. Indeed, to require expeditious removal in the absence of specific knowledge or awareness would be to mandate an amorphous obligation to “take commercially reasonable steps” in response to a generalized awareness of infringement. Viacom Br. 33. Such a view cannot be reconciled with the language of the statute, which requires “expeditious[ ]” action to remove or disable “the material” at issue. 17 U.S.C. § 512(c)(1)(A)(iii) (emphasis added). (Opinion at 16)

However, this does not absolve YouTube for potential liability for red flag knowledge.  Since the internet has changed much since the DMCA’s enactment, the examples of red-flag knowledge articulated by Congress are largely inapplicable now.  Those availing themselves of these protections hold up the examples of red-flag knowledge described by the Senate (e.g., domain names with words like “illegal,” “stolen” or “pirate” in them), while copyright enforcers have advocated for a broader standard of red flag knowledge, along the lines of “I know it when I see it.”  Seeing this hole in the law, the Second Circuit tried to reconcile a question a question that has befuddled many a copyright lawyer: What the hell, exactly, is red flag knowledge?

The difference between actual and red flag knowledge is thus not between specific and generalized knowledge, but instead between a subjective and an objective standard. In other words, the actual knowledge provision turns on whether the provider actually or “subjectively” knew of specific infringement, while the red flag provision turns on whether the provider was subjectively aware of facts that would have made the specific infringement “objectively” obvious to a reasonable person. The red flag provision, because it incorporates an objective standard, is not swallowed up by the actual knowledge provision under our construction of the § 512(c) safe harbor. Both provisions do independent work, and both apply only to specific instances of infringement. (Opinion at 17-18)

Actually proving red flag knowledge is a factual question.  It is also part of the reason the case is remanded to the S.D.N.Y.  Indeed, the Court of Appeals spends pages reviewing and discussing the record evidence it believes creates a question of fact as to whether YouTube had actual knowledge of infringement on its service. (Opinion at 19-22)  The same is true of willful blindness, the equivalent of knowledge in copyright cases. (Opinion at 19-24)

As to the “right and ability” to control user-uploaded content under § 512(c)(1)(B), the Second Circuit also remanded this issue to the District Court for further fact-finding.  The Court of appeals rejected both interpretations of this standard as advanced by the parties – for Viacom, a codification of common law vicarious liability standards; and for YouTube, a requirement that the provider must know of the particular case before it can control the infringement. (Opinion at 19-25)  The court agreed that the right and ability to control under § 512(c)(1)(B) requires more than the mere ability to remove or block access to materials on the defendant’s website – but how much more, or what that “more” might be, is unclear – other than the fact that it does not require specific knowledge.

Another issue remanded to the District Court is the question of YouTube’s syndication of its videos to others:

In or around March 2007, YouTube transcoded a select number of videos into a format compatible with mobile devices and “syndicated” or licensed the videos to Verizon Wireless and other companies. The plaintiffs argue—with some force—that business transactions do not occur at the “direction of a user” within the meaning of § 512(c)(1) when they involve the manual selection of copyrighted material for licensing to a third party. The parties do not dispute, however, that none of the clips-in-suit were among the approximately 2,000 videos provided to Verizon Wireless. In order to avoid rendering an advisory opinion on the outer boundaries of the storage provision, we remand for fact-finding on the question of whether any of the clips-in-suit were in fact syndicated to any other third party. (Opinion at 31-32)

The court rounds out its opinion by considering YouTube’s repeat infringer policy and other software tools used to avoid the posting of infringing content.  Neither are sufficient to exclude YouTube from the safe harbor provisions of § 512(c).  Because more fact-finding is needed, the Court of Appeals declined to determine whether the trial court erred in denying Viacom’s cross-motion for summary judgment.

While not likely to become an Alameda Books, this litigation is far from over.  Even if Youtube had won, Viacom likely would have petitioned the Supreme Court for certiorari.  Based on the Grokster case, there is some likelihood the Supreme Court would have granted it.  But by sending the case down to the S.D.N.Y. yet again, another appeal to the Second Circuit is all but ensured.


All Righthaven’s Intellectual Property Are Belong To Us

March 5, 2012

So sayeth the Honorable Philip Pro of the District of Nevada. (source)


Righthaven loses in Colorado

September 28, 2011

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:

Vegas Inc.

Ars Technica

the EFF’s DeepLinks Blog

Techdirt

Technology & Marketing Law Blog

 

 


I.P. Links Loot and Righthaven Roundup

September 24, 2011

So apparently we are sick of China stealing our intellectual property. (source) Human rights abuses, meh, not our problem.

You think you know from Intellectual Property? Bah. Beth Hutchens pwns you. (source)

This guy could learn a bit from Hutchens. He thinks that he has a new business model of registering a common phrase and then demanding money from people who use it. (source)

Patent system out of control? Evidence needed? Patent on making a snowman. Booyah. (source)

And if you missed the recent round of Righthaven Follies:

Copyright Troll’s Assets Targeted for Seizure, Wired.

Defense attorneys say Righthaven missed deadline to pay legal fees, Vegas Inc.

Lawyer wants US Marshals to seize copyright troll’s bank account, Ars Technica.

Righthaven Fails To Pay Attorneys Fees Ordered By The Court, Court Asked To Declare Righthaven In Contempt, Techdirt.

Righthaven, King Of Suing Without Notification, Whines To Judge About Motions Filed Against It Without Enough Notification, Techdirt.

Copyright Troll Righthaven Says It’s Nearing Bankruptcy, Wired.


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