May 22, 2011

Mass Copyright Litigation: New Challenge for the Federal Courts

The below originally appeared in the Daily Journal.

The past year has seen the emergence of a new litigation strategy that poses particular challenges for the federal courts: mass copyright litigation. Over 130 mass copyright cases – i.e., copyright infringement cases joining together hundreds and often thousands of Doe defendants at once – have been filed in just the last 15 months in federal district courts across the country, targeting over 135,000 people. These cases involve significant and substantive early, ex parte activity before the individual defendants are even aware of the litigation, much less in a position to respond. Yet even at this early stage, these cases raise fundamental due process concerns. While there has yet to develop a body of published case law about the novel issues raised by the mass copyright cases, a growing body of largely unpublished judicial decisions can help both courts and attorneys handling them, whether on behalf of an ISP (Internet service provider) or on behalf of a defendant.

The cases generally follow the same path. A complaint is filed against hundreds or thousands of unnamed “John Does,” usually involving a single claim of copyright infringement over a single copyrighted work. The cases are brought in the jurisdiction where the plaintiff’s attorney is located, while the defendants are ordinary Internet users scattered across the country. The copyrighted works are usually “independent” movies or pornographic films. One title, for instance, is “Nude Nuns with Big Guns”; others have titles even less safe for work. Immediately after filing, the plaintiff moves for leave to issue early subpoenas to the ISPs of the defendants in order to obtain their identifying information .

If leave is granted and the information obtained, plaintiffs’ attorneys send demand letters to the now-identified individuals sued, giving them a stark choice: They can attempt to defend a suit in a far away court, risking liability up to $150,000 in copyright statutory damages plus attorney fees and costs. Or, they can pay a settlement in the $2,000-$5,000 range. Because the settlement amount is less than the cost of even a pro forma defense, and the downside risk of litigation is so great under copyright’s lopsided damages scheme, the pressure to settle rather than raise legitimate defenses is high. For those accused of infringing pornographic movies, many with gay themes, the prospect of being publicly named in a lawsuit is a further reason to settle quickly. Thus, a court’s decision granting leave to issue discovery often gives the plaintiffs in these cases the only remedy they really want: the ability to demand settlements from the Doe defendants.

So what does this mean for the courts and ISPs receiving the subpoenas? It means that judicial supervision over the early, ex parte stages of these mass copyright cases is critical.

Luckily, several district courts have taken the time to review the questions raised in the ex parte phase, sometimes sua sponte and sometimes in response to concerns raised by ISPs or amicus briefs. The courts have addressed two main concerns rooted in due process: joinder and personal jurisdiction.

First, joinder. Courts in West Virginia, Texas and California have severed over 40,000 defendants from these cases on the grounds that they are not properly sued jointly. Rule 20 requires that, for parties to be joined in the same lawsuit, the claims against them must arise from a single transaction or a series of closely related transactions. The only thing linking the defendants in these cases is the use of a computer protocol, called BitTorrent, to allegedly infringe the same movie. As one court observed “[M]erely committing the same type of violation in the same way does not link defendants together for purposes of joinder.” Tellingly, only a handful of cases have been re-filed against individuals in the proper jurisdictions following these mass dismissals.

Second, lack of personal jurisdiction. This takes a bit of technical knowledge, but at bottom the concern is that plaintiffs have not met their burden of pleading specific facts sufficient to support the court’s exercise of personal jurisdiction over the defendants. In fact, the plaintiffs own filings normally demonstrate that personal jurisdiction over many of the thousands sued is lacking. This is because while the defendants initially are unnamed “John Does,” they are conditionally identified by an Internet Protocol (IP) address that plaintiffs’ allege was collected during its investigations of BitTorrent users. IP addresses are assigned to Internet users by the user’s ISP, then are used by Web sites and other places a person visits online to ensure that the information sought by the user is routed over the Internet to the user’s computer. Because it assigns the IP addresses to its customers, an ISP can usually connect a particular IP address to the customer using it at that time. Readily available free online tools allow an IP address to be tracked back to the ISP that is assigned to it, and that is how plaintiffs know which ISP to subpoena for which IP address.

Importantly, in addition to allowing the plaintiffs’ to identify the ISP to subpoena defendants, the IP address lookup also gives sufficient information to the plaintiffs to allow them to determine the location of the defendant, usually to within about 25 miles. This geolocation is generally sufficient to identify the judicial district where the defendant is located. So the process by which the plaintiff locates the relevant ISP is the same process by which it can discover the likely proper jurisdiction for the lawsuit. Yet the mass copyright cases continue to be brought not where the defendant (or even the plaintiff) is located, but rather where plaintiffs’ counsel is located, a strategic decision that greatly impacts the defendants’ ability to marshall a defense.

Indeed, a plaintiffs’ attorney in West Virginia recently brought six separate cases targeting thousands of customers of ISPs that did not even do business in West Virginia. In dismissing the case, the court admonished: “These amended complaints shall proceed only against Does with IP addresses of computers located within the State of West Virginia. According to testimony presented to the court, there is a publicly-available website that allows the plaintiff to determine the physical location of each Does’ computer at the time of the alleged copyright infringements.”

Amici are also concerned that courts have failed to apply the appropriate First Amendment test for revealing the identity of Internet users. This test, which has been applied in online copyright infringement cases as early as 2004, requires a careful balancing of the free speech interests of the defendant with the needs of the plaintiff and imposes a number of procedural and substantive obligations that help achieve that balance. Many of the mass copyright cases have failed to make those required showings.

While several courts have raised joinder and jurisdictional concerns, and many defendants have been dismissed based on them, at least one judge in the District Court for the District of Columbia, has ruled that the defendants suffer no due process concerns or harms until they are formally named in the litigation. Given the business model of pursuing settlements that are less than the cost of a defense, however, this ruling is troubling.

The explosion of these mass copyright cases raise novel issues for the courts. Moreover, given the pressure to settle created by the prospect of being named in and defending a copyright infringement suit involving pornographic works, often in a distant location, the initial decision to allow the identities of the accused to be revealed may be the only judicial decision made in the case. Judges presented with these lawsuits, and counsel for ISPs of the accused users, should carefully consider the due process issues raised by courts around the country, and take special care in considering whether to allow early discovery. Finally, this situation could be greatly helped by the issuance of some published decisions so that courts and litigants across the country can better draw upon the experience of others.

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April 19, 2010

U.K. Passes Internet Censorship and Disconnection Law

Call To Action by Tim Jones

Late Thursday night the U.K. Parliament passed the controversial Digital Economy Bill, which grants the U.K. government sweeping new powers to control access to the Internet.

The Digital Economy Bill has been the subject of heavy entertainment industry lobbying and widespread concern amongst U.K. citizens and telecommunications companies because it included provisions that would allow the U.K. government to censor websites considered "likely to be used for or in connection with an activity that infringes copyright," and disconnect the Internet connection of any household in the U.K. with an IP address alleged to have engaged in copyright infringement. Despite the many concerns expressed with the Bill's provisions, including questions by some Members of Parliament about whether these provisions could be used to block access to the Wikileaks website, the bill was rushed through organic viagra Parliament — apparently with several amendments that we're still assessing — after only two hours of debate in a special late-night "wash-up" session.

If you're in the U.K., we encourage you to join the Open Rights Group's campaign and express your views to your MPs now. You might also want to switch to an Internet Service Provider that understands the implications of the Digital Economy Bill and is willing to commit to protecting your civil liberties, like Talk Talk.

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April 17, 2010

The Entertainment Industry’s Dystopia of the Future

Commentary by Richard Esguerra

We're not easily shocked by entertainment industry overreaching; unfortunately, it's par for the course. But we were taken aback by the wish list the industry submitted in response to the Intellectual Property Enforcement Coordinator's request for comments on the forthcoming "Joint Strategic Plan" for intellectual property enforcement. The comments submitted by various organizations provide a kind of window into how these organizations view both intellectual property and the public interest. For example, EFF and other public interest groups have asked the IPEC to take a balanced approach to intellectual property enforcement, paying close attention to the actual harm caused, the potential unexpected consequences of government intervention, and compelling countervailing priorities.

The joint comment filed by the Motion Picture Association of America (MPAA), the Recording Industry Association of America (RIAA) and others stands as a sharp contrast, mapping out a vision of the future where Big Media priorities are woven deep into the Internet, law enforcement, and educational institutions.

Consider the following, all taken from the entertainment industry's submission to the IPEC.

"Anti-infringement" software for home computers

There are several technologies and methods that can be used by network administrators and providers…these include [consumer] tools for managing copyright infringement from the home (based on tools used to protect consumers from viruses and malware).

In other words, the entertainment industry thinks consumers should voluntarily install software that constantly scans our computers and identifies (and perhaps deletes) files found to be "infringing." It's hard to believe the industry thinks savvy, security-conscious consumers would voluntarily do so. But those who remember the Sony BMG rootkit debacle know that the entertainment industry is all too willing to sacrifice consumers at the altar of copyright enforcement.

Pervasive copyright filtering

Network administrators and providers should be encouraged to implement those solutions that are available and reasonable to address infringement on their networks. [This suggestion is preceded by a list of filtering methods, like protocol filtering, fingerprint-based filtering, bandwidth throttling, etc.]

The entertainment industry loves widespread filtering as a "solution" to online copyright infringement — in fact, it has successfully persuaded Congress to push these technologies on institutions of higher-education.

But this "solution" is full of flaws. First, even the "best" automated copyright blocking systems fail to protect fair use. Worse, these techniques are unlikely to make any lasting dent on infringing behavior, but will instead just invite the use of more encryption and private "darknets" (or even just more hand-to-hand sharing of hard drives and burned DVDs). But perhaps the most pernicious effect may be that copyright protection measures can be trojan horses for consumer surveillance. In an age of warrantless wiretapping and national censorship, building more surveillance and inspection technologies into the heart of the Internet is an obviously bad idea. In the words of the Hollywood movie, "if you build it, they will come."

Intimidate and propagandize travelers at the border

Customs authorities should be encouraged to do more to educate the traveling public and entrants into the United States about these issues. In particular, points of entry into the United States are underused venues for educating the public about the threat to our economy (and to public safety) posed by counterfeit and pirate products. Customs forms should be amended to require the disclosure of pirate or counterfeit items being brought into the United States.

Does that iPod in your hand luggage contain copies of songs extracted from friends' CDs? Is your computer storing movies ripped from DVD (handy for conserving battery life on long trips)? Was that book you bought overseas "licensed" for use in the United States? These are the kinds of questions the industry would like you to answer on your customs form when you cross borders or return home from abroad. What is more, this suggestion also raises the specter of something we've heard the entertainment industry suggest before: more searches and seizures of electronic goods at the border. Once border officials are empowered to search every electronic device for "pirated" content, digital privacy will all but disappear, at least for international travelers. From what we've learned about the fight over a de minimis border measures search exclusion in the latest leaked text, ACTA might just try to make this a reality.

Bully countries that have tech-friendly policies

The government should develop a process to identify those online sites that are most significantly engaged in conducting or facilitating the theft of intellectual property. Among other uses, this identification would be valuable in the interagency process that culminates in the annual Special 301 report, listing countries that fail to provide adequate and effective protection to U.S. intellectual property rights holders. Special 301 could provide a focus on those countries where companies engaged in systematic online theft of U.S. copyrighted materials are registered or operated, or where their sites are hosted. Targeting such companies and websites in the Special 301 report would put the countries involved on notice that dealing with such hotbeds of copyright theft will be an important topic of bilateral engagement with the U.S. in the year to come. (As order generic viagra noted above, while many of these sites are located outside the U.S., their ability to distribute pirate content in the U.S. depends on U.S.-based ISP communications facilities and services and U.S.-based server farms operated commercially by U.S.-based companies.)

Some background: the Special 301 process is a particularly unpleasant annual procedure by which the United States Trade Representative (USTR) pressures other countries to adopt tougher intellectual property laws and spend more for IP enforcement. In the Special 301 report, the USTR singles out particular countries for their "bad" intellectual property policies, placing them on a watch list, and threatening trade sanctions for those that deny "adequate and effective protection" for US IP rightsholders or restrict fair and equitable market access for US intellectual property.

Before this year, the US Trade Representative only sought input from the entertainment and pharmaceutical industries for these rankings, resulting in unbalanced assessment criteria. Countries have been listed for failing to sign on to controversial international treaties or for not mirroring certain parts of US law. For example, Chile was named for considering fair use-style exceptions to its copyright law; Canada was listed for requiring that its customs officers have a court order before seizing goods at the border; and Israel was highlighted for refusing to adopt DMCA-style anti-circumvention provisions after legislative debate concluded that anti-circumvention laws would have no effect on copyright infringement.

The creative communities' proposal imagines that the US Trade Representative should become a glorified messenger for Big Media, using its resources to pressure countries that "harbor" websites and Internet services that facilitate copyright infringement. In other words, they believe that the USTR should put US IP rightsholders' interests at the center of its foreign policy, ignoring other foreign policy goals such as regional security, and promoting innovation and competition.

Federal agents working on Hollywood's clock

The planned release of a blockbuster motion picture should be acknowledged as an event that attracts the focused efforts of copyright thieves, who will seek to obtain and distribute pre-release versions and/or to undermine legitimate release by unauthorized distribution through other channels. Enforcement agencies (notably within DOJ and DHS) should plan a similarly focused preventive and responsive strategy. An interagency task force should work with industry to coordinate and make advance plans to try to interdict these most damaging forms of copyright theft, and to react swiftly with enforcement actions where necessary.

This is perhaps the most revealing of the proposals: big Hollywood studios deputizing the FBI and Department of Homeland Security to provide taxpayer-supported muscle for summer blockbuster films. Jokes have been made about SWAT team raids on stereotypical file-sharers in college dorm rooms — but this entertainment industry request to "interdict…and to react swiftly with enforcement actions" brings that joke ridiculously close to reality.

What next?

Of course, these comments are just an entertainment industry wishlist, an exercise in asking for the moon. But they reveal a great deal about the entertainment industry's vision of the 21st century: less privacy (with citizens actively participating in their own surveillance), a less-neutral Internet, and federal agents acting as paid muscle to protect profits of summer blockbusters.

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RIAA, MPAA and others outline anti-piracy plan

By Jose Vilches, TechSpot.com
Published: April 16, 2010, 2:25 PM EST

Just days after the U.S. Government published a piracy study that pointed out the questionable methods used by some entities to estimate monetary losses from copyright infringement, the RIAA, MPAA and several others are using those same statistics to get a new anti-piracy campaign approved. Details of their Joint Strategic Plan submitted to the US Intellectual Property Enforcement Coordinator have been released, and it makes for an interesting read.

The submission (PDF) starts off citing how the rampant theft of intellectual property is harming the entertainment industry as well as the United States as a whole, and calls for new solutions to make meaningful inroads into the problem. Proposed methods include everything from bandwidth shaping and throttling, to site blocking and even encouraging users to install anti-piracy software on their own machines that would detect and potentially erase infringing content.

Other non-technological solutions include an educational program for online advertisers, financial payment services providers and the general public to spread awareness of how piracy affects the industry. They also suggest customs officials inquire travelers about any infringing content they — willingly or not — are bringing through the border (Like ripped movies on your laptop, the music on your portable player and the book you were reading on the plane).

The document goes on to mention ways of pressuring other countries into toughening up their IP protection laws, and funding new enforcement programs (at the taxpayer's expense) for the FBI and Department of Homeland Security to pro-actively prevent the leaking of summer blockbusters ahead of their debut. Of course, this is nothing more order cheap viagra than recommendations, but it serves to show how adamant these organizations are in protecting their business model.

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July 28, 2009

DRM: Here Today, (Hopefully) Gone Tomorrow?

DRM: Here Today, (Hopefully) Gone Tomorrow?

By Scott Nesbitt – Sunday, July 19, 2009

pullquoteIt's your birthday. Someone gives you a DVD of your favorite movie. In anticipation of a long train ride you're going to be taking soon, you decide to make a copy of the DVD that you can download to your MP4 digital media player.

You pop the DVD in your desktop computer and try to rip it. But it doesn't work. The DVD plays on your DVD player and on your computer.

Welcome to the world of DRM, one of the most contentious issues in the digital world today. Say you don't know what DRM is? Read on.

What is DRM?

DRM is short for Digital Rights Management (although some say it means Digital Restrictions Management). It's a set of technologies that's restricts how you can use digital content like music, video, and software. DRM is designed to stop or limit you from copying, converting, or accessing digital media.

DRM can block you from viewing something like an ebook on a device other than your ebook reader. It can stop you from ripping a CD or converting an audio file from one format to another. Or, it can prevent you from installing software (like games) on multiple computers.

cdLockHow it works is fairly simple. DRM applies encryption, in the form of a digital signature, to a file or a piece of software. The signature is like a unique stamp, telling the hardware or operating system software that whether or not it's OK for them to play together.

If the device or operating system on your desktop computer or laptop computer doesn't mesh with the digital signature of the file, then the file will be useless to you or you won't be able to install the software. Often, DRM is tied to one piece of hardware. If, for example, you have an MP3 file with DRM applied to it, that file might only play on one computer or MP3 do you need a prescription for viagra player.

There are, and have been, a number of DRM schemes. Some of the more widely-used ones are Windows Media DRM and Apple's FairPlay. You can read more about some of the better-known DRM schemes here.

Examples of DRM

As mentioned a few paragraphs ago, DRM can be applied to any digital file. Like what? How about an electronic book. Most ebook readers and reader software for computers have a unique ID. Some ebook sellers require you to register the IDs of those devices when you buy an ebook. A digital signature is applied to the ebook before you download it, and you can only read the ebook on those devices.

With digital television, many transmissions have a form of DRM called a broadcast flag applied to them. The broadcast flag indicates whether or not you can record the digital transmission and, if you can, what restrictions there are on recording it.

Microsoft Office (2003 and later) allows business users to apply DRM to word processor and spreadsheet files. If the business is running Microsoft Windows Server 2003, all that Office users need to do is click a toolbar icon to restrict permissions on a file. If anyone wants to read the file, they'll need to get the author's permission and get an add-on for Internet Explorer.

Why use DRM?

Napster logoThe folks who advocate DRM, like record companies and publishers, do so to enforce copyright and to protect their revenue. I'm sure that everyone remembers Napster. It was a file sharing service, one that really opened a huge can of worms as far as DRM and copyright went by allowing people to share digital music over the Internet.

The musicians and, especially, the record companies complained that they weren't getting royalties for this. It wasn't a new problem, just a new twist on an old one. Instead of people trading cassette tapes and burned CDs with family and friends, file sharing services like Napster enabled them to exchange huge numbers of files with strangers from around the world.

It's a matter of trust

The content providers that advocate and use DRM technologies will tell you that they're protecting their interests. They argue that every book, movie, or MP3 that's copied is one less book, movie, or MP3 that they can sell.

DRM restrictions, though, treat consumers like potential thieves. That's not a healthy relationship, and overlooks the value of viral marketing. Case in point: last year, a friend passed me a couple of MP3 files by a musician named Zoe Keating. I loaded the MP3s on my media player, and listened to the music while commuting. I was so impressed that I went out and bought another of Keating's albums. If the MP3 files that my friend passed my way had DRM applied to them, then I might not have ever heard Zoe Keating or bought one of her discs.

A number of writers and other artists are against DRM. One of the most vocal opponents of DRM is author and blogger Cory Doctorow.Whenever one of Doctorow's books is published, he makes it available for download (for free) from his Web site. All with the permission of his publisher. While some people mock Doctorow for doing this, he claims that doing this actually increases the sales of his books.

batmanAnother proponent of a world without DRM is author and comic writer Neil Gaiman. He's all for people sharing electronic copies of his work. Why? Gaiman likens it to people lending their friends a book or a CD. It exposes those friends to a new artist, and often spurs them to buy another of the artist's work.

Even a once staunch supporter of DRM, the band Metallica, has begun to change its tune (so to speak). In 2008, the band made DRM-free music available on its Web site.

Dealing with DRM

That's definitely a contentious issue. Much like DRM itself. Many consumers don't care whether their music or movies or software has DRM applied to it. As long as they can watch, listen, and use everything is fine.

That said, there's a growing anti-DRM movement. More and more people are speaking out against DRM, and working against it with their wallets.

So, what are your options? You can accept DRM. Or, you can choose to not buy movies, music, and software that has DRM applied to it. Both the Apple iTunes Store and Amazon.com offer DRM-free downloads of thousands of songs. (Amazon, though, is bi-polar in this regard: ebooks for the Kindle are locked down with a form of DRM.). Or, you can turn off formats that support DRM altogether, and go with Open Source formats like Ogg Theora and Ogg Vorbis.

Summing up

DRM is definitely a contentious subject. At the heart of the arguments for and against DRM is the issue of rights. The rights of the people producing and marketing content, and the rights of the consumers of that content. It's going to be a long time before both sides can find an acceptable middle ground, assuming there is one.

What are your thoughts about DRM? Feel free to leave a comment.

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