Digital Freedom

Senators Pressure Negotiators on ACTA

2008-10-02T15:24:00.000-07:00

By Art Brodsky
Public Knowledge
October 2, 2008

Senate Judiciary Committee Chairman Patrick Leahy (D-VT) and the panel’s senior Republican, Arlen Specter of Pennsylvania, have asked trade negotiators not to make the controversial Anti-Counterfeiting Trade Agreement (ACTA) too specific.

In an Oct. 2 letter to U.S. Trade Representative Susan Schwab, Leahy and Specter said they were concerned that the agreement was being drafted in such detail that it could limit congressional flexibility to deal with intellectual property and related issues in the future. The senators also said their concerns were compounded by the “lack of transparency” that goes along with trade agreements and by the speed of the negotiating process.

They also specifically asked Schwab to steer clear in the trade agreement of issues surrounding liability of Internet Service Providers and of technological protection measures. The senators said: “The contours of the law and liability exposure in these areas continue to be debated in the courts and in Congress. As technology is not static, Congress must have the ability to tailor the law as developments warrant without concern that a change may run afoul of ACTA.”

Schwab should not “rush into” a new trade agreement without Congressional involvement, the senators said.

A copy of the letter is here.

We have long been concerned about the secrecy surrounding the ACTA negotiations, which is why PK and the Electronic Frontier Foundation sued USTR for documents so that we could find out what’s going on behind the doors that are closed to us, but open to the business community that is pushing the trade agreement.

Stacking Penalties Upon Penalties (PRO-IP Passes Senate)

2008-09-29T14:03:00.000-07:00

By Sherwin Siy
Public Knowledge

Today, the Senate approved an amended version of its version of IP enforcement bill (now named the PRO-IP bill to parallel the enforcement bill in the House). PK’s press release is here.
As amended, the bill retained its increased forfeiture penalties for copyright infringement and media bootlegging, meaning that any number of multipurpose devices—even those not owned by the infringer—could get caught up in the net of forfeiture penalties. Nor does the amended bill contain any language (as did some earlier versions) requiring that the property be “substantially connected” to the offense.

Fortunately, some of the most worrisome provisions have been removed, including one that would grant the Attorney General the power to bring civil lawsuits against alleged infringers on behalf of copyright holders, and new forfeiture penalties for circumventing DRM.

But the focus on “enhancing” penalties by increasing them is worrisome. While there are legitimate uses for criminal forfeiture provisions, and even good arguments to be made for some types of civil forfeiture, the larger picture of penalties surrounding copyright infringement deserves a serious second look. Too often, penalties for crimes are only ratcheted upwards—it’s a way to signal to constituents that Congress is being quantifiably tougher on that particular crime. Unfortunately, while that may be an easy way to suggest a commitment to enforcing the law, the actual results often do little to increase deterrence, while potentially chilling all manner of uses for copyrighted works.

It’s hard to talk about copyright penalties without first mentioning damages, and statutory damages in particular. One of the great oddities of copyright law is the fact that an offense that costs the plaintiff one dollar can be paid back by penalizing the infringer an amount somewhere in between $750 and $30,000, possibly rising to $150,000 in cases of willful infringement. That’s per work infringed, meaning that downloading ten different tracks—not an unusual activity for a casual P2P infringer—could incur a penalty of $1.5 million. Obviously, theoretical multiplications of statutory damages only mean so much—this only becomes a problem if a judge or jury actually starts awarding such high amounts for such petty offenses.

But they have. Jammie Thomas, a Minnesota resident, was sued for downloading twenty-four songs from a P2P network, for which she was penalized $222,000. That’s $9,250 per song, when each digital file, had she bought it off of iTunes, Amazon, or any number of other digital music stores, would have given the copyright owner less than one dollar.

The justifications for this extreme amount can be found in a combination of:

(1) the need to deter infringement (and compensate owners) in cases where it’s hard to peg a specific amount of harm, and

(2) a statute that really never, in its inception, contemplated digital technology.

As for the first part, it’s easy to see how the concept of statutory damages can be a real benefit in copyright cases. A lot of times (such as with unreleased material or material intended to be published for free) it’s hard to determine just how much a plaintiff lost from the infringement. Setting an automatic dollar value can ensure not only that the plaintiff gets something. Setting statutory damages can also help ensure deterrence: a savvy defendant might otherwise decide to take a chance on infringing a work if he figures that the plaintiff will not bother with a lawsuit to only recover a speculative or nominal amount of money. Setting a wide range of values for statutory damages also makes some sense, since damages are calculated by the number of works infringed—making hundred of copies of one CD would still have the same maximum statutory penalty as making one copy of that CD.

Given the state of technology today, though, it’s a rare infringer that actually makes this calculation. In the case of most casual downloaders, the calculation probably has more to do with a question of how much they’re individually hitting a copyright holder’s bottom line (minimally), with no particular thought as to the expense of litigation. Whereas a commercial infringer—the sort originally contemplated by copyright law—might make hundreds or thousands of copies of a work, the home downloader makes one. Yet that same yawning range of penalties is available, and set before a jury. A value between $750 and $30,000? With that range, $9,250 falls somewhere below the median. Fair, right?

Well, not really—and a judgment like that fails to accomplish the goals of the statute. Recently, a federal court in Minnesota granted Jammie Thomas a new trial, based upon flawed jury instructions regarding liability. Yet the judge felt compelled to make a note of the damages issue, devoting the final section of his opinion to this detailed, thought-out plea:

The Court would be remiss if it did not take this opportunity to implore Congress to amend the Copyright Act to address liability and damages in peer-to-peer network cases such as the one currently before this Court. The Court begins its analysis by recognizing the unique nature of this case. The defendant is an individual, a consumer. She is not a business. She sought no profit from her acts. The myriad of copyright cases cited by Plaintiffs and the Government, in which courts upheld large statutory damages awards far above the minimum, have limited relevance in this case. All of the cited cases involve corporate or business defendants and seek to deter future illegal commercial conduct. The parties point to no case in which large statutory damages were applied to a party who did not infringe in search of commercial gain.

The statutory damages awarded against Thomas are not a deterrent against those who pirate music in order to profit. Thomas’s conduct was motivated by her desire to obtain the copyrighted music for her own use. The Court does not condone Thomas’s actions, but it would be a farce to say that a single mother’s acts of using Kazaa are the equivalent, for example, to the acts of global financial firms illegally infringing on copyrights in order to profit in the securities market. Cf. Lowry’s Reports, Inc. v. Legg Mason, Inc., 271 F. Supp. 2d 737, 741‐42 (D. Md. 2003) (describing defendants as a “global financial‐services firm” and a corporation that brokers securities).

While the Court does not discount Plaintiffs’ claim that, cumulatively, illegal downloading has far‐reaching effects on their businesses, the damages awarded in this case are wholly disproportionate to the damages suffered by Plaintiffs. Thomas allegedly infringed on the copyrights of 24 songs ‐ the equivalent of approximately three CDs, costing less than $54, and yet the total damages awarded is $222,000 – more than five hundred times the cost of buying 24 separate CDs and more than four thousand times the cost of three CDs. While the Copyright Act was intended to permit statutory damages that are larger than the simple cost of the infringed works in order to make infringing a far less attractive alternative than legitimately purchasing the songs, surely damages that are more than one hundred times the cost of the works would serve as a sufficient deterrent.

Thomas not only gained no profits from her alleged illegal activities, she sought no profits. Part of the justification for large statutory damages awards in copyright cases is to deter actors by ensuring that the possible penalty for infringing substantially outweighs the potential gain from infringing. In the case of commercial actors, the potential gain in revenues is enormous and enticing to potential infringers. In the case of individuals who infringe by using peer‐to‐peer networks, the potential gain from infringement is access to free music, not the possibility of hundreds of thousands – or even millions – of dollars in profits. This fact means that statutory damages awards of hundreds of thousands of dollars is certainly far greater than necessary to accomplish Congress’s goal of deterrence.

Unfortunately, by using Kazaa, Thomas acted like countless other Internet users. Her alleged acts were illegal, but common. Her status as a consumer who was not seeking to harm her competitors or make a profit does not excuse her behavior. But it does make the award of hundreds of thousands of dollars in damages unprecedented and oppressive.

And petty offenders like Thomas aren’t the only ones harmed by disproportionate penalties. When a new media device or service is invented and runs up against the business interests of a copyright holder, these statutory damages can put a startup with a legitimate case for fair use at an automatic disadvantage when it comes to simply being lawyered out of business. Even with a good legal case, the threat of astronomical damages can cause an innovator to settle before a complaint is ever filed.

The forfeiture penalties broadened by the PRO-IP Act now stack another penalty on top of this flawed structure. Over the years, the statutory damages themselves have been pushed upwards—tripling from their 1976 values. New crimes, like videotaping movies in a theater, or recording liver concert performances, are layered on top of copyright.

And while these additional, flawed structures are being piled on, the baseline of penalties itself remains a shaky foundation upon which to build.

DF welcomes Arts + Labs initiative to “Encourage Development and Dissemination of Legal, Safe and Innovative Content on the Internet"

2008-09-24T15:03:00.000-07:00

The following statement can be attributed to Maura Corbett, spokesperson for the Digital Freedom Campaign

"The Digital Freedom Campaign welcomes Arts + Labs to the discussion of critical issues involving artists, consumers, and new digital technologies. We are encouraged by the Coalition's stated focus on building compelling business models, rather than limitations and lawsuits. We look forward to joining them to promote innovative digital distribution systems that preserve the rights of consumers. We hope to work with this coalition to create a 21st century IP system that empowers and compensates artists, while enabling innovative applications like Pandora to survive and thrive."

Music Publishers, but Not Performers, Strike Deal on Online Royalty Structure

2008-09-24T06:35:00.000-07:00

The Digital Media Association (DiMA), the National Music Publishers Association (NMPA), the RIAA, Nashville Songwriters Association International (NSAI), and the Songwriters Guild of America agreed on a mechanical royalty rate of 10.5% for interactive streaming and limited downloads, ensuring that songwriters will be compensated for their works in the digital age.

This is a great agreement to be sure, but people may confuse this as being a solution to the Internet Radio Royalty Rate issue...it is not. That issue deals with the SONGWRITER royalty, not the PERFORMANCE royalty. It's an important distinction that not everyone in the press is grasping. Internet radio is in as dire straits as ever, because the exponentially increased performance royalty rates handed down by the Copyright Royalty Board last year still stand, and without a quick resolution that significantly lowers this rate the entire industry is in danger of extinction. So while Mitch Bainwol, chairman and CEO of the RIAA, applauded by saying ""The agreement demonstrates that our industries can work collaboratively to solve complex issues," what we need now is for his association to work collaboratively to solve a simple issue: the preservation of Internet radio.

Hollywood: Please Don’t Get Real

2008-09-19T05:47:00.000-07:00

Last week, Real Networks launched an application that will allow consumers to rip their DVDs to a computer hard drive. The new product appears legal under the Kaleidescape ruling, which allows the sale of computer servers that rip and store digital movies.

So what’s the big deal? After all, folks have been using unauthorized services to rip DVDs for years – or so we’ve been told.

Simply this: for the first time, consumers will be able to make copies of their DVDs in a legal, above-board way. And this opens up huge opportunities for the Hollywood studio, if they care to take advantage of them.

Real has gone out of its way to ensure that Hollywood’s IP is protected. Buyers can only make one copy of a DVD, playable only on the computer where it was made. The user can transfer the copy to up to five other Windows machines with the purchase of additional licenses. Finally, copies can’t be taken off the computer or uploaded to the Internet.

For the studios, this opens up a path to engage lawful consumers who wish to place-shift their DVD’s in an authorized environment. By enhancing consumer convenience (do you really enjoy packing physical DVDs for an airplane trip?) you increase demand for the content.

So please, MPAA, call off the lawyers. Better yet, go a step further and ensure that anyone who legally acquires a movie can watch it on any screen they choose, be it a computer, TV or mobile phone. Give the public what it wants – the right to view movies cheaply, legally and on a variety of devices – and you will replicate your record-breaking summer box office revenues in the digital world.

ACTION ALERT: Tell the Senate to Hold Up the IP Enforcement Bill

2008-09-17T09:51:00.000-07:00

By Alex Curtis, Public Knowledge

Last week, the Senate Judiciary Committee gave the green light to S. 3325, the Enforcement of Intellectual Property Act of 2008. We need you to show them the red light, NOW! This intellectual property enforcement bill lets the DOJ enforce civil copyright claims and lets the government do the MPAA and RIAA’s intellectual property rights enforcement work for them—at tax payers’ expense.

CLICK HERE TO CALL THE SENATE JUDICIARY MEMBERS NOW

(We’re using the awesome Cause Caller for this alert, so be ready to speak to a number of different Senate offices, rapid-fire style! We’ve picked Senators who may be like-minded in opposing this bill. Of course, feel free to call your own Senators.)

CLICK HERE TO SEND A FAX TO YOUR SENATORS

By allowing the federal government to sue infringers in civil court, the DOJ would be asking a court for monetary damages on behalf of content owners. In a civil suit brought by the government, the defendant loses many of the protections he possesses in a criminal action—including his right to free legal representation. What’s more, the government’s legal burden of proof is lower: the government only needs to prove infringement with a “preponderance of the evidence,” meaning that it’s more likely than not that infringement occurred, as opposed to the usual criminal standard of “beyond a reasonable doubt.” Does the content industry need this help from the Department of Justice? Absolutely not! In the last five years, the RIAA filed or threatened more than 30,000 suits against alleged infringers. If the Enforcement bill passes, not only will the number of such suits increase—they’ll also be paid for with your tax dollars.

Now, the bill’s backers are pushing to have it pass the Senate as early as today via a streamlined procedure, without the full Senate voting on the measure. Tell members of the Senate Judiciary Committee that you don’t want your tax dollars spent on DOJ’s civil enforcement of copyright, and to put a hold on the bill.

CLICK HERE TO CALL THE SENATE JUDICIARY MEMBERS NOW

CLICK HERE TO SEND A FAX TO YOUR SENATORS

To learn more about the Enforcement bill:

See this blog post

Read the letter from 12 concerned public advocacy groups

And learn more about the bill at OpenCongress

BTW: big thanks to Mehan, Sherwin and Scott for putting this all together at warp speed. Also thanks to Fred at Cause Caller.

S. 3325 Passes Senate Judiciary

2008-09-12T11:47:00.000-07:00

By Sherwin Siy, Public Knowledge

S. 3325, the Enforcement of Intellectual Property Act of 2008, passed the Senate Judiciary Committee earlier today, 15-4. The bill was amended to remove, among other things, the provision expanding penalties for circumventing DRM. Other amendments removed potentially problematic new offenses involving transshipment, and still others added protective orders for private or confidential data recovered when servers are seized or forfeited.

Still in the bill is a section authorizing the federal government to sue infringers in civil court in order to turn the money over to copyright holders. This provision lets the Attorney General take advantage of the lower standard for burden of proof in civil cases—here, the government only needs to prove infringement with a “preponderance of the evidence,” meaning that it’s more likely than not that infringement occurred, as opposed to the usual criminal standard of “beyond a reasonable doubt.” And the only penalty available under such cases is restitution—the government turns over the amount of damages to the copyright holder. This is a win-win for the content industry, which now can get money damages while taking advantage of the legal services of the Justice Department.

Latest on DVD Ripping

2008-09-11T08:19:00.000-07:00

RealNetworks recently launched its RealDVD Software application to great fanfare. The application allows users to copy DVDs on to their harddrives for later playback. Our readers are no doubt familiar with the CSS Encryption that most Hollywood DVDs are "protected" with, but it appears that RealNetworks has signed licenses with the DVD Copy Control Association (DVD-CCA) to allow for this type of playback.

The Digital Freedom Campaign applauds this development as a step in the right direction, albeit a qualified one. We encourage you to check out the commentary from EFF's Fred Von Lohmann, and the great article from CEPro summarizing the latest developments on DVD ripping.

Fla. Agreement Sheds New Light On Comcast Cut Off Policies

2008-09-05T14:10:00.000-07:00

By Art Brodsky, Public Knowledge

Prior to setting a cap on the amount of bandwidth a high-volume customer could use before having service terminated, Comcast instead cut off a set number of users regardless of how much bandwidth they used, according to documents released by Florida Attorney General Bill McCollum.

Comcast announced at the end of August that it would impose the 250 GB usage cap on subscribers that had been hinted at for weeks. The cap, which takes effect Oct. 1, appears to cover uploaded material and downloads, given that Comcast’s example included the number of digital photos that could be uploaded.

In announcing the cap on its Web site, Comcast said: “We’ve listened to feedback from our customers who asked that we provide a specific threshold for data usage and this would help them understand the amount of usage that would qualify as excessive.” Comcast made its announcement on Aug. 28, and the stories about the cap appeared that day and for the next couple of days following.

What Comcast didn’t mention, however, was that it had reached a settlement with McCollum’s Economic Crimes Bureau to pay $150,000 to the state to resolve “concerns over disclosure issues related to bandwidth use policies,” according to an Aug. 29 news release issued by the McCollum’s office. The settlement was the result of a state investigation of Comcast’s Acceptable Use Policy (AUP) in which Comcast “allegedly did not inform consumers of a specific bandwidth limit” for customers to be notified of “excessive use, which could lead to a customer being kicked off the service.

The actual settlement document shows that instead of cutting off heavy users of the service according to a specific amount of bandwidth used, Comcast instead cut off the top 1,000 users out of Comcast’s 14.4 million customer base (about .007 percent of subscribers), regardless of how much they used.

According to the settlement, “Pursuant to the AUP, as currently applied, each month the top 1,000 bandwidth users out of Comcast’s entire customer base of approximately 14.4 million subscribers (i.e., approximately .007% of subscribers) receive a direct, personal notification from Comcast by telephone that they are violating Comcast’s Acceptable Use Policy, because of their excessive use of bandwidth.”

When consumers asked Comcast to specify a cap on usage, “Comcast did not provide consumers with a specific bandwidth usage limit, stating that the consumers’ service would be at risk if they remained among the top 1,000 bandwidth users and directing them to the AUP and frequently asked questions explaining the AUP’s excessive use policy,” according to the settlement document.

That wasn’t good enough, as the Attorney General said that “a ‘top 1,000’ criteria, as previously applied, did not clearly and conspicuously disclose to the consumer the specific amount of bandwidth deemed to be excessive under Comcast’s subscriber agreements.”

The agreement gave Comcast the right to set the limit for “excessive bandwidth usage” by the beginning of 2009 and to spell out more clearly the terms under which customers could have their service terminated. The agreement also required that Comcast not use the term “unlimited” to advertise its high-speed Internet service as long as Comcast reserves the right to terminate user service for using too much bandwidth and without a “clear and conspicuous disclosure in close proximity to the term ‘unlimited’ of any applicable qualifications” of the use of the word.

Nothing in the agreement document indicates how much bandwidth the top 1,000 customers actually used, which could be a gauge to determine how appropriate the new 250 GB cap is.
According to one posting on DSL Reports, customers with 400 GB of usage were cut off. If that is within the ball park, the 250 GB cap might be seen as lower than necessary for Comcast’s network management while being seen as an inhibiting factor for customers.

BMI Distributes $786 Million in Royalties

2008-09-04T10:50:00.000-07:00

The Nashville Business Journal reported this week that BMI "set a record with its distributions for the 2008 fiscal year and will disperse more than $786 million to its members, an 8 percent increase from last year." Far from bemoaning the current state of the industry, the digital age, and the declining value of music, BMI's Executive Vice President and COO John Cody credited the increase in royalty distribution to the rising value of music and the fact that music today is available in more formats than ever before. So while the 4 major labels are losing money, relevance and power, the 375,000 songwriters, composers, and music publishers that BMI represents are thriving and seeing more money than ever. Artists 1, Major Labels 0.

TechCrunch Calls For A Digital Bill of Rights

2008-08-28T06:18:00.000-07:00

TechCrunch, much like the Digital Freedom Campaign, believes we need a Digital Bill of Rights. We encourage everyone to read this article, as it makes important points about the need a "a focused set of principles that can truly guide both lawmakers and policymakers....to have a consistent policy governing everything from Internet Protocol regulations to intellectual property on the Web."

While the Digital Freedom Campaign focuses on the first 3 issues laid out in the TechCrunch piece - "The Right to Use and Reuse Content," "The Right to Control Digital Property On Your Own Device," and "The Right to the Free Flow of Information" - it is important that all of the principles articulated are addressed by policymakers in a coherent and consistent manner. The presidential election gives us a chance to turn the page and move forward, with support and guidance from policymakers, in to a bright digital future. Now let's see if any one in Washington is listening...

Two Days Left to Vote for Our SXSW Panel!

2008-08-27T06:57:00.000-07:00

There are just two days left until the SXSW Panel Picker is closed, and we want to make sure the ballot box is stuffed to the brim. The Digital Freedom Campaign would greatly appreciate it if you took a moment to vote for our panel idea. As you can see, self-promotion department is booming!

Of Dancing Babies and Overzealous Takedowns: When "fair use is hard!" doesn't cut it

2008-08-22T10:03:00.000-07:00

Posted by Sherwin Siy of Public Knowledge, a Digital Freedom Partner

Yesterday, a federal district court in San Jose refused to dismiss a suit brought against Universal Music for improperly demanding that YouTube remove a home video from its site.
In this case, Stephanie Lenz was sent a takedown notice for posting a home video on YouTube. Lenz had made a video of her toddler stumbling through her kitchen, then hearing and bobbing to Prince’s “Let’s Go Crazy,” which was playing tinnily in the background on a countertop stereo. Despite the obvious fair use of the work, Universal sent a takedown notice to YouTube anyway. YouTube took the video down and notified Lenz that she had been accused of infringing copyright. After Lenz consulted a lawyer and issued a counter-notice, the video was put up again some six weeks later. After this, Lenz sued Universal.
There are provisions of the DMCA that let people like Lenz sue the sender of a takedown notice if the sender “knowingly materially misrepresents…that the material is infringing.” In return, Universal moved to dismiss the suit, saying that, even if the clip was fair use, notice-senders aren’t under any obligation to check and see if a use might be fair before sending a notice. All they have to do, says Universal, is see that their work was used somehow. Fortunately, the court rejected this argument.
But I want to take this opportunity to discuss one of the points that Universal raised in support of its position. The last time I mentioned the Lenz case on this blog was in reference to Universal’s assertion that fair uses were infringements—just excused ones. This time, I want to talk about Universal’s assertion—one that is often echoed—that looking for fair use is asking too much of notice senders, because fair use is an inherently fuzzy concept.
It’s a mantra in copyright circles: fair use is a fact-specific, case-by-case inquiry. Whether or not a particular use of a copyrighted work is fair depends a lot upon the specific circumstances of the case; broad categories aren’t generally going to cut it. For instance, even though “educational uses” are listed as a particular example of a fair use, not every educational use (for instance, copy shops making course packs) has been ruled fair.
That’s as it should be. However, there’s a tendency to go too far. Lawrence Lessig has famously said that “fair use is the right to hire a lawyer.” But too often, that’s read as a statement of the law, and not for the wry, pessimistic joke that it is. “Fact-specific” and “case-by-case” don’t mean that we must assume a naive ignorance of the doctrine until a court stamps a verdict on a particular use. While there’s a large gray area in fair use, there are areas off in the ends of that scale that we can unequivocally designate as black or white.
Lenz is a good example. The obvious defense to Universal’s allegation of infringement is fair use. Although part of the song was reproduced and performed as part of a new (derivative) work, it took a tiny, nearly unrecognizable portion of the song, was a small part of the larger whole of the clip, was used in a completely noncommercial setting, and would in no way whatsoever harm the market for Prince’s work. It would take someone with a complete disregard of the realities of copyright law to consider this infringing.
Yet that’s exactly what someone at Universal did. Someone identified this clip and proceeded to engage in a legal process that would result in Lenz’s work being removed from its home on the net. What were they thinking?
The likely answer was that they weren’t thinking at all. The most likely scenario I can think of was that Universal was using some automated system that searched YouTube and other hosting sites for content that resembled their own. Given that Lenz had named the video clip “Let’s Go Crazy #1,” a text-based search might have found it. An audio recognition algorithm might have been able to pick the song from its fuzzy background. And what then, after the posted video had been flagged? Did human eyes review it before the takedown notice, with its attendant legal threats and ramifications, went out?
The simple fact that this notice was sent shows a failure on Universal’s part—either a failure to review the clip, or to have it reviewed sensibly. Instead, the notice was sent despite all indications that the clip was not only harmless, but legal. Why?
Likely because, in someone’s calculation, it was considered cheaper and easier to send out these takedown notices willy-nilly (after all, what’s the cost of one more email) than to risk there possibly being an infringing video out there, which might result in a loss of revenue—perhaps a dollar’s worth from iTunes, multiplied by the percent chance that it was actually an infringement. It would cost more to have a knowledgeable person review the clips that they were accusing of infringement, but if sending out a notice that shouldn’t have gone out doesn’t cost anything, why go to the expense of another review?
Universal’s arguments against looking at fair use admit as much—they argued that taking fair use into account when sending notices would be too expensive for their purposes. Part of that expense stems from the fuzzy nature of fair use, since dealing with complex issues of context, purpose of use, and substantiality is something that requires a human brain—one with at least a bit of training, too. Dealing with fair use means that a copyright holder can’t automate the notice-and-takedown process without having a human in the loop—even if that means the process becomes more expensive to the copyright holder.
That’s because the cost-benefit calculus of the copyright holder needs to be balanced against the costs and benefits imposed upon the rest of society—including people like Becky Lenz. What are the costs to society of having legal content removed? They’re harder to calculate economically, and furthermore, they implicate fundamental rights that, according to our founding documents, ought not, cannot, be sold.
So the law creates a way for that balance to be taken into account—through provisions like the one Lenz used to sue Universal. Such safeguards help to right the balance of costs and benefits—if sending a false notice costs Universal very little, but—costs Lenz (in time, legal fees, and worry) a lot, there should be a means by which she can recoup those costs, if Universal was too cheap to prevent them from arising in the first place with a careless notice and takedown procedure.
But the excuse that fair use is hard goes beyond the narrower confines of DMCA notice-and-takedown. A number of voices in the content industry continue to call for filters on networks that will look for and identify infringing content. Of course, what that really means is that the filters will look for and identify copyrighted content—but whether or not that content is infringing depends on a lot of other factors, including fair use. In such cases, the consequences could be far worse than an improper takedown notice. Without legal structures like the 512(c) procedures and 512(f) safeguards, the content could just disappear en route on the network, or infringement suits might result.
But it’s not just automated filters—too often, you hear the argument that a use simply isn’t fair until a court says so. That’s far from true. While a court decision provides a definitive answer—at least as the law is interpreted in that court’s jurisdiction—a fair use is fair from the time of its making, through the lawsuit and trial, and after the opinion is published and reported. By the same token, an infringing use was infringing from its doing to after the decision. What changes isn’t the legal status of what happened—just how much people’s opinions differed. The facts of what happened happened—they remain the same. And until the law changes, the use was legal or not—not in some Schrodinger’s cat-like limbo, and certainly not assumed to be infringing unless proved otherwise.
Obviously, a both sides on an infringement lawsuit are going to present their best arguments to a court, and to the court of public opinion. That means that you’re going to have dueling statements in briefs and in the press about how something is clearly an infringement or clearly fair use. And the interests of fairness require the judge to hear both sides, and the press to report them both as well.
But that doesn’t absolve the parties involved—or anyone who has the necessary facts of the case—from making a fair and frank analysis of even that notoriously gray area of fair use. The fact that there are two sides to every issue doesn’t mean that one side isn’t wrong. And sometimes that’s more obvious than in others. Just because any number of ludicrous statements can be made before a court doesn’t mean that (a) they carry any weight, or (b) that they should ever have been made in the first place. (There’s any number of examples both on plaintiffs’ and defendants’ sides, that litigation reform advocates are likely to provide you with.)
Yet chanters of the “fact-specific” mantra will insist that these cases must be filtered through a court before anyone can even point out how silly they are. And this is even sillier. It doesn’t take a finely-honed legal mind to see that Lenz’s use is fair, or that, after Sony, it’s clear that time-shifting, even of cable television, or in digital formats, is fair use.
Yet these sorts of arguments too often lead to commentators giving up on fair use as a reliable protector of speech. If fair use is going to serve its purpose in allowing people to speak without prior legal restrictions, people have to be able to use it prospectively—consulting a lawyer, or hiring one, shouldn’t be a prerequisite free expression.

Hollywood and Silicon Valley Join Hands in San Jose

2008-08-14T08:15:00.000-07:00

By Michael Petricone, VP of Government Affairs, CEA

For those of us in DC, discussions of "digital content" usually revolve around legislation, lawsuits, and attempts to limit the rights of lawful consumers.

That's why last's week's trip to the Digital Hollywood Conference in San Jose was a breath of fresh air. On panel after panel, technology and content representatives sat together and acknowledged the realities and vast potential of our digital world.

Certain themes emerged:

1. Monetizing behavior is easier than changing it.

2. DRM does not prevent piracy, and annoys legitimate customers.

3. Legitimate players can thrive if they offer a good deal at a good price (see the overwhelming theatrical success of the Dark Night, despite the film's wide availability on file sharing sites).

Overall, there was shared optimism about digital technology's potential to empower artists, maximize distribution, and open up new revenue streams.

Now, someone just has to bring the good news to the policymakers in DC.

Vote for Our Panel Idea for SXSW!

2008-08-11T10:42:00.001-07:00

From the department of shameless self-promotion - The Digital Freedom Campaign has submitted what we think is a great idea for a panel at the South by Southwest festival next year, titled: "Policy Trainwreck: How Copyright Law Failed the Digital Age." Panels are chosen based partly on how many people vote for each idea in the SXSW Panel Picker on the SXSW website. Here is the link to our idea, we would greatly appreciate it if you would help us stuff the ballot box by voting for our submission today!

Victory for Home Recording in Cablevision Remote DVR Case

2008-08-06T04:29:00.001-07:00

By Sherwin Siy, Public Knowledge

On August 4, a federal appeals court ruled that Cablevision’s remote DVRs—which worked like off-site TiVos—didn’t infringe copyright. The decision, which overturns an earlier district court opinion, stated that there was no significant legal difference between the remote DVRs and a VCR. An all-too-brief summary of the history and findings follows.

The original case arose out of Cablevision’s creation and marketing of the “RS-DVR,” a service that, like a TiVo, let cable subscribers select different TV shows to be recorded digitally onto a hard drive. Unlike a TiVo, however, the hard drives of the RS-DVR are stored on Cablevision property. The difference between these configurations led to arguments by content companies that Cablevision was infringing the copyrights in their TV shows. Three particular acts were singled out:

First, as Cablevision received a signal from the content companies, it created a buffer copy of about .1 seconds of the show as the system checked to see if a customer had decided to record the show. Plaintiffs argued this was an infringing reproduction.

Second, if a customer had picked a show to be recorded, the stream of data representing that show would be copied from the buffer onto a server for that customer to view later. Plaintiffs argued that this recording was another infringing reproduction.

Third, when a customer decided to watch the show they had recorded, the show would be transmitted from the remote server for viewing in the customer’s home. Plaintiffs argued that this violated their “public performance” right in a show.

Last year, Public Knowledge joined a coalition of public interest, consumer, and industry groups in filing an amicus brief in support of Cablevision’s position, arguing that since the recorded copies are made and transmitted at the direction of the customer, that Cablevision was not the one “doing” the copying and public performing of the shows, and therefore could not be infringing. The brief also noted that playing back a recorded show over the RS-DVR wasn’t a public performance, which meant that it wasn’t an infringement. Another amicus brief, filed on behalf of a group of copyright law professors, had argued that temporary buffer copies shouldn’t be considered infringing.

To our great relief, the appeals court mostly agreed with these arguments.

On the issue of the first buffer copy, the court held that buffer copies weren’t infringements because they were too fleeting to be considered “fixed,” a requirement before something is considered a “copy” that can infringe (or otherwise implicate) a copyright. Although the entirety of a show would pass through the buffer bit by bit (and thus be “embodied” within it), a fixation needs to be more than just an embodiment—it also needs to be more than “transitory.” The court decided that this tenth-of-a-second buffer was too transitory to meet the statutory definition of a fixation, and therefore couldn’t be an infringement.

On the second question of the stored, recorded copies of the shows, the court made a couple of important distinctions. First, it noted that the plaintiffs were alleging direct infringement—i.e., that Cablevision was itself making infringing copies, not secondary liability—which was what Sony was accused of when it was making VCRs, or what Grokster was accused of doing for file-sharers. The court then noted that in a case alleging direct infringement, it’s important to see who is performing the action alleged to be infringing. Since here, the individual user makes the decision whether or not the copy is created, they are the ones making the copy, not Cablevision. Just as a VCR owner (as opposed to a VCR manufacturer) pressing REC on a box makes a copy, so too is the individual customer (and not Cablevision) the one making the recording here.

On the third question of the public performance, the court, interestingly, didn’t rule on who was “doing” the performance, instead relying entirely on the question of whether or not the transmission was a “public performance” in the first place. In order to be considered a performance “to the public,” a transmission has to be able to be received by different members of the public, whether at the same time or at different times. Plaintiffs argued that since the same show that was transmitted in realtime (with a license) by Cablevision, and could also be viewed later by any customer who recorded it, that Cablevision was making a public performance with those later transmissions. However, the appeals court stated that these later transmissions existed separately from the earlier, licensed transmission. In other words, in determining whether or not you have a public performance, the court held that you need to look at whether or not you are passing the same transmission to multiple people; not the same work. Although it might be the same episode of “House” broadcast at its scheduled time and later shown to me on my RS-DVR, the transmissions are separate; originating from different signals, and aimed at different audiences: the first is a public transmission, sent by Cablevision to all their subscribers; the second is, well, a private transmission, sent only to me. After all, as the court points out, if transmitting a work that had been previously transmitted to the public was always going to be a “public performance” of the work, than I could be infringing the public performance right by recording a TV show in my living room and then later playing it in my bedroom.

The appeals court’s decision, and its discussion of the merits of the various arguments, goes into far more detail than I can provide in this brief report. However, the upshot of the decision is not only a victory for user rights, home recording, and new digital technologies—it’s a victory for common sense.

Yahoo Does the Right Thing

2008-08-01T08:30:00.001-07:00

The Digital Freedom Campaign wants to applaud Yahoo for their decision to compensate consumers of their music store whose purchases will be rendered useless when they take their DRM Authentication servers offline September 30. Yahoo is offering coupons to these consumers to re-purchase their music through their new music partner, Rhapsody. Their original announcement was another ugly reminder of the shackles DRM puts on legally purchased content, but we are happy to see Yahoo do the right thing and make the best of an otherwise bad situation.

Universal Launches Lost Tunes - A DRM-Free Online "Small Local Record Store"

2008-07-31T06:30:00.000-07:00

Universal Music Group today announced the launch of their new online music service Lost Tunes, which focuses on distributing rare content from their catalogue. Best of all, this service is yet another nail in the coffin of DRM, as Lost Tunes will sell their high-quality MP3's DRM-Free! The Digital Freedom Campaign would like to congratulate Universal Music for finally seeing the blinding light and selling more and more of their catalogue without copy protection. Now they just need to point that light at their movie division.

Ars to DRM: We're Not Pro-Piracy, We're Just Not Dumb as Rocks

2008-07-25T08:56:00.000-07:00

That line from this Ars Technica article, discussing the fact that the Yahoo! Music Store customers will have the music tracks purchased from their site rendered obsolete when they take their DRM license key servers offline on September 30, 2008. Most of you probably remember when Microsoft did the same thing a couple months ago, then backed off after the consumer outrage that followed, agreeing to keep their DRM servers active through 2011. Google Video went through the exact same issue a year ago with its online store, but at least they agreed to provide full refunds to their customers. What do all these situations add up to? The Ars Technica headline says it all: DRM Still Sucks. And similar to Ars, the Digital Freedom Campaign is not pro-piracy, as some would like you to believe, we're just not dumb as rocks.

Dear MPAA,

2008-07-23T10:43:00.000-07:00

Congratulations on your record setting weekend!!! Now, please stop trying to impose restrictions on consumers.

Not only don’t MPAA’s own studies not back up their inflated piracy claims, but real world experience doesn’t either. Last weekend The Dark Knight opened to rapturous reviews and record-setting revenues – despite the fact that unauthorized copies of the movie were easily available online. Clearly the relationship between piracy, file sharing and box office receipts is not as linear as the movie industry claims.

Put a different way, even in the internet age, if you make an excellent movie then people will come see it. Given last weekend’s unambiguous lesson, we hope the MPAA will drop its demands for the broadcast flag, analog hole legislation, selectable output control, and other unnecessary consumer limitations. But we’re not holding our breath.

Do not adjust your television. The MPAA is controlling transmission.

2008-07-23T07:23:00.000-07:00

Posted by Jef Pearlman, Staff Attorney for Public Knowledge, a Digital Freedom Partner

If you’ve never seen the intro (original/new) to the TV show “The Outer Limits” then perhaps now is the time. Be sure to have the sound up: There is nothing wrong with your television set. Do not attempt to adjust the picture. We are controlling transmission…Perhaps if the intro was written today, it would say, “There is nothing wrong with your television set. But do not attempt to view our movies. The MPAA is controlling transmission.”

As Jon Law wrote on our blog last month, the Motion Picture Association of America (MPAA) has asked the FCC to let it selectively turn off different types of connectors in viewers’ homes. This technology, called “Selectable Output Control,” lets the creators and distributors of video pick and choose which video connectors will display their content — and which will not. The MPAA claims that in order to move release dates for Video-on-Demand (VoD) earlier than they are now (and before DVDs) they need this added control over your home electronics.

Yesterday, we, along with CFA, DFC, EFF, MAP, NAF, and U.S. PIRG submitted Comments to the FCC opposing the MPAA’s petition. We have three basic problems with it: Consumers Will Be Harmed In The (Non-)Displaying of this Film. Consumers expect that when they spend a lot of money on high definition television equipment, DVRs, Slingboxes, and home theater setups, they will be able to display all high definition content for the foreseeable future. They don’t expect that when movie companies choose to change their release dates, their setups will suddenly stop working.

The MPAA was pretty vague about what would happen to those people who rely on analog/component connections for high definition video. In the best case scenario, they simply will not have the option to order the movies as their neighbors — neighbors who have the same cable service and same hardware but just use different cables. At worst, they will order a high definition movie, only to find that the display is blank.

If the MPAA gets their way, at minimum 11 million people will be cut off from these services. But no big deal, right? I mean, the others are getting stuff sooner!

Move Along, Nothing to See Here
In its petition (and, indeed, anywhere), MPAA failed to provide any evidence that this kind of control was needed to prevent copyright infringement. We’ve learned from iTunes and Amazon that if you offer content legally, conveniently, and in an unrestricted way, people will buy it rather than pirate it. Disney CEO Robert Iger said it himself: “The best way to combat piracy is to bring content to market on a well-timed, well-priced basis.” So why do they need this control? Read on…

The MPAA Is Controlling Transmission. And Reception. And Use.

The MPAA’s petition asks not only for the ability to turn off analog or unprotected digital connections. It asks for the ability to turn of any connection on a per-work basis. But why would they want to turn off other connections? Check out Sony’s release of Hancock on its (otherwise cool) Bravia Internet service for a peek into a possible future. Sony is releasing Hancock to users of its Internet service before it goes out on DVD or VoD. However, only owners of a compatible Sony television will be able to use that box, because the movie will only go out of the box over the proprietary Sony “DMeX” connection.

What would happen if the MPAA decided to turn off all connections except for a proprietary MPAA one for new release movies? What if it then used its ability to license that connector as leverage? What kind of rules could it set for what your television could or could not do? Do you think you’d be able to use that connection with cool devices like a Slingbox?

I don’t usually consider myself part of the tinfoil hat crowd, but I do know that I don’t want media companies dictating what type of connections my television has and what I can do with the content I have legally acquired. Consumer electronics companies should be free to innovate and make their decisions based on what reasonable consumers want and what makes technological sense — not based on what the upstream content owners demand. But with Selectable Output Control in hand, the MPAA might be able to put a stop to that.

We’ll let you know what happens as this proceeding moves forward. For more information, check out our press release or read the filing itself.

"Fair Use? Who Cares?"

2008-07-22T08:56:00.000-07:00

Remember Universal's controversial takedown notice of a YouTube video from last year featuring a baby dancing to Prince's "Let's Go Crazy"? When the takedown notice was challenged, Universal didn't argue with the assertion that the video was a "fair use" of Prince's song , and the video went back online. The Electronic Frontier Foundation, a Digital Freedom Campaign Partner, is representing the victim and is asking a District Judge to exercise a clause in the DMCA which allows victims of meritless takedown notices to seek damages and award the victim attorneys' fees and other monetary damages. Universal is arguing that DMCA takedown notices can ignore Fair Use, as detailed in a great WIRED article from last Thursday (A major label looking to ignore Fair Use? You don't say!). The judge has not indicated when he would rule, but did say that this case was a "very important issue of statutory interpretation." We couldn't agree more...

Mark Hosler of Negativland on BreakThru Radio

2008-07-18T12:28:00.000-07:00

Check out BreakThru Radio’s interview with Mark Hosler of Negativland, aka the father’s of mashup. Mark discusses the evolution of the mashup, Negativland and the Digital Freedom Campaign. Thanks to BreakThru Radio for their continued support of the Digital Freedom Campaign.

Code of Best Practices in Fair Use for Online Video

2008-07-14T05:43:00.000-07:00

The Center for Social Media at American University recently released a great guide to current acceptable practices for use of online video, titled "Code of Best Practices in Fair Use for Online Video." A distinguished panel of experts, including members of the Digital Freedom Campaign's academic advisory board, came together to form this guide. It is a great resource for those using video content for any number of purposes to answer important questions about how to use copyrighted video appropriately. We could go on and on about how useful a guide like this is in attempting to define fair use and its limits, but would rather encourage you to read the document for yourself and see what you think. Our sincere thanks go out to the Center for Social Media and the panel of experts who contributed to the study for their efforts!

The Proof Is In - DRM-Free MP3s Driving Music Sales

2008-07-07T07:09:00.001-07:00

At the Digital Freedom Campaign we do our best not to say 'I told you so' - wait, who are we kidding? We love it! And here's another chance for us to say it - the major labels have long insisted that DRM protection of digital content was necessary to prevent piracy, but they finally began offering DRM-Free MP3's last year, after massive consumer outrage over the restrictions that DRM put on their lawfully purchased content. Now WebUser is beginning to report the results of this experiment, and just as we predicted, making MP3's available DRM-Free is having a seriously significant positive affect on sales of at least one company, 7Digital. The proof is in - it turns out consumers really are willing to pay for content that they can use when they want, where they want, and how they want.