French Court Rules Sony’s Portable Music Player & Download Service Breach Linked Sales Laws

A French court ruled that Sony's tying sales of music to a single type of portable music player, breached French law forbidding such "linked sales".  The Court also ruled that Sony mislead its customers by not making it clear on its portable music player packaging that it could only play music downloaded from Sony's own Connect music store

Importantly, the court did not go so far as to forbid the use of DRM, however.  

Sony was ordered to: (i) pay a fine of 10,000 euros ($13,000); (ii) henceforth state on its music-player packaging that the product only play songs downloaded from Sony's own Connect music store; and (iii) publish the information on its French website homepage.

Sources: The Australian | AgroVox | Euro2Day | Daily India | Washington Times | MSNBC

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Oregon District Judge – ‘Making Available’ – Sufficient Grounds For Copyright Infringement

  Decision – Motion to Dismiss Denied (October 25, 2006)
In a decision that may have far-reaching consequences an Oregon District Judge Ann Aiken has held, for the purposes of denying a motion to dismiss, that merely having a 'shared files folder' on one's computer, and thereby 'making files available for distribution', with nothing else, constitute the necessary elements of a copyright infringement action.

In response to this decision Recording Industry v. The People aptly says:

This is the first instance of which we are aware in which a judge has explicitly held that the RIAA's allegation of "making files available for distribution" is sufficient in and of itself to state a claim for relief under the Copyright Act. The decision contains no discussion of the Copyright Act, applicable case law, legal scholarship, or anything else that might give a clue as to how the judge came to agree with the RIAA. We will investigate further to see if the issue was briefed and, if so, how.

Dale's Comment: Wow! Whether or not making files available for distribution is sufficient to constitute copyright infringement (without proof that the file was actually copied by anyone) is the subject of wide-ranging debate. For this judge to make such a sweeping conclusion without supporting it in any way is surprising.  Fortunately for Barker the RIAA dismissed this case. Shrewdly for the RIAA, such dismissal may negate Barker's appeal on the merits while yielding a precedent they can point to in future cases. I suspect that whether this decision is appealable or not, the 'decision' will be hotly contested in future cases.

Sources: Recording Industry v. The People | Afterdawn | *ars technica 

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Shawn Hogan’s Motion to Dismiss RIAA Claim Denied

Motion to Dismiss Denied (December 11, 2006)
Text of Motion to Dismiss (November 2, 2006)
Last August I wrote about millionaire Shawn Hogan's decision to fight back against the MPAA's allegation that he illegally downloaded "Meet the Fockers". Last November I wrote about his motion to dismiss based on faulty copyright registrations

District Court Judge Thomas J. Whelan agreed that Hogan was factually correct but has nevertheless denied the motion to dismiss stating:

Courts take a liberal approach to errors in copyright registrations. Serious errors—even in the claimant’s name—do not invalidate copyright registrations in the absence of fraud before the Copyright Office or prejudice to the alleged infringer … Otherwise, the infringer would get a “free pass” to infringe, essentially because of a technicality.

…. 

Hogan has not even suggested that ither Universal entity defrauded the Copyright Office, nor has he shown prejudice dueto the error. Instead, he seeks to avoid addressing the merits of the copyright infringement claim by pointing out an error in the registration. Fortunately (for authors,claimants, and the general public), the Copyright Act does not require such rigid aherence to formalities.  

Sources: Text of Motion to Dismiss | Recording Industry v. The People |

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California Decision: Newsgroups/Bloggers Can’t Be Sued for User Posts (Barrett v. Rosenthal)

  Text of Barrett v. Rosenthal (Nov. 20, 2006)
The California Supreme Court, in overturning a San Francisco appeals court decision, unanimously concluded that the 1996 Communications Decency Act insulates Internet providers and Web sites against lawsuits for the defamatory statements of others. The Act provides:

“No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.”

In this case, the plaintiff doctors operated Web sites devoted to exposing health care fraud. Rosenthal, a woman's health advocate, posted a third party's e-mail that included harsh remarks about the doctors, calling them “quacks'' and “dishonest,''. The doctors sued for defamation, arguing that Rosenthal should be held responsible for posting the allegedly libelous material, along with the author of the e-mail.

"The prospect of blanket immunity for those who intentionally redistribute defamatory statements on the Internet has disturbing implications," writes Associate Justice Carol A. Corrigan in the majority opinion. "Nevertheless … statutory immunity serves to protect online freedom of expression and to encourage self-regulation, as Congress intended."

While an important victory for the likes of AOL and Google, it is also important for the growing Bloggosphere as it represents the first time an individual has sought, and obtained, the same immunity from defamation liability that is provided to ISPs under this Act.

Dale's Comment: OK, so I guess this means I'm off the hook for the silly things you might post in the comment section of this blog – at least in California.

Sources: New York Times | MSNBC | San Jose Mercury News | BBC | Inquirer | Forbes (AP) | LA Times | ZD Net | Washington Times | Red Herring | USA Today | SiliconValley.com | Washington Post | Toronto Star | Reuters | Bloomberg | EFF | Silicon.com

Music Downloading Judged Legal in Spain

A Spanish Judge has ruled that downloading music, as "a practised behavior where the aim is not to gain wealth but to obtain private copies" is not illegal or criminal activity in Spain. The judge ruled that article 31 of the Intellectual Property Law in Spain established a right to obtain copies of music without permission, provided they were for private use and not for profit. The Spanish recording industry will appeal.

Dale's Comment: Given the recent Swedish and Finish decisions, it appears judges in different European countries are applying the European copyright directives differently in this regard.

Sources: OUT-LAW.com | The Register | P2PNet | Typically Spanish | *Guardian Unlimited | San Jose Mercury News | PC Pro

Danish Court Blocks AllofMP3.com

One of Europe's largest ISPs, Tele2, has been ordered by a Danish court to block AllofMP3.com, the controversial Russia-based MP3 etailer. To my knowledge, this is the first decision of its kind anywhere in the world. The decision sets somewhat of a precedent insofar as there is now an affirmative obligation of a Danish ISP to effectively censor the sites their customers can access. Tele2 has said it will appeal the decision.

Dale's Comment: This ruling can be easily circumvented by Danish web surfers simply by using any of the numerous anonymizer sites on the Internet.

Sources: Slyck

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StreamCast Loses District Court P2P File Sharing Case

Text of Decision
In attempting to apply the Supreme Court's new "inducement" doctrine from MGM v. Grokster, District Judge Stephen V. Wilson, the same judge that in an earlier ruling had cleared StreamCast of infringement charges, found "…evidence of StreamCast's unlawful intent … overwhelming", held StreamCast liable for inducing Morpheus users to infringe on copyright and granted the plaintiffs summary judgment. Subject to any successful appeal, StreamCast is liable for up to $150,000 for each copyrighted song or movie shared with Morpheus which, of course, trends towards a damages value of $infinity! 🙂

The rather unclear Supreme Court doctrine of inducement requires a "clear expression or other affirmative steps" beyond mere distribution of P2P software to find infringement. Judge Wilson held that the test was met because: (i) Internal e-mails by StreamCast executives showed their awareness of users' infringements, they were eager to insure the supply of copyrighted content on the network, (iii) they implemented features that made it easier to infringe, and (iv) they failed to implement technology that could have deterred some infringements.

After MGM v. Grokster, Sharman Networks (Kazaa), Grokster, iMesh (Bearshare), eDonkey, Qtrax, Mashboxx and others settled. StreamCast was one of the few that decided to fight on. A StreamCast spokesperson said the company may appeal. LimeWire remains the only other large P2P Player still fighting on.

Sources: Ars Technica | EFF | New York Law Journal | Kathy Kirkman | L.A. Times | Chron.com (AP) | Daily Tech | MP3.com | Internet News | The Register | Slyck | Reuters | P2PNet | techdirt | Wired (AP) | cbc.ca | RIAA Press Release | DRM Watch

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eDonkey Settles for $30M and Shuts Down after Adverse Ruling

After a judge in New York's southern district ruled that eDonkey facilitated illegal activity by allowing users to swap copyrighted material over the eDonkey2000 network, MetaMachine Inc., the firm behind eDonkey, Overnet and their P2P variants, has agreed to cease distribution of their P2P software and to pay the RIAA $30 million to avoid a copyright infringement suit. The company also agreed to take measures to curtail file sharing by existing eDonkey and Overnet users. Despite the shutdown and settlement, existing users of eDonkey, and an open source version called eMule, will likely go on sharing files unabated. While BearShare, Kazza, Grokster and others have settled with the RIAA, Warez P2P, Limewire and Soulseek are examples of major P2P services that have not settled. The judge must approve the final terms of the eDonkey settlement.

Related Posts:

Sources: ars technica | CNet | San Jose Mercury news (AP) | MP3.com | Slyck | CDfreaks.com | PC World | Mac World | Playfuls | PC Pro | BetaNews | The Register | Syndey Morning Herald | DRM Watch

Dutch Court Rules ISPs Need Not Disclose File Swapper IDs

English Version of Earlier July 12, 2005 District Court of Utrecht Decision
The Dutch appeals court upheld an earlier District Court of Utrecht Ruling that the method used by the MediaSentry software used to collect IP addresses of alleged Dutch P2P file shares had no lawful basis under European privacy laws. The software scans shared folders on the suspect's hard drive. The Dutch anti-piracy organization, Brein, had requested that 5 Dutch ISPs disclose the name and address of the users of IP addresses identified by the MediaSentry. As is the case with RIAA-initiated lawsuits in the United States, Brein would have used that information to bring copyright infringement actions against the alleged file sharers.

Sources: The Register | CD Freaks | DigitalMusicWeblog | TelcomPaper | Michael Geist

Dale's Comment: If anyone has access to an English copy of the Appeals Court decision, please send a copy to me and I will post it here.

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Judge Shuts Down UK-based Streaming Football Site

In a decision reminiscent of the Canadian 2000/2003 iCrave TV decision, UEFA and BSkyB took three people behind Sportingstreams.com to the High Court where the judge upheld their claim that the site’s re-broadcasting of Champion League football games was unauthorized and breached copyright legislation.

Sources: Out-law.com | The Register

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TiVo Wins Patent Infringement Case Against Echostar

– Jury Verdict Form Part 1
– Jury Verdict Form Part 2
After deliberating for about two hours (including a cigarette break), a Texas jury awarded TiVo $73,991,964 in lost profits and royalty damages. The award was less than the $87M TiVo sought. The jurors thought TiVo had not done everything it could to protect its patent. The patent was granted in 2001, but the jurors calculated the damage award starting in January 2, 2002, when TiVo started clearly marking its products with patent notices. As the jury found Echostar willfully infringed, the judge could treble the damage award. Echostar is vowing to appeal. TiVo has said it will next seek an permanent injunction. TiVo will no doubt be seeking license fees from both PVR manufactures such as Moxi, Microsoft, Cisco/Scientific Atlanta, Motorola and NDS, and U.S.-based cable companies using competitive PVRs such as Time Warner, Cox, Charter and Cablevision.

Sources: Fox News | USA Today (AP) | Bloomberg | CNet | MarketWatch | ars technica | Bloomberg | San Jose Mercury News | Business Week | L.A. Times | TiVo Press Release | Echostar Press Release | Red Herring | Oxford Press | PC Magazine | Link

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Case Dismissed Over RIAA’s Failure to Provide Guardian Ad Litem Proposal

  Text of Priority v. Chan II Dismissal (March 27, 2006)
Other Court Filings

After requesting that the court dismiss an initial action it against Candy Chan, the RIAA filed suit against her teen-aged daughter Brittanny. The RIAA petitioned the court to appoint a guardian ad litem and insisted the defendant pay the guardian's fees. The court initially denied the request because it was troubled over how the guardian would be paid. The court suggested that the RIAA pay guardian fees into escrow with the ultimate determination of who was responsible for such fees to be made by the Court after trial. The court ordered the RIAA to submit a functional proposal for such an appointment and how the guardian could be paid pending the litigation's outcome. The RIAA failed to provide such a proposal.  Consequently, the court dismissed the suit against Brittany:

…Plaintiffs have failed to respond to the Court’s order to submit a functional proposal for the appointment of a guardian ad litem for Defendant. In fact, other than in the caption of Plaintiffs’ response, the Plaintiffs have not even acknowledged thatsuch an order was issued. The Court finds Plaintiffs’ failure to respond to the order inexplicable in ight of the efforts of the Court to work with the Plaintiffs in advancing this case and the fact thatPlaintiffs were ordered to provide a proposal. Accordingly, the Court concludes that Plaintiffs’failure to comply with an order of the Court justifies the dismissal of Plaintiffs’ action.

Sources: Recording Industry v. The People | P2PNet| MP3newswire.net | Wikipedia

P2P Shut Downs and Settlements in South Korea and Europe

Legal actions have taken place recently that put dents in P2P file sharing around the world. The South Korean file-sharing network Soribada announced on Monday that it has agreed to a settlement with KAPP (the Korean equivalent of RIAA in the US) related to charges of copyright infringement before that country’s Central District Court. Soribada will pay KAPP the sum of KRW 8.5 Billion (US $8.7 Million) to end the dispute.

Source: DMR Watch

Australian High Court Rules Against Kazaa

Text of Decision (UMA v. Sharman)
The Federal Court of Australia decided on Monday that the Kazaa file-sharing network has authorized copyright infringement and must modify its technology to curtail infringing activities within two months. Providing authorization to infringe is a violation of Section 101 of the Australian Copyright Act and is somewhat similar to principles of secondary infringement in other copyright laws, such as vicarious infringement in US law.

Sources: DRM Watch | CNet | TechLawJournal | ZDNet

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U.S. Supreme Court Finds Grokster Liable

Text of Decision
Grokster is held to be contributorily liable for inducing/encouraging its users to directly infringe the copyright in content shared through the Grokster peer-to-peer file sharing network.
Sources: Wikipedia Entry | PDF version | EFF Page | DRM Watch

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Canadian Federal Court of Appeal Reaches a Stalemate as to Whether and How Discovery of P2P Users’ Identity Can be Compelled

Text of Decision In BMG Canada v. John Doe 2005 FCA 193; [2005] F.C.J. No. 858 (CA) (QL), the Canadian Federal Court of Appeal considered a prior federal court ruling denying the Canadian Recording Industry Association's ("CRIA") request to compel ISPs to disclose of the identity of peer to peer (P2P) file sharing users.

The Court of Appeal disagreed with the lower court's ruling on the following basis:

  • Proper Test: It determined that the proper test to be applied in determining whether such disclosure can be compelled is whether a bona-fide claim against the proposed defendants is made out and not, as the lower court determined, whether a prima facie case (a higher standard) has been made out.
  • Findings on Infringement: The Court of Appeal determined that the lower court should not, at that stage of the preceding, have made conclusions as to what would or would not constitute infringement and made it clear that if the case proceeded further "it should not be done on the basis that the findings to date on the issue of infringement have been made". The court suggested several basis upon which the lower court's infringement (or lack there of) conclusions could be challenged. Accordingly, the Court of Appeal held that the lower court's finding that "the downloading of a song for personal use does not amount to infringement" must be ignored in any future consideration of the case.

However, the Court of Appeal did agree with the lower court with respect to the importance of balancing the privacy interests of ISP customers with the need protect intellectual property rights. In future such cases CRIA must:

  • show that it has a bona fide claim” against the proposed defendant;
  • the claim must be based on admissible, non-hearsay, evidence;
  • there should be clear evidence to the effect that the information cannot be obtained from another source such as the operators of the P2P services in question;
  • "…[T]he public interest in favour of disclosure must outweigh the legitimate privacy concerns of the person sought to be identified if a disclosure order is made”.
  • The information on which a request for identification iis made (e.g., IP address) must be timely; and
  • The plaintiffs must not collect more personal information than necessary for the purpose of their claim.

Dale's Comment: It is not clear at this point whether, as the lower court judge concluded, downloading music off the Internet through P2P services constitutes copyright infringement or is permissible under the private copying exemption contained in section 80(1) of the Copyright Act. What is clear is that the evidentiary standard by which such disclosure can be compelled is much higher than CRIA had originally anticipated and certainly higher than what the U.S. courts are requiring of the RIAA. CRIA will be required to bring substantial, relaiable, admissible, non-hearsay evidence showing a bona-fide claim in order to have a court compel such disclosure. The judge has, to my mind, laid out a convenient road-map that CRIA can follow to compel such disclosure in future cases. In light of the private copying exemption contained in section 80(1) of the Copyright Act, whether or not CRIA will have success on the merits in any subsequent infringement case is still unclear. In any event, there is a significant probability that current copyright reform efforts in Canada will result in amendments to the Copyright Act clarifying the situation before any such future case makes it to the courts. In particular, in reseponse to this case, Heritage Canada has stated that the Government of Canada intends to enact changes to the Copyright Act to confer exclusive "making available" rights to copyright holders intended to explicitly make such unauthorized P2P sharing of music online illegal.

Earlier Trial Level Post:

Related Stories: Internet and E-Commerce Law in Canada | e-Copyright Bulletin | Heritage Canada | CRIA Press Release

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Grokster & Streamcast Win Major Court Victory

Text of DecisionHTML Version
The 9th U.S. Circuit Court of Appeals said Grokster Ltd. and StreamCast Networks Inc., unlike the original Napster, were not liable because they don’t have central servers pointing users to copyright material.

Note: This decision was ultimately overtuned by the U.S. Supreme Court on June 27, 2005. See related stories posted on June 27, 2005.

Sources: MSNBC | Tech Law Journal

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Canadian Federal Court Rejects Motion to Disclose IP Addresses of P2P Users

Text of Decision (Reversed, in part, on appeal)

Update (May 19 2005): Note that the findings of the court described below as to: (i) the lack of infringement; and (ii) the tests that must be met to compel disclosure; were subsequently overturned by the Court of Appeal. Click here for my post on the appeal court's ruling.

——

In BMG Canada Inc. v. John Doe, 2004 FC 488 (aff'd/rev'd 2005 FCA 193), much like the RIAA is doing in the U.S., the Canadian Recording Industry Association ("CRIA") brought a Federal Court of Canada motion to compel Canadian ISPs to disclose the identities of 29 individuals they allege were violating copyrights through the use of KaZaA and iMesh P2P file-sharing networks. CRIA submitted that the individuals used the IP addresses registered with the defendant ISPs and, as such, sought disclousre of their identities from the ISPs. Judge von Finckenstein ruled that CRIA did not meet the necessary tests for granting such an equitable bill of discovery. Specifically, CRIA did not meet the required tests in the following ways:

A. CRIA did not establish a prima facie case against the unknown wrongdoers:

Affidavit Deficiencies:

  1. The affidavits in support of the motion, being provided/sworn by the President of MediaSentry Inc. (Gary Millin) consisted largely of hearsay. His employees identified the IP addresses of the John Does, not Mr. Millin
  2. The Media Decoy system used by MediaSentry, distributes millions of bogus or inoperative files over the Internet to look like music files. Mr. Millen did not actually listen to the files copied by the John Does to determine if they were infringing files, decoy files or other files.

No evidence exists to connect the pseudonyms and the IP addresses:

No evidence was supplied as to how MediaSentry linked the pseudonyms used by KaZaa and iMesh users to the IP addresses identified by MediaSentry.

No evidence of infringement in copyright:

  1. Section 80(1) (Copying for Private Use) of the Copyright Act provides:"the act of reproducing all or any substantial part of a musical work … onto an audio recording medium for the private use of the person who makes the copy does not constitute an infringement in the musical work" and, as such, "the downloading of a song for personal use does not amount to infringement".
  2. Merely placing personal copies of songs into shared directories which are accessible by others via a P2P services does not constitute either: (i) the distribution or unauthorized copies or (ii) authorization of the reproduction; of sound recordings which is prohibited under the Copyright Act.
  3. The judge analogized to the L.S.U.C. v. CCH case where the establishment of facilities that allowed photocopying in a room full of copyrighted material did not amount to authorizing infringement. The judge could not see a real difference between that and a computer user that places a personal copy on a shared directly linked to a P2P service.
  4. The judge also noted that Article 6 of the 1996 WIPO Treaty, whereby authors would have the "exclusive right of authorizing the making available to the public the original and copies of their works", does not form a part of Canadian copyright law as the treaty has not yet been implemented in Canada.

B. CRIA did not show that the ISPs were the only practical source for the identity of the P2P users:

The person from whom discovery is sought must be the only practical source of the information available to the applicants. CRIA did not establish who the operators of the KaZaa or iMesh services were or whether the information could be determined from such persons.

C. In light of CRIA's delays, the public interest for disclosure was not outweighed by privacy concerns:

  1. While the plaintiffs are entitled to protect their rights, in light of legitimate privacy rights of Canadians, the judge must be satisfied that the information is reliable and disclosure is the minimum required for the plaintiffs to identify the alleged defendant. The ISPs indicated they could only reliably produce the requested information if requested in a timely fashion (ie: within 30 days or less of the alleged incident).
  2. However, the notice of motion requesting disclosure was given months after the evidence was gathered.
  3. Given the age of the data, its unreliability and the serious possibility of an innocent account holder being identified, the court was of the view that the privacy concerns outweigh the public interest concerns in favor of disclosure.

Subsequent Federal Court of Appeal Post:

Related Stories: WikiPedia | P2PNet | Gen X at 40 | CNet | Lang Michener

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Hollywood Wins DVD-Copying Case

Text of Partial Summary Judgment
EFF Archive of Pleadings
Judge Susan Illston of the Northern District Federal Court for California sided with the Motion Picture Association of America, which claimed that 321 Studios’ DVD-X Copy and DVD Copy Plus software violate copyright law. The company, based in St. Charles, Missouri, must stop “manufacturing, distributing or otherwise trafficking in any type of DVD circumvention software” in seven days.
Sources: Wired 1 | Wired 2 | Ferrago | Findlaw.com | Out-law.com