File sharing and the law

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Since file sharing can be used for both uncontroversial and controversial purposes, this article focuses upon the latter, where file sharing is being used and a significant or predominant proportion of material shared is subject to copyright in the same or another country.

Contents

[edit] Background

[edit] File sharing

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Main article: File sharing

The debate on peer to peer and file sharing is ostensibly a global phenomenon. Peer to peer ("P2P") technology allows people worldwide to share files and data; however a significant proportion of the data shared is material passed freely between users that is (or should legally be) subject to copyright or other restrictions. Different legal systems, and different technologies, handle this differently. Some of the key background and distinctions are as follows:

  • P2P file sharing is used both legitimately (to distribute with permission or non-copyright materials), and illegitimately (in breach of copyright). It is highly popular and effective, with some estimates being that 15 - 35% of all internet traffic is P2P usage in some form or other.[citation needed]
  • P2P systems vary - some rely upon a centralized server, others are decentralized with no one site operating the system. Recent systems often have anonymity or obfuscation built in, making it harder to identify senders, recipients and material, and providing a degree of plausible deniability.
  • In some file sharing systems, the owner of a sharing system directly distributes files themselves. In others, notably BitTorrent, the organizer is not in fact distributing any copyright material. rather, they act like a cataloger or co-ordinator, indexing files rather than themselves offering any such material. A typical such file might provide a filename, a location it can be downloaded from, and various checksums which can be used to verify the file's integrity when downloaded. It does not, itself, contain any media material, whether legal or otherwise.

[edit] Copyright law

Main article: Copyright

A copyright in the United States consists of the rights enumerated under 17 USC 106.[1]

The four largest record companies, working together under the leadership of the RIAA, seek to stop peer to peer file sharing by attacking the use of 'shared files folders'. They claim that the making of files available for sharing on a P2P network infringes on their right under 17 USC 106(3) "to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending". Critics have argued that the RIAA has failed to show (a) dissemination, (b) of actual phonorecords or copies, (c) "to the public" (as opposed to a limited group), or any (d) sale, transfer of ownership, rental, lease, or lending..... all of which are required components of a 17 USC 106(3) "distribution".

[edit] Legal issues relevant to file sharing

The challenges facing copyright holders in the face of file sharing systems are quite novel historically and have highlighted many new challenges in both theory and practice:

  • Ambiguities in the interpretation of copyright law
  • The new challenges posed by international communications and varying legislations
  • Mass litigation and the development of processes for evidence and discovery
  • Rapidly developing new technologies and uses
  • Low barriers to entry by would-be sharers and the development of a mass usage of the technologies
  • File sharing approaches developed in response to litigation against sharers, which obfusticate or hide the fact that sharing is happening, or the identities of those involved. For example: encryption and darknets.

Further challenges have arisen because of the need to balance self-protection against fair use. A perceived overbalance towards protection (in the form of media that cannot be backed-up, cannot be played on multiple systems by the owner, or contains rootkits[2] or irksome security systems inserted by manufacturers) has led to a backlash against protection systems in some quarters. For example, the first cracked AACS encryption key in December 2006 came about because:

I just bought a HD DVD drive to plug on my PC, and an HD movie, cool! But when I realized the 2 software players on windows don't allowed me to play the movie at all, because my video card is not HDCP compliant and because I have an HD [high definition] monitor plugged with DVI interface, I started to get mad... This is not what we can call "fair use"! So I decide to decrypt that movie...[3]

[edit] Cases and case law

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Please improve this article if you can (June 2007).

[edit] The Basic Copyright Law Issues

At this time the development of the law in this area is in its infancy.

In the United States, for example, a record industry trade association, the RIAA, on behalf of the four (4) largest worldwide record companies, has launched an estimated 30,000 cases over a 4-year period, all against people whose internet access accounts have, according to the plaintiffs, been associated with peer-to-peer file sharing accounts using FastTrack technology, e.g., Kazaa, LimeWire, Gnutella, iMesh, and others. The suits are based upon a report of an internet investigator who claims to have detected a "shared files folder". At the core of these cases is the allegation that the defendants "made available for distribution" the song files in a shared files folder. See, e.g. Elektra v. Barker[4] and Warner v. Cassin[5], two pending cases in which the legal viability of that accusation has been tested, for an examination of the legal issues. So far only one case against an alleged infringer is known to have gone to trial[6], and no other fully contested cases are known to have been determined by a trial, summary judgment motion, or otherwise. The trial which did go forward took place in October, 2007, and resulted in a verdict of $222,000 for "making available" 24 song files having a total retail value of $23.76, or less. The defendant is moving to set aside the verdict on the ground of the excessiveness of the size of the verdict, and if that does not succeed will be filing an appeal. However, the judge who presided over the trial has independently issued an order indicating that he believes his submission of the case to the jury under the RIAA's "making available" theory may have been a "manifest error of law", and that the verdict may need to be set aside on that ground, apart from the damages issue.[7]

Subsequent to the Thomas trial, in Atlantic v. Brennan [8], Elektra v. Barker[9], above, Atlantic v. Howell[10], and London-Sire v. Doe 1[11], the Courts have rejected the RIAA's "making available" theory.[12]. But in Barker the judge did suggest to the RIAA another theory which it might plead -- "offering to distribute for purposes of redistribution" -- for which there is no known precedent at all, and which is ambiguous in terms of what an "offering" would be. This suggestion was roundly criticized by Judge Neil V. Wake in Howell, however. So although the lower courts seem to be forming a consensus that the 'making available' theory is inccorect, the question of whether 'making files available' over a peer to peer network is actionable, is an open question in the United States, at least in terms of obtaining binding appellate level precedents.

[edit] Primary Infringement Liability

The fundamental question, "what use can a P2P file-sharing network's customers make of the software and of copyrighted materials without violating copyright law", has no answer at this time, as there has been almost no dispositive decisionmaking on the subject.

This issue has received virtually no appellate attention, the sole exception being BMG v. Gonzalez[13], a decision of the U.S. Court of Appeals for the Seventh Circuit, which held that where a defendant has admitted downloading and copying song files from other users in the P2P network without permission of the copyright holders, she cannot claim that such copying is a "fair use". Since Gonzalez involves a defendant who had admitted to actual copying and downloading of songs from other unauthorized users, it is of limited applicability in contested cases, in that it relates solely to the reproduction right in 17 USC 106(1), has no bearing on the 17 USC 106(3) distribution right, and does not deal with defenses other than "fair use".

A case which has broad implications, not only for the subject of P2P file sharing but for the internet at large, is Elektra v. Barker,[14] an RIAA case against Tenise Barker, a Bronx nursing student. Ms. Barker moved to dismiss the complaint, contending, among other things, that the RIAA's allegation of "making available" did not state any known claim under the Copyright Act.[15][16]. The RIAA countered with the argument that even without any copying, and without any other violation of the record companies' distribution rights, the mere act of "making available" is a copyright infringement, even though the language does not appear in the Copyright Act, as a violation of the "distribution" right described in 17 USC 106(3).[17] Thereafter, several amicus curiae were permitted to file briefs in the case, including the MPAA, which agreed[18] with the RIAA's argument, and the Electronic Frontier Foundation (EFF), the U.S. Internet Industry Association (USIIA), and the Computer & Communications Industry Association (CCIA), which agreed with Ms. Barker.[19][20] The US Department of Justice submitted a brief refuting one of the arguments made by EFF,[21] but did not take any position on the RIAA's "making available" argument, noting that it had never prosecuted anyone for "making available".[22]. The Elektra v. Barker case was argued before Judge Kenneth M. Karas in Manhattan federal court on January 26, 2007[23], and decided on March 31, 2008. [24]

The decision rejected the RIAA's "making available" theory but sustained the legal sufficiency of the RIAA's pleading of actual distribution and actual downloading. Additionally, the Court suggested to the RIAA that it might want to amend its complaint to include a claim for "offering to distribute for purposes of distribution", but gave no guidance on what type of evidence would be required for an "offer". The Court's suggestion that merely "offering" to distribute could constitute a violation of the Act has come under attack from William Patry, the author of the treatise Patry on Copyright. [25]

Three other decisions, also rejecting the RIAA's "making available" theory, came from more unexpected sources.

The Barker decision was perhaps rendered anticlimatic by the decision of Judge Janet Bond Arterton, from the District of Connecticut, handed down six weeks earlier, in Atlantic v. Brennan [26], rejecting the RIAA's application for a default judgment. Brennan, like Barker, rejected the RIAA's "making available" theory, but unlike Barker it found the RIAA's specificity on the other issues to be insufficient, and it rejected the conceptual underpinnings upon which Judge Karas based his "offer to distribute" idea.

And Barker was perhaps overshadowed by the decision of Judge Gertner, rendered the same day as the Barker decision, in quashing a subpoena served on Boston University to learn the identity of BU students, in London-Sire v. Doe 1 [27]. Here too the Court rejected the RIAA's "making available" theory, but here too -- like Atlantic but unlike Elektra -- also rejected any possible underpinning for an "offer to distribute" theory.

And then came the decision of the District Judge Neil V. Wake, in the District of Arizona, in Atlantic v. Howell.[28]. This 17-page decision[29] -- rendered in a case in which the defendant appeared pro se (i.e., without a lawyer) but eventually received the assistance of an amicus curiae brief and oral argument by the Electronic Frontier Foundation[30]-- was devoted almost exclusively to the RIAA's "making available" theory and to the "offer to distribute" theory suggested by Judge Karas in Barker. Atlantic v. Howell strongly rejected both theories as being contrary to the plain wording of the Copyright Act. The Court held that "Merely making a copy available does not constitute distribution....The statute provides copyright holders with the exclusive right to distribute "copies" of their works to the public "by sale or other transfer of ownership, or by rental, lease, or lending." 17 U.S.C. ...106(3). Unless a copy of the work changes hands in one of the designated ways, a "distribution" under ...106(3) has not taken place." The Court also expressly rejected the 'offer to distribute' theory suggested in Barker, holding that "An offer to distribute does not constitute distribution".[31]

As noted above, the Capitol v. Thomas verdict is now in jeopardy because of the trial judge's having accepted the RIAA's arguments and instructing the jury that they did not need to find that any files were actually distributed, in order to hold the defendant liable for "distribution".

There may be indications that the RIAA has been jettisoning its "making available" theory. In a San Diego, California, case, Interscope v. Rodriguez, where the Judge dismissed the RIAA's complaint as "conclusory", "boilerplate", "speculation", the RIAA filed an amended complaint which contained no reference at all to "making available". [32] In subsequent cases, the RIAA's complaint abandoned altogether the "making available" theory, following the model of the Interscope v. Rodriguez amended complaint.

In its place, it is apparently adopting the "offer to distribute" theory suggested by Judge Karas. In the amended complaint the RIAA filed in Barker, it deleted the "making available" argument -- as required by the judge -- but added an "offer to distribute" claim, as the judge had suggested.[33] It remains to be seen if it will follow that pattern in other cases.

Meanwhile, in its first jury trial, decided months before any of the above decisions, the RIAA had prevailed upon the trial judge to give the jurors an instruction which adopted its "making available" theory[34], over the protestations of the defendant's lawyer. It is to be anticipated that, in the event a judgment is entered in the Thomas case, and an appeal taken, the foregoing cases -- rejecting the "making available" theory -- will figure prominently in the appeal.

[edit] Secondary Infringement Liability

Secondary liability, the possible liability of a defendant who is not a copyright infringer but who may have encouraged or induced copyright infringement by another, has been discussed generally by the United States Supreme Court in MGM v. Grokster[35], which held in essence that secondary liability could only be found where there has been affirmative encouragement or inducing behavior. On remand, the lower court found Streamcast, the maker of Morpheus software, to be liable for its customers' copyright infringements, based upon the specific facts of that case. [36]

Under US law "the Betamax decision" (Sony Corp. of America v. Universal City Studios, Inc.), holds that copying "technologies" are not inherently illegal, if substantial non-infringing use can be made of them. Although this decision predated the widespread use of the Internet, in MGM v. Grokster, the U.S. Supreme Court acknowledged the applicability of the Betamax case to peer to peer file sharing, and held that the networks could not be liable for merely providing the technology, absent proof that they had engaged in "inducement."

A little over a year later, the RIAA initiated the first major post-Grokster, secondary liability case, Arista v. Limewire, in Manhattan federal court. Lime Wire denied the allegations, and counterclaimed, charging the major record companies with antitrust violations and other misconduct."Lime Wire Sues RIAA for Antitrust Violations" The antitrust claims have, however, been dismissed[37], so the case is moving ahead solely on the copyright issues.

A secondary liability case in Australia, under Australian law, was Universal Music Australia Pty Ltd v Sharman License Holdings Ltd [2005] FCA 1242 5 September 2005, which was settled out of court.

[edit] More

The Electronic Frontier Foundation (EFF) is a donor-supported group which seeks to protect and expand digital rights. Its activities include litigation, political lobbying, and public awareness campaigns. The EFF has vocally opposed the RIAA in its pursuit of lawsuits against users of file sharing applications and supported defendants in these cases. The foundation promotes the legalization of peer-to-peer sharing of copyrighted materials and alternative methods to provide compensation to copyright holders.[38]

[edit] More details by legislative regime

[edit] Europe

Main article: EU Copyright Directive

In the European Union (EU), the 2001 EU Copyright directive, which implemented the 1996 WIPO treaty ("World Intellectual Property Organization Copyright Treaty"), prohibits peer-to-peer, claiming it is a violation of the directive. However, not all European member states have implemented the directive in national legislation. Notably, on December 22, 2005, after discussing the EU directive, the French parliament passed two amendments legalizing the exchange of copies on the Internet for private use. In a later proceeding, the French government withdrew the article in question and made illegal any p2p client obviously aimed at sharing copyrighted material. The term "obviously" was not defined. The project of law (called DADVSI) has still to be discussed by the French Senate and, if the decision differs from the Assemblée Nationale's, it will be debated on second lecture back at the Lower House.

[edit] Canada

Interestingly, Canada stands out by authorizing, at least until the projected copyright reform, downloads on peer-to-peer networks under the "private copying" exception. See File sharing in Canada.

[edit] Important cases

[edit] USA

[edit] Sweden

[edit] Singapore

[edit] References

  1. ^ 17 USC 106
  2. ^ See 2005 Sony BMG CD copy protection scandal.
  3. ^ By "Muslix64", written on doom9's forum. See original post and the ensuing AACS encryption key controversy.
  4. ^ Elektra v. Barker
  5. ^ Warner v. Cassin
  6. ^ Capitol v. Thomas (Duluth, MN)
  7. ^ "Judge in Capitol v. Thomas says "manifest error of law" may have been committed by incorrect "making available" instruction", Recording Industry vs. The People, May 15, 2008.
  8. ^ Atlantic v. Brennan
  9. ^ Elektra v. Barker
  10. ^ "RIAA summary judgment motion denied in Atlantic v. Howell; RIAA 'making available' theory & Judge Karas 'offer to distribute' theory rejected", Recording Industry vs. The People, April 29, 2008
  11. ^ London-Sire v. Doe 1
  12. ^ See discussion of the first three of these cases at “The Recent Making Available Cases”, William F. Patry, The Patry Copyright Blog, April 3, 2008, and of the fourth, Atlantic v. Howell, at "Atlantic Recording Corp. v. Howell" Id., April 30, 2008
  13. ^ BMG v. Gonzalez
  14. ^ Elektra v. Barker
  15. ^ Elektra v. Barker, Memorandum of Law in Support of Motion to Dismiss Complaint
  16. ^ Reply Memorandum of Law in Support of Motion to Dismiss Complaint
  17. ^ Elektra v. Barker, Plaintiffs' Memorandum of Law in Opposition to Dismissal Motion
  18. ^ Amicus Curiae brief of MPAA
  19. ^ Amicus Curiae brief of EFF
  20. ^ Amicus Curiae brief of USIIA and CCIA
  21. ^ Statement of Interest of U.S. Department of Justice
  22. ^ Statement of Interest, page 5, footnote 3
  23. ^ "Elektra v. Barker "Making Available" Oral Argument Now Available Online", Recording Industry vs. The People, February 27, 2007
  24. ^ "Judge rejects RIAA "making available" theory but sustains complaint, and gives RIAA chance to replead defective theory in Elektra v. Barker", Recording Industry vs. The People, March 31, 2008.
  25. ^ "The recent making available cases", The Patry Copyright Blog, April 3, 2008.
  26. ^ "Default judgment denied in Atlantic v. Brennan, RIAA complaint insufficient, possible defenses of copyright misuse, excessive damages", Recording Industry vs. The People, February 25, 2008.
  27. ^ "RIAA's Boston University Subpoena Quashed in Arista v. Does 1-21", Recording Industry vs. The People, April 3, 2008.
  28. ^ Atlantic v. Howell
  29. ^ "RIAA summary judgment motion denied in Atlantic v. Howell; RIAA 'making available' theory & Judge Karas 'offer to distribute' theory rejected", Recording Industry vs. The People, April 29, 2008
  30. ^ "Jeffrey Howell is not alone; Electronic Frontier Foundation files amicus curiae brief refuting RIAA arguments in Atlantic v. Howell", Recording Industry vs. The People, January 12, 2008
  31. ^ For commentary on Atlantic v. Howell see "Atlantic Recording Corp. v. Howell", The Patry Copyright Blog, April 30, 2008. For the amicus curiae brief submitted by the Electronic Frontier Foundation in support of Mr. Howell, see "Jeffrey Howell is not alone; Electronic Frontier Foundation files amicus curiae brief refuting RIAA arguments in Atlantic v. Howell", Recording Industry vs. The People, January 12, 2008
  32. ^ "RIAA Abandons "Making Available" in Amended Complaint in Rodriguez case", Recording Industry vs. The People, September 10, 2007.
  33. ^ "Amended complaint filed in Elektra v. Barker", Recording Industry vs. The People, May 2, 2008.
  34. ^ "Jury Instructions in Virgin v. Thomas Available Online" Recording Industry vs. The People, October 5, 2007 (See instruction number 15)
  35. ^ MGM v. Grokster
  36. ^ "Streamcast Held Liable for Copyright Infringement in MGM v. Grokster, Round 2", Recording Industry vs. The People, September 30, 2006.
  37. ^ "RIAA's Motion to Dismiss LimeWire Antitrust Counterclaims is Granted; Counterclaims Dismissed in Arista v. LimeWire", Recording Industry vs. The People, December 3, 2007
  38. ^ Electronic Frontier Foundation. Making P2P Pay Artists. Retrieved on April 25, 2006.

[edit] See also