Digital Economy Bill: Secretary of State Secondary Legislation?

A source close to the British Labour Government has just given me reliable information about the most radical copyright proposal I’ve ever seen.

Secretary of State Peter Mandelson is planning to introduce changes to the Digital Economy Bill now under debate in Parliament. These changes will give the Secretary of State (Mandelson — or his successor in the next government) the power to make “secondary legislation” (legislation that is passed without debate) to amend the provisions of Copyright, Designs and Patents Act (1988).

What that means is that an unelected official would have the power to do anything without Parliamentary oversight or debate, provided it was done in the name of protecting copyright. Mandelson elaborates on this, giving three reasons for his proposal:

1. The Secretary of State would get the power to create new remedies for online infringements (for example, he could create jail terms for file-sharing, or create a “three-strikes” plan that costs entire families their internet access if any member stands accused of infringement)
2. The Secretary of State would get the power to create procedures to “confer rights” for the purposes of protecting rightsholders from online infringement (for example, record labels and movie studios can be given investigative and enforcement powers that allow them to compel ISPs, libraries, companies and schools to turn over personal information about Internet users, and to order those companies to disconnect users, remove websites, block URLs, etc)
3. The Secretary of State would get the power to “impose such duties, powers or functions on any person as may be specified in connection with facilitating online infringement” (for example, ISPs could be forced to spy on their users, or to have copyright lawyers examine every piece of user-generated content before it goes live; also, copyright “militias” can be formed with the power to police copyright on the web)

Mandelson is also gunning for sites like YouSendIt and other services that allow you to easily transfer large files back and forth privately (I use YouSendIt to send podcasts back and forth to my sound-editor during production). Like Viacom, he’s hoping to force them to turn off any feature that allows users to keep their uploads private, since privacy flags can be used to keep infringing files out of sight of copyright enforcers.

This is as bad as I’ve ever seen, folks. It’s a declaration of war by the entertainment industry and their captured regulators against the principles of free speech, privacy, freedom of assembly, the presumption of innocence, and competition.

This proposal creates the office of Pirate-Finder General, with unlimited power to appoint militias who are above the law, who can pry into every corner of your life, who can disconnect you from your family, job, education and government, who can fine you or put you in jail.

More to follow, I’m sure, once Open Rights Group and other activist organizations get working on this.

[thanks to darkpatator and cory doctorow via cc]

Top 10 Copyright Law Scandals That Rocked the World in 2009

As we bring an end to the year 2009, we close the book not just on one of the most interesting years in copyright but also one of the most interesting decades.

When January 1, 2000 came about there was a great deal of uncertainty about the future of copyright. The DMCA had just became law a few years prior and the lawsuit between the RIAA and Napster was just starting to make headlines. There was clearly a war brewing but no one was sure where it would lead.

The 2000s were the decade of that war. From the opening bell to an ongoing conflict today, the Web grew up to a point where copyright industries could no longer ignore it and they began to fight back as well as embrace it.

It was a decade of copyright conflict, as well as new ideas and new technology. Looking back on it, it is almost impossible to pick the ten biggest stories, especially since history is yet to decide what is most important, but I decided to make a run at it nonetheless.

With that in mind, here is my top ten copyright stories of the past ten years…

10. Apple Sues Psystar

In July of 2008 Apple sued a small Florida-based company called Psystar for copyright infringement. Psystar was the maker of so-called Hackintosh systems, non-Apple computers with OSX pre-installed, which is against Apple’s user license for OSX. Psystar countersued claiming, among other things, copyright misuse.

The two sides engaged in a very bitter lawsuit (technically two lawsuits as there was a separate one for OSX Snow Leopard and Leopard) but the tide quickly turned against Psystar as temporary restraining order barred Psystar from selling its clones and that order was, in turn, recently made permanent.

Psystar and Apple did partially settle their differences but there are question surrounding Psystar’s latest product, Rebel EFI, which allows home users to install OSX on Psystar machines.

Apple hasn’t taken a real stance on this program yet, but other clone makers use a similar process without any intervention from Apple.

9. SCO Tries to Kill Linux

In 2003 SCO sued IBM for $1 billion claiming the company had infringed its copyrights by putting code from its Unix operating system into Linux. These claims, however, have remained largely unproven even after over six years of legal wrangling.

The case, however, has moved like a soap opera. SCO and IBM exchanged their lawsuits and SCO also filed suits against Autozone and DaimlerChrysler, two Linux users. However, Novell eventually jumped in and sued SCO claiming that SCO did not own the rights to the Unix code they were alleging was infringed. According to Novell, who sold SCO the code in a previous deal, SCO did not purchase the rights to the code in the contract.

The district court seemed to agree and, in August 2007, ruled that Novell owned the code in question. The next month, SCO filed for bankruptcy protection.

However, the case isn’t quite dead yet, an appeals court has ruled that the lower court was hasty in making the determination about Novell’s ownership without a trial. As such, that case has been revived and a win by SCO could, at least in theory, bring the other lawsuits back as well.

Confused? Here’s a great timeline of the events on Wikipedia.

8. UMG and Viacom Take On Veoh and YouTube

In 2007, Viacom captured some big headlines by suing Google and YouTube for $1 billion for copyright infringement. However, a similar suit had already been filed by the record label UMG against the much smaller Veoh and that case was much farther along.

The problem was simple. Though the DMCA was not even ten years old, it was already looking antiquated, meant for a Web that was very different, before sites such as YouTube existed. It was unclear if or how the law would apply to them and copyright holders, frustrated by infringement on video sharing sites, decided to sue and let the courts decide.

In UMG’s case though, the court ruled against them, UMG has promised a swift appeal but the case was made clear that the DMCA safe harbor protections, which protect hosts from being held liable for infringements by their users, apply to sites like Veoh.

However, the YouTube case still may turn out differently as Viacom claims to have found evidence that YouTube had actual knowledge of infringing material and may have even uploaded content themselves. As such, the two cases may provide good tests for how far the safe harbor protections go and, through that, could play a major role in determining the kinds of services that available on the Web in the future.

7. Perfect 10 Sues Google

In 2004, adult content producer Perfect 10 sued Google over its relatively new image search engine. At issue was Google’s indexing and creation of thumbnails of unauthorized copies of P10’s images. Though the district court ruled against Google on the issue of thumbnail creation, the Ninth Circuit Court of Appeals, to where the case was appealed, ruled that they were a fair use.

The decision has been a touchstone in recent copyright history and has been the basis for much of the advancements in search engines over the past few years. It is also one of the most-cited copyright rulings as it lays down much of the framework for how fair use applies to the Web and where many of the limits are.

Note: Commenter Åsk Dabitch reminded me I omitted the Kelly v. Arriba Soft in talking about the Perfect 10 Case. The Kelly case was a 2002/2003 one that had many of the same facts but dealt with a much smaller search engine. Though it was the first to rule that thumbnails in a search engine were a fair use, elements of the case, such as in-line linking of images, were batted back to the lower court, which was unable to take the case as Arriba Soft had gone out of business. As such, Perfect 10, which was handled by the same court, has really become the definitive fair use case on this topic.

6. The Google Book Search Saga

In 2005 both the Author’s Guild and the Association of American Publishers sued Google over its book search project, which scans and indexes books from various libraries to make them searchable on the Web and also to display relevant snippets.

However, where the Perfect 10 case highlighted Google’s willingness to fight for fair use for everyone, the Google Book Search lawsuit brought an end to the era of Google as the legal champion as Google sought out a controversial settlement that would give them, and only them, the rights to scan and display books.

The first draft of that settlement, which would allow Google to scan and display in copyright but out-of-print books in exchange for a slice of the revenue, was scuttled earlier this year after the Department of Justice filed objected to elements of it. A revised settlement, which offers greater protection for international authors and for authors who can’t be located, was granted preliminary approval and is being commented upon now.

5. The Pirate Bay Saga

Established in 2003, The Pirate Bay has become one of the decades most interesting and most important copyright stories.

Since their founding, they have been sued repeatedly, had their hosting cut several times, been forced to move the site repeatedly as well, they had their host raided and, most importantly, the four founders were convicted of criminal copyright infringement in a joint criminal and civil trial.

Other bittorrent trackers and file sharing services have come and gone but The Pirate Bay has managed to hang on and is still active today. Through a combination of regular relocations to friendly countries, a shadowy organizational structure and solid technology, The Pirate Bay has been able to repeatedly and deliberately thumb the eye of major content creators and still keep the lights on.

Perhaps even more importantly, The Pirate Bay was the inspiration for The Pirate Party, which recently won two seats in the EU Parliament.

4. Three Strikes

The decade saw the war against file sharing heat up and one of the tools that has been repeatedly mentioned as a possibility for curbing such sharing is “three strikes” laws, which would disconnect file sharers after they received two warnings.

France, in many ways, has been at the forefront of this debate, passing a three strikes law only to have it declared unconstitutional as it did not allow judicial oversight. However, the government quickly regrouped and passed a new version of the bill with judicial oversight that has a better chance of surviving constitutional challenges.

New Zealand was also in the middle of this debate beginning in late 2008 with its proposals for section 92a of its copyright code, which would have forced ISPs to ban alleged infringers. After a significant amount of protest, that bill was scrapped and a new draft of it offers more oversight.

However, the issue has been raised in countless countries over the years and may be a part of the ongoing ACTA treaty negotiations. Only time will tell on that front.

3. Grokster Sets a New Standard

One of the most-cited copyright cases of all time has been the 1984 case Sony Corp. v. Universal City Studios, better known as the Betamax case. The case found that Sony’s Betamax product, which allowed home users to record movies and TV shows, was infringing as it was “capable of substantial noninfringing uses.”

Many were interested to see how the ruling would apply to file sharing networks, including Grokster, which had been sued by movie studios. However, in its 2005 decision, the Supreme Court punted in the issue and created yet another new test, the inducement test, to see if a product or service “induces” users commit copyright infringement. The court ruled against Grokster, which in turn forced the final closure of the service.

The Grokster ruling is now almost always cited along with Betamax and it created another test that inventors, including Web developers, have to be aware of when creating new products that interact with copyrighted works.

2. The RIAA Lawsuits

In September of 2003 the RIAA sued over 250 alleged files sharers for copyright infringement, marking the first time that individual file sharers had been sued by the organization. Since then, the RIAA has filed tens of thousands of such lawsuits, the majority of which have been settled before ever reaching a courtroom, usually for a few thousand dollars (no such luck for Denise Barker), but two have made it all the way to a verdict, the Joel Tenenbaum case and the Jammie Thomas case.

Though all three of the trials (the Jammie Thomas case was tried twice) were major victories for the RIAA in the court, resulting in large damage awards, the effort has failed to curtail illegal file sharing at all. As a result, the RIAA announced it would stop suing individuals, though it has been finishing up cases already in progress, and focus instead on working with ISPs to cut off file sharers from the Web.

However, as of today, that effort has produced no significant fruit other than offers to pass on infringement notices.

1. Napster Shuts Down

In 2001, as part of a lawsuit by the RIAA (though the Metallica one was far more publicized), Napster was forced to close their doors, after an injunction was filed against them. The lawsuit, which began in 1999, marked the beginning of the public’s awareness of copyright issues on the Web, the shutdown, marked the beginning of the copyright fight.
Though Napster itself would be reincarnated many times, including most recently as a legitimate music service that was purchased by Best Buy, its mark as the first widely-known file sharing network, and first such closure, remains with us today.

Almost any story on this list or that took place in the 2000s can be traced back to this one incident. Its closure paved the way for the slew of file sharing services that came after it, including The Pirate Bay, as well as the new file sharing technologies that have replaced it, including bittorrent.

In many ways, this moment defined the decade.

Honorable Mentions

Really fast, here are a few stories I seriously considered for inclusion but decided against for one reason or another:

1. Radiohead and Trent Reznor Give Away Music – Could be the beginning of new business models for music.
2. Remote DVR Ruled Legal – Cablevision wins its fight to remotely host DVR content.
3. iTunes Store Launches – Another critical business element (details on Apple iTunes Software License Agreement here).
4. DRM Debacles/Death of DRM -Many stories to choose from.
5. Many, Many More…

Bottom Line

The 2000s were a very busy decade for copyright news. The Web grew up a lot during the decade but copyright issues played a very critical role in many of the growing pains it encountered along the way.

My hope for the 10s is that it can be the decade where we stop the fighting and start working on solutions, where copyright holders, users and intermediaries work together to create sustainable business models for the new digital world.

Though it has been an ugly decade for the copyright wars, with the battle lines drawn, it may be easier to start negotiating and finding common ground. It’s obvious that this is an emotional issue that affects people personally and financially very deeply, that makes it all the more important we treat these issues with respect and work with one another to find good answers.

There is no magic bullet, any solution will need a combination of law, technology and business savvy to make it work, but if we are willing to work with one another, it can happen.

[thanks to johnathan bailey, aarongustafson, mecredis, matthurst, anniemole, jakobinac, jimbarter, topgold, ndeviltv, dannysullivan, and richardfx7676 via cc]

Leaked E-Mails From DigiProtect & Davenport Lyons on Cease & Desist Letter Costs

Having forced tens of thousands of P2P users to pay up for costly pre-settlement notices, a number of European law offices and and anti-piracy companies suddenly find themselves on the other side of the gun: The German scene news site gulli.com asked local authorities to start criminal investigations against a well-known anti-piracy law office.

German news-outlet gulli.com has received information from inside DigiProtect/Davenport Lyons about so called ‘Cease&Desist’ letters, says WikiLeaks, going on:

“The most likely audience will be filesharers, who received a cease & desist letter by Davenport Lyons, ACS:Law, Kanzlei Kornmeier or any other lawyer, who works together with DigiProtect & Davenport Lyons. The leak happened through an unknown source from within DigiProtect / DavenportLyons.

The documents are the basis of the latest stories on gulli.com about Davenport Lyons/DigiProtect.

In this document, you can see correspondence of german lawyer Dr. Udo Kornmeier with Brian Miller from Davenport Lyons. The content of this fax is focused on managing: money. Who gets it, how much, and how is it all handled.

And in German:

(de) Das deutsche News-Portal gulli.com hat einige Information aus den Reihen von DigiProtect/Davenport Lyons in Bezug zu P2P-Abmahnungen erhalten. Sie ist am interessantesten fuer Filesharer, die ebenfalls von Davenport Lyons, ACS:Law, der Kanzlei Kornmeier oder jeden anderen Kanzlei, die mit DigiProtect zusammenarbeitet, abgemahnt wurden. Der Leak geschah durch eine unbekannte Quelle innerhalb DigiProtect / DavenportLyons.

Die Dokumente bilden die Grundlage der Artikelserie zu Davenport Lyons/DigiProtect auf gulli.com.

In diesem Dokument sieht man Korrespondenz zwischen dem deutschen Anwalt Dr. Udo Kornmeier sowie Brian Miller von Davenport Lyons. Der Hauptdiskussionspunkt des Faxes ist Geld. Wer bekommt es, wie viel und wie wird alles verrechnet.

Now the German edition of Britain’s prestigious Financial Times has picked the Gulli story up.

The issue at heart could not only derail current anti-piracy campaigns, but potentially even lead to disbarment of the lawyers involved with these cases.

Here’s what happened: Two weeks ago, an internal fax with details about the business of Germany’s anti-piracy company Digiprotect turned up on Wikileaks.org. The document was supposedly sent by German lawyer Udo Kornmeier, who has been assisting Digiprotect in hunting down thousands of German P2P users, to the U.K.-based law office Davenport Lyons, which has been doing the same thing in the U.K. with evidence provided by Logistep. Both Kornmeier and Digiprotect have publicly declined to comment on the authenticity of the document.

Digiprotect, Logistep, Davenport Lyons and even Kornmeier are well-known for their anti-P2P lawsuits, which typically work like this: A company like Digiprotect or Logistep logs the IP addresses of P2P users that share certain movies or songs. This type of evidence is then used to get ISPs through various legal measures to reveal the identity of these file sharers. Davenport Lyons or Kornmeyer then send out cease and desist letters complete with a pre-settlement offer. Pay 450 Euros, and we won’t sue you. The demand came from Davenport Lyons, hired by “protection” companies in Europe, and which also fronts for DigiProtect in Britain. Davenport Lyons was fired by Atari after making a gross mistake by targeting a completely innocent UK husband-and-wife.

This type of enforcement for cash has been going on for years, and some companies involved have in fact started to use bar codes on their pre-settlement notices to more efficiently deal with thousands of claims. Critics have long suspected that rights holders and the companies involved use P2P as a sort of mass lawsuit cash cow, and in fact another leaked document recently revealed that suing a user for file sharing can be 150 times more profitable than legally selling your work to the same user. British consumer rights lobby Which? filed an official complaint against Davenport Lyons for its, “campaign of letters alleging illegal filesharing,” said The Register.

The document states that “the whole project is kind of a joint venture where no party charges the other party with any costs.” The problem with such a set-up is that the pre-settlement offers are usually based on costs incurred by retaining a law office to pursue the claim. File sharers are asked to pay 450 bucks for a porn movie because it costs money to investigate their IP address and send them the cease and desist letter.

However, German law specifically states that these costs can’t be based on the success of the claim. In other words: In order to invoice file sharers for lawyer fees, these fees have to occur and be paid by someone no matter whether a file sharer pays up or not. Invoicing someone for costs that haven’t actually occurred could be seen as fraud.

That’s exactly what German lawyer Thomas Stadler believes to be going on here. He recently analyzed the work of Digiprotect and Kornmeier on his blog and concluded that it “violates existing laws.” Kornmeiers answer? He send Stadler a cease and desist notice, demanding to take down the blog entry in question. Stadler responded by asking other lawyers that have been defending file sharers for assistance, and he’s been compiling further evidence against the parties involved. I wouldn’t be too surprised if more documents make their way to Wikileaks as well.

Stay tuned.

[thanks to rinzewind, p2pnet, and Janko Roettgers via cc]

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