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]

How Musicians Are Causing Copyright Law Controversy

Round One: Radiohead and Nine Inch Nails v. The Music Industry (RIAA).

And so far, the public is supporting the bands.

What’s going on with Radiohead and Nine Inch Nails?

Well Radiohead recently just did a really innovative act, they’ve taken their new album In Rainbows, and placed on their website – and you can pay any price for it! Yes, that price includes absolutely nothing -as in FREE. Yes, a free Radiohead album for download online.

I just found about a survey in the United Kingdom that said that about 33% of all the people who downloaded Radiohead’s album online did pay some money to the band, up to as much as £20 ($40 in United States Dollars). There’s even reports that one downloader purchased the album for £100 ($200 USD)!

Nine Inch Nails (NIN) seems to be following in similar suit. Trent Reznor, head of NIN, has released a statement concerning their freedom from their label contract and future musical direction concerning their Year Zero album:

“Right now nine inch nails is a totally free agent, free of any recording contract with any label. I have been under recording contracts for 18 years and have watched the business radically mutate from one thing to something inherently very different and it gives me great pleasure to finally be able to have a direct relationship with the audience as I see fit and appropriate.”

What’s the result from what Radiohead did with the free albums stunt? Did they lose money?

Initial reports are that they actually may be making the same amount of money they would have made normally, with following months possibly bringing even more of a profit! Their success with this marketing may find other bands and musicians going independent, possibly bypassing major record labels and self-release their own products. This may be the beginning of a paradigm shift for musicians and the music industry. Most musicians have grown up with the classic notion:

1. Make some music.
2. Grind it out for years and years at clubs and bars until a major label finds you.
3. Sign with the label and give over a majority of your record sale profits to them.
4. Make your money from concert sales.

This turns this on it’s head. It’s known that concert ticket prices are at an all-time high. This is due to the immense failure of the RIAA (Record Industry Association of America) to protect the interests of the artists. The RIAA has the major labels as their main concern. It seems that the time has come for artists to make their own way.

Are all musicians this open-minded?

Well, did you hear about the Metallica vs Napster battle a little while ago? That created huge negative backlash for the band and the repercussions are still around today.

In 2000, Metallica noticed a demo for their song “I Disappear” was floating around the Napster P2P (Peer-to-Peer) file sharing network. After more searching, they found their entire album available for free download on Napster. Metallica filed legal action against Napster, demanded the 300,000 users with Metallica songs be banned, and they also filed legal action against Yale University, University of Southern California, and Indiana University for not doing enough to stop internet file sharing from going on in their campuses. Metallica drummer and co-founder Lars Ulrich then provided a statement to the Senate Judiciary Committee:

My band authored the music which is Napster’s lifeblood. We should decide what happens to it, not Napster — a company with no rights in our recordings, which never invested a penny in Metallica’s music or had anything to do with its creation. The choice has been taken away from us.

What about the users of Napster, the music consumers? It’s like each of them won one of those contests where you get turned loose in a store for five minutes and get to keep everything you can load into your shopping cart. With Napster, though, there’s no time limit and everyone’s a winner-except the artist. Every song by every artist is available for download at no cost and, of course, with no payment to the artist, the songwriter or the copyright holder.

If you’re not fortunate enough to own a computer, there’s only one way to assemble a music collection the equivalent of a Napster user’s: theft. Walk into a record store, grab what you want and walk out. The difference is that the familiar phrase a computer user hears, “File’s done,” is replaced by another familiar phrase-”You’re under arrest.”

This caused huge headaches for the band, as tons of parodies were produced on the internet, making fun of Metallica and “Lar$ Ulrich” and the culmination being named #17 on Blender magazine’s list of “biggest wusses in rock” for its “anti-Napster crusade”.

What gave even more ammunition to the anti-Lars Ulrich crowd is an interview where he admits to not a be a user of computers and the internet:

Everybody always attacks me on it, and I’m totally open and frank, the computer is not something that gets a lot of use in my house. The Internet is not something that I utilize very much as a tool. That’s fair enough. Now certainly I have been accused of being ignorant on certain computer things, that’s all fair enough, but once again it’s sort of sad and pathetic that it becomes the best counter argument that people come up with -how can he be against a company like Napster if he’s never been on there? It’s like, because, my fucking songs are being traded around, you know, hundreds of thousands of them a day against my free fucking will, against my wishes. I think people lose sight of that with all these arguments, all these analogies, all these things that people try to come up with and be clever.

So what’s next for the music industry?

It’s definitely going to be an interesting time in the world of copyright right and the rights of musicians to protect their creative work and interests. Will more musicians join the Radiohead side and adapt with the times? Or will more musicians join the Metallica side and attack the new wave of internet music distribution?

What do you think is the future of the music industry?