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]

RIAA v Joel Tenenbaum: Million Dollar Lawsuit For Seven Downloaded Songs

Joel Tenenbaum was one of thousands, perhaps millions of teenagers. When he was 17, he allegedly downloaded seven songs from the Internet using a peer-to-peer file sharing program called Kazaa [Both parties appear to agree this is a downloading case, not (solely) an uploading case like many of the others]. Now, 10 years later, he is being sued by the Recording Industry Association of America (RIAA), along with Capital Records and Sony BMG. What does the RIAA want from Mr. Tenenbaum? $1 million.

But before we begin to think about the legal details and who is right or wrong, let’s think about why this is a problem. For starters, the current architecture of the Internet does not technically support copyright. It is different from controlled virtual environments such as Second Life, in which any object made by someone will forever contain the “watermark” of the maker. Items or programs in Second Life can be designated at birth whether or not they will be copyable or transferable.

That does not mean copyright has no meaning on the Web– only that the architecture of the Web makes it easy to exchange copyrighted material to a scale that cannot compare to what could happen in the physical world.

Is the Architecture of the Net Creating Problems?

These copyright issues are taking place because the creators of the Internet did not think like proprietary networks. As explained in Chapter 2, the people who designed the Internet were primarily academic researchers and corporate engineers who “had little concern for controlling the network or its users’ behavior.” When they first made the Internet, they probably had no idea that someone (actually two someones) would come along and invent a peer-to-peer file sharing program.

If the Internet were designed by the RIAA, they probably would have made it so that music would not be able to be shared by multiple people. We can make this assumption because one of the attempts made by the music industry has been to impose digital rights management, or DRM, on their products. DRM gives the media maker the authority to control what can and cannot be done with a song. For instance, a music file can be programmed so that it can only be played a certain number of times, or only on certain devices. While DRMs are increasingly fading, they still have a strong presence in much of the content available on online music stores like iTunes.

So what does that mean for an organization like the RIAA? It could continue its current mission of hunting down music downloaders/uploaders and suing them, hoping in the long run that this will discourage people from doing so. Or, it could look for an entirely different business model that still brings in revenues regardless of Internet file sharing. Or… it could try to change the Internet to one that is more controlled by requiring Internet service providers to impose filters.

That last scenario is something that concerns people like Charles Nesson, Harvard Law School professor and Mr. Tenenbaum’s legal representative. According to Prof. Nesson, the RIAA’s lawsuit against Mr. Tenenbaum is more about working to change the infrastructure to make control of content easier.

In the defense of the counterclaim he argues:

They do this, not for the purpose of recovering compensation for actual damage caused by Joel’s individual action, nor for the primary purpose of deterring him from further copyright infringement, but for the ulterior purpose of creating an urban legend so frightening to children using computers, and so frightening to parents and teachers of students using computers, that they will somehow reverse the tide of the digital future.

That is something we should think about. Will the Internet continue to run on the open infrastructure that it currently is? Do we, as users, have any say in what happens to it?

[via futureoftheinternet]

The Jammie Thomas Case: RIAA Strikes Hard at Kazaa Users

Intellectual property rights are oftentimes thorny issues in the legal community. Enforcing intellectual property laws are challenging, especially in the digital age, which is marked by instantaneous and wide-scale access to materials deemed owned by certain organizations or companies, with only a few clicks of the mouse. Even with the rapid pace of technological change, it appears that much still needs to be done to make clear the parameters on the use and distribution of valuable commercial information or property.

It will be noted that since the dawn of the information age, music piracy has been a widespread practice not just in the United States but across the world. Kept at bay by the expensive prices of original CDs or DVDs of an album or movie, consumers are often left feeling that they’re in a no-win situation – they would like to purchase an original copy but at the same time there may not be much of a difference in quality when getting a replicated or “fake” copy of the real creative work, especially if it will entail huge cost savings.

Jammie Thomas, who hails from Minnesota, is one of the 26,000 people sued by the Recording Industry Association of America (RIAA), and whom a federal judge in Minnesota adjudged liable of copyright infringement after she used file-sharing software on copyrighted music. A single mother to two kids, Thomas became the object of public scrutiny when she was ordered to pay six record companies their due compensation for her act. Yet Ms. Thomas stood firm on her refusal to pay an out-of-court settlement when the record companies, from whom she obtained several songs, fought it out in the name of propping up the music industry and protecting copyright.  It proved very financially draining, though, when Thomas was ordered by the courts to pay $222,000 in damages.

Thomas’ identity emerged when RIAA logged on to Kazaa, whose peer-to-peer technology, in essence, connotes the connection of individual users sans a central management point. Mere installation of Kazaa connects the main user to other users.  Of special note is that Kazaa’s end user license agreement site does issue fair warning to users, noting some of the actions which are not allowed, like transmitting, accessing or communicating any data that users do not have a right to transmit under any law or under contractual or fiduciary relationships; and  transmitting, accessing or communicating any data that infringes any patent, trademark, trade secret, copyright or other proprietary rights of any party. For more information on the role that Kazaa plays in copyright law, take a look at our article RIAA Settles Kazaa Copyright Battle with Bronx Woman.

The Jammie Thomas case shows that state and common law rights may actually be inadequate in giving  original expressive works a protective shield against unrestricted copying. In the cyber-era, there appears to be a greater legal uncertainty on what constitutes an infringement or not. In the case of Thomas, the songs being shared on her Kazaa file-sharing account online included popular tracks by the Swedish “death metal” band Opeth, Janet Jackson, Guns ‘N’ Roses, Journey, Destiny’s Child and several others.

Jammie Thomas has found sympathizers in the form of university professors (upon retrospection, it will be remembered that the “No Electronic Theft Act” of 1997 also had the academic community opposing it) not to mention the case judge who had mulled over the declaration of a mistrial. Fueling the judge’s doubts and misgivings is an assessment on whether the act of putting a file for distribution by way of placing it in a shared folder, without evidence of being downloaded, actually constitutes copyright infringement.

The Jammie Thomas case truly perplexes ordinary folks on the internet, who at certain points in their lives discover the “joys” of obtaining music files or even movie video segments online, and enjoy it strictly for personal use.  It seems a hefty price to pay for music that one simply wanted to share with peers. Then again, the huge investments that companies make in creative works of art cannot be overlooked, which in some way does make the ruling on Jammie’s liability a reasonable one.

Just as the arguments on the Jammie Thomas case have been heating up, people may well recall and refer to the Digital Millennium Copyright Act in 1998, which was signed into law by President Clinton in October 1998, stipulating, among others, that it is a crime to circumvent anti-piracy measures built into most commercial software. This makes us think that if something is truly prohibited, modern technology has devised ways and means to continually remind digital users on what is or is not unlawful.  Moreover, are not service providers expected to limit access or remove material from users’ web sites if these constitute copyright infringement?  The impact of digital technology on the free-flowing exchange or sharing of ideas has been so all-encompassing that individuals may get lost in animation as they keep on discovering and letting others know what they were able to obtain online.  In effect, should not the guardians of the companies with websites be issuing fair warnings protecting not just themselves but those who visit their sites?

The digital age has truly changed many things, and thus also requires a reexamination of intellectual property rules.  While I agree that original creative works or innovations do deserve to be protected from unwarranted copying/replication, distribution to the public through sale, lease or lending, or rental, particularly on a public scale, it is likewise the responsibility of record or movie companies and other intellectual property rights holder to issue fair warnings to consumers on their restrictions.

Sound reasoning  dictates that copyright owners resort to or use technological self-help measures to protect their property. Copyright infringement may actually be stopped on peer-to-peer networks and unauthorized access may be indicated by using file scanning software on file-sharing networks. The instant availability or public access of copyrighted works may be blocked, diverted, or impaired.

As for copyright legislation, it must be noted that its impact on stifling rather than giving ifree rein to creativity on the part of  users for which an innovation  is created, may be worth considering.  Many organizations that strive to stay within the fair use guidelines set by copyright laws are worth emulating. Finally, there are alliances, associations and coalitions today  that aim to promote the rights of  individuals in the copyright law.   The bottomline is that while due diligence in respecting intellectual property is important, creativity and freedom of expression need not be restrained by intellectual property laws and their enforcement.

Do you feel RIAA is in the right by suing ordinary citizens or are they abusing their power?

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