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 Peer To Peer Filesharing on Campus: Selling Slinky Dresses, Sleazy Massage Parlors, and the Sony Betamax.

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Presentation on theme: " Peer To Peer Filesharing on Campus: Selling Slinky Dresses, Sleazy Massage Parlors, and the Sony Betamax."— Presentation transcript:

1  Peer To Peer Filesharing on Campus: Selling Slinky Dresses, Sleazy Massage Parlors, and the Sony Betamax

2  Who is at War? Copyright Owners vs. Pirates? Copyright Owners vs. Telecommunications? Copyright Owners vs. Software Developers? Copyright Owners vs. Colleges and Universities? Copyright Owners vs. Pirates? Copyright Owners vs. Telecommunications? Copyright Owners vs. Software Developers? Copyright Owners vs. Colleges and Universities?

3  Copyright Owners v. Pirates This a riot in the “streets” –Charles Nesson It’s a “Movement” –“As the largest grassroots effort in the history of the world, file trading is essentially the average person’s way of saying we don’t agree with the status quo.” –Richard Menta This a riot in the “streets” –Charles Nesson It’s a “Movement” –“As the largest grassroots effort in the history of the world, file trading is essentially the average person’s way of saying we don’t agree with the status quo.” –Richard Menta

4  Copyright Owners v. Pirates The REVOLUTION has started! –“What’s happening with global, peer-to-peer networking is not altogether different rom what happened when the American colonists realized they were poorly served by the British Crown: The colonists were obliged to cast off that power and develop an economy better suited to their new environment…. No law can be successfully imposed on a huge population that does not morally support it and possesses easy means for its invisible evasion.” --John Perry Barlow The REVOLUTION has started! –“What’s happening with global, peer-to-peer networking is not altogether different rom what happened when the American colonists realized they were poorly served by the British Crown: The colonists were obliged to cast off that power and develop an economy better suited to their new environment…. No law can be successfully imposed on a huge population that does not morally support it and possesses easy means for its invisible evasion.” --John Perry Barlow

5  Copyright Owners v. Pirates This isn’t a revolution; it’s “Armageddon” –“It's getting clear – alarmingly clear, I might add – that we are in the midst of the possibility of Armageddon.” – Jack Valenti on file sharing This isn’t a revolution; it’s “Armageddon” –“It's getting clear – alarmingly clear, I might add – that we are in the midst of the possibility of Armageddon.” – Jack Valenti on file sharing

6  Copyright Owners v. Telecom Senate Commerce Committee Hg on DMCA subpoenas (Sept. 2003): “The essence of [the RIAA’s] position is that once they make a filing with the court and pay their $25, due process goes out the window. I believe it will be inevitable that the Internet stalker, the child molester, the abusive spouse or some other wacko who uses the Internet is going to[use the subpoena power for evil purposes].” –James Ellis, general counsel of SBC Communications Senate Commerce Committee Hg on DMCA subpoenas (Sept. 2003): “The essence of [the RIAA’s] position is that once they make a filing with the court and pay their $25, due process goes out the window. I believe it will be inevitable that the Internet stalker, the child molester, the abusive spouse or some other wacko who uses the Internet is going to[use the subpoena power for evil purposes].” –James Ellis, general counsel of SBC Communications

7  Copyright Owners v. Software Developers: A Superpower Vulnerable to Attack? Weakness #1: Reliance on Gatekeepers –“All U.S. copyright law … proceeds on the assumption that effective and efficient copying is a large-scale, publicly visible, commercial activity, and therefore, that legal prohibitions against unauthorized copying are enforceable.” (Congressional Office of Technology Assessment, 1989) –No material enforcement actions against end users prior to 1990’s Weakness #1: Reliance on Gatekeepers –“All U.S. copyright law … proceeds on the assumption that effective and efficient copying is a large-scale, publicly visible, commercial activity, and therefore, that legal prohibitions against unauthorized copying are enforceable.” (Congressional Office of Technology Assessment, 1989) –No material enforcement actions against end users prior to 1990’s

8  Weakness #2: Legality and ethics of “home copying” and “sharing with friends” are ambiguous 1971 Congressional Report: copyright was never meant to ‘restrain the home recording, from broadcasts or from tapes or records, of recorded performances” Sony v. Universal City Studios (U.S. 1984): time shifting = fair use 1989 Survey by Congressional Office of Technology Assessment: most people think copying for friends is OK (63%), but copying for money is wrong (76%) –(see, e.g., Metallica) Weakness #2: Legality and ethics of “home copying” and “sharing with friends” are ambiguous 1971 Congressional Report: copyright was never meant to ‘restrain the home recording, from broadcasts or from tapes or records, of recorded performances” Sony v. Universal City Studios (U.S. 1984): time shifting = fair use 1989 Survey by Congressional Office of Technology Assessment: most people think copying for friends is OK (63%), but copying for money is wrong (76%) –(see, e.g., Metallica)

9  The War Begins...

10  The Napster Offensive P2P with centralized database and search index: efficient and scalable In less than 2 years (summer 1999 to Feb 2001), Napster claimed 60 million registered users and 26 million+ active users. By 2001, analysts estimated users “sharing” nearly 3 billion songs (about 200 million CDs) per month.

11  The Napster Offensive Effective because it exploited Weakness #2 of Copyright Law: Home copying and sharing copies with friends perceived by many to be socially acceptable 2000 Pew Internet Project Study: 78% of users do not consider downloading to be stealing 61% of users do not care if music they download is copyrighted Effective because it exploited Weakness #2 of Copyright Law: Home copying and sharing copies with friends perceived by many to be socially acceptable 2000 Pew Internet Project Study: 78% of users do not consider downloading to be stealing 61% of users do not care if music they download is copyrighted

12  The Napster Offensive Napster failed because its design, which scaled impeccably, failed to attack Weakness #1 of Copyright Law: Napster was a “gatekeeper” that could be sued, enabling the RIAA to shut down the network A&M Records v. Napster (9th Cir. 2001): control over the database and search index renders Napster liable Napster failed because its design, which scaled impeccably, failed to attack Weakness #1 of Copyright Law: Napster was a “gatekeeper” that could be sued, enabling the RIAA to shut down the network A&M Records v. Napster (9th Cir. 2001): control over the database and search index renders Napster liable

13  In re Aimster Copyright Litigation (7th Cir. June 2003) Essentially the same design as Napster, but encrypted Judge Posner rejects Aimster’s claims of ignorance and inability to monitor Essentially the same design as Napster, but encrypted Judge Posner rejects Aimster’s claims of ignorance and inability to monitor

14  Contributory infringement: “[O]ne who, with knowledge of the infringing activity, induces, causes or materially contributes to the infringing conduct of another, may be held liable as a ‘contributory infringer’.”

15  Let’s Go to the Videotape “ [T]he sale of copying equipment, like the sale of other articles of commerce, does not constitute contributory infringement if the product is widely used for legitimate, unobjectionable purposes. Indeed, it need merely be capable of substantial noninfringing uses. ” – Sony Corp. v. Universal City Studios (U.S. 1984) “ [T]he sale of copying equipment, like the sale of other articles of commerce, does not constitute contributory infringement if the product is widely used for legitimate, unobjectionable purposes. Indeed, it need merely be capable of substantial noninfringing uses. ” – Sony Corp. v. Universal City Studios (U.S. 1984)

16  A Question of Degree? “[W]hen a supplier is offering a product or service that has noninfringing as well as infringing uses, some estimate of the respective magnitudes of these uses is necessary for a finding of contributory infringement.” – Judge Posner in Aimster “[W]hen a supplier is offering a product or service that has noninfringing as well as infringing uses, some estimate of the respective magnitudes of these uses is necessary for a finding of contributory infringement.” – Judge Posner in Aimster

17 ... A Question of Degree? “A retailer of slinky dresses is not guilty of aiding and abetting prostitution even if he knows that some of his customers are prostitutes – he may even know which ones are. The extent to which his activities and those of similar sellers actually promote prostitution is likely to be slight relative to the social costs of imposing a risk of prosecution on him. But the owner of a massage parlor who employs women who are capable of giving massages, but in fact as he knows sell only sex and never massages to their customers, is an aider and abettor of prostitution....” –Judge Posner in Aimster “A retailer of slinky dresses is not guilty of aiding and abetting prostitution even if he knows that some of his customers are prostitutes – he may even know which ones are. The extent to which his activities and those of similar sellers actually promote prostitution is likely to be slight relative to the social costs of imposing a risk of prosecution on him. But the owner of a massage parlor who employs women who are capable of giving massages, but in fact as he knows sell only sex and never massages to their customers, is an aider and abettor of prostitution....” –Judge Posner in Aimster

18  So, Is File Sharing More Like a Slinky Dress or a “Massage”? “The slinky-dress case corresponds to Sony, and, like Sony, is not inconsistent with imposing liability on the seller of a product or service that, as in the massage-parlor case, is capable of noninfringing uses but in fact is used only to infringe.” “Aimster has failed to produce any evidence that its service has ever been used for a noninfringing use, let alone evidence concerning the frequency of such uses.” “The slinky-dress case corresponds to Sony, and, like Sony, is not inconsistent with imposing liability on the seller of a product or service that, as in the massage-parlor case, is capable of noninfringing uses but in fact is used only to infringe.” “Aimster has failed to produce any evidence that its service has ever been used for a noninfringing use, let alone evidence concerning the frequency of such uses.”

19  MGM v. Grokster, et al. (U.S. Supreme Ct. June 27, 2005) FastTrack protocol and network created in 2000 by Dutch programmers Created KazaA client application to access FastTrack network, Grokster and Streamcast paid KazaA to access the network FastTrack avoids scaling problems via superpeering tiering system, which results in finite number of superpeers doing bulk of work FastTrack protocol and network created in 2000 by Dutch programmers Created KazaA client application to access FastTrack network, Grokster and Streamcast paid KazaA to access the network FastTrack avoids scaling problems via superpeering tiering system, which results in finite number of superpeers doing bulk of work

20  MGM v. Grokster, et al. By May 2003, KazaA had become the world’s most downloaded software program of any kind, with more than 230 million downloads –Sept 2003 Cong. Testimony by RIAA’s Cary Sherman Supreme Court: “…the vast majority of users’ downloads are acts of infringement, and because well over 100 million copies of the software in question are known to have been downloaded, and billions of files are shared across the FastTrack and Gnutella networks each month, the probable scope of copyright infringement is staggering.” By May 2003, KazaA had become the world’s most downloaded software program of any kind, with more than 230 million downloads –Sept 2003 Cong. Testimony by RIAA’s Cary Sherman Supreme Court: “…the vast majority of users’ downloads are acts of infringement, and because well over 100 million copies of the software in question are known to have been downloaded, and billions of files are shared across the FastTrack and Gnutella networks each month, the probable scope of copyright infringement is staggering.”

21  MGM v. Grokster, et al. Supreme Court: “The question is under what circumstances the distributor of a product capable of both lawful and unlawful use is liable for acts of copyright infringement by third using the product.”

22  MGM v. Grokster, et al. District Judge Wilson granted summary judgment in favor of Grokster and Streamcast –(KazaA did not appear in court to defend itself) Judge Wilson rejected MGM’s claims that Grokster and Streamcast, like Napster, “are capable of controlling the activities of their users.” District Judge Wilson granted summary judgment in favor of Grokster and Streamcast –(KazaA did not appear in court to defend itself) Judge Wilson rejected MGM’s claims that Grokster and Streamcast, like Napster, “are capable of controlling the activities of their users.”

23  MGM v. Grokster, et al. Judge Wilson took the issue of control as the sine qua non of contributory liability under Sony: “The critical question is whether [defendants] do anything, aside from distributing software, to actively facilitate--or whether they could do anything to stop--their users’ infringing activity.” Judge Wilson took the issue of control as the sine qua non of contributory liability under Sony: “The critical question is whether [defendants] do anything, aside from distributing software, to actively facilitate--or whether they could do anything to stop--their users’ infringing activity.”

24  MGM v. Grokster, et al. Judge Wilson’s answer: Grokster was like the dress shop selling slinky dresses to known prostitutes “Neither Streamcast nor Grokster facilitates the exchange of files between users the way Napster did. Users connect to their respective networks, select which files to share, send and receive searches, download files, all with no material involvement of Defendants. If either Defendant closed their doors and deactivated all computers within their control, users of their products could continue sharing files with little or no interruption.” Judge Wilson’s answer: Grokster was like the dress shop selling slinky dresses to known prostitutes “Neither Streamcast nor Grokster facilitates the exchange of files between users the way Napster did. Users connect to their respective networks, select which files to share, send and receive searches, download files, all with no material involvement of Defendants. If either Defendant closed their doors and deactivated all computers within their control, users of their products could continue sharing files with little or no interruption.”

25  MGM v. Grokster, et al. Judge Wilson: “Grokster and StreamCast are not significantly different from companies that sell home video recorders or copy machines, both of which can be and are used to infringe copyrights. While defendants, like Sony or Xerox, may know that their products will be used illegally by some (or even many) users, and may provide support services and refinements that indirectly support such use, liability for contributory infringement does not lie ‘merely because peer-to-peer file sharing technology may be used to infringe plaintiffs' copyrights.’” Hence, “absent some evidence of active and substantial contribution to the infringement itself, Defendants cannot be liable.” Summary Judgment granted. Judge Wilson: “Grokster and StreamCast are not significantly different from companies that sell home video recorders or copy machines, both of which can be and are used to infringe copyrights. While defendants, like Sony or Xerox, may know that their products will be used illegally by some (or even many) users, and may provide support services and refinements that indirectly support such use, liability for contributory infringement does not lie ‘merely because peer-to-peer file sharing technology may be used to infringe plaintiffs' copyrights.’” Hence, “absent some evidence of active and substantial contribution to the infringement itself, Defendants cannot be liable.” Summary Judgment granted.

26  MGM v. Grokster: 9th Circuit Affirms Judge Wilson Defendants did not have requisite knowledge: Distribution of product capable of substantial noninfringing uses could not give rise to contributory liability unless distributors had “specific knowledge of infringement at a time at which they contributed to the infringement, and failed to act upon that information” Also: Defendants did not “materially contribute” to users’ infringement because it was users themselves who searched for and retrieved infringing files, with no involvement by Defendants beyond providing the software in first place Defendants did not have requisite knowledge: Distribution of product capable of substantial noninfringing uses could not give rise to contributory liability unless distributors had “specific knowledge of infringement at a time at which they contributed to the infringement, and failed to act upon that information” Also: Defendants did not “materially contribute” to users’ infringement because it was users themselves who searched for and retrieved infringing files, with no involvement by Defendants beyond providing the software in first place

27  The Empire Strikes Back: Copyright Owners launch 2-front counteroffensive 1) The Legal Front: Pursue all the Gatekeepers they can find –Appeal Grokster ruling to U.S. Supreme Court –the INDUCE Act –Sue the users who offer “substantial amount” of copyrighted music –Threaten colleges and universities with liability if they don’t clamp down on file sharing by their students Copyright Owners launch 2-front counteroffensive 1) The Legal Front: Pursue all the Gatekeepers they can find –Appeal Grokster ruling to U.S. Supreme Court –the INDUCE Act –Sue the users who offer “substantial amount” of copyrighted music –Threaten colleges and universities with liability if they don’t clamp down on file sharing by their students

28  The Empire Strikes Back: 2) The Cultural Front: Change social norms regarding non-commercial copying and sharing by consumers –Publicize lawsuits against “substantial” users –“Educational” media campaign –Obtain the “help” of colleges and universities in changing the cultural norms that currently pervade their student communities 2) The Cultural Front: Change social norms regarding non-commercial copying and sharing by consumers –Publicize lawsuits against “substantial” users –“Educational” media campaign –Obtain the “help” of colleges and universities in changing the cultural norms that currently pervade their student communities

29  MGM v. Grokster: Plaintiffs appeal to Supreme Court MGM: Sony rule for products “capable of substantial noninfringing use” should not apply where the “primary” use of the product is infringing Defendants: Sony rule should apply, even where principal use of product today is infringing, where noninfringing uses are “significant” and likely to grow in future MGM: Sony rule for products “capable of substantial noninfringing use” should not apply where the “primary” use of the product is infringing Defendants: Sony rule should apply, even where principal use of product today is infringing, where noninfringing uses are “significant” and likely to grow in future

30  MGM v. Grokster: Supreme Court Reverses “Sony’s rule limits imputing culpable intent as a matter of law from the characteristics or uses of a distributed product. But nothing in Sony requires courts to ignore evidence of [actual culpable] intent if there is such evidence” “We hold that one who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties.” “Sony’s rule limits imputing culpable intent as a matter of law from the characteristics or uses of a distributed product. But nothing in Sony requires courts to ignore evidence of [actual culpable] intent if there is such evidence” “We hold that one who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties.”

31  Supreme Court Lists 3 Sources of Evidence of Culpable Intent 1) “each company showed itself to be aiming to satisfy a known source of demand for copyright infringement, the market comprising former Napster users” 2) “neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software” (but see footnote 12) 3) “the commercial sense of their enterprise [revenue from sending ads to users] turns on high-volume use, which the record shows is infringing” (but see waffle in next sentence) 1) “each company showed itself to be aiming to satisfy a known source of demand for copyright infringement, the market comprising former Napster users” 2) “neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software” (but see footnote 12) 3) “the commercial sense of their enterprise [revenue from sending ads to users] turns on high-volume use, which the record shows is infringing” (but see waffle in next sentence)

32  What About Clarifying the Sony Standard? Opinion of the Court (3 Justices): actual evidence of inducement eliminates need to “revisit” the Sony ruling “to add a more quantified description” of what constitutes “capable of substantial noninfringing use” Ginsberg Concurrence (3 Justices): Defendants failed to show “that substantial or commercially significant noninfringing uses were likely to develop over time” Breyer Concurrence (3 Justices): Defendants did demonstrate that “the foreseeable development” of noninfringing uses, “when taken together with an estimated 10% noninfringing material, is sufficient to meet Sony’s standard” Opinion of the Court (3 Justices): actual evidence of inducement eliminates need to “revisit” the Sony ruling “to add a more quantified description” of what constitutes “capable of substantial noninfringing use” Ginsberg Concurrence (3 Justices): Defendants failed to show “that substantial or commercially significant noninfringing uses were likely to develop over time” Breyer Concurrence (3 Justices): Defendants did demonstrate that “the foreseeable development” of noninfringing uses, “when taken together with an estimated 10% noninfringing material, is sufficient to meet Sony’s standard”

33  MGM v. Grokster: A few quibbles Precedential value may be limited because there may be few obstacles for others to distribute similar software without “clear expression or other affirmative steps to foster infringements” Characterization of Sony case by Souter may be inaccurate, and application of “inducement” theory in Sony case may have changed outcome –Is “library building” fair use or infringement? Precedential value may be limited because there may be few obstacles for others to distribute similar software without “clear expression or other affirmative steps to foster infringements” Characterization of Sony case by Souter may be inaccurate, and application of “inducement” theory in Sony case may have changed outcome –Is “library building” fair use or infringement?

34  Gone in 60 Seconds The Matrix, Downloaded: 56K Dialup:168 hours ISDN:74 hours Cable Modem:25 hours T1 Line:6.4 hours Internet2:6 seconds The Matrix, Downloaded: 56K Dialup:168 hours ISDN:74 hours Cable Modem:25 hours T1 Line:6.4 hours Internet2:6 seconds

35  Copyright owners v. Colleges and Universities Oct. 3, 2002 letter to [University/College President] from “representatives of America’s creative community”: “We are concerned that an increasing and significant number of students are using university networks to engage in online piracy of copyrighted creative works.” “We believe there must be a substantial effort, both disciplined and continuous, to bring this piracy under control.” Oct. 3, 2002 letter to [University/College President] from “representatives of America’s creative community”: “We are concerned that an increasing and significant number of students are using university networks to engage in online piracy of copyrighted creative works.” “We believe there must be a substantial effort, both disciplined and continuous, to bring this piracy under control.”

36  “The students and other users of your school’s network who upload and download infringing copyrighted works without permission of the owners are violating Federal copyright law. “Theft” is a harsh word, but that it is, pure and simple.” “As Dep. Asst. Atty General John Malcolm recently stated, ‘Stealing is stealing, whether it’s done with sleight of hand by sticking something in a pocket or it’s done with the click of a mouse.’ It is no different from walking into the campus bookstore and in a clandestine manner walking out with a textbook without paying for it.”

37  “Sheldon Steinbach, General Counsel of the American Council on Education, said of such illegal file ‘sharing’ activities: ‘Why is this issue important to higher education institutions? First, educational institutions are in the business of forming students’ minds. A fundamental part of this formation is teaching about ethics, personal responsibility, and respect for the rule of law. Colleges and universities should not be in the business of condoning or promoting unlawful activities.’” “We ask that you forward copies of this letter to your General Counsel/Chief Legal Officer, as well as your Director of Information Technology/Information Systems, your Chief Financial Officer, and your Dean of Student Affairs.”

38  “We urge you to adopt and implement policies that –Inform students of their moral and legal responsibilities to respect [our] rights –Specifiy what practices are, and are not acceptable on your school’s network –Monitor compliance –Impose effective remedies against violators” “Students must know that if they pirate copyrighted works they are subject to legal liability.”

39  What Should the College or University Do? Implement Technical “Solutions” ? Minimize Legal Exposure ? Implement Economic “Solutions” ? “Educate” its Students ?

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42  University as Educator and Parent: Does the College or University have an obligation to protect its students? Can it change the norms of its students? Should it? Does the College or University have an obligation to protect its students? Can it change the norms of its students? Should it?

43  Is File Sharing “Immoral”? “Theft, pure and simple”? What does history teach us? –Cable TV –The VCR What does history teach us? –Cable TV –The VCR

44  Coming Soon to a Computer Near You “It's getting clear – alarmingly clear, I might add – that we are in the midst of the possibility of Armageddon.” – Jack Valenti on file sharing “We are going to bleed and bleed and hemorrhage, unless this Congress at least protects one industry that is able to retrieve a surplus balance of trade and whose total future depends on its protection from the savagery and the ravages of this machine.... [T]he VCR is to the American film producer and the American public as the Boston strangler is to the woman home alone.” – Jack Valenti on the VCR “It's getting clear – alarmingly clear, I might add – that we are in the midst of the possibility of Armageddon.” – Jack Valenti on file sharing “We are going to bleed and bleed and hemorrhage, unless this Congress at least protects one industry that is able to retrieve a surplus balance of trade and whose total future depends on its protection from the savagery and the ravages of this machine.... [T]he VCR is to the American film producer and the American public as the Boston strangler is to the woman home alone.” – Jack Valenti on the VCR

45  Funny You Should Bring that up, Jack... Universal City Studios v. Sony (9th Cir. 1981) Sony v. Universal City Studios (U.S. 1984)

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