Comcast seeks to crush innovation, technology, customers, American Way

From the Maryland Daily Record comes word of an oppressive new lawsuit by cable giant Comcast against an innovative small businessman named Frank Clark, and his innovative firm, OceanNet. According to Comcast's complaint, Clark innovatively subscribed to Comcast's cable modem service at 35 condo complexes, and then innovatively re-sold the signal via WiFi to residential customers in those buildings. Innovation wins! Everybody wins!

So what does Comcast do to address Clark's disruptive new innovation, premised on nothing more than innovatively space-shifting legally-purchased service? They sue their customer, of course! Relying on industry-written statutes like the Cable Communications Act and even the federal criminal code, as well as antedeluvian, pre-Twitter doctrines like "breach of contract," "unjust enrichment," "constructive trust," and "negligence," Comcast -- backed by two law firms -- is seeking damages, an injunction, a declaration, and even attorneys' fees and "investigative expenses." Especially offensive is Comcast's breach of contract claim, which seems to be based on the noxious notion that a company can impose limits on their law-abiding customers' space-shifting rights. What's next, a different contract where customers pay even more for the ability to exercise their God-given right to space-shift their service? This "tak[ing] away your fair use rights and sell[ing] them back to you" cannot stand. That defenders of the technology status quo like Ira Rothken would take to the pages of the Maryland Daily Record to defend Comcast's suit only demonstrates the sorry state of the legal profession.

It's time Comcast celebrate innovation rather than mount a litigation crusade to crush every new piece of technology and business model that comes along. Suing customers like Mr. Clark will get them nowhere.
Comcast v. Clark and OceanNet complaint

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ISPs, RIAA, the DMCA, 'graduated response,' and 'three strikes': the real story

The worldwide conflagration over "graduated response" and "three strikes" copyright enforcement proposals -- on which fire was thrown last week by conflicting reports of US ISPs' cooperation with the RIAA -- has, unsurprisingly, been marked by confusion and incorrect statements of the law. Let's try to clear some of this up.

First, the terminology. "Graduated response" is a term generally used to describe a program implemented by an ISP to address claims by copyright owners of infringement by the ISP's subscribers. Under graduated response, the ISP "graduates" -- i.e., increases, or makes more severe -- its response to the infringing subscriber upon each successive notice of infringement. So, for example, the first claim may lead to a warning. The next claim may lead to a harsher warning. The next claim might lead to a suspension, a monetary penalty, a degradation of service, or worse. A "three strikes" program refers to a particular subset of graduated response programs where the penalty upon the third notice of infringement is termination of the subscriber's account.

So what is the state of US law regarding graduated response and three strikes? Are ISPs legally required to implement these programs? Almost certainly no, as to peer-to-peer users. I think the law is now fairly clear that ISPs may not be held financially responsible for infringement by their users via p2p networks -- and that ISPs are not obligated (absent specific court order) to take action against users who infringe by p2p, even repeatedly. The reason lies in 17 U.S.C. § 512(a) -- the ("clear (albeit complex)"!) DMCA safe harbor for "Transitory Digital Network Communications" systems like ISPs. Section 512(a) provides a safe harbor from infringement claims against operators of so-called "dumb pipes" where "the transmission, routing, provision of connections, or storage is carried out through an automatic technical process without selection of the material by the service provider." (More detail in RIAA v. Verizon and pages 50-51 of the House DMCA report.) Significantly, the 512(a) safe harbor does not have a "notice and takedown" or repeat infringer provision [see update below]. In sum, 512(a) says that if the pipe is truly dumb -- a mere conduit, with no selection of material, no modification of content, and no storage -- then it gets the safe harbor, no further action required. (I should add that 17 U.S.C. § 512(j)(1)(B)(i) does authorize a court to issue an injunction (not monetary damages) "restraining [an ISP] from providing access to a subscriber or account holder of the service provider’s system or network who is using the provider’s service to engage in infringing activity...by terminating the accounts of the subscriber....")

[UPDATE: It is true that Section 512(i) provides that, to benefit from any of the DMCA safe harbors, the ISP/host must have "adopted and reasonably implemented, and inform[ed] subscribers and account holders of the service provider’s system or network of, a policy that provides for the termination in appropriate circumstances of subscribers and account holders of the service provider’s system or network who are repeat infringers." However, I know of no court that has interpreted that provision as requiring the forwarding of notices by an ISP to accused p2p infringers.]

(It's crucial to keep in mind the distinction between the Section 512(a) safe harbor for ISPs and the Section 512(c) safe harbor that governs "Information Residing on Systems or Networks At Direction of Users." The 512(c) safe harbor arguably covers hosts of user-generated content like YouTube and MySpace (though my friends at Viacom and UMG and NBCU don't concede this point). Section 512(c) does have a notice-and-takedown provision, and, to maintain the safe harbor, hosts must "terminat[e] in appropriate circumstances...repeat infringers." "Three strikes" is not a concept completely alien to the DMCA. YouTube, for one, has stated that it terminates upon a third DMCA notice as part of its implementation of the "repeat infringer" provision. See pages 17-18 of this brief.)

But wait: isn't an ISP at least required to pass on infringement notices to its subscribers when it receives such notices from copyright owners? CNET says so:

The Digital Millennium Copyright Act of 1998 has mandated that ISPs forward those letters to people accused of violating copyright.

And so (though I hesitate to cite such an openly pro-infringement site) does TorrentFreak:

For years, content owners such as record labels or movie studios have been sending copyright infringement notices to ISPs, who are legally obliged to forward these to their customers.

(my emphasis). Here's the explanation: I think CNET and TorrentFreak are both just plain wrong. Neither cites any DMCA provision that would obligate an ISP to forward infringement notices premised on p2p infringement by an ISP customer, and I know of none (and believe me, I've looked).

So why, if not forced by the DMCA or other provisions of copyright law, would ISPs forward notices, implement graduated response programs, or even terminate repeat p2p infringers (as TorrentFreak accurately says has been going on for years)? At least three reasons:

1) Because ISPs want to keep Congress off their backs. While the copyleft generally doesn't think online copyright infringement is a serious problem, virtually the entire Congress does. (Remember, the PRO-IP Act passed the House last year 410-11, and by unanimous consent in the Senate.) Suppose ISPs tell copyright owners: "Stop sending us your silly notices, and go pound sand. Section 512(a) protects us, and if our subscribers use BitTorrent to download every movie, TV show, and song on earth, that's your problem, not ours." Legally, they may well be within theirs rights to do exactly that. But politically, they would be virtually begging Congress to amend the DMCA in such away that their safe harbor would become considerably more dangerous. Better to cooperate with copyright owners at least to some extent -- if not all the way up to three strikes -- than to risk a new legal regime in which they would face massive liability if they do not take much stronger action against their infringing subscribers.

2) Because of contractual obligations -- or hopes of getting them. Major copyright owners often have business relationships with ISPs/cable operators/telecoms. For example: a studio may license its movies to a cable provider as part of a VOD service. The studio may say to the MSO: "We'll license you our movies. But you also run an ISP that provides Internet service to millions of subscribers, and neither of us should want to undermine our VOD service (where we split revenue) by having people downloading these very titles for free on BitTorrent. So, as part of our agreement, we want you to pass along infringement notices, institute graduated response, etc." ISPs/MSOs may push back, citing cost, technical difficulties, concern over customer privacy, or Internet freedom, but if they want the content badly enough, they will agree to some cooperation in copyright enforcement above and beyond what the DMCA actually requires. (Of course, ISPs will resist three strikes with all their might. Who wants to terminate customers paying $50 or more every month?)

3) Because -- as the WSJ puts it -- "the increasing burden of large amounts of music and movies [are] clogging [ISPs'] pipes." If forwarding infringement notices and taking stronger action against the worst of the infringers can free up bandwidth and thus increase connection speeds for everyone, then it's perhaps in the ISPs' interest to do it. (This is probably the weakest of the three reasons I've listed. ISPs don't really seem to mind when their customers use p2p systems -- and in fact the ability to download music and movies for free surely attracts many customers -- as long as such uses don't significantly disrupt the operations of their networks.)

So the studios and the record labels will continue to negotiate with the ISPs, and will probably reach various agreements to implement graduated response -- though I have real doubts whether three strikes will be implemented on a large scale. But remember that these negotiations are taking place because of business, long-term political, and technical reasons -- and not because the DMCA actually requires it.

Studios allege RealNetworks execs and attorneys 'sanitized' evidence in DVD-ripper case; seek sanctions for spoliation

The fight between the major movie studios and RealNetworks over the RealDVD ripping software has not received much attention since last fall, when Real released the software, only to pull it from the market a few days later after an order from a federal court.

The studios have moved for a preliminary injunction, which is set for a hearing April 1 (no joke). In the meantime, the parties have been engaging in expedited discovery. And it's been ugly. Today, via Wired, we learned a bit -- but not nearly enough! (more on that later) -- about just how ugly.

On Feb. 25, the studios moved for sanctions, charging that Real executives and attorneys "took active steps to sanitize the discovery record" by actively and willfully destroying relevant documents that should have been turned over in discovery. The juciest allegations involve a former Real Senior Program Manager named Nicole Hamilton, who was working on a RealDVD-related project and who was apparently terminated a few days before Real initiated this litigation by seeking a declaration that RealDVD is legal. Hamilton says that, before leaving Real, she turned over 3 or 4 spiral notebooks to 2 execs there. (See page 20 of this document). But Real now says it doesn't have them. (See page 19). Where did the notebooks go? Inquiring bloggers want to know!

It's very hard to evaluate the merits of the studios' claims, because much of their motion is redacted. Thus we get to read tantalizing sentences like, "Even more alarming, [REDACTED]..." (page 1) and "To take another egregious example, [REDACTED]...." (page 2). Torture! The studios seek an order for Real to preserve evidence, and a variety of evidentiary sanctions. Though they claim that Real's alleged spoliation "irreparably impaired the integrity of the judicial process," they have not gone all the way and asked for the judicial death penalty (i.e., terminating sanctions).

Real has not yet filed a true opposition to the sanctions motion so we don't know exactly what its substantive  response will be; what it has filed so far is simply a brief opposing the studios efforts to have their sanctions motion heard on shortened time. What I found most striking about Real's brief is its oddly measured tone. Usually, a party accused of spoliation reacts with righteous indignation (feigned or...real), but this brief seems to lack a certain fire in the belly. Instead we get very carefully crafted sentences like "Real is currently maintaining all documents related to this case." "[C]urrently"? (my emphasis). What about prior to "currently"?

But my favorite part of Real's brief is the label its attorneys at Wilson Sonsini came up with to describe Hamilton: "vindictive former employee." I've heard about lots of "disgruntled former employees" ("DFE"s in the trade), but Hamilton must have some very interesting things to say to earn the "vindictive" award. (We are again tortured in footnote 3 of the studios' brief, which tells us, "It is now clear why Real wished to avoid Ms. Hamilton's deposition. She testified, inter alia, that [REDACTED]...." Footnote 1 of Real's brief does reveal that Hamilton testified that someone "directed the deletion of email," which Real disputes.)

The studios want a hearing date of March 16 on the sanctions motion, but it's unclear whether that will happen, given Real's opposition to the expedited schedule. Should be an interesting one.

To get a sense of what the underlying dispute is about, I suggest reading the studios' TRO motion and Real's opposition. Much more on the substance of this case later.

Labels ask that Feb. 24 Tenenbaum hearing proceed without webcast

The plaintiffs in the record labels' suit against accused peer-to-peer infringer Joel Tenenbaum have asked the District Court to proceed with a scheduled February 24 motion hearing, despite the fact that the First Circuit will not by then have ruled whether that hearing may be webcast. District Judge Nancy Gertner has permitted the webcast, but the plaintiffs have appealed, and earlier this week, the First Circuit stayed the webcast order and set a hearing date of April 7.

In their "Request for Hearing" filed today, the plaintiffs point out that there are a total of 6 pending motions in the case, and that there is no reason to delay a hearing on those motions solely because of the webcast issue, which they describe as "collateral." Plaintiffs also complain that Tenenbaum has not complied with numerous pending discovery requests over long periods of time.

UPDATE:  Tenenbaum has now asked the District Court to hear several of the pending motions on Feb. 24 (without the webcast), but to postpone the hearing on his Motion for Leave to File Amended Counterclaim until after the First Circuit has ruled on the webcast issue. 

I think the labels' request that the entire Feb. 24 hearing proceed as scheduled is well taken. I have made clear that I support the webcast. But I agree that the webcast issue is "collateral"; it's minor compared to the basic copyright disputes in the case. And let's remember what is actually at stake here:  if the hearing proceeds without the webcast, it will simply be like virtually all hearings in federal court: completely open to the press and public, only with no recording or broadcasting permitted. It has been reported that the webcast would be the first ever, and, while the webcast would be a helpful way for those of us not in Boston to get a better sense of the oral argument, reading a transcript afterwards would not be the end of the world.

(h/t Recording Industry vs. The People)

Pirate Bay trial starts Monday; press focuses on 'spectrial,' not law

The trial of four operators of The Pirate Bay, the notorious p2p service, starts Monday in Sweden. It's a huge copyright case about a hugely popular site; according to the AP, TPB has 22 million users. The four defendants -- Hans Fredrik Neij, Gottfrid Svartholm Warg, Peter Sunde and Carl Lundström -- each face 2 years in prison and fines of about $140,000. And that's just for the criminal portion of the case; this trial has a civil component as well, with plaintiffs that include major US movie studios and record labels seeking over $14 million in damages.

The tech press all have previews; here's Wired, Ars Technica, CNET, and NewTeeVee. Read their stories to learn all about the defendants' defiant attitude ("What are they going to do about it? They have already failed to take down the site once. Let them fail again," said Warg), their bus, their ban on unsympathetic reporters from their press conferences ("They...'do not speak with assholes,' and reserve the right to deny press conference access to anyone 'just having [a] bad attitude.,' reports CNET."), and all the plans for Twittering, webcasting, and commenting on the trial. The defendants say they want a "spectrial" -- that's a combination of "spectacle" and "trial" -- and they seem to be well on the way to succeeding.

What's missing from all the coverage? Practically everything I want to know! How about telling us what Swedish law actually says about secondary liability for copyright infringement? Would it be so hard to quote the statute? (Is there a statute?) How about any relevant case law? Is the standard any different in the criminal and civil cases? What's the evidence against the defendants? Will they testify? Can they be forced to? Who else will take the stand? What role will the civil plaintiffs play at the trial? The defendants say The Pirate Bay will continue to operate even if they lose the case. How? Doesn't the court have the power to shut it down? NewTeeVee refers to Lundström as a "right-wing exremist." That's pretty interesting. Is it true? What's the evidence? (What's a "right-wing extremist" in Sweden, anyway? Someone who believes the top tax rate should be only 50% ?) Couldn't any of the news organizations find a Swedish lawyer to weigh in on the strength of the prosecution's/plaintiffs' case? (Sorry, Wired, Ira Rothken (the California litigator last seen on the losing end of a $111 million judgment against the operators of TorrentSpy) doesn't count.)

Hopefully as the trial -- estimated to take 13 days -- unfolds, we'll learn more about the actual legal issues, without being distracted by the "spectrial." But I'm not optimistic.

Checking in on Joel Tenenbaum's 'wikibrief'

It's now been a whole week since Joel Tenenbaum's legal team launched its "collaborative lawyering" project: its attempt to enlist the public's help in drafting a brief regarding its efforts to depose music industry litigator Matt Oppenheim. So it's worth checking in to see how it's working out.

To recap: Tenenbaum attempted to notice Oppenheim's deposition for the Ames Courtroom at Harvard Law School. Plaintiffs resisted, and Tenenbaum moved to compel. Plaintiffs opposed, and requested sanctions against Tenenbaum's counsel, Harvard Professor Charles Nesson. On Feb. 8, Tenenbaum's team publicly posted a draft reply/opposition to sanctions and provided a comment form for anyone with an Internet connection to weigh in -- no law license required.

So what sort of assistance have they received (at least publicly)? One week in, a grand total of 5 comments. The first, from "Andy," contains some general thoughts about the litigation, but nothing about the draft brief itself:

it is about more than just music. and maybe thats the problem. maybe it should be about less. both sides are throwing stones, neither side presents an empathic argument. are the RIAA representing the interests of the clients they serve, and are the students representing Joel’s interests effectively? there are real interests on both sides. and i’m not sure their voice rises above the rhetoric. what is the role of the court of public opinion when there is a real case in the court of “public opinion is not a factor?” good luck, guys. keep tweeting.

Attorney Ray Beckerman then weighs by calling the plaintiffs "freaks," directing Tenenbaum's team to briefing on a sanctions motion against him in another of the labels' lawsuits, and referring to Rule 11 (though the plaintiffs' request for sanctions was under Rule 37). Finally, I made 2 posts: one linking to my less-than-rave review of the initial draft, and the other pointing to the discussion at Legal Ethics Forum about ethical issues raised by the public posting of a draft brief.

The issues raised by this motion to compel, opposition, and request for sanctions are not remotely novel or complex. On the contrary, they are basic, routine, and mundane, involving the procedures for noticing a deposition, filing a motion in the District of Massachusetts, and determining whether discovery sanctions are appropriate. A Harvard Law professor and his team of eager and intelligent students should not need outside assistance in drafting such a brief. Perhaps the dearth of public response to Tenenbaum's plea for help reflects that.

First Circuit refuses to consider news media amicus brief on on webcast issue; cites potential need for recusal

The First Circuit has refused to consider an amicus brief by submitted by the AP, New York Times, and other major news organizations in support of an order permitting a webcast of an upcoming motion hearing in the record labels' copyright suit against accused peer-to-peer infringer Joel Tenenbaum. The court rejected the brief on the grounds that "[a]cceptance of the brief might create a need that would not otherwise exist for judicial recusal." The First Circuit's order did not specify the reason for the possible recusal; a likely scenario would be that one or more of the judges owns stock in the companies at issue. Also today, the First Circuit said it would accept amicus briefs submitted by the EFF (which I joined) and Courtroom View Network (which would provide the webcast of the Feb. 24 hearing). The record labels, which oppose the webcast, did not oppose submission of any of the amicus briefs.

I think it's unlikely that the court's refusal to consider the AP brief will change the ultimate outcome of its decision on the webcast. But it highlights what a mistake it was for Tenenbaum's counsel to explicitly rely on amicus briefs rather than making its own arguments -- especially when there was no guarantee that the court would even agree to consider those briefs. Tenenbaum's team is very lucky that it still has 2 friends left standing.

(h/t Recording Industry vs. The People)

Authors Guild explains stance on new Kindle 2; muddies the waters

The Authors Guild has released a statement attempting to clarify an earlier quotation from its executive director, Paul Aiken, suggesting that the text-to-speech "read-to-me" feature of the new Kindle 2 violates authors' copyrights. The Guild's statement is rather vague and, most notably, does not explicitly accuse Kindle-distributor Amazon.com of infringing its members' copyrights. According to the Authors Guild, the Kindle 2:

presents a significant challenge to the publishing industry. Audiobooks surpassed $1 billion in sales in 2007; e-book sales are just a small fraction of that. While the audio quality of the Kindle 2, judging from Amazon's promotional materials, is best described as serviceable, it's far better than the text-to-speech audio of just a few years ago. We expect this software to improve rapidly. We're studying this matter closely and will report back to you.

"Presents a significant challenge" and "studying this matter closely" is a far cry from "must immediately cease and desist." I don't take from this statement that the Guild is running to court anytime soon, if ever.

The Guild does correctly recognize that any disagreement over the "read-to-me" feature could be resolved through contract; authors (or publishers) are perfectly free to tell Amazon (individually): we won't license our books to Amazon as long as the text-to-speech feature remains part of the device. Advises the Guild:

we recommend that if you haven't yet granted your e-book rights to backlist or other titles, this isn't the time to start. If you have a new book contract and are negotiating your e-book rights, make sure Amazon's use of those rights is part of the dialog. Publishers certainly could contractually prohibit Amazon from adding audio functionality to its e-books without authorization, and Amazon could comply by adding a software tag that would prohibit its machine from creating an audio version of a book unless Amazon has acquired the appropriate rights.

Lastly, the Guild attempts to knock down the ludicrous suggestion that Aiken said that it's a violation of copyright to read to one's kids in private:

It isn't, unless the reading is being done by a machine.

Well, I'm with them on the "it isn't" part; clearly reading to one's kids is a private performance (for which no license is required), not a public performance for which the Copyright Act requires the copyright owner's permission. But the Guild loses me if it means to say, as a blanket matter, that "private out-loud reading" (the words used in its statement) is copyright infringement if done by a machine. If it's truly a private performance, then it's simply not copyright infringement -- whether the reading is done by human or robot.

Now there may be circumstances where a machine that reads to people inside the home is part of a public performance. Say a company sets up a giant server with audiobooks stored on it; subscribers get a small device with a screen and a speaker; they choose a book, and then the server beams the audiobook to the device, which instantly "reads" it to the customer in his living room. I'm pretty confident that's a public performance under the second clause of the "publicly perform" definition in Section 101:

to transmit or otherwise communicate a performance or display of the work...by means of any device or process, whether the members of the public capable of receiving the performance or display receive it in the same place or in separate places and at the same time or at different times.

In other words, in my scenario, it's a "public performance" even though the "reading" itself takes place in the privacy of one's home (just like a TV broadcast into your home is a public performance). I don't know if this is the kind of thing the Guild had in mind when it said that a "private out-loud reading" is an infringement if "the reading is being done by a machine." But the overbroad wording in its statement is only going to confuse matters.

Viacom's Fricklas on web video and 'wide berths'

Ad Age has posted an interesting video excerpt of a talk by Viacom Executive Vice President and General Counsel Mike Fricklas on his company's policies and practices in policing web video sites for infringing material. Fricklas discusses the use of automated filters, and the human review necessary to determine whether certain uses are fair. He also makes clear that Viacom gives a "wide berth" to -- i.e., tolerates -- various forms of noncommercial mashups, remixes, etc., that incorporate Viacom's content. Fricklas doesn't concede that all such uses are fair, but is explicit that Viacom has no interest in removing such fan-posted videos. And his position should come as no surprise; Viacom expressed similar sentiments in an exchange of letters with EFF in April 2007.

Fricklas' comments in the Ad Age video provide another useful reminder that, although the occasional high-profile web video dust-ups get all the attention, the fact is that major copyright holders send takedown notices on vast numbers of clearly infringing videos-- with very little attention at all. And they have little interest in snuffing out the ability to make truly creative, noncommercial use of their works on web video sites.

New Kindle's 'Read-to-Me' feature: copyright problems ahead?

Amazon.com's release of the new Kindle 2 -- which includes a "read-to-me" feature whereby a computer-generated voice can read books aloud -- has sparked a bit of a copyright kerfuffle. Referring to "read-to-me," Paul Aiken, Executive Director of the Authors Guild, told the Wall Street Journal:

They [Amazon] don't have the right to read a book out loud.... That's an audio right, which is derivative under copyright law.

Is he right? Let's take a look. The Copyright Act grants authors several exclusive rights, among them the right to "prepare derivative works based upon the copyrighted work" and "to perform the copyrighted work publicly." 17 U.S.C. § 106(2),(4).

A pre-recorded "audiobook" is clearly a derivative work, and a company wanting to make and sell an audiobook must obtain a license from the copyright owner. But as I understand the Kindle 2, it does not include actual recorded audiobooks; rather, it simply includes technology that reads aloud the text (text which I assume it has licensed). And the electronic "reading" is never "fixed," so there is a good argument that a derivative work is never prepared (though there is controversy about this).

The more difficult question is whether the text-reading function of the new Kindle implicates the public performance right. Section 101 of the Copyright Act defines "publicly perform" as:

to transmit or otherwise communicate a performance or display of the work...to the public, by means of any device or process, whether the members of the public capable of receiving the performance or display receive it in the same place or in separate places and at the same time or at different times.

Authors might argue that Amazon has essentially set up a system that, through the Kindle, publicly performs the work each time the user engages the "read-to-me" function. Amazon would likely counter that: 1) at most, there are numerous private performances, which copyright law permits; and 2) the user -- not Amazon -- is the one doing the performing. Cf. Cablevision (cert. petition pending). I'd need to know a lot more about the way the new Kindle actually functions before offering an opinion as to whether Amazon's actions potentially violate anyone's public performance right.

The other thing to keep in mind is that we don't know the terms of authors' contracts with their publishers, or the publishers' contracts with Amazon. Depending on the scope of the grant of rights, Amazon may have an argument that it already does have a license that covers the "read-to-me" feature -- which would extinguish any possible copyright claim.

One last thing: Techdirt says of the quote from Mr. Aiken of the Authors Guild above:

And, actually, if you take that reasoning further, any reading outloud from a book that is not yours is also a violation of copyright law, according to Aitken. Read to your kids at night? Watch out for the Authors Guild police banging down your door.

Similarly, the headline of the Techdirt piece reads, "According To Author's Guild, You Cannot Read Books Out Loud." Absurd. Whether or not Aiken is right about the copyright implications of the new Kindle (and I am far from sure that he is), his statement says nothing about "any reading outloud from a book that is not yours" or "[reading] to your kids at night." Reading aloud to one's kids is a private performance, which the Copyright Act mercifully leaves unregulated. I strongly suspect Mr. Aiken knows that, and that he did not mean to suggest otherwise -- and he does not intend to bang down anyone's door.

Tenenbaum counsel asks for comment on draft brief on Oppenheim deposition; the first-ever wikibrief?

The Joel Tenenbaum copyright infringement case is setting all sorts of interesting legal precedent -- just not in the area of copyright law. First there was the order granting permission for a live public webcast of a motion hearing -- apparently the first such webcast ever in federal court. And now we're seeing some precedent set in the brief-drafting process. Harvard Law School Professor Charles Nesson, who, along with a group of students, serves as Tenenbaum's counsel, has posted for public view and comment a draft of a brief regarding Nesson's efforts to depose Matthew Oppenheim, a longtime recording industry litigator. I've never heard of any attorney publicly releasing a draft of a brief before filing it. Such a public editing process (a wikibrief? or "collaborative lawyering"?) raises all sorts of interesting legal ethics issues regarding, at least, confidentiality and potential obligations of (and even liability for) the editors. But I'll leave those fascinating questions to the legal ethics experts and will instead focus on the substance of the draft brief.

First, some background. On Jan. 20, Tenenbaum filed a "Conditional Motion to Compel Deposition of Matthew Oppenheim," seeking to force Oppenheim to sit for a deposition on Jan. 22 -- in the Ames Courtroom at Harvard. Plaintiffs (the major US record labels) filed an opposition to the motion to compel, which included a request for sanctions against "defendant's counsel" (unclear to me whether that includes just Nesson, or his team of law students as well) for what they termed Tenenbaum's "blatant disregard for fundamental court procedure."

Tenenbaum's draft brief is labeled "Reply to Plaintiffs' Motion for Sanctions"; it's more accurately a Reply in Support of Defendant's Conditional Motion to Compel Deposition of Matthew Oppenheim. Like Tenenbaum's appellate brief on the webcast issue, this draft brief is...extremely brief. Less than one page long, in fact. I'm all in favor of brevity, but this draft brief is wholly lacking in substance, in citation to legal authority, and in responses to the arguments made by the labels in their opposition brief. See for yourself:

Publish at Scribd or explore others:

Here is a list of arguments made by the labels in their opposition that Tenenbaum's draft brief completely ignores:

• Defendant failed to follow the Federal Rule of Civil Procedure and District of Massachusetts Local Rule mandating a conference between attorneys before filing a motion.
• There was no subpoena to Oppenheim for a Jan. 22 deposition.
• A subpoena to Oppenheim for a Jan. 20 deposition was invalid under FRCP 45 because: 1) it was not personally served; 2) it lacked witness and mileage fees; 3) the specified deposition location in Massachusetts was improper for a deposition of Oppenheim, a Maryland resident.
• Defendant is not entitled to take discovery because he has not yet filed his disclosures under FRCP 26.
• FRCP 37 requires an award of sanctions in discovery disputes unless the Court finds that Tenenbaum was “substantially justified” in bringing his initial motion.

Maybe Tenenbaum has good answers to these arguments (though I seriously doubt it). But if he does, he omits them from this draft. Instead, he spends 2 of his 4 paragraphs (yes, the entire draft consists of only 4 short paragraphs) responding to an argument that the labels' brief did not even make regarding the potentially privileged nature of Oppenheim's testimony. The labels did not argue that Oppenheim's deposition should not go forward because he has only privileged information to offer; rather, they said, "A conference among the parties is...required to determine whether there exist any non-privileged areas of testimony from Mr. Oppenheim that may be discoverable in this case."

One other thing: I have never litigated in the District of Massachusetts, and don't claim to be familiar with all its practices. That said, I'm not sure Tenenbaum's reply brief is even permitted by its Local Rules. Local Rule 37.1, which governs discovery disputes, speaks of a motion and an opposition -- but no reply. And the general rule on motions, Local Rule 7.1, provides that a reply brief "may be submitted only with leave of court" -- which Tenenbaum does not appear to have sought. (I think the court should permit a reply brief, at least to give Nesson a chance to respond to the request for sanctions.)

I really can't figure out what Nesson is up to here. He, and possibly his student helpers, are facing the very real possibility of being sanctioned for having filed what appears to be a baseless motion to compel Oppenheim's deposition. Yet their draft reply in support of their motion to compel (and opposition to the request for sanctions) makes no relevant legal arguments, cites no cases, and doesn't even begin to explain to the court its version of events. I've seen many pro se briefs that are much, much better than this. But Tenenbaum isn't pro se; he has a Harvard Law School professor representing him! Nesson and his student team are obviously passionate about copyright law and their defense of their client. But they still have to play by the same rules of civil litigation as everyone else. They're smart enough to learn the rules, and they have access to all the research materials they'll ever need. Time to set aside the wikibrief and get old-fashioned: crack open Moore's, log on to Westlaw, and get to drafting.

(Given that we're in uncharted -- and deeply strange -- waters here, I feel compelled to reiterate that I am commenting here simply as a blogger. I have no attorney-client relationship with Tenenbaum or his counsel, and I am not providing them with legal advice. Prof. Nesson acknowledges this here.)

Selectable Output Control: Yes, it's still good for consumers

Ars Technica reports that the motion picture industry continues to press its arguments to the FCC on the issue of "selectable output control," a form of technical protection for digital transmission of movies whereby content owners could selectively block use of unprotected analog outputs from home entertainment devices, such as cable boxes. The studios want SOC in place before they implement plans to introduce a new feature: HD movies piped into the home, before DVD release, and possibly even when films are still in the theater.

Last year the studios filed a petition with the FCC to lift its current ban on SOC, but, so far at least, the FCC has not yet granted it. Ars points to a letter confirming that execs and lobbyists from Sony Pictures earlier this week met with Acting FCC Chairman Michael Copps and his staff "to talk up (PDF) 'the advantages of expanded consumer choices in the marketplace' which would supposedly come with a waiver on the agency's ban on" SOC.

Techdirt is outraged by this, particularly by the studios' argument that SOC will result in more consumer choice. Let's examine Techdirt's argument (while doing our best to ignore its liberal use of tendentious language ("break your DVR," "totally ridiculous," "jedi mind trick," "politicians are a bit slow," " The MPAA is simply trying to confuse politicians," "yammering on and on").

Techdirt implies that the studios claim they can't (i.e., are physically unable to) implement the new early home HD window without SOC, because there's something "stopping" them from doing so. But that's not what the studios actually said; if you read their petition in context, you will see that they simply said that they won't implement the new services unless they have SOC in place to allay their piracy and business concerns. So when Techdirt says, "There's absolutely nothing stopping the MPAA from offering this "consumer choice" right now," it's correct -- but the studios never claimed anything different. The studios' position in a nutshell is: Sure, as a purely technical matter, we could give everyone early-window HD VOD now. But we think that would be a bad business decision, because of our piracy and other copying concerns. But rather than paraphrasing, let's look at what the MPAA actually said in its petition:

Specifically, the Petitioners are interested in exploring opportunities to provide consumers with the ability to order recently released theatrical, high definition movies directly through their MVPD [multi-channel video programming distributors] (the "Services"). These new Services are exactly the type of ''new business models" that the Commission contemplated when it adopted the encoding rules. While each studio would have its own independent business model developed through private negotiations with existing and potentially new partners, the purpose of this Petition is to remove a general regulatory impediment that prevents implementation of content protection required in the specific case of the Services.

In order to make this extremely high value content available for general in-home viewing at such an early release window, protections are necessary to ensure it is not exposed to unauthorized copying or redistribution. Enabling SOC in this instance will provide the Petitioners with vital protections by allowing their high value content to flow only over secure and protected digital outputs. Absent sufficient protections, the Petitioners' theatrical movies are simply too valuable in this early distribution window to expose them to uninhibited copying or redistribution. Expedited consideration of this waiver request is necessary in order for the Petitioners to move forward with their independent discussions with MVPDs regarding introduction ofthe Services.

When the petition uses language like "prevents" and "necessary," it is simply saying that, it the studios' judgment, their concerns about "unauthorized copying or redistribution" have led them to determine that they will not begin the new services without SOC -- not that anything actually physically prevents them from doing so. It's clear what the MPAA is saying: its members want to implement the new services, but, after evaluating the piracy and business issues involved, have decided that they aren't willing to do so unless they have SOC. No "jedi mind tricks" here.

Techdirt mocks the MPAA's argument that SOC would result in additional consumer choice. But the studios' argument is perfectly reasonable. As I previously explained:

Today the studios don't offer pre-DVD hi-def VOD. If SOC comes to be, they will, and consumers will have an additional choice in home-movie viewing. If the copyleft succeeds in continuing to block SOC, they won't. And how exactly are consumers better off when the government takes steps that result in the studios offering them fewer choices?

Whether SOC opponents like it or not, the studios have made clear that they won't implement the new services without SOC. Thus the way to bring more choice to consumers is to allow the studios to use SOC, and experiment with the new early-window HD VOD service. Maybe SOC and the proposed services will be a complete flop. But we'll never know unless the FCC allows the SOC experiment, which the studios say will give them the confidence to proceed.

One more thing: Techdirt writes:

[SOC is] about giving the MPAA another way to block legitimate watchers from doing perfectly legal time shifting of the content on their TV.

Techdirt cites no law for the proposition that it's "perfectly legal" to time-shift paid VOD content; that that's not surprising, for the simple reason that there are no cases so holding. The Supreme Court's Sony-Betamax decision is often mis-cited as an all-purpose free pass for time-shifting. But it isn't. In fact, the Court was explicit that it was not ruling on the ability to time-shift content that the user specifically pays for (which is what the VOD service at issue in the SOC proceedings would be):

This case involves only the home recording for home use of television programs broadcast free over the airwaves. No issue is raised concerning cable or pay television...

The Sony-Betamax Court also was careful to define "time-shifting" quite narrowly:

the practice of recording a program to view it once at a later time, and thereafter erasing it.

Thus the ability to record high-value paid content on a DVR, watch it multiple times, and retain it indefinitely, is well beyond the scope of existing law on time-shifting. I see no indications that courts today would expand Sony-Betamax to encompass such activities. And there is nothing wrong with copyright owners taking reasonable steps, such as pressing for permission to implement SOC, to inhibit unlicensed copying and further distribution of their most valuable products. Why should the FCC prevent them from even trying?

UPDATE: Paul Sweeting of Content Agenda has an interesting take on the issue, suggesting that falling DVD sales may prod the studios to put in place the early HD VOD service even without SOC:

Given than more than half of studios' profits from movies come from DVD, the rapid erosion of that revenue stream is potentially catastrophic. Disney and Fox-parent News Corp. this week each reported huge earnings hits in their filmed entertainment divisions due to plunging DVD sales. Time Warner saw an increase in film earnings but still experienced a decline in DVD revenue.

Would an early, premium priced, high-def VOD window get people watching movies at home again and replace some of those DVD losses? Hard to say. But it's also hard to point to any other existing or potential distribution channel where they're likely to replace those dollars in the near term.

The question for the studios is whether the need to create a new revenue stream will be keen enough to risk doing it without the protection of SOC.

NY Times: 'Digital Pirates Winning Battle With Studios'

The NY Times has a rather depressing report on film and TV piracy, focusing on the rise of rogue YouTube wannabes like SuperNova Tube ("We work WITH uploaders, not against them.") and the "link farms" (aka "leeching" or "linking" sites) that provide easy access to the content stored there. Nothing much new here for those who have toiled in the anti-piracy fields for the last few years, but the article is interesting and informative, and has some good color.

The article also provides some much-needed perspective to the web-video debate, where nearly all the attention (yes, including some from me) seems to be focused on the relatively small number of questionable or downright bogus DMCA notices that copyright owners issue from time to time. Don't get me wrong: the problem of bad takedowns is real (I've been on the receiving end myself), and I'm all in favor of exploring ways to avoid them. But I still believe that the problem of web video piracy dwarfs the problems related to overzealous efforts to fight web video piracy. Any "solution" to the bogus takedown problem must acknowledge the vast infringement problem, and not unduly interfere with copyright owners' efforts to combat it.

BREAKING: Plaintiffs didn't 'win' Grokster Supreme Court case

Reacting to the news of Jenner & Block partner Don Verrilli's move to DOJ, the Excess Copyright blog described the appellate specialist as follows:

Donald Verrilli, of Jenner and Block, who fought and won the Grokster case for the music industry in the US Supreme Court along with many other important caess, has been named as associate deputy attorney general.

Accurate and unobjectionable, no? Well, not to Ray Beckerman at Recording Industry vs. The People! Writes Beckerman, an attorney and vehement industry critic:

I take exception to the statement that Verrilli "won" the Supreme Court Grokster case; the Grokster decision (a) set the bar very high for secondary copyright infringement, and (b) merely denied summary judgment to the defendant, but did not award victory to the plaintiffs. Thereafter Grokster settled, and Streamcast lost in the lower court.

You read that correctly: Verrilli didn't actually "win" in the Supreme Court. Hmm. I remember things a bit differently. Let's go to the .pdfs:

A large group of copyright owners sued Grokster and a company called StreamCast Networks.

The District Court granted summary judgment to defendants.

The Ninth Circuit affirmed the grant of summary judgment to defendants.

Defendants hailed their "landmark win." Plaintiffs were sullen.

The Supreme Court took the case, reversed the grant of summary judgment 9-0, and articulated a new standard for secondary copyright liability based on inducement of infringement -- a standard very favorable to copyright owners.

Plaintiffs were over the moon. Defendants weren't.

Grokster settled with plaintiffs, reportedly agreeing to pay $50 million and shut down its service.

The District Court issued an injunction in favor of plaintiffs and against StreamCast.

So who "won" in the Supreme Court? Are we seriously even having this discussion?

(Disclosure: I represented several of the plaintiffs in the Grokster litigation while an associate at O'Melveny & Myers.)

Latest sign of the e-discovery apocalypse

We're all used to sports stars endorsing soft drinks, cars, or breakfast cereals. But I just saw what I suspect is a first: a sports star flacking for an e-discovery vendor. For the uninitiated, e-discovery is the process whereby parties retrieve and exchange electronically-stored information ("ESI" to pros) in litigation. Given the huge volume of email and other electronically stored documents that corporations generate today, e-discovery can be an enormously complex and expensive process. And a scary one, too: every attorney who defends big corporations lives in mortal fear that his or her case will be sunk by revelations that his client erased -- even unintentionally -- ESI that the law requires to be saved and produced to the other side. (Yes, the law has protections for those who make innocent mistakes, but the fear remains.)A huge industry of consultants and other vendors has arisen in recent years to handle massive e-discovery jobs, and I guess we shouldn't be too surprised that they are acting just like every other industry, seeking out popular sports figures to make their case. Thus I just saw an ad on CNBC for major e-discovery vendor FTI Consulting, Inc., featuring Irish golf champ Pádraig Harrington hawking e-discovery services, comparing his 2008 British Open win to...well, e-discovery, through some vague metaphor about "game-changing." (Sorry, I couldn't find the video online.) A banner at the bottom helpfully directs readers to BeReadyBeRight.com. I guess Michael Phelps must have been unavailable...

Captain of sinking ship offers boatbuilding advice

The Boston Globe has a thinly reasoned editorial attacking the recording industry's litigation strategy, and calling for "the industry to shut down its punitive campaign entirely." The digital music strategists on the Globe editorial board seem to think the industry's troubles would never have occurred if only they had bought -- rather than sued -- Napster:

The industry missed an opportunity to turn informal file-sharing into a profit center when it failed to buy Napster, the first of the popular downloading services, when it had a chance in 2000.

No word from the Globe how "the industry" would have been able to generate revenue from this purchase, or how they would have cleared all the rights to the millions of songs available through Napster -- many of which they didn't own or control. (Shawn Fanning never bothered with such trifles.) Nor does the Globe tell us how the labels and publishers were to have navigated the major antitrust obstacles to having "the industry" collectively buy what was then the dominant means of Internet distribution. And what was "the industry" supposed to do if Napster users migrated to some cool new p2p service that had no subscription fees or advertising, or faster transfers, or just featured really bitchin' graphics on its home page? Should "the industry" have bought them too, or would a lawsuit have been OK?

Before the Globe starts dispensing its wisdom on Internet business models to the music industry, I can think of some other problems that need solving, much closer to home.

Record labels file reply in support of anti-webcasting petition in First Circuit

The record label plaintiffs have filed their reply brief in support of their petition for writ of mandamus or prohibition seeking to block the webcast of an upcoming motion hearing in their copyright suit against accused peer-to-peer infringer Joel Tenenbaum. Much of the brief focuses on the District of Massachusetts Local Rule governing electronic media in courtrooms. And the labels seem to have backed off some of their more aggressive (and weakest) claims about the harm that would supposedly befall them if the Feb. 24 motion hearing is webcast; there's no mention of the widely-mocked fear that the "broadcast will be readily subject to editing and manipulation by any reasonably tech-savvy individual."

Publish at Scribd or explore others:

I should add that I am sympathetic with the labels' concern that Tenenbaum's counsel is trying to turn this case into a circus. I just think that the ringmaster's antics -- as well as the substantive copyright issues raised in the case -- should be widely available for public view and comment.

Courtroom View Network files amicus brief in support of Tenenbaum webcast

Courtroom View Network, which District Judge Nancy Gertner authorized to provide the webcast of the upcoming motion hearing in the Joel Tenenbaum case, has itself weighed in with an amicus brief to the First Circuit. The CVN amicus, drafted by Boies, Schiller & Flexner, LLP, focuses largely on the issue of interpretation of the District of Massachusetts local rule that covers cameras in the courtroom.

C&C editor Sheffner asks First Circuit to allow Tenenbaum webcast; joins with EFF to urge courtroom electronic media access; hell freezes over

C&C is pleased to announce that its editor has signed onto an amicus brief authored by the Electronic Frontier Foundation, urging the First Circuit to affirm an order by Judge Nancy Gertner permitting a live webcast of an important upcoming hearing in the record labels' copyright infringement against accused peer-to-peer infringer Joel Tenenbaum. The labels have sought a writ of mandamus or prohibition from the First Circuit, asking the Court of Appeals to block the webcast. The labels cite District of Massachusetts local rules they say disallow such a courtroom webcast, as well as their fear that if the webcast is allowed, "statements may be taken out of context, spliced together with other statements and []rebroadcast as if it were an accurate transcript."

The EFF brief that I joined points out that the record labels themselves have said that they launched their lawsuits against individual p2p infringers in part to generate awareness of the legal consequences of copyright infringement on the Internet, and RIAA President Cary Sherman has said he "welcome[s] [a] national conversation" on the issue. What better way to foster that conversation than to allow the public to listen to the legal arguments themselves, and let them draw their own conclusions as to who's right?

Just so there's no confusion: I support the labels' lawsuits, and think their legal arguments should, and will, prevail at the upcoming District Court hearing (now set for Feb. 24). I just think everyone who can't attend the Boston hearing in person (like me!) should have the opportunity to watch as well.

Thanks to the attorneys at EFF, including Kurt Opsahl, Cindy Cohn, and Fred von Lohmann, for their excellent work on the brief, which was also joined by Public.Resource.org, the Media Access Project, Internet Archive, Free Press, and the California First Amendment Coalition. I'm usually on the other side of EFF on copyright issues, but was very pleased to be able to cooperate with them here.

My additional Tenenbaum coverage is here.

And with this love-in out of the way, we can now return to our regularly scheduled disagreements over copyright law...

Graduated response: yes in Ireland, no in UK, maybe in the US

The record labels have settled their copyright suit against big Irish ISP Eircom, with the pipe purveyor agreeing to a "three strikes" regime that will result in the termination of users who continue to distribute songs after warnings to stop. The settlement came 8 days into a trial that had kicked off with the release of embarrassing emails in which an Eircom exec seemed to condone illegal downloading and wrote, "Think of it [piracy] as helping the health and good living of rich cocaine sniffing rock stars by leaving them with less free money to spend on sex and drugs." The usual suspects are not pleased, claiming that the agreement lacks "due process" for users. (I'm no expert on Irish law, but how does "due process" apply to a private contractual relationship?)

The Irish agreement comes on the heels of word that ISPs Comcast and AT&T may enter into similar "graduated response" programs with major labels in the US. And news that the UK will not mandate a similar program.

We're just at the beginning of implementation of graduated response programs on a large scale. Frankly, no one has any idea how this will play out in the real world. All eyes are on now on Eire.