Fair and Square - DMCA Takedown Notification Senders Must Consider Fair Use

The DMCA takedown notice has become near universal on the Internet, allowing for those whose rights have been infringed online to have the service provider take down that material or face the music for their ignorance. What this has given rights holders is, arguably, a weapon, which allows them to take down material on a whim with very little or no regard to its actual use or purpose. Often one can accidentally include infringing material, or even use them for a legitimate purpose, yet rights holders have never had to consider these facts, but could assert their rights when ever they wanted to. This changed towards the end of 2015, when the US Court of Appeals addressed the question on what amounts to 'authorization under 17 USC § 512. This writer wanted to discuss this case sooner, and laments his lateness.

The case of Lenz v Universal Music Corporation dealt with Stephanie Lenz, who uploaded a video on YouTube of her young kids dancing to the song Let's Go Crazy by Prince, lasting a lengthy 29 seconds. The video comprises of her two kids, specifically her youngest, bopping to the song, which is audible in the background. Upon finding Ms. Lenz's video, Universal Music lodged a removal request with YouTube, who promptly removed the video. Ms. Lenz sent a counter-notification to YouTube, which was defended by Universal as a legitimate request (and in their correspondence, did not discuss or mention fair use, but asserted plain infringement). Ms. Lenz subsequently sought counsel, and the video was reinstated some time after a second counter-notification was sent, and she pursued further action in the matter, asserting a misrepresentation claim under section 512(f).

The heart of the case lies in section 512, and more specifically, the obligations in places on both the notified and the notified party. Under subsection c, the service provider has to 'expeditiously' remove any infringing material brought to its attention so as to benefit from the safe harbor provisions in the same section, and they have to notify the party who placed the infringing material on their service (the same affords them an appeal process to these notifications as well). Finally, should a rights holder abuse this process, subsection f provides that the person whose material has been removed due to this abuse can subsequently claim for damages due to the misrepresentation made by the notifying party.

A big point of contention in the case was whether a rights holder has to consider fair use under 17 USC § 107 before using the notification process. Although the section does not mandate this, it does, however, stipulate that "...the complaining party has a good faith belief that the use of the material in the manner complained of is not authorized by the copyright owner, its agent, or the law". This would potentially encompass fair use, as that would amount to an authorization for the work's use under law, even if the party who controls those rights objects to the use in some way.

Fair use, who would've thought!?

The Court discussed, although fairly briefly, whether fair use would be an affirmative defense that merely excuses infringement (i.e. does not authorize the use, but merely dismisses a later assertion of infringement should one be put forth), or whether it would be a true authorization and not an affirmative defense. The Court dismissed Universal's argument, and asserted that "...for the purposes of the DMCA — fair use is uniquely situated in copyright law so as to be treated differently than traditional affirmative defenses. We conclude that because 17 U.S.C. § 107 created a type of non-infringing use, fair use is "authorized by the law" and a copyright holder must consider the existence of fair use before sending a takedown notification under § 512(c)". This means that when a rights holder intends to send a notice under the section, they have to make a bona fide assessment on the legitimacy of the use of the work under fair use. Failure to do so would be a misrepresentation under section 512(f).

What followed was the Court's determination on whether Universal should have known that the video was fair use. This is an objective assessment, seeking actual knowledge of fair use on part of the notifier, rather than a simple mistake (using the notifier's subjective good faith knowledge at that time, rather than a standard of reasonable belief or knowledge, for example). The Court saw that Universal had not been 'willfully blind' to the existence of fair use or its application to Ms. Lenz's video. Ultimately, no misrepresentation was found, and Ms. Lenz could not recover damages. One has to still note the closing remarks by Judge Tallman, who handed down the majority's judgment: "Copyright holders cannot shirk their duty to consider — in good faith and prior to sending a takedown notification — whether allegedly infringing material constitutes fair use, a use which the DMCA plainly contemplates as authorized by the law".

This writer was truly surprised this point had never been argued at court, but found Judge Tallman's judgment to be correct. Arguably, fair use (and fair dealing here in the UK) is not merely an affirmative defense, but presents an authorization for the use of copyright protected works for those intended purposes, or within the remit of a given similar provision. Leaving it as merely a shield would encumber those using the works with a heavy responsibility for defending their use at court; one that most of them would not necessarily be able to afford. A stricter authorization allows for this use, and puts the burden on those who wish to assert their rights, and rightfully so, since they benefit the most from their works.

Source: JDSupra

Proposed Australian Copyright Law Changes - Copyright Infringement Challenged

Copyright seems to be going through some growing pains in the last few years, with extensive changes happening all over the world in the area. This has not been left out in the discussions of this blog, where copyright reform has been quite extensively covered in Ireland, Australia and the United Kingdom. As has been said by myself and others copyright needs this change, and updates have been warranted for some years. Arguably our neighbors in the Southern Hemisphere have been ahead of their UK counterparts for some time, at least in relation to copyright, with the introduction of the Copyright Amendment Act 2006, which amended the Australian Copyright Act 1968. Yet this didn't seem to be enough for the Aussies, and recently new changes to the 1968 Act have been brought up, flaring up opinions on both sides of the spectrum especially since the changes pertain largely to infringement. 

The proposed update to the current legislative scheme were introduced in a discussion paper titled "Online Copyright Infringement", commissioned by the Australian government, which was published last month. As presented by the paper itself: "[t]his paper outlines the Government’s proposed approach to amending the Copyright Act 1968 to provide a legal framework within which rights holders, ISPs and consumer representatives can develop flexible, fair and workable approaches to reducing online copyright infringement". Prima facie the paper does have a point, with millions of Australians accessing torrenting sites on an almost regular basis; however the issue isn't necessarily that one-sided and straightforward. This writer shall endeavor to discuss the proposed changes and whether the measures called for are appropriate for the current IP environment in Australia, which from just looking at things as a whole is quite complicated.

Extended Authorization Liability

The first proposed change is extended liability for the authorization of copyright infringement. What this is, in simple terms, is the allowance of copyright infringement through one's services more relevant to ISPs and websites. Authorization of infringement was the subject of a heated legal battle in the Roadshow Films Pty Ltd v iiNet Ltd case (discussed more extensively on this very blog over a year ago) - the very example discussed in the paper as well. Currently this is covered by section 36 of the Copyright Act 1968, which provides that certain factors have to be taken into account when assessing authorization under the Act: the party's power to prevent the infringement; the nature of the relationship between that party and the infringing party; and whether that party took any reasonable steps to prevent the infringement. Even though one can argue that the provisions is quite great in balancing blatant authorization vis-a-vis lesser forms of potential authorization such as the mere provision of services or the scope of measures which would have to be employed to fully prevent infringement, the provision can fall flat in the vastness of the Internet. The paper discusses this and states that "[e]xtending authorisation liability is essential to ensuring the existence of an effective legal framework that encourages industry cooperation and functions as originally intended, and is consistent with Australia’s international obligations". 

How this is proposed to be done is by having the courts assess authorization by looking at the relationship between the parties, and whether the potentially authorizing party took any reasonable steps to prevent the infringement. The reasonable steps the party took would be gauged through certain factors: "(a) the extent (if any) of the person’s power to prevent the doing of the act concerned; (b) whether the person or entity was complying with any relevant industry schemes or commercial arrangements entered into by relevant parties; (c) whether the person or entity complied with any prescribed measures in the Copyright Regulations 1969; and (d) any other relevant factors". This change puts the onus quite heavily on the 'authorizing' party, in other words, potentially places ISPs and others with an onus that is potentially very vague and strict. Increases in liability and a need for more enforcement and monitoring will undoubtedly create costs, and potentially cause disruptions and claims processes for users (both legitimately and illegitimately in some cases one can imagine), which would only have a negative impact on the average Australian consumer.

Extended Injunctive Relief to Block Infringing Overseas Sites

The second proposal put forth is the extension of rights holders' capabilities to block foreign websites which facilitate the infringement of copyright. As put forth by the paper: "[w]here online copyright infringement is occurring on a commercial scale, rights holders need an efficient mechanism to disrupt business models operated outside of Australia". The changes discussed take cues from the UK regime where under section 97A of the Copyright, Designs and Patents Act 1988 a court can block access to a service provider, i.e. a website, should an ISP have 'actual knowledge' of a person using the aforementioned service to infringe copyright. As explained by the paper "[a] similar provision in Australian law could enable rights holders to take action to block access to a website offering infringing material without the need to establish that a particular ISP has authorised an infringement".

Roo was worried over his habit of downloading the newest jams

The proposed change to the provision would impose a vague duty on ISPs for injunctive relief against websites given: "[t]he Copyright Act would be amended to enable rights holders to apply to a court for an order against ISPs to block access to an internet site operated outside Australia, the dominant purpose of which is to infringe copyright... Rights holders would be required to meet any reasonable costs associated with an ISP giving effect to an order and to indemnify the ISP against any damages claimed by a third party". On the face of it the proposed change would give third-parties more capabilities to block websites, however when compared to its UK cousin, leaves out the specification of 'actual knowledge' on the ISPs part, affording rights holders a carte blanche of injunction possibilities against potentially any website which serves the 'dominant purpose' of infringing copyright. 

Extended Safe Harbor Scheme

The final proposed change is one which provides protection for monetary damages for service providers, such as ISPs. Under section 116AA (and subsequent sections 116AC-116AF) of the Copyright Act 1968 a service provider is protected, if they fulfill the conditions set out in section 116AH, for acting as a conduit for Internet activity; for caching through an automatic process; for storing protected material in its systems or network; and for referring users to a location on the web. Even though the provision is akin to its American cousin in the Digital Millennium Copyright Act, it's still much stricter as it currently stands. 

The proposal merely wishes to extend the application of the safe harbor provision to others beyond 'carriage service providers', the wording currently used, to 'service providers', extending the scope of protection beyond just ISPs. As the paper states: "[t]he Copyright Act would be amended to extend the application of the safe harbour scheme to entities engaged in the activities set out in sections 116AC to 116AF. This would be achieved by removing the reference to carriage service provider and replacing it with a definition of ‘service provider’, being any person who engages in activities defined in sections 116AC to 116AF". This is the only change which will wholly, at least on the face of it, impact the current scheme positively rather than negatively. 

Thoughts on the Changes

The proposed alterations to the current scheme have drawn a heap of criticism from several parties. Nicolas Suzor and Alex Button-Sloan have argued that "[the changes] could include blocking peer-to-peer traffic, slowing down internet connections, passing on warnings from industry groups, and handing over subscriber details to copyright owners". In their mind the heart of the issue is not the lack of addressing copyright infringement, but "... that Australians are not being fairly treated by the copyright industries", which stems from the fact that "...Australians pay more for digital downloads, have less choice in how they can access film and television, face large delays before content is released, and much foreign content is still not available at all in Australia". This is arguably very true, and lies at the heart of the high infringement rates, as Australians are paying 50% or even more for software and other digital goods than other nations; an example which serves to illustrate what drives illegal copying. 

Mr. Suzor and Button-Sloan further state that "...the draft proposal is likely to have serious unintended consequences. It is likely to raise the price of internet access in Australia... [and] cause major uncertainty in copyright law". Arguably this is true, as was discussed above, the buck for extra enforcement and monitoring will be passed onto the consumer. One final thought the gentlemen provide is that consumers have been left out the debate; a debate which potentially impacts them in a drastic way. 

Overall the proposed changes are quite rights holder heavy, and showcase somewhat of a one-sided approach to the issue if infringement. What needs to be addressed is the pure and unadulterated heavy pricing of our Southern Hemisphere friends, especially in a time when the digital distribution of content is practically free for software companies. Physical media will incur more costs due to the distance it needs to be shipped, storage costs and so forth, but in a world where media is shifting to an intangible form, this pricing is nothing short of a money-grab. How the proposal is finally implemented, if at all, remains to be seen; however this writer for one hopes the Australian legislature will think long and hard about the implications to the average Australian it may cause.

Source: TechDirt

Retrospective - Linking to Trouble

In the days prior to BitTorrent technology, the primary source for any endeavoring online 'pirate' seeking to get their mitts on copyrighted content, was through direct links on websites leading to copies of any specific materials. Before the discussions over the possible liability of Internet Service Providers here in Australia, the issue of whether a website owner sharing links to infringing material (such as songs) would be authorizing the acts of copying that content by posting those links ended up in the Full Federal Court in late 2006.

An imagining of a potential MP3s4Free user

The case of Cooper v Universal Music Australia dealt with the website owned and operated by Mr. Cooper, aptly named "MP3s4Free.com". The site itself didn't host or contain any infringing materials, such as sound recordings, but did however have direct links (hyperlinks) to other sites providing those copies. The file was automatically downloaded to the user's computer once they had clicked the link on Mr. Cooper's site, transferring it from a different server. Although some of the content linked to on the site was legitimate, however overwhelmingly the content was illegal one way or another. Subsequently a number of record companies, including Universal Music, sued Mr. Cooper under the Copyright Act 1968 for the authorization of copyright infringement. 

The provision for the authorization of infringement hinges on whether the operator (Mr. Cooper in this case) has any power in preventing the infringement; the nature of the relationship between the two parties (Mr. Cooper and the user); and whether the operator (Mr. Cooper) took reasonable steps to prevent or avoid the infringement through his service. 

In deciding whether Mr. Cooper had the power to prevent any infringing acts through his website, the Court saw that he indeed did have the power to do so. The Court reached this conclusion in deciding that a person could be deemed to have had the power to prevent the act should they have had the ability to merely not do what was in their power or abilities to do (the posting or allowing the posting of links for example), yet instead did so through some calculated technical measures. What this means is that Mr. Cooper, in actively linking to infringing content, chose to do so and had the power to simply not to post those links on his site. The Court's reasoning is sound, even in its simplicity. If you have a choice between the knowing facilitation of potentially infringing acts, should you choose to do so, you clearly possess a power to prevent any acts occurring from your actions, yet ignore that ability. The intent and capabilities of the operator are imperative.

Should the relationship be one which does not seek to benefit the operator one way or another, it is more likely that there's no authorization on the face of things. The nature of the relationship between the operator and the users is one which is hard to specifically identify, however the Court did establish a relationship in its findings. At first instance (initial court proceedings in lower courts) the primary judge found that as Mr. Cooper's website was very "friendly" and allowed for easy access to the music files being downloaded, overall being very attractive to potential or current users. The more important aspect of this was the financial gain incurred by Mr. Cooper through advertisements on his website, giving the site a commercial aspect. The Court concluded that the nature was one where Mr. Cooper endeavored to benefit from the links to infringing material.

Don't click! 

Finally, did Mr. Cooper take any reasonable steps to prevent the infringing acts through his website? At the bottom of each page there was a link to a Disclaimer, stating that "when you download a song, you take full responsibility for doing so. None of the files on this site are stored on our servers. We are just providing links to remote files". Aside from the mentioned disclaimer, Mr. Cooper took no active part in preventing any acts; merely attempted to exonerate himself by passing the responsibility onto the users themselves. Rightfully so, the Court found that this was not adequate and the Disclaimer was merely a cosmetic touch and was not intended to have any real legal effect. Mr. Cooper was therefore held liable through the authorization of the copying of infringing material through his website.

Thinking ahead, how could one avoid liability through hyperlinks? Clearly it boils down to content filtration or other means of active or automatic prevention, and the reason for your linking. Should you not take active steps, such as through moderation, and complacently sit back and wait for your monthly AdSense check to fall through the letter box, you might be liable. Links in themselves are not bad and often websites welcome outside links to their content, but this can change according to the various Terms and Conditions set by each site. In the United States websites can potentially be protected under the Safe Harbor provisions (a nice example of which was discussed on this very blog), albeit for unknowing facilitation and potential activeness in the stopping of such acts when notified.