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Cleaning Up Counterfeits by Cutting The Cash Flow From Ads

It looks like IP rights holder’s may now have more recourse against the pirates and counterfeiters than a DMCA notice or the lengthy UDRP Complaint process.  This week, just a month after the White House released its 2013 Joint Strategic Plan on Intellectual Property Enforcement, and with the support of the U.S. Interactive Advertising Bureau, eight U.S. companies that operate Internet advertising networks (Google, Microsoft, Yahoo!, Condé Nast, 24/7 Media, Adtegrity, and SpotXchange) announced committed to a set of “Best Practices Guidelines for Ad Networks to Address Piracy and Counterfeiting” which is intended to cut off the cash flow  from online ad sales to websites engaging in copyright and trademark infringement.

The general commitment made by the Ad Networks is to:

(a)  Maintain policies prohibiting websites that are principally dedicated to selling counterfeit goods or engaging in copyright piracy and have no substantial non-infringing uses from participating in the Ad Network’s advertising programs and post such policies on the Ad Network’s website;

(b)  Maintain and post these best practices guidelines on the Ad Network’s website;

(c)  Ad Network policies will include language indicating that websites should not engage in violations of law;

(d)  Participate in an ongoing dialogue with content creators, rights holders, consumer organizations, and free speech advocates.

The commitment includes the institution of a complaint process similar to the DMCA’s “notice-and-takedown” system, whereby Ad Networks will (among other things): “Accept and process valid, reasonable, and sufficiently detailed notices from rights holders or their designated agents regarding websites participating in the Ad Network alleged to be principally dedicated to selling counterfeit goods or engaging in copyright piracy and to have no substantial non-infringing uses.”  In response to such a complaint, “[a]n Ad Network may take steps including but not limited to requesting that the website no longer sell counterfeit goods or engage in copyright piracy, ceasing to place advertisements on that website (or pages within that website) until it is verified that the website (or pages within the website) is no longer selling counterfeit goods or engaging in copyright piracy, or removing the website from the Ad Network.”

Prior to this effort, while copyright owners could clean up infringing content on the Internet through the use of DMCA notices to online service providers (OSPs), and trademark owners could file UDRP complaints to have infringing domains (i.e. domain names that are the same or confusingly similar to its trademark(s)) transferred to the trademark owner, there was little recourse against websites selling counterfeit products.  It will be interesting to see if these Ad Network Best Practices have any influence on the practices of the OSPs.  Is there a Digital Trademark Act in our future?!

See Also: Google Public Policy Blog  Post

Operation in Our Sites

Anyone who visits a website seized by the government for counterfeiting violations will now be met with a public service announcement (PSA) that educates them about the impact that such crime has on global economics.  The PSA is the result of a new partnership announced last in May between the National Intellectual Property Rights Coordination Center (IPR Center) and the National Crime Prevention Council (NCPC).

The PSA will play on domain names seized under Operation In Our Sites, a sustained law enforcement initiative that began more than two years ago to protect consumers by targeting the sale of counterfeit merchandise on the Internet.  Since its inception in June 2010, the operation is responsible for the seizure of 2,065 domain names.  Once these domain names are seized, they are in the custody of the federal government.  Visitors to those sites find the banner below that notifies them of the seizure and educates them about the federal crime of willful copyright infringement. Continue reading

Jersey Boys’ Use of the Ed Sullivan Clip Qualifies as a Fair Use

Plaintiff SOFA Entertainment, owner of the licensing rights to the “Ed Sullivan Show”, was attending the Broadway show Jersey Boys when he noticed that a seven second clip from the “Ed Sullivan Show” appeared in the show.  The Jersey Boys show is loosely based on the Four Seasons band and the lives of its members.  The seven second clip featured the Four Seasons band getting ready for their “Ed Sullivan Show” performance.  After the show ended, plaintiff filed a copyright infringement suit against the Jersey Boys producers.

The Ninth Circuit disagreed with plaintiff and found that the clip in the Jersey Boys show constituted a fair use.  First, the purpose and character of the use was “transformative” because it added something new to the clip’s original meaning or message.  The clip was not shown for entertainment value.  Instead, it was shown to provide a reference point in rock and roll history. Continue reading

Veoh Wins Again…

Another battle in the war between file-sharing websites and the the music and film studios. Veoh Networks, owner and operator of the ‘Veoh’ media-hosting website, has won its latest battle against Universal Music Group.  Universal had filed suit for copyright infringement claiming that the Veoh website – on which users can post video and music clips – contained infringing material, and that Veoh had stored the infringing clips.  Veoh denied the claims arguing that it had complied with the requirements for ‘safe harbor’ protection given to internet providers and websites under the Digital Millennium Copyright Act (DMCA) because it acted quickly to remove material when an allegation of infringement was received, and that it did not have ‘actual knowledge’ that the materials in question were infringing.

Finding that Veoh Networks was entitled to the protection afforded by the ‘safe harbor’ provisions of the Digital Millennium Copyright Act (DMCA), the Ninth Circuit Court of Appeals sided with Veoh.  Judge Raymond C. Fisher for the Court stated that “merely hosting a category of copyrightable content, such as music videos, with the general knowledge that one’s services could be used to share infringing material, is insufficient” to establish liability for copyright infringement on the part of the website.  As such, Veoh did not have the “substantial influence on the activities of users” for a finding of liability.

The case is UMG Recordings Inc. v. Veoh Networks Inc., 10- 0955902, U.S. Court of Appeals for the Ninth Circuit, and can be viewed at: http://cdn.ca9.uscourts.gov/datastore/opinions/2013/03/14/09-55902.pdf

 

Anchors Away! No More Safe Harbors for Pre-1972 Sound Recordings!

Ahoy! Calling owners of copyrights in sound recordings fixed prior to February 15, 1972! According to the New York Supreme Court, Appellate Division in its April 23, 2013 decision (UMG Recordings, Inc. v. Escape Media Group, Inc.), it’s going to be hard for infringers of these works to stay Afloat using the DMCA Safe Harbor provisions.

Grooveshark to Apple and Google: We're legal, licensed, and ready to disrupt, a photo by joe.ross on Flickr,  used under a Creative Commons Attribution-ShareAlike license http://creativecommons.org/licenses/by-sa/2.0/In 2012, Universal Music Group (UMG) sued Escape Media Group, Inc. (parent company of Grooveshark, an Internet-based music streaming service), for the common law copyright infringement of UMG’s pre-1972 sound recordings which had been uploaded to Grooveshark. Escape’s defense was that as an ISP, it is shielded from liability for infringement by the section 512(c) of the DMCA (safe harbors). UMG’s primary argument was that the DMCA’s safe harbors didn’t apply to pre-1972 sound recordings, because those recordings are not covered by the Copyright Act (which was amended in 1971 to include sound recordings fixed before February 15, 1972).

On July 12, 2012, New York State Supreme Court Judge Barbara R. Kapnick took a bite out of UMG’s argument, relying on Capitol Records, Inc. v. MP3tunes, LLC, 821 F. Supp. 2d 627 (SDNY 2011), in which the Federal District Court found the DMCA did in fact embrace sound recordings fixed before February 15, 1972, stating that “there is no indication in the text of the DMCA that Congress intended to limit the reach of the safe harbors provided by the statute to just post–1972 recordings.”

Refusing to Walk the Plank, UMG appealed and, as of Tuesday, it appears that the Appellate Division has Jumped Ship, Capsizing the decision of the trial court. In its opinion, the court accepted UMG’s argument that if the DMCA were to apply as Escape argued, it would directly violate section 301 (C) of the Copyright Act, which expressly extended federal copyright protection only to recordings fixed AFTER February 15, 1972 – “[w]ith respect to sound recordings fixed before February 15, 1972, any rights or remedies under the common law or statutes of any State shall not be annulled or limited by this Title until 2067″. If the DMCA were to apply to a pre-1972 sound recording, the owner would no longer be able to sue under the common law or statutes of any State; the only remedy available would be service of a takedown notice on the infringer – i.e. a LIMITATION on the owner’s remedies.

For the court to find in favor of Escape, it would have to conclude that Congress intended to modify section 301(c) when it enacted the DMCA. However, as the court stated, statutes are not deemed to repeal earlier ones without express words of repeal, and the DMCA could not be held to repeal section 301(c) of the Copyright Act, especially in light of the fact that the statutes can reasonably co-exist. Congress explicitly separated the universe of sound recordings into two categories – one for works “fixed” after February 15, 1972, to which it granted federal copyright protection, and one for those fixed before that date, to which it did not. Accordingly, absent anything in the Copyright Act itself, or its legislative history, it was clear to the court that Congress meant to apply the DMCA to the former category, but not to the latter.

Reading the Copyright Act as a whole, as is required, the court interpreted the DMCA’s references to “copyright” and “copyright infringer” to specifically refer to those works that are covered by the DMCA – i.e. post-1972 works.

In rejecting Escape’s argument that the very purpose of the DMCA – to promote efficiency in Internet operations – will be thwarted if it is deemed not to apply to pre-1972 recordings because Grooveshark and similar ISPs would be forced to proactively research the history of every work before permitting it to be posted, the court pointed out that there are, in fact, two explicit Congressional priorities in the statutory language:

To promote the existence of Intellectual Property on the Internet; and
To insulate pre-1972 sounds recordings from federal regulation.
In the final line of the decision, the court Baited Congress to clarify its intent: “[u]nder such circumstances, it would be far more appropriate for Congress, if necessary, to amend the DMCA to clarify its intent, than for this Court to do so by fiat”.

Looks like it’s a Pirates’ Life for Escape… New York State has thrown a Line out to all pre-1972 copyright holders, and the implications may really keep common law copyright infringement claims Flooding in. But the real question is whether it will be All Hands on Deck in Congress to re-Navigate the murky wording of the DMCA.

In other “Maritime” news… Fleet week in New York has been cancelled this year. It appears that this concrete jungle is really Weighing Anchor and washing anything left in the Harbors out to Sea.

Think Twice Before Illegally Downloading the New Beyonce Song or X-Men Movie

Have you illegally downloaded music and movies in the privacy of your own home for years without any repercussions? That’s about to change.

The Copyright Alert System (“CAS”) was developed to educate internet users on copyright infringement. Now, when a user illegally downloads copyrighted content from a peer-to-peer network or file sharing site, if a copyright owner witnesses the infringement, a notification is sent from the copyright owner to the internet provider, who then sends an Alert to the user.

The goal of this new program is to educate internet users about the importance of respecting copyrights and to alert users of their infringing activity.

How it works:

Continue reading

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