The Internet is Not a VCR

That may seem obvious, but if you’re an internet service provider who fails to uphold your end of the DMCA bargain, you’d sure like the courts to think of your service as analogous to the VCR. Certainly, this is fundamental to the appeal filed in the case of BMG v. Cox Communications, for which oral arguments were heard at the 4th Circuit on October 25.

In December of 2015, a jury awarded BMG $25 million in damages after finding Cox guilty of contributory copyright infringement committed by its customers. As a result of evidence demonstrating that Cox had taken affirmative action to avoid implementing a repeat-infringer policy,* the ISP was deemed to have nullified its “safe harbor” under the DMCA, which broadly protects ISPs against liability for copyright infringements committed by their users. Counsel for Cox has argued on appeal that had the jury been instructed to apply what’s known as the Sony-Betamax standard, the outcome might have been different.

Cox asserts that it cannot be held liable for contributory infringement for the same reasons that Sony Corp could not be held liable in 1984 when it was sued by Universal Studios for the production and sale of the Betamax video tape recorder. Specifically, Cox relies on the Supreme Court holding that because the Betamax could be used for “substantial non-infringing purposes,” Sony could not be held liable for contributory infringement even though the company knew that some customers would inevitably use its product to infringe.

Needless to say, internet access is used substantially for non-infringing purposes by millions of consumers, but that’s more or less where the comparison between the Betamax and an ISP ends. Cox is not the first internet service to try to make the Sony argument, and for good reason: because if it worked, no online service provider could ever be held liable for contributory copyright infringement. What’s funny about this, however, is that it was the ISPs themselves (ATT, Verizon, et al) who in the 1990s fought for the liability shield provisions in the DMCA that are at issue in this case. In other words, by Cox’s logic, those ISPs negotiated a statutory “safe harbor” provision against a liability that allegedly did not exist based on a Supreme Court decision in 1984.

The Sony Standard Has Already Been Defined

Unfortunately for Cox, the Supreme Court has largely answered the interpretation of Sony that they hope to apply in their defense. In MGM Studios v. Grokster (2005), the Court, for instance, clarified that the Sony standard does not preclude consideration of any evidence that may indicate knowledge of, or intent to induce or facilitate, infringement—even if the defendant’s product or service may be used for substantially non-infringing purposes.

In other words, the whole “non-infringing use” thing is not a blanket defense. In Sony, the knowledge of infringement was generalized (i.e. somebody somewhere would use VTRs to infringe); whereas in Grokster and other internet-based circumstances, the knowledge can be both specific and actively ignored or facilitated by the service provider. Hence, an important distinction in the Betamax ruling, which does not apply to ISPs, was that Sony’s relationship with its users ended with the purchase of the video recorder. Sony had no way of knowing, controlling, or influencing the infringing or non-infringing uses made by those customers, and so could not reasonably be held liable for contributory infringement.

But an ISP is exactly the opposite. The relationship with customers is continuous and interactive such that the ISP can know precisely how its service is being used by each individual. Were this not the case, the compromise proposals in the DMCA, which include a provision that ISPs maintain a policy for addressing repeat infringers, would not exist. And I repeat, these provisions were largely proposed by the ISPs themselves.

During oral arguments at the 4th Circuit, Judges Wynn and Shedd did grill BMG counsel rather strenuously on the subject of what defines a “repeat infringer.” In truth, this is a flaw with the DMCA, which actually fails to define a number of its terms, and these ambiguities  have inadvertently resulted in both ISPs and edge providers straining the intent of the law. A major reason for the lack of clarity in the statutes is that, constituent to the passage of the DMCA, Congress ordered both the ISPs and the rights holders to collaborate in good faith to develop technical solutions to mass infringement. That was a year before Napster provided a road map for just how lucrative third-party infringement could be for a platform that learned to exploit the imperfections of the DMCA. Enter YouTube.

As a matter of plain common sense, it ought to be clear to anyone without the slightest knowledge of copyright law that the internet is not a VCR. The Betamax and its subsequent VHS followers were devices with very limited applications, whether infringing or not. By contrast, nearly everyone uses the internet all day long for everything from checking the weather, conducting business, grocery shopping, streaming the news, and talking with friends and family.

Some have argued that our universal dependence on the internet means that nobody should ever be denied service for any reason, including repeat copyright infiringement. This is technically a separate debate which has been attached to the Cox/BMG case and asserted in other contexts by the EFF and similar “digital rights” organizations. Personally, I would argue that, at least in terms of of the DMCA and BMG’s claim, that the omnipresence of the internet only serves to vitiate Cox’s appeal to the very narrow Sony-Betamax standard, which was predicated on the very narrow purpose of that particular technology.

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* §512(i) of the 1998 Digital Millennium Copyright Act (DMCA) requires that ISPs implement policies to address repeat infringement, including account termination in reasonable circumstances.

© 2017, David Newhoff. All rights reserved.

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