Author: David Newhoff

David is an author, communications professional, and copyright advocate. After more than 20 years providing creative services and consulting in corporate communications, he shifted his attention to law and policy, beginning with advocacy of copyright and the value of creative professionals to America’s economy, core principles, and culture.

BMG Settles With Cox as Petitioner Asks Supreme Court to Interpret DMCA

On Saturday, Digital Music News reported that BMG Rights Management has reached a “substantial” settlement agreement with Cox Communications, thus ending a four-year legal battle that was teed up for a retrial in district court before the end of this month. In December of 2105, a jury awarded $25 million plus $8 million in fees to BMG, finding Cox guilty of contributory copyright infringement for the ISP’s role in the infringing activities of its customers.

For detailed discussion of this case, see posts here, here, and here.

Cox appealed to the 4th Circuit where most of its key defenses were rejected by the court with the exception of one procedural technicality—the instruction to the jury regarding the standard for contributory infringement. On that basis, the case was remanded for retrial, and in a new brief, Cox requested that copyright infringement not be referred to as “theft” or “stealing” during opening statements. Judge Liam O’Grady denied the request, writing, “Specifically, the Court does not find it appropriate to bar BMG from referring to copyright infringement as stealing, theft, or some other related term, as such language is not unduly prejudicial to Cox.” That news came on August 15th, nine days before the announced settlement agreement.

This case has been followed closely by both copyright advocates and digital rights groups as a potential landmark for online service providers with regard to their rights and responsibilities under the terms of the DMCA. Although Digital Music News is correct to report that a settlement does not render the force of legal precedent that a final decision in court would have, the fact-pattern and judicial opinions in BMG v. Cox will likely be instructive in future, similar litigation. Suffice to say, the general assumption that ISPs enjoy magical, blanket immunity vis-a-vis copyright infringement took a substantial beating at every phase of this case.

Evidence revealed that, by willfully avoiding any denial of service to repeat infringers, Cox vitiated its safe harbor under the DMCA. Its appeals to the “Sony standard” were rejected. Its attempts to redefine the term “repeat infringer” were rejected. Its claims to having no knowledge of infringing activity were rejected. And amici like EFF filing briefs in the case, asserting that denial of internet service for any reason was equivalent to cutting off someone’s access to water, were not persuasive due to the fact that account termination for repeat copyright infringement—if the ISP wants to be shielded from liability—is mandated by statute.

Most acutely, the facts, allegations, and defenses already presented and opined upon in this case do not bode well for Cox as it now faces a $1.5 billion lawsuit by several of the major record labels, including Sony, UMG, and Warner Music Group for “knowingly profiting from the infringing activity of its users.” It will be very interesting to see whether Cox even tries to fight this larger suit in court after the much smaller case has demonstrated how the narrative is likely to play out—and in the same circuit.

DMCA to SCOTUS?

In related DMCA news, pornographic producer Ventura Content has filed a petition for cert at the Supreme Court after the Ninth Circuit upheld a summary judgment in favor of the website Motherless, despite evidence that the site, like Cox, allegedly engaged in conduct that should have nullified the safe harbor shield. At the heart of the petition is Ventura’s assertion is that the Ninth Circuit in particular fosters “DMCA disarray” among various court interpretations of the statutes. “The result of the DMCA disarray is that abject bootlegging in the offline, brick-and-mortar world remains unlawful, but the same conduct online by and OSP-turned-publisher garners absolute summary judgment immunity,” the petition states.

Ventura alleges, for instance, that a split exists between the Ninth and other circuits with specific regard to the OSP’s requirement to maintain a repeat infringer policy, as was dispositive in Cox. The brief states …

“At root, the Second and Seventh Circuits have disallowed formulaic policies that allow OSPs to run brazen infringement machines and to purposefully engage in conduct to avoid knowledge—that is, behave like ostriches; in stark contrast, the Ninth Circuit in Ventura permitted a brazen infringement machine that is more actively involved in curating infringing content than even the business model this Court outright—and unanimously!—condemned in Grokster.”

Ventura argues that, after 20 years of “court gestation of online copyright standards,” it is time for the Supreme Court to provide guidance with a consistent reading of the statutes and to mitigate the unintended effect of the DMCA, which has too-often provided automatic immunity to online enterprises—an immunity that would never be afforded to organizations or individuals operating in the real world. While it is always a safe bet the Supreme Court will not grant cert, Ventura’s petition summarizes the frustration rightholders of every size have felt, watching some of the largest platforms in the world grow rich on the infringement of their works, all shielded by elastic interpretations of the DMCA.

Platform Responsibility? How about starting with legal content?

It may be hip these day to talk about platform responsibility, but just a couple years ago, there were no mainstream conversations about how the operations and policies of online service providers might be enabling misinformation, hate speech, propaganda, etc. And while mea culpas from Facebook’s Mark Zuckerberg and Twitter’s Jack Dorsey make headlines, and Google tries to pitch the general message that “we’re all in this together,” my more cynical self wonders whether these service providers are just waiting out the news cycle. Waiting until we grow weary of this new discussion, which just happens to be focused on some of the most difficult (if not intractable) questions, like where to draw lines on protected speech.

As alluded to in this post, it is my personal theory that if the major service providers do not change their policies, practices, and rhetoric with regard to illegal content—or support of illegal content—then all this chatter about finding balance in the realm of protected speech is just pandering noise that will soon die down. I do not doubt that Zuckerberg, Dorsey, et al feel personally conflicted about the role their platforms have played in elevating rank divisiveness into the mainstream of political discourse; but when these guys, and other representatives of OSPs say things like “We have to do better,” I can’t help but think of the litany of cases in which internet companies have fought against complying with established legal principles at every turn.

I think of Google fighting a Canadian Supreme Court order in Equustek v. Google to delist links to a counterfeit product supplier. Or Yelp in Hassell v. Bird refusing to remove a review that a court held to be libelous. Or the fact pattern in BMG v. Cox Communications which revealed a systemic policy whereby the OSP avoided compliance with the terms of the DMCA. Or even Viacom v. YouTube, which, though settled without trial, revealed a similar fact pattern of knowingly enabling users to infringe copyrights. Or one of my favorite moments in internet hubris: Reddit’s hand-wringing, apologetic rationale for removing a subreddit that was hosting stolen nude photos of celebrities, who happened to be victims of a hacker.

Not one of the cases alluded to above involves protected speech, yet the responses have all been variations on the same theme: that removing anything from the web can only be a slippery slope toward “censorship.” And despite the fact that these, and other examples, generally entail unprotected, illegal content, we are now suddenly expecting the OSPs to grapple with the more complicated matter of monitoring legal speech and to do…something…as a matter of principle. Don’t get me wrong. A change in attitude would be welcome in so many ways. But if the major platforms cannot first amend their practices with regard to illegal material, I am highly doubtful they will come anywhere near striking the balance that everyone who is now having the “responsibility” conversation says is so essential.

In a panel discussion about platform responsibility hosted yesterday by the Technology Policy Institute, Daphne Keller of the Center for Internet and Society said that she “did not want to return to the copyright wars” in context to the discussion now being had. That’s her prerogative, of course, but copyright infringement is probably the vanguard issue that is most instructive to this moment of internal and external consideration of what platform responsibility actually means. Two decades worth of policies adopted by the major OSPs to first profit from copyright infringement and then seek to reshape copyright law itself in the courts, in academia, and in the public sphere reveal the sense of “responsibility” these companies have felt toward the people they have been exploiting. And of course when the exploited complained they were told they were wrong—that they did not understand the future.

In fact, in yesterday’s panel, I believe it was Keller who alluded to the “false dichotomy” that pits technology against rightholders, but let us not forget the origin of that bullshit narrative. Because it didn’t come from the rightholders. Shall we do a search for all the editorials posted by Techdirt, by EFF, by Lessig and Lefsetz—by copyright critics large and small—who have labeled creative rightholders as technology Luddites “clinging to old models”? That’s not the copyright owner’s narrative, it’s Big Tech’s narrative. So, if there is a false dichotomy, which now demands clarification, it ought to be recanted by the liars who wrote it and are still repeating it. That would be taking responsibility.

Interestingly enough, as a former Associate General Counsel for Google, Keller worked on the aforementioned Equustek case, and in June of 2017, she wrote a blog post for CIS in which she labeled the Canadian Court order that Google remove search results globally as an “ominous” proposal. In simple terms, this was a case in which a counterfeit business infringed Equustek’s trade secrets and then sold knock-off products via multiple sites on the web. Equustek sought and won a court order to remove the counterfeiter’s sites globally from Goolge’s search results.

I cite this example because it is comparatively straightforward. The legit company deserves the business earned by its products; consumers deserve to know what they’re buying and from whom; and there is no speech protection for trade in counterfeit goods. Equustek is also instructive because there is a clear parallel between its prayer for injunctive relief and, say, the motion picture industry’s efforts to have Google delist or demote major pirate sites, which are also not protected speech. Yet, in her 2017 post, Keller sums up the “ominous” nature of the Canadian Court order thus:

“Canada’s endorsement of cross-border content removal orders is deeply troubling. It speeds the day when we will see the same kinds of orders from countries with problematic human rights records and oppressive speech laws. And it increases any individual speaker’s vulnerability to laws and state actors elsewhere in the world. Content hosting and distribution are increasingly centralized in the hands of a few multinational companies – Google, Facebook, Apple, Amazon and Microsoft with their web hosting services, etc. Those companies have local presence and vulnerability to formal jurisdiction and real world threats of arrest or asset seizure in scores of countries.”

Apropos that first sentence, Keller asks rhetorically in the same post, “Can Russia use its anti-gay laws to make search results unavailable to Canadians?” I have two responses to this: the first is No, because the hypothetical, Russian court order would violate both Canadian and American law, which is not the case in Canada’s order to Google in Equustek. Keller, who is really citing Canada’s Michael Geist, falsely alleges that the defendant in Equustek is disseminating protected “speech and information,” which is not the case because the content is infringing and misleading in a manner that could be construed as fraudulent.

My second response is to mention that the policy view Keller seems to advocate—that the rule of law just doesn’t work in cyberspace—is exactly how we arrived at the moment in history when the Russian government is in fact exporting its agenda to the U.S. by using our own speech rights against us on social media. The Geist/Keller example of the Russian court order is pure hypothetical hysteria, but the phenomenon in which paid Russian hackers are fomenting anti-gay, and other hateful sentiments, to ratchet up divisiveness in the U.S. is a verified reality. I happen to think this makes pretty compelling evidence that the rule of lawlessness in cyberspace hasn’t worked out so well, but perhaps that’s just my inner Luddite talking.

So, although the topic of platform responsibility may be trending right now, I maintain some doubt that the OSPs can, or even should, try to protect society against the social and political effects of problematic information. That topic may be what sparked the conversation, but the complexity of that challenge, as it is currently framed, may wind up allowing the service providers to revert to the status quo, in which they moderate almost nothing and monetize almost everything.

Instead, taking on the less-challenging task of actually mitigating illegal content—copyright infringement, harassment, counterfeiting, trafficking, libel, etc.—does not require platform administrators to wade into the murky complexities of moderating speech. So, if they really mean it when they say, “We have to do better,” they can certainly start by complying with reasonable court orders and working with—rather than against—key stakeholders seeking a more lawful internet ecosystem.

Photo by David Crockett

The CLASSICS Act is Not a Reversal of Copyright Doctrine

As the world mourns the passing of Aretha Franklin, we need no further discussion about the value of recording artists. The anthem of a generation, Franklin’s first hit, “Respect” was not written by her but by Otis Redding, who first recorded the song in 1965. But in 1967, Aretha made that song what it is—“owned it” as we say today—along with the work of producer Jerry Wexler, engineer Tom Dowd, and the studio musicians at Muscle Shoals Sound Studios, including King Curtis, who gave us that instantly-recognizable saxophone solo, and who was murdered in 1971.

We also need no further evidence that the somewhat arbitrary line in copyright law, which places pre-1972 sound recordings in a class separate from those made after February of that year, has little to do with the timelessness of many recorded songs. Who knows how many times Aretha’s records will be played over the coming decades via Sirius XM or Pandora or other non-interactive digital services, but is it truly unreasonable that these corporations should pay a license fee for that privilege? Is it wrong, for instance, that the heirs of engineer Tom Dowd, who passed away in 2002, receive some fraction of a royalty for his contributions to the sounds of Franklin, Coltrane, Mingus, Clapton, Charles, Rod Stewart, et al?

Some critics of the CLASSICS Act seem to think it is wrong on principle—that CLASSICS creates a royalty “windfall” that these authors never expected at the time in which they made these sound recordings. This is how copyright critic and scholar Annemarie Bridy described her antagonism toward CLASSICS via Twitter a couple weeks ago, and it is the reason she calls the bill a reversal of copyright doctrine. “My only dog in this fight is not wanting to see © created retroactively for existing works whose very existence is proof that their creators needed no copyright incentive for their creation. I see no doctrinal justification for it,” Bridy tweeted.

And I wouldn’t pick on one critic alone for her tweets except for the fact that I’m sure Bridy represents the views of many who feel likewise, despite the fact that her position—although posing as a statement of raw principle—is doctrinally unsound, historically inaccurate, just plain mean-spirited, and kinda dangerous as a rationale.

By dangerous, I mean to say that even if CLASSICS does represent a shift in legal doctrine (and I hold that it does not), why should this alone be an argument against its adoption? Doctrinal change is the reason Bridy has advanced degrees and a job at a university instead of being restricted to “women’s work.” Doctrinal change is the reason Aretha’s “Respect” became an anthem that added the essential ingredient of boogie to the civil rights movement. What exactly is wrong with doctrinal change? It’s the only way this country has ever managed to live up to the grand promises in its founding documents.

With regard to copyright law, Bridy’s premise is that because copyright’s purpose is incentive, it is therefore superfluous to establish a new copyright protection for works for which the incentive obviously existed at the time of their authorship. In my view, this is the mean-spirited part of her argument—and it is a view shared by others—which espouses a too-mercenary approach to copyright’s purpose. It is an extension of the sentiment that copyright is a “devil’s bargain” which society makes with artists in order to get them to produce what we want out of them. (And it is a sentiment I find especially unpalatable in context to artists of color.)

But in addition to this being a rather craven way to relate to any artist, it is also historically oversimple—particularly with regard to the public performance right and pre-72 sound recordings, which are technically protected by common-law copyright due to a rather muddled definition of the word “published” in the evolution of statutory copyright. (See new post by copyright historian Zvi Rosen for more details).

Suffice to say that Bridy poses an argument which, to the casual observer looks reasonable, but which the copyright expert recognizes as glossing over the complicated legal status of pre-72 sound recordings. Nobody I know disagrees that the 1972 threshold created a copyright mess, but Bridy’s opinion does little to untie that know when she conflates constitutional copyright (i.e. its foundational purpose) with statutory and common-law copyright in the service of blasting a very narrow, and very simple, amendment to the law.

A Doctrinal Shift?

As a broad rebuttal to Bridy’s premise that CLASSICS represents a dramatic shift in principles, it is neither settled legal doctrine, nor settled history, that copyright’s sole purpose is incentive. While the debate continues as to whether intellectual property rights are indeed grounded in natural rights, there is at least enough scholarship on this subject to reject Bridy’s over-reliance on the assumption that once incentive has been achieved, copyright has fulfilled its only value. (Moreover, even the incentive calculus entails a bundle of rights, enforceable over many years, and includes more than pecuniary transactions.)

But we don’t even need to get into the more theoretical aspects of intellectual property law, or debate the extent to which Lockean principles of property and labor informed the Constitution and the earliest American statutes. Because even without all that, CLASSICS is just a tiny amendment to the Copyright Act that accomplishes more or less what every amendment to copyright law has always done: respond to changes in technology.

Nearly every update to copyright law represents an effort to identify and protect the creative expressions of authors in the context of new technologies, whether these have been new means of producing and distributing works or new means of copying and potentially infringing works. And it is also worth noting that many of the limitations to copyright’s protections have also been written in response to new technologies.

So, when Bridy declares that the recording artists working before 1972 had no expectation of this royalty stream, she’s overstating what CLASSICS does by understating the obvious—that no artist working well into the 1990s likely imagined the expansion of non-interactive, digital streaming “radio” services. Yet, somehow the artists whose recordings were made after 1972—and are, therefore, receiving royalties from these services—are not the beneficiaries of a copyright “windfall” in Bridy’s view? She’s conflating a technological change in the market with an aberration in copyright history to make a case that this amounts to a doctrinal reversal.

As discussed in this post, the sound-recording right itself has almost never played much of a role between artists and their consumers. Artists like Aretha Franklin made sound recordings, consumers bought physical copies, and the radio broadcasters successfully argued against paying royalties on the (then not unreasonable) grounds that radio play sold records.

Today, digital streaming has largely replaced sales of recordings, and relatively new players like Pandora provide a radio-like experience, including thousands of pre-72 sound recordings because, like Aretha’s classics, they still kick ass. But they also earn revenue for these services, which can no longer claim that their play promotes record sales. And all CLASSICS does is insist that a portion of the revenue earned from streaming these songs goes back to the artists, supporting artists, and supporting creators who made them. That is anything but a reversal of copyright doctrine. It’s a reaffirmation of a founding principle of copyright: R-E-S-P-E-C-T.