Tag: felony streaming

What’s the Protecting Lawful Streaming Act Really About?

As with the CASE Act, anti-copyright (and even some copyright-neutral) voices reacted on social media to the fact that a bill called the Protecting Lawful Streaming Act (PLSA) was attached to the massive omnibus spending package that passed Congress last night.  What this bill will do is make enterprise-scale criminal copyright infringement, by means of digital streaming, a felony rather than a misdemeanor. So, once again, the gnashing of teeth began, alleging that Congress kowtowed to Hollywood, that this provision was snuck in as a rider at the 11th hour, and that making streaming a felony threatens all manner of innocent internet users. As usual, none of the above is true.

I wrote about felony streaming in the body of a post about the indictments against a group of men operating an illegal streaming service called Jetflicks in the U.S., and I shall republish here with minor alterations:

The distinction between civil copyright infringement and criminal copyright infringement is based on the purpose and conduct of the alleged infringer. Old-school criminal copyright infringement usually entailed mass-producing bootleg, physical copies of works like movies or record albums to sell in an unlicensed market as a substitute for the legal market. Consequently, U.S. criminal code historically identified unlicensed reproduction and distribution as felony charges that law enforcement may bring in criminal copyright cases.  But streaming audio or video (though it often implicates reproduction and distribution) has been considered a public performance of a work, and unlicensed public performances are, historically, misdemeanors. 

But clearly, the kind of harm that will be caused by enterprise-scale infringement via online streaming is greater than any amount of counterfeiting that was done in the pre-digital age. If selling ten thousand bootlegs out of a warehouse in 1988 was a felony, then how can it make sense that illegally streaming tens of thousands of works to tens of millions of viewers is considered a lesser crime?  A letter written in July of 2019 by the Register of Copyrights to the Senate Judiciary Committee, IP Subcommittee states, “Under this system, criminal streaming piracy, no matter the dollar amount it involves or the number of works affected, is de facto treated as a lesser crime than the illegal downloading or reproduction of the exact same content.”

So, the distinction that made mass infringement via streaming a misdemeanor was a technicality, a loophole, that no longer applied to the real world of digital-age piracy for profit. The PLSA, which was not conjured in the wee hours of last night’s omnibus spending bill haggling, simply closes the loophole. It has no bearing on any individual users, legal streaming services, or even individual streaming of an infringing use; and it changes nothing about the nature of civil copyright enforcement. So, unless you are building the next Pirate Bay or Megaupload or Jetflicks—and doing so within the reach of American jurisdiction—you would never need to know about this change to the criminal code.

As usual, the internet industry, with the support of its network of anti-copyright pundits, simply oppose enforcement at every opportunity, and this was one of those opportunities. That said, it is true that, unlike the CASE Act, Hollywood does have an interest in felony streaming. And why wouldn’t they? If we’re using “Hollywood” as a generic term for motion picture producers, whose products do we think are illegally streamed in mass quantity by pirate enterprises? But like the CASE Act, the proposal to close the streaming loophole has been in public discussion for many years for the reasons I have stated, and it is political theater to allege that Congress suddenly “caved” to Hollywood on this matter.

In reality, the PLSA is the result of months of negotiations between content industry representatives and parties representing online platforms and user communities. Because the bill was narrowly tailored—at the insistence of those purporting to represent users—groups that usually express concern with any copyright legislation agreed to the final language of the bill and even went on record at a House Judiciary Hearing saying that they were not opposed to the bill.

So, nobody caved to Hollywood, as Techdirt will tell you, because the legislative amendment just makes common sense to anyone looking at the issue; and the only people this change will affect negatively are criminal operators, who cause economic harm to a whole segment of middle-class workers. Meanwhile, the handful of critics, shouting from their rather well-feathered aeries in academia and industry-funded think tanks, should maybe shut up about this one and find something real to complain about. We’ve got plenty.

Image by: Elnur

DMCA Review II – Looking to foreign jurisdictions, when some answers are already here.

As we batten down the hatches to weather the present storm, streaming entertainment enters the foreground of our new and temporary reality in which we voluntarily circumscribe daily life to the confines of home. This is no time, of course, to fuss about media piracy per se. We have bigger fish to fry, but one must keep busy, and so on the subject of streaming entertainment, the Senate Judiciary Committee on March 10th held its second hearing in what will be a year-long review of the 1998 Digital Millennium Copyright Act. 

This time, the IP Subcommittee turned its attention to foreign jurisdictions and piracy. The thesis question was this:  How do other countries address piracy and what, if anything, can we learn from them?  Naturally, the EU Directive of 2019, especially Article 17, which was designed to incentivize the largest user-supported platforms to enter into license agreements, was discussed in both of the two-panel sessions. But from testimonies as oppositional as Stan McCoy of the Motion Picture Association and former Pirate Party member Julia Reda of the EU Parliament, I think it’s fair to say that all interests are sufficiently dissatisfied with the outcome of that legislation that it may not prove terribly instructive to U.S. lawmakers. 

What I did find compelling in the hearing was summed up during the second panel by Jonathan Yunger, CEO of Millennium Media, who said in Q&A with Senator Coons that, two things he’d ask to see in the U.S. would be site blocking and felony streaming. And if I were placing bets on the recommendations that will ultimately follow this review, I predict that the committee will find these two proposals highly persuasive. Interestingly enough, site blocking does not require a radical revision of the DMCA (if it requires any), and felony streaming does not implicate DMCA revision at all. 

Site Blocking is Effective and Already Intended by DMCA

As highlighted by law Professor Justin Hughes in Panel I, it is clear from the language in Section 512(j) of the DMCA that Congress intended to empower a court to order a service provider, even though it is not a party to a litigation, to cease providing access to infringing material as a form of relief to a plaintiff. Under this section, if a rights holder can prove that a given site is dedicated to infringement, the court is supposed to be able to instruct a Google or a Time Warner to block access to that site or sites. Yet, as Hughes points out, this already extant section of the statute has hardly been used. 

Economics professor Michael Smith testified that we now have a sufficient volume of data which demonstrates that blocking multiple pirate sites has the positive effect of driving consumers to legal platforms.  Additionally, Professor Hughes enumerated several of countries where we can see that site blocking neither disrupts a functioning internet nor chills protected speech. “Given the widespread use of this enforcement tool in other democratic societies,” Hughes stated, “it may be worthwhile for the subcommittee to explore why §512(j) has not been utilized.” 

I imagine the IP Subcommittee will heed this recommendation to review the historic inefficacy of section 512(j). After all, more effective site blocking would actually address myriad piracy problems at the same time with no effect upon the public interest, or in any way meaningfully amending the safe harbor provisions for service providers. For instance, more sophisticated and insidious access to pirated material through set-top boxes called “Kodi boxes” would be mitigated by site blocking because these infringing apps, loaded on these boxes, search for titles of filmed entertainment stored on foreign pirate site servers. Consequently, site blocking should substantially reduce the incentive to get into the illegal streaming game through the “box” model and, therefore, alleviate some of the burden on federal law enforcement to investigate these enterprises.  

Why Has 512(j) (i.e. site blocking) Not Been Used?

I do not claim to know all the answers to that question, but at least part of the answer comes down to the fact that internet industry and “digital rights” activists have fought, in both the blogosphere and the courts, to avoid compliance with even court-ordered injunctions to remove  or block access to content. Most prominently, perhaps, was Google’s defiance of the Canadian Supreme Court, which ordered sites blocked as injunctive relief for plaintiff Equustek whose IP had been stolen by a party marketing counterfeits on the sites at issue.

Or to highlight just how entrenched the industry’s misguided sense of responsibility is in this regard, the subcommittee could review the defense and supporting amici in Hassell v. Bird, in which Yelp! argued that by complying with an injunction to remove material, which had been judged unlawful by a court, this would “harm due process.” This was a profoundly absurd claim to come from a “no-fault” third party responding to a court order to cease facilitating harm to a plaintiff. Due process does not a apply to an unnamed, no-fault party—except apparently within the twisted strands of logic peculiar to website operators, who have historically assumed that it is their right to host, link to, and even monetize anything that ends up on their platforms. 

Site operators and their supporters, like the EFF, PublicKnowledge, and, at times, the ACLU, have endeavored to tie both courts and public perception into knots over one of the most basic forms of justice—injunctive relief by unnamed third parties—and it seems that correcting this error (i.e. making Section 512(j) mean what it says) would be short work for legislators. 

Felony Streaming is Controversial for No Good Reason

As I say, I was also struck by Mr. Yunger asking for felony streaming as a solution to piracy, which does not in fact require revision to the DMCA, but rather a change to the criminal code. As discussed in this post about the indictments against the operators of Jetflicks, streaming a “public performance” of a copyrighted work is still a misdemeanor, despite the fact that it is exactly how large-scale piracy is achieved today. In fact, nothing in the old bootlegging model, which is a felony, could come close to illegally streaming a movie or TV show to tens of millions of consumers, occasionally even preempting the official release of the project.

“Under this system, criminal streaming piracy, no matter the dollar amount it involves or the number of works affected, is de facto treated as a lesser crime than the illegal downloading or reproduction of the exact same content.” –Register of Copyrights, July 2019–

Some fairly outlandish fear-mongering has been employed in opposition to felony streaming proposals over the years. By “over-criminalizing” unlicensed streaming, the critics say, good-faith site operators could wind up in jail due to error or the unlawful conduct of their users.  But this scare tactic is contradicted by a few important realities, not the least of which is that we do not generally see good-faith site operators charged with misdemeanors either. 

To be charged with criminal copyright infringement, a defendant must truly be engaged in copyright infringement as a business enterprise. Nothing about elevating enterprise-scale, unlicensed streaming to a felony would change the burden of proof for filing criminal charges; it merely puts teeth in the law as a deterrent against launching in this kind of operation. Further, elevating illicit streaming to a felony does not alter the liability protections for good-faith service providers. 

The same principles would still apply to the “safe harbor” provision established for good-faith providers whose users upload infringing material.  Having said that, however, the incentive narrative needs to change to apropos Mr. Yunger’s testimony that his company’s films, in one accounting, had been viewed over 110 million times on YouTube. So clearly good faith alone is not getting the job done. 

Meanwhile, as CreativeFuture reported in a recent blog post, a new operation called Plex appears to combine the “Kodi box” piracy streaming model with a Napster-like twist such that users can “share” libraries they store on Plex servers—particularly if those libraries comprise bootleg files. If Plex is intentionally facilitating large-scale infringement through streaming from its servers,* its defense against an infringement charge would presumably seek to hide behind the technicality that its users are “directing” the uploading of files to the server space under user control. Hence, by more robustly criminalizing the act of streaming public performances, this would seemingly close a DMCA loophole without actually revising the DMCA. 

With regard to considering both felony streaming and a review of 512(j), the IP Subcommittee should assess the amount of disinformation and flawed legal arguments that have been deployed on these topics by various parties in the internet industry. For the better part of the last two decades these companies have consistently behaved as though the original intent of DMCA was always that they should do exactly they want—even in defiance of court orders. The members of the committee know very well that nothing could be further from the truth. 

The Jetflicks indictment: talk about crime not paying.

After reading the indictment that was handed down last week against the eight men who allegedly ran the pirate streaming service called Jetflicks, all I could do was wonder what the hell they were thinking. Between 2007 and 2017, Krisopher Lee Dallmann and Darryl Julius Polo operated Jetflicks as a subscription-based service, delivering tens of thousands of unlicensed audio-visual works to customers around the United States.  So, not only do I want to ask how they imagined they would avoid prosecution while operating inside the U.S., but the following email exchange between Dallmann and a programmer named Louis Angel Villarino (as quoted in the indictment) really makes me wonder why they even bothered …

Dallmann: When Jetflicks starts making crazy $$ in a few months… How much do you need to make to be full-time for Jetflicks only?

Villarino: 120k a year

Dallmann: That’s doable …

Dallmann:  Jetflicks made 750k 3 years ago… 500k in 2015… And a sad 350k last year

Dallmann: If we didn’t have people that took advantage, we’d be awesome.

Assuming this correspondence provides some insight into the enterprise, I am not sure which inscrutable detail to highlight first; but I suppose it would have to be Dallmann’s woeful complaint that customers were “stealing” from Jetflicks by sharing login credentials.  The naïve innocence in his choice of words “took advantage,” implying that he sincerely believed he had an ethical leg to stand on, resonates with the somewhat pathetic revelation that this doomed venture was not even viable enough to provide Villarino with a full-time gig at $120k/year.  

Not that I recommend or condone criminal enterprises, but if one is going to take the risk, it seems like it ought to be with the intent to make some serious money, no?  Operating a media piracy service inside the United States is operating on a time-clock; a criminal indictment will be forthcoming.  So, if the plan does not include reaping several million dollars in a very short time, followed by a flight to a country beyond extradition, then perhaps applying to one of the many tech jobs out there is a better career move.  Some of them actually pay more than $120k per year.

In fact, if I correctly interpolate the evidence cited in the multi-count indictment, it does seem like running Jetflicks was a lot of damn work for not nearly enough revenue.  After all, making sure subscribers receive TV shows in a timely manner when you have absolutely no license to do so requires quite a bit of time and technical skill—not to mention capital expense for servers etc.—that, again, better pay a substantial return considering that a hearty pounding on the door by the FBI is imminent.  Instead, the operators almost seem to have believed they were running a legitimate business that they expected to operate indefinitely.

Some Defendants May Argue Misdemeanor Offense

As this case proceeds to trial, perhaps the rationales of the defendants will be revealed, but if not, it may still be interesting to watch the defense(s) of the six supporting characters, including Villarino.  While the apparent ringleaders Dallmann and Polo are charged with multiple counts of felony infringement, money laundering, aiding and abetting, the other six are only charged with conspiracy to commit copyright infringement.  Consequently, some or all of these men may try to prove that they were only involved in the act of streaming infringing content because streaming is currently a misdemeanor. I have no idea, of course, whether any of the six has any evidence to support such a defense, and some or all may seek plea deals; but this case could highlight the view that many policymakers believe there is no reason for streaming not to be a felony.

The distinction between civil copyright infringement and criminal copyright infringement is based on the purpose, conduct, and goal of the alleged infringer.  Old-school criminal copyright infringement usually entailed conduct like mass-producing bootleg copies of works to sell in an unlicensed market as a substitute for the legal market. Consequently, U.S. criminal code identifies unlicensed reproduction and distribution as charges that law enforcement may bring in copyright cases.  But streaming audio or video (though it often implicates reproduction and distribution) is considered a public performance of a work, and unlicensed public performances are still considered misdemeanors. 

Clearly, with regard to the kind of harm that may be caused by enterprise-scale infringement, the “streaming loophole” is a legal distinction that is outdated by the nature of the technological means used to infringe.  If selling ten thousand bootlegs out of a warehouse in 1988 was a felony, then how can it be that streaming multiple infringing works to potentially millions of viewers is considered a lesser crime?  A letter written this July by the Register of Copyrights to the Senate Judiciary Committee, IP Subcommittee states, “Under this system, criminal streaming piracy, no matter the dollar amount it involves or the number of works affected, is de facto treated as a lesser crime than the illegal downloading or reproduction of the exact same content.”

It seems likely that lawmakers will eventually recognize that streaming is the contemporary method of mass-bootlegging and, therefore, amend the criminal code to encompass public performance by streaming as a form of felony infringement.  In response, the “digital rights” advocates will doubtless write many screeching blogs and post scary-looking memes predicting once again that innocent children will face jail for inadvertently streaming infringing material, or that startup “innovators” will be afraid to enter the market.  And as usual, none of these complaints will be grounded in reality.

Caselaw is replete with both criminal and civil copyright cases, and the distinctions are clear.  This is why a start-up like VidAngel, no matter how much its model proves to be a contorted workaround to copyright law, will have its day in civil court, but its founders will not face criminal charges for the attempt.  There is no comparison between a well-intended enterprise that is held to be infringing and a criminal enterprise that seeks to profit by means of a black market.  Though in the case of Jetflicks, apparently not profiting enough for all the trouble.

Regardless of where policymakers net out on felony streaming in the near term, I will say this for the proposal:  the amended criminal statute might have acted as a deterrent for at least some of the six guys now facing charges in the Jetflicks case. Of course, this implies that they would have known enough to consider the difference, which only begs the original question:  What the hell were they thinking?