For the final post in my copyright series, I want to focus on another example in my series of discussions about formalism vs. policy in copyright. Today’s case is WNET v. Aereo, which allowed continued operation of a creative television streaming service. As I’ll discuss below, the case pretty clearly complies with the statutory scheme, much to the relief of those who believe content is overprotected and that new digital distribution methods should be allowed. This time, the policy opposition is best demonstrated by Judge Chin’s dissent in the case.
In the end, though, the case shows what all of the cases I’ve discussed show: copyright was not really developed with digital content storage and streaming in mind. While some rules fit nicely, others seem like creaky old constructs that can barely hold the weight of the future. The result is a set of highly formalistic rules that lead to services purposely designed inefficiently to either follow or avoid the letter of the law. This problem is not going to get any better with time, though my ownguess hope is that the pressure will cause providers to create some better solutions that leave everyone better off.
As noted in my last post, there have been several important copyright decisions in the last couple months. I want to focus on two of them here: Viacom v. YouTube and UMG v. Escape Media. Both relate to the DMCA safe harbors of online providers who receive copyrighted material from their users – Section 512 of the Copyright Act. Their opposing outcomes illustrate the key point I want to make: separating interpretation from policy is hard, and I tend to favor following the statute rather than rewriting it when I don’t like the policy outcome. This is not an earthshattering observation – Solum and Chiang make a similar argument in their article on patent claim interpretation. Nevertheless, I think it bears some discussion with respect to the safe harbors.
I was intrigued by the comment in the recent ReDigi holding to the effect that there were three distinct secondary liability claims in the case: (a) contributory infringement; (b) inducement of infringement; and, (c) vicarious infringement (pp 14-15 of the opinion). The judge finds that contributory infringement and vicarious infringement are established, so expressly does not rule on the inducement claim. I can understand that inducement may be problematic if ReDigi was in fact advertising that it was a “legal” service, even if ReDigi was incorrect in the court’s opinion. But I also thought that inducement was generally regarded as a part, or subset, of the contributory infringement claim, rather than as a distinct third test for secondary liability.
In Perfect 10 v Google, the court seems to divide contributory infringement into two sub-categories: Sony-style arguments relating to articles not capable of substantial or commercially significant non-infringing uses, and Grokster/Napster-style arguments related to intentionally inducing or encouraging direct infringement. This second class seems to break down into the “inducement” and the “active participation with knowledge” sub-categories. Is ReDigi doing something different in describing “inducement” as a third distinct form of secondary liability outside contributory liability, or is it the same thing, but phrased differently?
I’ve been chatting in class lately with students about user-license agreements relating to digital products (who hasn’t?) and we keep coming back to the iTunes license and the question of who “owns” your iTunes library. There was a news story a while back about Bruce Willis being shocked that he couldn’t leave his iTunes library to his children in his will because he didn’t really own any of the music. Some of my students and I started wondering what Apple actually says in the license about ownership of the music and whether ownership of the music library could be linked in any way with a notion of ownership of the user account. When I actually looked at the license, I was interested in the way the terms on user accounts were actually drafted:
As a registered user of the iTunes Service, you may establish an account (“Account”). Don’t reveal your Account information to anyone else. You are solely responsible for maintaining the confidentiality and security of your Account and for all activities that occur on or through your Account, and you agree to immediately notify Apple of any security breach of your Account. Apple shall not be responsible for any losses arising out of the unauthorized use of your Account.”
I’m really interested in the wording of the second sentence of this paragraph. Unlike the rest of the agreement it’s drafted in the imperative i.e. “Do not…” rather than in more traditional contract language. Does anyone think this is significant? Does it mean that Apple understands that it really can’t contractually control what a user does with his or her password, so this is written more as a direction to the user rather than a contract term? Or am I reading too much into it?
I want to briefly interrupt the hubbub over Kirtsaeng (which I fully intend to contribute to at some point) to note that last week the Ninth Circuit released an updated opinion in UMG Recordings v. Shelter Capital Partners, the Section 512 immunity case it decided back in December 2011. The old opinion, 667 F.3d 1022 (9th Cir. 2011), is now vacated. Apparently the panel conducted a rehearing and the new opinion modifies the old one in a few ways, primarily to bring the opinion in line with the Second Circuit’s opinion in Viacom v. YouTube, 676 F.3d 19 (2d Cir. 2012). I’ve created a redlined version showing the changes (aside from minor differences like page numbers).
That’s a pretty interesting development, I think. I can’t think of another copyright case where an appellate court changed its opinion after having been persuaded by the reasoning in another circuit’s opinion. Certainly it would be better if the Ninth and the Second Circuits “talked to each other” more often in this way.
In any event, the outcome is still the same: UMG lost on all of its arguments that Veoh didn’t fall within the safe harbor, and that Veoh’s investors were secondarily liable for infringement; Veoh still loses on its argument that its Rule 68 offer of judgement should get it attorneys fees. But there are several important alterations to the reasoning. Continue reading