CS 335 Reading for
October 25:
Copyright Liability and Computer Networks
On Monday, October 25, 2004, Ethan Preston will conduct the lecture for
CS 335. Mr. Preston is a attorney practicing in Chicago in commercial
litigation and computer law. The assigned reading and the lecture for
this class are meant to provide you with some familiarity with
copyright law issues raised by networked computers. In particular, this
class is intended to provide you with a background in copyright law and
peer-to-peer networks.
There are a substantial number of readings assigned for this
class. However, many of those readings are quite short. A number
of the readings ask you to skim the reading except for specific pages
or to skim the entire reading. While the readings to be skimmed bear to
the subject matter, they are either not central to our discussion or
should simply not require much of your time. The assigned reading also
include some discretionary readings. These discretionary readings are
intended to provide you with additional resources if a topic is
interesting to you, but they will not be covered in class. Some of the
readings have questions underneath them. You are asked to think about
these questions after you have done the reading and form an opinion.
The discussion in the October 25 is class will give you an opportunity
to express your reactions to the readings and exchange them with the
other students and the instructors.
I. Copyright Infringement and Warez
This section's readings concern the legal system's methods for
preventing and deterring copyright infringement. There are two basic
methods of controlling copyright infringement. First, the legal system
can incarcerate people who commit criminal copyright infringement.
Second, the legal system can impose liability on people who commit
criminal or civil copyright infringement.
One of the most important concerns for copyright holders is whether
they can enforce their rights economically. Obviously, copyright
holders must pay for lawyers, but they also receive payments from
defendants. The question is whether the payments they collect exceed
their litigation costs and attorneys' fees. This is an important
question you should think about while reviewing these materials.
A. Individual Civil Liability
Any copyright holder can sue a person who infringes (that is,
reproduces) their copyrighted works. Although copyright holders can
recover statutory damages (discussed below) and attorneys' fees, they
must pay for private attorneys until the case ends and the defendant
pays the copyright holder. Given that private attorneys can cost tens
of thousands of dollars per case, copyright holders may not be able to
recover all their costs against a defendant.
READ Section 504 of the Copyright Act regarding statutory damages:
http://www4.law.cornell.edu/uscode/17/504.html
(What is the maximum amount of statutory damages for copyright
infringement?)
SKIM the RIAA's mass lawsuits against individual infringers (you only
need pay attention to the number of people sued):
http://www.wired.com/news/print/0,1294,63263,00.html
http://www.wired.com/news/print/0,1294,63579,00.html
http://www.wired.com/news/print/0,1294,63945,00.html
http://www.wired.com/news/print/0,1294,65162,00.html
(Can average consumers defend one of the RIAA's suits economically?
That is, can consumers pay their attorneys to defend them successfully
for less than the cost of simply settling from the outset? If the RIAA
settles these cases for $3,000 to $5,000 per individual, will the RIAA
recover its attorneys fees it paid? If it is not economical for the
RIAA to file these lawsuits, why would it do so?)
B. Individual Criminal
Liability
Federal law enforcement (such as the FBI) investigates criminal
copyright cases, and federal prosecutors (United States Attorneys under
the Department of Justice) prosecutes those cases. As discussed below,
a person who pleads guilty or is convicted is sentenced to
incarceration. The length of the incarceration depends on the retail
value of the infringed goods. Although private copyright holders can
ask that federal law enforcement target particular infringers, they do
not control the criminal prosecution process. However, criminal
prosecution of copyright infringers is essentially free for copyright
holders (except, of course, that copyright holders pay taxes to the
federal government).
One of the more startling aspects of criminal copyright infringement is
how easy computers make it to copy a great deal of copyrighted works.
READ the Justice Department's investigation into warez groups (criminal
copyright enforcement):
http://cybercrime.gov/ob/OBorg&pr.htm
(What is the typical motivation for individuals in the warez scene?)
READ the criminal copyright infringement statues:
http://www4.law.cornell.edu/uscode/17/506.html
http://www4.law.cornell.edu/uscode/18/2319.html
(Is a profit motivation necessary for criminal liability? What is
the standard for criminal copyright infringement?)
READ the federal investigation of "Fastlane" group, which used
sophisticated technical measures to avoid identification:
http://www.cybercrime.gov/fastlane.htm
(If the defendants' technical efforts to avoid detection by law
enforcement were so sophisticated, how were they identified?)
SKIM the United States Sentencing Guidelines to see how a defendant's
sentence for criminal copyright infringement is calculated:
http://www.ussc.gov/2003guid/2b5_3.htm
http://www.ussc.gov/2003guid/5a.htm
Although
reviewing the Sentencing Guidelines should not take a lot of time, it
is important reading.
(You may know someone who is file-sharing. Please look at the
Sentencing Guidelines and estimate that person's potential sentence. If
you do not know anyone who is file sharing, estimate the value of the
software on your computer and calculate the potential sentence for
criminal copyright infringement of that amount of software. You may be
surprised at how severe the sentence given how easy it is to copy
software and other data with computers.)
II. Peer-to-Peer Networks
A. P2P Networks Present a
New Challenge for Copyright Law
It is difficult to enforce criminal or civil copyright laws against
individuals on P2P networks. One of the largest problems is that there
are so many P2P users. It is difficult to sue them all, or even enough
to control copyright infringement on P2P networks. So copyright holders
have a strong incentive to sue the P2P networks themselves, and shut
down file-trading at the network level (rather than pursue innumerable
individual infringers).
READ this news article for an idea of how many P2P users there are
(note the difference between the number of people simultaneously
connected to a P2P network and the number of people who have used a P2P
network):
http://www.slyck.com/news.php?story=477
(If the RIAA has sued approximately 5,000 P2P users, what are the
chances that a P2P user has been sued?)
However, P2P application authors are not typically liable as direct
infringers. Most P2P application authors do not store infringing files
on their own computers, provide Internet connectivity to P2P users, or
otherwise operate or control the P2P networks. Rather, most P2P
application author offer the P2P applications as stand-alone software.
However, copyright law provides a copyright holder rights against
indirect copyright infringers. In particular, copyright owners can sue
for contributory infringement (where the defendant has knowledge of the
infringing activity and materially contributes to the infringement) and
vicarious infringement (where the defendant profits from the
infringement and can control or prevent the infringing activity).
READ SECTIONS I, II, III, IV.A., IV.B. and V of the Electronic Frontier
Foundation's analysis of copyright liability in the context of computer
networks and summary of recent caselaw:
http://eff.org/IP/P2P/p2p_copyright_wp.php
If you
don't read anything else for this class, read this!
(What does the EFF recommend most strongly for staying out of trouble?
Do you think the operators of BitTorrent trackers avoid indirect
copyright liability?)
However, P2P applications lie on the edge of indirect copyright
liability. Some P2P operators fall into indirect copyright liability,
and some do not. This is an unsettled area of law. In general,
liability depends on whether the P2P application was capable of
noninfringing uses, or whether the P2P operator knew or should have
known about specific infringing activities in time to prevent them. Two
recent appellate cases have applied indirect copyright liability
doctrines to P2P networks. Pay close attention to how the different
architectures and features of the P2P networks lead to different
results.
READ PAGES 3-5 and 11-18 of the 2003 In Re Aimster decision (by the
Seventh Circuit Court of Appeals in Chicago):
http://www.ca7.uscourts.gov/op3.fwx?submit1=showop&caseno=02-4125.PDF
(What special feature did Aimster/Deep use to try to avoid
copyright liability? Why was Aimster/Deep unsuccessful?)
SKIM PAGES 9-14 and 21-24, and READ PAGES 15-21 and 25-26 of the 2004
Metro-Goldwyn-Mayer v. Grokster decision (by the Ninth Circuit Court of
Appeals in San Francisco):
http://www.ca9.uscourts.gov/ca9/newopinions.nsf/E9CE41F2E90CC8D788256EF400822372/$file/0355894.pdf?openelement
(Question: How are Grokster and Streamcast different from Napster? From
Aimster? If Kazaa/Sharman controls Grokster's "supernodes," where does
that leave Kazaa/Sharman?)
B. Proposed Legislation
In the wake of the decisions above, the RIAA has lobbied Congress to
make certain changes in copyright law. One of these bills would expand
the indirect copyright liability doctrine, and the other would expand
criminal copyright liability.
READ sections 103 and 110 of the latest version of the proposed Piracy
Deterrence and Education Act of 2004:
http://thomas.loc.gov/cgi-bin/query/z?c108:H.R.4077:
SKIM this analysis of the PDEA:
http://news.com.com/2102-1028_3-5387682.html?tag=st.util.print
READ the top part of this analysis of the PDEA:
http://www.corante.com/copyfight/archives/020117.html
(What impact would a letter from the Department of Justice have on
a file-trading recipient? How would the PDEA expand criminal copyright
liability?)
READ the proposed Inducing Infringement of Copyrights Act of 2004:
http://thomas.loc.gov/cgi-bin/query/z?c108:S.2560:
READ an article about the status of that bill:
http://www.corante.com/importance/archives/026457.php
SKIM the LawMeme Reader's Guide to Ernie Miller's Guide to the INDUCE Act:
http://research.yale.edu/lawmeme/modules.php?name=News&file=article&sid=1549
(Take a brief look at some of the technologies that INDUCE might have affected. How does the INDUCE Act alter the traditional balances between
copyright holders and technology manufacturers? What does the
Guide suggest prompted lawmakers to attempt to pass this
legislation?)
C. P2P Networks' Legal
Vulnerabilities
SKIM an article about the resource problems the Gnutella network faces:
http://www.firstmonday.dk/issues/issue5_10/adar/index.html
(How many percentage of people on Gnutella provide the lion's share of
files on the Gnutella network? If you were a lawyer for the RIAA trying
to stop file-sharing and you could only sue one out of every thousand file-sharers, who would you sue? If the majority of the files
on a particular peer-to-peer network were taken down, how useful
would that network be?)
SKIM a whitepaper on Freenet's architecture and technical features:
http://freenet.sourceforge.net/papers/freenet-ieee.pdf
(Does Freenet's architecture and technical features insulate
Freenet node operators from copyright liability? Think about Aimster.)
DISCRETIONARY READING: A law review on Freenet's survivability in the
legal system:
http://www.lawtechjournal.com/articles/2002/05_021229_roemer.php
(If an individual person could be sued for millions of dollars for
operating a Freenet node, but the person knows that the Freenet system
will continue to operate and the person can continue to use Freenet,
even if they do not operate a node, what incentive does a person have
to operate a Freenet node?)
D. P2P Networks' Technical
Vulnerabilities
DISCRETIONARY READING: A news article on the RIAA flooding peer-to-peer
networks with spoofed files:
http://www.siliconvalley.com/mld/siliconvalley/3560365.htm
E. P2P Networks' Legal
Strategies
SKIM these news articles about Kazaa/Sharman's legal structure:
http://www.wired.com/wired/archive/11.02/kazaa_pr.html
http://www.chron.com/cs/CDA/printstory.hts/tech/1759841
(What is Kazaa/Sharman's strategy for staying out of legal trouble?)