Manolito is not the next Spanish summer hit

The 1709 Blog thanks guest blogger Valentina Torelli for the following analysis of a case that has begun to attract a good deal of attention in recent days. The decision in question comes from the Court of Appeal, Madrid, and deals with file-sharing. This is what Valentina says:

A few days ago, following the results of the Observatory of Privacy and Digital Content Consumer Habits for 2013 report, Eleonora wondered about the situation of piracy in Spain, in particular the data suggesting that 84% of content consumed in Spain is said to be from unlicensed sources and that more than half of internet users appear to embrace commonly illegal downloads.

This report was presented by a coalition of companies from the cultural sector on April 9 last and it immediately provoked a reaction of the Spanish Ministry of Culture, which published on its website a communication rejecting the Observatory's conclusions and detailing encouraging figures in the fight against piracy: 349 out of 406 complaints were resolved, with 162 websites suffering removal of unlawful content and 23 being completely closed down.

On the same day, the Court of Appeal of Madrid published its judgment in the controversial Pablo Soto case (here). In Spain, music is one of the creative industries that has been most affected by piracy, suffering not only from illegal downloads but also from the unfair competition of P2P platforms, which are not generally liable for the unlawful activities of their users.

This case started in 2008 when Promusicae (the collecting society representing the music producers in Spain) together with Universal Music Spain SL, Warner Music Spain SL, Sony BMG Music Entertainment Spain SA and EMI Music Spain SA brought an action before the Court of First Instance of Madrid against Mr Pablo Soto Bravo and the two companies solely directed by him, namely OPTISOFT SL and PIOLET NETWORKS SL plus the company M PUNTO 2 PUNTO TECHNOLOGIES SA.

The plaintiffs sought removal of Blubster, Piolet and Manolito both in their free-of-charge and pay-for versions. These sites consisted of an advanced development of the P2P protocol, whereby the search and the sharing of contents are decentralized, meaning that they can be run on the internet within the users' computers, once those applications are downloaded or bought from the defendants' webpages, without any direct involvement of the latter. The problem is that those programs did not provide any specific filter that would allow to distinguish between authorised and unlawful contents to be reproduced and shared between the internet users. Consequently , the plaintiffs also requested that www.blubster.com, www.piolet.com, www.manolito.com and www.mp2p.net be shut down.

The case, which dealt with copyright infringement and unfair competition claims alike, was dismissed both at first instance and on appeal.

In its judgment of 31 March last, the Court of Appeal provided a helpful description as to current state of art regarding copyright enforcement in Spain, pending the entry into force of the recent changes to the Spanish Copyright Act and in particular the introduction – as per Article 138.2 of the draft reform – of contributory and vicarious liability for digital copyright infringement.

Given the decentralised nature of the P2P applications under examination, the court stated that:

1. As to the direct liability for copyright infringement of the defendants:

The online reproduction and the sharing of copyright-protected content is lawful in so far as no copyright-protected material is involved or where the internet users can rely on the authorisation of the right holders. Moreover, the P2P applications should be considered in the light of the principle of the neutrality of technology. Accordingly the applications' creators and/or distributors cannot be considered liable for the unlawful use made out of them.

In the present case, the defendants cannot be defined as ISPs. Thus the related liabilities, provided by the Information Society Services Law (Ley 34/2002 LSSI) implementing the e-Commerce Directive, cannot be applied. The defendants only created and commercialised P2P applications on the internet, without carrying out any acts of mere conduit, caching, hosting and linking. The court added that it was not possible to ascribe direct liability for acts of copyright infringement to them: the defendants neither reproduced nor made available the music files to the public, nor did they harm the TPMs applied to the music files.

2. As to an indirect liability of the defendants for copyright infringement:

Indirect liability for copyright infringement, in the forms of vicarious and the contributory liability, is a controversial matter in Spain. At the moment the judges have no legal grounds upon which they can ascribe liability for indirect infringements.

The court held that, according to indirect liability doctrine, while a third party has infringed a right (i.e. an IP right) the defendant [the indirect infringer] must not only be aware of such illegal activity of but must also have substantially participated in the infringement, by inducing, causing or materially contributing to the infringement (i.e. contributory liability), or by exerting the right/authority of control over the infringer to get a direct financial benefit from the infringement (i.e. vicarious liability). In the Spanish system, unlike in the US legal framework, no typified conduct of indirect liability currently exists.

The Court of Appeal observed that US case-law that construed indirect liability in the Betamax, Napster and Grokster cases could be applied in this domestic dispute. In particular, the provisions in Spanish copyright law outlining the regulation of the TPMs and the DRMs could not be such as to allow applicability of indirect liability doctrine to copyright infringement cases.

3. As to the defendants' liability for unfair competition:

The offer of a P2P application does not imply the misappropriation or taking unfair advantage of the right holders' content where no plan to sink and to unbalance the right holders was conceived.

According to the court, in the case under exam no unfair competition acts of imitation could be ascribed to the defendants, since they solely developed an advanced P2P software in the full exercise of their entrepreneurial and commercially strategic powers. Not even the general clause of goodwill could serve as a legal ground in this dispute: the applications were created for the sharing of all types of audio files, without any control over the unlawful traffic of copyright materials on part of the internet users, given the decentralised nature of the P2P platforms allowing the users to share music files without intermediaries. The defendants did not play any role in deactivating the DRMs applied by the music producers to the music files, thus avoiding any copyright infringement. During the trial it was largely proved that not only were the contested P2P applications completely in compliance with the music files' DRMs but also that on the defendants' websites a copyright notice to prevent IP rights' infringement was placed in a prominent position.

It is apparent that the Spanish piracy situation is causing much concern to the cultural industries inside and outside this country. It is arguable that this critical condition cannot solely be linked to legal technicalities. Spanish judicatures have often claimed that the legal tools in their power are insufficient to fight against the piracy phenomenon, even after the introduction of a judicial-administrative proceeding by means of the Sinde-Wert Law (Ley Sinde) which was passed in 2011 and established an ad hoc antipiracy section within the Intellectual Property Commission. At the time of its adoption, the idea was that this new procedure would have speeded up copyright enforcement, although its targets are only the ISPs. It is also arguable that the provision of accessible legal offers is still insufficient. It is however hoped that the draft Reform Act of the Intellectual Property Law, approved on 14 February last, together with the introduction of new business models applicable to the cultural industry will definitely contribute to finding a new direction for the protection of cultural content.

The ACI Adam and UPC Telekabel judgments: time to legalise file-sharing?

From Joao Quintais and Christina Angelopoulos comes the following note, with a timely reminder concerning the forthcoming Information Influx event. They write:

In Case C-435/12 ACI Adam BV and Others the Court of Justice of the European Union (CJEU) ruled that the private use copying exemption allowed under Articles 5(2)(b) and 5(5) of Directive 2001/29 (the InfoSoc Directive) is limited to reproductions made from lawful sources. This affects how private copying levies can be calculated: the number of reproductions made from unlawful sources can no longer be taken into account. At least as importantly, it also means that a significant number of acts of reproduction made by end-users are now clearly qualified as infringing, such as downloads of movies and music from unlicensed internet sites. Does this strengthen or weaken the case for the legalisation of file-sharing for non-commercial uses?

At the Institute for Information Law's upcoming Information Influx International Conference (Amsterdam, 2-4 July) an expert panel considers the ramifications and potential impact of this and other recent CJEU judgments. IViR researchers will also present the preliminary results of a survey of the Dutch public's views on alternative compensation systems (details here).

In another panel at the same conference entitled “Filtering Away Infringement: Copyright, Injunctions and the Role of ISPs” the focus will lie on the related question of the role of intermediaries in stopping illegal file-sharing. The private copying judgment has repercussions for ISPs too. In Case C-314/12, UPC Telekabel Wien GmbH v Constantin Film Verleih GmbH, the Austrian referring court queried, among other matters, the relevance of the exact parameters of the private copying exception with regard to the interpretation of Article 8(3) of the InfoSoc Directive. That provision treats intermediaries whose services are used by a third party to infringe a copyright or related right as being subject to injunctive relief. The Court concluded that uploaders of infringing content “use the services of intermediaries” in the sense of Article 8(3), which opens intermediaries up to injunctive action. In this way the CJEU avoided discussing the private copying exception in that context. The ACI Adam judgment however would indicate that, even in cases where the Court’s logic in UPC Telekabel would not apply, intermediaries would still not be shielded from injunctions, as the downloader (who indubitably does use the services of her access provider) must also be considered to be participating in the infringement. The implications would be substantial and no doubt will give rise to a lively debate at the conference.

This looks good; this blogger is curious to know what the conclusions of the expert panel might be, and hopes to hear all about it after the event.

First NZ file-share award: too little, or too much?

The 1709 Blog thanks Simon Fogarty (Senior Associate, A J Park, New Zealand) for the following highly topical news item:

"On 29 January 2013 the New Zealand Copyright Tribunal issued its first decision in relation to the file-sharing infringement provisions of the Copyright Act 1994. You can read the decision here.

In brief, the provisions are intended to give copyright owners – particularly in the music and film industries – a relatively quick and cheap way of dealing with unlawful peer to peer file sharing.

For a claim to go before the Copyright Tribunal a person must receive three infringement notices. The three notices are known as detection, warning and enforcement notices. After an enforcement notice has issued the copyright owner (or its representative) can request a ruling from the Copyright Tribunal. The tribunal will do that based on the papers filed although the tribunal can hold a hearing at the request of one party. This case was taken by the Recording Industry Association of New Zealand (RIANZ). The respondent is not identified in the decision.

In the decision the Copyright Tribunal confirms that, if a person does not challenge an infringement notice, there is a presumption that the file-sharing identified in each notice is an infringement.

In this case the respondent did not challenge any of the notices that RIANZ issued. In fact, the respondent acknowledged that at least one of the infringements occurred. However, she denied any knowledge of the two other infringements.

On the evidence, the tribunal ruled that the respondent downloaded and uploaded two songs. The respondent was therefore found to infringe copyright.

The tribunal then had to determine the penalty that the respondent had to pay. The tribunal must order a penalty sum unless it is manifestly unjust to do that. Any penalty is capped at a maximum of NZ$15,000.

The tribunal calculated a penalty of NZ$616.57 as follows.

• The damages component was based on what the respondent would have paid for lawfully downloading three tracks – NZ$6.57. 

• The contribution to the ISP's fees for processing the three notices was set at NZ$50 – the actual fees were NZ$75. 

• The applicant's NZ$200 official fee. 

• A deterrent sum calculated at NZ$360.

When calculating the deterrent sum, the tribunal took into account

• the flagrancy of the infringement 

• the effect of the infringing activity on the market for the work 

• whether the other sums awarded in the penalty are a sufficient deterrent to future infringing.

The tribunal held that the infringing was not flagrant and that there was no evidence that the respondent's uploading had any detrimental impact on the market for the works. The tribunal ruled that because the other penalty sums were modest, the respondent should be fined a deterrent sum of NZ$120 per infringement.

There has been a mixed reaction to the decision, including comments that this is a bad law as the onus is primarily on the defendant. There is also some speculation that the sum awarded is too low to be effective.

In relation to the latter point the decision sends a clear message to internet users that they can be penalised if they breach the provisions of the Act. At first blush NZ$616.57 may not seem like a high penalty. But for the majority of people, having to pay that fine would be a burden. Certainly, it is far more than the NZ$6.57 that the respondent would have paid if she had downloaded the songs lawfully".

The fine, in European terms, works out at about 380 euro, or US$ 520. Is it a meaningful deterrent? Is it excessive in relation to the infringement, or inadequate in relation to the complexity and bureaucracy of the procedure which leads to it?  And how is it distributed?  Readers may have further questions. This is a good time and place to ask them.

Should parents be responsible for their teenager's actions?

I should rephrase that as: should parents be legally responsible for their teenager's actions? As we all know, teenagers are a law unto themselves. The thought of being legally responsible for one is pretty frightening. Fortunately, yesterday the German Federal Court, der Bundesgerichtshof, handed down a decision saying that the parents of a 13 year-old file-sharer could not be held responsible for their son's infringement. Further, they could not be required to monitor or hinder his activity online. Phew.

The Bundesgerichtshof released a press release, in German, saying that the parents could not be held responsible as they had taught their son that file-sharing was illegal and had not known that their son was file-sharing.

The case was brought by various record producers who, back in 2007, found that a particular IP address was linked to the illegal download of 1,147 audio files. The IP address was traced to this teenager's family home, specifically to a computer belonging to the teenager himself. The computer was subsequently seized and the authorities found that "Morpheus" and "Bearshare" had been installed, with the "Bearshare" icon appearing on the desktop.

The record producers sued the parents of the teenager citing a violation in their duties of parental supervision, and claimed damages of €2,380.80. The district court found in favour of the record producers, and the family's subsequent appeal to the appellate court was unsuccessful. The appellate court found the parents liable for damages caused by their son's illegal file sharing because they failed to properly supervise him. The court relied on under s.832(1) BGB which says [my rough translation assisted by Google Translate]:

"Any person legally required to supervise a legal minor or a  person requiring supervision due to a mental or physical condition, will be liable for any damage caused by the person subject to supervision. The supervising person is excluded from liability if he meets his duty of supervision or if the damage would have occurred had he met his duty of supervision."

The appellate court said that the parents should have installed a firewall and security program, and that they could have seen by checking the computer that their son had installed file-sharing programs.

However the Bundesgerichtshof found yesterday that given that the parents had taught their son that file-sharing was illegal, they had met their "parental obligation to supervise a normally developed 13-year-old child". They were not required to go so far as to monitor or obstruct their son's use of the internet nor to conduct checks on the computer. The court held that such measures would only be required if parents had reasonable grounds for suspecting their child of infringing use.

Of course this raises the question of how much any parent knows about what their teenage child does on a computer but overall this seems to be the right decision. Parents should teach their children the do's and don't of the internet but cannot, practically, be required to monitor their child's every move.

TorrentFreak  labels this decision a "blow to rightsholders in their quest to clamp down on illicit file-sharing". This seems a step too far; in a world where teenagers often know much more about computers than their parents do it would be unfair to make them responsible for activities that they may know nothing about.

TorrentFreak also notes that Germany is the toughest jurisdiction in the world when it comes to enforcing laws against on file-sharers, as legislation means that internet account holders are almost always found liable for activities taking place on their connections. Further, Columbia University recently noted that most people in Germany think that it is wrong to file-share (other than with friends or family). It sounds to this blogger like German law is heading in the right direction, by prioritising education and personal responsibility but clamping down on file-sharing by finding individuals liable when it has to.

O2 to disclose details of porn downloaders

Yesterday the High Court of Justice (Chancery Division), England and Wales, ordered telecom company O2 to hand personal details of more than 9,000 broadband subscribers to Golden Eye International and pornography firm Ben Dover Productions, on account of the illicit download of porn films, reports The Telegraph.

The 152-paragraph decision of Arnold J followed an application by Golden Eye and thirteen other claimants for a Norwich Pharmacal Order (as first elaborated in Norwich Pharmacal Co v Customs and Excise Commissioners [1974] AC 133) against O2, seeking to obtain disclosure of the names and addresses of O2 customers who are alleged to have committed infringements of copyright through peer-to-peer filesharing using the BitTorrent protocol. 

The applicants were divided into two groups.

The first group included Golden Eye and Ben Dover Productions. While the latter is the owner of the copyright in a series of pornographic films starring Ben Dover and which were released between 1995 and 2008, Golden Eye enjoys a royalty-free worldwide exclusive licence of all copyrights and rights in these films, as well as marketing a range of associated merchandise under the Ben Dover trade mark.

The second group of claimants are copyright holders in other pornographic films, who had entered into a 2-year licensing agreement with Golden Eye. 

Porn veteran Ben Dover
(copyright News Group Newspapers Ltd)

Golden Eye had previously applied and obtained similar orders against British Telecommunications in 2009, and BSkyB in 2010. It is worth recalling (para 103) that, from 2009, ISPs have been required by UK law to retain records of which customer was using which IP address at any particular time for a period of one year. So far, Golden Eye has only brought three claims for infringement arising out of information obtained by virtue of the 2009 and 2010 Norwich Pharmacal orders. All of them were issued in the Northampton County Court, in at least two cases using the Money Claim Online system (MCOL). According to Arnold J MCOL is unsuitable for copyright infringement claims and should not be used for that purpose. 

In the case of O2, Arnold J found that there was a prima facie case that each of the respective subscribers associated with the IP addresses provided by the claimants had illicitly copied one or more of each of the applicants’ works for the purpose of making them available via file-sharing websites for third parties to download. The claimants undertook to the Court that they have a genuine intention to pursue a claim against any of the subscribers with whom a compromise is not reached and where there is a legitimate and appropriate legal basis to do so. Accordingly, Arnold J ordered O2 to disclose "the name and postal address of the registered owner or owners of each of the internet account or accounts that were assigned to the internet protocol address".

In parallel to this, among the other things, Arnold J ordered Golden Eye to pay into an escrow account to be held by the respondent's solicitors a sum equal to £2.20 per IP address requested with £2500 security costs.

In no case, however, shall the applicants disclose to the general public, by making or issuing a statement to the media, the names or addresses of any person or persons whose identity is made known as a result of the grant of the relief ordered until after (1) the receiving the express consent of the person concerned, or (2) the applicants have commenced proceedings to enforce their copyright and related rights against such person or persons. 

A discreet notice will be sent to P2P file-sharers  

Of particular interest is the part of the judgment (paras 116 ff) which deals with the proportionality of the order sought by Golden Eye and the other applicants. In particular, Arnold J recalled that in Promusicae and Scarlet (and most recently in Netlog) the CJEU held that, when adopting measures to protect copyright owners against online infringement, national courts must strike a fair balance between the protection of intellectual property rights guaranteed by Article 17(2) of the Charter and the protection of the fundamental rights of individuals and, in particular, the rights safeguarded by Articles 7 [Respect for private and family life] and 8 [Protection of personal data]. This said, Arnold J held (para 117) that the correct approach to considering proportionality can be summarised as follows: 

"(i) neither Article [in the Charter] as such has precedence over the other; (ii) where the values under the two Articles are in conflict, an intense focus on the comparative importance of the specific rights being claimed in the individual case is necessary; (iii) the justifications for interfering with or restricting each right must be taken into account; (iv) finally, the proportionality test – or 'ultimate balancing test' - must be applied to each.”

In this case the claimants were owners of copyrights which had been infringed on a substantial scale by individuals who engaged in P2P filesharing. Arnold J made it clear (para 145) that "[t]he mere fact that the copyright works are pornographic films is no reason to refuse the grant of relief, since there is no suggestion that they are obscene or otherwise unlawful." The only way in which the copyright owners could ascertain the identify of those individuals and seek compensation for past infringements would be by (i) obtaining disclosure of the names and addresses of the subscribers, (ii) writing letters of claim to them  seeking voluntary settlements and (iii) where it is cost-effective to do so, bringing proceedings for infringement.

Having observed that the grant of the order sought by the applicants would invade the privacy of O2 subscribers and impinge upon their data protection rights, Arnold J considered first the claim of Golden Eye and Ben Dover Productions. The judge found that these had a good arguable case that many of the relevant subscribers had infringed their copyrights. Therefore, as the claimants' interests in enforcing their copyrights outweigh O2 subscribers' interest in protecting their privacy and data protection rights, it was proportionate to order O2 to disclose its subscribers' personal details.

On the contrary, Arnold J rejected the claim of the other applicants, in that it would have not been appropriate, when balancing the competing interests, to make an order which endorsed an arrangement under which the other claimants surrendered total control of the litigation to Golden Eye. Such an order would have been tantamount to “the court sanctioning the sale of O2 subscribers' privacy and data protection rights to the highest bidder”. 

Pirate Bay "a stronger case" of infringement than Newzbin

Dramatico Entertainment Ltd & others v British Sky Broadcasting Ltd & others [2012] EWHC 268 (Ch) (20 February 2012) is today's big British copyright news. Mr Justice Arnold, sitting in the Chancery Division, England and Wales, gave judgment. This blogger hasn't yet had a chance to read the details, but this is how Music Week saw the ruling:

"The UK record industry has today claimed a major victory in its fight against the Pirate Bay - with the High Court recognising that the site's owners and users are operating illegally.

Claimants represented by the BPI - including Dramatico, EMI, Polydor, Rough Trade and Warner - argued that the UK's leading six Internet Service Providers should block the filesharing site. Defendants including BT, TalkTalk, Sky and Virgin Media did not attend the hearing and were not represented.

In a written [84 paragraph] judgment handed down earlier today, Mr Justice Arnold ruled that "both users and the operators of TPB infringe the copyrights of the Claimants (and those they represent) in the UK". He added [in paragraph 81]: 

"In my judgment, the operators of TPB do authorise its users' infringing acts of copying and communication to the public. They go far beyond merely enabling or assisting. On any view, they 'sanction, approve and countenance' the infringements of copyright committed by its users. But in my view they also purport to grant users the right to do the acts complained of. It is no defence that they openly defy the rights of the copyright owners. I would add that I consider the present case to be indistinguishable from 20C Fox v Newzbin [here] in this respect. If anything, it is a stronger case". ...

A further hearing is now set for in June to decide which ISPs should block the site, and how".

Dutch Court blocks access to The Pirate Bay

As reported by Reuters, a couple of days ago a court in The Hague ordered Dutch ISPs Ziggo and XS4ALL to block access to controversial website The Pirate Bay, in order to prevent illegal downloading of music, films and games.

The case was brought by BREIN, a trade association representing both the Dutch recording industry and movie studios, which has for quite a long time - and with various outcomes - attempted to stop The Pirate Bay being accessible.

BREIN, which apparently wanted to establish a precedent, had initially targeted Ziggo because it is one of the largest ISPs in The Netherlands. XS4ALL then joined Ziggo in the case, as permitted under Dutch law, to support the ISP's position.

On 11 January The Hague court found in favour of BREIN. Now Ziggo and XS4ALL have 10 days to block access to The Pirate Bay, otherwise they will face a fine up to EUR 250,000.

"Due to the nature of the so-called BitTorrent protocol, the court assumes that those subscribers not only downloaded files, but also uploaded and thus they have infringed copyright", held the Court. While downloading is legal in The Netherlands, uploading is not, notes Computer World UK.

Time to worry?

In Sweden, where the website was founded, the owners of The Pirate Bay have been prosecuted and the website was eventually banned in 2010. Despite this, the popular site is still available online around the world.

What will happen next?

While BREIN`s director welcomed the "very important" ruling, Ziggo announced that it will appeal the decision. Even though the company opposes illegal downloading, this is ‘the start of a slippery slope’, said Ziggo`s spokesperson. "It is not the job of internet companies to act as a police force". XS4ALL`s spokesperson said the provider be "bitterly disappointed", as "fundamental rights are bartered for commercial interests". 

Apparently the decision has not particularly shocked The Pirate Bay, which has already advised users of the website on how to circumvent the blocking. 

Readers of this Blog may be interested in discussing this decision, as well as its possible echo at the European level, in light of the recent ruling of the CJEU in Case C-70/10 Scarlet ... 

More on The Pirate Bay story here and here.

Not a quiet sea for the Grooveshark

With the start of the new year, copyright is already back in courts.

Popular digital music service Grooveshark's parent company, the Escape Media Group, was sued on Wednseday before the New York State Supreme Court in Manhattan for, inter alia, breach of contract and an accounting (the case is EMI Entertainment World Inc v Escape Media Group Inc, New York State SupremeCourt, New York County, No. 650013/2012) . 

EMI claims that, since entering a licensing agreement to stream music in 2009, Escape has "made not a single royalty payment to EMI, nor provided a single accounting statement."

The complaint refers to alleged written and oral estimates by Grooveshark that it owes at least $150,000, but EMI said it believes the actual sum "greatly exceeds" such estimates.

As recalled by Reuters, the filing came less than a month after three other major record companies -- Vivendi SA's Universal Music Group, Sony Corp and Warner Music Group -- filed a lawsuit before the U.S. District Court, Southern District of New York, accusing Grooveshark of pirating thousands of songs (UMG Recording Inc et al v Escape Media Group Inc et al, U.S. District Court, Southern District of New York, No. 11-08407).

Grooveshark allows users upload songs to its servers, which other users can then stream free. It calls itself the world's largest on-demand and music discovery service, with 30 million monthly active users, more than 15 million songs, and 14 billion streams a year. 

A shark operating in a gray zone

According to its DMCA Takedown Policy, Grooveshark is committed "to honor all takedown requests that comply with the requirements of the Digital Millennium Copyright Act (DMCA) and other applicable intellectual property laws" In any case, and "[t]o be clear, as long as your infringement claim complies with the terms of the DMCA we will honor it, however we would much rather pay you than remove your content."

As pointed out by the New York Times, "[w]ith the music industry coming to rely more and more on fully licensed services like Spotify and Rhapsody that stream music by subscription, EMI’s suit highlights the legal gray zone in which Grooveshark operates."

In a statement, Grooveshark said: “This is a contract dispute that we expect to resolve.”

Let's wait and see then.

Information is holy; copying is a sacrament

As reported inter alia by TorrentFreak and BBC News, a new church received its first official recognition.

Kopimism, whose central tenet is the right to file-share, was registered by Swedish governmental agency Kammarkollegiet as a religious organisation just before Christmas. 

The Church of Kopimism is a religious organisation with roots which go back to 2010. The community of kopimi requires no formal membership, although the Church is said to count around 3,000 members. What you have to do is just feel a calling to worship what is the holiest of the holiest, information and copy. Sacred symbols are CTRL+C and CTRL+V.

The Church of Kopimism has tried to become registered as a religious organisation for more than a year. 

As declared by Gustav Nipe (the board chairman for the organisation), difficulties with registration "might have [had] something to do with the governmental organisations abiding by a very copyright friendly attitude, with a twisted view on copying."

Effects of recognition
of 'Jedi' religion 

"Being recognised by the state of Sweden is a large step for all of kopimi. Hopefully, this is one step towards the day when we can live out our faith without fear of persecution", said 19-year-old philosophy student and spiritual leader of the Church, Isak Gerson.

Despite this, as explained by music analyst Mark Mulligan, "[i]t doesn't mean that illegal file-sharing will become legal, any more than if 'Jedi' was recognised as a religion everyone would be walking around with light sabres."

Legislative steps across the globe (see the debate surrounding the SOPA) may in fact go in a different direction from what is the kopimi attitude towards file-sharing. 

Kopimi seem aware of such threats:

"We challenge all copyright believers - most of which have a great deal of influence in politics, and who derive their power by limiting people's lives and freedom. What they most of all want [is] to limit the knowledge. We need to steel ourselves for their hatred and aggression.

FRAGILE! Members of the Public

The Solicitors Disciplinary Tribunal has fined two solicitors £20k each and suspended them for three months for sending intimidating letters to people about illegal filesharing, the SRA reports here.

Some litigators may be puzzled to find that the solicitors' crimes included demanding compensation, disregarding protestations of innocence and being interested in making money.

Karaoke hoarder becomes first Scottish file-share convict

Procurator Fiscal:
"Law and honour"

Via the ever-helpful Hector MacQueen comes news of a media release from the other side of Hadrian's Wall, issued earlier today by the Crown Office and Procurator Fiscal Service, Scotland. It reads as follows:

"FIRST PERSON IN SCOTLAND CONVICTED OF ILLEGAL MUSIC FILE SHARING

Anne Muir, 58, has become the first person in Scotland to be convicted for illegally sharing music files online. Muir pleaded guilty at Ayr Sheriff Court last month to a contravention of section 107(1)(e) of the Copyright, Designs and Patents Act 1988. Muir, from Ayr, admitted to distributing £54,000 worth of copyrighted music files by making them available to others via a 'peer-to-peer' file sharing application.

Following an initial investigation by BPI (British Recorded Music Industry) and IFPI International Federation for the Phonographic Industry), a formal complaint was made to Strathclyde Police. Officers subsequently obtained a search warrant for her home at Gordon Street, Ayr, and seized vital evidence, including computer equipment.

This is the first conviction of its kind in Scotland and is particularly significant to the music industry.

District Procurator Fiscal for Ayr, Mirian Watson, said:

"Intelligence gathered by BPI and IFPI revealed that Anne Muir was a prolific user of a particular file sharing network based in the UK. Illegally flouting copyright laws is tantamount to theft and not only deprives legitimate companies and artists of earnings, but also undermines the music industry as a whole. We will continue to work effectively with law enforcement in this area and to apply our robust prosecution policy."

Sentencing has been deferred until 31 May at Ayr Sheriff Court".

The BBC has supplied further details. Muir's lawyer Lorenzo Alonzi is reported as saying that his client, an auxiliary nurse at Ayr hospital, had not used the network for any financial gain, but to build up her self-esteem after suffering from depression for a number of years:

"Mrs Muir was not in any way trying to distribute on a large scale, she had a very big quantity of these files because she was hoarding -- a symptom of a severe obsessive personality disorder that she suffers from. She has, for many years, suffered from bouts of depression, which causes her to have extremely low self-esteem."

Her haul consisted of 7,493 digital music files and, truly depressingly, 24,243 karaoke files.

Much will depend on how the court treats Muir when it comes to the sentencing.  A low sentence will be seen as no more than a slap on the wrist and as a message that it's not worth prosecuting file sharers; a high one will make her into a martyr and can result in poor publicity for the copyright-reliant industries.  The court may have a tough job getting the right balance, particularly if Muir's mental state is a major issue.

Police target file sharers in 14 European countries

The web is buzzing this morning with news that police in 14 European countries launched a coordinated series of raids on suspected file-sharing network operations yesterday (Tuesday 7th). Reports say that Belgian authorities spearheaded the investigation that led to the raids, although a substantial part of the police activity took place in Sweden, including a raid on Sweden's PRQ in Solna, the new web host of whistleblower site WikiLeaks. Raids also took place on sites in Stockholm, Malmo, Eskilstuna and at Umea University's campus in Sweden. TorrentFreak reports that other raids took place in The Netherlands, Belgium, Norway, Germany, Italy. Great Britain, Czech Republic and Hungary. The believed target of the raids is the file-sharing "Warez Scene" or the “Scene”, which appears to be a loosely-affiliated group thought to be behind many leaks of copyrighted material to the Internet and described as “ the network of individuals and servers at the top of the so-called ‘Piracy Pyramid’ “. In Sweden it is reported that four people are being questioned on suspicion of breaching copyright law. Servers and computers have also been seized.

PRQ’s Mikaelo Viberg spoke to reporters and said that armed with IP addresses, police officers turned up at PRQ’s premises “At 9:00 this morning, five policemen were here” adding “They were interested in who were using two IP addresses from 2009 and onwards. We have no records of our clients but we’re handing over the e-mail addresses for those behind the IPs. However, it’s rare that our clients have mail addresses that are traceable.”

The web was also creaking under a welter of rumours of conspiracy - the theory being that because of the PRQ action, the raids were in some way connected to WikiLeaks whose recent exposures have been rather embarrassing for the Government and military in the USA. Sweden’s Pirate Party (unsurprisingly) expressing concern saying it was “highly critical” of the raid but Swedish prosecutor Frederick Ingblad confirmed to local media that WikiLeaks was not a target of the operation.

http://torrentfreak.com/police-in-file-sharing-raids-across-europe-wikileaks-host-targeted-100907/

A kind of magic? Tenenbaum damages shrunk by 90%

US District Judge Nancy Gertner has slashed the federal jury award made against convicted file sharer Joel Tenenbaum by 90 percent, ruling that the award of $22,250 per infringed work could not withstand scrutiny under the Due Process Clause and was “unconstitutionally excessive’’ in light of what she described as the modest harm caused to the record labels whose works were infringed. She cut the award to from $675,000 to $67,500, one-tenth of the original sum. Judge Gertner said

“There is no question that this reduced award is still severe, even harsh .... It not only adequately compensates the plaintiffs for the relatively minor harm that Tenenbaum caused them; it sends a strong message that those who exploit peer-to-peer networks to unlawfully download and distribute copyrighted works run the risk of incurring substantial damages awards.’’

Judge Gertner’s maths to get to a figure of $22,250 damages for each act of infringement went like this

- statutory damages must bear a reasonable relationship to the actual damages
- the actual damage sustained by plaintiffs was no more than $30
- the benefit to the defendant was in the neighborhood of $1500
- it was permissible to treble the minimum statutory damages due to defendant's wilfulness

However the Boston Globe reports that the Judge Gertner believes that reduction also sends an equally important message that the constitutional protection against grossly excessive punitive awards in civil suits protects not only big corporations but “ordinary people like Joel Tenenbaum’’. Congress, she said, never envisioned that the Digital Theft Deterrence Act of 1999 would expose people like Tenenbaum to huge statutory damages for violating copyright law through illegal file sharing.

The major label’s trade body, Recording Industry Association of America (RIAA) issued a statement saying, “With this decision, the court has substituted its judgment for that of 10 jurors as well as Congress’’ saying that it would “contest this ruling’’.

Judge Gertner’s decision to reduce jury damages mirrors that in the case against Minnesota single mum, Jammie Thomas-Rasset who faced a jury award of $1.9 million. Earlier this year, the judge in that case reduced a jury award of $1.9 million in favour of the recorded music industry to $54,000 in her second trial, and the industry offered to settle the case with her for $25,000. However, Thomas-Rasset rejected the settlement, and the case is now poised to go to trial for a third time. Whether Tenenbaum decides to appeal is open – his lawyer, Havard law professor Charles Nesson said he is inclined to appeal the $67,500 award as still unconstitutionally excessive to the First Circuit Court of Appeals but must speak first with his client. Tenenbaum to reporters he had not read the decision and whilst he welcomed any reduction but he could not afford $67,500 either.

http://beckermanlegal.com/pdf/?file=/Lawyer_Copyright_Internet_Law/sony_tenenbaum_100709Decision.pdf
http://www.boston.com/news/local/massachusetts/articles/2010/07/10/file_sharing_damages_reduced_tenfold/
and lots of interesting comments here in the blogsphere http://recordingindustryvspeople.blogspot.com/2010/07/675000-verdict-reduced-to-67500-in-sony.html

And see 'A copyright ruling no one can like' at http://news.cnet.com/8301-31001_3-20010428-261.html

RIAA face up to third Thomas-Rasset trial

I imagine that the mention of the names Joel Tenenbaum and Jammie Thomas-Rasset, the two high profile and currently convicted file swappers in the USA, probably drum up nothing but despair in the offices of the Recording Industry Association of America (RIAA) in light of the ongoing negative press the record labels face for ‘suing their own customers’ etc etc. Even so, the RIAA has rejected a judge's order reducing the damages awarded against convicted file-swapper Jammie Thomas-Rasset from $1.92 million to $54,000, meaning that the Minnesota single mum will now face a third trial on the issue of damages

In her first trial, a jury found Thomas-Rasset guilty and ordered her to pay $222,000 in damages for copyright infringement. However, the judge later said he had erred in his instructions to the jury and ordered a new trial. In the second trial the jury again found Thomas-Rasset guilty, but this time awarded $1.92 million in damages. Then last month the judge from the second trial, Judge Michael Davis, sided with Thomas-Rasset's attorneys and reduced that jury award to $54,000, representing $2,250 for each song that Thomas-Rasset was found guilty of sharing - triple the statutory minimum of $750, but far far less than the statutory maximum of $150,000. To end matters, the RIAA then offered Thomas-Rasset an even lower settlement (thought to be $25,000) provided she ask the judge to vacate his ruling that lowered the damages; she refused that offer. The RIAA have now said that they “find it impossible to accept a remittitur that could be read to set a new standard for statutory damages - essentially capping those damages at three times the minimum statutory amount of $750 saying “this far-reaching determination is contrary to the law and creates a statutory scheme that Congress did not intend or enact." Let round three (and a half) commence.

http://www.dmwmedia.com/news/2010/02/10/fileswapper-headed-third-trial-copyright-charges

Goodbye Sweden, hello Ukraine: bulletproof havens for your holidays ...

Yesterday's Guardian featured an article ("Internet pirates find 'bulletproof' havens for illegal file sharing") by Bobbie Johnson, that newspaper's tech correspondent, which carries some useful pointers as to where file-sharers might choose to go for their holidays this summer. According to this article,

"Internet pirates are moving away from safe havens such as Sweden to new territories that include China and Ukraine, as they try to avoid prosecution for illegal file sharing ...

For several years, piracy groups that run services allowing music, video and software to be illegally shared online have been using legal loopholes across a wide range of countries as a way of escaping prosecution for copyright infringement.

In the last year there has been a significant shift, say piracy experts, as the groups have worked to stay beyond the reach of western law enforcement.

The change is rooted in the evolution of "bulletproof hosting", or website provision by companies that make a virtue of being impervious to legal threats and blocks. Not all bulletproof services are linked to illegal activities, but they are popular among criminal groups, spammers and file-sharing services.

Rob Holmes, of ... IP Cybercrime, ... said successful hosts were now starting to get stronger. "Some of the more popular ones have become more strongholds than they were previously," he said. "It's an industry and it always will be. When you think about it, bulletproof hosting is just a data version of money laundering."

Late last year a Swedish court found four men guilty of breaking copyright law through their links to the Pirate Bay website, ....

That decision prompted many piracy services to seek jurisdictions beyond the reach of western law. Pirate Bay moved its web servers to Ukraine, while another popular file-sharing service, Demonoid, which started in Serbia, also relocated.

"Before going completely dark in October [2009], Demonoid physically moved their servers to Ukraine, and remotely controlled them," said John Robinson, of BigChampagne, .... "Ukrainian communications law, as they paraphrase it, says that providers are not responsible for what their customers do. Therefore, they feel no need to speak about or defend what they do."

Not every controversial service has fled beyond traditional jurisdictions, however. Some problematic hosts still exist in the US, such as the infamous host McColo, which was based in San Jose, California, and remained in operation until last year.

Pirate Bay, after its brief excursion to Ukraine, is now run out of a Dutch data centre called CyberBunker, which is based in an old nuclear facility of the 1950s, about 120 miles south-west of Amsterdam.

Research published last year showed that most bulletproof hosts are located in China, where criminals are able to take advantage of low costs and legal loopholes to avoid prosecution.

Despite officials in Beijing talking in tough terms about computer crime – hacking potentially carries a death sentence in China – the authorities rarely co-operate with other countries to take action against hi-tech criminals. As a result, just a handful of firms in China are responsible for hosting thousands of criminal enterprises online. ...

Richard Cox of Spamhaus, a British organisation that watches spammers and monitors bulletproof hosts, said it was almost impossible to stop expansion of such services. "At the moment there are a number of individuals who are setting up bulletproof hosting sites in China," he said. "No matter how big a part of the Chinese network we block, the administrators there just do not care."

Not every controversial service has fled beyond traditional jurisdictions, however. Some problematic hosts still exist in the US, such as – the infamous host McColo, which was based in San Jose, California, and remained in operation until last year.

But the long-term impact of offshore hosting is becoming more problematic as investigators worldwide try to cut the links between criminal groups and protected internet servers.

One notorious gang of hackers, known as the Russian Business Network, ... started as a bulletproof host in St Petersburg but had connections to a wide range of criminal activities online. Widely known in the computer security community, it is being investigated by the FBI. The Russian authorities, meanwhile, have been keen to foster greater communication to stop the spread of criminal activity online.

Some are hopeful that greater co-operation between international governments will help prevent the development of new piracy havens, but others suggest that it is unlikely that a complete block on such activities will ever be possible.

"There will always be a place to run to," said Rob Holmes ... "Each time a law passes, or a new country creates some kind of stumbling block for them, they'll always find another place to do this. It goes back to the speakeasies in the 1920s – when one place got busted, they would just congregate in another place."

It can be argued that bulletproof havens are a positive step when viewed in broad terms: they are a sign that diplomacy, economic pressure and other measures can at least be targeted at the havens themselves, which can be worked on individually with a view to their cooperation. This is not much consolation to IP rights owners, however, since it is their rights which cannot be enforced.

Holiday in Ukraine here
Ukraine luxury hotels here

Mandelson wants to give something back

Peter Mandelson, the Secretary of State for Business, Innovation and Skills has made an interesting guest contribution to the Times (29th August 2009) titled “Taking something for nothing is wrong . . . . . . that’s why we must stop illegal file sharing and give the creative industries a breathing space”

The article, which is a good read, can be found in the Saturday Times for the princely sum of just £1.50 (ooo err – forget about David Geffen and Corfu, with an election on the way should we tell Mr Murdoch that Labour’s Lord Mandelson is helping him monetise content) or it can be found just one click away (for free, ooops) here.

Tenenbaum filesharing trial opens in Boston

It’s not being streamed live but the Joel Tenenbaum file sharing case in the USA is certainly making the headlines. Tenenbaum, the 25 year old college student accused of illegally downloading and sharing music online, is in the public eye not least because of the ‘flamboyant’ (elsewhere described as ‘rambling’) presence of Harvard law professor Charles Nesson who opened the defence by holding up a rectangular piece of plastic foam wrapped in cellophane which he said represented the compact discs that record companies sold before digital music became available online. He then sliced open the wrapper with scissors and hundreds of tiny jigsaw pieces fell in a pile in front of the jury in US District Court in Boston with Nessom saying “You have the ability to share, and this physical object’’. The 70-year-old professor then paused and snipped open the foam commenting “suddenly broke into a million bits. Here it is. Bits. . . . Can you hold a bit in your hand? You can’t. . . . And suddenly you have songs being shared by millions of kids around the world.’’

Tenenbaum no longer denies that he shared music illegally but Nesson said his client was “a good kid’’ who admits using file swapping network Kazaa to share songs online but says he did it only because of his he love of music, not to make a profit saying "He was a kid who did what kids do and loved technology and loved music” adding “the Internet was not Joel's fault …. the internet sweeps in like the way the automobile swept into the buggy industry".

Timothy M. Reynolds, who represents four major record labels which are plaintiffs in the trial, said damages to the industry from free file-sharing are enormous and imperil “real people,’’ ranging from sound engineers to talent scouts saying “The defendant knew what he was doing was wrong at each step of the way, but he did it anyway,’’ said Reynolds, who added that Tenenbaum continued sharing music files on other peer-to-peer networks even after the recording industry filed suit. He also pointed out that Tenenbaum didn't initially admit he was the person using Kazaa at his IP address alleging that the student "tried to blame others for his conduct - he didn't take responsibility" and initially tried to pin blame on his friends, his sisters, a foster child living with his family and even a "burglar".

Wade Leak, a senior vice president at Sony and deputy general counsel, testified that illegal file-sharing has cost record companies profits and made it harder to nurture new artists, citing Bruce Springsteen as one performer who became a star only after releasing a couple of modestly successful records and Reynolds added that "The exact amount of harm is incapable of exact proof. But make no mistake about it: the defendant's activities caused significant harm". Nesson has said that the record industry is simply making an example of Tenenbaum’s activities - which are common practice amongst youth across the US saying "Everyone could download [songs] for free … and millions and millions did. Joel was one of those millions. In his way he's like every other kid. There's nothing that distinctive about Joel".

The final witness of the day was Tenenbaum's father, Dr Arthur Tenenbaum, who was called by the RIAA to testify and who told the court that he had once called his son at college, in 2002, to warn him he may be sued if he continued to use the P2P client. He told the court his son responded: "You only get sued if you do it a lot". The trail judge, Nancy Gertner, has already ruled out any form of ‘fair use’ defence and with the admission of guilt it is difficult to see what Nesson will achieve beyond perhaps minimising damages - but with a jury, who knows! That said, in the recent Jammie Thomas-Rasset trial the jury awarded dmages of $1.92 million. The case continues, with Judge Gertner saying she would like it all wrapped up by Friday.

http://www.boston.com/news/local/massachusetts/articles/2009/07/29/opening_statements_made_in_civil_suit_over_swapping_songs/
http://news.cnet.com/8301-1023_3-10298079-93.html

http://copyrightsandcampaigns.blogspot.com/2009/06/gertner-nixes-barlow-as-tenenbaum.html

Photo: Professor Charles Nesson in his trademark turtle neck top