Tarantino Suit Against Gawker Dismissed

As reported by the 1709 Blog back in February, director Quentin Tarantino is currently suing popular media and gossip blog, Gawker, for the contributory infringement of copyright in a script entitled, The Hateful Eight. The screenplay was leaked after the director circulated it among six acquaintances. Thereafter, the script was uploaded to two file-sharing sites: Anonfiles.com and Scribd.com. Gawker reported the leak and provided hyperlinks to the uploaded files.

Quentin Tarantino

Last week, a district court judge in the Ninth Circuit granted Gawker’s motion to dismiss on the grounds that Tarantino had failed to provide any evidence of direct infringement. Instead of providing the necessary proof that someone copied the work and that Gawker’s actions contributed to that direct infringement, Tarantino simply speculated that some direct infringement must have taken place.    

This leads one to wonder whether Tarantino’s assumption that direct infringement occurred was misplaced. On the balance of probabilities, it seems likely that someone will have downloaded the script from the file-sharing sites. Ought the failure to provide a specific allegation of such actions be grounds for motion to dismiss? Or ought the court presume direct infringement and allow the case to continue to the discovery stage?

Also interesting is the court’s discussion of what qualifies as a direct infringement. In a footnote, the court states that “even if Plaintiff alleged that individuals accessed the links contained in Defendant’s article in order to read Plaintiff’s script, such an allegation would still not support Plaintiff’s contributory infringement claim against Defendant” because “[s]imply viewing a copy of allegedly infringing work on one’s own computer does not constitute direct infringement.” Some have questioned whether this statement is consistent with a previous Ninth Circuit case of MAI Systems v Peak Corp., 991 F.2d 551 (1993). According to this case, the automated copying of protected material into a computer’s RAM is potentially grounds for direct infringement, despite the temporary existence of the copy. Presumably if someone did use the link to access the script, their viewing of the site would create a RAM copy and thus constitute a direct infringement under the MAI holding.

The court will allow Tarantino to re-file the case with more evidence by the end of the month.  Meanwhile, although he was initially so appalled by the leak that he decided to scrap the project, the director has subsequently stated that he is continuing to work on the script.

German court find domain name registrars must act on client's infrigements

PC World reports that the Regional Court of Saarbrücken in Germany has ruled that a domain name registrar "can be held liable" for the copyright infringements of a website it registered if it is obvious the domain is used for infringements and the registrar does nothing to prevent it in a case between Universal Music and Key-Systems, the German registrar of the domain name for h33t.com, a torrent tracker site which had shared Robin Thicke’s album and single Blurred Lines. 

Key-Systems argued that it was not responsible for the copyright infringement and that it was only providing a technical service, but the court ruled that a registrar had a duty to investigate having been notified of infringing activity, and had to take corrective action in case of obvious violations -and close the domain if necessary.

It seems that Universal had demanded that Key Systems deactivate the domain:  Volker Greimann, Key-Systems’ General Counsel told PC World "The courts’ definition of what is obviously violating is however extremely broad and the duty to act is expanded to deactivation of the entire domain even if only one file or link is infringing,” adding "If left unchallenged, this decision would constitute an undue expansion of the legal obligations of each registrar based in Germany, endangering the entire business model of registering domain names or performing DNS addressing for third parties”. 

The Federal Court of Justice in Karlsruhe had previously ruled that DENIC (the central registry for all domains under the .de top level domain, similar to Nominet in the UK) is generally not liable for infringement, and that DENIC could be liable but only where notified and the infringement was obvious and readily identifiable - at a specific domain.

Key-Systems faces a maximum fine of €250,000 (US$339,000) if they d not apply the court's ruling. Key-Systems is currently reviewing the decision and considering its options for an appeal.

It's interesting that the German courts seem to be asking registrars and registries to 'make up their own mind' about what might be "obviously violating" - not least on what is and isn't infringing: From Betamax machines to Amstrad dual cassette decks to download software to websites - this definition has troubled the courts for decades - and continues to trouble. And let's not forget the recent spat about the letters sent out by the City of London Police's IP Crime Unit to domain name registrars hosting suspected "infringing" websites: Canadian domain registrar easyDNS recently published a National Arbitration Forum ruling which seems to be in it's favour in relation to the domains that were blocked by Public Domain Registry in response to a letter from the City Of London Police's Intellectual Property Crime Unit. Having heard that the IP Crime Unit was not a court of law, the Arbitrator charged with the task of considering this dispute ruled in favour of easyDNS saying "No court order has been issued which would prohibit the transfer of the domain names at issue from the Registrar Of Record to the Gaining Registrar. Therefore, there is nothing in the Transfer Policy which authorises the Registrar Of Record to refuse to transfer the domain names". The ruling continued: "To permit a Registrar Of Record to withhold the transfer of a domain based on the suspicion of a law enforcement agency, without the intervention of a judicial body, opens the possibility for abuse by agencies far less reputable than the City of London Police". 

Here it seems that German registrars are expected to be the enforcement agency - AND make the decision of the court.

http://the1709blog.blogspot.co.uk/2013/12/pipcu-goes-global-in-pursuit-of-illegal.html

Prison term for kiwi karoke copycat

The owner of a New Zealand karaoke business has been jailed for four months for offering and selling substantial numbers of karaoke tracks – which had been created from scratch by the owners of Auckland-based Sundown Karaoke, which creates karaoke recordings, burns them to disks and sells them around the world, paying on royalties to the appropriate songwriters. Desmond Robert Adams, 40, also known as Heremia Adams, appeared in the Rotorua District Court  having already  pleaded guilty  to a charge under the Copyright Act 1994 of making for sale an object that was an infringing copy of a copyright work. He was sentenced to four months in prison and ordered to pay reparation of $784. 

Adams was the owner/operator of 1st Choice Karaoke, which provides karaoke and DJ equipment and services throughout New Zealand. According to the police Summary of Facts, in March 2011 Adams advertised karaoke and DJ equipment, and access to 37,000 karaoke songs, on auction website Sella. The complainants contacted him, and Adams sent them a list of songs, telling them he had sold the library to more than 50 clients worldwide. The complainants made a $200 deposit and one member of staff travelled to Rotorua. She met with a team from TVNZ's Close Up programme, who fitted her with a covert camera and microphone to complete the sale. She paid Adams another $584, and was given two external hard drives which held an impressive the 37,000 songs. When random samples were examined by the police they found a number of songs were the copyright property of the complainants.

Judge Jocelyn Munro said there had been few convictions of this type under the Copyright Act. She said there had to be serious consequences for those that breached commercial copyright in order to deter others saying "This is all too common and all too easy in this internet age" adding "For many in recording and entertainment, their livelihoods depend on what they produce." in their victim impact statement, the complainants estimated they had lost in excess of $1.5 million in sales because of Adams and that his actions had reduced their income to next to nothing, destroying their business. Judge Munro noted that with more than 50 sales admitted, the offending had clearly taken place over time saying "This is a large commercial operation you have embarked on. For that reason nothing less than a term of imprisonment is adequate [to provide] deterrence."

http://www.rotoruadailypost.co.nz/news/jailed-for-selling-music-on-internet/1767526/

Hopping Mad

From guest blogger Philippa Malas comes this thoughtful piece which the 1709 Blog commissioned on a fascinating development in the US: Philippa, who used to work within the art world at Sotheby's, is a persistant IP enthusiast who studied for the Bar course last year.

"Hopping Mad

The major US television networks are potentially hopping mad at the release of a new digital video recorder (“DVR”). “The Hopper” was recently launched by the third largest satellite television provider in the States, DISH. Subscribers to Primetime Anytime can activate the Hopper to record the entire prime time broadcast schedule aired across NBC, ABC, CBS and Fox networks (the “Networks”). The Hopper also features “Auto Hop” which automatically skips the adverts of the stored prime time content during play back. DISH actively markets its product as “commercial free TV”. Ted Harbert, NBC Broadcasting Chairman referred to the device as “an attack on our ecosystem”.

DISH pre-empted objections to its product by filing suit in New York for declaratory relief, arguing that it had complied with its transmission licences and that copyright had not been infringed. Unsurprisingly, the Networks disagreed. Auto Hop allows the consumer to skip advertising during prime time periods which generate significant advertising revenue. NBC, CBS and Fox -- but not ABC -- (the “Networks”) filed suit in Los Angeles for copyright infringement with Fox also suing for breach of contract, in an action which has been stayed pending a motion to dismiss brought by DISH against CBS and NBC. A hearing date in New York is set for 2 July 2012.

The US Copyright Act confers an exclusive right on a copyright owner to reproduce, distribute and prepare derivative works which are based upon the works capable of attracting the right, § 106(1). The Networks contend that infringement has occurred under § 501, alleging (a) direct infringement and (b) secondary infringement through (i) inducement of infringement; (ii) contributory infringement; and (iii) vicarious infringement. It is worth identifying the substance of these objections, then considering the case in relation to EU provisions.

Direct infringement

The Networks argue that the Hopper’s storage capacity (two terabytes or 2000 hours of video content) combined with the Primetime Anytime service means a user can create an on demand library which is copied to a device under the ongoing remote control of DISH. DISH is creating and distributing unauthorised copies of the Networks’ work which directly infringe their rights under §. 501. Note: it is the user and not DISH that is responsible for activating the service and therefore for creating the copy.

Secondary infringement

Inducement to infringe

The Networks also claim that by providing the user with the Hopper and related features, DISH are promoting the use of its products for infringement and inducing infringement (§. 101). They claim that DISH targets known markets for infringement, namely consumers who wish to watch content without paying for permanent copies of ad-free works (via iTunes or Hulu.com). This draws parallels to terminology used in the US internet file-sharing case MGM Studios v Grokster. The Supreme Court found against Grokster, which had aimed to satisfy a known source of demand for copyright infringement. It would be difficult to draw the same conclusion in the instant case. DISH’s customers are likely to assume that the third largest US satellite TV provider had obtained the requisite broadcasting licenses and are therefore, dissimilar to the potential pirates a Grokster-type scenario might pre-suppose. In Grokster, the defendants were also found liable as the court established that they had not developed tools to diminish infringing acts and that they were gaining an economic benefit by selling advertising space on their site. DISH is gaining economic benefit and markets the Hopper to an audience as a way of avoiding the advertisements. It is not easy to determine whether infringement has occurred under this head.

Contributory infringement

Second, the Networks allege contributory infringement. The provision of DISH’s services and the Hopper facilitate and assist the user to infringe copyright. FOX’s pleadings allege that DISH has control over one of two storage elements in the Hopper and can monitor its users’ and prevent infringement but that it fails to do so. Success on this ground depends on whether DISH is aware that the users are infringing copyright. Its declaratory relief filing is evidence to the contrary. Even if the users are recording broadcasts, the activity could be exempt under fair use, as established in Sony v Universal City Studios 464 U.S. 417 (1984), and there would be no secondary infringement.

Vicarious infringement

Finally, the Networks argue that DISH vicariously infringes their rights. As DISH has partial control over the Hopper, it has the power to control infringing conduct of its customers. Again, the difficulty here is that it is the customer (not an agent of DISH) which is creating the copy. Control is only recognized in cases which establish a recognised agency relationship. Since the user is not obliged to use the Hopper’s features, infringement is not an inevitable conclusion.

An EU perspective

It seems that the Networks may have difficulty pursuing the infringement claims. Only Fox has filed for breach of contract. Fox also states that it is not taking issue with ‘traditional DVRs’, merely DISH’s particular product. From an EU perspective, that would be a wise path to adopt following the conclusions of the Court of Justice of the European Union (CJEU) in Airfield v Sabam C-431/09 and C-432/09 and more recently FAPL v QC Leisure C-403/08 and C429/08. In Airfield the court considered ‘communication to the public’ under the Satellite Broadcasting and Cable Retransmission Directive (93/83). It held that permission from a rights holder was required when a satellite provider intervenes in the communication from the original broadcaster, making works accessible to a public (‘new public’) wider than that conceived under the original authorisation. This is regardless of whether the programmes are already being broadcast by means reaching viewers directly. DISH counter that they obtained the relevant licences to permit the retransmission of the broadcast. In FAPL, the CJEU again examined ‘communication to the public’, concluding that it was not irrelevant that such a communication is of a profit-making nature [177]. DISH might also struggle with a defence under Article 5(1) Copyright Directive (2001/29). The copies stored on the Hopper are more substantial reproductions than those considered in ITV Broadcasting Ltd and others v TV Catch Up Ltd [2011] EWHC 1874 (Pat) (applying Infopaq)".

A katpat to Chris Torrero, for steering us to the initial link on IP Brief