Online piracy, Content ID and the role of intermediaries: is this the right direction?

A few days ago the Wall Street Journal - this serious blogger's favourite and only (well, sort of) publication in her spare time - published an interesting article discussing the presence of illegally uploaded films on YouTube and asking a question which also 1709 Blog readers might have had for some time now: why isn’t YouTube's Content ID used by rights owners as widely as one might expect to identify and block illicit contents from YouTube?

As explained on the relevant page, since 2007 YouTube has made available for free use an advanced set of copyright policies and content management tools to give rights holders control of their content. Content ID allows rights owners to:

·         Identify user-uploaded videos comprised entirely or partially of their content and

·         Choose, in advance, what they want to happen when those videos are found. Make money from them. Get stats on them. Or block them from YouTube altogether.

Rights holders deliver YouTube reference files (audio-only or video) of content that they own, metadata describing that content, and policies on what they want YouTube to do when a match is found. YouTube compares uploaded videos uploaded against those reference files, and applies the requested policy: monetise, track or block content.

According to the latest Content ID statistics,

·         Content ID scans over 100 years of video every day

·         More than 3,000 partners use Content ID, including every major US network broadcaster, movie studio and record label

·         YouTube has more than eight million reference files (over 500,000 hours of material) in its Content ID database; 

·         Over a third of YouTube's total monetised views come from Content ID

·         More than 120 million videos have been claimed by Content ID.

Apparently, however, these numbers are not high enough. According to the Wall Street Journal, illegally uploaded copies of well-known films such as Disney's animated classics (including "Peter Pan," "Snow White and the Seven Dwarfs," and "Fantasia") have been available on YouTube to watch for as long as a year.

  

While the conditions under which liability of intermediaries such as YouTube may arise under the Digital Millennium Copyright Act have been recently clarified in a landmark decision of the US Court of Appeals for the Second Circuit (on which see Ben's posts here and here), and YouTube has recently implemented a new appeals process to dispute Content ID claims (here), piracy levels remain high on platforms like YouTube.

While video scanning is not effortless,
it has to be graceful

"Hit one, countless others appear. Quickly. And the mallet is heavy and slow" summarises the New York Times.

For example, to get around Content ID, some YouTube users have started placing copyrighted videos inside a still photo of a cat that appears to be watching an old JVC television set. The Content ID algorithm has a difficult time seeing that the video is violating any copyright rules; it just sees a cat watching TV.

Besides this, rights owners have been increasingly involving intermediaries in their fights against online piracy. Just think about the high and growing numbers showed in the Google Transparency Report or the implementation of the so called 6-strikes enforcement plan in the US (here, here, here, here ...). 

But does all this work?

Do you need magic to contrast online piracy?
Perhaps some Fantasia is required first ... 

According to the co-director of Fight for the Future, "There’s a clearly established relationship between the legal availability of material online and copyright infringement; it’s an inverse relationship ... The most downloaded television shows on the Pirate Bay are [were?] the ones that are not legally available online.”

While rights owners are having a tough time in curbing online piracy, and infringers themselves are finding new ways to get around piracy detectors, this blogger ventures to say, not only (and very originally indeed) that "the answer to the machine is in the machine", but also that the most effective way to contrast piracy would be to develop innovative services which allow users to enjoy copyright-protected materials legally, but also easily and at a reasonable price. Is this too banal? Yes, but it seems that not everybody has got it yet …

Russia withdraws Berne reservation

WIPO-watchers and copyright nerds will already have spotted Berne Notification No. 258: Berne Convention for the Protection of Literary and Artistic Works, which bears the following news:

Notification by the Russian Federation: Withdrawal of Declaration Concerning Article 18 of the Paris Act (1971)

The Director General of the World Intellectual Property Organization (WIPO) presents his compliments to the Minister for Foreign Affairs and has the honor to refer to the deposit, on December 9, 1994, by the Government of the Russian Federation, of its instrument of accession to the Berne Convention for the Protection of Literary and Artistic Works of September 9, 1886, as revised at Paris on July 24, 1971, and amended on September 28, 1979 with a declaration according to which the effects of the said Convention shall not extend to the works which, at the date of entry into force of the Convention with respect to the Russian Federation, are already in the public domain in its territory. See Berne Notification No. 162 of December 13, 1994.

In this respect, the Director General has the honor to notify that the Government of the Russian Federation has deposited, on January 31, 2013, a notification withdrawing the above-mentioned declaration.

January 31, 2013

A handy explanation of the background to this move, and to what it means, can be found on the Wikipedia page entitled International Copyright Relations of Russia.

Court of Appeal takes a punt on database rights

Time flies and the flow of significant copyright cases continues at a pace that makes it hard for even the best-organised of blogging teams to pick up each decision as it comes out, dedicate the depth of care and attention to it which it (and the blog's readership) merits, and then post a polished analysis.  This post on yesterday's 109-paragraph ruling of the Court of Appeal for England and Wales (Lord Justice Lloyd, Lord Justice Lewison and, giving judgment for the court, Sir Robin Jacob) in Football DataCo & Others v Stan James Plc & Others and Sportradar GmbH & Others,[2013] EWCA Civ 27. is therefore a good deal shorter than its content deserves.

The judgment reveals that the appeal covered two separate actions, heard together, on the subsistence and infringement of database right in data relating to football matches. The claims were brought by the English and Scottish Football Leagues and their licensees against Stan James plc, a betting company and Sportradar, an online sports data provider. All parties had appealed various findings by Mr Justice Floyd in his first instance decision of 8 May 2012, noted by the IPKat a day later here.

The proceedings concerned only joint liability aspects of each claim, and the Court of Appeal held as follows, at [106]:

"(a) There is a sui generis database right in FDC's Football Live database; 

(b) Both before and after defence UK punters [not the Oxford and Cambridge sort, but those who place bets] extract a substantial part of that database when they use the pop-up facility on the Stan James website [the reference to 'before and after defence' is to the fact that the defendants changed their practice after they filed their defence];

(c) Both Stan James and Sportradar are joint tortfeasors with the UK punters; and

(d) There are no defences of abus de droit or infringement of Article 10 of the ECHR."

In reaching these conclusions, however, the Court made a number of findings that have potential implications beyond the immediate subject matter of these actions. The judgment seems to provide that a website owner anywhere in the world who hosts a hyperlink that a UK user uses to access infringing content will be jointly liable with that user for the infringing acts. This finding has potentially enormous implications in the sphere of the internet.

The Court of Appeal has also found that a database which qualifies for protection under the database right regime may exist within a literary work which is protected by copyright, there being no conflict in the two rights subsisting simultaneously. As such it seems that literary works can be reclassified as databases by claimants. This may seem fanciful but, in doing so, a copyright owner can strengthen his hand in any dispute. The test for infringement of the sui generis database right is very different to that of regular copyright, since it's directed towards the protection of investment and not creativity. Additionally there are no "fair use" type defences available under the Database Directive. As such, for example, a news reporting agency may claim that database rights underpin its news report and, on that basis, seek to prevent republication by a rival.

The final (?) installment in the Newzbin saga

© HikingArtist.com

Everyone will be aware of the courts' decisions in Newzbin and Newzbin 2. By way of short summary, Newzbin was a website which indexed and provided links to infringing films and music. In March 2010, Mr. Justice Kitchin ruled that Newzbin liable both for communicating copyright protected works to the public and for authorising copyright infringement. He held that Newzbin was deliberately indexing copyrighted content, and that "for the year ended 31 December 2009, it had a turnover in excess of £1million, a profit in excess of £360,000 and paid dividends on ordinary shares of £415,000".

Newzbin was temporarily shut down but came back as Newzbin 2. In June 2011, the Motion Picture Association applied for an injunction to force BT to cut off customers' access to Newzbin 2, which was granted by the High Court on 28 July 2011.

In September 2011, Newzbin 2 released software which aimed to circumvent the BT blocking, causing the High Court to order BT to block its customers' access to the Newzbin 2 within fourteen days. This was a first in terms of UK copyright law.

Both decisions are summarised in more detail by the IPKat here.

The latest in the saga is a decision from the High Court regarding whether a copyright owner has a proprietary claim to money derived from infringement of the copyright. Six film studios, all members of the Motion Picture Association, claimed to be the owners or exclusive licensees of the copyright in numerous films and television programmes, and argued that where copyright is infringed, the copyright owner has a proprietary claim to the whole proceeds of the infringement.

Mr Justice Newey held that the remedies for infringement of copyright are dealt with in chapter VI of part I of the CDPA. Section 96(2) states that, in an action for infringement of copyright, "all such relief by way of damages, injunctions, accounts or otherwise is available to the plaintiff as is available in respect of the infringement of any other property right".

He concluded that:

"Despite Mr Spearman's persuasive advocacy, it seems to me clear that a copyright owner does not have a proprietary claim to the fruits of an infringement of copyright. I shall not, therefore, grant proprietary injunctions."

So Hollywood won't get the profits of Newzbin's piracy.

An interesting side note: ZDNet  reported that the barrister acting for Newzbin in its 2010 trial has been indefinitely struck off in January 2012 because he owned the file-sharing site. The Bar Standards Board disbarred Brighton-based David Harris for breaches of paragraphs 301(a)(iii), 302, 603(d) and 901.7 of the Code of Conduct of the Bar of England and Wales.

Welsh music dispute heads to Tribunal

Three weeks ago we reported that German song collection society GEMA was taking YouTube to the arbitration board of the German Patent and Trade Mark Office over the alleged use of 1,000 unlicensed music tracks on the internet video platform, and for an independent decision on whether it’s demand for E1.6 million was appropriate. 

Now comes news that the BBC is taking new Welsh language music collection society Eos to the Copyright Tribunal in a row about BBC radio royalties which began back in 2007 when the Welsh songwriters and music publishers were still members of PRS for Music. A three-way discussion between the BBC, PRS and the affected welsh language music creators ensued and continued for a quite few years without resolution, until eventually over 300 Welsh-language creators and rights owners left the PRS and set up their own collecting society, Eos. There remains a ‘significant gap’ between what the musicians and publishers want, and what the BBC is prepared to pay, and currently BBC Welsh language programming is denied the use of the 30,000 songs is Eos’s database – previously core to is Welsh services - making it hard for the national broadcaster to meet Welsh language targets – and of course Welsh music isn’t being played on the radio in Wales, meaning Eos songwriters and publishers are not getting paid. 

Eos claimed they were being short-changed and the group has accused the BBC of conducting "sham" negotiations. The director of BBC Cymru Wales, Rhodri Talfan Davies, says the corporation is not trying to threaten Welsh language musicians in the dispute over royalties and the BBC now wants the Copyright Tribunal to resolve it's row with Eos,  and has even offered to contribute to the group's legal costs to "ensure that Eos is able to put its arguments to the independent copyright tribunal which is the established legal process to resolve commercial disputes of this nature in a fair and binding manner". Its appears the parties are continuing to negotiate. 

Eos chief executive, Dafydd Roberts, said the latest development was "disappointing" saying "We've taken legal advice .... so we'll be considering our position in terms of a Copyright Tribunal. But what's disappointing is that whilst we thought we were negotiating with the BBC on various terms, in fact all they were doing was preparing ground for the Copyright Tribunal". Roberts said that Eos will consider allowing BBC Radio Cymru to play its members' music pending any decision. 

http://www.bbc.co.uk/news/uk-wales-21351113

Is Universal Publishing’s exit from collective licensing a step backwards for music industry ‘one stop’ aspirations?

The one question I always get asked by young entrepreneurs setting out to create legitimate digital offerings in the digital music space is where do they go to get licences to use music, and make payments ? Well, there is no easy answer. In 2012 Daniel Ek, the creator of Spotify, pointed out that the European Union alone had 27 different  music collection societies for songs – and a similar number for sound recordings as well as the the four major labels dealing directly  for digital rights: Ek said the service’s U.S. debut was then still a few months off as Spotify worked through a maze of licensing issues with publishers, labels and collection societies, saying that to create a new above-board music platform in America under current copyright law required big reserves of money, lawyers and perseverance. And that’s just America! At the time Johanna Shelton, senior policy counsel for Google Inc said “The Internet is a simple distribution platform … [but] we’ve made things unnecessarily complex,” noting that calls for a music rights organisation, a one-stop shop to deal with all licensing issues, had gone unheeded. But we all now know that in default of legitimate services ……. piracy fills the void -  and then no-one gets paid.

Martin Mills, the much respected boss of independent Beggars group whose labels include XL, 4AD and Rough Trade and home to Adele, The National, The Prodigy, Sigur Ros, Jack White and Vampire Weekend amongst others, recently admitted that rights owners - especially the bigger ones - had made various mistakes in the way they licence online content services in the last fifteen years, and that the music rights industry still needed to work harder on developing better cross-territory licences. That said, Mills told an audience at the MIDEM convention "I don't believe that the present day music industry is a reluctant licensor" adding "we do not need to have control of our rights taken away from us, to be forced to licence that in which we have invested at uneconomic prices, to simply allow huge tech firms to make even huger profits. Yes, music companies needed tech companies just like tech companies need content, but "as someone who invests in music - and when I looked at the numbers a few years ago we had written off £25 million in unrecouped advances to artists over the years - it makes me fume when politicians cosy up to the big techs at our cost and spout philosophically about the needs of the modern world, about us being dinosaurs, and about music's irresistible urge to be liberated and free".

European digital commissioner Neelie Kroes has been a staunch advocate on opening up digital licensing and said last year “Too many barriers still block the free flow of online services and entertainment across national borders [in Europe]. The Digital Agenda will update EU Single Market rules for the digital era” saying her aims were to boost the music download business, establish a single area for online payments, and further protect EU consumers in cyberspace. Kroes called on content owners of Europe to construct a "simple, consumer-friendly legal framework" for making digital content available across the Union saying the traditional content industries had not developed their licensing models fast enough to cope with the new demands of internet services saying "Digitisation has fundamentally changed content industries, but licensing models simply have not kept up with this. National licensing can create a series of Berlin cultural walls. The price, both in pounds and frustration, is all too real, as creators are stifled and consumers are left empty-handed. It is time for this dysfunction to end. We need a simple, consumer-friendly legal framework for making digital content available across borders in the EU".

Mills took issue with some of Kroes' comments, saying "All in life needs balance and vision, and the likes of Neelie Kroes miss that point. When businesses make money out of music, music rights owners must have the right to a fair share of that income". Noting also that the music industry pumps a lot more into the tax system than many of the tech giants putting pressure on rights owners, Mills concluded: "I'm incensed about the discrimination and the lack of understanding with which those like us who spend their lives creating art that brings people joy, can get treated by those in power. I very much hope that we can all be a part of changing that, because unless we do, the ladder we climbed will not be there for those who follow us".

I have recently blogged on the ongoing progress to establish a Global Repertoire Database for music (Global Repertoire Database Tunes Up): In Europe SACEM (France), SGAE (Spain) and SIAE (Italy) have joined forces to create ‘Armonia’, the first pan-European hub for licensing of online services, gathering together more than 5.5m works (the rights of which are managed by the three collecting societies), and addresses online exploitation and/or mobile uses over a territory of 35 countries. Other commercial developments include the collaboration between the PRS (UK) and STIM (Sweden) with a jointly-owned commercial service centre for back room operations; Publisher  EMI has joined up with GEMA (Germany) and PRS and formed a ‘one-stop shop’ for the licensing of online rights  and the UK is in the process of working out how a Copyright Hub – the Digital Copyright Exchange – might work - the place where any copyright owner can choose to register works, the associated rights to those works, permitted uses and licences granted and the place for potential licensees to go for easy to use, transparent, low transaction cost copyright licensing – streamlining copyright licensing and facilitating the licensing of copyrights on a 'one stop shop' basis with a registry of copyright data and copyright owners, and potentially with licensing mechanisms.

But conversely comes the news that Universal Music Publishing has confirmed its intention to withdraw it's digital rights from US performance rights organisations ASCAP and BMI. CEO Zach Horowitz confirmed the planned move in a statement to Billboard, citing an inability from both societies to achieve market rates with digital services; the move will follow Sony/ATV/EMI's lead, and will allow UMPG do direct deals with streaming services, with Horowitz saying "In order to ensure that our songwriters are fairly compensated, we believe the best approach is for us to negotiate directly with these services”. Recently Sony/ATV (now controlling the EMI catalogue) struck a direct deal with Pandora which seems to  secure the Sony publisher a bigger cut of the royalties available for song rights from the streaming company. Billboard sources also report that BMG Chrysalis has also negotiated the option to do the same but is yet to decide if it will use a direct strategy, a a move away from blanket licence deals negotiated by the collecting societies.

So, if the bigger rights owners, who generally have more to gain from direct deals, move away from collective licensing, where does that leave the concept of a ‘one stop shop’?  If a new digital music business has to go to all of the major publishers in the USA or elsewhere – and all of the major record labels - that means even more ‘stops’ than when Ek was trying to set up Spotify. And surely this must be a huge deterrent  to legitimate business models? That said,  one can see the attraction to the big rights owners to go it alone - higher royalty payments and upfront advances,  or even shareholdings, and also labels, publishers, songwriters and artists can retain vetoes over certain tracks - and have a more hands on approach to licensing.  And indeed, whilst it may be only ‘one’ company out of many that need to be cleared – that label or publisher may be able to offer a global licence – a near must in most digital business plans.

The whole issue is complicated further by the fact that no-one seems quite sure how advances from (or shareholdings in) digital operators are treated.  For example how do Universal and Sony account for their shareholding in Spotify to their recording artistes? An important question if you are a recording artiste or songwriter!

But we clearly have two way tension (at least): Universal’s move reveals the wish of content owners to manage their own digital rights – possibly on a global scale – but this should be balanced against the clear advantage of collective licensing and the fact without global one stop licensing the music industry runs the risk of promoting piracy through over complicating the legitimate market. Do we really want to exclude innovative  but cash-strapped start-ups who could be blocked from the market? Do we want to marginalise smaller rights owners – who are further down the food chain from the major music publishers and recorded music groups? But as Martin Mills rightly says, it seems equally wrong to force rights owners to “licence that in which we have invested at uneconomic prices, to simply allow huge tech firms to make even huger profits”. A conundrum? As ever, maybe some of our 1709 community may have a view!

And see the Max Planck Institute's comments on the draft EU Directive on collective rights management here  http://ipkitten.blogspot.co.uk/2013/02/max-planck-comments-on-draft-directive.html

http://www.billboard.com/biz/articles/news/1533683/martin-mills-call-to-action-his-billboard-midem-speech-in-full

http://the1709blog.blogspot.co.uk/2012/11/hoopers-vision-unfolds.html

http://www.xlrecordings.com/news

http://www.musicweek.com/news/read/universal-music-publishing-to-leave-ascap-bmi/053431

Or my heresy blog - suggesting that just ONE single global collection society is the way forward  here http://the1709blog.blogspot.co.uk/2012/05/is-it-time-for-super-society.html

Japan launches Operation Decoy File

This diagram was released by the Ministry to explain
Operation Decoy File

Rocket News 24, a Japanese entertainment site, has reported on Japan's new tactic to combat illegal file sharing: Operation Decoy File. Japan already has strict copyright laws under which illegal downloaders can be jailed for up to two years  and/or a fine of up to  ¥2 million (approx. GBP 13,700) and illegal uploaders can face up to ten years in prison and/or a fine of up to ¥10 million (approx. GBP 68,400).

Now Japan's Ministry of Internal Affairs and Communications has announced, in conjunction with the film and music industries in Japan, that it will launch Operation Decoy File. The excellently named operation involves introducing - would you believe it? - decoy files containing copyright messages into popular P2P file sharing networks. The user clicks on a file intending to download a film or song and instead receives the following message (kindly translated by Rocket News 24):

"A Warning from the Organisation to Raise Awareness of Copyright. Files with the same name as this contain content which is in violation of copyright when distributed over P2P networks such as Winny or Share.

Knowingly downloading and of course uploading files that are protected by copyright law without the consent of the owner over the internet is illegal copyright infringement. Please stop immediately.

Also, from 1 October 2012, downloading content which is known to be available for sale is punishable by a maximum 2-year prison sentence and/or ¥2,000,000 fine.

Our copyright organisation is working to eliminate copyright infringement by file sharing software. In addition to consulting the police to obtain the disclosure of user’s identities, we want to focus on user education."

File sharers have naturally attempted to differentiate between the films and songs they are trying to download and the text files, for instance by checking the size of the files. A thought process which the Japanese authorities are likely to also have had, causing them to at least try to camouflage their decoy files. The Ministry has made it clear that they want to see whether it is possible to reduce the already low incidence of file sharing in Japan by increasing copyright awareness, a tactic which might work better in Japan than other countries.

Hargreaves questions limits for private copying

Whilst we are focussing on levies in the European sphere, I noticed an interesting interview with Ian Hargreaves who authored the May 2011 Review of the UK's intellectual property framework which is now, to an extent, being actioned by the UK Government. 

During the interview, in the ever excellent Out-Law, Hargreaves questions whether the Government's plans to enable individuals to make private copies of copyrighted material go far enough, saying that whilst he was broadly supportive of the way the Government intends to act on the recommendations he made in his Report,  it’s plans in relation to a new private copying exception could have been more ambitious. Professor Hargreaves says that he agrees with the Government's view that a new levy system would not have to be introduced to account for a new private copying right for consumers, saying “I think that it is very difficult to argue that a levy is owing to compensate for the making lawful a practice that is already ubiquitous" Hargreaves said. "I think the Government is right not to go for a levy" adding "the case for a levy arguably does increase the more latitude you give [the exception]. If we were in a situation where we could adjust the fine detail of the way that some of these rules and practices work I think we’d be in a better situation, but we’re not. [Copyright law] is not a flexible and adaptable system,"

Hargreaves adds "The shortcoming of the new arrangement will be that it will still feel intuitively incorrect to a lot of people – I can’t transfer something from my wife’s iPod that I gave her for her birthday. We transfer the MP3 file into the car player – who owns the car? You can tie yourself in knots. I don’t want to exaggerate that but if the goal is to have something which corresponds to the way that the technology is already encouraging people to behave it is desirable that the law is as close to what consumers find sensible and rational as possible”.

It’s an interesting read – more here and here on Out-Law 
http://www.out-law.com/