Recently in File Sharing Category

Brett Frischmann: Taking Back Educational Fair Use: "Educational fair use is shrinking. By virtue of significant improvements in the administration of copyright licensing and persistent pressure by publishers and copyright owners to license virtually all uses of works, many educators have been corralled into seeking permission and paying for licenses through institutions such as the Copyright Clearance Center. To make matters worse, there is a circular feedback loop in fair use analysis that ties fair use to market effects (or market failure) such that the availability of licensing revenues undercuts arguments for fair use and gradually leads to its demise."

Previously: Thoughts on Fair Use

Major record labels filed a law suit in the Southern District of NY against P2P file sharing company LimeWire: Arista Records LLC v. LimeWire LLC, 06-CV-5936.

"he very design and promotion of LimeWire show that Defendants know (actually as well as constructively) of the massive infringement of Plaintiffs' copyrights occurring via LimeWire. Defendants' knowledge and intent are apparant in other respects as well. For example, Defendants make it easy for a user to donload and install LimeWire even after indicating that he/she 'intend[s] to use LimeWire for copyright infringement.' Following a perfunctory refusal by Defendant's web site, the user simply navigates back to the prior page, changes his/her answer, and is allowed to continue with the download.

The complaint establishes 5 theories of liability:

1. Inducement of Copyright Infringement

   Defendants have induced and continue to induce infringement by, for example, aiming to satisfy a known source of demand for copyright infringement, including the market comprising users of other infringing services that were shut down or compelled to block access to Plaintiffs’ copyrighted works, such as Napster, Grokster, and Kazaa.



2. Contributory Copyright Infringement

   Defendants are liable as contributory infringers for the copyright infringement committed via LimeWire software and services. Defendants have knowledge of the massive infringement that has occurred and continues to occur through LimeWire, and Defendants have caused, enabled, facilitated, and materially contributed to that infringement.



3. Vicarious Copyright Infringement

Defendants are liable as vicarious infringers for the copyright infringement committed via LimeWire software and services. At all times relevant to this action, Defendants (i) have had the right and ability to control and/or supervise the infringing conduct of LimeWire users, and (ii) have had a direct financial interest in, and derived substantial financial benefit from, the infringements of Plaintiffs’ copyrighted sound recordings via LimeWire.



4. Common Law Copyright Infringement of Pre-1972 Recordings


5. Unfair Competition as to Pre-1972 Recordings

William Patry, The Patry Copyright Blog: RIAA v. LimeWire:

We are in a new era and this complaint reflects that era.

I happen to think the new era sucks, but it is here and we had best come to grips with it. The LimeWire case is likely to provide the inducement for that waking up. Aside from what I regard as the Supreme Court's insitutional irresponsibility, my objection to the Grokster opinion (which is not a defense of Grokster the company), is that it only added to the conceptual morass begun with Sony by creating a new, third category of third-party liability, and without any perceived need for it by the parties, Congress, or anyone else. It was, I believe, merely a way to paper over the court's inability to do the job it took upon itself: determine how to apply Sony to the Internet. When the Court shirked that responsbility, it apparently felt it too had to something to show it was tough on pirates (you're not alone Mr. Attorney General!), hence the inducement theory.

The RIAA released year-end statistics for the US recorded music market. The NY Times reports: Music Industry's Sales Post Their Sixth Year of Decline: "In the United States, overall shipments of music products, including CD's and digital albums and singles combined, fell 3.9 percent last year."

According to the RIAA, physical unit sales dropped by 8% from 2004 and revenues from those sales dropped by 7.9%. In contrast, digital sales increased by 166.2% in terms of unit sales and 174.5% in revenue. The overall net effect was that total unit sales grew by 35.9% from 2004 and revenues declined by six tenths of one percent.

At The Long Tail blog, Chris Anderson discusses the effect of the digital distribution market (and uses snazzy charts): Music Industry: Is digital making up the difference?: "In revenue terms the industry did about as well last year as it did before, and it's worth noting that the margins on digital distribution are considerably higher because there are no physical goods to manufacture and ship. So 2005 may have been more profitable than 2004 (it certainly was for Warner Music Group). Who knew?"

For the entire world, IFPI also released its 2005 year-end report: Digital formats continue to drive the global music market "Record company trade revenues from digital sales globally nearly tripled in value, from $400 million to $US 1.1 billion in 2005. The total number of digital single tracks downloaded online or to mobile phones rose to 470 million units, up from 160 million in 2004. The US, Japan, UK, Germany and France are the top five digital markets. In general, countries with a greater percentage of digital sales are the strongest markets for music sales overall."

The Silicon Valley Media Law Blog reports that PROs ASCAP and BMI also saw significant growth in new media revenue: PROs see leap in new media revenues: "Public performance rights organizations saw marked increases in new media revenues in 2005, according to their reported financial results."

Pitchfork interviewed attorney Steve Gordon about file sharing, copyright law, the record industry and PROs: Live at the Witch Trials: "I think the culture of the labels have been unable to adapt to the impact that new technology, particularly the web, has had on the recorded music. The labels, for many years, combined two basic characters-- Ivy League-trained lawyers and savvy music business types with "ears." Sometimes one executive was both-- Clive Davis, for instance. But the one culture that was never present were techies. They are there now. But they do not call the shots. The Sony DRM debacle shows they still have no clue."

Rufus Pollock evaluates 5 empirical studies of P2P file sharing and its effect on music purchasing: P2P, Online File-Sharing, and the Music Industry: "The basic result is that online illegal file-sharing does have a negative impact on traditional sales. The size of this effect is debated, and ranges from 0 to 100% of the sales decline in recent years, but a figure of between 20 and 40% would be a reasonable consensus value (i.e. that file-sharing accounted for 20-40% of the decline in sales not a 20-40% decline in sales)."

On Wednesday, the full Senate Judiciary Committee held hearings on "Protecting Copyright and Innovation in a Post-Grokster World," with testimony from:

• The Honorable Mary Beth Peters, U.S. Register of Copyrights, Copyright Office, Washington, D.C.
• The Honorable Debra Wong Yang , U.S. Attorney for the Central District of California , and Chair of the Attorney General’s Advisory Committee , on Cyber/Intellectual Property Subcommittee , Los Angeles, CA
• Marty Roe, Lead Singer, Diamond Rio, Nashville, TN
• Cary Sherman, President, Recording Industry Association of America, Washington, D.C.
• Gary Shapiro, President and Chief Executive Officer, Consumer Electronics Association, Arlington, VA
• Mark Lemley, William H. Neukom Professor of Law, Stanford University Law School, and Director, Stanford Program in Law, Science and Technology, Stanford, CA
• Ali Aydar, Chief Operating Officer, SNOCAP, San Francisco, CA
• Sam Yagan, President, MetaMachine, Inc. (developer of eDonkey and Overnet), New York, New York

Details about the testimony continue after the jump...

Cathy Kirkman finds two recent decisions-- one patent, the other copyright-- citing Grokster: Grokster cited in patent inducement case. The Federal Circuit cites Grokster for the proposition that "Evidence of active steps taken to encourage direct infringement, such as advertising an infringing use or instructing how to engage in an infringing use, show an affirmative intent that the product be used to infringe."

In Monotype Imaging v. Bitstream, Inc. (N.D.Ill. Jul. 12, 2005), the district court found no evidence for inducement in "contributory infringement claims over software that replicates typeface fonts."

As we are still trying to figure out what the effects of Grokster will turn out to be, the analysis is in full effect.

Lawrence Lessig, Wired Magazine: A Rotten Ruling: "Pundits bathed the Court in praise for its "sensible balance" between the demands of Hollywood and the pleas of technologists. The pundits are idiots. The Grokster case revealed the worst in Supreme Court ivory towerism."

Oxford Analytica, Forbes.com: Grokster Decision Has Limited Impact: "Strong consumer demand for fee-free file swapping, the difficulty of pursuing legal judgements against individual infringers and the lack of a stable technological solution means file swapping will continue to grow. Restructuring to reduce or eliminate intermediaries in the current business model for content distribution appears inevitable."

The Congressional Internet Caucus held a session on July 19, Interpreting Grokster: Protecting Copyright in the the Age of Peer-to-Peer with Andrew Greenberg (Carlton Fields), Don Verrilli (Jenner & Block) and Fred von Lohmann (Electronic Frontier Foundation). Streaming video and downloadable audio are available.

In the Village Voice, Nick Mamatas discusses the RIAA file sharing lawsuits and his experience as a defendant: Meet John Doe

Reuters reports: Hollywood Studios File New Round of Web Lawsuits: "The civil suits against unnamed "John Doe" defendants seek up to $150,000 per downloaded digital file and come as the U.S. film industry prepares for its annual Oscar telecast in Hollywood where awards for top films and stars are given out."

Courtesy of Joseph Hall and his RSS mercenary, a RSS feed for MGM v. Grokster from the EFF case archive:

The briefs filed so far include:

Briefs of Petitioners (entertainment companies)

• Brief for Motion Picture Studio and Recording Company Petitioners [PDF 352K]
• Brief for Songwriter and Music Publisher Petitioners [PDF 932K]

Amicus Briefs Supporting Petitioners

• Brief of the Progress and Freedom Foundation [PDF 172K]
• Brief of the United States Solicitor General's Office [PDF 112K]
• Brief of the Business Software Alliance [PDF 156K]
• Brief of Law Professors, Economics Professors and Treatise Authors in Support of Petitioners
[PDF 188K]
• Brief of Kids First Coalition, Christian Coalition of America, Concerned Women for America, et al in Support of Petitioners
[PDF 328K]
• Brief of Law and Economics Professors in Support of Petitioners [PDF 56K]
• Brief of the Defenders of Property Rights in Support of Petitioners [PDF 60K]
• Brief of State Attorneys General in Support of Petitioners [PDF 256K]
• Brief of Commissioner of Baseball, NBA, NFL, Professional Photographers of America, et al in Support of Petitioners [PDF 92K]

Amicus Briefs Neutral as to Result

• Brief of The Digital Media Association, Netcoalition, The Center for Democracy and Information Technology Association of America [PDF 196K]
• Brief of Senators Leahy and Hatch in Support of Neither Party [PDF 112K]
• Brief of the American Intellectual Property Law Association (AIPLA) in Support of Vacatur and Remand [PDF 92K]
• Brief of Video Software Dealers Association (VSDA) Suggesting Reversal [PDF 308K]
• Brief of Professor Lee A. Hollaar in Support of Neither Party [PDF 204K]
g
• Brief of Audible Magic, Digimarc and Gracenote in Support of Neither Party

Ed Felten looks at briefs submitted by the Solicitor General and a group of "anti-porn and police organizations," Grokster Briefs: Toward a More Regulable Net : "These briefs are caught between nostalgia for a past that never existed, and false hope for future technologies that won't do the job."

Previously: Ninth Circuit Affirms Grokster Ruling (including actual analysis), P2P in the 9th Circuit, Again, NYT on Grokster, Seeking Cert in Grokster, Grokster briefs, Supremes grant cert in Grokster, Grokster, Brand X and the 'Net, Supreme Geekery

Wired: The BitTorrent Effect: "BitTorrent lets users quickly upload and download enormous amounts of data, files that are hundreds or thousands of times bigger than a single MP3. Analysts at CacheLogic, an Internet-traffic analysis firm in Cambridge, England, report that BitTorrent traffic accounts for more than one-third of all data sent across the Internet."

Substantial, non-infringing use of peer-to-peer networks: "This page exists to document instances of substantial, non-infringing use (hereafter SNIU) in peer-to-peer (hereafter P2P) networks."

News.com reports: FTC spotlights proposals on P2P risks: "The head of the Federal Trade Commission sent a letter to Congress on Tuesday highlighting efforts that file-swapping companies are making to disclose potential online risks."

The FTC will host a workshop about P2P Filesharing on Dec. 15 and 16.

Available on the FTC site are the public comments about the consumer protection and competition issues in P2P file sharing technology.