LAW: Bittorrent and Secondary Copyright Infringement

This is not just a rant. I have a substantive point to make about the nature of secondary copyright liability. It just so happens that I get to rant for awhile to set up the facts.

The most popular Bittorrent directory on the world wide web is closing down for good less than a week after the MPAA announced that it had the latest P2P filesharing technology in its sights. A few days ago, the MPAA sued more than 100 operators of Bittorrent tracking websites.

I'm not surprised. I don't really think the site operators would have won an infringement case anyway.

Although it's one of the latest technologies, Bittorrent relies on tracking websites to host lists of files that users can download in order to retrieve large files from a large number of sources simultaneously, thus dramatically reducing the time it takes to grab a file. Essentially, users load a Bittorrent program on their computers and provide information on how other Bittorrent users can download files that they have made available. As users download parts of files, Bittorrent makes those file fragments available for others to share so that it isn't necessary to serve an entire copy of a large file on a single computer. Unlike traditional P2P networks, Bittorrents don't require full copies of a file, which permits a level of distributed file hosting never before seen.

Of course, one of its most popular uses has been copyright infringement, specifically of movies. You can get one much faster than you can with a conventional P2P network, where download speed increases only as full copies of files become available.

However, Bittorrent relies on tracking files to work. And the most efficient way to disseminate tracking files is on websites. I think this brings sites like suprnova.org, which hosted lists of Bittorrent tracking files, squarely within the Napster decision. Site operators stored tracking files that visitors downloaded in order to enable them to commit acts of copyright infringement. In this way, the Bittorrent files are a lot like Napster's central servers. The site operators knew that users were relying on the site to facilitate copyright infringement and got traffic because of it.

According to Wired News, MPAA representatives expressed no desire to go after Bram Cohen, the creator of Bittorrent. And as of today, the Bittorrent website is still up and you can still download the software from a number of places, including sourceforge.

Despite the argument that site operators might not know what is going on inside the computer, I think that reality demonstrates that a lot of Bittorrent tracking websites know exactly what their users are doing. Here is some text from one website that hasn't come down yet:

Why choose ******** and BitTorrent?

1. Users move to ******** Bittorrents instead of Kazaa every day

2. Bittorrents are spyware free.

3. Bittorrents are adware free.

4. Bittorrents files are verified and rated, no dummy files or corrupted files!

5. As seen in CNET News: ******** BitTorrents is taking over Kazaa as the prefered P2P networks.

6. Extremely easy to use, and counting on full tech support.

The site's toolbar further supports my point. It advertises movies, games, tv shows, anime, music, apps, and comics. This particular site charges a fee for registration, so I couldn't access any tracker lists. As a side note, anyone who uses a credit card to pay for access to a site that may promote copyright infringement is asking to get sued by the MPAA. Watch National Treasure and see what I mean. I suppose it's possible that the site serves only public domain works and freeware or shareware software. But I'm skeptical about anything claiming to be "taking over Kazaa."

Anyway, I think that most of the Bittorrent tracker sites are a pretty clear case of secondary copyright infringement, which occurs when you don't do any illegal copying yourself, but you do certain things that enable others to do it more easily. According to Chilling Effects:

Vicarious liability, a form of indirect copyright infringement, is found where an operator has (1) the right and ability to control users and (2) a direct financial benefit from allowing their acts of piracy. User agreements or Acceptable Use Policies may be evidence of an operator's authority over users. The financial benefit may include a subscription fee, advertising revenues, or even a bartered exchange for other copyrighted [material]. Under the doctrine of vicarious liability, you may be found liable even if you do not have specific knowledge of infringing acts occurring on your site.

and:

The other form of indirect infringement, contributory infringement, requires (1) knowledge of the infringing activity and (2) a material contribution -- actual assistance or inducement -- to the alleged piracy. Posting access codes from authorized copies of software, serial numbers, or other tools to assist in accessing such software may subject you to liability. Providing a forum for uploading and downloading any copyrighted file or cracker utility may also be contributory infringement. Even though you may not actually make software directly available on your site, providing assistance (or supporting a forum in which others may provide assistance) in locating unauthorized copies of software, links to download sites, server space, or support for sites that do the above may contributorily infringe. To succeed on a contributory infringement claim, the copyright owner must show that the webmaster or service provider actually knew or should have known of the infringing activity.

It seems pretty clear to me that a site, particular one that charges a registration fee, that enables users to download Bittorrent trackers that allow them to illegally download copyrighted works would be, like the original Napster, both a vicarious and contributory infringer.

Notice the term "inducement." It appears in the contributory infringement analysis. It also appears in the Induce Act, which media meat puppet Orrin Hatch proposed in order to give corporate content owners yet another weapon. The act would hold liable for copyright infringement anyone who:

intentionally aids, abets, induces, or procures, [copyright infringement] and intent may be shown by acts from which a reasonable person would find intent to induce infringement based upon all relevant information about such acts then reasonably available to the actor, including whether the activity relies on infringement for its commercial viability.

Notice that the cause of action under the act, creatively dubbed "inducement," is substantially broader than "inducement" as a type of contributory copyright infringement: knowingly and actually assisting infringement. It could also catch a lot of "dual use" technologies that are used to infringe copyrights, but are market for other legitimate purposes.

The iPod, anyone?

Anyway, the Induce Act died in Congress, the victim of disagreement between technology companies and content owners. The tech sector wants to be able to make things like DVR's, iPods, and CD burners without having to fight the entertainment industry over "inducing" copyright infringement. Big media would like very much to rule the world and control innovation absolutely. I suppose the setbacks that the Induce Act has suffered were inevitable.

However, inducement is back, this time before the Supreme Court in MGM v. Grokster. I think that the big issues before the Court will be inducement and the "substantial noninfringng uses" test from the Sony Betamax case, which states:

Accordingly, the sale of copying equipment, like the sale of other articles of
commerce, does not constitute contributory infringement if the product is widely used for legitimate, unobjectionable purposes. Indeed, it need merely be capable of substantial noninfringing uses.

The question is thus whether the Betamax is capable of commercially significant noninfringing uses. In order to resolve that question, we need not explore all the different potential uses of the machine and determine whether or not they would constitute infringement. Rather, we need only consider whether on the basis of the facts as found by the District Court a significant number of them would be noninfringing.

As for substantial noninfringing uses, the issue is what "capable of substantial noninfringing uses" means. Does the business model mean anything? How much can a defendant really stretch potentiality of a substantial noninfringing use before anything can escape liability under this exception?

This is a test that targets a technology itself. Is the product or service capable of substantial noninfringing uses? If so, it escapes liability and a device-killing injunction. If not, it goes away.

Well, almost anything is. Even Napster would be capable of such uses. After all, it could have purchased licenses. But that didn't save it. Why?

Some people think Napster was wrongly decided. Personally, I don't. While I think P2P is a valuable technology with a lot of potential, Napster was using it for illegal purposes. Furthermore, its value as a service depended almost entirely on those illegal uses.

Realistically, that has to matter. "Substantial noninfringing uses" can't become an excuse raised by people who are clearly and presently profiting from infringement. The doctrine is supposed to protect innovators, not thieves.

So where should a court draw the line? How remote can a potentially substantial noninfringing use be before it's no defense to a party that's merely raising the possibility as an excuse to continue encouraging acts of copyright infringement?

I have had some unique opportunities to discuss the issue with attorneys from both sides from the issue and I think I've come up with the beginning of a test that I could support.

If a technology has a present, commercially significant noninfringing use, then its developer is not liable for secondary copyright infringement. That's the easy part.

If the technology does not have such a use, but is capable of commercially significant noninfringing uses, then its developer will not be liable for secondary infringement unless it derives most, if not all, of its present value from acts of infringement.

I was surprised when inducement came up in our discussion. Parts of the committee wanted to suggest to the Court that one who induced another to infringe a copyright by affirmatively persuading or encouraging the infringement was liable or if the developer is not pursuing the development of value based on substantial noninfringing uses in good faith.

I think this is a hard standard to prove, but I think it strikes the right balance. the Bram Cohens of the world, who create useful and innovative technologies, get to continue working while the Suprnovas of the world get injunctions. Some may criticize this standard as being overprotective of the developer. Maybe so, but courts have traditionally erred on the side of innovation and should continue to do so.

It's important to remember that the Suprnovas and Napsters out there are not actually committing any copyright infringement of their own. Their users are. And regardless of where courts draw the "substantial noninfringing use" line, copyright owners will always be able to pursue actual infringers, identify them, and seek recovery that way.

Besides, there are other ways to impose secondary copyright liability by targeting acts instead of technology. This is where this whole "inducement" theory comes in. The idea is that you don't need to create any technology to be a secondary infringer if you actively enocurage and enable others to commit direct infringement.

If the goal is to prevent infringement, I think that requiring copyright owners to pursue the actors rather than the technology that they use (which, as in the case of Bittorrent, they may not even have created), seems to be a reasonable tradeoff for being able to go after people for "inducement" whether as an element of contributory infringement or a separate and independent claim, like Orrin Hatch wants to make it.

I think it's important for any kind of liability based on "inducement" to be limited to contributory infringement and to actual bad actors. This is why I talked about Bittorrent so extensively.

In the case of Grokster and other traditional P2P networks, there are three sides: the software devleoper, the content owner, and the users. In the Bittorrent context, there are four: the software developer, the copyright owners, the users, and the web site operators who host lists of tracking files. In situations like this, it's absolutely critical to separate the bad acts from the technology itself.

This is why I side with those who think "inducement" liability, whether based on contributory infringement or some other cause of action that Congress will have to hammer out, must be limited to the bad acts, while leaving the technology behind the acts behind.

The distribution of Bittorrent doesn't infringe on copyrights. The maintenance of tracker websites does. I would like to see a definition of secondary liability based on affirmative acts of persuasion that intentionally encourage users to infringe copyrights. Furthermore, such acts should form the fundamental basis of the business. This way, you get the Suprnovas, but you don't get the Bittorrents. This preserves the technology and pursues the bad uses.

Essentially, I think "inducement" should be limited to cases where the business model is what's doing the infringing. This protects dual use technologies, but not the people who profit from encouraging others to use them for infringement. I think that a defendant could be held liable under an inducement theory if the copyright owner is able to prove that they performed affirmative acts intended to promote acts of direct copyright infringement. Further, the distribution of a technology that is capable of substantial noninfringing uses should not be a factor under this kind of analysis. The acts of encouraging infringement (providing the Bittorrent tracking files in a convenient, centralized place so that people can directly infringe copyrights by illegally downloading movies) are wrong. The distribution of the technology (Bittorrent itself) isn't.

So what we have here are two ways to get at secondary liability. One attacks a technology itself. The other attacks bad acts using an otherwise neutral technology that happens to be capable of infringing copyrights on a large scale. Are they perfect? No. I'm a human being so are the men and women who contributed significantly to the development of my position on the issue. But then again, I don't think it's reasonable to expect perfection either. Every industry has to deal with some degree of loss. Why should the entertainment industry be any different?