Transcript Standard Setting in High

Class 16
Copyright, Winter, 2014
Third-Party Liability
Randal C. Picker
James Parker Hall Distinguished Service Professor of Law
The Law School
The University of Chicago
773.702.0864/[email protected]
Copyright © 2005-14 Randal C. Picker. All Rights Reserved.
Old-School Copying

Facts
A
buys Britney CD
A plays it and uses a cassette tape recorder, over
the air, to copy it on a cassette to listen in his car.

What result for A? Copyright infringement? Fair
use? Something else?
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New-School Copying, Circa 1987

Facts
A
buys Britney CD
A establishes a direction digital connection
between CD player and digital audio tape recorder
and makes a copy

What result for A?
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Screen Capture Slide
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Screen Capture Slide
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Screen Capture Slide
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17 USC 1008: “No action may be brought under
this title alleging infringement of copyright based
on the manufacture, importation, or distribution of
a digital audio recording device, a digital audio
recording medium, an analog recording device, or
an analog recording medium, or based on the
noncommercial use by a consumer of such a
device or medium for making digital musical
recordings or analog musical recordings.”
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Audio Home Recording Act of 1992
7
Copying under the AHRA

Three Types
Analog
Recording
 The old school original
AHRA Digital Recording
 Recording that tracks the definitions set out in
1001
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Copying under the AHRA
Non-AHRA
Digital Recording
 All of the other digital recording
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Protection under 1008

For consumers engaging in noncommercial
use
Of
analog recording
Of AHRA Digital Recording

But
No
July 18, 2015
protection for Non-AHRA Digital Recording
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10
Diamond sells the Rio, an early MP3-player
The RIAA challenges the Rio as violating the
Audio Home Recording Act of 1992, which
requires certain recording devices to include
SCMS, the Serial Copy Management System.
The Rio doesn’t include SCMS.
The Act imposes a royalty system on targeted
devices and copying media.
July 18, 2015
RIAA v. Diamond, 180 F.3d 1072
(9th
11
Cir. 1999)
Diamond wins: “Under the plain meaning of
the Act’s definition of digital audio recording
devices, computers (and their hard drives) are
not digital audio recording devices because
their ‘primary purpose’ is not to make digital
audio copied recordings.”
July 18, 2015
RIAA v. Diamond, 180 F.3d 1072
(9th
12
Cir. 1999)
“In fact, the Rio’s operation is entirely consistent
with the Act’s main purpose—the facilitation of
personal use. As the Senate Report explains,
“[t]he purpose of [the Act] is to ensure the right
of consumers to make analog or digital audio
recordings of copyrighted music for their private,
noncommercial use.” S. Rep. 102-294, at *86
(emphasis added).”
July 18, 2015
RIAA v. Diamond, 180 F.3d 1072
(9th
13
Cir. 1999)
“The Act does so through its home taping
exemption, see 17 U.S.C. § 1008, which “protects
all noncommercial copying by consumers of
digital and analog musical recordings,” H.R. Rep.
102-873(I).”
July 18, 2015
RIAA v. Diamond, 180 F.3d 1072
(9th
14
Cir. 1999)
“The Rio merely makes copies in order to render
portable, or ‘space-shift,’ those files that already
reside on a user’s hard drive. Cf Sony Corp. of
America v. Universal City Studios, 464 U.S. 417
(1984) (holding that ‘time-shifting’ of copyrighted
television shows with VCR’s constitutes fair use
under the Copyright Act, and thus is not an
infringement). Such copying is paradigmatic
noncommercial personal use entirely consistent
with the purposes of the Act.”
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RIAA v. Diamond, 180 F.3d 1072
(9th
15
Cir. 1999)
“For the foregoing reasons, the Rio is not a
digital audio recording device subject to the
restrictions of the Audio Home Recording
Act of 1992. The district court properly
denied the motion for a preliminary
injunction against the Rio's manufacture
and distribution.”
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RIAA v. Diamond, 180 F.3d 1072
(9th
16
Cir. 1999)
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“Napster contends that MP3 file exchange is the
type of ‘noncommercial use’ protected from
infringement actions by [Section 1008]. Napster
asserts it cannot be secondarily liable for users’
nonactionable exchange of copyrighted musical
recordings. … We agree with the district court
that the Audio Home Recording Act does not
cover the downloading of MP3 files to computer
hard drives.”
July 18, 2015
A&M Records v Napster, 239 F.3d 1004
(9th
19
Cir. 2001)
“We conclude that the district court did not err
when it refused to apply the ‘shifting’ analyses
of Sony and Diamond. Both Diamond and Sony are
inapposite because the methods of shifting in
these cases did not also simultaneously involve
distribution of the copyrighted material to the
general public; the time or space-shifting of
copyrighted material exposed the material only to
the original user.”
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A&M Records v Napster, 239 F.3d 1004
(9th
20
Cir. 2001)
“In Diamond, for example, the copyrighted music
was transferred from the user’s computer hard
drive to the user’s portable MP3 player. So
too Sony, where ‘the majority of VCR purchasers
. . . did not distribute taped television
broadcasts, but merely enjoyed them at home.”
July 18, 2015
A&M Records v Napster, 239 F.3d 1004
(9th
21
Cir. 2001)
“We find no error in the district court’s
determination that plaintiffs will likely succeed in
establishing that Napster users do not have a fair
use defense.”
July 18, 2015
A&M Records v Napster, 239 F.3d 1004
(9th
22
Cir. 2001)
“In Diamond, for example, the copyrighted music
was transferred from the user's computer hard
drive to the user’s portable MP3 player. So
too Sony, where ‘the majority of VCR purchasers
. . . did not distribute taped television
broadcasts, but merely enjoyed them at home.”
July 18, 2015
In re Aimster Copyright Litigation, 334 F.3d 643
(7th
23
Cir. 2003)
“The record supports the district court’s finding
that Napster has actual knowledge that specific
infringing material is available using its system,
that it could block access to the system by
suppliers of the infringing material, and that it
failed to remove the material.”
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A&M Records v Napster, 239 F.3d 1004
(9th
24
Cir. 2001)
“Here, plaintiffs have demonstrated that Napster
retains the right to control access to its system.
Napster has an express reservation of rights
policy … . To escape imposition of vicarious
liability, the reserved right to police must be
exercised to its fullest extent. Turning a blind eye
to detectable acts of infringement for the sake of
profit gives rise to liability. …”
July 18, 2015
A&M Records v Napster, 239 F.3d 1004
(9th
25
Cir. 2001)
“The district court correctly determined that
Napster had the right and ability to police its
system and failed to exercise that right to
prevent the exchange of copyrighted material.”
July 18, 2015
A&M Records v Napster, 239 F.3d 1004
(9th
26
Cir. 2001)
“Even when there are noninfringing uses of an
Internet file-sharing service, moreover, if the
infringing uses are substantial then to avoid
liability as a contributory infringer the provider of
the service must show that it would have been
disproportionately costly for him to eliminate or
at least reduce substantially the infringing uses.”
July 18, 2015
In re Aimster Copyright Litigation, 334 F.3d 643
(7th
27
Cir. 2003)
“This appeal presents the question of whether
distributors of peer-to-peer file-sharing computer
networking software may be held contributorily
or vicariously liable for copyright infringements
by users. Under the circumstances presented by
this case, we conclude that the defendants are
not liable for contributory and vicarious
copyright infringement and affirm the district
court's partial grant of summary judgment.”
July 18, 2015
MGM v Grokster, 380 F.3d 1154
(9th
28
Cir. 2004)
Grokster in the Sup Ct

Two Cuts
Grokster
loses 9-0 on an inducement theory
We get a 3-3-3 decision on Sony
 Souter, Thomas & Scalia: 9th Cir wrong on Sony
and no more
 Ginsberg, The Chief Justice & Kennedy: Liable
under Sony
 Breyer, Stevens & O’Connor: Not liable under
Sony
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Grokster

Key Questions
How
does Grokster relate to Sony?
What does it take to avoid liability under Grokster?
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Three Pieces of Evidence

1. Satisfying known demand for copyright
infringement
Trying

to get Napster users
2. Business model driven by advertising
Turns
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on infringing high-volume use
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Three Pieces of Evidence

3. Didn’t try to filter out infringing uses
“Underscores
… intentional facilitation of their
users’ infringement”
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Three Pieces of Evidence
But
See Footnote 12
 “Of course, in the absence of other evidence of
intent, a court would be unable to find
contributory infringement liability merely based
on a failure to take affirmative steps to prevent
infringement, if the device otherwise was
capable of substantial noninfringing uses. Such
a holding would tread too close to the Sony safe
harbor.”
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Megaupload Indictment (Jan 5, 2012)