errrr...probably not fair use...

this is not my best work (...sorta one of those..."gosh, i wish i had two more days" assignments...and now when i re-read it, i'm like "yikes, embarrassing...need to change that...") but...nonetheless, i really enjoyed copyright class...especially because it's so relevant. first, my assignment. then, a recent article on slate.com (...which is probably not fair use...but still interesting...)


To: Professor Madison
From: (deleted)
Date: May 8, 2006
Re: Codification of Secondary Liability for Copyright Infringement

Background: From the early 20th century secondary liability for copyright infringement has largely remained in the hands of the judiciary. Although Congress considered codifying secondary liability when creating the 1976 Copyright Act, it ultimately declined to do so, implicitly leaving the doctrine for the courts to develop. See H.R. Rep. 94-1476 § 106, 501 (1976). Currently, the Copyright Act still does not include secondary liability and, indeed, the doctrine is based upon common law theories. This memo addresses whether Congress should codify secondary liability at this time.

Discussion: To assume that the underlying confusion regarding secondary liability will disappear if Congress amends the Copyright Act to codify secondary liability neglects to appreciate the lessons taught by the codification of fair use. Fair use was a judicially created doctrine that Congress codified in the Copyright Act of 1976. Although Congress codified the minimum standards of fair use, the legislative history shows that it purposefully refused to create a static doctrine and instead used general terms. H.R. Rep. 94-1476 § 107 (1976). Therefore, the “facial emptiness of the statutory language [of fair use] means that alone, it is almost useless analytically….” Michael J. Madison, A Pattern-Oriented Approach to Fair Use, 45 Wm. & Mary L. Rev. 1525, 1563-64 (2004).
Likewise, a broad, statutory explanation setting forth the general elements needed to prove each theory of secondary liability for copyright infringement – contributory infringement, vicarious liability and active inducement – essentially would be superficial. These elements are already defined in the case law. (See Fonovisa, Inc. v. Cherry Auctions, Inc., 76 F.3d 259 (9th Cir. 1996) (defining the elements of contributory infringement and vicarious liability); MGM, Inc. v. Grokster, Ltd., 125 S. Ct. 2764, 2779-2782 (2005) (defining the elements of active inducement)). What is less clear, as shown by the recent peer-to-peer cases, is how to apply the traditional elements to technology in the digital age.
Yet, the legislative history of the fair use statute shows Congress’ refusal “to freeze [that] doctrine in the statute.” H.R. Rep. 94-1476 § 107. Instead, Congress plainly defers to the courts, “especially during a period of rapid technological change.” Id. The same should be true for secondary liability.
More specific statutory language would also run the risk of failing to allow for a full analysis of secondary liability. To find secondary liability, one must first find direct infringement. The direct infringer must violate an exclusive right of the copyright owner. 17 U.S.C. § 501 (2000). The exclusive rights are subject to the limitation of fair use. Id. § 107. Therefore, one who is accused of secondary liability will have a defense to liability if the alleged infringing activity was a fair use.
For example, in Sony v. Universal City Studios, Inc., 464 U.S. 417 (1984), the Supreme Court introduced a safe harbor for contributory infringement. In determining whether Sony was liable for infringement carried out by users of its VCRs, the Court borrowed the “staple article” defense codified in the Patent Act and held that “the sale of copying equipment . . . does not constitute contributory infringement [i]f the product is [capable of] substantial noninfringing uses.” Id. at 442. (“the Sony defense”). Next, the Court analyzed whether time-shifting constituted a fair use, noting that the majority of the public used VCRs to copy television shows to watch at a later time. Id. at 424. The Court found this to be fair use and, thus, Sony was not held liable for contributory infringement due to the VCR’s substantial noninfringing use (“SNIU”). Id. at 456.
Again, a full analysis of secondary liability, especially where the Sony defense is applicable, is incomplete without a thorough fair use analysis. Yet, Congress has specifically assigned the courts “to adapt the [fair use] doctrine to particular situations on a case-by-case basis.” See H.R. Rep. 94-1476 § 107. In contrast, present patent law does not have a corollary fair use provision to protect. This is precisely why the Patent Act can so easily codify contributory liability, active inducement, and explicitly provide that a contributory infringer will not be held liable for the sale of “a staple article or commodity of commerce suitable for substantial noninfringing use.” 35 U.S.C. § 271 (2000). Patent law does not require a fair use analysis to see if a staple article is capable of SNIU.
Accordingly, the current uncertainty with secondary liability for copyright infringement is not so much rooted in the various theories themselves, but in the ambiguity surrounding the concept of a SNIU and the applicability of the Sony defense. The Court in Grokster indicated that the Sony defense, in the context of active inducement, could be used to limit “imputing culpable intent” from the characteristics or uses of a product. 125 S. Ct. at 2279. However, it did not address the underlying issue of what constitutes an SNIU, especially once the Grokster defendants stipulated direct infringement. Id. at 2772.
In addition, the two concurring opinions, written by Justice Ginsburg and Justice Breyer respectively, came to opposite conclusions on the existence of a SNIU and the evidence they considered, leaving the lower courts with little guidance. Justice Ginsburg found that the defendants’ products “were overwhelmingly used to infringe…and that infringement was the overwhelming source of revenue from the products,” and this was insufficient evidence to show reasonable development for SNIUs. Id. at 2786. She noted that there was “no finding of fair use and little beyond anecdotal evidence of non-infringing use.” Id. at 2785. On the other hand, Justice Breyer found that evidence of 10% non-infringing use was “substantial” enough for Sony to apply if there was a “foreseeable” chance for the development of other SNIUs. Id. at 2789.
Essentially, the difference between the two Justices seemed to hinge on how to interpret technological evidence, despite the lack of a fully developed record, as opposed to how to interpret the elements of secondary liability. Therefore, the Court does not need Congressional guidance as to theories of secondary liability. Rather, it needs fully developed lower court records to determine what constitutes an SNIU in the digital age.
Conclusion: While Congress is in the best position to further explore the implications of copyright protection in the digital environment, it would be premature to codify secondary liability. Understandably, current case law is not entirely clear. Still, it provides some guidelines for technology companies to structure themselves to avoid secondary liability, thereby not completely chilling innovation. The peer-to-peer cases, arguably, show technological innovations due to the copyright constraints. In contrast, copyright owners are not assured a monopoly in an unrelated market, especially when a defendant can show the SNIUs of its product. Thus, copyright owners have an incentive to protect their rights through other means such as password protections or watermarking. Without codifying secondary liability, there will also be more risks to litigation for unclear cases of direct infringement. Most importantly, the cases give an incentive for the public to come forth and show its SNIUs of technology. Accordingly, this uncertainty provides incentive for all interested parties to achieve the precise balance that the Copyright Act seeks to achieve in the marketplace as opposed to in the legislature.

________

How the Bell Lobby helped midwife YouTube.
By Tim Wu
Posted Thursday, Oct. 26, 2006, at 4:28 PM ET
When Google bought YouTube, the conventional wisdom—expressed in op-eds, newspaper articles, and scary editorial cartoons—was that they'd also bought themselves a whole heap of copyright trouble. The New York Times used the phrase "litigation-laden landmine." Part-time copyright theorist Mark Cuban warned that YouTube would face the same copyright fate as Napster.
There's only one problem with these theories: the copyright law itself. Under the copyright code, YouTube is in much better legal shape than anyone seems to want to accept. The site enjoys a strong legal "safe harbor," a law largely respected by the television and film industries for the choices it gives them.
But the most interesting thing is where all this legal armor protecting YouTube—and most of the Web 2.0 (user-generated content) industry—comes from. It's the product of the Bell lobby—Google's bitter opponent in the ongoing Net Neutrality debates. So, while YouTube may be the creative child of Silicon Valley, it is also, as much, the offspring of Bell lobbying power.
Back in the early 1990s, when the "information highway" was the talk of the town, Hollywood and the recording industry worked hard to make Internet companies responsible for any and all copyright infringement that happened via the Internet. Jack Valenti, Hollywood's chief lobbyist, warned that without congressional action, "the information superhighway … will collapse the great wonder of intellectual property." The recording industry, for its part, dispatched Johnny Cash to rhetorically link Internet piracy and, yes, a "ring of fire."
This summer, Sen. Ted Stevens, R-Alaska, earned the bemused contempt of geeks everywhere when he described the Internet as "a series of tubes." But back in 1995, Hollywood was insisting that the Internet be characterized as "a bookstore." And a bookstore, unlike a series of tubes, breaks the law if it "carries" pirated novels. So too, Hollywood urged, Internet companies should be liable if they carry any illegal materials, whether the companies know it or not.
Had that view prevailed, there would probably be no YouTube today, and also no free blog sites, and maybe not even Google or Web 2.0. What venture capitalist would invest in a company already on the hook for everything its users might do? But, in one of the lesser-known turning points in Internet history, Hollywood never got its law. Its unstoppable lobbyists ran into an unmovable object: the Bell companies, who own those "tubes" over which the Internet runs. In the mid-1990s, fearing a future of liability, the Bells ordered their lobbyists to fight Hollywood's reforms, leading to one of the greatest political struggles in copyright history. (This paper provides a history of this and other struggles.)
Hollywood employs legendary lobbyists, like Jack Valenti, but when they ran into the Bells, it was like Frazier meeting Foreman. The Bells quickly put holds on all the legislation the content industries wanted. Telecom lobbyists like Roy Neel, a close friend of Al Gore (and later Howard Dean's campaign manager), went to Congress and began saying things like, the "copyright law threatens to put a damper on the expression of ideas on the Internet."
Facing stalemate, in 1997 the industries settled on a compromise: something called the Online Copyright Liability Limitation Act, which became Title II of the Digital Millennium Copyright Act of 1998 (§512 of the Copyright Code). It is this law that makes YouTube worth paying more than what you pay for its videos. And its long-term effects have been enormous—you might call §512 the Magna Carta for Web 2.0.
Why? Section 512(c) of the law applies to "Information Residing on Systems or Networks At Direction of Users." In 1998, that meant Geocities and AOL user pages. But in 2006, that means Blogger, Wikipedia, Flickr, Facebook, MySpace, and, yes, YouTube—all the companies whose shtick is "user-generated content."
Thanks to the Bells, all these companies are now protected by a "notice and take down" system when they host user content. That means that if Jon Stewart notices an infringing copy of The Daily Show on YouTube, Comedy Central can write a letter to YouTube and demand it be taken down. Then, so long as YouTube acts "expeditiously" and so long as YouTube wasn't already aware that the material was there, YouTube is in the clear. In legal jargon, YouTube is in a "safe harbor." Earlier this week, when YouTube took down 30,000 files after requests from a Japanese authors' group, that was §512(c) in action.
Of course, as with any law, YouTube's legal status might not be 100-percent airtight. The law suggests (in §512(c)(1)(A)(ii)) that YouTube might be liable if, in the absence of notice, it is "aware of facts or circumstances from which infringing activity is apparent." Also, YouTube provides a search, and maybe it could be liable for that. There might be enough to make trouble in the hands of a judge who really hates "that whole Web 2.0 thing."

But we may never find out. What's really interesting is that the content industry actually likes §512 more than anyone will admit. The notice-and-takedown system gives content owners the twin advantages of exposure and control. When stuff is on YouTube, the owners have an option. They can leave it posted there, if they want people to see it, and build buzz. But they can also snap their fingers and bring it all down. And for someone who is juggling her desire for publicity against her need for control, that's ultimately a nice arrangement.
Stated otherwise, much of the copyrighted material on YouTube is in a legal category that is new to our age. It's not "fair use," the famous right to use works despite technical infringement, for reasons of public policy. Instead, it's in the growing category of "tolerated use"—use that is technically illegal, but tolerated by the owner because he wants the publicity. If that sounds as weird as "don't ask, don't tell," you're getting the idea. The industry is deeply conflicted about mild forms of piracy—trapped somewhere between its pathological hatred of "pirates" and its lust for the buzz piracy can build.
But what about Mark Cuban's copyright argument? Why isn't YouTube in trouble in the same way Napster and Grokster were? The first difference, as indicated, is that Napster simply wasn't covered by the §512 safe-harbor law, and YouTube is. Napster wasn't "hosting" information at the direction of its users, but rather providing a tool for users to find and download predominantly infringing content. It may sound odd that Napster gets in more trouble for helping you find illegal stuff than YouTube does for actually hosting it. But that's the law and why YouTube should really, really thank its friends at Bell.
There may also be deeper differences. If the Internet were not a bookstore, or tubes, but rather a red-light district, YouTube would best be imagined as the hotel, and Napster, well, the pimp. YouTube, like a hotel, provides space for people to do things, legal or not. It's not doing anything illegal itself, but its visitors may be. But Napster, everyone more or less now admits, was cast as the pimp: It was mainly a means of getting illegal stuff. Right or wrong, we seem to accept the benign vision of YouTube as an entity which, unlike Napster, was basically born as a place to showcase stupid human tricks.
The upshot is, as YouTube goes mainstream, copyright's etiquette rules are becoming clearer. Yes, these sites can make it easier to infringe copyright. But so long as that's not the principal aim of your company, you have more breathing room today than you once did. And under the emerging regime, if you do cause infringement, you have to be nice about it and make determined efforts to stop it. Apple has learned that dance well, even as its iPods make swapping music all the more part of being American. And YouTube has, in turn, learned from Apple the early lessons of Napster: You can act out in cyberspace. Just don't be a copyright pimp.