A Legal Blog by Aaron | Sanders, PLLC


Does Actual Knowledge Kill or Merely Suppress the Sony-Betamax Rule?

Court: Actual Knowledge Kills Sony-Betamax Dead, and That Might Make a Difference

Hey, I sort of called it. In my last blog post, I embarked on a journey of self-discovery in which I learned that ISPs were not effectively immune to claims for constructive copyright infringement. In this journey, I had to come to terms with the real possibility that the Sony-Betamax rule—that a product cannot create contributory copyright liability if it has substantial non-infringing uses—applies only where the claim is based on “constructive” knowledge (i.e., you should have known, as opposed to, you knew). This explained something that had puzzled me: why was Cox Communications even liable for the claims of contributory copyright infringement brought by Rightscorp? After all, internet service has a tremendous number of non-infringing uses. The answer (in my analysis) was: because Cox had actual knowledge of its customers’ infringement, for the same reason its repeat-infringer policy was such a hilarious shambles.

Actual Knowledge + Current Continuing Relationship

Earlier this week, the court in the Cox Communications case ruled on some post-judgment motions and followed very much the same reasoning in denying Cox’s motion challenging the jury verdict. Regarding the application of the Sony-Betamax rule, the court this…

A Sony Betamax video tape recorder. Weighed about 36 pounds. Copyright owners tried to stop it & lost (barely). Ended up giving copyrighted properties a second life as home video. Ironic, dontchya think? Groundbreaking. Lost out to JVC's VCR. Then VCRs stopped being a thing. Time marches on.

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Cox Rocked, Part 2: What the Jury Said (and Why)

Broadband Isn’t a “Draw” for Infringement, but What About Substantial Non-infringing Uses?

Back in late 2014, two of Rightscorp’s clients, BMG Music and Round Hill Music, sued the cable operator and internet-service provider, Cox Communications, for copyright infringement on grounds that Cox was liable for its users’ sharing of the plaintiffs’ copyrighted musical compositions using the BitTorrent protocol.

What’s Right for Rightscorp

Although it wasn’t a party, the case was crucial to Rightscorp. Rightscorp is in the business of investigating the sharing of copyrighted work over BitTorrent protocol and obtaining modest settlement from the BitTorrent users. For example, if Rightscorp thought you had shared “Bad Blood” using BitTorrent, it would send you a settlement demand of, say, $500—or some figure that’s low enough for you to afford but not high enough to be worth fighting over. It’s a low-return–high-volume business. And for it to work, Rightscorp needed to get as many settlement demands to users as possible.

But to do that, Rightscorp needed the cooperation of ISPs. That’s because Rightscorp doesn’t actually know who the user is. It just knows the user’s IP address at the time of the alleged file-sharing. Only the user’s ISP knows which of its users was using a…

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Cox Rocked but DMCA Safe Harbors Remain Unshaken

All We Really Learned Is that Even Big Corporations Don’t Always Run Things by Counsel.

We have learned quite a lot about the contours of the DMCA safe harbors over the last few years, thanks to record labels swinging for the fences, Viacom and Google’s tenacity in fighting over early-days YouTube, and a rare sighting of a certain kind of “red flag.” But these cases haven’t addressed the fuzziest area of the DMCA safe-harbors: the requirement for a “repeat infringer” policy. As I’ve argued before, this requirement is service providers’ greatest point of vulnerability. Because of the law’s fuzziness, service providers can’t be certain they’re in compliance. What’s more, if they’re, they lose all protection from DMCA safe harbors. But, for some reason, the rights holders have been reluctant to attack it.

To get clarity about a law, you need a case that is forced to address the difficult questions. Remember that courts only rule on the issues presented to them, and their findings and reasoning are only precedential to the extent they are necessary for the court’s decision. Courts don’t give advisory opinions, just because it would help clear things up. Thus, if there’s an easy way and a difficult…

Cox runs its graduated response to copyright infringement out of this trailer, far away from any legal counsel

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RightsCorp’s Lawsuit Against Cox Is Only Partly About Repeat Infringers

RightsCorp Has Some High Hurdles to Clear Before it Even Gets to Repeat Infringers

Typical. I read about a truly significant lawsuit, start blogging about what is obviously the main issue—an issue that has significance beyond the lawsuit—only to discover in analyzing the pleadings that the lawsuit isn’t all it’s cracked up to be.

RightsCorp: A Business Model in Trouble…

You’ve heard of the lawsuit against the major ISP, Cox Communications, for violating the repeat-infringer requirement of the DMCA? (Here’s the complaint.) If not, let me ’splain. No, there is too much. Let me sum up:

There is a company called RightsCorp that is in the business of enforcing copyrights for others. They make money by monitoring BitTorrent networks, finding files whose copyrights belong to its clients, identifying the IP address (and timestamp) and sending short little notices to the ISP that are supposed to be forwarded to the customer. The short little notice says the usual things that lawyers say in cease-and-desist letters that aren’t lies but don’t tell the whole copyright story, to wit: (a) you are a copyright infringer; (b) you “could be” liable for up to $150,000 per infringement; (c) your ISP service “could be suspended”; and (d) the actual…

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Hotfile on the Internet- What You Don’t Know Can Hurt Your DMCA Safe Harbor

On the Importance of Knowing Just Enough

As we all know by now (quick primer here), the DMCA safe harbor is a marvelous, marvelous thing for internet-related system operators—not just YouTube, but any website that interacts much with its users—but that marvelous protection can be lost if you’re not careful. One way to lose it is to have actual or “red-flag” knowledge of infringing activity on the network. The tendency among service providers, therefore—and something of a perverse incentive—is to remain as ignorant as possible of user activities on the system, unless forced to pay attention via a DMCA takedown notice.

Upload, Infringe, Repeat

But, as the recent Hotfile case demonstrates, complete ignorance isn’t good for your DMCA safe harbor. That’s because you have to promulgate and reasonably implement a policy that terminates repeat infringers. The Hotfile court held that implementing a repeat-infringer policy involves collecting some information.

As I’ve explained here, here and especially here, these repeat-infringer requirements raise several difficult questions that have not be adequately addressed by the courts. In Hotfile, the main question was: what is the minimum you have to do to have “reasonably implemented” a repeat-infringer policy? Folded into that question, however, was a knottier question: when…

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