JOLT Digest

By Heejin Choi and Dorothy Du – Edited by Julie Dorais

This past August, the Digest summarized some of the legal challenges that major service providers of online music and video streaming faced. Below are updates of select stories:

Grooveshark – All Four Major Record Labels Are Now Suing

Back in August 2011, the Digest reported that Universal Music Group, a major record label, filed a copyright infringement suit against Grooveshark, the popular music streaming service. Universal accused Grooveshark employees of posting more than 100,000 pirated songs, CNET explains. The lawsuit is still pending, and Wired reports that Universal could be seeking the maximum damages of a whopping $150,000 per song. In December 2011, Sony Music Entertainment and Warner Music Group joined the lawsuit through an amended complaint, according to UPI. Most recently, on January 4, 2012, EMI Music Publishing sued Grooveshark’s parent company Escape Media for breach of contract, CNET reports. The New York Times reports that EMI has accused Grooveshark of failing to make a single royalty payment to EMI since signing a music licensing pact with EMI in 2009. CNET says Grooveshark maintains that it is protected under the Digital Millennium Copyright Act’s safe harbor provision, 17 U.S.C. §512(c), which immunizes online service providers from acts of copyright infringement committed by their users under certain conditions. With EMI’s suit, all four major record labels are now suing Grooveshark.

Cloud Music (Amazon, Google and Apple) – MP3tunes Decision Affirms Legality

JOLT Digest reported back in August 2011 that providers of “cloud music” services and apps, such as Amazon, Google, and Apple, may be vulnerable to suits for copyright infringement because the music uploaded by users could have illegal origins. On August 22, the United States District Court for the Southern District of New York handed down its opinion in a lawsuit by EMI against MP3tunes, a cloud-based online music locker service similar to those provided by Amazon, Google, and Apple. See Capitol Records, Inc. v. MP3tunes, LLC, 07 Civ. 9931 (S.D.N.Y. Aug. 22, 2011). Wired explains that rather than requiring every user who wanted the same song to upload it separately, MP3tunes employed a bandwidth-saving strategy in which its software would check the server to see if the song was previously uploaded. If a match existed, the song would be added to the user’s digital music “locker” without requiring an upload. JOLT Digest summarized Judge Pauley’s opinion, which held that MP3tunes met the legal threshold to be protected by the Digital Millennium Copyright Act’s safe harbor provision.

The MP3tunes decision was good news for Google and Amazon because it affirmed the legality of cloud music services. Moreover, it cleared the way for them to take advantage of similar space-saving techniques. Up to then, both had required users to upload every song, regardless of whether it had previously been uploaded by another user, Wired reports. In November 2011, Apple launched a $25-a-year iTunes Match service, which, similar to MP3tunes, scans users’ iTunes music collection and cross-references the songs with its servers, according to Time Techland. That same week, Google Music launched. Mashable reports that the two services would compete with Amazon’s Cloud Player, which had been launched earlier. Amazon’s Cloud Player was removed from Apple’s App Store in November, however, because of “legal complications with the music industry,” Apple Insider states.

Although currently free of legal troubles, Google requested permission from the United States District Court for the Southern District of New York on February 1 to file an amicus brief in support of ReDigi. In its letter to the court on behalf of Google, Fenwick & West expressed concern over the case’s threat to the cloud computing industry. The court, however, denied Google’s request.

Zediva – Movie Streaming Service Closes Operations in Settlement Agreement

In October, 2011, the online movie streaming service Zediva and the Motion Picture Association of America (MPAA) reached a settlement to resolve a lawsuit filed by Hollywood last April, as covered by The Hollywood Reporter. In August, 2011, the MPAA won a preliminary injunction to effectively shut down Zediva, which operated with no licensing agreements with the studios, Wired reports. The Digest covered the legal debate this past August. Zediva originally appealed this decision to the Ninth Circuit, according to The Hollywood Reporter, but has now agreed to permanently discontinue its services and resolve all claims for $1.8 million.

ReDigi – Court Denies Preliminary Injunction Against Used Music Dealer

On February 6, 2012, a federal district court judge denied Capitol Records’ request for a preliminary injunction against ReDigi, ExtremeTech reports. ReDigi sells “used” digital tracks using a software that it claims can identify files that have been legally purchased and restrict a user’s access to such files once the user sells them through its marketplace. This past January, Capitol Records sued ReDigi for copyright infringement in the U.S. District Court for the Southern District of New York (complaint available at Copyright’em) seeking both a preliminary injunction to shut down the website and $150,000 per track in damages. Capitol Records alleged that “ReDigi makes and assists its users in making systemic, repeated, and unauthorized reproductions and distributions of Plaintiff’s copyrighted sound recordings” and that it acts as a “clearinghouse for copyright infringement.” Judge Sullivan denied the request for the preliminary injunction on the basis that Capitol Records could not show irreparable harm, and the parties now await further proceedings, Intellectual Property Magazine reports. Wired.com hosts the brief order, and attorney Ray Beckerman’s website provides an excerpt of the court transcript. According to ExtremeTech, this suit could have important implications regarding the application of the “first sale doctrine” under the Copyright Act of 1976, by which the purchaser and owner of a product has the legal right to resell that product.

Heejin Choi is a 1L at Harvard Law School, and Dorothy Du is a 2L at Harvard Law School.

Written by Raquel Acosta
Edited by Adam Lewin
Editorial Policy

I. Introduction

Artificial intelligence (“AI”) is, simply put, “the science and engineering of making intelligent machines.”[1] Quintessential examples of artificially intelligent machines include Hal from 2001 Space Odyssey or the robots from Isaac Asimov’s I, Robot series of short stories. Many of the things we think of when we think of true artificial intelligence — such as understanding nuanced language, solving novel problems, or learning through experience — are just starting to be real phenomena.[2] While self-aware robots remain within the realm of fiction, developments in the field of artificial intelligence are advancing our understanding of what computers are and what they are capable of being.

Increasingly, sophisticated computer programs call into question some of the foundational assumptions within the intellectual property (“IP”) regime by autonomically producing works which, if executed by a human author, would qualify for copyright protection. Copyright is intended to “promote the progress of Science and the useful Arts”[3] and grants a limited monopoly to authors over the production and dissemination over their creative expression with the aim of incentivizing more creative work than it inhibits by locking down creative capital.[4] Machines have no intention of creating novel works, nor do they consider incentives as such. With our current technology, only humans can make genuinely creative choices. It remains an open question as to whom, if anyone, would get the rights if all the innovative or novel contributions were the work of a machine.[5] This Comment discusses innovations in AI technology that possess a high enough degree of autonomous computational creativity to require re-examination of copyright standards.  (more…)

By Charlie Stiernberg

What Changed in Google’s Privacy Policy

Google recently announced changes to its privacy policy and terms of service, prompting concerns by a bipartisan group of congressmen over the future safety of customer data. Reuters reports that Pablo Chavez, Google’s director of public policy, responded directly to the lawmakers’ questions in a letter, stating that “the updated privacy policy does not allow us to collect any new or additional types of information about users.” The Electronic Frontier Foundation (“EFF”) applauded Google’s efforts to notify its customers of the changes, but criticized the company for not adequately explaining what it meant until after the congressional inquiry. According to EFF, the major substantive changes include (1) combining all of Google’s separate product policies into one, (2) removing the separation between customer data sets stored in each of those products, and (3) using the information obtained from one product in another. The new privacy policy goes into effect on March 1, 2012.

Intel Purchases $120M in Patents from RealNetworks

Intel agreed to pay RealNetworks $120 million for 190 patents and 170 patent applications covering RealNetworks’s streaming video codec technology. The Wall Street Journal reports that this is the latest in a set of large patent purchases by major technology companies, which peaked in June with the Nortel Networks patent auction. Competition in the smartphone and tablet markets has become more intense and patents more important as companies, including Intel, expand their businesses into the mobile sector. According to ZDNet, Intel called some of the patents “foundational,” indicating its belief that that some are important to the company’s efforts in the mobile media space. In addition to the sales agreement, Intel acquired the video codec’s development team, and the two companies signed a memorandum of understanding to develop next-generation video software and related products.

New Mobile Device Privacy Act Proposed

Rep. Edward Markey released draft legislation this week that would require mobile phone carriers to reveal if they are employing tracking software such as Carrier IQ. Wired reports that under the Mobile Device Privacy Act, consumers would have to give their consent before data—including web usage, call history, and text messages—can be sent to third parties. According to Ars Technica, the controversy started when a developer publicized the widespread use of Carrier IQ software on smartphones a few months ago. Rep. Markey said such software should only be used with the consumer’s “express consent,” and emphasized that the legislation is just a “discussion draft” right now. Sprint and Apple both recently announced they are dropping Carrier IQ, but T-Mobile and AT&T still use it. Verizon does not.

Twitter Reveals 4,400+ DMCA Takedown Notices Last Year

Twitter partnered with Chilling Effects, a project sponsored by the Electronic Frontier Foundation and the Berkman Center for Internet & Society, to publish all Digital Millennium Copyright Act (“DMCA”) takedown notices it has received since November 2010. Ars Technica reports that the site lists 4,410 takedown notices in that time frame. While Twitter regularly deletes tweets to gain safe harbor under the DMCA, the company stated that it wants to “be transparent with users.” The Huffington Post breaks down the requests by sender, showing that Magnolia Pictures, a New York film distributor owned by Mark Cuban, was responsible for a third of them. Web Sheriff, a third-party that automates takedown notices for its customers, sent at least half of all the requests in the list.

Megaupload.com indicted by Department of Justice
By Daniella Adler – Edited by Abby Lauer

U.S. v. Kim Dotcom et al., 1:12-cr-3 (E.D. Va.)
Indictment

The Department of Justice recently brought a criminal indictment against Megaupload.com and related websites in the Eastern District of Virginia on three different counts of copyright infringement as well as money laundering and racketeering.

The indictment calls the operators of Megaupload.com and its environs the “Mega-Conspiracy” and describes it as a “worldwide criminal organization.” The government estimates that $175 million in profits from subscriptions and advertising comes directly from the large volume of copyrighted material illegally posted on the website. Among the individuals indicted were Megaupload.com founder Kim Dotcom and several of the sites’ main employees and officers.

Currently, when users attempt to access any of the “Mega” sites, they are confronted with an FBI Piracy Warning, which explains that the domain has been seized, states that the “individuals and entities” associated with the crimes have been indicted, and lists the charges.  (more…)

By Susanna Lichter

Google Privacy Revisions Stir Debate
Google announced a new privacy policy last Monday, raising the concerns of privacy advocates, the Washington Post reports. The policy will allow the web giant to collect information across Google services including search, Gmail and YouTube. Google alleges that the changes will “provide, maintain, protect and improve” Google’s functionality as well as generate “more relevant search results and ads” for users. So far the policy has received mixed reviews. Digital rights organizations like Common Sense Media criticized the policy, calling it “frustrating and a little frightening,” and suggesting the inability to opt out of the policy may violate the company’s agreement with the FTC. However, the Telegraph reports that Viviane Reding, the European Commissioner for Justice, who advocates for laws on Internet privacy and data protection, made a statement praising the policy and commending Google’s forward thinking.

Facebook Prepares for IPO Filing
The WSJ reports that Facebook might file for an initial public offering as early as this week in what could be one of the biggest debuts for a U.S. company ever. The 7 year old website, which boasts 800 million members and was famously founded in a Harvard College dorm room, could raise as much as $10 billion and be valued upwards of $100 billion. According to the WSJ, Facebook Chief Executive Mark Zuckerburg had been reluctant to go public, fearing it would pose a distraction to the staff. Likely another factor that has kept the young company from going public is the public disclosure requirements. However, as the company fast approaches 500 shareholders, at which point the company would have to publicly report financial information anyway, public disclosure seems inevitable. Morgan Stanley is expected to underwrite the deal, beating out Goldman Sachs who appeared to have the edge on the underwrite a year ago. Morgan Stanley is the leader in Internet stock underwrites with clients including Groupon and LinkedIn Corp.

Feds Arrest Megaupload Execs, Anonymous Retaliates
Seven executives connected to the popular file sharing website Megaupload were arrested last week and the website was shuttered, Wired.com reports. The individuals were indicted on charges including criminal copyright infringement, conspiracy to commit money laundering and racketeering. The government says that the company facilitated in excess of $500 million in harm to copyright holders. Hacker collective “Anonymous” claimed responsibility for retaliatory attacks on the websites of the Justice Department, Recording Industry Association of America, and Universal Music that occurred shortly after Megaupload was taken down. Megaupload’s controversial founder, Kim Schmitz, aka Kim Dotcom, was among the arrests. The site’s chief executive, Swizz Beatz, was not implicated.