District Court Rules that DMCA Safe Harbors Apply to Cloud-Storage Music Locker Service Liable for Indirect Infringement

By Andrew Crocker – Edited by Jonathan Allred

Capitol Records, Inc. v. MP3tunes, LLC, 07 Civ. 9931 (S.D.N.Y. Aug. 22, 2011)

Slip opinion

The United States District Court for the Southern District of New York ruled on competing motions for summary judgment in a copyright infringement case brought by EMI, Inc. against cloud-storage locker service MP3tunes and its executive Michael Robertson. The court granted EMI’s motion for summary judgment of contributory infringement against MP3tunes for not removing specific infringing material from users’ accounts and direct infringement against Robertson for personally downloading infringing material, while granting in part MP3tunes’ motion for summary judgment on its entitlement to safe harbors under the Digital Millennium Copyright Act of 1998 (“DMCA”).

The court ruled that MP3tunes had satisfied the threshold requirement for safe harbors granted to service providers in the DMCA by establishing a policy for dealing with repeat infringers among other requirements, but it found that MP3tunes had not done enough to respond to takedown notices from EMI regarding MP3tunes users’ infringement. MP3tunes’ locker service allows users to upload music from their personal collections and play these songs back from any computer. MP3tunes also operates sideload.com, a website (and an accompanying web plugin) that allows users to search for new music and “sideload” it directly to their locker for storage and playback. Sideload.com also aggregates music sideloaded by users, serving as a resource for discovering new music. When MP3tunes received EMI’s takedown notice, it removed links to the infringing content from sideload.com, but it did not delete songs that had been sideloaded from these links to individual user accounts. Relying heavily on precedent from Viacom v. YouTube, 718 F. Supp. 2d. 514 (S.D.N.Y. 2010), which was previously covered by the Digest, the court held that although MP3tunes was obligated to remove only those copyrighted works that were described with sufficient precision in EMI’s takedown notice, it should have removed copies of these works from users’ accounts as well. As a result, the court ruled that EMI was entitled to summary judgment on the claim that MP3tunes was liable for contributory infringement for these specific works.

Eric Goldman’s Technology & Marketing Law Blog provides an overview of the case. The Washington Post and the New York Times both agree that the court’s application of DMCA safe harbors to MP3tunes’ service will be welcome news to Apple, Amazon, and Google, all of whom have recently introduced cloud music storage locker services.

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By Esther Kang

Steve Jobs Resigns As Apple CEO

Steve Jobs announced his resignation as CEO of Apple on Wednesday, reports The Wall Street Journal. In his resignation letter, Jobs wrote, “I have always said if there ever came a day when I could no longer meet my duties and expectations as Apple’s CEO, I would be the first to let you know.” Tim Cook, who had been Apple’s COO since 2005, has replaced Jobs. Many have raised concerns about the future of the company following Jobs’ departure, according to The Huffington Post. The Guardian reports that as of Thursday, Apple stock had dropped by 3% after Jobs’ announcement.

Facebook, RIM, and Twitter Meet with UK Government about Recent Riots

Reuters reports that on Thursday, UK Home Secretary Theresa May met with representatives from Facebook, RIM, and Twitter to discuss the role of social media in the recent British riots. The talks focused on building cooperation between the companies and the government to restrict criminal activity on social networks, but the UK government did not seek to impose any strict limitations on Internet services. According to PCWorld, Facebook released a statement welcoming the government’s efforts to “keep people safe” rather than “imposing new restrictions,” the company also recognized that at times, it must be more active when “dealing with situations that are heightened or sensitive such as the UK riots.”

RIAA Appeals District Court’s Reduction of Damages in File-Sharing Case

As Ars Technica reports, the RIAA has appealed the reduction of damages from $1.5 million to $54,000 in its suit against Jammie Thomas-Rasset to the Eighth Circuit. The case, filed in 2007, has already gone through three trials, the first two resulting in jury verdicts of copyright infringement and damages of $1.92 million and $1.5 million, respectively, until the district judge held the latter award unconstitutional. According to Techdirt, the RIAA bases its appeal on the correct interpretation of the word “distribution” in the Copyright Act and whether it covers merely making a copyrighted work “available.”

Court Rules that Ban on Teacher-Student Communication on Non-Work-Related Sites Violates the First Amendment

Ars Technica reports that a Missouri court has enjoined a new law that would have penalized teachers who communicate with students through “non-work-related” sites, which include Facebook and Twitter. The Volokh Conspiracy comments on the legal merits of the case and agrees with the court that the law was overly broad, prohibiting even communication between family members in some instances. In response to the public outcry against the law and the court’s ruling, Missouri Governor Jay Nixon has called for the law to be repealed, as well as other provisions not enjoined by the court to be removed, according to Yahoo News.

By Andrew Segna

Google Acquires Motorola Mobility for $12.5 Billion

Google announced on August 15, 2011 that it will acquire Motorola Mobility for $12.5 billion in cash. Ars Technica reports that this purchase was motivated in part by Google’s desire to acquire Motorola’s patents and to protect its Android mobile platform, as this deal will give Google control of more than 17,000 patents in the mobile arena and 7,000 patent applications. This acquisition comes in light of Google accusing Microsoft, Apple, Oracle, and other companies of attacking Google and Android by acquiring Novell and Nortel patents.

Missouri Federal Court Reject LegalZoom’s Motion for Summary Judgment on Whether LegalZoom Violates Unauthorized Practice Law

As reported on Eric Goldman’s Technology and Marketing Law Blog, the District Court for the Western District of Missouri rejected LegalZoom’s motion for summary judgment against accusations that the website dealt in the unauthorized practice of law. LegalZoom offers both blank legal forms and a service in which customers answer a series of questions, which provides LegalZoom’s software with the information necessary to create a completed legal document for the customer. The court did not have an issue with the blank forms. However, the court found that there was a question of whether LegalZoom, through the questionnaire, did more than just allow a customer to pick various wordings of a document.

Activists Protest Bay Area Rapid Transit’s Decision to Cut Mobile Phone Access in Subway Stations

According to the Guardian, a protest occurred in the Civic Center subway station in San Francisco on the night of August 15, 2011 over the decision by Bay Area Rapid Transit (BART) to cut mobile phone access on August 5 in anticipation of a protest against police shootings that threatened to disrupt rush hour commute. Anonymous, the online activist group, broke into BART websites and organized the August 15 protest. BART did not cut off mobile access on August 15 but did temporarily shut down the Civic Center station and three other stations.

Minecraft Developer Vows to Oppose Trademark Infringement Suit

Markus “Notch” Persson, the creator of the popular PC game Minecraft, asserted that he would oppose video game publisher Besthesda Softworks’ claim of trademark infringement, as reported by Ars Technica. Besthesda claims that the title of Persson’s new game, Scrolls, infringes its trademark on its own video games series, The Elder Scrolls. Persson initially responded to the allegations, which he called “bogus,” by challenging Bethesda to a match of the video game Quake III to determine who was right.

Sixth Circuit Rules that High-Volume Phone and Email Campaign Violates Computer Fraud and Abuse Act

By Michael Hoven – Edited by Abby Lauer

Pulte Homes, Inc. v. Laborers’ Int’l Union of N. Am., Nos. 09-2245; 10-1673 (6th Cir. Aug. 2, 2011)
Slip opinion

The Sixth Circuit affirmed in part and reversed in part the United States District Court for the Eastern District of Michigan, which had granted the Laborers’ International Union of North America’s (“LIUNA”) motion to dismiss Pulte Homes’ claim that LIUNA had violated the Computer Fraud and Abuse Act (“CFAA”) by carrying out a phone and email campaign against Pulte. The district court held that Pulte failed to show that LIUNA intentionally caused damage to Pulte’s phone and email systems.

The Sixth Circuit held that Pulte had successfully stated a “transmission” claim under the CFAA but agreed with the district court that it had not stated an “access” claim. The Sixth Circuit concluded that Pulte alleged sufficient facts to state a transmission claim, which requires showing that the defendant intentionally caused damage. The court reasoned that LIUNA’s phone and email bombardment had caused damage to Pulte’s computer system by diminishing Pulte’s ability to send and receive calls and emails. Such damage was also intentional, the court found, because LIUNA likely knew it was causing damage even if it acted without actual knowledge of the consequences of its phone and email barrage. The Sixth Circuit agreed with the lower court that Pulte failed to state an access claim but articulated different reasoning, holding that LIUNA’s actions were not “without authorization” because Pulte allowed members of the public to contact its offices and executives by phone or email. In so holding, the court adopted a “diminished-ability” standard for assessing damage, which may broaden liability under the CFAA.

The Computer Fraud/Data Protection blog provides an overview of the case. Techdirt criticizes the decision for expanding the CFAA beyond its original purpose of combating computer hacking to cover emails sent as part of a labor protest. The Technology & Marketing Law Blog questions whether Pulte had suffered significant damage and whether the allegations were sufficient to demonstrate intent on the part of LIUNA. (more…)

Written by Katie Booth
Edited by Vivian Tao
Editorial Policy

I. Introduction: Not all data uses are created equal.

Google recently introduced a new social networking tool called the Google+ project, which capitalizes on the fact that consumers want more control over whom they share their personal information with online. Google+ allows users to set up separate groups—such as a group for friends, a group for family, and a group for coworkers—and then share different information with each group. This recognizes a simple fact of life: As Google puts it, “[n]ot all relationships are created equal.” The popularity of the national Do Not Call Registry, which prohibits telemarketers from calling phone numbers listed in the registry, is another example of consumers’ desire to keep particular groups of people, such as telemarketers, from using their personal data.

In Sorrell v. IMS Health, however, the Supreme Court held that the First Amendment did not allow the government to regulate speech on the basis of the types of categorical distinctions between speakers that consumers make all the time. Invalidating a Vermont statute that prohibited data mining companies from using physician prescription data for marketing purposes, the Court held that the government could not engage in “content” or “viewpoint” discrimination against marketers by prohibiting the commercial use of this data while permitting its non-commercial use. Sorrell at 2659, 2663-64.[1] This ruling, which seemingly has its roots in the Court’s Citizens United decision, eviscerates the commercial speech doctrine—the First Amendment doctrine governing speech with a commercial viewpoint and content—by effectively holding that the government cannot regulate commercial speech, such as marketing, differently than other types of speech just because the speaker is a corporation or the content of the speech is commercial.

If Sorrell applies to the world of online data, then the Court leaves legislatures with difficult choices when it comes to regulating data privacy. Under Sorrell, legislatures cannot regulate the commercial use of data any differently than its non-commercial use. This means that proposed legislation such as the Commercial Privacy Bill of Rights Act of 2011 (“Commercial Privacy Bill”), which aims to do precisely the opposite, would likely not pass constitutional muster. Instead, legislatures may have to consider universal opt-in or opt-out schemes, under which consumers could individually opt in or out of the use of their personal data for any purpose, not just commercial use. In its opinion, the Sorrell Court mentioned HIPAA, the Health Insurance Portability and Accountability Act of 1996, which requires all consumers to receive and acknowledge notice of the ways in which health care providers may use their personal data, approvingly in this context. However, both opt-in and opt-out data privacy schemes may negatively affect innovation, research, and even privacy. If legislatures choose to pass consumer data privacy laws in the wake of Sorrell, they will face difficult choices between competing values and may ultimately leave consumer data privacy up to the market.  (more…)