In Playboy Enterprises, Inc. V. Frena  The Defendant John Frena operated a subscription computer bulleting service, Techs Warehouse BBS (BBS), that distributed unauthorised copies of the Plaintiff Playboy Enterprises, Inc’s copyrighted photographs. Subscribers of BBS could view and download Playboy Enterprises’ copyrighted photographs in high quality. The Court concluded that the defendant was directly liable, it did not matter that the Defendant claimed he did not make the copies himself.
This case was pre-DMCA. The DMCA gave intermediaries safe harbours, provided they comply with the strict procedure specified by the DMCA.
In the UK, liability for secondary infringement is also possible. The red flag in both jurisdictions is knowledge. The DMCA, at 17 U.S.C. § 512(c), closes the safe harbor to an internet service provider (“ISP”) who does not act quickly to remove the infringing material: (i) if the ISP has “actual knowledge that the material or an activity using the material on the system is infringing;” or, absent actual knowledge, (ii) if the ISP “is aware of facts or circumstances from which infringing activity is apparent” (referred to as “red-flag” knowledge). In the UK the Demon case – Laurence Godfrey v. Demon Internet Limited  sets out the position although this case is about defamation.
Intermediaries can also be directly liable. In Google v. Copiepresse  Copiepresse who represents a group of newspapers took Google to court in Brussels, claiming that by including headlines and links to online stories from the Belgian press without its prior permission, Google infringed the copyright of its newspaper members. Google was copying and making copyrighted works available to the public without consent. Google was found liable for direct infringement and ordered to withdraw from its sites all copyrighted material (articles, photographs, etc) under a daily penalty of 1,000,000 euro for every day of delay. Google asked the Court to reconsider its decision on the basis of the caching immunity under directive 2000/31/EC. The court found the direcive irrelevant on the grounds that the case involved the availability of the cached pages not the fact that they were cached. Google appealed but failed. In 2011 the court upheld the rulings. By caching the entire website of a newspaper company and displaying it according to search parameters, Google was directly liable for copyright infringement. Although, in this case the court emphasised the volume of copying, this does not mean that copyright infringement is based on a quantative test. Infact what constitutes copying is a qualitative test. The UK case of Designer Guild V. Russell Williams  is a good case in point. Copying the hook of a track or a riff alone is copyright infringement. Laying one track on top of another i.e. a mashup or a bootleg for commercial gain is copyright infringement. The key question is “is it original expression?” You can sample or cover a track but you need to get clearance or, if you are covering an entire track, pay a mechanical licence fee. VSTs have meant mash ups are of very high quality and relatively easy to produce.
Cambell v. Acuff-Rose Music Inc.  sets out 4 clear tests for deciding whether mash-ups are fair use.
(i) The purpose and character of the use, including whether such use is of a commercial nature or is for non-profit educational purposes.
(ii) The nature of the copyrighted work.
(iii) Whether the quantity and value of the materials used are reasonable in relation to the purpose of the copying.
(iv) The effect of the use upon the potential market for, or value of, the copyrighted work. ” Courts must consider not only the extent of market harm caused by the particular actions of the alleged infringer, but also whether unrestricted and widespread conduct of the sort engaged in by the defendant would result in a substantially adverse impact on the potential market for the original”.
In this case 2 Live Crew’s use of the original Roy Orbison hit “Oh Pretty Woman”, to “big hairy woman”, “baldheaded woman” and “two-timin woman”, was held to be parody and fair use. The intuitive argument is that Mashups are virtually verbatim copies of the original works. The only difference is way in which the work is compiled. They would therefore in most cases not be fair use under the Acuff-Rose Music tests.
P2P generations and Cyberlocker
A&M Records Ince v. Napster 
RIAA v Napster 
Napster was the first generation of P2P software. A central server-based model. It was a server based application. Your machine connected to Napster’s central servers by log in with a username and password. It told the central Napster servers which files were available on your machine. So although the users computers became servers and they downloaded songs from the computers of other users (peers), not from Napster, the Napster central servers had a complete list of every shared song available on every hard disk connected to Napster at that time. Recording companies successfully shut down Napster for facilitating the sharing of files containing copyrighted recordings.
MGM Studios and others V. Grokster and Streamcast Networks 
MGM Studios and others V. Grokster and Streamcast Networks 
The second generation of P2P software is Kazaa. This is the P2P generation software used by Grokster. The Kazaa P2P software is a user based model. The application is installed on the user’s computer and it interacts with the application server allowing the user to log on to the server. Once the user is logged on they can then interact through the software downloaded on their hard drive (note not through the server) with the computers of other users. Crucially the requests go directly from the software on one users computer to another users computer. There is no involvement in the sharing by the Kazaa server. Kazaa uses fast track protocol. The system divides users into super nodes and ordinary nodes. Super nodes are powerful computers with fast network connections, high bandwidth and processing capabilities. The approximately 30,000 super nodes act as traffic hubs, processing data requets from the slower ordinary nodes. Each super node may serve between 30 and 150 ordinary nodes at any one time. When a user installs the Kazaa software it comes coded with a list of super nodes. Everytime the user launches the Kazaa appliaction, his computer registers with the central server which chooses from a list of currently active super nodes. When a user sends out a request for a file, the request is funneled through the super nodes. The super node communicates with other super nodes which communicate with ordinary nodes until the file is located. The file is then sent directly to the requester’s computer via HTTP. The search for the file will extend seven levels into the network before it stops propagating.
In the first Grokster case, the court held that Grokster was not contributory liable because the file requests go directly from the software on one user’s computer to another user’s computer. There is no involvement in the sharing by the server.
In the second case, the court held that there was contributory infringement based on the volume of copying and knowledge.
SABAM v. Tiscali (Scarlet) District Court of Brussels 
The Belgian Society of Authors, Composers, and Publishers (SABAM) headquatered in Brussels brought an action for injunctive relief against a telecoms company Scarlet previously known as Tiscali also based in Brussels.
The case commenced by summons in June 2004 for injunctive relief by SABAM against Tiscali to assess the extent of the use of Tiscali’s internet service for the p2p exchange and use of unauthorised music compositions the rights to which were owned by the members of SABAM and to order Tiscali to prevent such use at its own cost.
The court granted the injunctive relief ordering that ‘Audible Magic solution’ be installed on the Tiscali network to effect the injunction. One of the issues that was considered was whether the injunctive relief if granted would contravene Article 15 of the Electronic Commerce Directive 2000 which did not impose any obligation to monitor its network on an ISP. The Court held that it did not.
Reference from the Brussels court to ECJ – Judgment 2011
Tiscali appealed. The appeal court referred the matter to the ECJ. The ECJ ruled that granting the injunctive relief would inter alia contravene Article 15 2000/31 Directive. In other words the judgment of the 2007 court was flawed therefore the appeal would be allowed.
MDY Industries v Blizzard Entertainment – 
Preventing the use of software robots with an online game with copyright.
Blizzard & Vivendi run the popular online game World of Warcraft (WoW). MDY created and sold a “bot” program called WoWGlider (“Glider”). A “bot” is short for robot” referring to a program that can emulate player actions. WoW players use bots while they are unable to play for themselves e.g. while sleeping or having a cup of tea. the bots will continue playing allowing the players to advance more rapidly in the game. Blizzard claimed the following interalia:
MDY claimed the following
Like all major legal cases the case turned on a small technical point. Were WoW users owners of their copy of the downloaded software used to play the WoW online game or did they just have a license.
Further that MDY was liable for contributory infringement for providing Glider. The court applied a two part test for determining whether a purchaser owned their copy of software or where just a licensee as follows:
1. Generally if the copyright owner makes it clear that she or he is granting only a license to the copy of software (you say THIS IS A LICENSE); and
2. Imposes SIGNIFICANT RESTRICTIONS on the USE or TRANSFER of the copy.
if the answer to both parts of the test is yes then the user holds a license and only gets the RAM copy. This is a very easy test for the copyright owner to satisfy since any interaction with a copy of the software will constitute “use”.
MDY Industries appealed the judgment of the district court, and a judgment was delivered by the Ninth Circuit Court of Appeals on 14 December 2010.
With regards to Glider’s circumvention of digital rights software, the court upheld the judgment that MDY violated the provisions of the Digital Millennium Copyright Act against trafficking in copyright circumvention technologies.
Pirate Bay 2012 – BitTorrent Technology
BitTorrent is a user based application in that you download the BitTorrent application that allows you to log onto the Tracker server. Then you look for a torrent file. The difference between BitTorrent and previous generations is that it creates a new network for every torrent file. Users of a BitTorrent network will select the file that they wish to download and, at that point, the downloading will begin simultaneously from a number of different host computer that all possess the same file.
You are downloading several pieces of the file from peers in different torrent networks which then all reassemble on your client application.
To download BitTorrent technology you need:
1. A software application;
2. Website known as Torrent sites;
3. Servers known as ‘Trackers’ that mange the download process.
Once a user downloads a given content file, they also become a source for future requests and downloads.
In 2009, the website’s founders were put on trial in Sweden, charged with facilitating illegal downloading of copyrighted material. They were found guilty and sentenced to a year in prison with a fine of 30 million SEK (€2.7M or US$3.5M as of 2009). In fourteen countries, ISPs have been ordered to block access to the website.
Several Pirate Bay proxy sites still exist today.
Megaupload case (Kim DotCom) 
The term cyberlocker refers to an online service that allows users to store large files in a password-protected hard drive space online – a ‘locker’. You have the option of ‘sharing’ the cyberlocker password information with friends, who can privately download whatever contents you put in those folders. The cyberlockers range in size from a couple hundred megabytes for their free services, all the way up to 2 or more gigabytes for their paid subscriptions. A few of the most popular services are RapidShare, HotFile, Mediafire as well as Megaupload and its sister site Megavideo. Users can even watch their uploaded audiovisual content if the website enables media streaming through its embedded media players. because cyberlockers are so convenient and sophisticated enough to house large movie and music files, it is a common practice for people to share copies of .avi movies and .mp3 songs through their cyberlockers. And unlike bittorrent file-sharing which is traceable, cyberlockers are very hard to monitor, as they employ one-to-one connectivity which is essentially invisible to surveillance tools.
In January 2012 Megaupload was shut down for inter alia contributory infringement.
Mr Dotcom, who was born Kim Schmitz, is still fighting a legal battle to stay in New Zealand from where he ran Megaupload. The case has generated controversy in New Zealand over the way the police and intelligence services gathered evidence before the raid and won an apology to Mr Dotcom from the country’s prime minister. Mr Dotcom has also won support from prominent computer pioneers such as Apple co-founder Steve Wozniak. The raid on Megaupload put 25 petabytes of data uploaded to it by its 50 million members into a legal limbo. In one message, Mr Dotcom said he was working with lawyers and the Electronic Frontier Foundation, which campaigns on digital rights issues, to get access to that seized data and return it to users.
Kim DotCom latest venture is called ‘Mega’. It is another file sharing site like MegaUpload. The new service will include mobile access, instant messaging and word processing similar to Wordbox as well as hosting, email and domain-name services. It is already proving extremely popular. Mega was launched on the 19 January 2013.
The latest media reports about this case in March 2014 were that Kim DotCom’s legal team is not being permitted to see the FBI’s evidence against him.
The standard copyrights cases are however where an artist ‘samples’ another artists music without permission, or a person reproduces photographs owned by another person without that other person’s permission. The great thing about copyright is that it protects some very interesting and diverse creative work
Mattel Inc v. MGA Entertainment Inc. 
Barbie was 42 years old when the exotic, puffy-lipped Bratz dolls Cloe, Jade, Sasha and Yasmin were launched in 2001. Bratz seized about 40 percent of Barbie’s market share in just five years. The Bratz sued first. In April 2005, their maker MGA Entertainment sued Mattel, claiming that the line of “My Scene” Barbies copied the big-headed and slim-bodied physique of Bratz dolls. Mattel counter sued, accusing Bratz designer Carter Bryant of having designed the doll while on Mattel’s payroll. Bryant worked for Mattel from September 1995 to April 1998 and then again from January 1999 to October 2000, under a contract that stipulated that his designs were the property of Mattel.
In July 2008, a jury ruled in favour of Mattel, forcing MGA to pay Mattel $100 million and to remove Bratz dolls from shelves (an injunction that lasted about a year). But the two toy companies continued to fight it out. In 2011 MGA prevailed, proving that Mattel had stolen trade secrets.
Victor Whitmill v. Warner Bros. Entertainment Inc. 
In The Hangover Part II, Stu Price, a geeky dentist played by actor Ed Helms, wakes up after a night of crazy antics in Bangkok to find a tribal painting tattoo on his face. Price’s tattoo is identical to the one Mike Tyson has in the first Hangover movie.
Tyson’s tattoo artist S. Victor Whitmill sued Warner Bros. Entertainment on the 28 April, seeking an injunction to halt the movie’s release on the 26 May. He obtained a copyright for the eight-year-old “artwork on 3-D” on 19 April, and claimed that the use of his design in the movie and in advertisements without his consent was copyright infringement. Warner Bros., defence was that a tattoo is not capable of copyright and/or that it’s inclusion was within the “Fair use” exception as a parody.
On 24 May 2011 Chief Judge Catherine D. Perry of the United States District Court for the Eastern District of Missouri denied an injunction on the movie’s release, but said Whitmill still had a case. If it meant avoiding a long trial, Warner Bros. said, in early June, that it would be willing to “digitally alter the film to substitute a different tattoo on Ed Helms’s face” when the movie is released on home video. But that ending was avoided as Warner Bros. and Whitmill reached an agreement on undisclosed terms.
David La Chapelle v. Island Def Jam Records and Related Parties 
On 14 February 2011 David LaChapelle filed a lawsuit against Rihanna in New York over the images in her sexy “S&M” music video, which was released that month. LaChapelle claimed that “the music video is directly derived from and substantially similar to the LaChapelle works.” He claimed that Rihanna copied eight images for the video, which copied the “composition, total concept, feel, tone, mood, theme, colors, props, settings, decors, wardrobe and lighting of his work. At the pre-trial hearing the judge ruled that LaChapelle have a prima facie case and it would go ahead. The case was settled in LaChapelle’s favour in September 2012.
This case would have been brought under section 21 CDPA 1988 in the UK.
The counter-intuitive argument in the unauthorised copying debate is the argument that there is no existential threat to the utilitarian value of copyright. In-fact, the advent of the Internet and other digital download platforms is simply another disruptive technology, like the radio cassette recorder, which will settle as the status quo in time. Finally, that copyright owners are exaggerating the challenge of unauthorised digital downloads to retain control of content, even to extend further control over the private use of copyright work beyond what has been allowed prior to 1996.