All Google Needed Was An Effective Takedown System to Reach the Safe Harbor

In granting summary judgment against Viacom on the grounds that Google was a legitimate Online Service Provider with an effective takedown system, and therefore entitled to receive the benefit of the DMCA “Safe Harbor” under 17 USC 512(c), the District Court cites copious amounts of legislative history establishing that without the safe harbor, the Internet might not grow robustly.  (Download PDF) Google’s general knowledge that there was a whole lot of infringement happening on YouTube didn’t mean that it was obligated to start screening for infringing content or hunting it down once it was posted, because their job is just to have an effective takedown system to remove content once the creator tells them it’s infringing.  The burden of discovering infringing content never shifts to the Online Service Provider, and it’s always the copyright holder’s job to find it and identify it by URL.  The court said:

Mere knowledge of prevalence of such activity in general is not enough. That is consistent with an area of the law devoted to protection of distinctive individual works, not of libraries. To let knowledge of a generalized practice of infringement in the industry, or of a proclivity of users to post infringing materials, impose responsibility on service providers to discover which of their users’ postings infringe a copyright would contravene the structure and operation of the DMCA.

YouTube Is DMCA-Friendly, Napster Was Not

The court also held that even though YouTube technology made it easy to infringe, that didn’t make it like Grokster or Napster, because those were systems that were designed to foment piracy.  This is an interesting distinction, because creating a video bazaar where everyone knows you can find stolen content doesn’t seem that different from creating a file sharing system where everyone knows you can create stolen content, but it’s different in one important way — Napster and Grokster never went around deleting content, and had no mechanism that would allow a copyright holder to locate where the content was and send a takedown notice.  This really means that some technology is DMCA-friendly (YouTube-style video communities) and some is not.

Ad Revenue From Tainted Traffic Is Pure

The court rejected the argument that Google should lose the DMCA safe harbor because it was generating ad traffic by having a site that in general, contains a lot of infringing content.  This part of the opinion isn’t very satisfying.  The court seems to be finessing the issue when it says:

The safe harbor requires that the service provider “not receive a financial benefit directly attributable to the infringing activity, in a case in which the service provider has the right and ability to control such activity ” § 512(c) (1) (B). The “right and ability to control” the activity requires knowledge of it, which must be item-specific.There may be arguments whether revenues from advertising, applied equally to space regardless of whether its contents are or are not infringing, are “directly attributable to” infringements, but in any event the provider must know of the particular case before he can control it.

That’s a distorted reading of “right and ability to control.”  Google has the right and ability to delete every single video on the whole site, or to just turn it off altogether. Google has the right and ability to delete every single video on the whole site, or to just turn it off altogether.  To say they have no “ability to control” infringing videos until they know that they are infringing is like saying I can’t control my appetite until I know the caloric content of my food.  If I were Viacom, not that I want to be Viacom, I would tell my lawyers to appeal on the grounds that the district judge distorted the meaning of the statute here.  After all, the court admitted that Google was working the system:

From plaintiffs’ submissions on the motions, a jury could find that the defendants not only were generally aware of, but welcomed, copyright-infringing material being placed on their website. Such material was attractive to users, whose increased usage enhanced defendants’ income from advertisements displayed on certain pages of the website, with no discrimination between infringing and non-infringing content.

Let The Creator Beware

If Google can generate ad revenue by taking in every kind of content without distinction, and make money on the infringing attractions, then Google can “work the float,” and always have enough infringing content to keep its blood pressure up at the expense of copyright holders.  The only way that content owners can act proactively is by implementing digital “fingerinting technology” through the “Claim Your Content” system that Google uses as its only screening mechanism.  Fingerprinting your content is not, however, cheap.  So what this opinion seems to announce is a doctrine of “Caveat Creator,” let the creator beware.

Will The Real Free Speech Provider Please Stand Up?

Please don’t take me for a copyright hawk, but this seems like a ruling that benefits a company that has made a habit of turning other people’s work into their payday, and is being encouraged to keep on doing it.  Meanwhile, real free, nonprofit libraries that have no advertising revenue, are discouraged from putting the works in their archives on the Internet where scholars and researchers can use it for fair use purposes, because publishers do not respect the fair use protections of 17 USC 107 (the Library Exemption from copyright infringement liability).  I am currently defending the American Buddha Online Library against a suit from Penguin, and although I won on jurisdictional grounds in New York District Court, Penguin appealed, and the Second Circuit court of appeals is now asking the New York State Appeals Court to take a look at the issues and see if something better can be worked out for Penguin by tweaking New York state law.  I am doing this case pro bono, because I’ve been well acquainted with the director for many years, but few libraries have a handy intellectual property lawyer to handle their cases.  So true freedom of speech on the Internet is getting suppressed by copyright lawsuits while Google gets to keep minting money by working the DMCA like a money pump.  Nice work if you can get it.

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Meanwhile, Microsoft is hedging its bets, releasing an app called “Tag” in both the iPhone App Store and in Android Market.  According to the New York Times, “Microsoft’s Tag technology allows you to use your phone as a mobile barcode reader. You simply point your phone’s camera at a tag (think: a smaller QRCode), snap a picture, and the Tag program will interpret it. This can be used to place things like coupons in physical locations, for example. ”

And as ZDNet reported, over in Europe, the EU Antitrust regulators have received complaints about Google rigging search results to favor its own businesses, a misfortune for which Google blames Microsoft:

Google Feb. 23 said three Web companies have filed complaints with the European Commission alleging that the search engine is demoting their Websites in Google search results and not respecting fair competition.

The European Commission, the antitrust body for the European Union, received complaints from UK price comparison site, Foundem, a French legal search engine called ejustice.fr, and Microsoft’s Ciao from Bing, a product shopping site.

While the Commission said it has not opened a formal review of Google over these complaints, Google denied the allegations and pointed to search rival Microsoft as the possible instigator.

And as reported in Wired, Google has of course returned the favor by joining in the EU Antitrust complaint against Microsoft:

The Internet company joins the Mozilla foundation, producer of the Firefox Web browser, and Norway’s Opera, a privately held company. Google adds the voice of a significant and well-financed player in the case against Microsoft.

In January, European regulators brought formal charges against Microsoft for abusing its dominant market position by bundling its Internet Explorer Web browser with its Windows operating system, which is used in 95 percent of the world’s personal computers.

Many people are likely to say, well if all three accuse each other of illegal conduct, probably none of it is true.  But here’s a hypothetical for you.  Suppose all three are telling the truth, and like Apple says, Google really is rolling its OS out on a platform that infringes Apple patents, and like Microsoft says, Google really is rigging search results, and as Google says, Microsoft really is using monopoly power to maintain a lock on the browser market?  Where is the consumer in the midst of this three-way orgy of market dominance.  Can anybody spell Fustercluck?

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Charles Carreon USPTO Trademark Registration # 3,749,709

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January 28, 2010

With even the President sounding off about the Supreme Court’s people-unfriendly decision in Citizens United v. Federal Electoral Commission, it seems like a safe time to share this little gem that I discovered while completing my Continuing Legal Education requirements.  While listening to several CDs of audio from the National Association of Criminal Defense Lawyers, I was spontaneously regaled by this hilarious recording – APPOINTED FOREVER – that Gerald Lefcourt used to preface his presentation.  Here are the hilarious lyrics:

Imagine me as God, I know I do

It feels so right

To be a federal district judge and know that I’m

Appointed Forever!

I was annointed by the President

And revelation told him I was heaven-sent.

And Congress in their wisdom granted their consent.

Appointed forever!

I’m a federal judge and I’m smarter than you

For all my life!

I can do whatever I want to do

For all my life!

Bring to me discovery

No matter what the issue is, I guarantee,

Somebody will be sanctioned as the penalty,

And there’ll be no error.

My decisions cannot be questioned by you

I’m always right

And my wise discretion is never abused

For all my life

Think of me as royalty

When you appear before me

Fall upon your knees

Even at the very worst,

If you take me up to get reversed,

You’ll have to get the Circuit Court to hear you first,

And that takes forever

Appointed Forever

Employed Forever

Appointed Forever

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For the past decade, I have been engaged in representing the owners of Internet domain names.  I entered into the field in 1999, when domain names were first recognized as valuable assets.   Even though common sense indicated that domain names were valuable property, in the Kremen v. Cohen case, I was one of the first lawyers to tackle the issue in court.  I pioneered the legal theory that domains are intangible personal property under the law of California, and prevailed on that claim in Federal court, turning my client into a millionaire, and establishing the legal principle that domain names may be recovered under the tort theory of “conversion.”  The full story of the case is told in my book, The Sex.Com Chronicles, A White-hat Lawyer’s Journey to the Dark Side of the Internet.

CRS Recovery v. Laxton, the RL.Com Case

Relying on the Kremen v. Cohen precedent, I’ve worked steadily in the domain name recovery field, most recently recovering RL.Com in 2008 pursuant to an order issued on Summary Judgment for my clients on the conversion theory by District Judge Claudia Wilken.  In the RL.Com case, I represented Dale Mayberry, the original registrant of the RL.Com domain, and Richard Lau’s company, CRS Recovery, Inc. that purchased the rights to recover the stolen domain.  The case seemed complicated, because RL.Com had been stolen by a hacker in China, sold to a digital “fence” in India, and purchased by John Laxton, a real estate broker in California.

Other Domain Litigation

In addition to RL.Com, I have recovered Hardcore.com and Milfhunters.com in Federal litigation in the Northern District of California and the District of Oregon, respectively.  I have also defended the owners of domains including Kazaalite.com and Arthrostim.com from UDRP proceedings and US District Court lawsuits.  I think I am on safe ground when I state that I am uniquely qualified to conduct domain name litigation in Federal Court.

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In April 1993, I left the world of LA civil law to fulfill a dream to relocate my family of five to a twenty-acre parcel of land near Ashland, Oregon. I got an Oregon Bar license in July 1993, and after discovering that if I worked for local lawyers, I could expect to make about one dollar for every five I’d been making in LA, I took a job as a Deputy DA in the Jackson County District Attorney’s Office in Medford, Oregon, prosecuting DUI’s, domestic violence and misdemeanor thefts.

It was about a one-hour commute each way over twisty mountain roads, and every day I had to read dozens of police reports and file around twenty criminal cases.  But hard as the job was, it was a valuable experience that has paid dividends over and over again, because I learned three lessons I hadn’t learned in law school or in the hard-driving litigation world of LA. First, I learned the lessons of country civility, as I realized that the slash-and-burn style of dealing with opposing counsel and witnesses didn’t play in the small-town environment where everyone knew everyone, slights were rarely forgotten and often easily avenged.  Second, I learned that juries need to hear a simple story to convict or acquit, and that a story that can be understood is thus more valuable than one that is absolutely precise.  Third, I learned that while documentary evidence is seductive, in trial, nothing can replace crisp, efficient questioning of the witnesses.

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Vuitton Verdict

January 14, 2010

Back in August of 2009, intellectual property lawyers sat up and took notice of a verdict entered in the Northern District of California, Judge James A. Ware presiding.  In Vuitton v. Akanoc, Case No. 07-3952, the jury not only ordered over $30 Million in damages for trademark infringement, it also awarded a total of $1.8 Million against three ISPs for contributory copyright infringement, thus becoming the first breach of the DMCA’s trusty “Online Service Provide Safe Harbor.”   In the interests of full disclosure, I will note that I also was a lawyer for Louis Vuitton back in 1989-1990 when I worked at Reboul, MacMurray, Hewitt, Maynard & Kristol, that was acquired by Ropes & Gray.  I now have no relationship with them, but Vuitton has always been an aggressive force in intellectual property, so wherever they are litigating, I keep an eye

I recently logged into PACER to check the docket in Vuitton v. Akanoc, particularly to see if they had appealed the verdict.  Surprise, surprise, not only has it not been appealed, it is still in post-trial proceedings, with Vuitton still trying to get a final injunction!  A rather shocking situation, when you think about it, and one that suggested to me that we have two factors in play — a very stubborn and well heeled defendant named Steven Chen, with a very pugnacious attorney named David A. Gauntlett.

When I saw that name, David A. Gauntlett, it stirred a recollection.  Back when I was just a young little viper learning to strike, three years out of law school, I worked at Mazursky, Schwartz & Angelo, a firm that handled exclusively contingent fee litigation, mostly personal injury, but also the occasional employment and complex commercial case.  I remembered that shortly after I joined the firm in 1990, I asked about whether MS&A ever did hourly work, and my mentor Arnie Schwartz told that he had completely sworn off doing hourly work after going largely uncompensated for hundreds of hours of work MS&A did for a firm called Callahan & Gauntlett.  As I recalled, Callahan & Gauntlett had been sued for insurance fraud by Truck Insurance, and retained MS&A to get their malpractice carrier to defend them against the claims.  A quick bit of research showed that the attorney now representing Akanoc is in fact the same gentleman, David A. Gauntlett, whose attorney is cited as Arnold Schwartz in this Ninth Circuit opinion in Callahan & Gauntlett v. Truck Insurance, affirming District Judge Mariana Pfaelzer’s decision to dismiss their lawsuit against Truck for refusing to defend them against fraud claims.

Now you might of course wonder what kind of fraud claims those would be.  I can’t be absolutely sure, but there was, around that time, a huge insurance scam orchestrated in the Southern California area that was called “The Alliance,” headed by former Finley, Kumble attorney Lynn Stites, who was ultimately sentenced to twelve years in prison after he pushed the wrong lawyer, Leonard Radomile, too far, and Radomile joined the Alliance as an undercover for the FBI.  Click this link to read the transcript of a TV show featuring CBS anchor Mike Wallace interview Radomile, and this one, to read a series of LA Times articles about Stites and The Alliance.

If you read the CBS transcript, after saying that the Alliance hauled in around $200 Million bucks in fraudulent attorney fees, Wallace explains that the nature of the Alliance scam was in fact to use non-covered claims of fraud to demand insurance coverage:

Now, how did the Alliance get that kind of money from insurance companies? Well, if you own a business and you’re insured against personal liability, property damage, things like that, your insurance company has to defend you if you are sued. But in California, if your insurance company argues that you are being sued for something not covered in your policy, like fraud, then a judge can rule that you have the right to pick your own lawyer and that the insurance company still has to pay the bill. And that is where the Alliance saw a chance to make a lot of money. In order to get in on those big fees paid by your insurance company, Alliance attorneys would offer to represent you for nothing. In fact, they even paid you to let them take your case. And in some cases, they represented the people who were suing you in the first place.

And if you compare that to the contentions made by Callahan & Gauntlett in their lawsuit against Truck Insurance, you can see that this is very similar to what they were trying to do:

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The divergence between Wall Street prosperity and Main Street suffering has reached a deplorable state.  Being a robber baron has never been so lucrative and risk-free, while being an unskilled worker — the fate of millions — has turned into a life sentence to poverty.  The government has been topping off the fuel tanks of banking institutions with all the go-juice they can carry, yet we see no zip in the economy that counts to most people — the job market.

I believe the government should support resurrection of the jobs-training programs of the sixties and seventies, where the US Dept of Labor subsidized wages for trainees in small businesses. In 1978, I was a 21-year old dad with a high school diploma, a wife and a kid. The recession of the late seventies had us living in our car.

Then I got a job as a bag-boy at Meister’s Buy Rite in Ashland Oregon, at $3.25/hour. Thanks to the 50% subsidy, Dick Meister got an employee for six months at the rate of $1.65/hr and I learned the grocery business. Eighteen months later, I was a Retail Clerk’s Union Cashier making $7.90 an hour.

A year after that, I went back to college, and three years later, on to UCLA law school, where I graduated in 1986. Since then, I’ve been admitted to the California and Oregon state bars, and have worked for big and small law firms, as a prosecutor and as a Federal Public Defender. Since 1995, I have been a solo practitioner with a practice that focuses on Internet law and technology. I make every effort to give back to the community through pro bono work and public involvement, and have always been grateful for that first leg up, back in 1978.

In summary, direct government spending on job training gives us the most “bang for buck,” and subsidizing small businesses to hire new employees is exactly the kind of bridge that benefits employers and employees, and can lead to sustainable growth.

The Chamber of Commerce is going to tell the White House what “small business” supposedly thinks government should do to remedy the collapse on Main Street.  American Rights at Work is trying to get the Chamber to listen to real people, so I put the gist of this post into a letter that they’re sending to the Chamber.  You can do the same, and if what I said here makes sense, just cut and paste it into the text box at this link, and they’ll take care of the postage.

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Without a doubt, an "emolument"

October 13, 2009

The Emoluments clause, U.S. Constitution Article I, Section 9, Clause 8 (art. I, § 9, cl. 8), provides:

No Title of Nobility shall be granted by the United States: And no Person holding any Office of Profit or Trust under them, shall, without the Consent of the Congress, accept of any present, Emolument, Office, or Title, of any kind whatever, from any King, Prince, or foreign State.

In a memorandum finding that NASA employees could not take paid leave to work for a Canadian University that was chartered under Canadian law, the United States Department of Justice has defined “King, Prince or foreign State” to include foreign universities:

Foreign public universities are, presumptively, foreign States within the meaning of the Clause.

The language of the Emoluments Clause is both sweeping and unqualified. The Clause in terms prohibits those holding offices of profit or trust under the United States from accepting “any present, Emolument, Office, or Title, of any kind whatever” from “any . . . foreign State” unless Congress consents (emphases added). There is no express or implied exception for emoluments received from foreign States when the latter act in some capacity other than the performance of their political, military or diplomatic functions. The decision whether to permit exceptions that qualify the Clause’s absolute prohibition or that temper any harshness it may cause is textually committed to Congress, which may give consent to the acceptance of offices or emoluments otherwise barred by the Clause. ⁽¹⁰⁾

***  Those who hold offices under the United States must give the government their unclouded judgment and their uncompromised loyalty. That judgment might be biased, and that loyalty divided, if they received financial benefits from a foreign government, even when those benefits took the form of remuneration for academic work or research.  Moreover, institutions of higher learning are often substantially funded, whether directly or indirectly, by their governments, and university research programs or other academic activities may be linked to the missions of their governmental sponsors, including national scientific and defense agencies.

Accordingly, we conclude that foreign governmental entities, including public universities, are presumptively instrumentalities of foreign States under the Emoluments Clause, even if they do not engage specifically in political, military or diplomatic functions.

There can be no doubt that the Nobel Prize Committee is an institution of the Norwegian government.  The Nobel website states:

Since the first Nobel Prizes were awarded in 1901, the Peace Prize has, in accordance with Alfred Nobel’s will, been awarded by a committee of five, appointed by the Storting (the Norwegian Parliamant), but without the committee being formally responsible to the Storting. According to rules laid down by the Storting, election to the committee was to be for a six-year term, and members could be re-elected. The committee’s composition should reflect the relative strengths of the political parties in the Storting, but the committee has elected its own chairman and deputy chairman. It was never required by the rules and on some occasions the matter has been debated, but so far all committee members have been Norwegian nationals.

Given that the avowed purpose of the award is to empower the President to exercise his influence in support of the Nobel commission’s mission to allegedly foment world peace, and comes with a very substantial “emolument,” $1.4 Million USD, it should be no-brainer that this comes up in front of Congress.  Mr. Reid, Madam Pelosi, front and center!  Let’s get this done before we vote on health care, okay?

This issue has already been raised by an anonymous poster, so I cannot claim to be an original thinker.  However, the question is rather obvious, and I am uncertain why Attorney General Eric Holder has failed to consider it.  Except, perhaps, that reading the Constitution isn’t a big priority inside the Beltway.

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September 9, 2009

The Third Circuit Court of Appeals upheld New Jersey District Court Judge Mary Cooper’s decision of all legal issues against IMEGA, a gambling trade association that had argued that the Unlawful Internet Gambling Enforcement Act of 2006, 31 U.S.C. § 5361 et seq. was unconstitutional.

The law makes it illegal for companies “engaged in the business of betting or wagering” to accept checks, credit cards, or other forms of payment  “to place, receive, or otherwise knowingly transmit a bet or wager by any means which involves the use, at least in part, of the Internet where such bet or wager is unlawful under any applicable Federal or State law in the State or Tribal lands in which the bet or wager is initiated, received, or otherwise made.”  IMEGA, referred to in the opinion as “Interactive,” argued (1) that the Act was void for vagueness, (2) that it violated the right to privacy by preventing gambling in the privacy of the home, and (3) that it violated the First Amendment right to free speech.

The Third Circuit found all three arguments had no merit.  The court decided: (1) The Act was sufficiently clear for any person “of ordinary intelligence” to understand it; (2) gambling is not protected from governmental impingement in the same way as is the right to have sex in the home; and, (3) the Act did not impinge on speech in any way.

We reject Interactive’s vagueness claim. The Act prohibits a gambling business from knowingly accepting certain financial instruments from an individual who places a bet over the Internet if such gambling is illegal at the location in which the business is located or from which the individual initiates the bet. 31 U.S.C.  5362(10)(A), 5363. Thus, the Act clearly provides a person of ordinary intelligence with adequate notice of the conduct that it prohibits.

It bears repeating that the Act itself does not make any gambling activity illegal. Whether the transaction in Interactives hypothetical constitutes unlawful Internet gambling turns on how the law of the state from which the bettor initiates the bet would treat that bet, i.e., if it is illegal under that states law, it constitutes unlawful Internet gambling under the Act.

In sum, we must reject Interactives facial challenge to the Act. Simply put, a gambling business cannot knowingly accept the enumerated financial instruments in connection with a bet that is illegal under any Federal or State law applicable in the jurisdiction in which the bet is initiated or received. Thus, the Act provide[s] a person of ordinary intelligence fair notice of what is prohibited. Williams, 128 S. Ct. at 1845.4A

Next, Interactive contends that the District Court erred in rejecting its claim that the Act violated a constitutional right of individuals to engage in gambling-related activity in the privacy of their homes. As noted above, the District Court held that Interactive lacked standing to assert the rights of third-party gamblers, and alternatively, that the claim failed on the merits.

We share the District Courts doubts regarding Interactives standing to assert these claims, particularly because Interactive does not itself have any relationship with individual gamblers, but rather seeks to assert third-party standing based on its members relationships with such gamblers. However, … we need not decide whether Interactive has standing because, even assuming that it does, we agree with the District Court that Interactives claim clearly fails on the merits.

Interactives reliance on those cases is misplaced. Both Lawrence and Earle involved state laws that barred certain forms of sexual conduct between consenting adults in the privacy of the home. Lawrence, 539 U.S. at 567; Earle, 517 F.3d at 744. As the Supreme Court explained in Lawrence, such laws touch[] upon the most private human conduct, sexual behavior, and in the most private of places, the home. 539 U.S. at 567. Gambling, even in the home, simply does not involve any individual interests of the same constitutional magnitude.  Accordingly, such conduct is not protected by any right to privacy under the constitution.

In its effort to locate a constitutional privacy right to engage in Internet gambling from ones home, Interactive looks primarily to Lawrence v. Texas, 539 U.S. 558 (2003), and Reliable Consultants, Inc. v. Earle, 517 F.3d 738 (5th Cir. 2008).

Before the District Court, 8 Interactive primarily pursued a claim that the Act violated the First Amendment. Although Interactive stated at oral argument that it had not abandoned that claim, it only tangentially mentions this argument in its papers to this court. In any event, the Act only criminalizes the knowing acceptance of certain financial instruments in connection with unlawful gambling. Simply put, such conduct lacks any communicative element sufficient to bring it within the ambit of the First Amendment. United States v. OBrien, 391 U.S. 367, 376 (1968).

The opinion is available at the link below.

Interactive Media Entertainment and Gaming Association, Inc. v. United States

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