Dan Glover Indirect theories of copyright liability

Osgoode IP Intensive Program - Indirect Infringement and the Internet 1

McCarthy Tétrault Advance™
Building Capabilities for Growth

Osgoode IP Intensive Program –
Indirect Infringement and the Internet
Daniel G.C. Glover, McCarthy Tétrault LLP
McCarthy Tétrault LLP / mccarthy.ca / September 2011 10692141


What Is Indirect Infringement?
“The Copyright Act does not expressly render anyone liable for infringement
committed by another. … The absence of such express language in the copyright
statute does not preclude the imposition of liability for copyright infringements on
certain parties who have not themselves engaged in the infringing activity. For
vicarious liability is imposed in virtually all areas of the law, and the concept
of contributory infringement is merely a species of the broader problem of
identifying the circumstances in which it is just to hold one individual
accountable for the actions of another.”
Sony Corp. v. Universal City Studios, Inc., 464 U.S. 417 at 434-35 (1984)

 Indirect infringement may occur when a third party
facilitates an infringement, but does not directly carry it out.
 BitTorrent Tracker = Air Traffic Controller for online
infringement, but it doesn’t fly or land the plane
 What level or kind of participation is enough?

McCarthy Tétrault LLP / mccarthy.ca


Between Scylla and Charybdis
Public Public interest
interest in in the
obtaining a encouragement
& dissemination
just reward
of works of the
for the arts & intellect
creator
Théberge, 2002

The Legislator’s Three Goals: 1) Encourage the good
actors; 2) Capture the bad actors (even in disguise); 3)
Make the ones in between just a little bit nervous


The Restricted Acts
3. (1) … “copyright” … means the sole right to produce or reproduce the work or any
substantial part thereof in any material form whatever, to perform the work or any
substantial part thereof in public or, if the work is unpublished, to publish the work or
any substantial part thereof, and includes the sole right
(a) to produce, reproduce, perform or publish any translation of the work,
(b) … to convert [a dramatic work] into a novel or other non-dramatic work,
(c) … to convert [a non-dramatic work] into a dramatic work, by way of
performance in public or otherwise,
(d) … to make any sound recording, cinematograph film or other contrivance
by means of which [a] work may be mechanically reproduced or performed,
(e) … to reproduce, adapt and publicly present [a] work as a
cinematographic work,
(f) … to communicate [a] work to the public by telecommunication,
(g) to present at a public exhibition… an artistic work …,
(h) … to rent out [a] computer program, and
(i) … to rent out a sound recording …,
and to authorize any such acts.
27. (1) It is an infringement of copyright for any person to do, without the consent of
the owner of the copyright, anything that by this Act only the owner of the copyright
has the right to do.


What Does Authorization Mean?
“‘Authorize’ means to ‘sanction, approve and countenance’…
Countenance in the context of authorizing copyright infringement
must be understood in its strongest dictionary meaning, namely,
‘[g]ive approval to; sanction, permit; favour, encourage’…
Authorization is a question of fact that depends on the
circumstances of each particular case and can be inferred from
acts that are less than direct and positive, including a sufficient
degree of indifference... However, a person does not authorize
infringement by authorizing the mere use of equipment that
could be used to infringe copyright. Courts should presume
that a person who authorizes an activity does so only so far as it
is in accordance with the law.”
• CCH Canadian Ltd. v. Law Society of Upper Canada,
[2004] 1 S.C.R. 339 at para. 38



The Commonwealth Track Record
 Vigneux (PC, 1945): Defendant hires out a record player to a
restaurant and supplies it with records via weekly rental  Not liable
 Muzak (SCC, 1953): Defendant lets broadcasting system and
supplies electric compositions to be played  Not liable
 Ames (Eng. Ch, 1981): Defendant shop provides record library
service and sells blank tapes  Not liable
 Amstrad (HL, 1988): Defendant manufactures, advertises and sells
audio systems that record at high speed from prerecorded cassettes
on to blank tapes  Not liable
 Lead speech of Lord Templeman: “From the point of view of
society the present position is lamentable. Millions of breaches of
the law must be committed by home copiers every year… A law
which is treated with such contempt should be amended or
repealed.”
 Sirius (FCA 2010): Defendant supplies satellite radio receivers that
automatically copy radio programs unless subscriber turns off default
setting  Liable because of automatic copying feature



Can the Common Law Fill the Gap?
“Copyright legislation simply creates rights and obligations upon the terms
and in the circumstances set out in the statute. This creature of statute has
been known to the law of England at least since the days of Queen Anne
when the first copyright statute was passed. It does not assist the
interpretive analysis to import tort concepts. The legislation speaks
for itself and the actions of the appellant must be measured according
to the terms of the statute.”
¬ Compo Co. v. Blue Crest Music Inc., [1980] 1 S.C.R. 357 at 372-373
“The fact that in this country … the law of copyright, like the law relating to
passing off, has been stretched to give protection to creative talents and
activities the protection of which was probably never in the contemplation,
and indeed in some cases cannot have been in the contemplation, of those
who from time to time have been responsible for the framing of successive
statutes. Language can be and has been stretched beyond the limits
that most people would attribute to the words used in successive
Copyright Acts, but there must be a breaking point. The question is
whether it has been reached.”
¬ CBS v. Ames, [1982] Ch. 91 (UK 1982)



The Creator’s “Ocean Problem”
“Chasing individual consumers is time consuming and is a teaspoon
solution to an ocean problem.”
- Randal C. Picker, "Copyright as Entry Policy: The Case of Digital
Distribution," 47 Antitrust Bull. 423, 442 (2002)

 In 1911, copying and distributing a work required major effort. Infringers
were not a moving target and facilitators not a concern.
 Creating a novel, software, or film remains labour- and capital-intensive.
 Now, intermediaries profit by facilitating the making of infringing copies.
In doing so, they usually need not infringe copyright directly.
 Thanks to the Internet, direct infringement can take place anywhere,
often invisibly, and at a minimal cost.
 Yet the current Act targets the old actors and activities, not the new. If
you use “specifically designed plates” to infringe, watch out (s. 27(4))! If
you run a BitTorrent tracker in Toronto, the Act has no easy answers.



The Host’s Ocean Problem

Introduction to Digital Britain, Final Report (2009)

“On 26 August 1768, when Captain James Cook set sail for
Australia, it took 2 years and 320 days before he returned to
describe what he found there.
“Yesterday, on 15 June 2009, 20 hours of new content were posted
on YouTube every minute*, 494 exabytes of information were
transferred seamlessly across the globe, over 2.6 billion mobile
minutes were exchanged across Europe, and millions of enquiries
were made using a Google algorithm.”
(1 EB = 1,000,000,000,000,000,000 bytes of information)
* We’re now up to 48 hours of new content posted on
YouTube every minute (7.9 years/day)



Varieties of Indirect Infringement
¬ Common design = where two or more persons act in concert with
one another pursuant to a common design in the infringement
 Incandescent Gas Light Company, Ld. v. The New Incandescent
Mantle Company, (1898) 15 R.P.C. 8: Defendant A sells fittings
downstairs, and Defendant B upstairs in the same building sells the
mantles to go with the fittings.
¬ Aid and abet = where a person knows that another's conduct
constitutes a breach of duty and gives substantial assistance or
encouragement to the other
 Pirate Bay, Finreactor: “By providing a website with advanced
search functions and easy uploading and downloading facilities,
and by putting individual filesharers in touch with one other through
the tracker linked to the site, the operation … has … facilitated and,
consequently, aided and abetted these offences.”



Varieties of Indirect Infringement (cont.)
¬ Contributory liability = where a person induces, causes or
contributes to infringing conduct of another with knowledge of the
infringing conduct
 Limewire: 93% of files made available & 98.8% of files requested for
download likely to be infringing. Software distributed with awareness of
the purpose to which it would be put, and was marketed to encourage
it. No meaningful steps taken to mitigate infringement.
¬ Vicarious liability = where a person is liable for indirect infringement
because the person has the right and ability to supervise infringing
conduct and has a direct financial interest in such activities
 Fonovisa v. Cherry Auction, 76 F.3d 259 (9th Cir. 1996): Defendant
ran a swap meet where independent vendors sold bootleg Latin music
tapes. Promotion of the meet, collection of rental and admission fees,
and being “in a position to police the vendors” supported liability.



Round One – VCRs/Cassette Tapes
“Now, the question comes, well, all right, what is wrong with the VCR. One of the
Japanese lobbyists … has said that the VCR is the greatest friend that the
American film producer ever had. … I say to you that the VCR is to the American
film producer and the American public as the Boston Strangler is to the woman
home alone.”
¬ Jack Valenti, Motion Picture Assn. of America, at hearings before Subcommitee
on Courts, Civil Liberties and the Administration of Justice, 1982
The Results:
¬ Amstrad: Since authorise under the 1911 Act means “to grant, or purport to
grant, expressly or by implication, the right to do the act complained of”, the
defendants by selling a high-speed twin-tape recorder might facilitate the copying by
purchasers of material in breach of copyright but did not "authorise" it. There was no
common design because all Amstrad did was sell the recorder to purchasers with
unknown purposes. There was no contributory liability because the recorders might
be used for lawful purposes and there were no positive acts of inducement.
¬ Sony: U.S. Supreme Court rules that sale of the VTRs to the general public does
not constitute contributory infringement of respondents' copyrights because (a) on
the record, users’ time-shifting of a free TV program was a fair use; (b) the VTRs
were therefore capable of substantial noninfringing uses.



Round Two – Grokster
“While there is doubtless some demand for free Shakespeare, the
evidence shows that substantive volume is a function of free access to
copyrighted work. Users seeking Top 40 songs, for example, or the latest
release by Modest Mouse, are certain to be far more numerous than those
seeking a free Decameron, and Grokster and StreamCast translated that
demand into dollars.”
- United States Supreme Court, MGM v. Grokster 545 U.S. (2004)
“Napster Inc. has announced that it will soon begin charging you a fee.
That’s if the courts don’t order it shut down first. What will you do to get
around it?”
- StreamCast proposed advertisement cited by Supreme Court

The Result:
One who distributes a device with the object of promoting its use to infringe
copyright, as shown by clear expression or other affirmative steps taken
to foster infringement, going beyond mere distribution with knowledge
of third-party action, is liable for the resulting acts of infringement by third
parties using the device, regardless of the device’s lawful uses.


Round Three – User-Posted Content
1) Viacom v. YouTube 2) Capitol v. MP3Tunes
 YT operates “User-posted content” site.  Defendant operates storage locker and
 On start-up, founder states in email that if it integrated “sideloading” site.
“just removed the obviously copyright  Users populate lockers and stream
infringing stuff,” traffic would “go from 100,000 music to PCs or other devices.
views a day to about 20,000 views.”  Defendant sells subscriptions for
 YT implements policy to take down content storage space on locker site.
only after receipt of demand letter.  Sideloading site points to many
 Users could be counted upon to upload infringing files (as high as 97%) and
duplicate files following takedown provides lists of “most popular songs”.
 Competitors screened uploaded videos for  One click allows for storage of sideload
unauthorized copyrighted content. songs in locker.
 YT rejected request to implement digital  Defendant takes down sideload links
fingerprinting technology. on receipt of notice, but does not trace
 In 2006, YT did internal study that found through to lockers.
that most viewed videos were 70%+  Defendant does not seek out titles
copyrighted, with only 10% licensed. described in non-compliant notice.
 YouTube users now upload 48hrs of  Officers and employees of Defendant
content per minute. personally sideload infringing songs.



Hosting Safe Harbours – Canada
2.4 (1) For the purposes of communication to the public by
telecommunication, …
(b) a person whose only act in respect of the communication of a work
or other subject-matter to the public consists of providing the means of
telecommunication necessary for another person to so communicate
the work or other subject-matter does not communicate that work or
other subject-matter to the public

However…
“copyright liability may well attach if the activities of the Internet Service
Provider cease to be content neutral, e.g. if it has notice that a content
provider has posted infringing material on its system and fails to take
remedial action.”
- SOCAN v. CAIP, [2004] 2 S.C.R. 427 at para. 124
And…
New ISP safe harbours are expected in copyright legislation this fall.


Hosting Safe Harbour – DMCA
§ 512. Limitations on liability relating to material online

(c) Information Residing on Systems or Networks At Direction of Users.—(1) In general.
— A service provider shall not be liable for monetary relief, or, except as provided in
subsection (j), for injunctive or other equitable relief, for infringement of copyright by reason of
the storage at the direction of a user of material that resides on a system or network
controlled or operated by or for the service provider, if the service provider—
(A) (i) does not have actual knowledge that the material or an activity using the material on
the system or network is infringing;
(ii) in the absence of such actual knowledge, is not aware of facts or circumstances from
which infringing activity is apparent; or
(iii) upon obtaining such knowledge or awareness, acts expeditiously to remove, or disable
access to, the material;
(B) does 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; and
(C) upon notification of claimed infringement as described in paragraph (3), responds
expeditiously to remove, or disable access to, the material that is claimed to be infringing or
to be the subject of infringing activity.
…
(m) Protection of Privacy.— Nothing in this section shall be construed to condition the
applicability of subsections (a) through (d) on—(1) a service provider monitoring its service
or affirmatively seeking facts indicating infringing activity



DMCA Eligibility Conditions
§ 512. (i) Conditions for Eligibility.—
(1) Accommodation of technology.— The limitations on liability
established by this section shall apply to a service provider only
if the service provider—
(A) has adopted and reasonably implemented, and informs
subscribers and account holders of the service provider’s
system or network of, a policy that provides for the
termination in appropriate circumstances of subscribers
and account holders of the service provider’s system or
network who are repeat infringers; and
(B) accommodates and does not interfere with standard technical
measures.



The U.S. “Red Flag” Doctrine
“If the service provider becomes aware of a ‘red flag’ from which infringing
activity is apparent, it will lose the limitation of liability if it takes no action.’”
- H.R. Rep. No. 105-551(II), at 53.
“The Court does not read section 512 to endorse business practices that
would encourage content providers to turn a blind eye to the source of
massive copyright infringement while continuing to knowingly profit,
indirectly or not, from every single one of these same sources until a court
orders the provider to terminate each individual account.”
- Perfect 10, Inc. v. Cybernet Ventures, Inc., 213 F. Supp. 2d 1146, 1177
(C.D. Cal. 2002)
“If investigation of ‘‘facts and circumstances’’ is required to identify material
as infringing, then those facts and circumstances are not ‘‘red flags’’ ’. That
observation captures the reason why awareness of pervasive copyright-
infringing, however flagrant and blatant, does not impose liability on the
service provider. It furnishes at most a statistical estimate of the chance
any particular posting is infringing – and that is not a ‘red flag’ marking any
particular work.
- Viacom v. YouTube, 2010 U.S. Dist. LEXIS 62829



The U.S. “Red Flag” Doctrine
 “The case law interpreting the statutory ‘red flag’ standard
suggests the flag may need to be an immense crimson
banner before the service provider’s obligation to intervene
comes into play.”
- Jane C. Ginsburg, “User-Generated Content Sites
and Section 512 of the US Copyright Act”
 “When a website traffics in pictures that are titillating by
nature, describing photographs as ‘illegal’ or ‘stolen’ may
be an attempt to increase their salacious appeal, rather
than an admission that the photographs are actually illegal
or stolen. We do not place the burden of determining
whether photographs are actually illegal on a service
provider.”
- Perfect 10, Inc. v. CCBill LLC, 481 F.3d 751, 763
(9th Cir. 2007)


A Challenge to the “Red Flag”
“A ‘red flag’ standard that demands greater certainty from the outset risks allowing
the service provider to ‘turn a blind eye’ to infringements because the provider could
claim that the possibility that some files might not be infringing means that
infringement can never be ‘apparent’ as to any file. By the same token, section
512(m)’s dispensation of service providers from ‘affirmatively seeking facts
indicating infringing activity’, should not entitle the service provider to passive-
aggressive ignorance.”
- Jane C. Ginsburg, “User-Generated Content Sites and s. 512 of the US Act”

“Congress clearly signaled its intention to trigger this exclusion whenever one
encounters any combination of ‘facts or circumstances’ sufficient to raise a ‘red flag’
warning the service provider that it is likely hosting acts of infringement. And the
flexible character of this exclusion is further confirmed by Congress’s choice to
trigger the exclusion once ‘infringing activity’—not particular and identifiable acts of
infringement— becomes apparent.
“Indeed, requiring item-specific, location-specific knowledge to establish
‘aware[ness] of facts or circumstances from which infringing activity is apparent,’
converts the awareness exclusion into a superfluity, because it would be satisfied
only when the ‘knowledge’ exclusion also is satisfied.”
- Viacom Appellate Brief, 2d Cir, December 2010



Back to Neutrality?
“The legal rules should enable us to have it both ways … An
entrepreneur who adopts what I’ll call a passive-aggressive
approach to user conduct that the entrepreneur reasonably
should anticipate (and indeed may intend) will collectively be
infringing on a large scale may in fact be building its business at
the expense of authors and right owners. In that event, it should
not matter how anodyne in the abstract the technology may be;
by failing to take steps to forestall ‘massive’ infringement, the
entrepreneur may in fact be encouraging unlawful user conduct,
and may thereby be exposing itself to liability, at least under
common law principles of secondary liability.”
- Jane C. Ginsburg, “User-Generated Content Sites”



Bill C-32 Enablement Provision
The Stated Goal:
 To crack down on “wealth destroyers” attacking the creative industries
The Amendment:
27 (2.3) It is an infringement of copyright for a person to provide, by
means of the Internet or another digital network, a service that the person
knows or should have known is designed primarily to enable acts of
copyright infringement if an actual infringement of copyright occurs by
means of the Internet or another digital network as a result of the use of
that service.
The Question:
 Does the enablement provision in Bill C-32 meet the stated goal?



Questions?


VANCOUVER MONTRÉAL
Suite 1300, 777 Dunsmuir Street Suite 2500
P.O. Box 10424, Pacific Centre 1000 De La Gauchetière Street West
Vancouver BC V7Y 1K2 Montréal QC H3B 0A2
Tel: 604-643-7100 Tel: 514-397-4100
Fax: 604-643-7900 Fax: 514-875-6246
Toll-Free: 1-877-244-7711 Toll-Free: 1-877-244-7711

CALGARY QUÉBEC
Suite 3300, 421 7th Avenue SW Le Complexe St-Amable
Calgary AB T2P 4K9 1150, rue de Claire-Fontaine, 7e étage
Tel: 403-260-3500 Québec QC G1R 5G4
Fax: 403-260-3501 Tel: 418-521-3000
Toll-Free: 1-877-244-7711 Fax: 418-521-3099
Toll-Free: 1-877-244-7711
TORONTO
Box 48, Suite 5300 UNITED KINGDOM & EUROPE
Toronto Dominion Bank Tower 125 Old Broad Street, 26th Floor
Toronto ON M5K 1E6 London EC2N 1AR
Tel: 416-362-1812 UNITED KINGDOM
Fax: 416-868-0673 Tel: +44 (0)20 7489 5700
Toll-Free: 1-877-244-7711 Fax: +44 (0)20 7489 5777

OTTAWA
Suite 200, 440 Laurier Avenue West
Ottawa ON K1R 7X6
Tel: 613-238-2000
Fax: 613-563-9386
Toll-Free: 1-877-244-7711


Dan Glover Indirect theories of copyright liability

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Viewers also liked

Viewers also liked (7)

Similar to Dan Glover Indirect theories of copyright liability

Similar to Dan Glover Indirect theories of copyright liability (20)

More from bsookman

More from bsookman (20)

Recently uploaded

Recently uploaded (20)

Dan Glover Indirect theories of copyright liability