Open eBooks Final Presentation ecox

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Open eBook Forum DMCA Update May 29, 2003: 

Open eBook Forum DMCA Update May 29, 2003 Evan R. Cox Partner, Covington & Burling San Francisco ecox@cov.com

DMCA Update: 

DMCA Update Overview: Sections 1201 and 512 The DMCA in the Courts DMCA Amendment Proposals State Super DMCA Legislation International Laws and Offshore Sites

DMCA Overview: 

DMCA Overview Sec 512 – ISP Safe Harbors Against Contributory and Vicarious Infringement Liability 512b,c,d: Stored material and links – must respond to notice and takedown 512a: Mere conduit role – must terminate repeat infringers and identify customers in response to subpoena (?) Sec. 1201 – Anti-Circumvention Necessary in light of Sony doctrine limiting liability for contributory infringement, and Sega, Nintendo, Sony reverse engineering fair use decisions New offense for traffickers New offense for users Civil and criminal penalties

Section 512 Safe Harbors in the Courts: 

Section 512 Safe Harbors in the Courts AOL v. Ellison (Mar. 2002): Usenet posting of eBooks 14 day Usenet posting only subject to 512(a) mere conduit exception, so no takedown obligation Reasonable implementation of repeat infringer policy does not require any actual terminations (contra: Perfect 10, Napster, Aimster, Costar) 9th Circuit appeal pending RIAA v. Verizon (Jan. and Apr. 2003) DMCA subpoena available for P2P users under 512(a) Rejects constitutional arguments re privacy and free speech DC Circuit appeal pending

Section 512 Safe Harbors in the Courts: 

Section 512 Safe Harbors in the Courts Takedown Notices Adequate investigation Internetmovies v. MPAA (Apr. 2003): Good faith belief can be based on suspicious facts, need not investigate and verify infringing downloads Adequate detail ALS Scan (4th Cir. Feb. 2001): Adequate to identify newsgroups solely devoted to infringing plaintiffs works, need not identify specific files MP3Board (Aug. 2002): Notice with titles but no specific links inadequate, notice identifying links adequate Hendricksen v. eBay (Sept. 2001): Notice with titles but no specific auctions inadequate Hendricksen v. Amazon (May 2003): No opinion, but press reports say notice that all postings unauthorized is adequate without identifying specific auctions

Section 1201 Anti-Circumvention Provisions in the Courts: 

Section 1201 Anti-Circumvention Provisions in the Courts Rejection of Constitutional Challenges First Amendment (code as speech) Due process (vagueness) Copyright clause (Eldred and limited term) Corley/Reimerdes (2nd Circuit May 2001) Elcom (C.D. Cal, May 2002) 321 Studios (N.D. Cal June 2002?)

Section 1201 Anti-Circumvention Provisions in the Civil Courts: 

Section 1201 Anti-Circumvention Provisions in the Civil Courts Rejection of Other Defense Arguments No fair use exception – Reimerdes, Elcom, 321 Studios(?) Academic freedom case dismissed because no controversy – Felton v. RIAA – but continuing theme Linking can be enjoined – Corley/Reimerdes No ineffective protection defense – Reimerdes and RealNetworks v. Streambox

Section 1201 Anti-Circumvention Provisions in the Civil Courts: 

Section 1201 Anti-Circumvention Provisions in the Civil Courts Lexmark and Skylink Cases (Feb. 2003) Protecting copyright or hardware tying? Relation to reverse engineering cases Creating new source of criticism for DMCA

Section 1201 Anti-Circumvention Provisions in the Criminal Courts: 

Section 1201 Anti-Circumvention Provisions in the Criminal Courts Elcom (Dec. 2002) “Willful”: intent element for criminal (but not civil) violation – subjective belief that conduct does not violate DMCA defeats liability Jury nullification – David vs. Goliath perceptions, sympathy for fair use argument, perceived lack of widespread harm due to rapid takedown Xbox mod chip prosecutions (Dec 2002/April 2003) Guilty pleas, first sentencing in April – 5 months prison, 5 Months home detention, 3 years probation, $28,500 fine

DMCA Amendment Proposals : 

DMCA Amendment Proposals Arguments for reform DMCA “overprotects” copyright Anti-circumvention technologies take away fair use rights Movie and music industries are monopolistic, charge excessive prices, and have failed to move quickly enough to offer legal digital download alternatives These themes are being pressed by well organized advocacy groups, find widespread resonance with press and general public, and are in vogue among majority of legal academics

DMCA Amendment Proposals : 

DMCA Amendment Proposals Digital Media Consumer Rights Act (HR 107, Rep.Boucher et al) “Fair use restoration” Exempts acts of circumvention if they do not result in an infringement Exempts trafficking if capable of substantial non-infringing uses Balance Act (HR 1066, Reps. Lofgren and Boucher) Creates rights to make backups of any digital work, including literary works (eBooks), and to play them in private on any digital media device Exempts use and trafficking for non-infriinging purposes if copryight holder fails to provide necessary means without extra burden or cost. Prospects For Passage Unlikely in near term – congressmen split and content industries more effective on Hill than in press But pressure may continue to build unless new business models demonstrate ability of DRM to expand choices and lower prices for consumers And some in tech industry starting to move away from content industries –Intel, Philips, Verizon, Sun at Boucher press event Copyright Office Fair Use Review Few proposals likely to pass, and does not exempt traffickers

State “Super DMCA” Legislation : 

State “Super DMCA” Legislation MPAA Model Legislation Designed to “modernize” existing cable and satellite anti-hacking legislation, but covers anti-circumvention relating to any digitally distributed content, more broadly defined than DMCA (not limited to protection of enumerated copyrights) and without most DMCA exceptions Rolled out and passed in a number of states in 2001-2002, including Penn, Michigan, Illinois, Delaware, Oregon, Wyoming Creates strong new remedies for digital content distributors, but also big risks for technology suppliers Tech industry negotiated limiting language with MPAA that protects technology providers but not necessarily users Bills pending in several more states (inc. Florida,Texas, Arkansas, Georgia, Massachusetts, Tennesee) but growing press backlash slowing adoption, even as amended – recent veto in Colorado

State “Super DMCA” Legislation : 

State “Super DMCA” Legislation MPAA Model Legislation [bracketed text represents additions to model in response to criticism of initial draft as passed in several states] First offense use or mfg./distribution of comunications device [with intent to defraud communications service provider] communications device = any hardware or software that can receive, retransmit, decrypt, etc without the express consent of the service provider Communications service/provider = transmission or content transmitted, i.e., provider of digitally distributed eBooks Second offense use or mfg./distribution of unlawful access device: primarily designed, distributed etc. for circumvention of effective technology to prevent unauthorized receipt, retransmission, decryption, etc. [Exception for multipurpose devices – capable of more than one function and not meeting DMCA-like tests - primary purpose, limited other use, or marketed for use in violation] Criminal and Civil Remedies Criminal penalties for all violation, felony status for quantities in excess of 10-50 devices or repeat offenses Civil cause of action for anyone aggrieved, including service provider, damages equal to lost retail price of services or statutory damages of up to $50,000 for each willful violation (device)

International Trends and Offshore Sites : 

International Trends and Offshore Sites Importance of international protection will grow US enforcement will continue to push pirate and circumvention sites further offshore to jurisdictions with weaker protections US courts willing to assert jurisdiction over downloading in US, but practical limit is whether site operators travel or have assets in US WIPO Copyright Treaty requires anti-circumvention laws Adequate legal protection and effective legal remedies against circumvention of effective technical measures Major trading partners moving to adopt stronger copyright, anti-circumvention laws, but lagging US by five years or more EU Copyright Directive requires adequate legal protection against mfg. and use, but also requires appropriate measures to ensure copyright holders facilitate enumerated copyright exceptions (think fair use analogs): Only 3 Member states have implemented so far Japan, China, Australia have adopted legislation, but few other Asian counties have signed WIPO Treaty Developing countries less interested in adopting, and more importantly, enforcing legislation

THANK YOU Questions?: 

THANK YOU Questions? ecox@cov.com

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