New Technologies, Court Decisions Muddying Copyright, E-Commerce Landscape

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By Joyce Cutler  

June 17 — Technology is changing distribution channels and business models of viewing content while recent court decisions are creating uncertainties about intellectual property rights both online and offline, according to participants at the Stanford University Law School e-commerce best practices conference.

Central to the June 16 discussions were recent court decisions, one involving Google Inc. and a bit actress who the U.S. Court of Appeals for the Ninth Circuit said held copyright interest in her performance in a controversial movie, and a pending U.S. Supreme Court case pitting broadcast giants against a technology startup backed by IAC/InterActive Corp. and its chairman Barry Diller, a former studio and television head.

In Garcia v. Google Inc., a 2-1 Ninth Circuit panel granted actress Cindy Garcia's request for a preliminary injunction requiring Google to take down from YouTube an amateur anti-Islamic film in which she appeared for seven seconds. Garcia v. Google, Inc., 2014 BL 51739, 109 U.S.P.Q.2d 1799 (9th Cir., 2/26/14).

Tom Rubin of Microsoft Corp. called it “one of the most surprising, shocking, interesting cases that I've seen in my career studying copyright law.”

“Bad facts do make bad law, and that's where we are at right now,” said Rubin.

The Ninth Circuit is considering Google and YouTube's request for en banc review.

Amici include Netflix Inc., Facebook Inc., Twitter Inc., Adobe Inc., Pinterest Inc., the California Broadcasters Association, 20 IP law professors, the Electronic Frontier Foundation and documentarian Morgan Spurlock from “Super Size Me.”

With the case still pending, Rubin said that the “best advice one can have right now is sit tight and pay attention.”

Covering All Bases

Mark Lemley, a law professor at Stanford Program, said the court “struggled mightily to achieved the results it achieved.”

“I think one thing that would have clearly made its work much harder is a signed contract from anyone who encounters your film in any way that expressly grants a set of rights,” Lemley said. “One best practice from the content creation side is, get contracts from absolutely anyone that assign rights,” something studios already do, he said.

Google's Fred von Lohmann emphasized the challenges to “get a signed contract from every human being who appears in any scrap of video” for a broad array of parties including independent user-created videos that are an increasingly important segment of the 100 hours of video uploaded every minute to YouTube.

“Some of my colleagues have said that this is a Bush v. Gore of copyright law,” referring to the Supreme Court's decision that decided the 2000 presidential election in favor of George W. Bush, and is intended as a one-shot decision, von Lohmann said. “But I'm not nearly so confident.”

The decision is enough to convince people to bring a copyright claim based on an on-camera appearance, von Lohmann said.

Focusing on Cloud, Aereo

Turning to the cloud, the panel discussed IAC's Aereo, which streams broadcast network programming to subscribers using thousands of dime-sized antennas that individually pick up a broadcast signal, make a copy and send the unique copy to a single subscriber.

During oral argument in Am. Broad. Cos., Inc. v. Aereo, Inc., No. 13-461 (U.S. argued April 22, 2014), Justice Stephen G. Breyer admitted to Aereo's attorney that he was concerned about unintended consequences to “all kinds of other technologies” in the court's ultimate opinion in the copyright infringement case.

Elizabeth Valentina of Fox Entertainment Group Inc. said there's “no blanket liability for a whole sector of businesses just because you call it cloud. It depends what you're doing. It depends on the function.”

“The reason this matters for cloud computing is there are a lot of companies out there whose business model is, ‘let me provide a storage platform for information and then have that information downloaded to individual users,’ ” such as Box.com or Dropbox Inc., Lemley said.

“If those individual acts are in fact themselves private transmissions, copyright law doesn't care. But if it's a public transmission, then a lot of companies engaged in cloud computing suddenly have a whole new front of copyright liability they have to worry about,” Lemley said.

Lemley and Joseph Gratz of Durie Tangri LLP in San Francisco and vice chair of the American Bar Association IP Section's Committee on Copyright and New Technologies, represent Aereo.

Far-Reaching Impact

“What happens if Aereo loses? It depends,” Valentina said. “If they want to keep going the case still goes,” she said. Other claims such as reproduction are unanalyzed and remain to be litigated, she said. The issue before the court is about over-the-air programming, so a result could be sports programs move to cable, Valentina said.

The issues are far bigger and reach to the future of cloud computing, von Lohmann said. Aereo, he said, “is a DVR in a cloud.”

“The reason it is so important is it demonstrates a real fundamental mismatch in copyright law today as that transition takes place” from storage on devices to storage in the cloud, he said. “There's no reason the law should treat those things differently, and yet the arguments being made in the Aereo case by copyright owners would treat those drastically differently,” von Lohmann said.

The risk is creating a lack of parity in copyright law, where for purely legal reasons it becomes more sensible to do stuff not in the cloud but in boxes in living room, closing the door on the cloud approach, he said.

DMCA No Answer

Von Lohmann disagreed that the Digital Millennium Copyright Act could solve problems created in cloud storage.

Under the statute, a copyright owner can't send a DMCA takedown notice to works stored in a file on a hard drive. “How does that cloud product compete with the hard drive in your laptop if you can't trust that the files that you put in there will still be there when you come back and you need them? That's the difference between the DMCA and the situation that applies to the hard drive sitting in your laptop,” he said.

“I love the DMCA. Don't get me wrong. But it was not intended to be an all-purpose fix for everything that could conceivably happen in the cloud,” von Lohmann said.

To contact the reporter on this story: Joyce E. Cutler in San Francisco at jcutler@bna.com

To contact the editor responsible for this story: Naresh Sritharan at nsritharan@bna.com