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By Peter Leung
Feb. 3 — While copyright holders push for services such as Netflix to enforce geographical licensing restrictions, practitioners worldwide say the law is unclear as to whether getting around so-called geoblocks to access restricted content actually constitutes copyright infringement.
Geoblocks are important to rights holders since they preserve long-standing industry practices of geography-based licensing and pricing—copyright-related practices that have been challenged by the Internet.
Though some have suggested that viewers who circumvent geographical blocks are infringing copyright, the law is unclear in many jurisdictions. Notably, Netflix—in announcing last month that it will be more proactive about blocking VPNs—avoided making any such claim.
Others have taken a stronger stance. PayPal, in a statement sent to Bloomberg BNA, responded to reports that it is blocking payments to VPN providers by unequivocally stating that it “does not permit the use of its service for transactions that infringe copyrights or other proprietary rights.” It said that it considered intentionally enabling users to get around geoblocks to be “unlawfully facilitat[ing] infringement.” Moreover, when asked whether it would block all VPNs, a PayPal spokesman said it would “continue to support business services that are operating legally and are not marketing their service in a manner” that encourages copyright infringement.
The main reason for the legal ambiguity is that, since many services like Netflix and Hulu stream content — rather downloading permanent copies — it's unclear whether users are infringing copyright holders' exclusive right to reproduce when they circumvent geoblocks to simply view content. Other traditional aspects of copyright, such as the right to make derivative works or to make a public performance, are generally not implicated in the traditional private user scenario.
Furthermore, while some countries have laws barring the circumvention of technological protection measures that limit access to copyrighted works, it's unclear in many places whether getting around geoblocks violates those laws.
To enforce geographical restrictions, streaming services often use a viewer's computer Internet Protocol (IP) address to determine his or her location and then tailor content access based on that information. Most streaming services have terms and conditions prohibiting the use of tools to disguise a viewer's location.
While hard numbers are elusive, it is believed that a small but significant number of viewers are using tools to get around geoblocks. In the case of Netflix, many countries have much smaller content libraries than what is available to viewers in the U.S., due to licensing arrangements. That's true even though Netflix, which has long been available in the U.S. and United Kingdom, is now available in over 130 countries. For example, subscribers in Hong Kong do not have access to “House of Cards,” even though it is a Netflix original series.
All this means that Netflix users continue to have reasons to hide their physical locations. This is true for other services as well; the BBC's iPlayer similarly restricts its content to U.K.-based users. However, one study says that some 60 million users have used iPlayer from outside the U.K., a number that the BBC reportedly described as not plausible.
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Even in the U.S., lawyers tell Bloomberg BNA that the law is unclear as to whether users circumventing geoblocks to watch streaming content are infringing.
Margaret A. Esquenet, a partner at Finnegan, Henderson, Farabow, Garrett & Dunner LLP in Washington, points out that, though there may be an argument that those watching unauthorized streams are not violating the right to reproduce, the analysis turns on the technical details of each particular service as well as on such issues as how much content is stored on a user's hard drive at any given time during the streaming process.
A circuit split illustrates this point. In MAI Systems Corp. v. Peak Computer Inc., 991 F.2d 511 (9th Cir. 1993) , a case discussing computer software, the U.S. Court of Appeals for the Ninth Circuit held that copies of software code loaded into a computer's random-access memory (RAM) is a copy because it is "fixed" and "can be perceived, reproduced or otherwise communicated." This suggests that the parts of a copyrighted work that are temporarily cached on a hard drive during streaming may be enough to constitute an infringing reproduction.
However, in Cartoon Network LP, LLLP v. CSC Holdings, Inc., 2008 BL 162181 (2d Cir. 2008), the Second Circuit found that a streaming digital video recorder service does not make fixed copies even though it buffers the stream in a hard drive— in this case no longer than 1.2 seconds—before it is deleted. There, the Second Circuit said that a fixed and, thus, reproduced copy must be both an embodiment that can be read or copied and must exist for more than a transitory duration. While the buffered video in Cartoon Network meets the embodiment requirement, it did not meet the “more than transitory” requirement because of its brief duration and the fact that the data was automatically overwritten during streaming.
The lack of guidance in this area may be due to the fact that there have been relatively few cases on the matter, Esquenet said. While some high-profile suits have been brought against end users, they are fairly rare. What's more, the few that are filed tend to be settled without ever getting to court.
Whether VPN use to circumvent a geoblock would violate the prohibition against circumventing technical measures in the Digital Millennium Copyright Act is also unclear.
One question is whether geoblocking qualifies as a “technological measure that effectively controls access to a work” protected by the DMCA. Several courts have used a literal definition of “access,” under which there is a stronger argument that circumventing a geoblocking scheme would violate the anti-circumvention provision.
However, other courts have adopted a narrower interpretation. In Chamberlain Group v. Skylink Tech. Inc., 381 F3D 1178, 72 USPQ2D 1225, (Fed. Cir. 2004), the U.S. Court of Appeals for the Federal Circuit held that the anti-circumvention bar only prohibits access “that bear a reasonable relationship” to one of the exclusive rights stemming from the Copyright Act. Thus, there is an argument that using a VPN to avoid geoblocks does not run afoul of the DMCA's anti-circumvention provisions if streaming even illicit movies does not infringe the exclusive right to reproduce a work.
The 5th Circuit, in a decision later vacated and decided on other grounds, adopted this approach explicitly, stating that, for the DMCA anti-circumvention provisions to apply, the technological measure “must protect the copyrighted material against an infringement of a right that the Copyright Act protects, not from mere use or viewing” (MGE UPS Sys. Inc. v. GE Consumer & Indus. Inc., 95 USPQ.2d 1632, 612 F.3d 760 (5th Cir. 2010) (unpublished) ) .
The effectiveness of the geoblocks may also be an issue. According to Mitch Stoltz, senior staff attorney with the Electronic Frontier Foundation, there is an argument that geoblocks that restrict access based on the user's IP address are so easy to circumvent that using VPNs to do so would not violate the DMCA because the law only prohibits circumventing technological measures that “effectively” control access.
The Computer Fraud and Abuse Act (CFAA) may be another potential source of liability, Stoltz said, though he argues that using the law that way would be an improperly broad application. The so-called anti-hacking statute prohibits those who access “protected computers” without authorization or while exceeding their authorized access. A streaming service user who employs a VPN to access content authorized elsewhere could run afoul of this, he said, with the streaming server being the “protected computer” accessed by a user beyond the limits of their authority.
Though Stoltz was unaware of the CFAA being used against streaming content users, there have been attempts to apply it in at least one case involving intellectual property. In a trade secrets case, a company accused a former contractor of violating the CFAA by logging onto the plaintiff's network without proper authorization (Pearl Invs., LLC v. Standard I/O, Inc., 257 F. Supp. 2d 326 (D. Me. 2003)).
In Canada, by comparison, there seems to be a stronger argument that viewers who avoid geoblocks to watch streaming content are not infringing. However, the act of avoiding the geoblock itself may violate limits on getting around technical restrictions.
Though there is no case law directly addressing the liability of viewers who watch unauthorized streams, Antonio Turco, a partner at Blake, Cassels & Graydon LLP in Toronto, said it's unlikely that a stream would be viewed as infringing the right of reproduction. He pointed out that the Supreme Court of Canada has held that, when caching is used for technical reasons, that in and of itself would not constitute copyright liability (Society of Composers, Authors and Music Publishers of Canada v. Canadian Assn. of Internet Providers,  2 SCR 427 (Can. ) ). In all likelihood, that would apply to the caching involved in streaming video, he said.
However, Turco added, an argument could be made that using a VPN to get around geoblocks violates restrictions against circumventing “technological protection measures” as defined in Section 41.1 of the Copyright Modernization Act, S.C. 2012, c 20 (Can.) to include technology which “controls access to a work”— a definition that would include geoblocks.
That situation could lead to interesting results. While a Canadian user could argue that they are not violating the law when using an unauthorized site to stream the latest movies still in theatres, another user paying for Netflix in the U.S. with legitimate licenses to content in another country may be in violation because they are circumventing a technological protection measure.
There also appears to be a stronger argument in Australia that users avoiding geoblocks are not violating copyright. Speaking with Bloomberg BNA, Andrew Christie, chairman of intellectual property at the University of Melbourne, said it's clear that watching geoblocked streaming content in Australia does not amount to copyright infringement.
According to Christie, the only possible argument that it is infringement would rely on an ambiguity in the statute about a copyright holder's right to communicate the work to the public. Section 22(6) of the Australian Copyright Act states that a communication is deemed to have been made “by the person responsible for determining the content of the communication” (Copyright Act 1968 (Cth) s 22 ss 6 (Austl.). Therefore, the argument would be that the user who selects which movie to watch is determining the content—and, therefore, making the communication.
To address this potential ambiguity, the law was amended in 2006 to add Section 22(6), which clarifies that a user is not determining the content of the communication merely by taking steps to gain “access to what is made available online by someone else in the communication.” The section also includes an example, stating a person is not setting the content of a communication merely by clicking on a link to a webpage.
That clarification, says Christie, should put “beyond doubt” that someone watching an illicit stream is not infringing the right to communicate. The intent of the statute was to cover the activities of a traditional broadcaster, and interpreting Section 22 to include those picking a stream to watch would be an unreasonable stretch.
“When I watch television, you wouldn't say that I determined the content by picking CBS as a channel,” he explains.
Similarly, he said that those watching a streaming service would not be infringing on the other exclusive rights belonging to the copyright holder, even if the streaming website is a clearly illicit one that makes no pretense of obtaining any sorts of licenses. The fact that it is streaming, not actually downloading, also affects the analysis, since transient copies are disregarded when discussing the right to reproduce works.
“It's a bit like going to an illicit cinema where the cinema doesn't have a license, or listening to music in public,” Christie explained. “We have never found this to be infringement, and I'm confident under Australian law that those watching streams are not infringing.”
Malcolm Turnbull, Australia's prime minister, agrees. A former communications minister, Turnbull has a “Frequently Asked Question” (FAQ) on his website relating to online infringement, in which he states that using a VPN to access geoblocked content is not illegal.
Geoblock circumvention is also likely not copyright infringement in India, said Shamnad Basheer, founder of the SpicyIP blog and formerly chaired professor in intellectual property at the National University of Juridical Sciences in Kolkata. He explained that, though the issue hasn't been explicitly addressed in the courts, the fact that streaming—at most—caches temporary copies on the hard drive makes it difficult to conclude that watching a stream would violate a reproduction right.
“I suspect that if this issue does come up, given our Indian IP jurisprudence being more pro-access than many other countries, I would not be surprised if a court would rule that streaming is per se not infringement of the reproduction right,” he predicted.
Conditions are different in the U.K., where practitioners told Bloomberg BNA that using a VPN to go around geographical restrictions to stream content would likely amount to copyright infringement.
According to Alan Bryson, a partner at J.A. Kemp in London, U.K. users viewing unauthorized streams are likely infringing the right to reproduce the protected work. Even if the content is not permanently downloaded, scenes are being reproduced on a screen—enough to be considered a reproduction.
He further explained that while a person using a legitimate service such as Netflix, and complying with its terms of service, is likely granted a license to view the copyrighted content, using a VPN to get around geographical limitations presumably violates those terms, meaning that the viewer would not have a license to access the content.
Another London-based practitioner agreed, saying that once a user violates the terms of service by circumventing the geographical blocks, he “loses the shield” provided by a legitimate service such as Netflix.
Although it's still common for copyright holders to have geographical restrictions on their licensing terms, and given current debate over copyright and the Internet, it's unlikely that questions concerning the legality of avoiding geoblocking restrictions will be settled anytime soon.
Stoltz of the EFF, for one, says that the notion of going after paying customers who are using VPNs to access content from other countries is “ridiculous”—and stresses the importance of recognizing the distinction between true copyright infringement and violating a streaming service's terms and conditions.
“These geographical restrictions of content are private contracts between companies,” he said. “There's a danger in making these contracts de-factor regulations on the public.”
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