Source: http://www.techlawjournal.com/alert/2008/09/30.asp
Timestamp: 2018-05-26 13:54:33
Document Index: 521419544

Matched Legal Cases: ['§ 1201', '§ 1203', '§ 107', '§ 106', '§ 1201', '§ 1030', '§ 1030']

TLJ Daily E-Mail Alert No. 1,835, September 30, 2008.
September 30, 2008, Alert No. 1,835.
Movie Companies Sue RealNetworks for Selling DVD Copying Software
9/30. Member companies of the Motion Picture Association of America (MPAA) and RealNetworks filed complaints against each other in different U.S. District Courts regarding the legality of RealNetworks' new RealDVD service, which enables users to copy DVDs that are protected by the DVD Content Control Association's (CCA) Content Scramble System (CSS).
The movie companies filed their complaint in federal court in Los Angeles, a district that is more supportive of copyright and the content industries. RealNetworks filed its complaint in federal court in the Northern District of California, a district that is more supportive of information technology companies.
RealNetworks' RealDVD web site allows users to download the RealDVD software for $29.99. RealNetworks states that this software enables purchasers to "Save your entire DVD collection to your PC or portable hard drive, then play them back without the discs."
The movie companies assert that this violates the Digital Millennium Copyright Act (DMCA) and the CSS licensing agreement. RealNetworks asserts that this is permitted by the licensing agreement, and is fair use.
Movie Companies' Complaint. MPAA members filed a complaint [18 pages in PDF] in U.S. District Court (CDCal) against RealNetworks alleging violation of the anti-circumvention provisions of the DMCA, and breach of contract, in connection with its RealDVD software.
The MPAA stated in a release [PDF] that "The Content Scramble System (CSS) built into DVDs prevents the unauthorized reproduction and distribution of copyrighted material released in DVD format. The RealDVD software illegally circumvents this copyright protection system. Among other things, the RealDVD software enables users to engage in an illegal practice known as “rent, rip and return,” whereby a person rents a DVD from a legitimate business like Blockbuster or Netflix, uses the RealDVD software to make multiple permanent illegal copies of the movie, and returns the DVD, only to rent another popular title and make permanent copies of it, repeating the cycle of theft over and over again without ever making a purchase."
It added that "The RealDVD software would enable massive theft of creative content that would have a direct, negative impact on the delivery of movies, television shows and other entertainment to consumers through the home entertainment and digital distribution markets."
"In manufacturing and selling RealDVD, RealNetworks Inc., a CSS licensee, has attempted to leverage its license improperly by making a product that permits users to circumvent the protections of CSS. Such a product was never intended to be authorized by the CSS license", wrote the MPAA.
Count 1 of the complaint alleges violation of 17 U.S.C. § 1201. Subsection (a)(1)(A) provides, in part, that "No person shall circumvent a technological measure that effectively controls access to a work protected under this title".
Subsection (a)(2) provides that "No person shall manufacture, import, offer to the public, provide, or otherwise traffic in any technology, product, service, device, component, or part thereof, that (A) is primarily designed or produced for the purpose of circumventing a technological measure that effectively controls access to a work protected under this title; (B) has only limited commercially significant purpose or use other than to circumvent a technological measure that effectively controls access to a work protected under this title; or (C) is marketed by that person or another acting in concert with that person with that person’s knowledge for use in circumventing a technological measure that effectively controls access to a work protected under this title".
Subsection (b) provides that "No person shall manufacture, import, offer to the public, provide, or otherwise traffic in any technology, product, service, device, component, or part thereof, that (A) is primarily designed or produced for the purpose of circumventing protection afforded by a technological measure that effectively protects a right of a copyright owner under this title in a work or a portion thereof; (B) has only limited commercially significant purpose or use other than to circumvent protection afforded by a technological measure that effectively protects a right of a copyright owner under this title in a work or a portion thereof; or (C) is marketed by that person or another acting in concert with that person with that person’s knowledge for use in circumventing protection afforded by a technological measure that effectively protects a right of a copyright owner under this title in a work or a portion thereof."
17 U.S.C. § 1203 provides a private right of action for violation of Section 1201.
Count 2 alleges breach of contract, namely, the DVD-CCA License Agreement. The movie companies and RealNetworks are merely licensees. However, the movie companies state in their complaint that the license agreement provides that they are beneficiaries who are granted a cause of action under the agreement.
The movie companies ask the District Court for a temporary restraining order, a preliminary injunction, and a permanent injunction. They also seek all profits derived by RealNetworks from its alleged violation of the DMCA.
They also seek preliminary and permanent injunctive relief for the alleged breach of contract. Also, they seek costs, attorneys fees, and other amounts.
The movie companies' action is Universal City Studies Productions LLLP, et al. v. RealNetworks, Inc. et al., U.S. District Court for the Central District of California, Western Division. Glen Pomerantz of the Los Angeles office of the law firm of Munger Tolles & Olsen signed the movie companies' complaint.
RealNetworks Complaint. RealNetworks filed its own complaint in U.S. District Court (NDCal) against movie companies seeking declaratory relief.
It wrote in a release that "RealDVD allows consumers to securely store, manage and play their DVDs on their computers. It does not enable users to distribute copies of their DVDs. RealDVD not only maintains the DVD's native CSS encryption intact, it also adds another layer of digital rights management encryption that effectively locks the DVD copy to the owner's computer to ensure that the content can not be improperly copied or shared. RealDVD provides consumers with a great solution for the playback and management of their DVD collections while adding security that is more robust than CSS."
RealNetworks stated that it "took this legal action to protect consumers' ability to exercise their fair-use rights for their purchased DVDs."
However, fair use, which is codified at 17 U.S.C. § 107, is an affirmative defense to infringement of the exclusive rights of copyright under 17 U.S.C. § 106. Fair use is not a defense to circumvention in violation of 17 U.S.C. § 1201, or to breach of contract. Moreover, the movie companies' complaint does not name as defendants any consumers.
Patrick Ross, head of the Copyright Alliance (CA), wrote a piece titled "RealNetworks: Make $$$ Now, Worry About the Law Later". He wrote that "The courts will have to settle this, and it will take some time. But common sense suggests that RealNetworks is grasping at straws in thinking it can charge people to practice what it calls ``fair use´´ but what is in fact the domain of the copyright owner through licensing. Unfortunately, this illegal DVD-copying door has now been opened just a bit further, making it that much more difficult for copyright owners to find a place for legitimate business models to flourish. Consumers lose with that result."
EFF and Others File Amicus Brief in Lime Wire Case
9/26. The Electronic Frontier Foundation (EFF), and other groups that are frequently at odds with intellectual property owners on copyright issues, filed an amicus brief [PDF] with the U.S. District Court (SDNY) in Arista Records v. Lime Wire, a case regarding secondary liability of technology vendors who make products that are used by consumers to infringe copyrights.
Lime Wire is a peer to peer client that uses the Gnutella network. Consumers use this to obtain and distribute infringing copies of copyrighted sound recordings.
Arista and other record companies filed their original complaint [PDF] in the District Court on August 4, 2006, alleging inducement of copyright infringement, vicarious copyright infringement, contributory copyright infringement, and other claims.
The parties to this amicus brief include the EFF, Center for Democracy and Technology (CDT), Computer & Communications Industry Association (CCIA), Public Knowledge (PK), Consumer Electronics Association (CEA), Home Recording Rights Coalition (HRRC), American Library Association (ALA), and Information Technology Association of America (ITAA).
They argue that the court should not interpret the inducement standard, announced by the Supreme Court in its 2005 opinion [55 pages in PDF] in MGM v. Grokster, 545 U.S. 913, to eviscerate the holding of the Supreme Court in its 1984 opinion in Sony v. Universal City Studios, 464 U.S. 417. See, story titled "Supreme Court Rules in MGM v. Grokster" in TLJ Daily E-Mail Alert No. 1,163, June 28, 2005.
They urge the court to limit the circumstances under which vendors of technologies used by consumers to infringe copyrights can be held liable under the inducement doctrine.
Ed Black, head of the CCIA, stated in a release that "our copyright law does not seek to punish innovators merely because a product is used for some infringing purpose. We have to ensure that the incentive to invent does not get buried under a stack of lawsuits".
This case is Arista Records, LLC, et al. v. Lime Wire LLC, et al., U.S. District Court for the Southern District of New York, D.C. No. 06 CV 5936 (GEL)
Music Industry Groups Propose Regulations on Compensation for Interactive Streaming and Limited Downloads
9/23. The Digital Media Association (DiMA), National Music Publishers' Association (NMPA), Recording Industry Association of America (RIAA), Nashville Songwriters Association International (NSAI), and Songwriters Guild of America (SGA) today announced an agreement regarding compensation for music creators for music distributed through certain online models.
The DiMA, NMPA and RIAA issues similar releases. All wrote that "The agreement, in the form of draft regulations submitted to the Copyright Royalty Judges, proposes for the first time mechanical royalty rates for interactive streaming and limited downloads, including for subscription and ad-supported services. The agreement proposes a flexible percentage of revenue rate structure, with minimum payments in certain circumstances."
They added that "Limited download and interactive streaming services will generally pay a mechanical royalty of 10.5 percent of revenue, less any amounts owed for performance royalties. In certain instances, royalty-free promotional streaming is allowed. Outside the scope of the draft regulations, the parties confirmed that non-interactive, audio-only streaming services do not require reproduction or distribution licenses from copyright owners."
Finally, they stated that "The agreement does not address royalty rates for physical product or permanent music downloads."
Some of the releases also offer the prediction that "The Copyright Royalty Judges are expected to issue a ruling on those rates on or before October 2."
See, DiMA release, NMPA release, and RIAA release.
IIPA Outlines PR China's Non-compliance with WTO Obligations
9/22. September 22, 2008, was the deadline to submit to the Office of the U.S. Trade Representative's (OUSTR) Trade Policy Staff Committee (TPSC) written testimony to assist it in preparing its annual report to the Congress on the People's Republic of China's (PRC) compliance with the commitments made in connection with its accession to the World Trade Organization (WTO).
The OUSTR will hold a hearing on October 2 on this matter. See, notice in the Federal Register, July 31, 2008, Vol. 73, No. 148, at Pages 44783-44785.
The International Intellectual Property Alliance (IIPA) submitted a comment [41 pages in PDF] in which it stated that "China fails to comply with its WTO obligations in two areas."
The IIPA wrote that "The first area is intellectual property rights protection. China fails to meet its obligations under the TRIPS agreement, both in its statutory regime and in the area of enforcement of rights, specifically, its failure to employ the law to provide effective and deterrent remedies, particularly criminal remedies, against “copyright piracy on a commercial scale” (as it is obligated to do under Articles 41 and 61 of the TRIPS Agreement)." (Parentheses and quotations in original.)
It added that "The second area is market access. China fails to meet its obligations to provide market access as agreed for some goods and services."
The OUSTR has already complained to the WTO. See, story titled "US to Complain to WTO Regarding PR China's Failure to Protect IPR" in TLJ Daily E-Mail Alert No. 1,562, April 9, 2007.
The IIPA is a coalition of seven groups: Association of American Publishers (AAP), Business Software Alliance (BSA), Entertainment Software Association (ESA), Independent Film & Television Alliance (IFTA), Motion Picture Association of America (MPAA), National Music Publishers’ Association (NMPA), and Recording Industry Association of America (RIAA).
Bush Signs Section 1030 Bill
9/26. President Bush signed into law HR 5938 [ LOC | WW], a bill to amend 18 U.S.C. § 1030, the computer hacking statute. See, White House press office release.
The Senate passed it on July 30, 2008. The House passed it on September 15, 2008. President Bush signed it on September 26, 2008. It is now Public Law Number 110-326.
For summaries of the legislative history and content of this bill, story titled "House Passes Section 1030 Bill" in TLJ Daily E-Mail Alert No. 1,826, September 16, 2008.
Title I of this bill is the "Former Vice President Protection Act". Title II is the "Identity Theft Enforcement and Restitution Act". Although, it has more to do with unauthorized access to computers, cyber crime, and 18 U.S.C. § 1030, than identity theft.
US and Estonia Sign Crime Fighting Agreement
9/29. The U.S. Department of Homeland Security (DHS) and Department of Justice (DOJ) and the Estonian Ministry of the Interior and Ministry of Justice signed an agreement on "Enhancing Cooperation in Preventing and Combating Serious Crime".
In April and May of 2007 Russia and persons located in Russia launched cyber attacks on government, financial, communications and news media servers in Estonia.
The agreement does not reference cyber-crime, or any other categories of crime. Rather, it broadly addresses criminal justice cooperation between the two nations.
It contains specific terms regarding searching for and sharing DNA profile data, fingerprint data, and other personal data. It also addresses privacy and the security of the two nations' criminal justice data.
Secretary of Homeland Security Michael Chertoff stated a release that "This agreement will jointly enable law enforcement officers on both sides to investigate crime more quickly and efficiently, and will help to further prevent criminal and terrorist travel."
A DHS spokesman stated to TLJ that this agreement "does not address cyber security".
The Senate will meet at 10:00 AM. It will begin consideration of HR 7081 [ LOC | WW], the "United States-India Nuclear Cooperation Approval and Nonproliferation Enhancement Act.".
9/29. Verizon announced in a release that William Barr, an EVP and General Counsel, will "retire at the end of this year". Barr was briefly the Attorney General in the administration of the first President Bush. Verizon also announced that it "expects to name a successor soon".
9/26. Jaime Chico Pardo was elected to AT&T's Board of Directors. He Chico is also Chairman of Teléfonos de México, S.A.B. de C.V., also know as Telmex. See, AT&T release.
9/29. The U.S. Court of Appeals (FedCir) issued its divided opinion [44 pages in PDF] in Praxair v. ATMI, a patent infringement case involving inequitable conduct and invalidity for indefiniteness. This case is Praxair, Inc. and Praxair Technology, Inc. v. ATMI, Inc. and Advanced Technology Materials, Inc., U.S. Court of Appeals for the Federal Circuit, App. Ct. Nos. 2007-1483 and 2007-1509, appeals from the U.S. District Court for the District of Delaware, D.C. No. 03-CV-1158, Judge Sue Robinson presiding. Judge Dyk wrote the opinion of the Court of Appeals, in which Judge Bryson joined. Judge Lourie wrote a partial dissent.
9/25. The Progress & Freedom Foundation (PFF) released a report [PDF] titled "FCC Reform: Scalpel or Steamroller?" The author is the FCC's Barbara Esbin. She reviews Rep. Joe Barton's (R-TX) recent proposal to reform Federal Communications Commission (FCC) procedure. She also offers additional proposals. She concludes that "It is high time to begin the debate on reforming our current approach to communications regulation and the agency charged with its implementation."