together
Online Distribution of Content
Trenton Computer Festival
College of New Jersey
Ewing, New Jersey
April 24, 2009
Frederic M. Wilf
Morgan, Lewis & Bockius LLP
The Challenge
“Digital files cannot be made uncopyable, any more than water can be
made not wet.”
— Bruce Schneier, “The Futility of Digital Copy Prevention,”
Crypto-Gram Newsletter <http://www.schneier.com/cryptogram-0105.html> (May 15, 2001)
Online Distribution
• Often called a “network of networks,” the Internet is
also a medium that incorporates all prior media
• Prior, independent communications technologies each become an
application on the Internet
• Television, movies, radio, newspaper, magazines, books,
newsletters, etc., are all bits in files
• Redistribution of pre-existing works
• “Re-purposed” text, graphics, video, etc.
• Concurrent distribution of new works in multiple formats
• Internet-specific media such as web sites, ‘blogs, etc.
Gregerson v. Vilana Financial
• Photographer sued real estate company for
infringement of photos copied from web site
• Gregerson v. Vilana Financial, Inc., Civil No. 06-1164 (D. Minn. Feb.
15, 2008)
• Held, actual damages awarded in the amount of $4462 for one image,
$10,000 in statutory damages for another image
• $5000 in damages awarded for removal of copyright management info
• 17 U.S.C. § 1202
• No attorney’s fees awarded
• Plaintiff appeared pro se
Grokster Effects
• Metro-Goldwyn-Mayer Studios, Inc. v. Grokster Ltd.,125 S. Ct.
2764 (2005)
• Distributor of software or device with the intention of promoting its use to
infringe copyright is liable for infringing acts by third parties
• Must prove purposeful, culpable expression and conduct
• File-sharing, P2P distribution of third party content continues,
but more quietly
• BitTorrent and other P2P technologies may be used by
motion picture vendors to distribute movies online
• Members of the MPAA may find the technology to be a cost-effective way to
distribute licensed copies of movies
– After all, we know the technology works…
• But some networks allegedly “break” BitTorrent by slowing down the
transmission of files
Cablevision
• Cablevision developed a remote-storage digital
video recorder (RS DVR) system
• Subscribers could use the cable system like a personal Tivo device
• Twentieth Century Fox Film Corp. v. Cablevision Sys. Corp., No. 06
Civ. 3990, 478 F. Supp. 2d 607 (S.D.N.Y. March 22, 2007),
reversed and remanded sub nom. Cartoon Network LP v. CSC
Holdings, Inc., Nos. 07-1480-cv & 07-1511-cv (2d Cir. Aug. 4,
2008).
• Held, “copies produced by the RS-DVR system are “made” by the
RS-DVR customer, and Cablevision’s contribution to this
reproduction by providing the system does not warrant the
imposition of direct liability.”
– It looks more like a Tivo than it does video on demand
Warning: Protecting IP Rights via ‘Spyware’
• Software vendors and web site owners are using
technology to determine whether copies of their
software have been paid for
• E.g., Microsoft Windows Vista and World of Warcraft
• End user license agreement allows monitoring
• Backlash on privacy issues
• See, e.g., “A New Gaming Feature – Spyware”
http://www.eff.org/deeplinks/archives/004076.php (Oct. 20, 2005)
• See also discussion of the Sony BMG “Rootkit” debacle and the
declaratory judgment action in MDY Industries, LLC v. Blizzard Ent.
Inc.
Copyright: Formalities
• Copyright notice is optional, but still recommended
•
© 2008 Bea Jones
• Copyright registration
• Free forms at Copyright Office
– 202/707-3000 for hard copy
– http://www.copyright.gov/forms (.pdf)
• $45 filing fee per application ($35 if you participate in the online beta)
• Copy of work (e.g., program or web site) on disk or hard copy
• Registration required:
• For U.S. citizens, to file a copyright infringement action in court
• For any copyright owner, file prior to infringement to qualify for the best
remedies
– Attorney’s fees
– Statutory damages ($200 - $150,000)
Digital Millennium
Copyright Act (DMCA)
• DMCA  ©
• (“DMCA is not necessarily copyright law”)
• Several discrete pieces, including
• Online Copyright Infringement Liability Limitation Act
• Copyright Protection and Management Systems
• Vessel hull design
• Not discussed here
DMCA: Online Service Provider (§ 512)
• “Online Service Provider” designation
•
File a form with the Copyright Office
• http://www.copyright.gov/onlinesp
• $80 filing fee
•
No liability if take-down provisions followed
•
Hendrickson v. eBay, Inc., No. CV 01-0495,
http://news.findlaw.com/cnn/docs/ebay/hendrickson.pdf (C.D.
Cal., Sep. 6, 2001) (§ 512 protects eBay against liability for
sale of allegedly-infringing copies of videos)
•
In Viacom v. YouTube, Viacom argues that YouTube has not
complied with § 512 and is liable to Viacom for over $1 billion
§ 512: Perfect 10 v. CCBill
• Perfect 10 alleged that CCBill and CWIE were
vicariously and secondarily liable for hosting web
sites that contained allegedly-infringing copies of
Perfect 10’s copyright-protected photographs
» Perfect 10, Inc. v. CCBill, LLC, No. 04-57143 (9th Cir.
March 29, 2007)
• Held, § 512 safe harbor requires that a hosting company meet all
requirements of § 512 including filing the designation of agent form, and
reasonably implementing a policy of terminating repeat infringers,
including tracking each complaint and each termination
• Held, take-down notices under § 512(c) must “substantially” comply with
all of the elements listed in the statute
DRM in Streaming Media
• Real Networks, Inc. v. Streambox, Inc.
• 2000 WL 127311 (W.D. Wash. 2000)
• Real uses an authentication sequence (Secret Handshake) to insure
that media will only be streamed from a RealServer to a RealPlayer
(e.g., the right users)
• Real uses embedded data (Copy Switch) to determine whether the
media may be copied by the recipient (e.g., the right uses)
• Streambox’s software mimics a RealPlayer’s Secret Handshake so that
media streamed to it behaves as if it were a RealPlayer, and it allows the
user to copy media even though the Copy Switch may be set to “off”
• Held, mimicking of Secret Handshake violates §1201(a)(2), while
bypassing Copy Switch violates §1201(b)
DRM: DMCA Violation
Involves a Copyright Right
• There is no violation of the DMCA, 17 U.S.C. § 1201
without proof that a technological protection method
was circumvented for the purpose of infringing a
right protected by the Copyright Act
• Nordstrom Consulting Inc. v. M&S Technologies, Inc., No. 06 C
3234 (N.D. Ill. March 4, 2008)
• Defendants apparently circumvented password protection to access
plaintiff’s software for the purpose of repairing or replacing a licensed
copy of the software, which is expressly permitted under the Copyright
Act
• Thus, no DMCA violation
DeCSS Cases
• Content Scramble System (CSS) is a TPM that protects
movies on DVDs
• CSS cracked, and the cracking program (DeCSS) distributed online,
obsoleting CSS programs in DVD players worldwide
• In each case, defendants’ web sites distribute copies of DeCSS and link to
other web sites that distribute DeCSS
• 2600 Case (Universal City Studios v. Reimerdes/Corley)
• Universal City Studios, Inc. v. Reimerdes, No. 00-Civ-0277, 111 F. Supp.
2d 294 (S.D.N.Y. Aug. 17, 2000)
<http://www.nysd.uscourts.gov/courtweb/pdf / D02NYSC/00-08117.pdf,
aff’d sub nom. Universal City Studios, Inc. v. Corley, No. 00-9185, 2001
U.S. App. LEXIS 25330 (2d Cir. Nov. 28, 2001)
<http://laws.findlaw.com/2nd/009185.html >
2600 DeCSS Case
• Permanent injunction granted
• CSS is an ACT designed to protect copyrighted movies
• DeCSS has no commercially significant purpose, other than to crack CSS
ACT
• Distribution of DeCSS violates prohibition on trafficking in devices that
circumvent ACT
• Courts turn away all First Amendment and reverse engineering (§1201(f))
arguments
• Lessons:
• (1) Where reasonable steps are used to protect copyright-protected
content, distribution of cracking tools is actionable
• (2) Expect the ACT to be cracked, and plan accordingly
DVD CCA DeCSS Case
• Can a TPM/ACT be a trade secret?
• DVD Copy Control Ass’n, Inc. v. Bunner, No. S102588 (Cal. Aug.
25, 2003), on remand, No. H021153 (Cal. App. Feb. 27, 2004)
• Cal. Supreme Court upholds injunction
• CSS may be a trade secret under UTSA
• Reverse engineering not an “improper means” to discover a trade
secret
• After remand, the plaintiff dismisses, but Cal. App. Ct. holds
reverse engineering is a proper way to learn a trade secret, so
injunction should never have been granted in the first place
• Lesson: A TPM/ACT may be protected as a trade secret, but the use
of reverse engineering to discover how it works is still not a violation of
trade secret law
BnetD Case
• Davidson & Assocs v. Jung, No. 04-3654 (8th Cir. Sept. 1, 2005)
http://www.ca8.uscourts.gov/opndir/05/09/043654P.pdf
• Plaintiffs sold games and an online service (Battle.net)
• Defendants reverse-engineered the games and created an online
emulation (bnetd.org) of Battle.net that allowed both licensed and
unlicensed versions of the games to play
• Held, plaintiff’s use of a “secret handshake” to validate use of the
games was an ACT that was circumvented because bnetd.org works
with both licensed and unlicensed versions of the games
BnetD (continued)
• Is the decision right, wrong or confused?
• Bnetd.org is an alternative service that does not directly circumvent
the ACT, but allows both circumvented and non-circumvented
copies of the games to play together
• If the games have been directly modified to play with bnetd.org,
then both the modifications of the games and any distribution of the
modifications may very well be a violation of Sec. 1201
BnetD (continued)
• However, if the games have not been modified, and if bnetd
emulates plaintiff’s Battle.net without copying it, then there may
have been no violation of Section 1201 because bnetd.org is not an
infringing copy of the Battle.net software owned by plaintiff
– Section 1201(f) allows reverse engineering for software
interoperability
– 8th Circuit confuses circumvention of the games with emulation
of the online environment
Lexmark v. Static Control
• Lexmark Int’l, Inc. v. Static Control Components, Inc.,
• No. 03-5400, 387 F.3d 522 (6th Cir. 2004)
<http://www.ca6.uscourts.gov/opinions.pdf/04a0364p-06.pdf>,
rehearing and rehearing en banc denied
• No. 04-CV-84-KSF (E.D. Ky. Feb. 23, 2006) (joint stipulation of
summary judgment with regard to DMCA claims)
• Lexmark adds microchips and software to some of its toner cartridges,
which the printer queries on start-up and other times
Lexmark v. Static Control (continued)
• Toner Loading Program (TLP)
– Small programs (37-55 bytes)
» Case caption in ASCII is larger
– Estimates amount of toner left in cartridges
• Printer Engine Program (PEP)
– Larger program (equates to 20 pages of source code
– Handles various functions of the printer, including checksum on
TLP
Lexmark
(continued)
• Authentication sequence
• “Are you a Lexmark cartridge?”
• Authentication, using 6 codes stored in each cartridge chip
• If authentication succeeds, TLP downloaded to printer and
checksum performed
• LXK ticker symbol (ASCII 4C 58 4B) embedded (“salted”) in TLP in
chips attached to toner cartridges
• Static Control Components makes remanufactured
toner cartridge components, including parts to
remanufacture Lexmark cartridges
• SCC’s chip includes copies of Lexmark’s chip-based software
Lexmark Case Holding
• Lexmark’s TLP software probably not protected by
copyright
• Lack of originality
• Limited number of alternative ways to prepare competing works
• TLP probably used as a lock-out code, so it may not be protectable
under the Copyright Act
• Lexmark’s authentication sequence does not control access to PEP
• Buying the printer provides access to PEP
• Authentication sequence does not prevent anyone from reading the
PEP code
• Authentication sequence used to keep out non-Lexmark cartridges
Lexmark Case Lesson
• Lesson 1: To obtain the benefits of Section 1201
• The content must be protected under the Copyright Act
• The TPM/ACT must control access to the content
• The TPM/ACT must control use of the content to the extent that such
use is reserved to the copyright owner (e.g., one or more the copyright
exclusive rights)
• Lesson 2:
• Under these facts, a rights owner may use a TPM to reduce copying by
competitors, but Section 1201 will not serve as the basis for a claim if
the TPM is circumvented
Chamberlain v. Skylink
• Chamberlain Group, Inc. v. Skylink Technologies, Inc.
• No. 02-C-6376 (E.D. Ill. Aug. 29, 2003), aff’d, No. 04-1118, 381 F.3d 1178
(Fed. Cir. 2004) <http://laws.findlaw.com/fed/041118.html >, petition for review denied No. 04997 (Sup. Ct. March 21, 2005)
• Chamberlain makes garage door openers (GDOs), with “rolling code” technology,
which change the code each time the transmitter button is pressed
• Reduce the likelihood that a burglar will use a “code grabber” to learn a fixed code
and open the garage door
• Make it harder for third parties to make universal replacement transmitters
• Skylink makes replacement transmitters, including one that
replaces rolling code transmitters (mimics “resynchronization”
of rolling codes)
Chamberlain Holding
• Plaintiff fails to allege that defendant’s transmitter
circumvented an ACT for the purpose of infringing
plaintiff’s copyrights
• Under §1201(a)(2), plaintiff must prove:
• ownership of a valid copyright
• effectively controlled by a TPM/ACT that has been circumvented
Chamberlain Holding (continued)
• that third parties can now access in a manner that infringes or facilitates
infringing a right protected by the Copyright Act
• because of a product that defendant either
– designed or produced primarily for circumvention, or
– primarily used for circumvention, or
– marketed for use in circumvention of TPM/ACT
• “A copyright owner seeking to impose liability on an
accused trafficker must demonstrate that the
trafficker’s device enables either copyright
infringement or a prohibited circumvention.”
Healthcare Advocates
• Healthcare Advocates, Inc. v. Harding, Earley, Follmer &
Frailey
• No. 2:05-CV-03524-RK (E.D. Pa. July 20, 2007)
• Plaintiff’s web site was copied by Archive.org, which maintains a library of web
sites as published from time to time, and viewed by defendant using the
Wayback Machine
• Plaintiff sought to block access to historical copies of its web site by adding a
robots.txt file containing a denial text string
• Held,
• Copying a web site for litigation purposes is a fair use
• Robots.txt is a TPM
• No circumvention of a TPM when there is no attempt at circumvention, and
theTPM malfunctions, so no DMCA violation
Sony Rootkit
• In re Sony BMG CD Technologies Litigation, No.
1:05-cv-09575-NRB (S.D.N.Y. Jan. 6, 2006)
• Sony BMG used two different DRM software packages on different
audio CDs to restrict consumer uses of the CDs, report customer
listening of the CDs, and condition use of the music on accepting terms
in an accompanying end user license agreement (“EULA”)
• Like a “rootkit,” the software concealed its presence through the use of
hidden files, maintained connections with Sony BMG’s servers, and
introduced substantial security vulnerabilities
• After substantial negative publicity, Sony BMG offered an uninstaller,
but the uninstaller introduced new vulnerabilities
Sony Rootkit (continued)
• Sony BMG eventually acknowledged both the DRM software and the
problems it caused, and recalled all of the discs
• Sony BMG had refused to refund the amounts paid for the discs
• Under the settlement, Sony BMG provides a menu of remedies based
on the particular DRM software encountered on a disk-by-disk basis
• For example, consumers who bought CDs with First4Internet’s
Extended Copy Protection (“XCP”) DRM software packages may
exchange them for copies of the same CDs with no DRM, and
download MP3 copies of the music; and Sony BMG provides each
consumer with a choice of
– a check for $7.50 plus one free download from a 200-title list, or
– three free downloads from the list
Sony Rootkit (continued)
• Other cases are still pending
• Sony BMG has sued Amergence Group (f/k/a
SunComm Int’l), one of the TPM providers
• For more information, see
• Electronic Frontier Foundation at http://www.eff.org/sony
• Halderman & Felten, “Lessons from the Sony CD DRM Episode,”
http://itpolicy.princeton.edu/pub/sonydrm-ext.pdf (Feb. 15, 2006)
• “Unintended Consequences: Seven Years Under the DMCA,”
http://www.eff.org (4th ed. April 2006)
Macrovision v. Sima Products
• Macrovision v. Sima Products Corp.
• No. 05 Civ. 5587 (RO) (S.D.N.Y. April 20, 2006).
• Macrovision’s Analog Copy Protection technology (“ACP”) makes it
more difficult to copy the analog signal generated by a DVD player
when playing a movie or other digital content
• Effect is that copies of the analog signal are degraded
• Sima’s products, called “CopyThis!” and “GoDVD,” eliminate ACP from
the analog signal, thus allowing higher quality copies to be made from
the analog signal
• Held, injunction granted as Sima’s products violate 1201(a)(2)
prohibition on trafficking in technology that circumvents a technological
measure that controls access to copyrighted content
Storage Technology
• Storage Technology Corp. v. Custom Hardware
Eng. & Consulting, Ltd.
– 421 F.3d 1307 (Fed. Cir. 2005), reh’g denied 431 F.3d 1374,
on remand Civil Action No. 02-12102 (D. Mass. June 28, 2006)
• Storage Tech makes data storage “silos” of data cartridges, and
which are controlled by a password-protected maintenance program
• Custom found a way to circumvent the password protection so that
Custom may provide maintenance for the Storage Tech silos
• Held, maintenance of software permitted under 17 U.S.C. § 117(c)
Storage Technology (continued)
• Held, since maintenance is permitted under Title 17, then
circumvention to perform maintenance does not violate
§ 1201
• Held, some of the code plaintiff claims was protected under
the Copyright Act and circumvented by Custom, was already
being given out for free by plaintiff, so defendant had not
circumvented any of the plaintiff’s rights
• Held, attorney’s fees may be awarded under 17 U.S.C.
§ 1203(b)(5)
WoW Glider
• Glider is add-on software that allows a user to automate the
actions of the user’s World of Warcraft (WoW) characters
• The user walks away from the computer; the character keeps going
• http://www.wowglider.com
• Declaratory judgment action seeks declaration that Glider does not infringe
copyrights in WoW and does not circumvent WoW’s Warden software, which looks
for violations by WoW users
• MDY Industries, LLC v. Blizzard Ent. Inc., No. CV 06-0255 (D. Az.) (complaint
filed Oct. 25, 2006, order issued Jan. 28, 2009)
• Court held that WoW’s Warden is a TPM that protects dynamic nonliteral
elements of WoW, and Glider circumvents Warden
• Court enters a $6.5 million judgment against MDY Industries
Jacobsen v. Katzer
• Jacobsen v. Katzer, No. 2008-1001 (CAFC Aug. 13,
2008) (http://www.cafc.uscourts.gov/opinions/081001.pdf visited Aug. 13, 2008)
• Jacobsen and Katzer wrote competing software for model trains
• Jacobsen’s software was distributed under the Artistic License 1.0
• http://www.opensource.org/licenses/artistic-license-1.0.php
• Katzer’s employees or predecessor copied Jacobsen’s code into
Katzer’s software, but failed to comply with the provisions of the Artistic
License
Jacobsen v. Katzer: Federal Circuit
• Federal Circuit vacates and remands to trial court
• Broad distribution to the general public does not equate to an unlimited
license
• In other words, free distribution does not equate to public domain
• The Artistic License as used by Jacobsen required Katzer to do certain
things
• Failure to comply with the terms of the license means that Katzer
violated conditions of the copyright license, rather than breach of
contractual terms or covenants
• Irreparable harm may be presumed as violations of the conditions of the
license means that Katzer’s uses of the Jacobsen software were not
authorized
Jacobsen: Conclusion
• Held, terms in the Artistic License violated by Katzer
were conditions, not covenants
• Any use of the software without complying with the terms in the Artistic
License were outside the scope of the license granted by Jacobsen
• Cites Nimmer that distribution of copies without a copyright notice
pursuant to a license that required copyright notice equates to
copyright infringement
• Once again, copies distributed in compliance with the conditions are
fully licensed, while copies not distributed in compliance are
infringing copies
Jacobsen: Implications
• Confirms that free/open source licensors may
pursue full set of copyright remedies against those
who fail to comply with their license
• Injunctive relief
• Presumption of irreparable harm
• Actual damages (if any)
• Statutory damages
• Attorney’s fees (!)
• Licensor must still comply with Copyright Act
requirements, including copyright registration
Other Recent Cases
• Software Law Freedom Center has been “busy”
• Reached a settlement with SuperMicro over alleged violation of open
source license for Busybox utilities
• Andersen v. Super Micro Computer, Inc., No. 1:08-cv-05269-RMB
(S.D.N.Y. filed June 9, 2008)
• Filed cases against Extreme Networks and Hammer Storage over their
alleged use of the Busybox utilities in violation of the open source
license
• Andersen v. Extreme Networks, Inc., No. 08-CV-6426 (S.D.N.Y.,
filed July 17, 2008)
• Andersen v. Bell MicroProducts, Inc. d/b/a Hammer Storage, No.
08-CV-5270 (S.D.N.Y., filed June 9, 2008)
Lessons Learned
• Technology is not the enemy, but is an enabler of
each of the parties who have skin in the game
• Section 512 can be a powerful safe harbor for ISPs,
web site owners and other online providers, if you
dot the I’s and cross the T’s
• Content owners who want to sue online providers
must similarly dot the I’s and cross the T’s
Lessons Learned
• Where appropriate, use of a TPM may be a good way to protect
content, regardless of whether any circumvention of that TPM can
serve as the basis for a claim under Section 1201
• To enforce a claim under Section 1201, courts are requiring a
connection between the circumvention and the protection of a right
under the Copyright Act
• Circumvention enables copyright infringement
• Circumvention enables uses not permitted by the copyright owner
– Types of copying
– Use in connection with plaintiff’s software
• Section 1201 does not apply where TPM/ACT used solely to protect
against competitors
• Section 1201 should be amended to allow circumvention for fair uses
permitted under 17 U.S.C. § 107
Lessons Learned
• Decreased use of digital rights management
• Since the Sony Rootkit debacle, fewer music publishers have used
DRM
• Book publishers are using DRM less than they used to
• “Publishers Phase Out Piracy Protection on Audio Books,” N.Y.
Times (March 3, 2008)
• Publishers should continue to use digital watermarking and other
passive techniques to identify copies of their works
• Publishers should be cautious about using technological protection
measures that actively control access and use unless they have been
fully vetted
Our Team
Frederic M. Wilf
Morgan, Lewis & Bockius LLP
fwilf@morganlewis.com
502 Carnegie Center
Princeton, NJ 08540
609.919.6646
1701 Market Street
Philadelphia, PA 19103
215.963.5453
Fred Wilf practices business, technology and
intellectual property law, with a focus on information
technology and the Internet
worldwide
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