TechLaw

An opinion released a few days ago in the Turnitin.com lawsuit, A.V. v. iParadigms, No. 07-293 (E.D. Va., March 11, 2008), took up several issues of interest to cyberlaw attorneys. The court (1) enforced a clickwrap agreement, (2) declined to enforce terms of use that were viewable by clicking on a hyperlink at the bottom of a Web page, and (3) held that Turnitin.com's service (which consisted of maintaining a database of student papers used to discover and deter plagiarism) was a fair use of the student papers submitted to Turnitin.com.

Turnitin.com's operator, iParadigms, contracts with schools to provide a plagiarism-detection service. Student papers submitted to Turnitin.com are electronically evaluated against a database of papers written by others in order to determine if the submitted paper is original. This case involved a copyright infringement claim brought by four high school students who submitted papers to Turnitin.com. They registered with Turnitin.com and in the process clicked on an "I agree" button to indicate their assent to the Turnitin.com User Agreement. The User Agreement disclaimed any liability in connection with a registrant's use of the Web site.

Clickwrap Agreement Enforced, Against Minors

The court's discussion of the enforceability of the clickwrap contract looked a lot like the dozens of cases already decided in this area. Suffice it to say that the court found that the students had entered into a valid contract when they clicked on the "I Agree" button to indicate assent to the terms of the User Agreement. What was interesting, however, was the court's rejection of the students' claim that, because they were minors at the time they made the contract, the contract was voidable. In Virginia, contracts by minors are voidable when the minor reaches the age of majority. The court parried this doctrine with one of its own: Even an infant cannot take the benefits of a contract without taking the conditions or limitations as well. The court identified several benefits the students took from the Turnitin.com User Agreement:

They received a grade from their teachers, allowing them the opportunity to maintain good standing in the classes in which they were enrolled. Additionally, Plaintiffs gained the benefit of standing to bring the present suit. Plaintiffs cannot use the infancy defense to void their contractual obligations while retaining the benefits of the contract.

Some benefits. The benefit of bringing a lawsuit that the court is tossing, and the benefit of participating in a high school anti-plagiarism exercise. This seems to be an awfully low standard. Any Web site catering to children should be able to cite equally valuable "benefits" from using their online services, so you have to wonder how much use the infancy defense will be to future online plaintiffs.

Browsewrap Language Not Enforceable

Although Turnitin.com won on the clickwrap contract point, it was not able to get an indemnification clause in its Web site terms of use enforced against the students. Turnitin.com's argument, based on Register.com Inc. v. Verio Inc., 356 F.3d 393 (2d Cir. 2004), was that the students assented to the terms by continually using the Turnitin.com Web site. The court disagreed, finding that there was no evidence of assent to the terms. First of all, the agreement that the court did enforce -- the clickwrap agreement -- contained language indicating that that agreement constituted the entire contract between the parties.

Leaving that point aside, the court observed that there was no evidence that the students viewed or read the Web site terms, and no evidence that the students ever clicked on the terms of use hyperlink or were ever directed to do so by Turnitin.com. The court acknowledged prior decisions -- such as Register.com -- where knowledge of Web site terms was imputed to users by repeated visits to the Web site and repeated exposure to the terms. However, the court said here, "in this case ... such imputation is improper because there is no evidence indicating that Plaintiffs were exposed to the terms of the Usage Policy."

The court distinguished Register.com based on the fact that, each time the Register.com Web site was used the site caused a notice of its terms of use to be transmitted to the user. In this case, the court said, "There is no evidence that the terms of the Usage Policy were presented to Plaintiffs beyond the existence of the Usage Policy link the appeared on each page."

Even though Turnitin.com lost on the browsewrap point, it's easy to see how a little more effort on Turnitin.com's part could have produced a favorable outcome.

Student Papers' Inclusion in Database Held Fair Use

Finally, the court took up Turnitin.com's argument that its use of the student's papers was a non-infringing fair use. The court, borrowing heavily from the Ninth Circuit's ruling in Perfect 10 Inc. v. Google Inc., 487 F.3d 701 (9th Cir. 2007), held that it was. Turnitin.com's use of the student papers was "highly transformative," the court found, noting that Turnitin.com took a creative work and transformed it into an anti-plagiarism technology. Further, Turnitin.com made no use of the creative aspects of the students' work, and in fact it used their works to protect the originality of their expression by using it to deter plagiarism. The court also noted that, although Turnitin.com copied the entirety of the students' papers, this copying in no way caused harm to the market value of the papers. All in all, the court concluded, Turnitin.com's use of the students' papers was a fair and lawful one.

When spoon bender and copyright maximalist Uri Geller recently succeeded, on lack-of-jurisdiction grounds, in having California litigation against him for sending a false DMCA take-down notice to YouTube dismissed, one of the reasons cited by the court was the fact that the plaintiff's claim could be litigated in Pennsylvania where a related action was pending.

Several days after the California court issued its ruling, however, Geller moved to dismiss the Pennsylvania case. Magicians call this "mis-direction," the trick of getting the audience to look in the wrong place at the right time. Scoff if you like about Geller's alleged ability to bend spoons with his mind. He is very good at misdirection.

In Sapient v. Geller, No. 07-2478 (N.D. Cal., Feb. 4, 2008), Judge Vaughn R. Walker sidestepped the knotty question of whether Geller's act of sending a DMCA take-down notice conferred jurisdiction over him where the notice was received. The court decided instead to simply dismiss the case in favor of the Pennsylvania action, where Geller's company, Explorologist Ltd., had filed a copyright infringement claim against Sapient. Judge Walker wrote:

Sapient will be able to raise his Section 512(f) claim against [Geller's company] Explorologist as a counterclaim in the Pennsylvania action. ... And although Geller is not a party to that action, Sapient will be able to bring his claims against Geller using either a regular jurisdiction analysis or the federal long-arm statute.

Needless to say, Sapient is not happy about Geller's trickery. In his answer, filed today, Sapient argued that Geller's motion to dismiss would deprive him of a forum to litigate his false DMCA take-down notice claim:

Explorologist indicated to Chief Judge Vaughn Walker of the Northern District of California that Sapient would not be harmed by dismissal of his claims there because this Court offered an alternative forum. Yet, when advised that Sapient intended to follow Chief Judge Walker's suggestion and amend his answer to join the claims to this action, Explorologist refused to stipulate to that amendment. Then, just hours after opening discussions regarding a stipulated dismissal that would provide for Sapient's claims, Explorologist ran to this Court seeking permission to dismiss. It then insisted, incorrectly, that Sapient should no longer be permitted to amend.

Explorologist is also under pressure to produce Geller for a deposition in the Pennsylvania action which, by all indications, it does not want to do. On the merits, Explorologist's copyright claim looks like an uphill battle. He is attempting to invoke British, not U.S., copyright law regarding three seconds of copyrighted video contained in a larger video production that sought to debunk Geller's claim to psychic abilities. A mind-bending feat, if he can pull it off.

The Pennsylvania court has ordered all parties to appear in person in Philadephia on March 18 to sort the matter out.

Search operator Google Inc. and Agence France Presse today announced a settlement in Agence France Presse v. Google Inc., No. 1:05-CV-546 (D.D.C.), in which AFP asserted copyright infringement arising from Google's unauthorized reproduction of copyrighted article fragments and photos in connection with Google's news aggregation site. Google contended that AFP's headlines and story leads were not copyrightable. Two interesting arguments, neither of which will be decided in this proceeding.

No indication from the parties whether money exchanged hands, though the announcement states that Google agreed to take a license for AFP's content.

A stipulation of dismissal filed today indicates only that AFP and Google had "resolved the differences which have arisen between them ...."

It used to be that sending a take-down notice to an ISP was a fairly routine exercise, with little downside for the copyright owner. ISPs usually complied without much fuss, more concerned with preserving their safe harbor status under the DMCA than losing an angry infringer as a customer.

But take-down notices are becoming a riskier proposition these days, at least for copyright owners asserting inaccurate or highly improbable infringement claims.

Blame (or thank, depending upon your perspective) the EFF. The civil rights group has quite effectively exploited a provision in the DMCA that imposes liability upon copyright owners who "knowingly materially misrepresent" their claim of infringement in the course of invoking the take-down procedure. 15 U.S.C. 512(f).

The latest example of this is the dispute between an ABC affiliate radio station in San Francisco and a blogger who goes by the handle, Spocko. His blog included audio clip excerpts of broadcasts from KSFO-AM, which he used to criticize the indecent language used by the talk show hosts. ABC sent a take-down notice to the blogger's service provider, alleging that Spocko's "flagrant use of KSFO's material is a clear violation of KSFO's copyright." The service provider shut down the blog.

EFF got involved and, in a Jan. 25 letter, responded to the allegations, characterizing them as "false" and saying that the usage falls squarely within the bounds of fair use. "Far from being grounded in law, ABC/KSFO's complaints amount to nothing more than an attempt to silence an effective critic," said the EFF, adding that "further misrepresentation aimed at Spocko's protected speech online may subject KSFO and ABC to liability under 17 USC 512(f) . . . ."

It is a strategy that has worked before for EFF, most notably in Online Policy Group v. Diebold Inc., 337 F. Supp. 2d 1195 (N.D. Cal. 2004) (take-down notice directed to material that was clearly not copyrightable supports award of damages, attorneys' fees under Section 512(f)).

The prospect of section 512(f) damages may have influenced settlements in at least two other lawsuits, Marvel Enter. Inc. v. NCSoft Corp., 74  USPQ2d 1303 (C.D. Cal. 2005) (settled within a few months after court refused to dismiss defendant's Section 512(f) counterclaim for false notification) and Kopp v. Vivendi Universal Games, No. 06-01767 (C.D. Cal. complaint filed March 23, 2006) (video game publisher dropped allegations of infringement and declined to block further sales of unauthorized strategy book after accused infringer files declaratory judgment action asserting violation of Section 512(f)).

By their nature, cease and desist letters are often rife with bluster and bravado. But when that language is tied to a take-down notice, it can expose the copyright owner to a palpable risk of damages where the infringement claim has little substance to it.

Well, it certainly did not take long for content owners to try out the Supreme Court's inducement test of secondary liability, announced in Metro-Goldwyn-Mayer Studios Inc. v. Grokster Ltd., 125 S. Ct. 2764 (2005). The claim popped up in nearly a half dozen cases filed or litigated in 2006. But so far, apart from the remand in Grokster, only two other district courts have applied the test.

The first ruling came from Judge Marilyn Hall Patel of the Northern District of California, who held that the recording industry could proceed with an inducement theory of liability against investors in the former Napster file-sharing service. In Re Napster Copyright Litigation, No. C MDL-00-1369  (N.D. Cal. May 17, 2006).

The inducement theory, as explained by the Supreme Court, imposes secondary liability against "one who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement."

This test does not require plaintiffs to show actual knowledge, Patel explained. She rejected an attempt by Napster's investors to limit their liability to just those works for which they received actual notice of infringement from the recording industry, noting that the Grokster test permits liability premised upon constructive knowledge. That the Grokster decision came down after this case was already in play is no impediment to its application here, Patel added.

The second ruling applying the inducement test originated from the District of New Jersey. An open-air flea market nabbed for hawking pirated CDs tried to use the inducement test to bolster its argument that "mere knowledge of actual or infringing uses" is not enough to subject a distributor of a product to secondary liability. The court did not give that argument any credence, observing that operating a flea market is not analogous to placing a copying device into the stream of commerce. Arista Records Inc. v. Flea World Inc., No. 03-2670 (D.N.J. March 31, 2006). The case settled in November 2006.

There is nothing surprising in either of these two holdings. But now, content owners are pushing to apply the test outside the traditional P2P context. One such lawsuit claims that XM Satellite Radio induces its subscribers to infringe the recording industry's copyrights by offering a service that lets those users build a digital library of their favorite songs recorded off of XM, all without paying any royalties for downloading. By advertising that the portable music player enables users to save huge collections of songs, XM has taken "affirmative steps" to promote infringement, the recording industry alleges. The court recently ruled that XM cannot escape liability by asserting immunity under the Audio Home Recording Act.

Two other lawsuits filed against social networking sites also cleave to the inducement test. Videographer Richard Tur has filed an infringement lawsuit against video streaming site YouTube, alleging that the company does not do enough to police its service for infringing copies of his videos (such as the Reginald Denny beating) that are uploaded to the site. Tur v. YouTube Inc., No. 06-4436 (C.D. Cal. complaint filed July 14, 2006). His complaint styles YouTube as the new Grokster and accuses YouTube of pursuing an advertising revenue model that directly benefits from the infringing activity. The court is scheduled to hear oral argument on cross motions for summary judgment on DMCA issues Jan. 29.

Finally, in UMG Recordings Inc. v. MySpace Inc., No. 06-07361 (C.D. Cal. complaint filed Nov. 17, 2006), the recording industry claims that the social networking site MySpace encourages rampant infringement by making it easy for its members to incorporate illegal copies of songs into their profiles. This, in turn, draws more traffic to the site, according to the complaint.

Of these three lawsuits, it is the XM case that probably has the riskiest liability exposure. Advertising materials used by XM to promote is XM+MP3 service, in which XM lauds the storage capacity of its device, could be problematic, particularly given the court's recent ruling that strongly suggested that the XM+MP3 service infringes the reproduction right. While the plaintiffs in the social networking cases will undoubtedly be able to show infringement occurs on YouTube and MySpace, they will have a tougher time showing that those services are designed with the aim of promoting infringement.

In two weeks, WIPO’s Standing Committee on Copyright and Related Rights will convene in Geneva to try to finalize the text to the proposed WIPO Broadcasting Treaty.

Webcasting is now off the menu. Many delegates lost their appetite for the contentious issue, concerned that the sideline topic threatened progress in more important areas, such as signal theft.

But as the SCCR’s chairman’s December 15 report illustrates, untangling webcasting from the treaty may not be a straightforward matter.

The definition of “retransmission,” a protected right under the proposed treaty, encompasses “any means of transmission.” Elsewhere in the text, the right of retransmission is said to include “over computer networks.” Further, the text refers to the right of reproduction as including “direct or indirect reproduction in any manner or form,” a phrasing that the delegation from India argued would likely be interpreted to include computer networks.

According to the report, the chairman took the view that while the draft treaty no longer embraced a new right protecting webcasts, the proposed treaty would, ems.bna.comtheless, empower broadcasters to prevent unauthorized webcasts of their transmissions.

“[T]here were several areas where acts and operations taking place by using computer networks were included as the defensive part of the traditional broadcasters’ rights, not as objects for protection. In those areas the traditional broadcasters should enjoy the possibility of authorizing or not authorizing certain exploitation or use of the protected subject matter. That did not make webcasting an object of protection.”

For example, the chairman explained in his report, a broadcaster in one country should have the authority to prevent a webcaster in an adjoining country from webcasting the signal to areas of the adjoining country that fall outside the broadcaster’s footprint.

“That would not bring that retransmission over the web within the scope of protection,” said the chairman. “[B]ut would place the retransmission over the web as a defensive element in the operative clauses on the protection of traditional broadcasters.”

Given the aim of the treaty to protect against signal theft, this perspective is certainly understandable. Yet, the difference between protecting webcasts themselves and preventing others from making unauthorized webcasts seems a rather fine point. The policy concerns that attend the granting of protections to webcasts seem no less relevant to the defensive use of the webcasting right than to its use offensively.

If file swapping tops Hollywood list of copyright woes, skirmishes with service providers over portability of content is fast becoming a close second. Companies responding to consumer demand for simple ways to shuttle lawfully acquired content between one device and another have come up with ingeniuous solutions that sometimes sidestep established licensing models.

But content owners got an early Christmas gift from the Librarian of Congress. The Librarian addressed space shifting in his third triennial rulemaking on proposed exemptions to the Digital Millennium Copyright Act. The Librarian rejected a proposal that would have permitted consumers to escape DMCA liability for bypassing security measures that prevent them from moving lawfully purchased content between devices.

The Librarian endorsed the view of the Register of Copyrights, who concluded that "the reproduction of those works onto new devices is an infringement of the exclusive reproduction right unless some exemption or defense is applicable."

Hollywood is hard at work trying to keep the portability issue in check. The recording industry has sued XM Radio over a portable device that allows users to save songs played over the program stream. Several cable networks have sued Cablevision over a virtual DVR service that allows consumers to save programs to a remote server. And TiVo has disabled its TiVoToGo feature (which allows subscribers to easily move content between a PC and their TiVo) on its new, HD set top box. EFF conjectures that this came about in response to pressure from Hollywood over piracy concerns.

Now, fights over portability are moving to a new frontier... video sharing sites, such as YouTube and Google Video. The content of these sites are ideally suited for portable devices. The modest file size of the video clips combined with their short duration make them great filler for down time while commuting. So, it was natural enough that a few clever people would come up with a way to peel the videos off the Internet and onto their portable media players.

One such workaround, created by Michael Arrington of TechCrunch, prompted a cease and desist letter from YouTube. The video sharing site alleged that the software tool violated its terms of use (which, according to YouTube, forbids downloading of content), tortiously interfered with its business relationships, and amounted to an unfair business practice.

YouTube elaborated in its letter that "[d]ue to Techcrunches video download tool, content creators and owners are less likely to upload or otherwise license content to YouTube due to their fear that the content can and will be copied and downloaded against their will."

Perhaps. But it is hard to see how that fear would not already be agitated by language in the YouTube Terms of Service that grants to each user a non-exclusive license "to use, reproduce, distribute, prepare derivative works of, display and perform such User Submissions as permitted through the functionality of the Website and under these Terms of Service."

Equally likely, services such as YouTube want to control migration of their content to other devices not just because of copyright infringement concerns but also so they can license user-created content to service providers. The New York Times has reported that YouTube is expected to announce a deal to provide select video clips for use on Verizon cell phones, through Verizon's Vcast network.

Of course, licensing deals like this depend on YouTube's ability to prevent users from easily porting the content to their cell phones and media players on their own.

Just like with P2P, it's all about distribution.

When the 110th Congress gets underway next year, it is a good bet that Rep. Rick Boucher will reintroduce his digital fair use bill. Hollywood has long resisted the measure, which excuses from DMCA liability the circumvention of digital locks where the underlying use is noninfringing. Proponents of the bill have often cited consumers' desire to make backup copies of fragile CDs and DVDs as an example of a legitimate use that would be tolerated by the legislation.

That example came under scrutiny in the Librarian's Nov. 22 rulemaking, a triennial review process in which the Library of Congress considers proposals for niche exemptions to the DMCA. In rejecting a proposed exemption for backup copies, the Librarian emphasized the risk of piracy inherent in an any such exemption:

The unauthorized reproduction of DVDs is already a critical problem facing the motion picture industry. Creating an exemption to satisfy the concern that a DVD may become damaged would sanction widespread circumvention to facilitate reproduction for works that are currently functioning properly.

The Librarian further stated that the Register of Copyrights found "no authority" (apart from a provision dealing with software) that supported the proposition that making backup copies is a fair use.

Of course, Boucher's bill does not rise or fall on this one example. But the Librarian's remarks do diminish the force of an argument that has proven somewhat effective in rallying support for the digital fair use bill.