Internet Giants Warn of Mass User Terminations If Recent Appellate Ruling Left Untouched

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The recent appellate decision in the long-running lawsuit brought by record labels and music publishers against MP3Tunes didn't get a tremendous amount of attention, but Google, Facebook, eBay, Twitter and other digital giants are aghast at the result and warning of dire consequences without a do-over.

On Oct. 25, the 2nd Circuit Court of Appeals gave copyright holders some big victories by narrowing the circumstances whereby internet service providers can claim safe harbor from copyright liability. 

MP3Tunes has now filed a motion for a rehearing en banc, and the company is being supported by friends in the tech industry. An amici curiae brief filed Tuesday on behalf of some of the largest online service providers is authored by noted legal scholar and advocate Mark Lemley and points to "three things" that "could be read to require OSPs to act in ways that are socially undesirable and technically infeasible."

The first deals with the 2nd Circuit panel's conclusion that MP3Tunes didn't properly implement a repeat-infringer policy.

Initially, the headline news here was the conclusion that "repeat infringers" need not be "blatant infringers," but the tech companies are extra worried because the 2nd Circuit wrote that a reasonable jury could have concluded that MP3tunes should have tracked users who repeatedly created links to infringing content or who copied files from those links. In other words, consumers of piracy.

"Amici are concerned that some will read this to suggest that OSPs must identify as repeat infringers not only users who repeatedly post infringing content ... but also anyone who interacts with content that is later alleged to be infringing, including those who merely access it or refer to it using a hyperlink," writes Lemley. "That would wreak havoc on the routine practices of OSPs far removed from MP3Tunes. For example, it might require companies like Yahoo!, Google and Pinterest to force their users to log in so they can track their activity and require termination of huge numbers of internet users who have never been accused of copyright infringement."

Lemley argues that DMCA takedown notices are standard protocol for figuring out who is an infringer. 

"It is entirely different, however, to impose on OSPs an obligation to tally strikes and terminate users merely for having accessed, viewed, or otherwise engaged with content that later might be the subject of a takedown notice," he adds. "That would upend existing practices for responsible OSPs that host user-submitted material. On this view, a repeat infringer would be not just one who serially causes infringing content to be stored on a provider’s system, but potentially anyone who has ever come into contact with that content."

The second and third tech objections deal with the 2nd Circuit panel's discussion of "red flag knowledge," meaning an awareness of "facts or circumstances from which infringing activity is apparent." If an internet service provider has "red-flag knowledge," they can be disqualified from safe harbor under the Digital Millennium Copyright Act.

The appeals court panel suggested that MP3Tunes had the ability to search its for MP3s before 2007 when major record labels had not yet authorized songs in MP3 format. Additionally, the appeals court discussed a class of works like Beatles songs that MP3Tunes and its founder Michael Robertson had general knowledge weren't being licensed for online use. Thus, a finding of facts and circumstances supposedly making infringement obvious.

The tech companies, though, don't like how "the panel opinion can be read as creating a duty to investigate potential infringement whenever a category of infringing material — rather than specific infringing material — is identified" nor how "general knowledge about authorized distribution channels or even general statements about infringement" can create red-flag knowledge.

In short, they prefer the onus be squarely on the shoulders of copyright holders to identify what's copyrighted and what's an infringement. Too many loopholes, they see, although they profess open-mindedness about the ultimate outcome in the MP3Tunes case.

"It may well be that MP3Tunes has engaged in conduct that gave it red-flag knowledge," writes Lemley. "Amici express no opinion on that issue. But the Court would avoid great mischief by eliminating language that suggests a copyright owner can create red-flag knowledge merely by saying that their works are 'never authorized.'”

Here's the full brief.

This one could incite others in the content industry like the MPAA to defend what's been decided.