Week 07: Technology Design and Liability
March 3rd, 2009
Prepared by Andy Brooks, Jeremy Whitaker, and Jonathan Yen
Copyright
Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417 (1984)
1975 – Betamax VTR released by Sony
1976 – Plaintiffs (Universal and Disney) seek monetary damages and injunction against Sony in California District Court
1979 – District Court denies Plaintiffs
1981 – Court of Appeals reverses District Court judgment and holds Sony liable for contributory infringement.
1982~1984 – Supreme Court orders a review, re-argument, and reversal of Court of Appeals judgment.
Facts: In 1975 Sony released the first video tape recorder(VTR) for the consumer market. Two major entertainment studios (Universal and Disney) brought suit over concerns that consumers would use the VTR to record copyrighted material and that empowering the home user with VTR recording capabilities would break important invisible philosophical boundaries that would result in lost control for the copyright holders.
A detailed investigation of consumer usage by the District Court uncovered two primary types of consumer behavior. While a fair number of users were found to be accumulating small collections of tapes, this usage was seen as limited by costs to the consumer and lack of real damage to the rights holder. Instead, the Courts focused on time shifting; the recording of programs not normally viewable in the confines of the consumers regular schedule. Neither of these uses were shown to decrease television viewing by the owners of VTR.
While the studios alleged that the device could be used for copyright infringement, they produced no evidence which illustrated “the transfer of tapes to other persons, the use of home recorded tapes for public performances, or the copying of programs transmitted on pay or cable television systems.” However, the studios alleged that by simply marketing the device Sony was liable for consumers’ infringing actions.
Court Findings: Ultimately, the Supreme Court’s decision for Sony was based on several issues. First, the plaintiffs did not represent the concerns of all members of the broadcast industry. Notable copyright holders, including Fred Rogers of Mr. Rogers’ Neighborhood, most major sports organizations, educational broadcasters (PBS), and religious groups testified that they approved of consumers using the device to record broadcasts for later viewing. Second, the Court found that time shifting was considered fair use under copyright law because consumers were not capitalizing from the act, and the technology spread the benefits of information to a greater number of people. Third, the court noted that the studios maintained powerful methods of generating profit from different activities. Fourth and perhaps most importantly, the Court did not find that Sony was not promoting the device for copyright infringement and argued that an injunction would harm the larger consumer market that benefited from legitimate use. This is a major departure from the Court of Appeals who ruled the opposite, based on their interpretation that there were no non-infringing uses which might protect Sony from contributory infringement. In their argument, the Supreme court underscored these non-infringing uses and gave deference to Congress’ responsibility to find the balance between protecting creative ingenuity (copyright) vs. promoting social use.
Response: Collectively we were quite interested in the fair use portion of the Court’s decision. In his dissension, Justice Blackmun argued that fair use applies when the copyrighted work is modified to produce something with public benefit, such as “criticism, comment, (or) news reporting.” However, the majority of the court applies a creative interpretation of fair use seeing time-shifting as a kind of extension of functionality to the original work, with the user manipulating the time of broadcast to the time-slot that best fits their schedule. We expect this creative interpretation is buffeted but the reality that VTR is not a direct 1:1 copy and degradation does occur, and as we all know future cases involving digital copying are not given the same treatment.
Another point of interest is how the development of this technology ultimately shook out for Disney/Universal. In hindsight we know that video media has been a huge profit source for these studios, with some films making more money in retail sales of home media formats than total box office revenue. Likewise the economies of many countries have benefited significantly by the ubiquity of personal entertainment systems and home media consumption.
MGM Studios, Inc. v. Grokster, Ltd. 545 U.S. 913 (2005)
Facts: In 2005, MGM sued peer-to-peer (P2P) file sharing application manufacturers Grokster and StreamCast(Morpheus) who were similar to the defunct Napster file-sharing service. MGM acted on behalf of group of 28 copyright holders, alleging that these applications contributed to copyright infringement. MGM argued that Grokster created and promoted the software as a means to illegally acquire copyrighted material. Both the District Court and Court of Appeals ruled for Grokster, referring to Sony as precedent and affirming that Grokster’s software had legitimate uses, and that removing it from the market would infringe upon Grokster’s rights. Several software companies filed amicus briefs supporting Grokster, including Microsoft and Intel. The Court was tasked with reconsidering Sony in light of new technological developments that lowered the barrier to infringing copyright.
Court Findings: The Court weighed the “competing values” (p.450) of protecting creativity through copyright vs. promoting technological innovation, but ultimately reversed the appellate court’s decision and found for MGM. First, Grokster knowingly and purposefully promoted its software as an alternative to the defunct Napster, which was successfully sued by copyright holders. Second, Grokster was aware of how users perceived and used its software, made no effort to prevent copyright infringement, and actively induced/encouraged users to infringe upon copyrights. Lastly, Grokster generated revenue from users’ actions, by way of advertisements that displayed within the software. Grokster had economic incentive to promote copyright infringement, as any use increased advertising revenue, and was therefore liable for contributory infringement. Sony, by contrast, had never materially contributed to copyright infringement in the sales of its device and could not be held liable for contributory infringement, even if its device made it possible for the user to infringe copyrights.
Response: In Grokster, we find that the Court is building upon some of the issues raised in Sony with regard to the contributory promotion of infringing use. However, with Grokster, the promotion is so blatant and the collected strength of the industry so coordinated that it makes the Court’s interpretation a bit predictable. One issue with Napster/Grokster though is that these are flagrant abuses of copyright and there are many more fair use opportunities in the greater P2P community/technology. Legitimate usages such as Skype, large file distribution by companies like Blizzard, Valve, and Open Source community, and distributed media streaming (Miro, Livestation) make P2P a technology that will require use-by-use reviews from the court.
Privacy
18 USC 2512 (electronic communication interception devices)
18 USC 2512 states that all devices which are primarily intended to be used for wire, oral, or electronic communication interception are forbidden to be possessed, manufactured, sold, advertised, or transported interstate or internationally, unless the device is intended for use by a communications company or political agency.
Response: As the defendants argue in Spy Factory, Congress is a bit unclear with its definition surrounding ESIDs. We can see instances were the definitions of “primarily” and “intended” can be argued. While “political agency” is a term that is easy to interpret, we consider “communications company” to be in need of clearer definition. Perhaps when the law was written communications companies were only telephone service providers, such as the “Ma Bell” version of AT&T. We see all sorts of communications companies today, from AT&T (land line, wireless, etc.) to Comcast (cable, VOIP) to Iridium (satellite). Could an email service provider, say Microsoft as the owner of Hotmail, be a communications company?
2512’s broad scope also makes us consider “what about…” questions. For example, what about parabolic microphones as often seen at sporting events and sold without 2512 restrictions? Would it be permissible to use such a device to listen in on your neighbors? What of an employer using these technologies to monitor your online chat conversations on their corporately controlled network? What if invasions of privacy are happening in conversations between employees and non-employees? What are employers allowed to monitor, with what tools, and what can they act on? Some of these questions may be covered in our Week 14 readings.
(c) J. Glover, Atlanta, Georgia
United States v. Spy Factory, 951 F. Supp. 450, 1997 (S.D.N.Y. 1997) Background and § II
Facts: Biro, Alon, Arce, and Demeter were retailers and traffickers in surveillance devices(ESIDs) who were arrested in sting operations in Miami in the mid-90s. Their businesses’, Spy Shops and G.E.S Electronics, sold ESIDs shaped as everyday devices like pens, wall plugs, calculators, and lightbulbs which were in fact audio recording devices used for eavesdropping. Originally a district court found Brio et al. guilty on various charges, but they appealed and the case was reviewed by the Eleventh Circuit Court of Appeals. Brio et al. charge that they were aware of legal restrictions on the sale of these devices but claim they were allowed by law to sell the devices to law enforcement agents or for export, even though statute 2512 forbids the sale of such devices without an explicit contract to do so. Brio et al. further charged that because 2512 did not include examples it was unconstitutionally vague and failed to give “adequate notice to the public of the prohibited conduct”(p.458).
Court Findings: The Court of Appeals, taking guidance from the Supreme Court, reviewed the vagueness charge in-so-far as the statute must “define the criminal offense with sufficient definiteness that ordinary people can understand”(p.459). The Court of Appeals finds that “the statutory language expressly describes the nature of the prohibited items” and this is hinged upon the statutes use of the word “surreptitious”(p.461). Additionally, the court explores how a product’s designer express their intention for how the device will be used by giving certain “objective physical characteristics” and a user’s intention for how they will use the device can often be determined based by those “objective physical characteristics”(p.461). The Court differentiates products sold by Brio et al. as being singularly designed to conceal their true function as “transmitters for the purpose of secretly intercepting oral communications.”
Response: This seems like a fairly obvious case where the defendants were clearly bending their interpretation of the law to their needs. However their defense, as mentioned above in 18 USC 2512, underscores how statutes and the law need to be precise in their definition. We see a correlation between this issue and those raised later in Superuser.
Examples: Laser Audio Surveillance (only $38,000), Pen Camera, Cellular Interceptor, and Audio Transmitter.
FTC v. Cyberspy Software
11/5/2008 – Complaint for Permanent Injunction and other Amended Relief
11/6/2008 – Temporary Restraining Order, Order to Show Why A Preliminary Injunction Should Not Be Granted, a Notice of Hearing
11/25/2008 – Preliminary Injunctive Order
Facts: FTC v. Cyberspy is a very recent case that illustrates the FTC’s efforts to block the sale of spyware and keylogger software, RemoteSpy. The FTC begins by aggressively putting their full weight behind a request for a permanent injunction and equitable relief that would bar Cyberspy from distributing its software, while recinding all contracts, and disgorging CyberSpy of “ill-gotten gains”(p.480). The court responds quickly with a temporary restraining order which once received by Cyberspy forbids them from: “promoting, selling, or distributing…”(p.502) RemoteSpy and assisting others with doing the same. Cyberspy essentially has to go dark on RemoteSpy, and not do/say anything about it. The court then follows-up after hearing from the defendants, with the preliminary injunctive order to put a long term freeze on Cyberspy’s activities.
Response: Using the evidence provided by the FTC it seems we have a blatant case of criminal wrongdoing. Cyberspy unabashedly promotes software that intentionally enables users to spy on others and collect personal information about them. It is contributory infringement, as one party is assisting others by providing technology to do something illegal.
Ohm, Paul — The Myth of the Superuser: Fear, Risk, and Harm Online, 41 U.C. Davis L. Rev. 1327 (2008)
Ohm defines Superuser as “a computer user who possesses power that the ordinary user does not.” He argues that the myth of the Superuser is constructed from stories and anecdotal evidence about alleged Superusers that are often overstated by tech experts and policymakers, who build on this fear of the Superuser to come up with laws designed to stop anyone who might move in any pattern similar to that of a Superuser. Ohm declares that the Superuser’s powers are greatly exaggerated and that policy should be aimed at general misuse instead of the mysterious powers of technology überlords. Ohm’s explanation of the origin of the Superuser myth is fear of technology and the murkiness of the powers of the Internet. In particular he speaks of the tools of the Superuser which can only be used and understood by the Superuser herself. These cultural fears are further exacerbated by the media’s portrayal of Superusers in popular movies where the flick of a mysterious switch created mass havoc.
Ohm argues that greater awareness of the mythological Superuser is needed and that fear of Superusers themselves has led to policy that overcompensates for what is misunderstood. He suggests that there be more fact-finding and analysis of Superusers, and lists out certain types of Superuser stories that should be ignored. Generally speaking, Ohm recommends disregarding stories that target people’s fears, and denounces populist policies that are made to alleviate people’s fears. In the case of the Superuser, Ohm urges us to act rationally and to recognize our fears rather than to act impulsively. Clear examples come to mind where emotions have dictated policy — the Japanese-American internment during World War II, McCarthyism, the policy reaction to the 9/11 attacks, and others.
Ohm describes tools similar to Cyberspy as enabling “script kiddies” to perform acts they would otherwise not have the knowledge to pursue. By cutting off Cyberspy the FTC is trying to put limit these types of tools, built by Superusers, sold to script kiddies. In alignment with the myth, the fear of misuse justifies the Court to act quickly by determining no potential use could ever outweigh misuse. There are likely to be many cases where the balance is not quite so clear cut (see P2P usage).
We agree with Ohm’s sentiment regarding the construction of laws that accurately target misuse instead of having a broad and overly general policy set to capture every possible use. With regard to the laws built post-9/11 we see the Superuser example as representative of the problems caused by the shifting political climate and a good example of why the separation of powers, and a nonpartisan court, is so important.
Supplemental Reading
EPIC complaint to the FTC In the Matter of Awarenesstech.com, RemotePCSpy.com, Covert Spy.com, RemoteSpy.com, and Spy-guide.net.
EPIC is the Electronic Privacy Information Center, a public interest group based in Washington, D.C. that “focuses public attention on emerging civil liberties issues and to protect privacy, the First Amendment, and constitutional values.” [See http://www.epic.org] In the age of increasing device and service complexity, we see organizations like EPIC working to keep the Federal Trade Commission (FTC) informed of the latest technologies. Without organizations like EPIC policing would fall primarily to the government and individual citizens.