The future of Internet entertainment as decided by courts:
UMG vs. Veoh.com, Hendrickson vs. eBay, MANSON DVDs and the Digital Millennium Copyright Act (DMCA) 2009
For those who are concerned about the future of information and entertainment, and where this whole Internet business is going, you may want to listen up. At the time of the infamous Sept. 11, 2001 attack on America, another disaster occurred, but it would change the way information and entertainment was to be disseminated for future generations to come. More specifically, a United States District Court in re: Hendrickson vs. eBay, et al, issued the "First Impression" decision with regards to the Digital Millennium Copyright Act (DMCA)
Now, eight years later, major entertainment companies are still fighting over the far reaching effects of that decision, which at the heart, concerned counterfeit DVDs of the now legendary 1973 MANSION documentary. Only this time, it's Universal Music Group (UMG) representing some of the world’s most famous musical acts against Veoh, owned by Time Warner, NBC and other heavyweights in the entertainment industry. The heart of Veoh's business model allows others to post movies and music on their Internet portal for downloading and viewing without charge.
Of course, if the Veoh folks only posted their own copyrighted works for viewing, there would be no problem or lawsuits. But then, how many times can you watch an old Warner Brothers movie or NBC reruns. So with thousands of unscrupulous third party users uploading music videos from UMG's catalog onto Veoh's website, there was bound to be a legal conflict. In short, two years ago, UMG sued Veoh, in major part, for vicarious copyright infringement, just as Robert Hendrickson sued eBay and those who were selling counterfeit MANSON DVDs on eBay, some nine years ago.
The UMG vs. Veoh case and the eBay case are almost identical in nature, in that both cases ultimately turned on one specific prong of the DMCA. More specifically, Section 512 (c)(1)(B) provides that a service provider may seek the section 512(c) safe harbor only if it
"does not receive a financial benefit directly attributable to the infringing activity, in a case in which the service provider has the right and ability to control such activity."
Therein lies the rup. It has long been established in copyright law, that secondary liability can be imposed upon one who "has the right and ability to control infringing activity", but does not. In both cases, in major part, the Plaintiffs sought to hold the service provider (ISP) vicariously liable for the direct infringing activity conducted by those who actually posted the infringing content.
Where the same legal language "right and ability to control the infringing activity" is used in the DMCA to deny ISPs safe harbor" protections from monetary liability, the Hendrickson vs. eBay Court and all others that followed have surmised that Congress could not have intended what it actually wrote.
As mentioned in the recent UMG vs. Veoh ruling, In Ellison vs. Robertson, the Ninth Circuit elaborated on and refined the District court's First Impression analysis, re: Hendrickson vs. eBay, as such.
"ISPs that do receive a financial benefit directly attributable to the infringing activity and that wish to avail themselves of subsection (c)'s safe harbor are required by 512(c)(1)(C) to delete or block access to infringing material. Yet in taking action they would, in Plaintiffs analysis, be admitting that they have the "right and ability to control" infringing activity, which under 512(c)(1)(B) would prevent them from qualifying for the subsection (c) safe harbor. It is conceivable that Congress intended that ISPs which receive a financial benefit directly attributable to the infringing activity would not, under any circumstances, be able to qualify for the subsection (c) safe harbor, But if that was indeed their intention, it would have been far simpler and much more straight forward to simply say as much. The court does not accept that Congress would express its desire to do so by creating a confusing, self-contradictory catch-22 situation that pits (512(c)(1) B) and 512(c)(1)(C) directly at odds with one another, particularly when there is a much simpler explanation: the DMCA requires more that the mere ability to delete and block access to infringing material after that material has been posted in order for the ISP to be said to have "the right and ability to control such activity."
But isn't it also possible that Congress may have "Dropped the ball", "Blew it", or just didn't understand what a nightmare it was creating? For argument's sake, where did Congress get the exact legal language "the right and ability to control the infringing activity", if not from secondary liability case law?
Please remember, we're not talking about just the future of billion dollar corporations like eBay, Amazon and Veoh, but also the very livelihood of thousands of copyright owners, so to just assume that Congress meant other than what it actually wrote is worry some to say the least. Now, allow me to humbly explain what is probably supposed to happen with regards third party infringements where, one party, the ISP has actually profited from the unlawful act that it facilitated.
First, as already acknowledged by the Ninth Circuit, the Honorable Judge Kelleher in his Hendrickson vs. eBay decision made a horrible mistake. According to the written Congressional Report, which spells out the exact procedure for applying the DMCA, section 512 of Title 17 Copyrights, a Judge is to first identify and rule upon the "direct" infringement for which secondary liability is sought. Then, and only thereafter, is an inquiry into the vicarious liability issue ripe for judicial consideration. if no "direct" infringement can be identified and ruled upon, the case is over. Secondary liability can only be attached to a "direct" infringement.
The language in Section 512 (c)(1) of Title 17 also supports the above explanation:
(1) In general. —A service provider shall not be liable for monetary relief, or, except as provided in subsection (j), for injunctive or other equitable relief, "for infringement of copyright"...
Clearly, the DMCA does not provide a "safe harbor" for ISPs to be immune from facilitating copyright infringement, but only to escape monetary liability, if certain conditions are met. So how did the train of Federal courts jump the tracks and crash, without any legal eagles and or law professors discovering the judicial mistake?
In Hendrickson vs. eBay, the defendant eBay submitted a Summary Judgment motion, but before the 'direct" infringements were ruled upon by Judge Kelleher. Then, in his excitement to be the first judge to hand down a definitive DMCA ruling, he sidestepped the issue of "direct" infringement and proceeded instead to whittle out a custom made decision to fit eBay's DMCA needs. In fact, the Judge's First impression Decision even mentions that it is going to address eBay's need for a DMCA ruling first. And there's a very good reason for dealing with the "direct" infringement issue first, as that can moot the issue of Congress not writing what it actually intended.
It also seems that the District court in UMG vs. Veoh, may have made the same fatal error. Without a clear understanding of the circumstances involved in a specific "infringement" there is no way for a court to properly determine whether the demanded DMCA prerequisites have been met. The DMCA's exact procedure for "finding the facts" is not only necessary to establish infringing activity, but to determine whether the ISP is liable monetarily for "willful" infringement. For instance, if an ISP was provided with a proper DMCA notice concerning a specific infringement, and did not expeditiously remove or disable access to the infringing material, the ISP can be held liable for "willful" infringement.
Once the "direct" infringement is decided upon, secondary liability can be attached if it is determined that the service provider received a benefit from the infringing activity, when it had the "right and ability" to stop the infringement from occurring, especially after it became aware of that specific infringing activity. In fairness, the direct infringing third party would be liable for the damages and a ISP party like eBay would be liable for the commission it made from the sale of the infringing article,
Otherwise, for an ISP like eBay to be allowed to enjoy unlawful and unjust enrichment for "it's" facilitation of copyright theft, is akin to rewarding the slave master for his legal cunning, cleverness and ability to crack a stiff whip. When the very cornerstone of American law is to help right a wrong, one might question how a Federal Court could even think that Congress didn't want for an ISP to at least give back it's unlawful earnings for contributing to infringing activity.
But, apparently the entire legal community and even the Ninth Circuit is in love with the Hendrickson vs. eBay DMCA Decision, so now here's the good part for us. Because it now appears to be well established that, there is no likelihood of an ISP to be found monetarily liable for its participation in infringing activity and because Hendrickson, like eBay is legally entitled to take full advantage of the Court's decisions, we're going "pay-per-view'' as originally planned.
That's right, but we have a business model that should knock some socks off. Not only will we post our own films for viewing, but you'll be able to post your own "exclusive" movies on one of our Exclusive Film Network websites, like ExclusiveMovies.com, or ExclusiveFilms.com and YOU will make half of the profits,
Soon you will also be able to post your own newsworthy videos on ExclusiveNews.com, for money! You can even be the news reporter, photographer et al. Your important photos can also be posted on ExclusivePhotos.com, etc. You can set your own price, post and get paid. Whether you are a filmmaker, journalist, movie studio, famous singer or actor, the Exclusive Film Network will provide a one stop Internet shop for you to expand your talents or business and make money too. Of course, if you're wealthy or just don't want the money, post your stuff for free on YouTube.
But the Exclusive Film Network will not be a portal for stupid videos or a place for "pirates" to violate and destroy others hard work, but an opportunity for talented folks to display their creativity. Maybe you are a public speaker who gives seminars or a special instructor who can give a web class. We will provide a worldwide arena, but it will be your show. You can upload your show and even promote it on ExclusivePreviews.com, and we will do the rest. With your imagination, the possibilities are endless.
Robert Hendrickson is now fine tuning his MANSON book and our signed DVDs are still available. When you buy from us, you help support the Exclusive Film Network, which is greatly appreciated.
This Time YOU will be the Judge and Jury
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