The 106; October 2003
Grokster wins one for the ISPs. The current version of Grokster does not “contributorily infringe”! so said the US District Court for the Central District of California in Metro-Goldwyn v. Grokster (April 25, 2003).
Generally , contributory copyright infringement requires one to demonstrate that an entity-s end-users are themselves engaged in direct copyright infringement (e.g., valid copyright plus access plus substantial similarity to the protected work ). The target of a suit for contributory infringement must be shown to have “knowledge of the infringing activity” or “that they induced, caused or materially contributed to the infringing conduct of another.”
While individuals are not off the hook, this decision gives ISPs and content providers a clearer road map to stay out of harms way. Individuals must still pause before late night downloading. Verizon and the RIAA have not given up on their subpoenas of individual infringers. (See In Re: Verizon) In fact, the court in Grockster found that some end-users (aka individuals) could be direct infringers.
C ontent providers and ISPs however can breath a bit easier — they can only be held to contributorily infringe if actual knowledge of specific infringement exists and if they “materially contributes to the alleged infringement, and can therefore do something about it.” Peer-to-peer providers should study this decision as a road map to avoid or limit liability.
Content owners beware! Because of Grokster, it will be harder to nail down the modern-day copying machine that spits out infringing copies at no cost. Copyright owners will have a more difficult time obtaining a TRO and preliminary injunction on the basis of contributory infringement. And going after each individual infringer is not an economical option. Photographers, authors, on-line software distributors must take extra steps to prevent and document the direct involvement of the ISP in the infringing activity. Although a copyright notice is not required for protection, singue use only technology ala Apple Music or watermark technologies should be carefully evaluated. How will you track your content?
Practice Points:
Napster, for example, materially contributed to the infringement because “without the support services defendant provides, Napster users could not find and download the music they want with the ease of which defendant boasts.” The Napster test likened Naptser to a swap meet. When reviewing your liability are you merely a passive conduit or:
1) Do you provide other services, like parking (virtual or physical), space, advertising, and clientele with the content you serve? Napster did. Napster, Inc. fell afoul because it “supplied the proprietary software, search engine, servers, and means of establishing a connection between users’ computers.”
2) Or are you more like a Grokster?
Grokster :
(i) has no access to the source code for the FastTrack software application and cannot alter it; and
(ii) does not operate a central file-sharing network but rather uses “super nodes.”
What makes Grokster different is the use and connection of preset with a list of “root supernodes,” each of which functions principally to connect users to the network by directing them to active supernodes.” While Napster was in control of the connection, “when users search for and initiate transfers of files using the Grokster client, they do so without any information being transmitted to or through any computers owned or controlled by Grokster.”
Reality of Music and the Web. The record industry is going to miss the point if they have not already. Two things occur before the CD is relegated to the life of vinyl: artists empowered to distribute directly to fans and technology that can deliver high quality digital downloads and that record companies can accept. Apples Music Store has solved the second quite elegantly although not all record companies have joined. Sonys competitive solution has not drawn the same attention. Artists depend on record companies to promote their mousic. Like good food, music needs a promoter. Because that role is so essential in a national market, record companies are here to stay in one for or another. I expect them to look more like movie studios do now after the old Hollywood stable system ended. Artists are ripped off in the mean time however. If music goes the way of television — with ads intersperced — we are in even deeper trouble culturally. In the meantime, give me a many gigabyte hard drive and Apple Music.
Identify and Deal with Problematic Business Relations (or Prepare to Litigate) Business relationships are like gardens, they take planning to work, require care and often must be weeded or repaired. Sales people tout that 90% of your future revenues will derive from your existing customers so one should do a better job communicating with existing customers for new business. The same may be said about risk. More risk exists from your existing relationships than from the likelihood that some third-party will raise a dispute. Business have given a lot of thought to disaster recovery. Usually they think of natural or 9/11 type disasters. But what type of disaster recovery plan do you have if a key relationship fails?
Action Plan: Few ever think of having a plan in the event things with a customer, supplier or partner show signs of a problem. We can all easily point to the signs — instantly returned emails yesterday go unanswered for an odd amount of time, the tone of their voice changes, new people show up being ccd, hesitations appear everywhere. We all depend on others to run our business and problems are inevitable. Talk internally about an action plan in the event a problem arises. Do not wait until it becomes a dispute.
1) Problem owners. Identify the key person in your organization that should own customer, partner, supplier problems. Identify a small chain of people internally that should provide input, information and contribute to a decision about problems. The goal should almost always be to diffuse them. Customers hate the run around. If you can empower your most-customer facing employee to resolve simple issues do it. If you cannot, have clear escalation make the buck stop or you will lose the customer. There is no better feeling on the basic level when some one says “I am sorry for the trouble, I would like to offer you a credit of that fee.” Customers want ownership of problems. You know as a customer what good customer service feels like. Use those experiences as your guide in partnerside relationships too. If you do not do this, you will need me sooner than you think.
2) Listen. The signs of a relationship are there but you must be listening. If you do not get good information from the field, you are asking the wrong questions. Teach active listening in your company. Investors must dig deeper when answers from management are always acceptable but results do not jibe with their words. Investors should take the time to talk down a level to get the truth.
2) Solve easy problems quickly. You are running a business, you are not running a litigation practice (leave that to me). Identify easy problems quickly and solve them. The message should almost always be, “we are sorry about what happened and we want to work with you, let us look at how to fix it.” Naive you say? I beg to differ. Ownership if problems is the quickest way to avoid a dispute. I am not advising you to take responsibility or to accept blame where it is not due (or to take it at all). I am asking you to connect with your customer, partner, supplier on a human level. Remember, disputes with entities are disputes with people. And these are people with whom you chose to do business. Of course, as we do business we often learn that the relationship is not perfect but put your ego aside. Identify the simple problems and get rid of them.
3) The difficult balance. When a server goes down on your watch there is a difficult balance between repairing the problem and documenting what caused the crash. If you plan now about how to set those priorities, both goals can be accomplished. If it is your partner or customers server their priority is clear. If it is your data on a server run by someone else, your priority is clear. It is not only how you solve the problem but how people feel about your solution that counts.
4) Know when to change gears. Things get bad quickly so do not be caught unprepared. Read the signs and prepare yourself and your organization. How will you document damages? How will they? Do you have a document retention policy? How should you talk about disputes over email internally as they brew? How about instant messaging technologies? Do your customer facing employees use them with customers and if so, what types of things should and should not be said?
Create your action plan now. Do not wait.
Grokster wins one for the ISPs. The current version of Grokster does not “contributorily infringe”! so said the US District Court for the Central District of California in Metro-Goldwyn v. Grokster (April 25, 2003).
Generally , contributory copyright infringement requires one to demonstrate that an entity-s end-users are themselves engaged in direct copyright infringement (e.g., valid copyright plus access plus substantial similarity to the protected work ). The target of a suit for contributory infringement must be shown to have “knowledge of the infringing activity” or “that they induced, caused or materially contributed to the infringing conduct of another.”
While individuals are not off the hook, this decision gives ISPs and content providers a clearer road map to stay out of harms way. Individuals must still pause before late night downloading. Verizon and the RIAA have not given up on their subpoenas of individual infringers. (See In Re: Verizon) In fact, the court in Grockster found that some end-users (aka individuals) could be direct infringers.
C ontent providers and ISPs however can breath a bit easier — they can only be held to contributorily infringe if actual knowledge of specific infringement exists and if they “materially contributes to the alleged infringement, and can therefore do something about it.” Peer-to-peer providers should study this decision as a road map to avoid or limit liability.
Content owners beware! Because of Grokster, it will be harder to nail down the modern-day copying machine that spits out infringing copies at no cost. Copyright owners will have a more difficult time obtaining a TRO and preliminary injunction on the basis of contributory infringement. And going after each individual infringer is not an economical option. Photographers, authors, on-line software distributors must take extra steps to prevent and document the direct involvement of the ISP in the infringing activity. Although a copyright notice is not required for protection, singue use only technology ala Apple Music or watermark technologies should be carefully evaluated. How will you track your content?
Practice Points:
Napster, for example, materially contributed to the infringement because “without the support services defendant provides, Napster users could not find and download the music they want with the ease of which defendant boasts.” The Napster test likened Naptser to a swap meet. When reviewing your liability are you merely a passive conduit or:
1) Do you provide other services, like parking (virtual or physical), space, advertising, and clientele with the content you serve? Napster did. Napster, Inc. fell afoul because it “supplied the proprietary software, search engine, servers, and means of establishing a connection between users’ computers.”
2) Or are you more like a Grokster?
Grokster :
(i) has no access to the source code for the FastTrack software application and cannot alter it; and
(ii) does not operate a central file-sharing network but rather uses “super nodes.”
What makes Grokster different is the use and connection of preset with a list of “root supernodes,” each of which functions principally to connect users to the network by directing them to active supernodes.” While Napster was in control of the connection, “when users search for and initiate transfers of files using the Grokster client, they do so without any information being transmitted to or through any computers owned or controlled by Grokster.”
Reality of Music and the Web. The record industry is going to miss the point if they have not already. Two things occur before the CD is relegated to the life of vinyl: artists empowered to distribute directly to fans and technology that can deliver high quality digital downloads and that record companies can accept. Apples Music Store has solved the second quite elegantly although not all record companies have joined. Sonys competitive solution has not drawn the same attention. Artists depend on record companies to promote their mousic. Like good food, music needs a promoter. Because that role is so essential in a national market, record companies are here to stay in one for or another. I expect them to look more like movie studios do now after the old Hollywood stable system ended. Artists are ripped off in the mean time however. If music goes the way of television — with ads intersperced — we are in even deeper trouble culturally. In the meantime, give me a many gigabyte hard drive and Apple Music.
Identify and Deal with Problematic Business Relations (or Prepare to Litigate) Business relationships are like gardens, they take planning to work, require care and often must be weeded or repaired. Sales people tout that 90% of your future revenues will derive from your existing customers so one should do a better job communicating with existing customers for new business. The same may be said about risk. More risk exists from your existing relationships than from the likelihood that some third-party will raise a dispute. Business have given a lot of thought to disaster recovery. Usually they think of natural or 9/11 type disasters. But what type of disaster recovery plan do you have if a key relationship fails?
Action Plan: Few ever think of having a plan in the event things with a customer, supplier or partner show signs of a problem. We can all easily point to the signs — instantly returned emails yesterday go unanswered for an odd amount of time, the tone of their voice changes, new people show up being ccd, hesitations appear everywhere. We all depend on others to run our business and problems are inevitable. Talk internally about an action plan in the event a problem arises. Do not wait until it becomes a dispute.
1) Problem owners. Identify the key person in your organization that should own customer, partner, supplier problems. Identify a small chain of people internally that should provide input, information and contribute to a decision about problems. The goal should almost always be to diffuse them. Customers hate the run around. If you can empower your most-customer facing employee to resolve simple issues do it. If you cannot, have clear escalation make the buck stop or you will lose the customer. There is no better feeling on the basic level when some one says “I am sorry for the trouble, I would like to offer you a credit of that fee.” Customers want ownership of problems. You know as a customer what good customer service feels like. Use those experiences as your guide in partnerside relationships too. If you do not do this, you will need me sooner than you think.
2) Listen. The signs of a relationship are there but you must be listening. If you do not get good information from the field, you are asking the wrong questions. Teach active listening in your company. Investors must dig deeper when answers from management are always acceptable but results do not jibe with their words. Investors should take the time to talk down a level to get the truth.
2) Solve easy problems quickly. You are running a business, you are not running a litigation practice (leave that to me). Identify easy problems quickly and solve them. The message should almost always be, “we are sorry about what happened and we want to work with you, let us look at how to fix it.” Naive you say? I beg to differ. Ownership if problems is the quickest way to avoid a dispute. I am not advising you to take responsibility or to accept blame where it is not due (or to take it at all). I am asking you to connect with your customer, partner, supplier on a human level. Remember, disputes with entities are disputes with people. And these are people with whom you chose to do business. Of course, as we do business we often learn that the relationship is not perfect but put your ego aside. Identify the simple problems and get rid of them.
3) The difficult balance. When a server goes down on your watch there is a difficult balance between repairing the problem and documenting what caused the crash. If you plan now about how to set those priorities, both goals can be accomplished. If it is your partner or customers server their priority is clear. If it is your data on a server run by someone else, your priority is clear. It is not only how you solve the problem but how people feel about your solution that counts.
4) Know when to change gears. Things get bad quickly so do not be caught unprepared. Read the signs and prepare yourself and your organization. How will you document damages? How will they? Do you have a document retention policy? How should you talk about disputes over email internally as they brew? How about instant messaging technologies? Do your customer facing employees use them with customers and if so, what types of things should and should not be said?
Create your action plan now. Do not wait.