Concerned About Fair Use in Copyright Law? Then Say What You Mean

According to a new report released today by the Institute for Policy Innovation (IPI), it is misleading to complain about "fair use" obstructions in copyright without specifying what type of fair use is being abused.

"Those claiming that 'fair use is hurt' by legislation, litigation or technology need to say what they mean when they talk about fair use, identifying the types of use that will be affected and justifying why that use is fair," says Lee A. Hollaar, author of the IPI report "What's Fair?" and professor of computer science at the University of Utah.

"Without doing so, it is impossible for those proposing legislation to try to meaningfully consider fair use."

Too often, fair use discussions stop at the "fair use" reference and do not identify a "particular use," a "transformative fair use," an "economic fair use," or a "fair use of necessity."

Take the Digital Millennium Copyright Act (DMCA), for example. Critics often rail about the bill's supposed "fair use restrictions" like preventing film critics from copying movie scenes into a review, or inhibiting instructors from creating a compilation disk of movie scenes for students.

Measured against a specific type of fair use abuse, these DMCA complaints have no grounding. These criticisms are more restrictions on convenience rather than a particular fair use concern, and "Convenience is not a part of the fair use analysis," reminds Hollaar.

Hollaar concludes: "Without knowing the nature of the fair use allegedly being hurt, it is impossible to assess valid arguments, or whether there are alternatives to lessen the impact of the restrictions."

The Institute for Policy Innovation (IPI) is a national, free-market think-tank based in Dallas, TX. Copies of the report, "What's Fair," are available online at http://www.ipi.org

Two Defendants Plead Guilty In Internet Music Piracy Crackdown

Two defendants pleaded guilty to conspiracy to unlawfully reproduce and distribute copyrighted music over the Internet.

Arthur Gomez, 25, of La Habra, Calif., pleaded guilty before U.S. District Judge Leonie M. Brinkema. His sentencing has been scheduled for July 13, 2007, at 9:00 a.m. Sergey Ribiakost, 21, of Bardonia, N.Y., pleaded guilty on April 17, 2007, before U.S. District Judge James C. Cacheris. His sentencing is scheduled for July 10, 2007, at 1:00 p.m. Both defendants pleaded guilty to one count of conspiracy to commit copyright infringement and face up to five years in prison, a fine of $250,000, and three years of supervised release.

Gomez and Ribiakost were leading members in the illegal software, game, movie and music trade online, commonly referred to as the warez scene. The defendants were active members of the pre-release music group Apocalypse Crew (APC), one of a handful of organized online criminal groups that acted as "first-providers" of much of the pirated music available on the Internet.

Ribiakost and Gomez represent the 46th and 47th convictions resulting from Operation FastLink, an ongoing federal crackdown against the organized piracy groups responsible for most of the first stage of illegal distribution of copyrighted movies, software, games and music on the Internet.

Operation FastLink has resulted, to date, in more than 120 search warrants executed in 12 countries; the confiscation of hundreds of computers and illegal online distribution hubs; and the removal of more than 50 million dollars worth of illegally copied software, games, movies and music from illicit distribution channels. Operation FastLink is the culmination of multiple FBI undercover investigations, including an investigation into online pre-release music groups led by FBI agents from the Washington field office.

Reports of Spider-Man 3 Piracy

Statement from Sony Pictures Entertainment Regarding Reports of Spider-Man 3 Piracy:

Contrary to news reports about stolen copies of Spider-Man 3 being sold illegally on the streets in China, our investigation in China has revealed no case of the film being pirated to date.
Similar hoaxes and false alarms have occurred prior to the release of other major films. We have uncovered examples of Spider-Man 2 being sold in Spider-Man 3 boxes in China. But thus far we can find no instance where Spider-Man 3 has appeared on DVD.

In addition, after an initial investigation of online sites worldwide, we have so far found no pirated copies of Spider-Man 3 on the Internet.

This incident underscores one of the problems with piracy -- people who buy illegal movies often get ripped off themselves.

Operator of For-Profit Software Piracy Web Site Sentenced to 24 Months in Prison

The owner of a massive for-profit software piracy Web site was sentenced in federal court to 24 months in prison.

Ronnie A. Knott, 36, of Salt Lake City, was convicted of criminal copyright infringement and sentenced by U.S. District Court Judge Gerald Bruce Lee to serve 24 months in prison to be followed by three years of supervised release.

Beginning in at least early 2005 and continuing until its shutdown by the FBI in May 2006, Knott operated a business called both "Smart PC" and "CDBackups," which provided paid "subscribers" access to infringing copies of software products that were copyrighted by companies such as Adobe Systems Inc., Apple Computer Inc., Microsoft Corporation, and Symantec Corporation. Subscribers paid as much as $125 per month in order to gain unlimited access to all the software on the site, which they could download freely. Knott admitted that he received approximately $20,000 in "subscription fees" for providing this access.

The investigation, which was conducted by agents of the FBI's Washington Field Office, involved an undercover agent who became a subscriber to Knott's service and was able to download more than $30,000 worth of pirated software. Using evidence of the FBI's undercover purchases as probable cause, Knott's operation was taken down in May 2006. Further investigation established that Knott had illegally reproduced copyrighted software with a retail value of nearly $2.5 million.

Extradited Software Piracy Ringleader Pleads Guilty

The leader of one of the oldest and most renowned Internet software piracy groups has pleaded guilty to criminal copyright infringement charges, in one of the first ever extraditions for an intellectual property offense.

Hew Raymond Griffiths, 44, a British national living in Bateau Bay, Australia, was extradited from Australia in February 2007 to face criminal charges in U.S. District Court in Alexandria, Va. He pleaded guilty today before U.S. District Judge Claude M. Hilton to one count of conspiracy to commit criminal copyright infringement and one count of criminal copyright infringement. If convicted on both counts, Griffiths could receive a maximum sentence of 10 years in prison and a $500,000 fine. Prior to his arrival in the United States, he had spent nearly three years incarcerated at a detention center in Australia while fighting his extradition in Australian court. Judge Hilton set a sentencing date for June 22, 2007 at 9:00 a.m.

Griffiths was the leader of an organized criminal group known as DrinkOrDie, which had a reputation as one of the oldest security-conscious piracy groups on the Internet. DrinkOrDie was founded in Russia in 1993 and expanded internationally throughout the 1990s. The group was dismantled by the Justice Department and U.S. Immigration and Customs Enforcement as part of Operation Buccaneer in December 2001, with more than 70 raids conducted in the U.S. and five foreign countries, including the United Kingdom, Finland, Norway, Sweden and Australia. To date, Operation Buccaneer has resulted in more than 30 felony convictions in the United States and 11 convictions of foreign nationals overseas. Prior to its dismantling, DrinkOrDie was estimated to have caused the illegal reproduction and distribution of more than $50 million worth of pirated software, movies, games and music.

Griffiths, known by the screen nickname "Bandido," was a longtime leader of DrinkOrDie and an elder in the highest echelons of the underground Internet piracy community, also known as the warez scene. He held leadership roles in several other well-known warez groups, including Razor1911 and RiSC. In an interview published in December 1999 by an online news source, he boasted that he ran all of DrinkOrDie's day-to-day operations and controlled access to more than 20 of the top warez servers worldwide. In fact, Griffiths claimed to reporters that he would never be caught.

Griffiths admitted that he oversaw all the illegal operations of DrinkOrDie, which specialized in cracking software and distributing the cracked versions over the Internet. Once cracked, these software versions could be copied and used without limitation. Members stockpiled the illegal software on huge Internet computer storage sites that were filled with tens of thousands of individual software, game, movie and music titles worth millions of dollars. The group used encryption and an array of other sophisticated technological security measures to hide their activities from law enforcement.

This case was investigated by the Washington field office of U.S. Customs and Immigration Enforcement (ICE) in conjunction with the Customs Cybercenter in Fairfax, Va.

This case is being prosecuted by Deputy Chief Michael DuBose and trial attorney Jay Prabhu of the Criminal Division's Computer Crime and Intellectual Property Section, and Assistant U.S. Attorney Robert Wiechering of the Eastern District of Virginia.

Copyright Infringement Detection for Online Video

Autonomy Corporation plc has released Virage Automatic Copyright Infringement Detection (ACID). Virage ACID enables copyright owners such as broadcasters, production houses and publishers to maintain control of their Intellectual Property by automating the detection of illegal distribution of copyrighted material on the Internet.

ACID offers a fast, accurate and scalable method of detecting breaches of copyright, wherever they are located and whatever format they are in. By automatically detecting any rich media that infringes an organization's copyright, Virage ACID eliminates the need for content owners to spend hours trawling through video sharing websites, or manually scanning p2p file contents.

Unlike many Digital Rights Management solutions, the system does not rely on watermarking and so is not undermined by random noise or format and codec changes.

Fifth Guilty Plea in P2P Piracy Crackdown

A fifth defendant has pleaded guilty in connection with Operation D-Elite, the first criminal enforcement action targeting individuals committing copyright infringement on a peer-to-peer (P2P) network using BitTorrent technology, Assistant Attorney General Alice S. Fisher of the Criminal Division and U.S. Attorney Eric F. Melgren for the District of Kansas announced today.

Sam Kuonen, 24, of Columbus, Ga., pleaded guilty to a two-count felony information charging him with conspiracy to commit criminal copyright infringement and criminal copyright infringement in violation of the Family Entertainment Copyright Act. The plea was entered before Judge Carlos Murguia, U.S. District Court Judge for the District of Kansas. Mr. Kuonen faces up to five years in prison, a fine of $250,000, and three years of supervised release. He is scheduled to be sentenced on July 16, 2007 at 10:30 a.m.

On May 25, 2005, federal agents shut down the Elite Torrents network by taking control of its main server. After seizing the server, authorities replaced the existing Web page with a law enforcement message announcing that "This Site Has Been Permanently Shut Down by the Federal Bureau of Investigation (FBI) and U.S. Immigration and Customs Enforcement (ICE)." Within only one week, the law enforcement message was viewed over half a million times.

The Copyright Law Act of 1976

The Copyright Law Act of 1976 defines "works of authorship" to include all of the following:

* Musical works
* Literary works
* Dramatic works
* Pictorial, sculptural and graphics
* Motion Pictures and Audiovisuals
* Sound Recordings
* Choreographic Works and Pantomimes
* An eighth work which falls under "architectural works" was later added in 1990.

What is unique about the United States copyright law is that it is automatic. Once someone has an idea and produces it in tangible form, the creator is the copyright holder and has the authority to enforce his exclusivity to it. In other words, the person is the owner of the creation. It is not necessary that a person register their work. However, it is recommended and it can serve as evidence if someone ever violates a copyright.

Read more: The Copyright Law Act

Indiana Resident Sentenced to 27 Months for Selling More Than $700,000 Worth of Counterfeit Software on eBay

An Indiana man has been sentenced to 27 months in prison for selling more than $700,000 worth of counterfeit computer software on the eBay Internet auction site, Assistant Attorney General Alice S. Fisher of the U.S. Justice Department's Criminal Division and Susan W. Brooks, U.S. Attorney for the Southern District of Indiana, announced today.

Courtney Smith, 36, of Anderson, Ind., was sentenced today by U.S. District Judge Sarah Barker of the Southern District of Indiana for selling counterfeit computer software over the Internet in violation of criminal copyright infringement laws. At today's guilty plea and sentencing, Smith admitted that he purchased counterfeit Rockwell Automation computer software through the eBay Internet auction site and then duplicated and resold the copyright protected software to other eBay users. Between March 6 and May 26, 2004, Smith sold counterfeit copies of Rockwell Automation software in 32 or more separate eBay auctions, receiving $4,149.97. The actual retail value of this software was in excess of $700,000.

"Mr. Smith exploited eBay to sell hundreds of thousands of dollars worth of counterfeit software at drastically reduced prices, thereby illegally profiting on the back of the copyright holder," said Assistant Attorney General Fisher. "The Department of Justice is committed to prosecuting individuals who exploit legitimate online auction sites to sell pirated software and commit other acts of fraud."

The case arose from a Department of Justice initiative to combat online auction piracy. FBI agents executed a search warrant at Smith's residence in Anderson on Dec. 15, 2004, seizing numerous computers, CDs and other devices used to manufacture the counterfeit software and sell it on eBay. Smith admitted to the investigators that he knew it was illegal to sell copyrighted software and that he not only manufactured and sold the counterfeit software on eBay, but also made his own Rockwell Automation Software labels to affix to the counterfeit software.

Smith has forfeited the computers and other equipment used in the offense and will make restitution to Rockwell Automation in the amount of $5,200.45. Judge Barker also ordered Smith to pay a $2,000 fine and serve two years of supervised release upon completion of his term of incarceration.

The case was investigated by the FBI's Milwaukee Field Office in Milwaukee, Wis. The case was prosecuted for the government by Trial Attorney Matthew J. Bassiur of the Computer Crime and Intellectual Property Section of the Criminal Division at the U.S. Department of Justice, and Assistant U.S. Attorney Steven DeBrota of the Southern District of Indiana.

New York Attorney Establishes Free Copyright and Trademark Blog

New York intellectual property attorney Trebor Lloyd has established a blog, Trebor's Bite-Sized Bits featuring easily digestible information on copyright, trademark and other related areas of law--a blog that is specially aimed as a primer to give a basic background to lay persons who need some understanding of these topics in their art or business.

Trebor Lloyd, a veteran of New York law firms and owner of a small independent record label, has seen the importance of the law of copyright, trademark and the right of publicity in a world which has become increasing media-driven and has soared off into cyberspace.

"What I think struck me most when I spoke to lay persons, and very intelligent lay persons at that, were the many basic misunderstandings, misconceptions and 'urban myths' about the basics of copyright and trademark law and such related fields as the right of publicity and unfair competition. I thought it might be a useful service to provide a place where a lay person could pick up a very basic background in copyright and trademark concepts--and get it all in easily digestible chunks over a period of time," says Lloyd.

Thus was born Trebor's Bite-Sized Bits, a free blog that provides a very simple background on issues in these areas of law and then intends to build on that basic understanding, using it as a base to eventually explore new developments of interest to artists, musicians, photographers, small media businesses and others who might find some grounding in the law useful.

Hollywood's Bleeding From Internet Piracy

SafeMedia Corporation, based in Boca Raton, Florida has developed technology that completely wipes out illegal file sharing. "SafeMedia's 'Clouseau®' makes it impossible for anyone to send or receive any illegal Peer-2-Peer transmissions or file sharing," said President Safwat Fahmy, the founder and CEO of SafeMedia Corporation. "Clouseau® examines all incoming and outgoing packets of information, destroys all illegal P2P while legal P2P goes to its desired location without any delay." SafeMedia has retained MAYO Communications, Los Angeles to help spread the word that its core technologies are the best and only solution to ending Online piracy.

"Current technology is worthless in stopping P2P piracy," he explained. "What was needed is a totally new approach in system architecture, and the Clouseau® is the best-of-breed Internet Piracy Prevention solution. It was designed from scratch specifically to stop all P2P Internet piracy no matter where it originates world wide."

According to a study released this year by the Los Angeles County Economic Development Corporation (LAEDC), state and local governments lose three times from piracy. First, they lose the sales taxes that should have been paid on the copied items. Next, they lose additional taxes when lost business revenues translate into lower spending and fewer jobs. And third, they bear the increased police, court, and prison costs associated with combating counterfeiting and related criminal activity.

The MPAA commissioned study reveals that the sound recording industry lost billions to piracy in 2005: sales of pirated music CDs were worth an estimated $4.5 billion and there were about 20 billion illegal downloads," said Study Author Greg Freeman, vice president, Public Policy and Consulting, LAEDC.

"Valuing the illegal downloads is trickier still, yet even a modest value of 10 cents per song suggests further industry losses of $2 billion," explained Freeman. "Global sales (physical and digital) of music in 2005 were $33.5 billion, with The Recording Industry Assn. of America (RIAA) members (U.S. companies) accounting for about 37 percent of the sales. Assuming a proportionate share of the global losses suggest U.S. firms lost $2.4 billion to piracy in 2005. Using the Los Angeles County's share of national employment in the sound recording industry (36 percent) suggests losses to L.A. County of $851 million."

"The technology moves through multi-layered encryptions, analyzes network patterns and updates itself frequently," explained Fahmy. "The packet examinations are noninvasive and foolproof. Clouseau® prevents the illegal back and forth flow of copyrighted files like you would find through LimeWire, Morpheus or eMule. This technology prevents a real loss to the industry."

Advanced technology and a unique approach to fingerprinting and DNA markers created by SafeMedia allow the thorough examination of all incoming and outgoing packets: illegal P2P is eradicated, while legal P2P passes along to its destination with no measurable delay.
At the industry level, the RIAA has threatened some of the nation's top universities with copyright infringement lawsuits, and hundreds of pre-litigation letters have been sent to students who have illegally downloaded thousands of songs. They've been given the option of settling for $3,000 - $5,000 or face lawsuits for up to $750 per song or more than $1 million in fines.

"For the first time ever, policy makers have the solution to insure compliance with the law. Businesses, universities, organizations and Internet users can comply in a friendly, positive environment without expensive and hostile legal action enforcement. Copyright holders can finally make the Internet available as a safe, viable distribution channel for all content industries," said Fahmy.

Website: www.SafeMediaCorp.com

Software License Awareness Day is April 10, 2007

Wasatch Software, a national reseller of information technology products, is sponsoring Software License Awareness Day on April 10 to inform organizations of the legal risks involved with software licensing. Software license agents from Wasatch Software will be available throughout 'Software License Awareness Day' to help address any potential issues for organizations interested in participating.

The use of software without proper licensing is a copyright infringement. If a software publisher brings civil action against an organization, it may face up to $150,000 in damages for each software program being used illegally. Also, organizations of all sizes can be held liable for employees' actions even if management was not aware.

See www.wasatchsoftware.com for more information

Five Email and Document Management Strategies Key to Reducing Litigation Costs

Smoking-gun documents and emails have been at the heart of the world's best known corporate legal battles, but the risks of information in litigation have suddenly grown with new U.S. Federal guidelines for e-discovery. How can companies get a handle on the exploding volume of online content to better address the costs and risks of litigation? Open Text(TM) Corporation, a leading provider of software that helps companies manage their growing stores of emails and documents, today released a list of five key technology strategies for litigation and e-discovery readiness that can help companies be as prepared in the courtroom as in the boardroom.

How can companies leverage this technology, sharpen their ability to manage information, and better respond to discovery requests? According to Open Text Executive Vice President Bill Forquer , these five key strategies can make all the difference:

- Define defensible policies: Map the governing regulations and internal requirements to the process of identifying what email or document constitutes a record. What is and isn't a record? How long should a record be kept or how long must it be kept? Does it need to be stored on a specific media? Kept in a specific location? Do your policies take into account metadata associated with records?

- Enforce policies with records management: Move policies from theory to practice with a completely automated and secure process for identifying, retaining, and destroying records. Key considerations: When does a document become a record? How do you capture the right amount of content? How do you accommodate multiple regulations or court cases concurrently? Do users need to continue to work with records or can they be offloaded into an isolated system?
- Centrally control all enterprise content: Establish control over all enterprise content without changing the way users work with content- including emails and documents in Microsoft Exchange and Microsoft SharePoint. Consider the following issues: How do you make records management a seamless part of the way users work? Can you describe all enterprise content in the same terms, no matter where it lives? How do you ensure that a legal hold or discovery procedure is spanning all relevant corporate content? Can you easily extend today's policies to tomorrow's potential information systems and repositories?

- Retain business records: Manage the cost-effective, physical storage of records in a compliant fashion while destroying non-records appropriately. Key considerations: How do you ensure that records are archived in a compliant manner? Does your accounting firm mandate specific storage methodologies for your records? Can you ensure admissibility by proving content has not been tampered with? Do you have a plan for storage systems that can store records for decades, outliving their host media?

- Extend with litigation support: Accelerate the collection, preservation, review and coding, and production of corporate records as evidence. Are your enterprise content repositories and records management practices fully integrated with your process for retrieving, coding, reviewing, and processing responsive content? Can you export content into the litigation support application without creating duplicate copies of records? When a case concludes, can you assuredly disable any holds placed on responsive content and automatically resume retention and disposition lifecycles?

Open Text and partner TCDI, a market leader in large-scale electronic discovery and litigation case management, recently introduced a combined software solution called http://www.opentext.com/2/pro-ll-litigation-management.

Content Protection Will Exceed $9 Billion Over Five Years

Spending on digital rights management (DRM) software and hardware to protect entertainment, commercial software, and other information will exceed $9 billion dollars over the next five years, says a new market research report from Insight Research Corp. By the close of 2007, total worldwide spending on DRM will reach just over $1 billion, and by 2012 business spending is forecasted to grow to nearly $1.9 billion, according to the new research study.

According to Insight's newly-released market analysis report, "Wireline and Wireless Digital Rights Management: Securing Content Distribution 2007-2012," DRM involves the combination of software and hardware technologies that enable the content owner and distributors to assign and control rights and conditions for viewing, listening, and employing the content present in digital media and applications -- be it a song, a movie, a medical or financial record, or a software game. The study focuses on the use of DRM by wireline retail users, wireless retail users, TV and home entertainment network (HEN) users, software application retail users, as well as software application corporate users. The report notes that as the value of digital content increases, applications of DRM will increase, though at a slower rate than the value of content based on the fact that DRM pricing is not tied to the value of the protected content.

"DRM evolved over the last two decades to serve corporations that needed a means to deal with information piracy, peer-to-peer file sharing, and various regulatory requirements. So in a sense DRM did not arise to meet the needs of end users, and in fact, it may be said to have evolved to spite the end user," says Robert Rosenberg, President of Insight. "While organizations like Creative Commons have emerged to balance the respective -- and sometimes conflicting -- rights of artists and creators, media companies, and individuals who share content, by and large the focus of the DRM industry is to protect the rights of the owner of the content, not the end user," Rosenberg concludes.

A free report excerpt, table of contents, and ordering information is available online at http://www.insight-corp.com/reports/WWD.asp. This 188-page report is available immediately for $3,995 (hard copy). Adobe Acrobat (PDF) report licenses are also available.