File sharing and the law

File sharing and the law

The legal issues in file sharing involve violation of copyright laws as digital copies of copy-written materials are transferred between users.

The debate on peer to peer and file sharing is a virtually global phenomenon. Peer to peer ("P2P") technology allows people worldwide to share files and data; however a significant proportion of the data shared is material passed freely between users that is (or should legally be) subject to copyright or other restrictions. Different legal systems, and different technologies, handle this differently. Some of the key background and distinctions are as follows:

* P2P file sharing is used both legitimately (to distribute with permission or non-copyright materials), and illegitimately (in breach of copyright). It is highly popular and effective, with some estimates being that 15 - 35% of all internet traffic is P2P usage in some form or other. Fact|date=September 2007

* P2P systems vary - some rely upon a centralized server, others are decentralized with no one site operating the system. Recent systems often have anonymity or obfuscation built in, making it harder to identify senders, recipients and material, and providing a degree of plausible deniability.

* In some file sharing systems, the owner of a sharing system directly distributes files themselves. In others, notably BitTorrent, the organizer is not in fact distributing any copyright material. rather, they act like a cataloger or co-ordinator, indexing files rather than themselves offering any such material. A typical such file might provide a filename, a location it can be downloaded from, and various checksums which can be used to verify the file's integrity when downloaded. It does not, itself, contain any media material, whether legal or otherwise.

Legal issues relevant to file sharing

The challenges facing copyright holders in the face of file sharing systems are quite novel historically and have highlighted many new challenges in both theory and practice:
* Ambiguities in the interpretation of copyright law
* The new challenges posed by international communications and varying legislations
* Mass litigation and the development of processes for evidence and discovery
* Rapidly developing new technologies and uses
* Low barriers to entry by would-be sharers and the development of a mass usage of the technologies
* File sharing approaches developed in response to litigation against sharers, which obfusticate or hide the fact that sharing is happening, or the identities of those involved. For example: encryption and Darknets.

Copyright law in United States

Copyright law

A copyright in the United States consists of the rights enumerated under 17 USC 106. [ [ 17 USC 106] ]

The four largest record companies, working together under the leadership of the RIAA, seek to stop peer to peer file sharing by attacking the use of 'shared files folders'. They claim that the making of files available for sharing on a P2P network infringes on their right under 17 USC 106(3) "to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending". Critics have argued that the RIAA has failed to show (a) dissemination, (b) of actual phonorecords or copies, (c) "to the public" (as opposed to a limited group), or any (d) sale, transfer of ownership, rental, lease, or lending..... all of which are required components of a 17 USC 106(3) "distribution".

The Basic Copyright Law Issues

At this time the development of the law in this area is in its infancy.

In the United States, for example, a record industry trade association, the RIAA, on behalf of the four (4) largest worldwide record companies, has launched an estimated 30,000 cases over a 4-year period, all against people whose internet access accounts have, according to the plaintiffs, been associated with peer-to-peer file sharing accounts using FastTrack technology, e.g., Kazaa, LimeWire, Gnutella, iMesh, and others. The suits are based upon a report of an internet investigator who claims to have detected a "shared files folder". At the core of these cases is the allegation that the defendants "made available for distribution" the song files in a shared files folder. See, e.g. "Elektra v. Barker" [ [ Elektra v. Barker] ] and "Warner v. Cassin" [ [ Warner v. Cassin] ] , two pending cases in which the legal viability of that accusation has been tested, for an examination of the legal issues. So far only one case against an alleged infringer is known to have gone to trial [ [ Capitol v. Thomas (Duluth, MN)] ] . No fully contested cases are known to have been determined by a trial, summary judgment motion, or otherwise. The trial which did go forward took place in October, 2007. Although it initially resulted in a verdict of $222,000 for "making available" 24 song files having a total retail value of $23.76, or less, the Judge who presided over the trial overturned the verdict, on the ground that his submission of the case to the jury under the RIAA's "making available" theory was a "manifest error of law". [ [ "RIAA's $222,000 verdict in Capitol v. Thomas set aside. Judge rejects 'making available'; attacks excessive damages."] , Recording Industry vs. The People, September 24, 2008.] He also criticized the size of the verdict as "wholly disproportionate" to the damages, and urged Congress to amend the Copyright Act to prevent the possibility of a recurrence.

Subsequent to the "Thomas" trial, and prior to the decision setting the verdict aside, the Courts in "Atlantic v. Brennan" [ [ Atlantic v. Brennan] ] , "Elektra v. Barker" [ [ Elektra v. Barker] ] , above, "Atlantic v. Howell" [ [ "RIAA summary judgment motion denied in Atlantic v. Howell; RIAA 'making available' theory & Judge Karas 'offer to distribute' theory rejected"] , Recording Industry vs. The People, April 29, 2008] , and "London-Sire v. Doe 1" [ [ London-Sire v. Doe 1] ] , had rejected the RIAA's "making available" theory. [See discussion of the first three of these cases at [ “The Recent Making Available Cases”] , William F. Patry, The Patry Copyright Blog, April 3, 2008, and of the fourth, "Atlantic v. Howell", at [ "Atlantic Recording Corp. v. Howell"] "Id.", April 30, 2008] . But in "Barker" the judge had suggested to the RIAA another theory which it might plead -- "offering to distribute for purposes of redistribution". This theory, based on the legislative history rather than the legislation itself, has no precedent, and is ambiguous in terms of what an "offering" would be. We are not aware of any other judge adopting it.

In sum, the lower courts seem to be forming a consensus that the 'making available' theory is incorrect. But the question of whether merely 'making files available' over a peer to peer network is actionable has yet to be decided on an appellate level. In "Thomas" Judge Michael J. Davis agreed most closely with the "Howell", "Brennan", and "London-Sire" analyses, and rejected the "offer to distribute" theory proffered by the judge in "Barker".

Primary Infringement Liability

The fundamental question, "what use can a P2P file-sharing network's customers make of the software and of copyrighted materials without violating copyright law", has no answer at this time, as there has been almost no dispositive decisionmaking on the subject.

This issue has received virtually no appellate attention, the sole exception being "BMG v. Gonzalez" [ [ BMG v. Gonzalez] ] , a decision of the U.S. Court of Appeals for the Seventh Circuit, which held that where a defendant has admitted downloading and copying song files from other users in the P2P network without permission of the copyright holders, she cannot claim that such copying is a "fair use". Since "Gonzalez" involves a defendant who had admitted to actual copying and downloading of songs from other unauthorized users, it is of limited applicability in contested cases, in that it relates solely to the reproduction right in 17 USC 106(1), has no bearing on the 17 USC 106(3) distribution right.

A series of cases dealing with the RIAA's "making available" theory has broad implications, not only for the subject of P2P file sharing but for the internet at large. The first to receive a great deal of attention was "Elektra v. Barker", [ [ Elektra v. Barker] ] an RIAA case against Tenise Barker, a Bronx nursing student. Ms. Barker moved to dismiss the complaint, contending, among other things, that the RIAA's allegation of "making available" did not state any known claim under the Copyright Act. [ [ Elektra v. Barker, Memorandum of Law in Support of Motion to Dismiss Complaint] ] [ [ Reply Memorandum of Law in Support of Motion to Dismiss Complaint] ] . The RIAA countered with the argument that even without any copying, and without any other violation of the record companies' distribution rights, the mere act of "making available" is a copyright infringement, even though the language does not appear in the Copyright Act, as a violation of the "distribution" right described in 17 USC 106(3). [ [ Elektra v. Barker, Plaintiffs' Memorandum of Law in Opposition to Dismissal Motion] ] Thereafter, several "amicus curiae" were permitted to file briefs in the case, including the MPAA, which agreed [ [ Amicus Curiae brief of MPAA] ] with the RIAA's argument, and the Electronic Frontier Foundation (EFF), the U.S. Internet Industry Association (USIIA), and the Computer & Communications Industry Association (CCIA), which agreed with Ms. Barker. [ [ Amicus Curiae brief of EFF] ] [ [ Amicus Curiae brief of USIIA and CCIA] ] The US Department of Justice submitted a brief refuting one of the arguments made by EFF, [ [ Statement of Interest of U.S. Department of Justice] ] but did not take any position on the RIAA's "making available" argument, noting that it had never prosecuted anyone for "making available". [ [ Statement of Interest, page 5, footnote 3] ] . The "Elektra v. Barker" case was argued before Judge Kenneth M. Karas in Manhattan federal court on January 26, 2007 [ [ "Elektra v. Barker "Making Available" Oral Argument Now Available Online"] , Recording Industry vs. The People, February 27, 2007] , and decided on March 31, 2008. [ [ "Judge rejects RIAA "making available" theory but sustains complaint, and gives RIAA chance to replead defective theory in Elektra v. Barker"] , Recording Industry vs. The People, March 31, 2008.]

The decision rejected the RIAA's "making available" theory but sustained the legal sufficiency of the RIAA's pleading of actual distribution and actual downloading. Additionally, the Court suggested to the RIAA that it might want to amend its complaint to include a claim for "offering to distribute for purposes of distribution", but gave no guidance on what type of evidence would be required for an "offer". The Court's suggestion that merely "offering" to distribute could constitute a violation of the Act has come under attack from William Patry, the author of the treatise Patry on Copyright. [ [ "The recent making available cases"] , The Patry Copyright Blog, April 3, 2008.]

Three other decisions, also rejecting the RIAA's "making available" theory, came from more unexpected sources.

The "Barker" decision was perhaps rendered anticlimatic by the decision of Judge Janet Bond Arterton, from the District of Connecticut, handed down six weeks earlier, in "Atlantic v. Brennan" [ [ "Default judgment denied in Atlantic v. Brennan, RIAA complaint insufficient, possible defenses of copyright misuse, excessive damages"] , Recording Industry vs. The People, February 25, 2008.] , rejecting the RIAA's application for a default judgment. "Brennan", like "Barker", rejected the RIAA's "making available" theory, but unlike "Barker" it found the RIAA's specificity on the other issues to be insufficient, and it rejected the conceptual underpinnings upon which Judge Karas based his "offer to distribute" idea.

And "Barker" was perhaps overshadowed by the decision of Judge Gertner, rendered the same day as the "Barker" decision, in quashing a subpoena served on Boston University to learn the identity of BU students, in "London-Sire v. Doe 1" [ [ "RIAA's Boston University Subpoena Quashed in Arista v. Does 1-21"] , Recording Industry vs. The People, April 3, 2008.] . Here too the Court rejected the RIAA's "making available" theory, but here too -- like "Atlantic" but unlike "Elektra" -- also rejected any possible underpinning for an "offer to distribute" theory.

And then came the decision of the District Judge Neil V. Wake, in the District of Arizona, in "Atlantic v. Howell". [ [ Atlantic v. Howell] ] . This 17-page decision [ [ "RIAA summary judgment motion denied in Atlantic v. Howell; RIAA 'making available' theory & Judge Karas 'offer to distribute' theory rejected"] , Recording Industry vs. The People, April 29, 2008] -- rendered in a case in which the defendant appeared "pro se" (i.e., without a lawyer) but eventually received the assistance of an "amicus curiae" brief and oral argument by the Electronic Frontier Foundation [ [ "Jeffrey Howell is not alone; Electronic Frontier Foundation files amicus curiae brief refuting RIAA arguments in Atlantic v. Howell"] , Recording Industry vs. The People, January 12, 2008] -- was devoted almost exclusively to the RIAA's "making available" theory and to the "offer to distribute" theory suggested by Judge Karas in "Barker". "Atlantic v. Howell" strongly rejected both theories as being contrary to the plain wording of the Copyright Act. The Court held that "Merely making a copy available does not constitute distribution....The statute provides copyright holders with the exclusive right to distribute "copies" of their works to the public "by sale or other transfer of ownership, or by rental, lease, or lending." 17 U.S.C. ...106(3). Unless a copy of the work changes hands in one of the designated ways, a "distribution" under ...106(3) has not taken place." The Court also expressly rejected the 'offer to distribute' theory suggested in "Barker", holding that "An offer to distribute does not constitute distribution". [For commentary on "Atlantic v. Howell" see [ "Atlantic Recording Corp. v. Howell"] , The Patry Copyright Blog, April 30, 2008. For the "amicus curiae" brief submitted by the Electronic Frontier Foundation in support of Mr. Howell, see [ "Jeffrey Howell is not alone; Electronic Frontier Foundation files amicus curiae brief refuting RIAA arguments in Atlantic v. Howell"] , Recording Industry vs. The People, January 12, 2008]

The next critical decision was that in "Capitol v. Thomas", which had received a great deal of media attention due to the fact that it was the RIAA's first case to go to trial, and probably additional attention due to its outsized initial jury verdict. The RIAA had prevailed upon the trial judge to give the jurors an instruction which adopted its "making available" theory [ [ "Jury Instructions in Virgin v. Thomas Available Online"] Recording Industry vs. The People, October 5, 2007 (See instruction number 15)] , over the protestations of the defendant's lawyer. Operating under that instruction, the jury returned a $222,000 verdict over $23.76 worth of song files. [ [ "RIAA Wins in First-Ever Jury Trial; Verdict of $222,000 for 24 Song Files Worth $23.76"] , Recording Industry vs. The People, October 4, 2007.] Almost a year after the jury returned that verdict, however, District Judge Michael J. Davis set the verdict aside, and ordered a new trial, on the ground that his instruction to the jurors -- that they did not need to find that any files were actually distributed in order to find a violation of plaintiffs' distribution right -- was a "manifest error of law". [ [ "RIAA's $222,000 verdict in Capitol v. Thomas set aside. Judge rejects 'making available'; attacks excessive damages."] , Recording Industry vs. The People, September 24, 2008.] The Judge's 44-page decision agreed with "Howell" and "London-Sire" and rejected so much of "Barker" as intimated the existence of a viable "offer to distribute" theory.

There may be indications that the RIAA has been jettisoning its "making available" theory. In a San Diego, California, case, "Interscope v. Rodriguez", where the Judge dismissed the RIAA's complaint as "conclusory", "boilerplate", "speculation", the RIAA filed an amended complaint which contained no reference at all to "making available". [" [ RIAA Abandons "Making Available" in Amended Complaint in "Rodriguez" case] ", Recording Industry vs. The People, September 10, 2007.] In subsequent cases, the RIAA's complaint abandoned altogether the "making available" theory, following the model of the "Interscope v. Rodriguez" amended complaint.

In its place, it is apparently adopting the "offer to distribute" theory suggested by Judge Karas. In the amended complaint the RIAA filed in "Barker", it deleted the "making available" argument -- as required by the judge -- but added an "offer to distribute" claim, as the judge had suggested. [ [ "Amended complaint filed in Elektra v. Barker"] , Recording Industry vs. The People, May 2, 2008.] It remains to be seen if it will follow that pattern in other cases.

econdary Infringement Liability

Secondary liability, the possible liability of a defendant who is not a copyright infringer but who may have encouraged or induced copyright infringement by another, has been discussed generally by the United States Supreme Court in "MGM v. Grokster" [ [ MGM v. Grokster] ] , which held in essence that secondary liability could only be found where there has been affirmative encouragement or inducing behavior. On remand, the lower court found Streamcast, the maker of Morpheus software, to be liable for its customers' copyright infringements, based upon the specific facts of that case. [" [ Streamcast Held Liable for Copyright Infringement in MGM v. Grokster, Round 2] ", Recording Industry vs. The People, September 30, 2006.]

Under US law "the Betamax decision" (Sony Corp. of America v. Universal City Studios, Inc.), holds that copying "technologies" are not "inherently" illegal, if substantial non-infringing use can be made of them. Although this decision predated the widespread use of the Internet, in "MGM v. Grokster", the U.S. Supreme Court acknowledged the applicability of the Betamax case to peer to peer file sharing, and held that the networks could not be liable for merely providing the technology, absent proof that they had engaged in "inducement."

A little over a year later, the RIAA initiated the first major post-Grokster, secondary liability case, " [ Arista v. Limewire] ", in Manhattan federal court. Lime Wire denied the allegations, and counterclaimed, charging the major record companies with antitrust violations and other misconduct. [ "Lime Wire Sues RIAA for Antitrust Violations"] The antitrust claims have, however, been dismissed [ [ "RIAA's Motion to Dismiss LimeWire Antitrust Counterclaims is Granted; Counterclaims Dismissed in Arista v. LimeWire"] , Recording Industry vs. The People, December 3, 2007] , so the case is moving ahead solely on the copyright issues.

Electronic Frontier Foundation

The Electronic Frontier Foundation (EFF) seeks to protect and expand digital rights through litigation, political lobbying, and public awareness campaigns. The EFF has vocally opposed the RIAA in its pursuit of lawsuits against users of file sharing applications and supported defendants in these cases. The foundation promotes the legalization of peer-to-peer sharing of copyrighted materials and alternative methods to provide compensation to copyright holders.cite web
url =
title = Making P2P Pay Artists
author = Electronic Frontier Foundation
accessdate = April 25
accessyear = 2006

In September, 2008, the organization marked the 5th 'anniversary' of the RIAA's litigation campaign by publishing a highly critical, detailed report, entitled "RIAA v. The People : Five Years Later" [ [ "RIAA v. The People : Five Years Later"] ] , concluding that the campaign was a cruel failure.

Copyright law in European Union

In the European Union (EU), the 2001 EU Copyright directive, which implemented the 1996 WIPO treaty ("World Intellectual Property Organization Copyright Treaty"), prohibits peer-to-peer, claiming it is a violation of the directive. However, not all European member states have implemented the directive in national legislation. Notably, on December 22, 2005, after discussing the EU directive, the French parliament passed two amendments legalizing the exchange of copies on the Internet for private use. In a later proceeding, the French government withdrew the article in question and made illegal any p2p client obviously aimed at sharing copyrighted material. The term "obviously" was not defined. The project of law (called DADVSI) has still to be discussed by the French Senate and, if the decision differs from the Assemblée Nationale's, it will be debated on second lecture back at the Lower House.

In Hungary, peer-to-peer is legal for private use, e.g. one can download copyrighted material and even upload it to other peers; however, it is still illegal to charge users for downloading (so that peer-to-peer server operators won't profit from this, lessening the industry's loss from not legally buying copyrighted material). The situation is similar in Spain where file sharing is legal for private use if it is done without any profit purpose. Although there is pressure from authors and publishers organization to make it look illegal, there is not a single settlement where someone has been declared guilty of sharing copyrighted material, whereas there are several cases ruling it legal if it is done with no profit purpose [cite web|title=Spanish judge says downloading is legal|url=|accessdate=2008-08-27] [cite web|title=Spanish court decides linking to P2P downloads is legal|url=|accessdate=2008-08-27] and a police chief of the technology squad has publicly say "No pasa nada. Podéis bajar lo que queráis del eMule. Pero no lo vendáis." ("It's ok. You can download whatever you want with eMule. But don't sell it."). [cite web|title=Del "¿Por qué no te callas?" al "No pasa nada, podéis bajar lo que queráis del eMule"|url=|accessdate=2008-08-27] There has also been demonstrations where the authorities has been informed that copyrighted material was going to be downloaded in a public place, the downloading was done and no legal measures could be taken against it. [cite web|title=Operation Teddy: P2P sharing is not illegal|url=|accessdate=2008-08-27] [cite web|title=Compartir Es Bueno! Lo hemos hecho! Y nadie nos ha detenido.|url=|accessdate=2008-08-27] [cite web|title=Spanish copyright society hounds Uni teacher out of job.|url=|accessdate=2008-08-27] [cite web|title=Jorge Cortell - Descargar y copiar música es legal y bueno|url=|accessdate=2008-08-27]

Copyright law in Canada

Interestingly, Canada stands out by authorizing, at least until the projected copyright reform [cite web|title=Copyright Reform Process|url=|accessdate=2008-06-27] proposed by Bill C-61 [cite web|title=Bill C-61|url=|accessdate=2008-06-27] , downloads on peer-to-peer networks under the "private copying" exception.

Copyright law in Australia

A secondary liability case in Australia, under Australian law, was " [ Universal Music Australia Pty Ltd v Sharman License Holdings Ltd] " [2005] FCA 1242 5 September 2005, which was settled out of court. In Australia it is legal to share music socially, however sharing music anonymously is illegal.fact|date=September 2008

Important cases

* Sony Corp. v. Universal City Studios (The Betamax decision)
* MGM v. Grokster
* The AACS encryption key controversy of 2007

* The 2006 raid on The Pirate Bay.

* Odex's actions against file-sharing


ee also

* 2005 Sony BMG CD copy protection scandal
* EU Copyright Directive
* Disk sharing
* Ethics of file sharing
* File sharing timeline
* P2P
* BitTorrent
* Legality of BitTorrent
* Don't Copy That Floppy

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