No Alibi For Grande: Labels and Rightscorp Score Major Strike on Value Gap

In a major victory for the rule of law and a total vindication for Rightscorp, Magistrate Judge Andrew Austin ruling in the labels’ contributory copyright infringement case against Grande Communications, a Texas-based ISP, has recommended that Grande be denied the DMCA safe harbor defense in a copyright infringement case for failing to implement a repeat infringer policy.  (UMG Recordings, Inc. v. Grande Communications Networks, LLC and Patriot Media Consulting, LLC, case number 1:17-cv-00365-DAE-AWA for those reading along at home.)

Recall that the DMCA safe harbor, as poorly drafted as it is, does include conditions to the ability of an online service provider to assert the safe harbor defense.  These include the “knowledge predicate” (essentially denying the safe harbor to those who had knowledge of the infringement waiving like a red flag).   Another predicate is the Congress’s  attempt to address the safe harbor’s moral hazard that Congress created by requiring the online service provider to take infringement seriously and to adopt–and actually implement–a repeat infringer policy.  Absent these predicates, the Congress has created what is essentially a back door royalty-free compulsory, the detestable “DMCA license,” which of course is no license at all.

While no one can predict the future, it is my hunch that these cases will demonstrate again and again that online service providers do not take these predicates seriously.  My bet is that they knowingly allow massive infringement to occur on their networks with no real effort to implement a repeat infringer policy.  Therefore, they bring trouble on themselves all by themselves.

That is certainly what happened in BMG’s groundbreaking case against Cox Communications, a precedent that figures largely in the Grande case and in the label and publisher tag-along case in Virginia against Cox. Thankfully, BMG led the way and hung in there as the lone copyright owner enforcing their rights until they achieved a successful result and settlement.  (BMG Rights Mgmt. (US) LLC v. Cox Commc’ns, Inc., 149 F. Supp. 3d 634, 657 (E.D. Va. 2015), aff’d in part, rev’d in part, 881 F.3d 293 (4th Cir. 2018).)

This is certainly the view of the magistrate in his recommendation to the trial judge on Grande’s contributory infringement.  Here’s a few relevant excerpts:

In this case, Grande had nothing even approximating the system Cox used, as for the six years before this lawsuit was filed, it never warned a customer they might be terminated, regardless of how many infringement notices Grande received about that customer….During the six year period, the only policy that addressed repeat infringement was Grande’s general Acceptable Use Policy, which among many other things, stated that repeat copyright infringers could have their service terminated….

More than six months after posting the DMCA policy, and two months after this case was filed, Grande terminated its first customer for infringement in nearly seven years. Through the date of the filing of the instant motion, Grande has terminated a total of 12 users—eleven in 2017, and one in 2018….This amounts to absolutely no implementation of the policy Grande had allegedly adopted. And, as in BMG, the policy that was actually in effect for this time was that Grande was determined never to terminate a subscriber, no matter what information Grande received about that customer allegedly infringing a copyright. It is hard to imagine a case in which it is more clear that the DMCA safe harbor is not available….The fact is, Grande had no policy in effect for the vast majority of the relevant time period, and its last minute conversion is too little too late.

And when a judge says “its last minute conversion is too little too late,” that’s roughly the equivalent of a phrase that echoed through my childhood–“that’s bullshit for starters.”  So don’t go there.

There’s a long way to go before this case is concluded, but it’s starting to look like a pattern is emerging here–ISPs, and probably all ISPs, got some bad, bad advice and have simply failed to address one of the few parts of the DMCA safe harbor that actually makes sense.

Of course, it must be said that Rightscorp played a crucial role in making this contributory infringement case.  If it were not for Rightscorp, who were also an integral part of the Cox case, it is unlikely that the copyright owners arguments would have been as compelling.  Magistrate Judge Austin acknowledged their role:

Grande’s complaints about the Rightscorp notices also miss the mark, for a host of reasons. First, the very same sort of Rightscorp notices at issue here made up a large portion of the notices that BMG relied on in their suit against Cox. Cox made very similar attacks on those notices, and also argued that the evidence failed to “prove actual knowledge of repeat infringement.” [Citation omitted] As the Fourth Circuit explained, that argument was misplaced, because “Cox bears the burden of proof on the DMCA safe harbor defense; thus, Cox had to point to evidence showing that it reasonably implemented a repeat infringer policy.” Id. The court found Cox failed to show that it had ever actually followed through and implemented its policy as written, and without such evidence, there was not a triable issue. Id. The same is the case here. Grande has pointed to no evidence that it ever considered terminating a user during the relevant period, despite the fact that there is ample evidence, including internal emails, indicating that it believed many of its customers were repeat infringers. Without at least some evidence of this sort, it cannot create a fact dispute related to its defense.

Grande has admitted that it would not have terminated any subscribers, no matter what the circumstances were, prior to June 2017, as the policy in place from 2010 to mid- 2017 was that it would not terminate a user for infringement “regardless of the source of any notice,” “regardless of the content of any notice,” and “regardless of the volume of notices . . . for a given customer.” [Citation omitted.] Moreover, the evidence in the record from Grande’s own documents reflects the opposite of what it now argues—Grande took the Rightscorp (and other) notices as evidence of infringement.…The criticism of the Rightscorp system and the notices it generated was never made until Grande was sued, and its lawyers raised these issues. What the lawyers thought of the notices in 2017 is irrelevant to the question of what Grande thought of them between 2010 and 2017. It is Grande’s employees’ knowledge that matters, and the evidence is undisputed that those employees believed the notices reflected that many of Grande’s customers were repeatedly infringing on copyrights.

The magistrate judge clearly took seriously the evidentiary record that Rightscorp helped to develop, and focused on the key evidence that was presented–when Grande received the notices they knew exactly what they meant and they fell into the very moral hazard that, having created the problem, Congress tried to address with the repeat infringer predicate.

It should be apparent that Cox and Grande will become extraordinarily important cases in the DMCA jurisprudence as we fight in Europe to roll back the greatest income transfer of all time–the value gap which is created by legacy statutes that have lost their utility.

Safe harbors were a nice idea to give a little latitude to reasonable people acting reasonably.  They were never intended to be an alibi.  But–as usual–the Congress having created the problem, it is now up to the copyright owners to fix it.

The Values Gap: CD Baby Shows that the Safe Harbor is a Privilege to be Respected and Not an Alibi to be Cheapened

It’s hard to believe that after a good ten years of being called out, YouTube still–still–cannot manage to stop neo-Nazi and white supremacist material from getting posted on its network.  We’ve been calling out YouTube for these inexcusable failures again and again and again.  And yet they keep recycling the safe harbor as an alibi–and they’re doing it again in Europe on Article 13.

I can understand that YouTube doesn’t want to “censor” users and there may be close cases from time to time.  For example, I could understand why YouTube CEO Susan Wojcicki might not want to take down videos from Seeking Arrangement that encourages young women into a “sugar daddy” relationship to pay for college and health care.

Sure, one of her Google colleagues was murdered by a woman he met through Seeking Arrangement.  Maybe Seeking Arrangement is a close case, particularly for a company that opposed the Stop Enabling Sex Traffickers Act.

But you know what’s not a close case? It’s right there in the title of the song–“Who Likes a N—“.  You would think that one would get picked up in a simple text filter of debased language.  But it wasn’t ten years ago and it still isn’t.  Not a close case.

And then there’s “Stand Up and Be Counted” by the White Riders.  It’s not that hard to figure out by listening to any of the many versions of this song that it’s a recruiting song for the Klu Klux Klan.  And it’s not that YouTube doesn’t know it–this version of the hate song has clearly been filtered by YouTube–oh, sorry.  Not by YouTube, but by the “YouTube community.”  But why is it that a KKK recruiting song doesn’t violate YouTube’s terms of service if it doesn’t shock Susan Wojcicki’s conscience?

White Riders

Today David Lowery called out YouTube and CD Baby for allowing hate rock to be distributed on their platforms.  Within hours, CD Baby pulled the account.  But not YouTube.

Let’s understand a couple things.  First, this is not hard.  The Anti Defamation League and the Southern Poverty Law Center have actual lists of these bands.  Both Music Tech Policy and The Trichordist have been hammering this issue for years.  Simple word searches could accomplish a large percentage of the task–the N word, KKK recruiting and images of Adolph Hitler are not close cases.

And let’s understand something else.  When users post movies, television shows and recorded music on YouTube, all of those materials have gone through some kind of legal review for standards and practices.  That doesn’t mean there’s no fair use or that there are no parodies.  It does mean that a human has thought about it because free expression is a judgement call.

Free expression is deserving of human examination.  You cannot create a machine that will do this for you.  You cannot rely on crowd sourcing to stop all uses of these vile terms and images–because in every crowd there’s someone who thinks it’s all just fine.  That’s why they’re called mobs.

YouTube, Facebook and all the Article 13 opponents actually are using a complete spectrum of review.  The problem is that they are cost shifting the human review onto artists and to a lesser extent their users for two reasons.  First and foremost is that they hope not to be caught.  That’s what the safe harbor is really all about.  The value gap is just a part of it–the other part is the values gap.  How do these people sleep at night?

But I firmly believe that the real reason that they shift the human cost onto those who can least afford it is because they’re too cheap to pay for it themselves.  They are willing to take the chance because getting caught so far has been a cost of doing business.

The real cost of their business is the corrosive effect that they have on our discourse, our families and our children.  There has to be a way to make YouTube responsible for their choices–and CD Baby showed today that it’s not only possible but necessary.

If YouTube and their paid cronies want to try to convince legislators that they deserve special protection, they need to live up to the standard that CD Baby set today.  And they need to do that before they get any further special treatment.

As we’ve said for years, the safe harbor is a privilege not an alibi.

@music_canada: Where would Google be without creators and the distortion of copyright protections?

PRESS RELEASE:

In a ground-breaking report, Music Canada, a national trade organization, documents the scale of harm being caused by the Value Gap – defined as the significant disparity between the value of creative content that is accessed, particularly through user upload content services like YouTube, and the revenues returned to the people and businesses who create it.

“This is the story you will not hear from Google,” says Graham Henderson, President and CEO of Music Canada.  “YouTube would never have emerged as the largest music service without distorting the use of safe harbour protections in copyright law that were created to protect ‘mere conduits’ or ‘dumb pipes.’  We now know that today’s digital platforms are the smartest pipes that have ever been imagined.”

Creators and governments around the world are taking notice, and taking action. In Canada, thousands of musicians, authors, poets, visual artists, playwrights and other members of the creative class, have urged the Canadian government to address the Value Gap in a campaign called Focus On Creators.

The Value Gap: Its Origins, Impacts and a Made-in-Canada Approach is available for download at https://musiccanada.com/resources/research/the-value-gap-report/.

Jack Morse: The secret, illicit [piracy] underside of Google Drive

 

[Editor Charlie sez:  From the “Stop Me Before I Infringe Again” Dept….]

Turns out that Google Drive is a whole lot less buttoned up than you may have thought.

The file-sharing service typically associated with spreadsheets and office life has a dirty little secret, and it’s one that our Mountain View overlords may not be so stoked on. Namely, the service is a haven for illegal file-sharing.

The offending goods reportedly include both your standard video files as well as a unique twist on the file sharing MO: Instead of uploading entire movies or shows to Drive itself, people are dropping in scores of unlisted YouTube links.

 

Essentially, the idea is that unlisted links are less likely to be spotted by automated systems crawling for this sort of thing and are therefore less likely to be pulled. Putting a collection of those links in one Drive and sharing it over social media is like passing around a secret phonebook containing the listings for all your favorite pirated content.

Read the post on Mashable

@musictechpolicy: Jean-Michel Jarre Identifies the Value Transfer

“The biggest flaw I want to highlight today is what is known as the “transfer of value” or the “value gap.” To survive and thrive, creators must be fairly paid for their works. Yet today, some of the world’s major digital music services are building large businesses on back of creativity while paying next to nothing in return. This is not fair. It is a market distortion. And it is holding back growth in the creative sectors.”

via Jean-Michel Jarre Identifies the Value Transfer — MUSIC • TECHNOLOGY • POLICY