Yesterday there was a huge ruling in the Ninth Circuit Court of Appeals in California. Now normally we don’t write about U.S. internet law around here, but since the decision affects our favourite Canadian pirate, Gary Fung of isoHunt, we’re gonna make an exception. Especially because isoHunt is fucked.
The case is called Columbia Pictures vs. Fung (PDF), but it’s not just Columbia that won. The plaintiffs were also Disney, TriStar, 20th Century Fox, Universal, and Warner Brothers. So basically every major movie studio. You’ll probably have some issues downloading their movies from isoHunt pretty soon.
So let’s take a step back. Back in 2006, the studios sued Gary Fung and isoHunt Web Technologies Inc., which operates sites including isoHunt and TorrentBox. Those sites allow you to search for files, and download them via torrent. As isoHunt always says, none of the files are hosted by them, and for the most part they don’t even host the trackers that allow your torrent program to run (all of which is true). They are essentially just search engines (isoHunt especially), and as such should be treated like Google. Well, the Ninth Circuit did not agree.
In 2009 a California District Court heard the Columbia v. Fung case, and ruled that Fung was liable for copyright infringement under U.S. law. That decision was for summary judgment, meaning that no damages were awarded, but the Court ruled that copyright infringement had taken place.
I should take a moment to explain that Fung was not directly infringing copyright, but he was liable for what they call in the States secondary infringement, or contributory infringement. It means Fung helped others do the actual infringing. It is sort of similar to the new concept of “enabling” copyright infringement that was introduced with Bill C-11 here in Canada, and I’ve written about in conjunction with isoHunt (wrote about it twice even!). Boy I’m prescient!
So back to the courts. Fung lost in 2009, and appealed. Yesterday’s decision was the result of that appeal. Let’s go to the blockquotes:
In sum, we affirm the district court’s grant of summary judgment to Plaintiffs on liability. We also affirm summary judgment to Plaintiffs on Fung’s claims that he is entitled to the safe harbors provided by 17 U.S.C. § 512
Well that was boring. But I wrote it to include the part about “safe harbors”, which is an important consideration in this case (and these cases generally) that I’d like to introduce to you. The DCMA (Digital Millennium Copyright Act) provides that ISPs and certain internet intermediaries like search engines (grouped together as OSPs – Online Service Providers) will not be liable for copyright infringement if they meet certain conditions (here’s a pretty good Wikipedia summary if you want more). It’s a defense to infringement, but Fung did not meet the conditions. Sucks to be you, Gary.
So what reasons did the Court give for confirming the holding of copyright infringement? Well, the Court said that Fung fulfilled the requirements for inducing copyright infringement under the famous Grokster case of the U.S. Supreme Court. Well, for the most part. They sort of adjusted one of the criteria to fit Fung’s case and the technology at hand; they said a “device” or “product” to induce liability could also be a “service” to induce liability. OK then.
The most important Grokster factor is probably that the product/device (or service in this case) is promoted as a product/device/service to induce copyright infringement. Here’s what the Court said:
we conclude that there is more than enough unrebutted evidence in the summary judgment record to prove that Fung offered his services with the object of promoting their use to infringe copyrighted material. No reasonable jury could find otherwise.
What kind of evidence did they have?
the most important is Fung’s active encouragement of the uploading of torrent files concerning copyrighted content. For a time, for example, isoHunt prominently featured a list of “Box Office Movies,” containing the 20 highest-grossing movies then playing in U.S. theaters.
Boy you just can’t make lists anymore without getting into trouble. Actually I kid. When a user clicked on a title there was a message encouraging the user to upload the movie. Fung also encouraged users via forum messages to upload and download all sorts of copyrighted materials. Also, too:
instances of Fung responding personally to queries for assistance in: uploading torrent files corresponding to obviously copyrighted material, finding particular copyrighted movies and television shows, getting pirated material to play properly, and burning the infringing content onto DVDs for playback on televisions.
Well that looks bad. The Court actually did a good job of explaining that just “knowledge” of infringement was not enough, and showing the evidence that Fung knew about it, sure, but also did all sorts of things that induced infringement.
After going through the Grokster analysis, the Court then looked to see if Fung could benefit from the safe harbor provisions. As mentioned above, Fung was shot down. One of the big (if not the big) factor to benefit from safe harbor is that the infringer “does not receive a financial benefit directly attributable to the infringing activity”. Well, Fung was cashing in!
the record shows that Fung generated revenue by selling advertising space on his websites. The advertising revenue depended on the number of users who viewed and then clicked on the advertisements. Fung marketed advertising to one advertiser by pointing to the “TV and movies . . . at the top of the most frequently searched by our viewers,” and provided another with a list of typical user search queries, including popular movies and television shows.
Fung promoted advertising by pointing to infringing activity
Well that’s bad! But how else was he going to make that sweet sweet cash? Anyway, the Court went through a bunch of other stuff about safe harbors (including an interesting legal bit about “red flag knowledge”), but no doubt by now you’re bored by all this Court talk so let’s just say Fung lost. The case will probably head back to the District Court now to try and figure out the cash money damages Fung has to pay to the studios.
Commentary analysis fun time!
I love isoHunt. I use it. You know that. But I have read this decision (for realz!) and I know the law in this area (I wrote my Masters Thesis on it), and I have to conclude that the Court did a good job analyzing the law as it stands and coming to their holding. Making a “product or device” into a “service” may be a bit sketchy, but I’ll allow it. The Court was just adapting to the technology.
Now, I agree with Fung’s lawyer that the Court made a bit of a mistake when it was talking about trackers in the safe harbor discussion. But that error is totally insufficient to make this decision problematic. As the law stands, based on Grokster, the Court came to the right decision.
Taking the view from above the 49th parallel, I believe Canada targeted isoHunt with the enabling provisions of C-11. As I wrote in my first isoHunt post:
In my oh so humble opinion, isoHunt is probably screwed.
I strengthened that in my second isoHunt post:
Your takeaway for the day – isoHunt is fucked.
Well, it looks like the Harper government could have been saved some trouble. The Ninth Circuit Court of Appeals is doing their job for them. I’m guessing the damages awarded to the studios will be so large as to put Fung and isoHunt and his other torrent sites out of business. It’s only a matter of time.
Where am I going to get my Breaking Bad episodes now?