What is file sharing?
Most file sharing over the internet is performed using peer-to-peer (“P2P”) networks. P2P software providers, such as KaZaA, Grokster, Gnutella, Morpheus, eDonkey and LimeWire, distribute file-sharing software which enables individual users to easily search millions of other in-network consumers’ computers for files to download. The files most often downloaded are music and videos.
What is "load distribution"?
P2P distribution networks spread the load for file downloading across millions of machines. Each computer makes files available to every other computer in the P2P network. As there is no way a single central server could have enough disk space to hold all the files, or enough bandwidth to handle all the requests, P2P file sharing accomplishes what would be impossible any other way.
How does the P2P software find the file that I am searching for?
The P2P software must provide a method of indexing the available files so users can access them. Currently, there are three primary methods of indexing:
How do P2P providers make $?
Non-subscription based P2P providers profit by selling advertisements that appear both on their websites and on the users’ computers when they employ the file-sharing software. Some of these advertisements are generated by third-party software providers who partner with P2P providers to bundle their software with the P2P software in exchange for a fee.
U.S. Copyright Laws Governing File Sharing
This website limits coverage of the laws governing file sharing to U.S. copyright law and does not attempt to examine other bodies of law or legal principles that might apply to P2P file sharing, including patent, trademark, trade secret, unfair competition and criminal statutes.
Title 17 of the United States Code includes the Copyright Act of 1976 and all subsequent amendments to U.S. copyright law. This section is meant to provide a brief overview of U.S. Copyright Law, nothing more. If you are looking for a more complete understanding, please read the code. For the entire text of Title 17 and related amendments, go to http://www.copyright.gov/title17/.
Exclusive rights of the copyright holder
An individual is liable for copyright infringement if he violates the exclusive rights of the copyright holder. The exclusive rights of a copyright holder are:
• The right to reproduce the copyrighted work
• The right to prepare derivative works based on the copyrighted work (i.e., adapt)
• The right to distribute copies of the copyrighted work
• The right to publicly perform or display the copyrighted work
File-sharing copyrighted information violates the right to reproduce and the right to distribute. Courts have held that file sharing, which involves making and transmitting a ditigal copy of music, infringes copyright.
Proving copyright infringement
To prove copyright infringement, the copyright holder must show two things: (1) he owns a valid copyright; and (2) the defendant infringed on that copyright. Infringement may be inferentially proven by showing that the defendant had access to the copyrighted material, work in the possession of the defendant is substantially similar to the copyrighted material, and one of the copyright owner’s rights (reproduction, distribution, etc.) was compromised. Neither intent nor knowledge is an element of copyright infringement.
Fair Use defense to copyright infringement
For certain copyright infringements, the fair use doctrine provides a potential defense. The Copyright Act enumerates the following four "fair use factors" that must be analyzed to determine whether a particular use of a copyrighted work is fair use.
|•||Commercial vs. Educational Use. The purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes.|
|•||Nature of the copyrighted work.|
|•||Amount and substantiality of the portion used in relation to the copyrighted work as a whole.|
|•||Effect of the use upon the potential market for or value of the copyrighted work.|
Remedies for copyright infringement.
For each copyright infringement, the United States Copyright Act, U.S.C. Title 17 § 504, enables copyright owners to elect to recover either actual damages or between $750 and $30,000 in court awarded damages, plus costs and attorneys fees. In the event willful infringement is proven, courts may award damages up to $150,000 per copyrighted work. Therefore, an individual who intentionally downloads 10 songs from a P2P service could theoretically be liable for $1,500,000 damages in a copyright infringement suit despite the fact that the actual retail value of the 10 copies of the songs may be less than $100.
Digital Millennium Copyright Act (DMCA)
The Digital Millennium Copyright Act, signed into law by President Clinton on October 28th 1998, amended Title 17 and added various other provisions of U.S. Copyright Law. The DMCA implements treaties signed in December 1996 at the World Intellectual Property Organization (WIPO) Geneva conference and contains additional provisions addressing related matters.
|Highlights of the DMCA|
|•||Makes it a crime to circumvent anti-piracy measures built into most commercial software.|
|•||Outlaws the manufacture, sale, or distribution of code-cracking devices used to illegally copy software.|
|•||Does permit the cracking of copyright protection devices, however, to conduct encryption research, assess product interoperability, and test computer security systems.|
|•||Provides exemptions from anti-circumvention provisions for nonprofit libraries, archives, and educational institutions under certain circumstances.|
|•||In general, limits Internet service providers from copyright infringement liability for simply transmitting information over the Internet.|
|•||Service providers, however, are expected to remove material from users' web sites that appears to constitute copyright infringement.|
|•||Limits liability of nonprofit institutions of higher education -- when they serve as online service providers and under certain circumstances -- for copyright infringement by faculty members or graduate students.|
|•||Requires that "webcasters" pay licensing fees to record companies.|
|•||Requires that the Register of Copyrights, after consultation with relevant parties, submit to Congress recommendations regarding how to promote distance education through digital technologies while "maintaining an appropriate balance between the rights of copyright owners and the needs of users."|
|•||Explicitly states that "[n]othing in this section shall affect rights, remedies, limitations, or defenses to copyright infringement, including fair use..."|
Common Law Doctrines: Contributory and Vicarious Copyright Infringement
One can be liable for copyright infringement without being directly responsible for the violation. Two recognized theories of secondary copyright liability are contributory copyright infringement and vicarious copyright infringement. These common law doctrines are very important for corporations, internet service providers, software developers, educational institutions, and parents to consider when assessing their exposure to file sharing liability. In order to be held liable for copyright infringement under either of these secondary theories, some direct infringement must have occurred.
Contributory Copyright Infringement
Contributory infringement is “the act of participating in, or contributing to, the infringing acts of another person.” In the copyright context, knowing (or having reason to know) about the copyright infringement and inducing, causing, or materially contributing to the violation constitutes contributory infringement.
Substantial Non-Infringing Uses (a.k.a. Betamax) Defense
If the defendant accused of contributory copyright infringement manufactures or creates the means with which copyright infringement can occur, constructive knowledge of the infringing activity will be imputed unless the defendant can show that the product is capable of substantial or commercially significant non-infringing uses. If a substantial non-infringing use is shown, the copyright owner must demonstrate that the defendant had reasonable knowledge of the specific violations and failed to act on that knowledge to prevent infringement.
Currently, there is a circuit split as to whether a product must be actually used for a non-infringing purpose in order to be “capable” of it. In In re Aimster Copyright Litig., the Seventh Circuit held that being physically capable of a non-infringing use is not enough; the defendant must produce evidence that shows the product is actually used for the stated non-infringing purposes. However, in MGM Studios, Inc. v. Grokster Ltd., the Ninth Circuit held that a product only need only have the capacity to be used for a substantial or commercially significant non-infringing purpose in order require the copyright owner to demonstrate that the defendant had reasonable knowledge of specific violations.
Vicarious Copyright Infringement
Vicarious infringement is “a person’s liability for an infringing act of someone else, even though the person has not directly committed an act of infringement." For example, a concert theater can be vicariously liable for an infringing performance of a hired band or an employer can be vicariously liable for the acts of its employees.
In order to be held vicariously liable for copyright infringement, the “principal,” such as the theater or employer, must have the ability and right to oversee users’ conduct and enjoy a direct, financial benefit as a result of the wrongful acts.