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CPTWG MEETING #91CPTWG MEETING #91

September 8, 2005September 8, 2005

Legislative/Regulatory UpdateLegislative/Regulatory Update

Jim BurgerJim Burgerjburger@dowlohnes.comjburger@dowlohnes.com

CPTWG MEETING #91CPTWG MEETING #91

September 8, 2005September 8, 2005

Legislative/Regulatory UpdateLegislative/Regulatory Update

Jim BurgerJim Burgerjburger@dowlohnes.comjburger@dowlohnes.com

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OverviewOverviewOverviewOverview

LegislationLegislation All Quiet – So Far – on the Legislative FrontAll Quiet – So Far – on the Legislative Front

Senator Stevens MGM v. Grokster and the Senator Stevens MGM v. Grokster and the Balance Between Innovation Services Against Balance Between Innovation Services Against Protecting Content ProvidersProtecting Content Providers

Other developments Other developments StorageTek v. CHEStorageTek v. CHE Monotype Imaging Inc. v. Bitstream IncMonotype Imaging Inc. v. Bitstream Inc

LegislationLegislation All Quiet – So Far – on the Legislative FrontAll Quiet – So Far – on the Legislative Front

Senator Stevens MGM v. Grokster and the Senator Stevens MGM v. Grokster and the Balance Between Innovation Services Against Balance Between Innovation Services Against Protecting Content ProvidersProtecting Content Providers

Other developments Other developments StorageTek v. CHEStorageTek v. CHE Monotype Imaging Inc. v. Bitstream IncMonotype Imaging Inc. v. Bitstream Inc

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StorageTek v. CHE – BackgroundStorageTek v. CHE – BackgroundStorageTek v. CHE – BackgroundStorageTek v. CHE – Background Federal Circuit Court of Appeals DecisionFederal Circuit Court of Appeals Decision StorageTek – makes storage devices – sued StorageTek – makes storage devices – sued

CHE – 3CHE – 3rdrd party maintenance Co. – for party maintenance Co. – for copyright & DMCA violationcopyright & DMCA violation

To maintain storage devices CHE had toTo maintain storage devices CHE had to boot the system – put maintenance program boot the system – put maintenance program

in RAMin RAM CHE needed error messagesCHE needed error messages To get them defeated StorageTek’s password To get them defeated StorageTek’s password

protection programprotection program

Federal Circuit Court of Appeals DecisionFederal Circuit Court of Appeals Decision StorageTek – makes storage devices – sued StorageTek – makes storage devices – sued

CHE – 3CHE – 3rdrd party maintenance Co. – for party maintenance Co. – for copyright & DMCA violationcopyright & DMCA violation

To maintain storage devices CHE had toTo maintain storage devices CHE had to boot the system – put maintenance program boot the system – put maintenance program

in RAMin RAM CHE needed error messagesCHE needed error messages To get them defeated StorageTek’s password To get them defeated StorageTek’s password

protection programprotection program

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Court found that CHE not guilty of copyright Court found that CHE not guilty of copyright violation under violation under §117(c) of the Copyright Act§117(c) of the Copyright ActOn DMCA count CHE not guilty because it did not On DMCA count CHE not guilty because it did not violate copyright or facilitate copyright infringementviolate copyright or facilitate copyright infringementRelied on Chamberlain v. Skylink (garage door Relied on Chamberlain v. Skylink (garage door opener case):opener case):““[Congress] chose to create new causes of action for [Congress] chose to create new causes of action for circumvention and for trafficking in circumvention circumvention and for trafficking in circumvention devices. Congress did not create new property devices. Congress did not create new property rights.”rights.”

Court found that CHE not guilty of copyright Court found that CHE not guilty of copyright violation under violation under §117(c) of the Copyright Act§117(c) of the Copyright ActOn DMCA count CHE not guilty because it did not On DMCA count CHE not guilty because it did not violate copyright or facilitate copyright infringementviolate copyright or facilitate copyright infringementRelied on Chamberlain v. Skylink (garage door Relied on Chamberlain v. Skylink (garage door opener case):opener case):““[Congress] chose to create new causes of action for [Congress] chose to create new causes of action for circumvention and for trafficking in circumvention circumvention and for trafficking in circumvention devices. Congress did not create new property devices. Congress did not create new property rights.”rights.”

StorageTek v. CHE - DecisionStorageTek v. CHE - DecisionStorageTek v. CHE - DecisionStorageTek v. CHE - Decision

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Monotype Imaging Inc. v. Monotype Imaging Inc. v. Bitstream Inc – BackgroundBitstream Inc – Background

Monotype Imaging Inc. v. Monotype Imaging Inc. v. Bitstream Inc – BackgroundBitstream Inc – Background

First Lower Court Case (DC ND IL) to First Lower Court Case (DC ND IL) to Interpret Interpret GroksterGrokster

Monotype – Font “Foundry” – Sued Monotype – Font “Foundry” – Sued Bitstream for TrueDoc font display program Bitstream for TrueDoc font display program for direct, vicarious and contributory for direct, vicarious and contributory copyright infringementcopyright infringement

TrueDoc replicates typeface designs for TrueDoc replicates typeface designs for recipient of a document even if doesn’t have recipient of a document even if doesn’t have font installed on the machinefont installed on the machine

First Lower Court Case (DC ND IL) to First Lower Court Case (DC ND IL) to Interpret Interpret GroksterGrokster

Monotype – Font “Foundry” – Sued Monotype – Font “Foundry” – Sued Bitstream for TrueDoc font display program Bitstream for TrueDoc font display program for direct, vicarious and contributory for direct, vicarious and contributory copyright infringementcopyright infringement

TrueDoc replicates typeface designs for TrueDoc replicates typeface designs for recipient of a document even if doesn’t have recipient of a document even if doesn’t have font installed on the machinefont installed on the machine

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Monotype Imaging Inc. v. Monotype Imaging Inc. v. Bitstream Inc – DecisionBitstream Inc – DecisionMonotype Imaging Inc. v. Monotype Imaging Inc. v. Bitstream Inc – DecisionBitstream Inc – Decision

Court found that Monotype failed to prove direct Court found that Monotype failed to prove direct copyright infringementcopyright infringement

But went on to examine secondary liability issuesBut went on to examine secondary liability issues Contributory – even if proved direct no evidence Bitstream Contributory – even if proved direct no evidence Bitstream

knewknew Citing Grokster the court says: Citing Grokster the court says: “ “The Supreme Court has recognized that a court may impute

culpable intent as a matter of law from the characteristics or uses of an accused product.”

Supreme Court did not say thatSupreme Court did not say thatthe Court held that “one who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties.”

Court found that Monotype failed to prove direct Court found that Monotype failed to prove direct copyright infringementcopyright infringement

But went on to examine secondary liability issuesBut went on to examine secondary liability issues Contributory – even if proved direct no evidence Bitstream Contributory – even if proved direct no evidence Bitstream

knewknew Citing Grokster the court says: Citing Grokster the court says: “ “The Supreme Court has recognized that a court may impute

culpable intent as a matter of law from the characteristics or uses of an accused product.”

Supreme Court did not say thatSupreme Court did not say thatthe Court held that “one who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties.”

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Monotype Imaging Inc. v. Monotype Imaging Inc. v. Bitstream Inc – Decision Con’tBitstream Inc – Decision Con’t

Monotype Imaging Inc. v. Monotype Imaging Inc. v. Bitstream Inc – Decision Con’tBitstream Inc – Decision Con’t

The District Court boiled The District Court boiled Grokster Grokster down to three down to three “features”“features”

““[T]he defendants targeted ‘a known source of demand for [T]he defendants targeted ‘a known source of demand for copyright infringement, the market compromising former copyright infringement, the market compromising former Napster users.’”Napster users.’”

““Neither defendant took any steps to diminish the Neither defendant took any steps to diminish the infringing activity that they knew about.”infringing activity that they knew about.”

““The defendants’ models of business were such that they The defendants’ models of business were such that they made money by increasing the volume of use of their made money by increasing the volume of use of their software, therefore increasing the volume of infringement.”software, therefore increasing the volume of infringement.”

It then found that Bitstream’s conduct fit none of those It then found that Bitstream’s conduct fit none of those “features”“features”

The District Court boiled The District Court boiled Grokster Grokster down to three down to three “features”“features”

““[T]he defendants targeted ‘a known source of demand for [T]he defendants targeted ‘a known source of demand for copyright infringement, the market compromising former copyright infringement, the market compromising former Napster users.’”Napster users.’”

““Neither defendant took any steps to diminish the Neither defendant took any steps to diminish the infringing activity that they knew about.”infringing activity that they knew about.”

““The defendants’ models of business were such that they The defendants’ models of business were such that they made money by increasing the volume of use of their made money by increasing the volume of use of their software, therefore increasing the volume of infringement.”software, therefore increasing the volume of infringement.”

It then found that Bitstream’s conduct fit none of those It then found that Bitstream’s conduct fit none of those “features”“features”