Oh, for the good old days. The Wild, Wild West - a small handful of computer wizards pioneering the World Wide Web, doing as they pleased. Everyone got away with electronic murder - cybersquatting, blatant piracy, password sharing, child pornography, you name it. The Web was not very important then, and therefore no loud voices complained. That first group of rebellious, free thinking "computer nerds" did not have much of a lobby in Washington, D.C., or anywhere else. When any complaints were heard, the legal world was neither trained nor technologically equipped to do much about it.
Corporate America began migrating to the Net in response to an exploding population of users, but at first was stymied by a legal system that was wholly unprepared to deal with the mischief that could be exacted upon it. The law is dramatically catching up, but it has a ways to go.
On the copyright infringement front, it took years to shut down Napster, largely because putting Napster into the framework of the copyright law was like trying to put a square peg into a round hole. A&M Records' lawsuit against Napster was filed in December of 1999 - A&M Records, Inc. v. Napster, Inc., No. 3:99cv05183 (N.D. Cal., filed Dec. 6, 1999) - by which time Napster had developed a considerable head of steam. It took the plaintiffs almost nine months to garner a preliminary injunction, only to have it suspended by the Court of Appeals two days later, the same day the plaintiffs posted the required $5 million bond Id., 114 F.Supp.2d 896 (N.D. Cal. 2000). The "expedited" appeal consumed another seven months - Id., 239 F.3d 1004 (9th Cir. 2001) - and another month before the trial court could enter a preliminary injunction spelling out a convoluted procedure whereby the plaintiffs would notify Napster of names of infringing files, triggering a requirement that Napster take them down, Id., 2001 WL 227083, 2001 WL 777005, 2001 WL 789461 (N.D. Cal., March 5, 2001). Four months later, a modified injunction completely shutting down Napster - Id. 2001 Nos. NO. MDL-00-1369 MHP and C-99-5183 MHP (N.D. Cal., July 11 2001) - was stayed by the Court of Appeals just like the first one, Id., No. 01-16308 (9th Cir., July 18, 2001). Nearly two-and-a-half years after filing its lawsuit, the Napster plaintiffs finally obtained an order shutting down Napster, Id., 284 F.3d 1091 (9th Cir. 2002).
It did not take so long for relief to be granted against Napster's parrot, Aimster. Not long after the nine federal cases against Aimster that were filed in federal courts around the country were consolidated in Chicago - Aimster Copyright Litigation, 177 F.Supp.3d 1380 (N. D. Ill., Nov. 16, 2001) - plaintiffs garnered an injunction comparable to that against Napster, Id., 2002 WL 31006142 (N.D. Ill., Sept. 4, 2002), far more quickly than the two-and-a-half-year crusade against Napster. But there remain KaZaA and Morpheus.
KaZaA is offshore, and is being pursued around the world by the same cast of characters that have been chasing Napster and Aimster, but with less success. KaZaA is trying to take advantage of Netherlands' copyright law, which does not recognize the important concept of contributory infringement, an important principle of American copyright law that was a key weapon against Napster.
Perhaps a bigger issue is peer-to-peers that can continue to exist despite the shuttering of the founding company. Napster was at the hub of the file-sharing network. More advanced P2Ps operate differently. Like the Internet, there is no switch that can turn them off.
One way the copyright industry is fighting back is recently proposed legislation allowing copyright owners to plant viruses in P2Ps with impunity [see "Rip and Burn - Theft of Your Content," Oct. 2002] . A perhaps more dramatic one is found in a recent criminal prosecution.
The case involved a highly organized Internet software piracy group that called itself "Pirates with Attitudes." Seventeen defendants were indicted for conspiracy to violate the criminal provisions of the Copyright Act. The case was so complex that the court at the outset had to make a special order to defense counsel because of the anticipated length of the trial, United States v. Rothberg, 2000 WL 1230495 (N.D. Ill., Aug. 25, 2000). Most of the defendants ultimately entered guilty pleas, with another convicted after a jury trial, leaving the "hotly contested sentencing issue, namely the value of the infringing items," Id., 2001 WL 1654758 (N.D. Ill., Dec. 20, 2001). The significance of the amount involved, of course, is that under the federal sentencing guidelines the severity of the sentence in property crimes is a function of the amount of the economic loss. In other words, the more copyrighted works they stole, the more time they do. Significant is the structure and location of the conspiracy:
"The group was alleged to have an elaborate hierarchy and members worldwide. According to the indictment, PWA stored libraries of pirated software on several File Transfer Protocol sites, including one called Sentinel, which came on line in 1995 and was in operation until January 2000. Access to the Sentinel site was controlled by the senior members of PWA, and members with access were able to download pirated computer programs to their own computers and distribute them to others.
"The computer hardware used to operate the Sentinel site was located at the University of Sherbrooke in Sherbrooke, Canada. In January 2000, this equipment was seized by the FBI, with the cooperation and assistance of Canadian law enforcement personnel. The only software programs that remained on Sentinel as of the date of the seizure were those that had been uploaded in late 1999 and early 2000; programs uploaded earlier evidently had been deleted as obsolete or for other reasons. Analysis by an FBI computer specialist produced a list of approximately 5,000 software programs that were still on the Sentinel site at the time of the seizure."
After a hearing, the Government took a significant hit when the judge rejected its position that the value should be over $10 million, finding that the amount should be pegged at $1,424,640, Id., 2002 WL 171963 (N.D. Ill. Feb. 4, 2002). But that amount triggers sentencing guidelines of 24-30 months of imprisonment, Id., ___ F.Supp.2d ___, 2002 WL 1308634 (N.D. Ill. June 14, 2002). One of the defendants who entered a guilty plea was granted a departure from that range because of substantial cooperation with authorities and other extraordinary family circumstances, two of the very few means by which a court can depart from the guidelines range. In other words, everyone involved must be sentenced to at least two years in prison; and under the guidelines, they cannot be given probation and must serve 86 percent of the sentence. That converts to actually sitting in a federal prison for a year and eight months.
The world is catching up to cybersquatters, too. Everyone knows that an injured party can file an action under 15 U.S.C. � 1125(d) requiring a domain name to be transferred to its rightful owner. A couple of recently published decisions, however, granted damage and attorney fees awards against cybersquatters, roughly $100,000 in one case, Bellagio v. Denhammer, 2001 WL 34036599 (D. Nev. July 10, 2001), and over $1.6 million in another, Malletier v. Veit, 211 F.Supp.2d 567 (E.D. Pa. 2002). Significantly, because of the underlying finding of intent that is required to award damages in those types of cases, the judgments are not likely to be in the category of debts that can be discharged in bankruptcy. Judgments like that can be assigned to attorneys who specialize in collection, so figure that the defendants will be working for the plaintiffs for life.
The point of all of this is that the Internet has become such an important component of commerce that law enforcement has been forced to catch up. Significantly, the public position of the copyright industry is that copying a CD over a P2P network is the same as stealing it from a record store; and shoplifters are usually charged with theft and prosecuted accordingly. Given that the music industry claims to have suffered a significant loss in sales - all attributable to P2P file swapping - while all other entertainment is experiencing growth, look for a hard push to find a way to prosecute P2Ps. However, don't look for them coming to the rescue of adult content creators, whose material is probably the most swapped of any. They stand to benefit only as an incidental result of whatever victories the music industry can obtain.
Clyde DeWitt is a partner in the Los Angeles, California-based national law firm of Weston, Garrou & DeWitt. He can be reached through AVN Online's offices, at his office at 12121 Wilshire Boulevard, Suite 900 Los Angeles, CA 90025 or over the Internet at [email protected]. Readers are considered a valuable source of court decisions, legal gossip and information from around the country, all of which is received with interest. Books, pro and con, are encouraged to be submitted for review, but they will not be returned. This column does not constitute legal advice but, rather, serves to inform readers of legal news, developments in cases, and editorial comment about legal developments and trends. Readers who believe anything reported in this column might impact them should contact their personal attorneys.
