This month's article is particularly directed to those of you who create or license content. It may also be of interest to those of you who are doing ripping and burning. However, it dramatically impacts anyone who profits from selling adult content in any way: manufacturers, wholesalers, retailers, Webmasters, mail-order companies - the whole adult industry. Many of you are already aware of the problem and are bewildered as to what to do about it. Hopefully, what follows will bring you up to date.
Billions of peer-to-peer downloads from Napster and its successors have cost the recording industry billions. It is starting to do the same to the adult industry.
In May of 1999, AVN sponsored an adult video industry shindig in Cancun, at which the author of this column was honored to be a speaker. One of the topics was the threat to the industry posed by the Internet, where the capability of downloading 10-minute video clips would soon exist. In response to those predictions, AVN's main Website was bombarded with posts - complete with equations in some cases - proclaiming what an idiot this guy was and urging him to limit his predictions to law. Well, it is time for an "I told you so," because, as we all know, the prediction has come to pass. Now let's deal with the problem.
The percentage of residences being hooked up to high-speed Internet access is soaring, and peer-to-peer file swapping is probably the driving force. Estimates of late are that one P2P system is now facilitating music downloads at a rate of 1.1 billion per month! That represents billions in lost royalties for the artists.
How much difference does that make? Well, compact disc sales have dropped 10 percent in the past year, while every other category of entertainment - concerts, movie tickets, amusement park admissions - has grown, or at least remained stable. The only plausible explanation for the decline in compact disc sales is P2P. And if it hasn't happened already, it certainly won't be long until we experience corresponding dips in sales and back-room plays at adult video stores, adult rentals at the mom-and-pops, and subscriptions to adult Internet sites.
The pioneer of this, of course, was Napster, which was methodically extinguished by a copyright-infringement action by the record companies. Napster unsuccessfully contended that they were not infringing anyone's copyrights themselves, so they should be off the hook: A&M Records, Inc. v. Napster, Inc. , 239 F.3d 1004 (9th Cir 2001). But there will be more than one child born in the world to carry on Napster's activities. Listed as located in "South Whales" is Kazaa.com; another is MusicCity.com, the target of a Los Angeles federal copyright-infringement action brought by MGM and dozens of other motion picture and recording companies.
The Napster case is cited for the proposition that these P2P outfits are guilty of copyright infringement. But to support such a claim, there must be a copyright to infringe. To save you the trouble of digging out your dusty issues of this magazine looking for the copyright article, the following is a brief refresher.
When a motion picture is first "fixed in a tangible medium," its creator establishes a copyright interest in it. If someone infringes your copyright, you can sue them for damages. But that will not do you much good, because your lost profits and the infringer's profits are difficult to establish and, as a practical matter, are not usually very sizable when measured against the attorneys' fees and investigation costs associated with bringing the suit. And if it is P2P for free, it is really difficult to establish either lost or illegal profits.
If you comply with the registration and deposit requirements within three months after the first publication, or at least get it done before the infringing activities begin, you garner the ability to recover huge statutory damages, plus court costs and, importantly, attorneys' fees. But if the infringer waits for three months after the first publication of your masterpiece and starts infringing before you accomplish registration and deposit, all you can get are the infringer's profits or your lost profits (plus court costs). Good luck with that!
Recall that registration and deposit is relatively easy. Even if you are just a little startup, you probably can do the first one with very little attorney assistance and, after that, do them yourself. Details can be found in this column in the March 2001 issue of AVN Online and/or at the Library of Congress' Website, www.loc.gov/copyright. Simply put, you execute the proper form, write a small check and send the requisite depository copies to the Library of Congress.
In addition to registration and deposit, you should include a copyright notice. You see those everywhere, like "� 2002 AVN Publications, Inc." The notice does not need to be in any particular place, but the more conspicuous, the better.
Assuming that you are a veteran of ripping music from Napster, KaZaA, Music City, or one of the other ones - and most everyone is - you are probably laughing. "A lawsuit is going to stop P2P sharing, like when it moves offshore and goes further underground? They are going to sue some chump who is sitting in his den downloading scenes from adult comps? Ha-ha-ha-ha-ha-ha. Yeah, right!" That's like giving someone a jar of bug killer and a box of Q-Tips to exterminate all of the Africanized honeybees in Texas. They will reproduce faster than you can kill them.
Because the record companies have had more at stake for a much longer period than the adult companies, and have more money to deal with it, they have been thinking about this longer than you have. Following is what is in the works to stop P2P.
The weapon du jour is electronic countermeasures. There are several of them.
The first are so-called "cease-and-desist programs." The object is to deliver an electronic message scolding the recipient. So, for example, if you have a copyright on a song entitled, "A Song to End All Songs," you put a dummy file on the P2P network with that name on the file. When another P2P member downloads your dummy file, she receives a lecture about copyright infringement and an admonition that, if she wants to listen to the song, she should go to the store and purchase the album, not steal it from the Internet.
Dummy files must be naturally replicated through the P2P network because, if they are self-replicating, they are viruses, which are illegal. It may seem almost comical that it is illegal to send a virus to someone trying to rip off your copyrights, but it is a violation of many of the various state anti-virus laws. And remember that they might be spread to someone who isn't ripping off any content, which supplies a good reason for not using them.
As a practical matter, that kind of dummy file concept is not likely to work in connection with adult rip-and-burns. What do you figure the chances are that someone ripping a d.p. scene is going to have a guilt complex about violating someone's copyright? And, he is saving himself a trip to the back room of the mom-and-pop down the street and the rental fee in the process.
Another cute idea is a dummy file that plants a little snitch file in the P2P member's hard drive, and then snitches him off. Such a program, circulated through the P2P as a dummy file, can be associated with the use of so-called "taggants" in the copyrighted files. The snitch file looks for the taggants and, if any are found, reports them to the copyright owner.
The snitch/taggant combination, however, has both a legal and a practical drawback. The legal drawback is that such activity likely will be claimed to violate anti-hacking statutes. The legal problem, however, is dwarfed by the practical problem, which is that these snitch programs often set off virus alarms. So much for your secret snitch.
Another electronic countermeasure is the massive posting of dummy files, sort of like the drones that B-52s release to confuse the anti-aircraft missiles. The idea is to circulate large numbers of dummy files into the P2P system. That way, someone trying to download a particular song or movie clip will download dummies over and over, and at the same time will be uploading dummies over and over. There is, however, an issue as to whether this is considered hacking, although probably not a very strong one.
Another is a re-direction file. You go on P2P and download a dummy file that appears to be the song you want but - surprise! - it re-directs you on your browser to a Website that will sell you the same song you were trying to download. But that, too, may be a virus because it does so automatically.
Finally, there can be programs that search for the copyrighted files and do misery to the computer trying to upload them. That, of course, violates all kinds of virus and hacking laws, and are therefore not a good idea.
Enter United States Congressman Howard L. Berman from - no surprise - Los Angeles. Apparently the entertainment industry, which is now starting to call itself the "copyright industry," has gotten his ear. Congressman Berman is in the process of cooking up legislation that would legalize electronic countermeasures. As of this writing, a proposal had not been finalized.
As Congressman Berman explains, "Congress should free copyright creators and owners to develop and deploy technological tools for addressing P2P piracy. We could do this by creating a safe harbor from liability for copyright owners that use technological means to prevent the unauthorized distribution of their copyrighted works via P2P networks." What that means is not yet clear, but the Electronic Frontier Foundation (www.eff.org) is reeling, concerned that the bill will authorize copyright owners to erase your hard drive if you download a copyrighted file.
Where this will go is anyone's guess. But you can bet that Congressman Berman's bill, whatever it turns out to be, will be the subject of heated debate, as copyright owners (many of whom themselves probably have illegally downloaded files from P2Ps) battle with EFF over what self-help should be available, to what extent and with what restrictions. Meanwhile, the P2Ps are developing counter-countermeasures of their own, and the beat goes on.
This story will not end. It started with the invention of the tape recorder, went to the Supreme Court with the introduction of the Betamax, and continues with P2P networks. But one thing is certain: P2P downloading of five-minute vignettes at VHS quality can be done with a modem on a POTS (plain old telephone service) line, and most new computers have the necessary hard-drive space and the CD-R/RW drive to rip and burn their own comps, free of charge.
What will that do to your rentals, sales, back-room plays or whatever you do? The recording industry has already established the dire consequences in terms of sales.
Clyde DeWitt is a partner in the Los-Angeles-based law firm of Weston, Garrou & DeWitt. He can be reached through AVN'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.
