Apparently feeling that they’ve resolved the longstanding issue of illegal immigration and can move on to the next crisis, Immigration and Customs Enforcement (“ICE”) and the U.S. Justice Department have identified a new enemy in their ongoing stuggle to protect truth, justice and the American way: Internet sites that sell counterfeit goods and pirated movies.
Indeed, just this month, government officials announced that they have shut down nine websites as part of their newly announced initiative, “Operation In Our Sites,” which is intended to protect Hollywood’s intellectual property. Officials estimated that nearly 7 million pirated movies and shows per month were downloaded from the offending websites.
The announcement was held on a soundstage at The Walt Disney Studios in Burbank, CA. Neither Johnny Depp nor Captain Hook reportedly was present.
Posted February 28th, 2010 by Narine BagdassariancloseAuthor: Narine BagdassarianName: Narine Bagdassarian Email: email@example.com Site:http://ca.linkedin.com/pub/narine-bagdassarian/19/855/ba3 About: Narine Bagdassarian is a lawyer with Jones Harley LLP in Toronto, Ontario. Her experience focuses on insurance defense work - personal injury, property loss, products liability and subrogation. Before moving to Toronto, she was a practicing attorney in Los Angeles, specializing in Workers’ Compensation Insurance Defense. She received her Bachelor of Arts degree from UCLA in 2002 and, in 2005, she obtained her law degree from Whittier Law School.
Narine is a huge UCLA Bruins football fan, as well as being a devoted Los Angeles Kings fan. (Pre-game superstitions and protocol? Check.) She looks forward to the day when she can own the Kings. In the meantime, she's attempting to resist the urge to speak like a Canadian (failing miserably at this, she's been told).See Authors Posts (5)
This topic angers me. Fines for infringement under the Copyright Act range from $750 to $150,000 per infringement. That’s a wide spectrum! More disturbing is that the Act leaves the pricing decision in the hands of the judge, without any real guidelines for them to follow.
This week, a judge ordered Whitney Harper to pay $27,500 for illegally downloading 37 songs…I’ll do the math for you – that’s $750 a song, i.e., the minimum allowed. Earlier this year, Joel Tenenbaum was held liable for $675,000 for file sharing 30 songs – that’s $22,500 per song. It gets better. Nearly a year ago, Jammie Thomas-Rasset was ordered to pay $1.92 million by a jury for downloading 24 songs…$80,000 per download! How does the court conclude how much to, for lack of a better word, charge per song? Is it based on the popularity of the song? Does Lady Gaga or Jay-Z rank higher than Skid Row or Journey because the former are currently more mainstream?
Emailing. Instant messaging. Texting. On-line gaming. Ten years ago, even five years ago, such words and concepts were alien to the typical luddite. Now, these terms are not just parts of the common parlance; a vast majority of us actually use these resources on a daily basis (in some cases, with our childrens’ guidance and assistance).
Consider, then, the relatively new concept of “cloud computing.” In lay terms, cloud computing is the on-line or internet-based use of a third-party vendors’ or service providers’ off-site (and hopefully secure) servers for data storage and/or management. Hotmail, Facebook, LinkedIn, YouTube and Google all use cloud computing to serve their members, often at no cost. At the same time, there are a growing number of vendors (like Apple) which “host” or “back-up” at-home and business computer systems by storing a consumer’s data or facilitating their use of cost-effective business solutions for a monthly or annual fee. Users typically do not have to incur fixed costs or purchase hardware or even software programs. All they need is access to a computer and the internet. And with that, voila! Cloud computing is just a click away.
Needless to say, the advent of cloud computing has opened up a world of opportunity for entrepreneurial software developers, hardware providers, and data storage companies around the globe. At the same time, it has created new business segments with a keen need for insurance products. Cyber insurance. Tech insurance. Property/All-Risk insurance. Business Interruption insurance. Professional Services/E&O insurance. Fidelity/Crime insurance. And, in some cases, personal injury/advertising injury coverage.
The potential third-party exposures are endless. Consider, for example, the legal (and regulatory) implications (and concomitant need for insurance) when an unauthorized user hacks into a “cloud” database storing personally identifiable or proprietary business information. Or think about the possibility of liability for a software developer or data storage vendor who has a customer that uses the cloud to host viruses or illegal content. Or who simply release information about their clients to marketers, advertisers or other third-parties without considering the impact or legal ramifications of their doing so. And how about power outages or other crises or service interruptions that prevent customers from accessing their accounts or critical business information that may be the key to closing an all-important business deal (resulting in privacy claims, claims of lost income, lost profits and business interruption expense and other alleged third-party injury).
So too, first-party cyber/tech risks are well known in other contexts and would apply with equal force and effect to cloud computing. The threat of service interruptions, data corruption and the like all necessitate the need for insurance.
The bottom line, as always, is that underwriters need to constantly stay ahead of the curve and tailor their products (and marketing strategies) to address the ever-changing landscape of new and innovative technology resources. Today cloud computing. Tomorrow? Ask me tomorrow night….
Here’s a quick recap of the facts: the defendant, Joel Tenenbaum, was a college sophomore who was accused of using file-sharing programs like KaZaA to download and distribute 30 copyrighted songs. Tenenbaum’s file sharing was not for profit; it was for his own private enjoyment and that of his friends. He had downloaded songs, but not entire albums of music, and he did not make any changes to the music (i.e., turn them into his own creative work). Unfortunately, he had continued to file share notwithstanding changes in the case law which made it clear that his conduct was not protected, and after digital music was lawfully available (the iTunes Music Store debuted in April 2003, approximately 15 months before Tenenbaum’s computer was detected on the Kazaa network). Justice Gertner concluded that “fair use” was not a defence. Here’s why.
“Only one thing is impossible for God: To find any sense in any copyright law on the plant” - Mark Twain.
What Are the File Sharing Trials?
The file sharing trials are copyright infringement actions dealing with the distribution and downloading of digital music. The Recording Industry Association of America (RIAA) is the trade organization that supports and promotes the major music companies. Over the past few years, the RIAA has deployed investigators in cities across North America to track down individuals who pirate digital music, and has brought resulting lawsuits against music fans for sharing music over peer-to-peer networks.
For many people, these cases bring to mind the old saw “but for the grace of God, there go I.” Generally speaking, the RIAA has settled these lawsuits for relatively modest amounts. In a couple of cases, however, the defendants have opted instead to ‘roll the dice’ and go to trial. Under the U.S. Copyright Act, juries have discretion to award damages of anywhere between $750 and $150,000 per copyrighted work, but they are provided with little or no guidance in how damages are to be assessed. As a consequence, these file sharing trials have resulted in jury verdicts for shocking sums of money that would seem to dwarf any actual damages that have actually been suffered by the copyright holders. The fact that these damage awards may be grossly disproportionate to the harm actually incurred has generated constitutional concerns which will likely be tested in the courts in the near future. In particular, two cases have recently received a significant amount of media attention:
A pub owner in the U.K. has been fined £8,000 because someone used its open wireless hotspot to download copyrighted material unlawfully.
The managing director of the hotspot provider The Cloud, Graham Cove, told ZDNet UK that the case, brought in the civil courts, is believed to be the first of its kind in the UK. He would not identify the pub concerned, however, because the pub had not yet given permission for the case to be publicized. Cove did advise that the fine had been levied in a civil case “sometime this summer”. The Cloud’s pubco clients include Fullers, Greene King, Marsdens, Scottish & Newcastle, Mitchell & Butlers and Punch Taverns.
The law surrounding open Wi-Fi networks and the liability of those running them is a grey area. Although copyright owners have brought infringement cases against individuals before in the UK, this case is believed to be the first where the operator of a hotspot – a place where people can buy or get free access to a high-speed wireless internet connection – has been successfully sued.
Based on the facts made known to date, this decision appears to be somewhat anomalous. As Professor Lilian Edwards, a professor of internet law at Sheffield Law School, told ZDNet UK, businesses operating a hotspot for customers or visitors should be “not responsible in theory” for users’ unlawful downloads, under “existing substantive copyright law”. Anomalous or not, however, this must be a real cause of concern for businesses that provide their customers with wireless access (as well as their liability insurers). “You’re probably OK for now in terms of data retention,” Edwards said, “but watch out for the pile of copyright infringement warnings coming your way.”
This decision may have implications for the U.K.’s upcoming and controversial Digital Economy Bill, with measures that could include disconnection of the account holder, and could make matters worse for businesses with open Wi-Fi hotspots. At a wireless hotspot, it is not possible to determine the IP address of an individual who has downloaded infringing material because the IP address that is recorded will be that of the hotspot. A rights holder who seeks to identify an infringer of a copyright is therefore not able to distinguish the hotspot operator from the end user of the downloaded copyrighted material. Referring to the fact that it is currently not yet clear as to whether those facing disconnection would get their chance to appeal before or after being cut off, Edwards said businesses should “lobby for the upcoming Code of Practice to allow an early appeal against [warnings] before rather than after you get disconnected”.