TVShack Extradition Case Tumbling as Seventh Circuit Holds Linking/Streaming is Lawful

Last week, the U.S. Department of Justice's (DOJ) criminal prosecution of British citizen Richard O'Dwyer for operating a site called TVShack hit what ought to be a major stumbling block. TVShack allows users to link to other computer servers that host television shows and movies. Clicking on the link will allow the user to watch those videos from those sites in a frame on TVShack. The DOJ claims that O'Dwyer is violating criminal laws prohibiting copyright infringment.  

However, no less a legal authority than the U.S. Seventh Circuit Court of Appeals disagrees.  That Court just held in a different case, Flava Works v. Gunter, 2012 WL 3124826 (August 2, 2012), that linking to and streaming videos is not copyright infringment.  Now England, which initially agreed to extradite O'Dwyer to face trial in the United States, must reconsider that decision in light of this new legal precedent.  

The new court opinion involves myVidster.com, a site that allows users to link to and watch videos hosted on other sites without leaving the myVidster site. Porn purveyor Flava Works had sued myVidster, alleging that myVidster was helping potential Flava Works customers circumvent the company’s pay wall.  Flava Works had obtained a preliminary injunction preventing myVidster from allowing links to infringing Flava Works videos on third party sites.  On appeal, the Seventh Circuit held that since myVidster does not host any infringing videos or invite infringing links, it is not a copyright violator.

Even though Flava Works cannot get money from myVidster for hosting links to and streaming infringing content, the DOJ is seeking to extradite and imprison a citizen of another country for that same conduct. Something is broken here.  

The boundaries of civil liability for contributing to, or inducing, infringement by other people have grown increasingly murky in the face of technological change. Nevertheless, U.S. efforts to imprison foreign nationals under novel copyright theories without precedent even in civil law are accelerating rather than decreasing.

In January, the DOJ and New Zealand law enforcement agents swooped in by helicopter to arrest Hong Kong-based cyberlocker service Megaupload's founder, Kim Dotcom, at his home outside of Auckland. Officials seized the Mega domain names, millions of dollars worth of art, vehicles and real estate, arrested six other Megaupload employees, and copied data from at least 50 million users worldwide for later perusal at FBI headquarters.

Like TVShack, Megaupload's charges are based on a novel and unprecedented theory.  No distributor of a product capable of substantial non-infringing uses has ever been held criminally liable for copyright infringement committed by its customers.  Moreover, Mega will point to its efforts to comply with the DMCA, which gives a safe harbor to sites that take down specific infringing material of which it becomes aware, but does not require sites to police more generally for copyright infringement.  Since the majority of U.S. federal courts hold that criminal copyright infringement requires proof of “willfulness”, i.e. a desire to violate a known legal duty, ultimately, the question is not whether the defendants behaved unlawfully, but whether they believed they did.  See RSM v. Herbert, 466 F.3d 316 (4th Cir. 2006).  Even an unreasonable, but honest, mistake about the legal status of the service should return a verdict of "not guilty".

TVShack and Megaupload are reminiscent of the criminal case against Russian citizen Dmitry Sklyarov.  There, the U.S. arrested Sklyarov in the summer of 2001, immediately following the DEFCON hacker conference. Sklyarov was the lead programmer for his company's Advanced eBook Processor software. That software allowed users to make copies and print otherwise locked pdf fils, transfer the files to other devices and have the text read aloud by the computer. The DOJ claimed, in the first criminal prosecution under the novel anticircumvention provisions of the 1998 Digital Millennium Copyright Act, that the software illegally eluded technological measures that controlled access to copyrighted PDF files.  Though the program was lawful in Russia, Sklyarov was forced to stay in California, separated from his family, until he eventually cut a deal requiring him to testify against his company.  At trial, the company managed to beat all four DMCA charges.  

Why is the U.S. bringing criminal cases against foreign nationals for provision of digital services that were at least arguably lawful under U.S. law?  As a matter of due process, it is simply improper to prosecute individuals, expecially those who live elsewhere, for conduct that falls in a grey area under U.S. law.  

Because the law is ambiguous and evolving, and guilt is by no means a given, advocates of the charges emphasize "optics" to bolster potentially baseless charges.  For example, a recently leaked memo from the Motion Picture Association of America to its members about how to respond to press inquiries about TVShack underscores alleged bad behavior on O'Dwyer's part.  It suggests that he advertised the site as a place to find current movies and TV shows, says his switching domain names after the ICE seizure shows guilty knowledge, and holds its nose at the amount of money the site made.  These details, the MPAA asserts, show that unlike "genuine" search engines, TVShack was "dedicated to making infringing content publicly available".  For Megaupload, the indictment faults the defendants for hiding infringing content from search, copies email communications between employees smirking that "we’re not pirates, we’re just providing shipping services to pirates :)” and details Kim Dotcom's collection of extravagant cars subject to seizure, with license plates like "Guilty", "Mafia" and "God".

Still, a bad attitude is not the same as criminal behavior. Changes in technology have subjected people who use computers and entertainment services to arcane regulatory regimes. Is changing domain names evading the (uncertain) law, or establishing service resiliancy? Is removing results from search hiding infringment, or abating it? When the next Louis C.K. wants to distribute her standup comedy video with a minimum of hassle and without a production or distribution deal, a cyberlocker service that pays per click, like Megaupload did, is a great solution. As for TVShack's links, they are nothing more than pointers to other content on the web.  Beauty may be in the eye of the beholder, but beasts must be defined by the rule of law.  

The government should answer some important about U.S. policy in this area.  Does the DOJ's Computer Crime and Intellectual Property Section guide prosecutorial discretion in bringing criminal copyright cases, and what are those guidelines?  How is the DOJ taking into account the existence or lack of relevant legal precedent in favor of finding guilt? How does the DOJ consider when potential defendants are located outside of the U.S. and what that means for proof of wilfullness? What are DOJ guidelines for how involved the MPAA and other business interests may get in the investigation and prosecution decisions of the DOJ? (See, e.g. allegations of MPAA going to great lengths to push a US/UK copyright fraud case).  

More immediately for Richard O'Dwyer, England has to decide whether it will send one of its citizens to face trial in the U.S. for conduct that has never been criminally prosecuted here before and that at least one Federal Circuit has said, in Flava Works, is lawful.  

 

Comments

Jennifer, I don't see how Flava Works is relevant under criminal law as long as DOJ charges O'Dwyer with copyright infringement via accomplice liability. Criminal liability via aiding and abetting is routinely broader than civil liability, so I don't see why the absence of civil liability says anything about whether a defendant committed a crime through accomplice liability.

I think you're drastically overstating the holding in the MyVidster case. One of the primary reasons the court didn't allow a preliminary injunction was because there wasn't any evidence (at this early stage in the litigation) of inducement on the part of MyVidster. I can't speak specifically about MyVidster, but many of these sites offer uploaders a portion of the ad money based on the number of clicks they get. It doesn't seem like a stretch at all to think that Flava Works will be able to show inducement after discovery. I think a lot of this opinion is mere dicta. Of course, I could be wrong. I just saw this linked on another blog and figured it would be something really really insightful since it was on Stanford University's web page. This is all just my opinion and I do not mean any disrespect.

Expect no end of MPAA trolls to come here and contradict this article.

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