Maryland Bar Bulletin
Publications : Bar Bulletin : May 2009

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Entertainment and Sports Law :  

Avast, matey! In an effort to combat illegal file sharing, members of the recording industry have engaged in litigation against individuals claiming violation of the 106(3) right of distribution. The theory advanced suggests, that by “making available” song files in a “shared folder,” a user of a peer-to-peer (“P2P”) service has violated the exclusive distribution right of the copyright holder like a modern-day pirate on the digital high seas.

The core copyright industries have remained relatively static over the past 30 years. The “big three” are still commercial movies, commercial sound recordings and commercial books. However, the manner in which these works reach their audience has transformed at a rapid rate that far outpaces lawmakers’ ability to keep up.

First came centralized server file sharing, like Napster. Next came user-controlled P2P sharing, like KaZaA and Grokster. Then came bittorrent and trackers like The Pirate Bay. One of the primary shared characteristics among the three aforementioned technologies is their purpose: to allow users to freely transfer files – most notably music files – via the Internet and usually in violation of copyright law.

Generally, online file sharing can create liability for P2P users as direct infringers, and for P2P services as contributory infringers. However, one of the problems faced by the recording industry is that enforcement under the current law may be inadequate. Due to the “viral” nature of Internet file sharing, the economic harm that can be caused by one person illegally transferring a music file is enormous.

Imagine – Cindy College Student has on her hard drive the song “Poker Face” by Lady GaGa. She then shares that song with 10 people who each share it with another 10, and so on. Cindy is not a direct infringer because she didn’t do the downloading resulting in reproductions. She may be a contributory infringer, assuming the District Court has jurisdiction over the people who downloaded the song. However, the damage has already been done. Now Interscope Records and their attorneys are faced with a lawsuit against many defendants who may be unable to satisfy a judgment, instead of just one defendant.

Cindy’s liability as a contributory infringer under 106(1) – the right of reproduction – is contingent upon a finding of direct infringement as to each person that downloaded the song. That process would be cumbersome to say the least. How then can the copyright holder stop the bleeding? If Cindy is not reproducing the work, can she be distributing copies or phonorecords? The recording industry says yes.

The right of distribution is the right to distribute copies or phonorecords of the work to the public “by sale or other transfer of ownership, or by rental, lease of lending.” Copies and phonorecords are the material objects in which a work is embodied. Therefore, in order to violate the distribution right, Cindy would have to part ways with, or otherwise dispose of a physical object. This is hard to do over the Internet.

Enter the “making available” cases. See, e.g., Capital Records, Inc. v. Thomas, 579 F. Supp. 2d 1210 (D. Minn. 2008); Elektra Entm’t Group, Inc. v. Barker, 551 F. Supp. 2d 234 (S.D.N.Y. 2008).

The “making available” theory has its roots in the Fourth Circuit. In Hotaling v. Church of Jesus Christ of Latter-Day Saints, 118 F.3d 199 (4th Cir. 1997), the court held that making an infringing copy of a book available in a library, even absent evidence of actual distribution, was enough to find a violation of the 106(3) right of distribution.

It follows that when Cindy places a copy in her “shared folder” she has essentially placed the book in the library and listed it in the catalogue system, thereby “making available” the copy in violation of the distribution right. Relying on Hotaling, the preamble to section 106, and the confusing relationship between “distributions” and “publications,” proponents of the “making available” theory were at first successful. In spite of this, district courts have started to disagree, the majority of which have found that 106 does not contain an implicit right to “make available” as a theory for direct infringement.

The lower courts now seem to agree that an actual distribution of a physical copy, something that does not occur in the P2P context, is required for direct infringement liability. However, there is still disagreement about the relationship between “publication” and “distribution,” and whether those terms are synonymous. Finally, there is an argument that a “making available” right must exist because the WIPO Copyright Treaty, which has also been ratified by Congress, recognizes a “making available” right.

It is clear that under the current statutory language, regardless of legislative intent, a “making available” right does not exist. Nevertheless, copyright holders can still protect themselves from online piracy in a P2P context by enforcing their 106(1) reproduction right, as well as theories of contributory infringement. Anne Bonnies and Edward Teaches of the digital age, beware!

Joseph M. Pappafotis is a member of both the Maryland and New Jersey Bars. He is currently the law clerk for the Honorable Charles G. Bernstein in the Circuit Court for Baltimore City.

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Publications : Bar Bulletin: May 2009

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