Tag: EFF

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Copyright Internet Uncategorized

CloudFlare’s Desperate New Strategy to Protect Pirate Sites

a gavel lying on a table in front of booksSan Francisco-based CloudFlare has earned a somewhat dubious reputation in the online world. Website owners can set up CloudFlare in just a few minutes, gaining the performance, security, and privacy benefits the service provides. Traffic routed through CloudFlare’s global content delivery network is cached for faster delivery times and protected from numerous online threats. Pirate sites have flocked to the service because it hides their true identities from copyright owners by default. And it probably doesn’t hurt that CloudFlare CEO Matthew Prince thinks that “censoring the Internet” is “creepy,” even “under a court order.”

Prince practices what he preaches, and CloudFlare has been all-too-ready to lend a helping hand to even the most notorious pirates. When The Pirate Bay rose from the ashes in early 2015, CloudFlare provided the site with services that helped manage its massive server loads. CloudFlare’s encryption technology even made it easy for users in the UK to circumvent the High Court’s ban ordering ISPs to block the pirate site. Amazingly, The Pirate Bay is now back in the United States, using its original thepiratebay.org Virginia-based domain and benefiting from CloudFlare’s robust services to make its criminal enterprise run smoothly worldwide.

Of course, the only reason CloudFlare can get away with supporting the world’s most-visited torrent site is because the DMCA is such a mess. Courts have set the bar so high that CloudFlare wouldn’t likely be found to have red flag knowledge of the massive amounts of infringement it certainly knows its service enables for globally-infamous criminal infringers like The Pirate Bay. Rather than taking the high road and refusing to work with obvious pirate sites, CloudFlare lawyers up when pushed and denies the supportive role that its service provides.

We saw this last year in the Grooveshark case. After the original Grooveshark site was found liable for willful infringement and agreed to shut down, copycat sites sprung up at different top-level domains such as grooveshark.io and grooveshark.pw. The plaintiffs obtained a temporary restraining order against the copycats, which registrars Namecheap and Dynadot promptly complied with by disabling some of the domains. But when the plaintiffs asked CloudFlare to stop providing services to some of the other copycats, they were met with firm resistance. The plaintiffs had to turn to the court for an order clarifying that the injunction against the copycat sites prevented CloudFlare from providing them services.

With the backing of the Electronic Frontier Foundation, CloudFlare put up a big fight. It denied that it was in “active concert or participation” with the copycats, which under Rule 65 would have made it bound by their existing injunction. CloudFlare argued that its services were merely passive and that the domains would still remain accessible even if its services were cut off. The district court rejected CloudFlare’s self-serving arguments, noting that it was in fact aiding and abetting the copycat sites by operating their authoritative domain name servers and optimizing their traffic worldwide. Since CloudFlare had actual notice of the injunction and was in “active concert or participation” with the enjoined copycats, it was also bound by their injunction under Rule 65.

Hit with what must have been the eye-opening reality that, under penalty of contempt, it couldn’t knowingly help its enjoined customer engage in the very wrong the court had ordered it to stop committing, one might think that CloudFlare would have become more respectful of court orders involving its customers. However, as recent developments in the MP3Skull case show, CloudFlare has decided to again take the low road in shirking its responsibility to the court. And its argument here as to why it’s beyond the court’s reach is even more desperate than before.

In April of 2015, several record label plaintiffs sued MP3Skull for copyright infringement, easily obtaining a default judgment when the defendants failed to respond to the suit. Earlier this year, the plaintiffs were granted a permanent injunction, which the defendants quickly flouted by setting up shop under several different top-level domains. Naturally, the common denominator of these multiple MP3Skull sites was that they used CloudFlare. The plaintiffs’ lawyers sent a copy of the injunction against the pirate sites to CloudFlare, asking it to honor the injunction and stop supplying services to the enjoined domains. But, as with Grooveshark, CloudFlare again refused to comply.

The record label plaintiffs have now gone back to the district court, filing a motion requesting clarification that CloudFlare is bound by the injunction against the MP3Skull sites. They argue that the “law is clear that CloudFlare’s continued provision of services to Defendants, with full knowledge of this Court’s Order, renders CloudFlare ‘in active concert or participation’ with Defendants,” and they point to the opinion in the Grooveshark case in support. According to the plaintiffs, the only issue is whether CloudFlare is aiding and abetting the enjoined defendants by providing them services.

CloudFlare opposes the motion, though it noticeably doesn’t deny that it’s in “active concert or participation” with the enjoined defendants. Instead, CloudFlare argues that, since this is a copyright case, any injunction against it must comply with the DMCA:

Section 512(j) prescribes specific standards and procedures for injunctions against service providers like CloudFlare in copyright cases. It places strict limits on injunctions against eligible service providers. 17 U.S.C. § 512(j)(1). It specifies criteria that courts “shall consider” when evaluating a request for injunctive relief against a service provider. 17 U.S.C. § 512(j)(2). And it requires that a service provider have notice and an opportunity to appear, before a party may bind it with an injunction. 17 U.S.C. § 512(j)(3). Plaintiffs ignored those requirements entirely.

The gist of CloudFlare’s argument is that Section 512(j) controls injunctions against service providers like itself, notwithstanding the fact that Rule 65 binds those in “active concert or participation” with an enjoined party. In other words, CloudFlare says that the DMCA gives service providers unique immunity from having to obey court-issued injunctions under the Federal Rules—a remarkable claim requiring remarkable proof. And the case law cited to back up this claim? None. Zip. Nada. CloudFlare fails to produce one single cite showing that any injunctive-relief statute, whether copyright or otherwise, has ever been deemed to preempt the longstanding rule that it’s contempt of court to aid and abet an enjoined defendant. The desperation is palpable.

The reason the DMCA doesn’t apply to CloudFlare is obvious. Section 512(j) states that it “shall apply in the case of any application for an injunction under section 502 against a service provider” that qualifies for the safe harbors. CloudFlare goes on for pages about how it’s a service provider that would qualify for the safe harbor defense if given the chance, but all of this misses the point: CloudFlare is not being enjoined. The only service provider being enjoined is MP3Skull—and that injunction was issued under Section 502 without the limitations set forth in Section 512(j) because MP3Skull didn’t even bother to show up and attempt to claim the safe harbors. But the plaintiffs have not sought an injunction against CloudFlare, which they could only do by naming CloudFlare as a party to the suit.

Since CloudFlare itself isn’t being enjoined under Section 502, Section 512(j) provides it no limitations. The issue is simply whether, under the Federal Rules, CloudFlare is bound by the injunction that has already been issued against the MP3Skull sites. Perhaps not wanting to get bench-slapped again on the aiding and abetting question under Rule 65, CloudFlare is taking an even lower road with this desperate new argument that it’s magically immune to court orders against its customers under the Federal Rules. The district court has yet to rule on the plaintiffs’ motion, but my guess is that it will make short work in reminding CloudFlare of the court’s true power to hold aiders and abettors in contempt.

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Innovation Inventors Legislation Patent Law Patent Litigation Uncategorized

Changes to Patent Venue Rules Risk Collateral Damage to Innovators

dictionary entry for the word "innovate"Advocates for changing the patent venue rules, which dictate where patent owners can sue alleged infringers, have been arguing that their remedy will cure the supposed disease of abusive “trolls” filing suit after suit in the Eastern District of Texas. This is certainly true, but it’s only true in the sense that cyanide cures the common cold. What these advocates don’t mention is that their proposed changes will weaken patent rights across the board by severely limiting where all patent owners—even honest patentees that no one thinks are “trolls”—can sue for infringement. Instead of acknowledging the broad collateral damage their changes would cause to all patent owners, venue revision advocates invoke the talismanic “troll” narrative and hope that nobody will look closely at the details. The problem with their take on venue revision is that it’s neither fair nor balanced, and it continues the disheartening trend of equating “reform” with taking more sticks out every patent owner’s bundle of rights.

Those pushing for venue revision are working on two fronts, one judicial and the other legislative. On the judicial side, advocates have injected themselves into the TC Heartland case currently before the Federal Circuit. Though it has no direct connection to the Eastern District of Texas, advocates see it as a chance to shut plaintiffs out of that venue. Their argument in that case is so broad that it would drastically restrict where all patentees can sue for infringement—even making it impossible to sue infringing foreign defendants. Yet they don’t mention this collateral damage as they sell the “troll” narrative. On the legislative side, advocates have gotten behind the VENUE Act (S.2733), introduced in the Senate last Thursday. This bill leaves open a few more venues than TC Heartland, though it still significantly limits where all patent owners can sue. Advocates here also repeat the “troll” mantra instead of offering a single reason why it’s fair to change the rules for everyone else.

With both TC Heartland and the VENUE Act, venue revision advocates want to change the meaning of one word: “resides.” The specific patent venue statute, found in Section 1400(b) of Title 28, provides that patent infringement suits may be brought either (1) “in the judicial district where the defendant resides” or (2) “where the defendant has committed acts of infringement and has a regular and established place of business.” On its face, this seems fairly limited, but the key is the definition of the word “resides.” The general venue statute, found in Section 1391(c)(2) of Title 28, defines residency broadly: Any juridical entity, such as a corporation, “shall be deemed to reside, if a defendant, in any judicial district in which such defendant is subject to the court’s personal jurisdiction with respect to the civil action in question.” Taken together, these venue statutes mean that patent owners can sue juridical entities for infringement anywhere the court has personal jurisdiction over the defendant.

The plaintiff in TC Heartland is Kraft Foods, a large manufacturer incorporated in Delaware and headquartered in Illinois that runs facilities and sells products in Delaware. The defendant is TC Heartland, a large manufacturer incorporated and headquartered in Indiana. TC Heartland manufactured the allegedly-infringing products in Indiana and then knowingly shipped a large number of them directly into Delaware. Kraft Foods sued TC Heartland in Delaware on the theory that these shipments established personal jurisdiction—and thus venue—in that district. TC Heartland argued that venue was improper in Delaware, but the district court rejected that argument (see here and here). TC Heartland has now petitioned the Federal Circuit for a writ of mandamus, arguing that the broad definition of “reside” in Section 1391(c)(2) does not apply to the word “resides” in Section 1400(b). On this reading, venue would not lie in Delaware simply because TC Heartland did business there.

TC Heartland mentions in passing that its narrow read of Section 1400(b) is favorable as a policy matter because it would prevent venue shopping “abuses,” such as those allegedly occurring in the Eastern District of Texas. Noticeably, TC Heartland doesn’t suggest any policy reasons why Kraft Foods should not be permitted to bring an infringement suit in Delaware, and neither do any of the amici supporting TC Heartland. The amicus brief by the Electronic Frontier Foundation (EFF) et al. argues that Congress could not have intended “to permit venue in just about any court of the patent owner’s choosing.” But why is this hard to believe? The rule generally for all juridical entities is that they can be sued in any district where they chose to do business over matters relating to that business. This rule has long been regarded as perfectly fair and reasonable since these entities get both the benefits and the burdens of the law wherever they do business.

The EFF brief goes on for pages bemoaning the perceived ills of forum shopping in the Eastern District of Texas without once explaining the relevancy to Kraft Foods. It asks the Federal Circuit to “restore balance in patent litigation,” but its vision of “balance” fails to account for the myriad honest patent owners like Kraft Foods that nobody considers to be “trolls.” The same holds true for the amicus brief filed by Google et al. that discusses the “harm forum shopping causes” without elucidating how it has anything to do with Kraft Foods. Worse still, the position being urged by these amici would leave no place for patent owners to sue foreign defendants. If the residency definitions in Section 1391(c) don’t apply to Section 1400(b), as they argue, then a foreign defendant that doesn’t reside or have a regular place of business in the United States can never be sued for patent infringement—an absurd result. But rather than acknowledge this collateral damage, the amici simply sweep it under the rug.

The simple fact is that there’s nothing untoward about Kraft Foods filing suit in Delaware. That’s where TC Heartland purposefully directed its conduct when it knowingly shipped the allegedly-infringing products there. It’s quite telling that venue revision advocates are using TC Heartland as a platform for changing the rules generally when they can’t even explain why the rules should be changed in that very case. And this is the problem: If there’s no good reason for keeping Kraft Foods out of Delaware, then they shouldn’t be advocating for changes that would do just that. Keeping patent owners from suing in the Eastern District of Texas is no reason to keep Kraft Foods out of Delaware, and it’s certainly no reason to make it impossible for all patent owners to sue foreign-based defendants that infringe in the United States. Advocates of venue revision tacitly admit as much when they say nothing about this collateral damage. This isn’t fair and balanced; it’s another huge turn of the anti-patent ratchet disguised as “reform.”

The same is true with the VENUE Act, which copies almost verbatim the venue provisions of the Innovation Act. This bill would also severely restrict where all patent owners can sue by making it so that a defendant doesn’t “reside” wherever a district court has personal jurisdiction arising from its allegedly-infringing conduct. To its credit, the VENUE Act does include new provisions allowing suit where an inventor conducted R&D that led to the application for the patent at issue. It also allows suit wherever either party “has a regular and established physical facility” and has engaged in R&D of the invention at issue, “manufactured a tangible product” that embodies that invention, or “implemented a manufacturing process for a tangible good” in which the claimed process is embodied. Furthermore, the bill makes the same venue rules applicable to patent owners suing for infringement and accused infringers filing for a declaratory judgment, and it solves the problem of foreign-based defendants by stating that the residency definition in Section 1391(c)(3) applies in that situation.

While the proposed changes in the VENUE Act aren’t as severe as those sought by venue revision advocates in TC Heartland, they nevertheless take numerous venues off of the table for patentees and accused infringers alike. But rather than acknowlede these wide-sweeping changes and offer reasons for implementing them, advocates of the VENUE Act simply harp on the narrative of “trolls” in Texas. For example, Julie Samuels at Engine argues that the “current situation in the Eastern District of Texas makes it exceedingly difficult for defendants” to enforce their rights and that we need to “level the playing field.” Likewise, Elliot Harmon at the EFF Blog suggests that the VENUE Act will “finally address the egregious forum shopping that dominates patent litigation” and “bring a modicum of fairness to a broken patent system.” Yet neither Samuels nor Harmon explains why we should change the rules for all patent owners and accused infringers—especially the ones that aren’t forum shopping in Texas.

The VENUE Act would simply take a system that is perceived to favor plaintiffs and replace it with one that definitely favors defendants. For instance, an alleged infringer with continuous and systematic contacts in the Eastern District of Virginia can currently be sued there, but the VENUE Act would take away this option since it’s based on mere general jurisdiction. Likewise, the current venue rules allow suits anywhere the court has specific jurisdiction over the defendant—potentially in every venue for a nationwide enterprise—yet the VENUE Act would make dozens of these venues improper. Furthermore, patentees can now bring suits against multiple defendants in a single forum, saving time and money for all involved, but the VENUE Act would make this possibility much less likely to occur.

The “troll” narrative employed by venue revision advocates may sound appealing on the surface, but it quickly becomes clear that they either haven’t considered or don’t care about how their proposed changes would affect everyone else. If we’re going to talk about abusive litigation practices in need of revision, we should talk about where they’re occurring across the entire patent system. This discussion should include the practices of both patent owners and alleged infringers, and we should directly confront the systemic collateral damage that any proposed changes would cause. As it stands, there’s little hope that the current myopic focus on “trolls” will lead to any true reform that’s fair and balanced for everyone.

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Copyright Internet Uncategorized

Attacking the Notice-and-Staydown Straw Man

Ever since the U.S. Copyright Office announced its study of the DMCA last December, the notice-and-staydown issue has become a particularly hot topic. Critics of notice-and-staydown have turned up the volume, repeating the same vague assertions about freedom, censorship, innovation, and creativity that routinely pop up whenever someone proposes practical solutions to curb online infringement. Worse still, many critics don’t even take the time to look at what proponents of notice-and-staydown are suggesting, choosing instead to knock down an extremist straw man that doesn’t reflect anyone’s view of how the internet should function. A closer look at what proponents of notice-and-staydown are actually proposing reveals that the two sides aren’t nearly as far apart as critics would have us believe. This is particularly true when it comes to the issue of how well notice-and-staydown would accommodate fair use.

For example, Joshua Lamel’s recent piece at The Huffington Post claims that “innovation and creativity are still under attack” by the “entertainment industry’s intense and well-financed lobbying campaign” pushing for notice-and-staydown. Lamel argues that the “content filtering proposed by advocates of a ‘notice and staydown’ system . . . would severely limit new and emerging forms of creativity.” And his parade of horribles is rather dramatic: “Parents can forget posting videos of their kids dancing to music and candidates would not be able to post campaign speeches because of the music that plays in the background. Remix culture and fan fiction would likely disappear from our creative discourse.” Scary stuff, if true. But Lamel fails to cite a single source showing that artists, creators, and other proponents of notice-and-staydown are asking for anything close to this.

Similarly, Elliot Harmon of the Electronic Frontier Foundation (EFF) argues that “a few powerful lobbyists” are pushing for notice-and-staydown such that “once a takedown notice goes uncontested, the platform should have to filter and block any future uploads of the same allegedly infringing content.” Harmon also assumes the worst: “Under the filter-everything approach, legitimate uses of works wouldn’t get the reasonable consideration they deserve,” and “computers would still not be able to consider a work’s fair use status.” Like Lamel, Harmon claims that “certain powerful content owners seek to brush aside the importance of fair use,” but he doesn’t actually mention what these supposed evildoers have to say about notice-and-staydown.

Harmon’s suggestion that the reliance on uncontested takedown notices gives inadequate consideration to fair use is particularly strange as it directly contradicts the position taken by the EFF. Back in October of 2007, copyright owners (including CBS and Fox) and service providers (including Myspace and Veoh) promulgated a list of Principles for User Generated Content Services. These Principles recommend that service providers should use fingerprinting technology to enact notice-and-staydown, with the general caveat that fair use should be accommodated. Two weeks later, the EFF published its own list of Fair Use Principles for User Generated Video Content suggesting in detail how notice-and-staydown should respect fair use.

The EFF’s Fair Use Principles include the following:

The use of “filtering” technology should not be used to automatically remove, prevent the uploading of, or block access to content unless the filtering mechanism is able to verify that the content has previously been removed pursuant to an undisputed DMCA takedown notice or that there are “three strikes” against it:

1. the video track matches the video track of a copyrighted work submitted by a content owner;
2. the audio track matches the audio track of that same copyrighted work; and
3. nearly the entirety (e.g., 90% or more) of the challenged content is comprised of a single copyrighted work (i.e., a “ratio test”).

If filtering technologies are not reliably able to establish these “three strikes,” further human review by the content owner should be required before content is taken down or blocked.

Though not explicitly endorsing notice-and-staydown, the EFF thinks it’s entirely consistent with fair use so long as (1) the content at issue has already been subject to one uncontested takedown notice, or (2) the content at issue is at least a 90% match to a copyrighted work. And the funny thing is that supporters of notice-and-staydown today are actually advocating for what the EFF recognized to be reasonable over eight years ago.

While Harmon never explicitly identifies the “powerful lobbyists” he accuses of wanting to trample on fair use, he does link to the Copyright Office’s recently-announced study of the DMCA and suggest that they can be found there. Reading through that announcement, I can only find three citations (in footnote 36) to people advocating for notice-and-staydown: (1) Professor Sean O’Connor of the University of Washington School of Law (and Senior Scholar at CPIP), (2) Paul Doda, Global Litigation Counsel at Elsevier, and (3) Maria Schneider, composer/conductor/producer. These three cites all point to testimonies given at the Section 512 of Title 17 hearing before the House Judiciary Committee in March of 2014, and they show that Harmon is attacking a straw man. In fact, all three of these advocates for notice-and-staydown seek a system that is entirely consistent with the EFF’s own Fair Use Principles.

Sean O’Connor seeks notice-and-staydown only for “reposted works,” that is, “ones that have already been taken down on notice” and that are “simply the original work reposted repeatedly by unauthorized persons.” His proposal only applies to works that “do not even purport to be transformative or non-infringing,” and he specifically excludes “mash-ups, remixes, covers, etc.” This not only comports with the EFF’s recommendations, it goes beyond them. Where the EFF would require either a previously uncontested notice or at least a 90% match, O’Connor thinks there should be both an uncontested notice and a 100% match.

The same is true for Paul Doda of Elsevier, who testifies that fingerprinting technology is “an appropriate and effective method to ensure that only copies that are complete or a substantially complete copy of a copyrighted work are prevented or removed by sites.” Doda explicitly notes that filtering is not suitable for “works that might require more detailed infringement analysis or ‘Fair Use’ analysis,” and he praises YouTube’s Content ID system “that can readily distinguish between complete copies of works and partial copies or clips.” Doda’s vision of notice-and-staydown is also more protective of fair use than the EFF’s Fair Use Principles. While the EFF suggests that a previously uncontested notice is sufficient, Doda instead only suggests that there be a substantial match.

Unlike O’Connor and Doda, Maria Schneider is not a lawyer. She’s instead a working musician, and her testimony reflects her own frustrations with the whack-a-mole problem under the DMCA’s current notice-and-takedown regime. As a solution, Schneider proposes that creators “should be able to prevent unauthorized uploading before infringement occurs,” and she points to YouTube’s Content ID as evidence that “it’s technically possible for companies to block unauthorized works.” While she doesn’t explicitly propose that there be a substantial match before content is filtered, Schneider gives the example of her “most recent album” being available “on numerous file sharing websites.” In other words, she’s concerned about verbatim copies of her works that aren’t possibly fair use, and nothing Schneider recommends contradicts the EFF’s own suggestions for accommodating fair use.

Lamel and Harmon paint a picture of powerful industry lobbyist boogeymen seeking an onerous system of notice-and-staydown that fails to adequately account for fair use, but neither produces any evidence to support their claims. Responses to the Copyright Office’s DMCA study are due on March 21st, and it will be interesting to see whether any of these supposed boogeymen really show up. There’s little doubt, though, that critics will continue attacking the notice-and-staydown straw man. And it’s really a shame, because advocates of notice-and-staydown are quite conscious of the importance of protecting fair use. This is easy to see, but first you have to look at what they’re really saying.