APPEALS COURT SIDES WITH VERIZON IN RIAA SUBPOENA SUIT

Ginsburg concluded DMCA language was limited to content held by ISPs. He acknowledged the 1998 law was written before P2P. “Had the Congress been aware of P2P technology, or anticipated its development, 512(h) might have been drafted more generally,” Ginsburg wrote. He said that while he was “not unsympathetic” with the copyright infringement on P2P networks, “it is not the province of the courts, however, to rewrite the DMCA in order to make it fit a new and unforseen Internet architecture, no matter how damaging that development has been to the music industry or threatens being to the motion picture and software industries.”

RIAA now must file a traditional John Doe suit, Verizon Assoc. Gen. Counsel Sarah Deutsch said. Filing a suit against a suspect whose identity isn’t known isn’t uncommon but requires more judicial review than the DMCA procedure, under which a copyright holder need only a court clerk’s signature. A John Doe suit will be under judicial supervision, which Deutsch said preserves “the privacy, safety and legal rights” of Internet subscribers.

RIAA Pres. Cary Sherman said “we can and will continue to file copyright infringement lawsuits against file sharers who engage in illegal activity.” He called the decision “inconsistent with both the views of Congress and the findings of the District Court,” but didn’t say whether RIAA would appeal. RIAA hadn’t responded to our clarification request by deadline. Sherman did say that the ruling “unfortunately means we can no longer notify illegal file sharers before we file lawsuits against them to offer the opportunity to settle outside of litigation. Verizon is solely responsible for a legal process that will now be less sensitive to the interests of its subscribers who engage in illegal activity.”

Deutsch told us Verizon CEO Ivan Seidenberg hadn’t received the letter, dated Dec. 16. She said the carrier wanted to “find reasonable ways to cooperate” with copyright owners, but “we have to see what they're asking for” in terms of the number of letters. She said RIAA hadn’t paid the “reasonable costs” the law required for subpoena compliance and in the last week had been bundling 12 or more IP addresses in a single subpoena. “We were gearing up to oppose” bundled subpoenas, possibly in court, Deutsch said, but now no longer needed to. The bundling suggests that RIAA could want ISPs to write thousands of letters, she said. As to Sherman’s claim that Verizon would be responsible for RIAA’s stopping warning letters, “that is just complete nonsense,” she said, saying RIAA never wanted to send letters to begin with.

Senate Governmental Affairs Investigations Subcommittee Chmn. Coleman (R-Minn.) has criticized the RIAA subpoenas. At a hearing he conducted, RIAA Chmn. Mitch Bainwol pledged to send warning letters. Coleman said the case showed litigation wouldn’t solve the recording industry’s problem. He has threatened legislation to restrict DMCA subpoena power. He said he would continue to work toward a solution. His spokesman didn’t respond to a query about the senator’s intentions on legislation.

Sen. Brownback (R-Kan.) said the decision “is exactly the result included” in his S-1621 introduced earlier this year (WID Sept 18 p3). The bill, among other things, aimed to require copyright holders to go before a judge to pursue infringers. He said he would continue to press his bill to make it formally part of the law. Brownback said the district court interpretation of DMCA subpoena use “did nothing to protect innocent consumers from stalkers, pedophiles, spammers and telemarketers who could use the same quasi-subpoena power.”

House Internet Caucus Co-Chmn. Boucher (D-Va.), a longtime critic of DMCA whose bill (HR-107) would amend a different portion, said the decision would protect the privacy of Internet users. He was involved in the creation of the DMCA and said “Congress never intended that subpoenas be issued in the circumstances under which they have been requested by the recording industry.” Senate Judiciary Committee Chmn. Hatch (R-Utah) said the decision “makes the need for reform of the subpoena process even more urgent.” He said an alternative was needed to artists’ having to sue “all accused infringers in federal court.”

Ginsburg took a direct tone in his decision, at one point suggesting RIAA’s argument that Sec. 512(h) applied to an ISP regardless whether it was storing material “borders upon the silly.” “It’s unusual for them to say that,” said Morrison & Foerster attorney Jonathan Band. Such strong language “sort of sends a signal” to any other court that might address the issue, he said.

RIAA has several options for challenging the decision. It can call for a hearing by all the Appeals Court’s judges, although Band said that wasn’t likely to be granted on a 3-0 decision by the chief judge. RIAA also could appeal to the U.S. Supreme Court, but Band said that court might be reluctant to take it absent a split among circuits. But RIAA could press the issue in another circuit to seek a division.

Verizon had made 3 arguments to the appeals court: (1) 512(h) didn’t apply to an ISP merely providing a conduit for file sharers, which the court accepted. (2) The district court lacked jurisdiction to issue subpoenas. (3) 512(h) violated the First Amendment because it prevented anonymous speech. The appeals court didn’t rule on the 2nd or 3rd argument.

Verizon isn’t the only ISP resisting the DMCA subpoenas, used this year by RIAA to gather information to file suits against more than 300 alleged unauthorized file sharers. RIAA has issued nearly 3,000 subpoenas to ISPs to identify alleged infringers. SBC also has resisted. Its case against RIAA recently was relocated to the same D.C. district court that had ruled in RIAA’s favor, a move the association welcomed. SBC Fri. called the appellate ruling “a clear and unmistakable message to the recording industry” that “strongly affirms our positions since we began our legal battle.” The company vowed to “continue to oppose DMCA subpoenas wherever they may be presented to us in order to protect the privacy rights of our customers.” “RIAA’s tactics completely backfired on them,” Deutsch said. She noted that an RIAA subpoena case against Charter Communications was before the 8th U.S. Appeals Court, St. Louis, and any court that considered such a case would “pay very close attention to what the U.S. Appeals Court had to say today.”

The DMCA requires an ISP to identify infringed material brought to its attention by a content holder and to remove that content or disable access to it. But Ginsburg pointed out that Verizon couldn’t do that because it wasn’t storing the alleged infringing content. The RIAA argued that Verizon could disable access if it closed the user’s Internet account. However, Ginsburg cited Verizon’s argument that “Congress considered disabling an individual’s access to infringing material and disabling access to the Internet to be different remedies for the protection of copyright owners,” citing different statutes.

Several trade groups praised the court’s decision. The U.S. Internet Industry Assn. (USIIA), of which Verizon is a member, said the court rightly ruled that copyright holders didn’t have the right to “invade the personal privacy and security of American consumers on the basis of allegations.” The Computer & Communications Industry Assn. (CCIA), a strong supporter of Boucher’s DMCA rewrite bill, said the decision still would permit identities to be revealed by ISPs “when appropriate” but would negate the RIAA’s “scorched earth” approach. Public Knowledge called the ruling “an early holiday present,” while the Electronic Frontier Foundation (EFF) said it would prevent record companies from stifling free speech.

The decision will impair MPAA’s ability “to combat the plague of Internet piracy,” Pres. Jack Valenti said. He said the court had failed to recognize “Congress’s clear intent was to protect intellectual property,” but “we will continue our fight against Internet piracy with the tools available to us and we are confident we will prevail.”

The Dist. Court ruling in Jan. forced Verizon to begin complying with the RIAA subpoenas, although the carrier immediately appealed and sought a stay.

Verizon’s case was argued in Sept. by Wiley, Rein & Fielding partner Andrew McBride. He said the ruling “avoids turning the DMCA into a blunt investigative instrument that applies to all private communications over the Internet.” Bruce Joseph, head of Wiley, Rein’s Copyright Practice, who represented ISPs during deliberations on the DMCA, said “we are pleased to see that the D.C. Circuit has interpreted the statute as it was intended… as a tool to be used in limited circumstances.”

RIAA last week wrote several major ISPs urging their cooperation in sending notification letters to suspected infringers. In a letter obtained by Washington Internet Daily that was cc'd to 8 congressional chairman and ranking members focused on the subpoena issue, Sherman and Bainwol asked ISPs to send Notice of Infringement letters to the subscribers associated with IP addresses that RIAA would provide. “As you know,” they wrote, “while we can obtain the [IP] address of a subscriber who is using your Internet service to infringe a copyright owned by one of our members, only you know the actual identity of the subscriber affiliated with that address.” Sherman and Bainwol said if the ISPs sent letters to suspected infringers that RIAA didn’t identify with DMCA subpoenas, that effort “will help ensure that a vibrant and legitimate market for online music can succeed while also potentially sparing customers from becoming defendants in future copyright infringement suits.” They also promised to continue using the DMCA subpoena process, a vow undermined by the Fri. court decision.