2:23 PM

The appeals court has ruled in favor of Verizon against the RIAA in the file sharers subpoena case. This is a huge win for Verizon, file sharers, and fans of limiting the power of copyright laws. I first heard the news from John Palfrey, but I'm sure just about everyone is covering it by now. The ruling itself is available as a PDF.

First, the background: the DMCA allows copyright holders to issue subpoenas against Internet providers to compel them to reveal the identity of users who have copyrighted works online. Note that this subpoena power exists independently of a lawsuit. Copyright holders also have the option to file a lawsuit and then subpoena the Internet provider to learn the identity of the user. The DMCA reduces the requirements for the copyright holder by not requiring the initial lawsuit and not requiring any evidence of infringement.

In 2002, the RIAA issued two subpoenas to Verizon under the DMCA to determine the identity of two Verizon customers which the RIAA asserted were distributing copyrighted music files over a file sharing network. Verizon challenged the subpoenas on both statutory and constitutional grounds. The district court ruled in the RIAA's favor and Verizon appealed the ruling. Verizon also attempted to stay the ruling during the appeals process. Verizon lost the request for the injunction and was compelled to provide the information about the customers to the RIAA.

Since then, the RIAA has issued thousands of subpoenas to Internet providers across the country and has used the information to file hundreds of copyright infringement lawsuits and threaten hundreds more with potential lawsuits. A small fraction of the subpoenas have been challenged by both the Internet providers and by their customers and a small number of the lawsuits have been challenged, but in the majority of cases the targets have settled, with typical settlements of a few thousand dollars.

This ruling brings that process to a halt by ruling that the subpoenas aren't valid.

The ruling states that Verizon made one statutory argument and two constitutional arguments opposing the subpoenas. The statutory argument is that the language of the DMCA specifies that the Internet provider provide storage for the infringing file. File sharing software, which did not exist when the DMCA was written, allows the users to store the files on their own computers rather than those of the Internet provider and uses the Internet provider only to transport the files when they are copied from one user to another. Verizon argued that since the Internet provider doesn't store the file, the DMCA does not apply.

The first constitutional argument is that the law is invalid under Article III of the Constitution, which requires a "case or controversy" before a court can issue a subpoena. Verizon argued that in the absence of a lawsuit, there is no "case or controversy" and therefore the law is unconstitutional.

The second constitutional argument is based on the First Amendment. Verizon argued that the DMCA infringes on the user's rights of speech and association.

The appeals court agreed with Verizon's statutory claim and did not come to a decision on the constitutional claims, although a footnote indicates that the court would not have accepted the Article III argument.

Section 512 of the Copyright Act, added by the DMCA, lays out protections against liability for Internet providers for the copyright infringement carried out by the users. Subsection 512(a) protects against liability for transferring copyrighted materials at the request of a user. 512(b) protects against liability for caching or temporarily storing materials. 512(b) is important for the overall performance of the Internet because Internet providers rely on caching to reduce the total data sent over the Internet, which increases the speed of the Internet. 512(c) protects against liability for storing copyrighted materials at the request of a user, provided that the Internet provider is generally unaware of the content of the material. Finally, 512(d) basically protects search engines from liability.

The important subsections in this case are the 512(a) protection against data transfer and the 512(c) protection against data storage. A significant difference between the two subsections is that 512(c) includes a take-down provision while 512(a) does not. The take-down provision requires that upon receiving a subpoena as detailed in subsection 512(h), the Internet provider must either remove or block access to the allegedly infringing material. 512(h) also requires that the provider provide the identity of the allegedly infringing user to the copyright holder.

The arguments reduce to minutiae on the exact wording of the law and whether or not subsection 512(c) applies to file sharing networks. To my mind, it's obvious that 512(c) depends on the provider providing data storage and it clearly does not in the case of file sharing networks, but the actual arguments in this case are far more nitpicky. In any event, the court decided in favor of Verizon, ruling that 512(c) does not apply to file sharing networks.

Alternatively, the RIAA held that subsection 512(h), which requires the identity of the user to be revealed, applies to all four subsections and protection from liability, so that even if file sharing is covered by 512(a), copyright holders can still issue a subpoena under 512(h) to learn the identity of the user. In response, the courts states that, "This argument borders on the silly."

Verizon argued that 512(h), because of the way that it is written, only applies to 512(c) and not to 512(a), (b), or (d), despite the fact that 512(b) and (d) also have take-down provisions which reference 512(c). The court rejected this argument for 512(b) and (d) but agreed for 512(a). The court emphasizeds that 512(b)-(d) all refer to data storage while 512(a) refers only to data transfer.

The RIAA made an argument that the legislative history of the DMCA indicates that 512(c) should apply to file sharing anyway, but the court ruled that the law is quite clear as written and if it doesn't apply to file sharing, that was because file sharing was developed after the law was passed. If Congress had anticipated file sharing, it might have written the law differently, but it didn't and that's that.

Finally, the RIAA argued that Verizon's interpretation would defeat the purpose of the DMCA, to which the court basically responded with "tough luck." It's not the court's job to make laws; it's Congress'. The court pointed to the ongoing Congressional hearings on file sharing to back up that position.

The important question is what happens next. The RIAA may appeal to the Supreme Court, but it hasn't yet stated that it will. The RIAA has stated that this ruling will force its hand and will prevent it from attempting to settle infringement claims outside of lawsuits, which implies that the RIAA intends to keep suing anyway.

My big question is on the fate of all the issued subpoenas. By now, hundreds of subpoenas have been improperly issued, leading to lawsuits and settlements. What is the status of these subpoenas? I thought that the DMCA listed penalties for knowingly filing erroneous subpoenas, but I can't track the precise language down now. Is the RIAA on the hook? They could claim it wasn't "knowingly," but it still could result in a lot of trouble for them. Does this throw the outcome of the various lawsuits and settlements in doubt? Could a target of the RIAA claim that since the subpoena was improper, the settlement was invalid? This is one of those times when I wish my knowledge of general legal process was better than it is.

This ruling only applies to the DC circuit. Will the RIAA just start issuing subpoenas through courts in another circuit? Will the RIAA and MPAA try to change copyright law to include file sharing under the take-down provisions of the DMCA? There are many different directions the RIAA could move in from here. I'm very curious about what they will do.

Another obvious point is the way in which copyright law in general struggles to keep up with technology. The Copyright Act of 1909 was written partially to account for the new technologies of the late 19th century. 60 years later, technology had changed sufficiently to require the complete overhaul of the law in the Copyright Act of 1976. Less than 15 years after that, the Audio Home Recording Act was written in response to the rise of audio tape. Less than 10 years after the AHRA, the DMCA was intended to cover digital technology. And now, five years later, court rulings on file sharing are indicating that the DMCA has failed.

It feels like we're moving toward a breaking point, where the pace of technological change outstrips the response of the law so badly that a fundamental reconceptualization of copyright will be required. I don't think we're there yet, but I hope we get there soon.

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