News & Cues: Legal Drama Around P2P File-Sharing [Part II]

by Koka Tarini Siddhartha

A quick recap…

In our previous post, we discussed the basics of P2P file-sharing networks and left you with an information-laden table highlighting a few important cases involving these networks — and their final outcomes. In this post, we will elaborate further and connect the dots to explain the relevance of those cases, and also speculate on the possible future of KickassTorrents.

What should we infer from the table?

An important point to note is that there is an evident transition of liability when we move from a centralized to a decentralized server. A landmark judgment in the field of fair use is the 1984 Sony Corp v. Universal Studios case, also referred to as the ‘Betamax case’. Here, the US Supreme Court ruled in favour of Sony’s VTR/VCR which introduced time-shifting to the world. The court held that the sale of an article of commerce could not be stopped just because there was the possibility of an infringing use, when the product could otherwise be used for legitimate purposes.

In other words, it needs to be determined whether the infringing uses of a product are so high that they overshadow its non-infringing uses. While copyright infringement must be minimized, it cannot come at the cost of suppressing inventions.

How is the Sony case relevant to this discussion?
(Please refer to the table from Part I.)

As the distinction between centralized and decentralized servers might now be clearer, we can draw your attention to the Napster and Aimster/Madster cases [A&M Records, Inc. v. Napster, Inc (2001) and Re Aimster Copyright Litigation (2003)].

Both Napster and Aimster/Madster were functioning over centralized servers, i.e., they could have restricted the copyright infringement taking place via their servers since they had control over the transaction of files through it. Since no action was taken by them, the court ruled against them, resulting in the end of both services.

In MGM v. Grokster Ltd. (2005), all three services — Grokster, Morpheus and later on, even Kazaa — were taken to court for the illegal distribution of copyrighted work. Here, all three functioned on decentralized servers and claimed they did not violate copyright laws, as the files did not pass directly through their server. They even tried using the Sony defence but the court finally rejected their contention and held that as the product/service was intended to be distributed to encourage infringement, their founders were liable to be punished for the same.

(Fun fact for Shark Tank lovers: Grokster’s fight at the supreme court was partly funded by billionaire Mark Cuban.)

How does contributory infringement come into the picture?

The Sony decision protected the VTR/VCR manufacturers from contributory infringement as the product was primarily designed to serve a non-infringing purpose. The same could not be said for the decentralized P2P servers Grokster, Morpheus and Kazaa, as they actively promoted the illegal dissemination of copyrighted work.

Seven reasons for their liability as contributory infringers:

  1. They were aware of the direct infringement by users of their software.
  2. They did not develop filtering tools to reduce the infringement.
  3. Their documents showed that they wanted to attract former Napster users.
  4. They circulated newsletters promoting their software’s abilities.
  5. They failed to block anyone from using their software to share copyrighted files.
  6. They blocked entities trying to monitor the use of their software.
  7. They profited from selling advertising space — the more the software was used, the more money they would make through the display of ads.

Further, as such a widely-shared service makes it nearly impossible to charge the direct infringers, the practical approach is to hold these P2P networks liable on grounds of secondary liability by being vicariously liable for the infringement, as they benefited monetarily from their users’ direct copyright infringement.

How is all this connected to torrent sites like The Pirate Bay and KickassTorrents?

Well, using these cases as a precedent, courts in various jurisdictions have taken similar action. For starters, the founders of The Pirate Bay were found guilty, and had to serve an imprisonment term as well as pay a fine. This case was tried by the Stockholm District Court, Sweden. A more recent case which catapulted this post is the arrest of KickassTorrents’ founder, Vaulin.

All that you have read so far will make sense now, because these are the arguments that will be put forth when Vaulin goes to trial on August 29, 2016, at the High Court of Auckland. KickassTorrents only hosts the .torrent files, and does not actually engage in the transaction of copyrighted material. On the other hand, it has refused to comply with takedown notices.

While Vaulin will be represented by lawyer Ira Rothken — who has in the past successfully won original suits in this field (also known as first impression cases) — the outcomes of the above-mentioned cases do not lean in Vaulin’s favour.

Should KickassTorrents be punished for piracy?

There have been mixed reactions to arresting Vaulin and shutting KickassTorrents down. On one hand, you have the movie and music industries, which insist that the torrent site should be shut down, as they are suffering losses in millions of dollars due to piracy. On the other hand, people insist that the website should continue to function as it has several legal services one could avail of as well. For example, several games and apps rely on these torrents to circulate updated versions amongst their users.

It is also pertinent to mention here that the BitTorrent protocol in general is not used solely for illegal purposes. Facebook and Twitter use the protocol to move files internally. BitTorrent Sync is similar to Dropbox, except that it syncs content directly between computers. Even various governments use it as it reduces bandwidth costs and can transfer huge files.

For Game of Thrones fans, the Time Warner CEO, one of the show’s directors, and even author George R.R. Martin consider it a compliment that the show is the most pirated across the globe. The CEO went as far as declaring that the high piracy rates were better than an Emmy! The first season of Game of Thrones was the best-selling DVD in 2012. Even The Big Bang Theory sold well despite being the third-most pirated show.

All we’re getting at is that there are both legal and illegal uses attached to BitTorrent, and while copyright infringers cannot get away with it because of the legal systems in place, removing these websites and arresting their founders will not stop piracy. Mirror or clone KickassTorrents websites were already up and running a few days after Vaulin’s arrest.

The internet is often compared to a hydra — cut off one tentacle, and it grows another. Perhaps it is time that governing bodies try a different approach in tackling P2P file-sharing networks.

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