Peer-to-Peer File Sharing

A Peer-to-Peer (P2P) Primer

 

• For a basic understanding of how the software works, see Metro-Goldwyn-Mayer Studios, Inc. v. Grokster Ltd., 380 F.3d 1154 (9th Cir. 2004).  Read pp. 10-13.
• Also take a look at Kazaa’s and LimeWire’s descriptions of how their systems work.
• Finally, take a look at these wikipedia entries:
• The general entry for peer-to-peer.
• Also, this chart showing the number of p2p file sharing programs out there.  Of interest on the chart are the presence of spyware/adware and the ability to share files "anonymously."
• In these instances, pay attention to what advantages peer-to-peer file sharing has over traditional client/server distribution, as well as the advantages and disadvantages of the various methods of indexing files.

 

A Copyright Primer

 

This whole section is optional.  However, it may be helpful if you want a better grasp on the copyright law, as it pertains to P2P file sharing.

• American copyright law is grounded in Article I, Section 8, Clause 8 of the Constitution:
  
  "The Congress shall have Power . . . To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries[.]"
  
  
• What does copyright protect?  (Chapter 1)
• Read 17 U.S.C. § 102 for what types of works are protected (and not protected) by copyright.
• Read § 106 for the exclusive rights afforded to a copyright owner.  For our purposes, the most important of these are reproduction and distribution of the work.  There are exceptions to the exclusive rights in § 106, but they usually are irrelevant in the file sharing context.
• Who owns a copyright?
• Read 17 U.S.C. § 201(a), (b), and (d).
• Record labels usually say their sound recordings are "works made for hire."  This means that, if I record an album for Sony, Sony is considered the author and owner of the sound recording.  Movie studios work the same way.
• As for the underlying song itself, the songwriter is usually considered the author and initial owner.  S/he will then transfer the song to a music publisher, who then owns the copyright in the song.
• What is copyright infringement?  (Chapter 5)
• Read 17 U.S.C. § 501(a)-(b).
• So, if I make an mp3 file of "Let It Be" by the Beatles available over a P2P network and someone downloads it, I have distributed the song and the sound recording without authorization.  The copyright owner of the recording (in this case, Apple Records) can sue me for infringement.  The copyright owner of the underlying song (in this case, Sony/ATV) can also sue me for infringement.
• So what happens to me if I get caught?  Read §§ 502-507.

The "Evils" of P2P

As if we didn’t know, P2P file sharing programs are used to share music, movies, software, etc. over the internet.  Much of it is unauthorized.  From a policy standpoint, how much of a problem is this?

 

• The RIAA and MPAA certainly think it’s big, saying they have lost hundreds of millions of dollars due to internet piracy.  See also the Music United website.
• Economists disagree over whether P2P sharing actually causes lost sales.  See this New York Times article.
• Extremely optional: The studies alluded to in this article can be found here (Oberholzer/Strumpf) and here (Liebowitz).  If an economically inclined person in the class would be so kind as to clue us in on what the heck is going on in these studies, I’m sure we would all be eternally grateful.
• Read the section of Larry Lessig’s Free Culture called "Piracy II" (pp. 66-79 of the book, pp. 80-93 of the PDF).
• Think about the four types of sharing that Lessig delineates.  How many of us have engaged in these types of sharing?  How would you weigh the costs of type A sharing against the benefits of types B-D?
• In the Grokster case before the Supreme Court, a group of musicians submitted this amicus brief attesting to the benefits they received as a result of (type D) sharing.  Read parts I and II of the argument (pp. 18-24) and browse through the statements of interest (pp. 6-15).

 

The Industry Response

 

Suing the Individual Users of P2P Software

 

Most people have heard about the RIAA’s lawsuits against individuals who allegedly share music files through P2P networks.  The latest round of suits by the IFPI (the RIAA’s international equivalent) netted 8,000 file sharers.

• Sometimes the RIAA’s tactics appear heavy-handed, such as when they sued this 83-year-old dead grandmother or this 12-year-old girl.  Is this a sign of the industry’s overzealousness, or are these examples merely unfortunate effects of an otherwise worthy campaign against pirates?
• Take a look at this site showing what exactly happens when the RIAA sues an individual.  Take note of a few things:
• Most individuals share files anonymously, and the RIAA is forced to sue "John Does" until it finds out the true identity of the file sharer (obtained by subpoenaing the file sharer’s ISP).  Does this raise privacy concerns?  Any other concerns?
• Check out the amounts of money obtained by the RIAA in each settlement and in each default judgment.  Pretty heavy stuff — copyright owners are threatening to pursue statutory damages (up to $150,000 per infringement), and so a settlement in the $3700 range sounds like a "bargain."
• An early story suggests the RIAA’s campaign against file sharers has been successful.  A more recently published study (optional read) cautiously corroborates this, pointing out:
• File sharers may simply reduce the number of files shared, bringing them "below the radar" of the RIAA (which had announced that it was targeting people who share over 800 files).  In the end, there is still a generous supply of music files available for download.
• A potential public backlash may result as consumers react to the RIAA’s tactics.

 

Suing the P2P Software Companies

 

• Read the majority opinion in Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, 545 U.S. 913 (2005).  Justice Ginsburg’s and Justice Breyer’s concurring opinions are optional.
• Fred von Lohmann’s excellent analysis of potential liability for P2P software companies is found here.  Please read through the whole document, but pay particular attention to:

• The three types of secondary liability that could be imputed to P2P companies (Part III.B.).
• The types of "affirmative acts" the Supreme Court held could show "inducement" (Part IV.C.; see also pp. 9-14 and 25-28 of Grokster).

• The steps von Lohmann says a P2P developer can take to insulate itself from secondary liability (Part VI).
• Links to the cases in the above analysis are provided below for your edification and entertainment (but not required reading).
• Sony Corp. v. Universal City Studios, Inc., 464 U.S. 417 (1984)
• A&M Records v. Napster, 239 F.3d 1004 (9th Cir. 2001)
• In re Aimster Copyright Litigation, 334 F.3d 643 (7th Cir. 2003)

• The Grokster case was remanded down to the district court, which applied the new inducement theory and granted MGM summary judgment against StreamCast (after co-defendants Grokster and Sharman Networks had settled).  Skim through pp. 28-45 of the order granting summary judgment, taking note of the details in the record that court says show inducement.
• Do you agree with the court’s conclusion that StreamCast "induced" copyright infringement?
• The EFF writes a response to the StreamCast decision here.  Do you agree with this response?
• If you were a P2P developer, how would you design your system and business to avoid secondary liability?  Are von Lohmann’s tips enough?
• In a strange turn of events, Bertelsmann AG (the parent company of BMG Publishing and half-owner of Sony/BMG record label) invested over $90 million in the original Napster while it was facing legal battles.  The other record labels obviously didn’t like this, and sued Bertelsmann, saying the influx of cash it gave Napster staved off bankruptcy and allowed massive infringement to continue for months longer than it should have.  At least one claim against Bertelsmann has been settled.

 

Other Solutions

 

• Collective Licensing — read the EFF’s proposed collective licensing system, whereby each file sharer pays $5 a month for the right to share (download as well as upload) as much content as they want.  Think about the viability of such a system.
• From the standpoint of a major record label or music publisher, would this system recoup enough revenue to justify expending money on recording and releasing an album? 
• If the music industry does not "sign on" to a collective licensing system, von Lohmann advocates a compulsory license, whereby rightsholders would have to allow sharing of their music and would receive a fee set by the government.  Some people (optional read) disagree with this, extolling the virtues of a free market.  What are the relative advantages and disadvantages of a compulsory license, a collective license, and the current system where each user must negotiate separately with each rightsholder?
• What do you think of the promise of P2P for independent or unsigned musicians?  Will this new method of distribution obviate the need for musicians to sign with major labels, or put them on even ground?
• What happens if people don’t pay their fee?  Von Lohmann seems to assume that "file sharers are willing to pay a reasonable fee for the freedom to download whatever they like," and that copyright owners could continue to enforce their rights, "offer stragglers [who don’t pay] the opportunity to pay a fine and get legal."  Is this realistic?
• Filtering
• Read this article about the effort to create "fingerprinting" technology that will be used to detect copyrighted music and movies and block their distribution over P2P networks.
• Take a quick look at Snocap’s and Audible Magic’s websites.
• Should filtering be required to avoid secondary liability for inducing copyright infringement?

 

Fun Stuff (completely optional)

 

• "Edumacation."  Check out this cartoon trying to teach America’s youth about the value of copyright.
• A Convenient Champion of Copyright.  Sharman Networks, the company behind KaZaA, provided this notice to Google that several websites were distributing unauthorized, infringing copies of the KaZaA software.  Google promptly removed access to these sites from its search results.