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File-Sharing Liability: What Employers - and Parents - Need to Know
The Recording Industry Association of America (the "RIAA") has officially declared war on peer-to-peer file-sharing of music. As has been widely reported in the news, the RIAA has sued hundreds of people who share their music with others online. In the wake of these suits, we have been asked to advise employers who are concerned about the potential copyright infringement exposure they could have for employees who might be file-sharing at work. We have also gotten a lot of questions from parents concerned about liability for file-sharing by their children. In this article we will describe some of the legal issues implicated by file-sharing and offer some guidelines.
The Law of File-Sharing.
Under existing copyright law, it is reasonably clear that you may copy music from a CD that you own to a cassette or DVD or even to your computer hard drive for your own personal use. It also is fairly clear that you may burn a copy of your CD to use in the car or as a back-up, or to download the music to a personal MP3 player like a Rio® or iPod™ without a serious risk of legal reprisal. In the past, courts have held that downloading digital copies of music that the downloader already owns -on vinyl or tape, say – is permissible. But giving others a copy of the personal copy stored on a hard drive by burning CDs for friends (or worse, selling it) or making a digitized music library available to others to download to their MP3 players, will almost always be a violation of the Copyright Act.
Two Kinds of Liability
In general, employers and parents assessing their exposure to file-sharing liability
should consider two types of copyright liability - contributory infringement and
- Contributory infringement. Contributory infringement means that, with
knowledge of the infringing activity, you cause or materially contribute to copyright
infringement by someone else. This concept has been fleshed out in several recent
cases involving music sharing technology.
A&M Records, Inc. v. Napster, Inc. Napster facilitated file-sharing by allowing
users to upload music files to the
company's servers. A group of record companies sued Napster for copyright infringement.
Although the Napster
technology arguably supported substantial legal uses (i.e., non-infringing uses
such as sharing public domain materials), the Napster court found for the record
companies. The court said Napster knew or should have known that persons were
using the company's central servers (on which copies of copyrighted music were
stored) to engage in infringing activities, but did not prevent it.
Aimster Copyright Litigation. In Aimster, the file-sharing
technology permitted users to swap files only when the users were online and connected
in a chat room enabled by an instant-
messaging service. Unlike Napster, the Aimster servers did not make copies of
the music files; rather, the music files resided on individual users' computers.
When prompted, Aimster's servers searched the
computers of users for requested files.
Again, record companies sued, alleging copyright infringement. Aimster defended
by identifying several non-infringing uses (e.g., file-sharing of noncopyrighted
music or downloading of music already owned by the user). But again the court
found for the record
companies, holding that actual knowledge of infringing uses of
otherwise permitted technology (that is, technology that has
substantial non-infringing uses) could nevertheless make one a
- Vicarious liability. A court may find a "principal," such as an
employer, "vicariously liable" for the actions of her agents or
employees. The theory in the employment context is that the
employer should be responsible for the wrongful acts of her
employees when the employer has the right and ability to oversee her employees'
conduct, and she enjoys a direct, financial benefit as a result of those wrongful
For instance, the Napster court found Napster vicariously liable for infringements
by its users. Napster, said the court, had the right and ability to supervise
its users' conduct, and had a direct financial interest in the infringing activity.
When Are Employers Liable?
Let's assume an employer provides employees with high-speed Internet access for business purposes. Let's also assume the
employer is aware that some employees use that access to file-share copyrighted materials. In this case, the employer may be liable for contributory infringement. The test, again, will be whether the employees predominantly use the file-sharing program for substantial non-infringing purposes, or whether they predominantly use the
program for infringing purposes. If the former, the ancillary
infringing uses - sharing songs online - may well not support liability.
The employer may also be subject to vicarious liability if she is aware of, but ignores, her employees' illegal activities.
What to Do.
File-sharing policy. We have advised employers to establish and enforce a policy prohibiting the use of file-sharing software. Such a policy (if enforced) can help to reduce the risk of
contributory or vicarious liability for copyright infringement.
Legitimate music sources. Businesses that need access to music for business reasons may also consider buying songs online through a legitimate digital music store, listening to authorized samples
(usually 10-20 second clips) that are available on many online book and music stores, buying the CD, or licensing the music.
When Are Parents Liable?
Parents, of course, are very concerned about the RIAA lawsuits against individuals (including young children) who have made their music collections available to others online. In these suits, the RIAA has asked for $150,000 per infringement, plus injunctive relief.
Can parents be liable for copyright infringement by
unemancipated minor children? In most states, parents are liable only for the malicious or violent torts of their children (think guns and cars). But from a practical point of view, many children will not have the means to satisfy legal judgments; and many parents - hoping to keep their children's records clean -- will pay to discharge those debts.
What to Do.
Talk to your children about file sharing. Liability for file-sharing is complicated, and children may not understand that they may be breaking the law. In view of the unprecedented legal steps taken by the RIAA, parents should discuss with their children the issues raised in this article. You can say that downloading music from the Internet is considered theft by the music industry, and that many artists are against it, and may suffer financially from it if people stop buying their CDs and get their music for free instead. Emphasize the many legal ways to obtain music, including legal online sources. And, of course, consider deleting the sharing features and shared files on your children's computers. Indeed, Digital Media Wire reports that during the month of August, 1.4 million households deleted all the digital music files saved on their PC hard drives (citing a survey by the NPD Group).
Please feel free to contact us for more information, or copies or links to the sources we have cited.
First Amendment Victory: FCC Withdraws Indecency Ruling Against Sarah Jones
Jones v. FCC
Frankfurt Kurnit succeeded in getting the FCC to withdraw its determination that our client Sarah Jones's work, "Your Revolution," was indecent.
Ms. Jones, an award-winning performance artist and poet, wrote "Your Revolution" as a response to the offensive treatment of women in music on mainstream radio. The work employed the hip-hop form, and certain vocabulary from hip-hop songs, to illustrate Ms. Jones's point.
The FCC's indecency declaration effectively censored Ms. Jones's work for an indefinite period of time without providing her any role in the decision-making process.
Along with our co-counsel, People for the American Way, Frankfurt Kurnit brought a court action against the FCC,
seeking a declaration that the FCC ruling violated Ms. Jones's constitutionally protected free speech rights. After the district court dismissed the case for lack of standing, we appealed the case to the Second Circuit. We argued that the FCC decision-making process had already dragged on for almost two years, and that Ms. Jones was suffering irreparable harm to her First Amendment rights because, among other things, radio stations were refusing to air her song for fear of being fined. Faced with the prospect of a reversal on appeal, the FCC withdrew its indecency determination against "Your Revolution."
Edward H. Rosenthal and Kesari Ruza wrote the briefs, with assistance from Larry Ottinger and Elliot Mincberg of People for the American Way.
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Bid Rigging Claims Against Stamp Auction House Dismissed
Gregory Stolow v. Greg Manning Auctions, Inc.
Ronald C. Minkoff and Jessie F. Beeber won dismissal of a complaint against several rare stamp dealers and auction houses who were sued by a dissatisfied competitor. The complaint alleged that the defendants had conspired to rig bids and fix prices at various stamp auctions throughout the United States from 1990 to 1999. These actions, the complaint charged, constituted violations of the RICO statute and the Sherman Act, as well as common law fraud.
The Court dismissed each and every claim against the
defendants. It held that the plaintiff lacked standing to sue under RICO, that the Sherman Act claims were barred by the statute of
limitations, and that the fraud claims failed because the plaintiff had admitted that he participated in stamp auctions even though he was aware of the alleged bid rigging.
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FINAL FAVORABLE DECISION IN BOOK LIBEL CASE
Cuevas v. President and Fellows of Harvard College
In Cuevas v. President and Fellows of Harvard College, our clients Harvard University Press and noted sociologist and author Robert Jackall were sued for libel over the publication of Mr. Jackall's non-fiction book "Wild Cowboys: Urban Marauders & The Forces of Order," about gang members in Washington Heights and the law enforcement agencies that prosecuted them. We argued that Mr. Cuevas was not entitled to recover damages for what he claimed was a false portrayal of himself in the book. The Court agreed and dismissed the case on summary judgment,
finding that neither of the defendants acted in a grossly
irresponsible manner; that Mr. Jackall thoroughly researched the book; and that Harvard properly relied on Mr. Jackall's
unquestioned reputation and its own review process in publishing it. Mr. Cuevas has chosen not to appeal.
Edward H. Rosenthal and Yuki Hirose wrote the motion for summary judgment; Mr. Rosenthal argued the motion.
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