The North American Free Trade Agreement (NAFTA) between the United States, Canada, and Mexico was negotiated more than 25 years ago.

Over the past quarter-century trade has changed drastically, especially online, so the United States is now planning to modernize the international deal.

One of the topics that has received a lot of interest from various experts and stakeholders are safe harbors. In the US, Internet services are shielded from copyright infringement liability under the safe harbor provisions of the DMCA, but in Mexico and Canada, that’s not the case.

The latest round of NAFTA renegotiations are currently taking place in Montreal and this is heating up the debate once again. Several legal scholars and advocacy groups believe that such US-style safe harbor provisions are essential for Internet services to operate freely on the Internet.

A group of more than fifty Internet law experts and organizations made this clear in a letter sent to the negotiators this week, urging them to make safe harbors part of the new deal.

“When NAFTA was negotiated, the Internet was an obscure electronic network. Since then, the Internet has become a significant — and essential — part of our societies and our economies,” the letter reads.

“To acknowledge this, if a modernized NAFTA contains a digital trade chapter, it should contain protections for online intermediaries from liability for third party online content, similar to the United States’ ‘Section 230’.”

The safe harbors in the Communications Decency Act and the DMCA ensure that services which deal with user-generated content, including Google, YouTube, Facebook, Twitter, and Wikipedia, are shielded from liability.

This immunity makes it easier for new user-generated services to launch, without the fear of expensive lawsuits, the argument goes.

However, not everyone sees it this way. In a letter cited by Variety, a group of 37 industry groups urges U.S. Trade Representative Robert Lighthizer to negotiate ‘strong’ safe harbor protections. Strong, in this case, means that simply responding to takedown notices is not always enough.

“If these anti-IP voices succeed, they will turn long-standing trade policy, with creativity and innovation at its core, on its head by transforming our trade agreements into blueprints for how to evade liability for IP theft,” they write.

The MPAA and RIAA, which also signed the letter, previously stressed that the current US safe harbors are not working. These industry groups believe that services such as YouTube exploit their safe harbor immunity and profit from it.

The RIAA, therefore, wants any negotiated safe harbor provisions in NAFTA to be flexible in the event that the DMCA is tightened up in response to the ongoing safe harbor rules study.

So, what should a content industry-approved safe harbor look like then?

The music industry group says that these should only be available to passive platforms that are not actively engaged in communicating and do not generate any revenue from pirated content. This would exclude YouTube and many other Internet services.

While it’s clear that the ideas of both camps are hard to unite, there’s still the question of whether there will be a new and improved NAFTA version at all. President Trump has previously threatened to terminate the agreement.

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Through a series of new proposals, the European Commission is working hard to modernize EU copyright law. Among other things, it will require online services to do more to fight piracy.

These proposals have not been without controversy. Article 13 of the proposed Copyright Directive, for example, has been widely criticized as it would require online services to monitor and filter uploaded content.

This means that online services, which deal with large volumes of user-uploaded content, must use fingerprinting or other detection mechanisms – similar to YouTube’s Content-ID system – to block copyright infringing files.

The Commission believes that more stringent control is needed to support copyright holders. However, many legal scholars, digital activists, and members of the public worry that they will violate the rights of regular Internet users.

In the European Parliament, there is fierce opposition as well. Today, six Members of Parliament (MEPs) from across the political spectrum released a new campaign video warning their fellow colleagues and the public at large.

The MEPs warn that such upload filters would act as “censorship machines,” something they’ve made clear to the Council’s working group on intellectual property, where the controversial proposal was discussed today.

“Imagine if every time you opened your mouth, computers controlled by big companies would check what you were about to say, and have the power to prevent you from saying it,” Greens/EFA MEP Julia Reda says.

“A new legal proposal would make this a reality when it comes to expressing yourself online: Every clip and every photo would have to be pre-screened by some automated ‘robocop’ before it could be uploaded and seen online,” ALDE MEP Marietje Schaake adds.

Stop censorship machines!

Schaake notes that she has dealt with the consequences of upload filters herself. When she uploaded a recording of a political speech to YouTube, the site took it down without explanation. Until this day, the MEP still doesn’t know on what grounds it was removed.

These broad upload filters are completely disproportionate and a danger for freedom of speech, the MEPs warn. The automated systems make mistakes and can’t properly detect whether something’s fair use, for example.

Another problem is that the measures will be relatively costly for smaller companies ,which puts them at a competitive disadvantage. “Only the biggest platforms can afford them – European competitors and small businesses will struggle,” ECR MEP Dan Dalton says.

The plans can still be stopped, the MEPs say. They are currently scheduled for a vote in the Legal Affairs Committee at the end of March, and the video encourages members of the public to raise their voices.

“Speak out …while you can still do so unfiltered!” S&D MEP Catherine Stihler says.

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Fifteen years ago, the RIAA was contacting alleged file-sharers in the United States, demanding cash payments to make supposed lawsuits go away. In the years that followed, dozens of companies followed in their footsteps – not as a deterrent – but as a way to turn piracy into profit.

The practice is now widespread, not just in the United States, but also in Europe where few major countries have avoided the clutches of trolls. Germany has been hit particularly hard, with millions of cases. The UK has also seen tens of thousands of individuals targeted since 2006 although more recently the trolls there have been in retreat. The same cannot be said about Finland, however.

From a relatively late start in 2013, trolls have been stepping up their game in leaps and bounds but the true scale of developments in this Scandinavian country will probably come as a surprise to even the most seasoned of troll-watchers.

According to data compiled by NGO activist Ritva Puolakka, the business in Finland has grown to epidemic proportions. In fact, between 2013 and 2017 the Market Court (which deals with Intellectual Property matters, among other things) has ordered local Internet service providers to hand over the details of almost 200,000 Finnish Internet subscribers.

Published on the Ministry of Education and Culture website (via mikrobitti.fi) the data (pdf) reveals hundreds of processes against major Finnish ISPs.

Notably, every single case has been directed at a core group of three providers – Elisa, TeliaSonera and DNA – while customers of other ISPs seem to have been completely overlooked. Exactly why isn’t clear but in other jurisdictions it’s proven more cost-effective to hone a process with a small number of ISPs, rather than spread out to those with fewer customers.

Only one legal process is listed for 2013 but that demanded the identities of people behind 50 IP addresses. In 2014 there was a 14-fold increase in processes and the number of IP addresses targeted grew to 1,387.

For 2015, a total of 117 processes are listed, demanding the identities of people behind 37,468 IP addresses. In 2016 the trolls really upped their game. A total of 131 processes demanded the details of individuals behind 98,966 IP addresses. For last year, 79 processes are on the books, which in total amounted to 60,681 potential defendants in settlement cases.

In total, between 2013 and 2017 the Market Court ordered the ISPs to hand over the personal details of people behind a staggering 198,552 IP addresses. While it should be noted that each might not lead to a unique individual, the number is huge when one considers the potential returns if everyone pays up hundreds of euros to make supposed court cases go away.

But despite the significant scale, it will probably come as no surprise that very few companies are involved. Troll operations tend to be fairly centralized, often using the same base services to track and collect evidence against alleged pirates.

In the order they entered the settlement business in Finland the companies involved are: LFP Video Group LLC, International Content Holding B.V., Dallas Buyers Club LLC, Crystalis Entertainment UG, Scanbox Entertainment A/S, Fairway Film Alliance LLC, Copyright Collections Ltd, Mircom International Content Management, Interallip LLP, and Oy Atlantic Film Finland Ab.

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Late last year Playboy sued the popular blog Boing Boing for publishing an article that linked to an archive of every playmate centerfold till then.

“Kind of amazing to see how our standards of hotness, and the art of commercial erotic photography, have changed over time,” Boing Boing’s Xena Jardin commented.

Playboy, instead, was amazed that infringing copies of their work were being shared in public. While Boing Boing didn’t upload or store the images in question, the publisher took the case to court.

The blog’s parent company Happy Mutants was accused of various counts of copyright infringement, with Playboy claiming that it exploited their playmates’ images for commercial purposes.

Boing Boing sees things differently. With help from the Electronic Frontier Foundation, it has filed a motion to dismiss the case, arguing that hyperlinking is not copyright infringement.

“This lawsuit is frankly mystifying. Playboy’s theory of liability seems to be that it is illegal to link to material posted by others on the web — an act performed daily by hundreds of millions of users of Facebook and Twitter, and by journalists like the ones in Playboy’s crosshairs here,” they write.

The article in question

The defense points out that Playboy’s complaint fails to state a claim for direct or contributory copyright infringement. In addition, it argues that this type of reporting should be seen as fair use.

“Boing Boing’s reporting and commenting on the Playboy photos is protected by copyright’s fair use doctrine,” EFF Senior Staff Attorney Daniel Nazer says, commenting on the case.

“We’re asking the court to dismiss this deeply flawed lawsuit. Journalists, scientists, researchers, and everyday people on the web have the right to link to material, even copyrighted material, without having to worry about getting sued.”

The lawsuit shares a lot of similarities with the case between Dutch blog GeenStijl and local Playboy publisher Sanoma. That high-profile case went all the way to the European Court of Justice.

The highest European court eventually decided that hyperlinks to infringing works are to be considered a ‘communication to the public,’ and that a commercial publication can indeed be held liable for copyright infringement.

Boing Boing hopes that US Courts will see things differently, or it might be “the end of the web as we know it.”

“The world can’t afford a judgment against us in this case — it would end the web as we know it, threatening everyone who publishes online, from us five weirdos in our basements to multimillion-dollar, globe-spanning publishing empires like Playboy,” Boing Boing writes.

—

A copy of Boing Boing’s memorandum in support of the motion to dismiss is available here (pdf). The original Playboy complaint can be found here (pdf).

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Despite a considerable migration towards streaming piracy in recent years, copyright trolls are still finding plenty of potential targets around the world. Alleged BitTorrent pirates are target number one since their activities are most easily tracked. However, it isn’t all plain sailing for the pirate hunters.

Last December we reported on the case of Lingfu Zhang, an Oregan resident accused by the makers of the 2015 drama film Fathers & Daughters (F&D) of downloading and sharing their content without permission. While these kinds of cases often disappear, with targets making confidential settlements to make a legal battle go away, Zhang chose to fight back.

Represented by attorney David Madden, Zhang not only denied downloading the movie in question but argued that the filmmakers had signed away their online distribution rights. He noted that (F&D), via an agent, had sold the online distribution rights to a third party not involved in the case.

So, if F&D no longer held the right to distribute the movie online, suing for an infringement of those rights would be impossible. With this in mind, Zhang’s attorney moved for a summary judgment in his client’s favor.

“ZHANG denies downloading the movie but Defendant’s current motion for summary judgment challenges a different portion of F&D’s case,” Madden wrote.

“Defendant argues that F&D has alienated all of the relevant rights necessary to sue for infringement under the Copyright Act.”

In response, F&D argued that they still held some rights, including the right to exploit the movie on “airlines and oceangoing vessels” but since Zhang wasn’t accused of being on either form of transport when the alleged offense occurred, the defense argued that point was moot.

Judge Michael H. Simon handed down his decision yesterday and it heralds bad news for F&D and celebration time for Zhang and his attorney. In a 17-page ruling first spotted by Fight Copyright Trolls, the Judge agrees that F&D has no standing to sue.

Citing the Righthaven LLC v. Hoehn case from 2013, the Judge notes that under the Copyright Act, only the “legal or beneficial owner of an exclusive right under a copyright” has standing to sue for infringement of that right.

Judge Simon notes that while F&D claims it is the ‘legal owner’ of the copyright to the Fathers & Daughters movie, the company “misstates the law”, adding that F&D also failed to present evidence that it is the ‘beneficial owner’ of the relevant exclusive right. On this basis, both claims are rejected.

The Judge noted that the exclusive rights to the movie were granted to a company called Vertical Entertainment which received the exclusive right to “manufacture, reproduce, sell, rent, exhibit, broadcast, transmit, stream, download, license, sub-license, distribute, sub-distribute, advertise, market, promote, publicize and exploit” the movie in the United States.

An exclusive license means that ownership of a copyright is transferred for the term of the license, meaning that Vertical – not F&D – is the legal owner under the Copyright Act. It matters not, the Judge says, that F&D retained the rights to display the movie “on airlines and ships” since only the transferee (Vertical) has standing to sue and those locations are irrelevant to the lawsuit.

“Under the Copyright Act, F&D is not the ‘legal owner’ with standing to sue for infringement relating to the rights that were transferred to Vertical through its exclusive license granted in the distribution agreement,” the Judge writes.

Also at issue was an undated document presented by F&D titled Anti-Piracy and Rights Enforcement Reservation of Rights Addendum. The document, relied upon by F&D, claimed that F&D is authorized to “enforce copyrights against Internet infringers” including those that use peer-to-peer technologies such as BitTorrent.

However, the Judge found that the peer-to-peer rights apparently reserved to F&D were infringing rights, not the display and distribution (exclusive rights) required to sue under the Copyright Act. Furthermore, the Judge determined that there was no evidence that this document existed before the lawsuit was filed. Zhang and his attorney previously asserted the addendum had been created afterwards and the Judge agrees.

“F&D did not dispute that the undated anti-piracy addendum was created after this lawsuit was filed, or otherwise respond to Defendant’s standing argument relating to the untimeliness of this document,” the Judge notes.

“Accordingly, because the only reasonable inference supported by the evidence is that this document was created after the filing of this lawsuit, it is not appropriate to consider for purposes of standing.”

So, with Vertical Entertainment the only company with the right to sue, could they be added to the lawsuit, F&D asked? Citing an earlier case, the Judge said ‘no’, noting that “summary judgment is not a procedural second chance to flesh out inadequate pleadings.”

With that, Judge Simon granted Lingfu Zhang’s request for summary judgment and dismissed F&D’s claims for lack of standing.

As noted by Fight Copyright Trolls, the movie licensing scheme employed by F&D is complex and, given the fact that notorious copyright troll outfit Guardaley is involved (Guardaley filed 24 cases in eight districts on behalf of F&D), it would be interesting if legal professionals could dig deeper, to see how far the rabbit hole goes.

The summary judgment can be found here (pdf)

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