Hollywood Fears that Stream-Ripper Verdict Will Serve as Roadmap for Foreign Pirates

Last year, a group of prominent record labels filed a piracy lawsuit against the Russian operator of YouTube-ripping sites FLVTO.biz and 2conv.com.

The labels hoped to shut the sites down, but this effort backfired.

In January, US District Court Judge Claude M. Hilton dismissed the case due to a lack of jurisdiction. The Court carefully reviewed how the sites operate and found no evidence that they purposefully targeted either Virginia or the United States.

The sites are not seen as highly interactive and their interaction with users could not be classified as commercial, the Court concluded.

“As the Websites are semi-interactive, the interactions with the users are non-commercial, and there were no other acts by the Defendant that would demonstrate purposeful targeting, the Court finds that Defendant did not purposefully avail himself of the benefits and protections of either Virginia or the United States,” the verdict read.

The RIAA labels were disappointed and last week they submitted their opening brief at the Fourth Circuit Court of Appeals. The labels are not the only organizations that have an interest in this case though. A few days ago, Hollywood’s MPAA and others chimed in as well.

The MPAA filed an Amicus Curiae brief in support of the record labels. The industry group notes that it has a vested interest in the matter, as the district court verdict hurts its ability to go after site operators who are located outside of the US.

The MPAA argues that it was a mistake by the district court to grant the dismissal. That ‘error’ could cause significant damage to copyright holders, it says, describing the Russian owner of the site as a brazen pirate.

“Kurbanov is a brazen digital pirate. His highly interactive, commercial,
stream-ripping websites are, in essence, piracy valets that deliver stolen works to the websites’ users,” MPAA writes in its brief. 

While movie studios are not directly harmed by stream ripping, at least not to the extent that the record labels are, they fear that, if the current verdict is upheld, it will become harder to bring foreign site owners to justice.

“If affirmed and widely adopted, the district court’s erroneous holding could serve as a roadmap for foreign pirates, teaching them how to exploit the U.S. market and American intellectual property while evading jurisdiction in the United States, thus depriving aggrieved American copyright owners of a legitimate—and often the only—forum in which to enforce their rights.”

The MPAA has quite a bit of experience with these types of lawsuits. It previously brought cases against the Canadian operator of torrent site isoHunt, for example, and targeted a Panamanian defendant in the Hotfile case.

In the current brief, the movie industry group focuses in great detail on the supposed commercial nature of the stream-ripping sites. The Court concluded that the advertisements could not be seen as commercial interactions, but the MPAA disagrees.

“The district court’s holding failed to appreciate how the internet-advertising and digital-piracy ecosystems work,” the MPAA writes.

“In fact, Kurbanov’s websites are quintessentially commercial. Kurbanov attracts users, in part, because the only cost of accessing the infringing websites is exposure to advertisements—no money changes hands between the users and Kurbanov.”

The advertising networks the sites rely on are seen as a cornerstone of digital piracy, the MPAA notes. Pirate sites can’t easily sell advertisements directly and therefore use third-party companies to generate revenue.

The Hollywood group argues that Kurbanov’s decision to use ad-networks, as opposed to direct sales, illustrates his commercial intent. These advertisements target US users, which is one of the reasons why the court should have jurisdiction over the site owner.

This would also be in line with previous orders issued by US federal courts, the movie studios conclude.

“Kurbanov, by engaging in this unlawful scheme, rendered himself subject to the jurisdiction of our federal courts. Courts have confronted the ad-based model of piracy in numerous prior cases, and have routinely held that such sites are commercial in nature,” MPAA writes.

The MPAA is not the only outside party to take an interest in this case.

The Association of American Publishers also submitted a brief in support of the record labels, and the Copyright Alliance and the International AntiCounterfeiting Coalition has done the same.

All amici argue that the district court verdict should be overturned to protect the interests of copyright holders. Thus far, the Court of Appeal granted the filing of the latter two briefs. The MPAA brief has yet to be accepted.

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A copy of the Amicus Curiae brief from the MPAA is available here (pdf). 

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