MPAA's Lawsuit Against Megaupload Is Yet Another Broadside Attack On The Internet

from the collateral-damage dept

When the upload was completed, Megaupload reproduced the file on at least one computer server it controlled and provided the user with a Uniform Resource Locator ("URL") "link" beginning with "megaupload.com." The uploader could then propagate the link broadly over the Internet, so that anyone interested in downloading or otherwise accessing a copy of the file could easily find it on Megaupload's servers.

To conceal the scope of infringennent occurring on the Megaupload website, defendants did not provide users with a searchable index of files available for download from the Megaupload website (although defendants themselves had access to such an index). Instead, defendants relied on numerous third party "linking" sites to host, organize, and promote URL links to Megaupload-hosted infringing content, including plaintiffs' copyrighted works.

Napster is not an Internet service provider that acts as a mere conduit for the transfer of files.... Rather, it offers search and directory functions specifically designed to allow users to locate music, the majority of which is copyrighted.

To ensure a vast and ever-growing supply of popular copyrighted content to which they could sell premium access, defendants paid users to upload popular content to Megaupload's servers. Defendants' Uploader Rewards program promised premium subscribers cash and other financial incentives if they uploaded popular works, primarily copyrighted works, to Megaupload's servers. The rewards program also encouraged users to publicly promote links to that content, so that the content would be widely downloaded.

Megaupload could also have implemented various readily available and effective technological solutions (including, without limitation, automated filtering using digital fingerprinting-based content-identification technology) to identify and prevent infringement of copyrighted content. Megaupload chose not to do so.

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Earlier this week, we wrote about the MPAA's announced plans to sue Megaupload in a civil lawsuit to pile on to the criminal charges the company is already facing. As we noted, there's no legitimate reason for such a lawsuit, given the criminal lawsuit already underway, other than as a way to try to get a favorable court ruling it can use against others. Having now read the full complaint against Megaupload , it's quite clear that this is exactly what the MPAA is doing. The lawsuit isfor the internet, even if you think that Megaupload itself was a bad actor. Even the LA Times -- Hollywood's hometown paper -- has called out the lawsuit for how it may have negative consequences felt broadly across the internet That's because the lawsuit makes a whole bunch of claims about Megaupload that are perfectly reasonable activities for tons of user-generated content and/or cloud computing companies. But, because Hollywood has spent years demonizing Kim Dotcom as a movie-style villain a la "Dr. Evil" , it seems to be hoping that the courts won't notice that it's basically making up what theycopyright law to be, rather than what it is.First, it describes the fact that when you upload a file to Megaupload, the service would then give you a link that you could share. The MPAA paints this as if it's some nefarious scheme to encourage infringement. But it's actually how pretty much any cloud or user-generated content site works.But, of course, Dropbox or YouTube do the same exact thing. Then, they call out the fact that Megaupload did not provide its own search engine, as if that's something nefarious:Except, cloud storage companies from Dropbox to Box to Google Drive don't supply a searchable index of files available on their services either. And that's for a very good reason. Because they'repromoting their services as a place to go to search for infringing works. In fact, you just have to go back to the RIAA's lawsuit against Napster, to see where theclaim was made. In that case, the court found that Napster was, in part, liableYet, now, the MPAA seems to be arguing thathaving a search engine means you're trying tocopyright infringement. Damned if you do, damned if you don't -- just how the RIAA and MPAA like it. If you have a search engine, you're enabling infringement, if you don't have a search engine, you're "concealing" infringement.The MPAA also tries to paint other perfectly reasonable business model choices as nefarious. Offering premium paid-for services for faster downloads, or access to larger files, is painted as some evil plan to profit off of infringement. But it also makes perfect business sense for a company like Megaupload seeking to cover its bandwidth bills. Similarly, the famed "financial incentives for premium users" is treated as if this is actually paying people to post infringing works. But that makes little sense. It's actually an incentive to get people to post. It's the same reason that YouTube today pays top YouTubers who bring in lots of visitors. Is the MPAAarguing that such an incentive program is illegal?Except, nothing in this program appeared to be about encouraging people to post infringing works. In fact, it would seem like a pretty stupid program for encouraging infringement, as Megaupload would likely be able to bring in a lot more attention and revenue for authorized legitimate content. Such a program, in actuality, appears to be theway for artists to go direct to their fans, offering them ways to get the content for free, while still earning money. In fact, that's why artists like Busta Rhymes spoke out in favor of Megaupload after it was shut down. He pointed out that he could make a lot more money releasing his own music directly via Megaupload, than in going the old record label system.Furthermore, since this lawsuit is from the movie studios, they list out a number of specific movies that they claim were on the site. However, Megaupload says that the uploader rewards program only applied to files smaller than 100MB , meaning it likely didn't apply to any films that were uploaded. Assuming that's accurate, the studios are going to have quite a difficult time proving that the rewards program induced infringement of movies.On top of that, even if the program was used by some to make money from sharing infringing works, the program itself is clearly content neutral, and not about encouraging sharing of infringing works. For the MPAA to allege otherwise threatens all kinds of incentive programs on pretty much any user-generated content site.Next, the MPAA complains that when they sent takedowns to Megaupload, it only removed the specific URL they sent, and not all copies of the content. But, uh, that's all that the law requires. As the court in the YouTube/Viacom case ruled, under the DMCA, the service provider needs to be made aware oflocations where infringing content is. They can't just be given a single URL and told to "block all copies of that." Nor would such a request be reasonable either, as infringement depends on, not. In the YouTube/Viacom case, Viacom initially sued over files that, meaning they were licensed -- yet it argued those were infringing. You run into the same problem here in that the MPAA is arguing that if you know that a particular file is infringing, all similar content must be removed. But the law does not say that. Though, clearly, the MPAA is seeking to change the interpretation of the law.Next, the MPAA argues that because Megauploadused filtering tools to prevent new uploads of works previously claimed as infringing, and did not do so, that proves it's liable. However, that's completely bogus. Many, many, many copyright cases have all said over and over again that nothing in the DMCA creates a duty for service to proactively filter new uploads. In fact, the industry itself admits that this is true, because they're currently asking Congress to change the law to make this a new legal requirement. Yet, in the Megaupload complaint, they pretend it is already the law:But there is no legal reason why it had to do so. In fact, considering that others have spent tens to hundreds of millions of dollars on such systems, there are perfectly good business reasons not to have spent such money. Here, the MPAA is using this lawsuit to try to get a court to suggest there's a legal duty to filter. This would have anegative impact on startups who couldn't afford the tens of millions of dollars entry fee.You can argue that Megaupload was widely used for infringement. You can even argue that Megaupload management were awful people who didn't care that much about copyright. But if you read this lawsuit objectively, you have to admit that it is a straight up attack on the basic principles of cloud computing and user-generated content, while seeking to change settled law and reinterpret the DMCA in a way the MPAA fantasizes it should be, rather than the way the law is today. That's incredible dangerous.It's no surprise that they're doing this against Megaupload, a company based halfway around the globe, with all its assets seized, and which is fighting a massive criminal complaint at the same time. That will, obviously, lead to limited resources to fight this civil suit, making it easier for the MPAA to sneak through dangerous changes to the law, via potential court rulings. These are changes that it's been unable to get written into the law for the past few years, so now it's using the courts to try to do its dirty work.No matter what you think of Megaupload, this is a very dangerous lawsuit.

Filed Under: cloud computing, copyright, movies, user generated content

Companies: megaupload, mpaa