Students: Kelly Barrett, Karen Bilek, Igor Bilmes, Sean Carrell, Patrick Cassidy, Amy Chen, Michelle Kessler

7th Circuit Continues Shutdown Of Aimster File-Swapping Service
Mealey's Litigation Report: Copyright August 4, 2003

"A file-sharing program that allows users to swap music file online should continue to be shut down by preliminary injunction until the merits of the case can be resolved, a federal appeals panel ruled June 30 (In re: Aimster Copyright Litigation, No. 02-4125, 7th Cir.; 2003 U.S. App. LEXIS 13229).

(Opinion available 24-030714-005Z) The Seventh Circuit U.S. Court of Appeals, affirming the U.S. District Court for the Northern District of Illinois, said John Deep, owner of Aimster, may argue at trial that his service has substantial noninfringing uses and, thus, that the technology may legally be used as per Sony Corp. of America, Inc. v. Universal City Studios, Inc. (464 U.S. 417 [1984]). However, for the purposes of affirming the preliminary injunction shutting down the service, the panel said the District Court correctly decided that Deep had presented no evidence that Aimster had ever been used for a "non-infringing" use.

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'Slinky Dress' Analogy

"There are analogies in the law of aiding and abetting, the criminal counterpart to contributory infringement. A retailer of slinky dresses is not guilty of aiding and abetting prostitution even if he knows that some of his customers are prostitutes. . . . The extent to which his activities and those of similar sellers actually promote prostitution is likely to be slight relative to the social costs of imposing a risk of prosecution on him," Circuit Judge Richard A. Posner wrote for the panel.

"But the owner of a massage parlor who employs women who are capable of giving massages, but in fact as he knows sell only sex and never give massages to their customers, is an aider and abettor of prostitution," the panel said. "The slinky-dress case corresponds to Sony, and, like Sony, is not inconsistent with imposing liability on the seller of a product or service that, as in the massage-parlor case, is capable of noninfringing uses but in fact is used only to infringe."

Students: David Freydin, Christopher Haggerty, Tamara Jaggers, Luke Mangan, Robert Mellican, Luke Novak, Jamie Goldstein

Colleges Move to Stop File-Swapping
September 2, 2003 Tuesday 7:10 AM Eastern Time
ALEX VEIGA; AP Business Writer

"Students arriving for fall classes at colleges across the country are facing technological hurdles and stern warnings aimed at ending swapping of music and movie files over high-speed campus Internet connections. Several of the universities are responding to a recording industry campaign to control the rampant copying of files over peer-to-peer networks. Among other things, campuses are distributing brochures, running ads in student newspapers and devoting school Web pages to information on copyright infringement.

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The Recording Industry Association of America, a trade group representing the five major recording companies, regards file-sharing as theft and is expected to file several hundred copyright infringement lawsuits by mid-September.

So far, at least 10 universities, including UCLA, have been served with subpoenas demanding they help the recording industry identify possible targets of such lawsuits, according to the Electronic Frontier Foundation, an advocacy group for online civil liberties.

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Sharing of music files is a crucial issue for the industry. It says the practice is largely responsible for a 25 percent drop in CD sales since 1999. Revenue from album sales has declined from $14.6 billion in 1999 to $12.6 billion in 2002, according to the RIAA.

The industry has begun to embrace pay music download services, particularly the successful Apple iTunes for Macintosh computer users. But a successful Windows-based service for the vast majority of home computer users has not yet emerged."

Students: Ian O’Neill, Mary Peal, David Perkins, Elizabeth Popolis, Denise Randolph, Melissa Saffer

DVD-CCA v BUNNER
Baker & McKensie E-law Alert 9/1/2003.

"The Supreme Court of California has ruled that a ban on posting links over the Internet to code which allows users to circumvent anti-piracy technology on DVDs does not violate free speech. The dispute centered on computer programmer Andrew Bunner, who in 1999 posted the code to crack an encryption program. The DVD Copy Control Association sued Bunner and others under the Uniform Trade Secrets Act. A state judge ordered Bunner to remove the code but the injunction was lifted on appeal. A unanimous Supreme Court reversed the lower court decision and held that an order to remove the code "does not violate the free speech clauses of the United States and California."

Students: Eric Sangster, Emily Schwartz, Sherese Shabazz, Raefat Shaltout, Anthony Valach, David Wilding, Thomas Nicholson

IBM Internal Letter
(Posted on E week 9/2/2003 http://www.eweek.com/article2/0,3959,1212374,00.asp)

Bob Samson
Vice President, Systems Sales
IBM Systems Group

IBM yesterday responded to SCO's amended complaint. We see no merit in their claims and no supporting facts. Significantly, IBM counter sued SCO on a range of issues. Simply put, SCO's scheme is an attempt to profit from its limited rights to a very old UNIX operating system by introducing fear, uncertainty and doubt into the marketplace.

The counterclaims are detailed in our legal filing, but here are the key points:

• SCO has violated the GNU General Public License, under which it accepted Linux contributions and distributed Linux.
• SCO has improperly claimed the right to revoke IBM's UNIX license, despite the fact that IBM's contract expressly provides that IBM's rights are irrevocable and that Novell, which is a party to the agreement under which IBM obtained an irrevocable and perpetual UNIX license, agrees that SCO cannot terminate IBM's license and has exercised its right to waive this claim.

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Along these lines, there is an informative analysis of the SCO complaint available on the Open Source Development Lab Website entitled, "Questioning SCO: A Hard Look at Nebulous Claims," by Eben Moglen, General counsel of the Free Software Foundation. It puts the SCO claims in the proper perspective for Linux users. We have this paper, and all of the latest analyst reports and press articles, including the latest C/net story, to help you answer customer questions on our SCO Complaint page.

Make no mistake, SCO will continue to look for ways to create fear, uncertainty and doubt. FUD, not facts, remains the focus of SCO's efforts. As the lawsuit continues, understand that the industry will resolve it. In the meantime, if you get questions, as always, send them to this ID or contact your local counsel.

Linux continues to gain momentum. We have never had a LinuxWorld more overflowing with innovation, offerings and news (see SuSE and IBM achieve government certification for Linux). IBM will continue to drive both AIX and Linux. And, we are as committed as ever to meeting our customers' needs.

Students: Venkate Nayak Salatry, Anuj Sharma, Bassil Swaiss, Guillermo Torres de Noriega, Kanokwarin Sirowate

Database Bill Is Ready for Prime Time...
WASHINGTON INTERNET DAILY JULY 30, 2003

"Database protection proponents want Congress to create a new federal misappropriation tort barring either copying a database wholesale or reproducing a "qualitatively substantial component" of it, NetCoalition said.

Perhaps the most complete articulation of that approach appeared in HR-2652, introduced in the 105th Congress, NetCoalition's primer distributed Tues. says. That bill "clearly intended to resurrect the 'sweat of the brow' doctrine" the U.S. Supreme Court rejected in its 1991 decision in Feist v. Rural Telephone, the primer said. Under what was called a new federal misappropriation tort, anyone found to have extracted or used in commerce all or a substantial part of a database could be sued in federal court and wind up paying treble damages, the primer said. However, it said, the proposal raised not only constitutional questions but also concerns over its vague terms. Although the House passed HR-2652 twice, NetCoalition said, it ultimately was stopped.

NetCoalition members also worry that the European experience with database protection legislation doesn't bode well for a similar U.S. law. The European Union Database Directive prohibits the extraction or reuse of a qualitatively or quantitatively substantial part of a database, even if the extraction doesn't include any protectable expression. "As was predicted," the primer says, "European companies have used the EU Database Directive to try to make proprietary the very kind of facts and information that the [U.S.] Supreme Court has consistently ruled are in the public domain." And Europe's lack of First Amendment protections makes it "easier to interpret the directive far more broadly than in the U.S.," McGuiness said.

Database legislation of the HR-354 sort has the potential to push the Internet toward a fee-for-services model, McGuiness said. It also could squelch a great deal of Internet information, NetCoalition said, including: (1) Airline price comparisons. (2) Public interest Web sites linking news stories of interest to members. (3) The gathering of weather information from various sites for use in scholarly research. (4) The posting by a member of Congress of his or her voting record."

Students: Jie Gao, Hsin-Li Hu, Wenfeng Li, Chia-Yi Li, Shengming Shi, Bingui Wu

US Film Giants Win DVD Lawsuit
XINHUA ECONOMIC NEWS SERVICE
August 12, 2003

"Three United States film giants have won a lawsuit in Shanghai against local DVD sales companies who sold pirated discs of Hollywood films, local court sources said. The Shanghai No 2 Intermediate People's Court recently issued a verdict ordering the Shanghai Hezhong Enterprise Development Co and Shanghai Yatu Film Culture Broadcasting Co each to pay 101,000 yuan (US$12,200) in compensation to 20th Century Fox Film Corp; 35,000 yuan (US$4,200) to Disney Corp; and 35,000 yuan to Universal Studios. The two Shanghai DVD companies must also issue a public apology via the local Chinese-language Xinmin Evening News and confess to having sold pirated discs.

The case will hopefully warn off others tempted to produce pirated DVDs as the US firms have pledged to take further court action if necessary, he added. Local media said the lawsuit foreshadows action by the Motion Picture Association of America against those violating US movie copyrights on the Chinese market. The association, which brings together nine major US film producers, is reportedly set to launch a series of legal procedures later this year against those manufacturing and selling pirated discs in China.

On February 25, agents of the three US film companies pretended to be ordinary customers and, accompanied by notaries, bought a series of popular pirated DVDs such as "Moulin Rouge," "Jurassic Park III" and the fourth series of "The X-Files" at outlets of the two defendants. The US companies then sued the two Chinese firms on the basis of the evidence collected. The plaintiffs noted in court that they had registered the copyright of the relevant movies in the United States and had not yet granted any others the right to issue DVDs of those movies on the Chinese mainland market.

The court ruled that, under the Berne Convention for the Protection of Literary and Artistic Works, signed by the Chinese Government in 1992, the three US companies enjoy the copyright to those movies in China, and the accused Shanghai DVD firms had infringed the US companies' legal rights and interests by selling pirated discs of their movies. The defendants admitted selling pirated discs from the very beginning but did not manage to reach any out-of-court settlement with the US companies.

The Ministry of Culture and other Chinese authorities have launched irregular campaigns against DVD piracy since 2001 to make the video market safe for foreign intellectual property rights but piracy is far from being eradicated."

Students: Katrin Jendersie, Henrik Ott-Ebbesen, Holger Postel, Goesta Schindler, Sabine Barb Weyergraf

Commission Moves Against 13 Member States For Failure To Implement EU Legislation
Commission of the European Communities
RAPID July 14, 2003

"The European Commission has decided to pursue infringement procedures against thirteen Member States for failure to implement or for implementing incorrectly in national law various Internal Market Directives and EC Treaty obligations. The Commission will formally ask Belgium, Germany, Spain, Greece, France, Ireland, Luxembourg, the Netherlands, Austria, Portugal, Finland, Sweden and the UK to implement quickly the necessary legislation in a total of 16 cases covering Directives on copyright and exchange of securities markets information, along with the Second Postal Services Directive. … These requests will take the form of "reasoned opinions", the second stage of the infringement procedure under Article 226 of the EC Treaty. Should a Member State which has received a reasoned opinion fail to give a satisfactory reply within the deadline (usually two months), the Commission may refer the matter to the European Court of Justice. In addition, the Commission has decided, under Article 228 of the EC Treaty, to send further reasoned opinions … Ireland to comply immediately with judgements of the European Court of Justice, requiring … Ireland to ratify the Berne Convention for the protection of literary and artistic works (Paris Act, 1971). If the countries concerned do not comply, the Commission can ask the Court to impose daily fines.

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Copyright and related rights in the Information Society

The Directive on the harmonisation of certain aspects of copyright and related rights in the Information Society (see IP/01/528) was adopted by the European Parliament and the Council in May 2001. Member States agreed to implement it within eighteen months, before 22 December 2002.

The Directive is the European Union's response to the digital environment as it updates copyright protection to keep pace with technology. It aims to stimulate creativity and innovation by ensuring that all copyright material including books, films and music, is adequately protected. It provides a secure environment for cross-border trade in copyright protected goods and services, and will facilitate the development of electronic commerce in new and multimedia products and services.

The Directive harmonises the principal rights of authors and certain other rightholders and provides for certain exceptions to copyright and the protection of anti-circumvention measures and rights management information.

Moreover, it is the means by which the European Union and its Member States implement the two 1996 World Intellectual Property Organisation (WIPO) "Internet Treaties", the WIPO Copyright Treaty and the WIPO Performances and Phonograms Treaty, which have adapted copyright protection to digital technology. This makes implementation all the more urgent.