DC Circuit Reverses in RIAA v. Verizon
December 19, 2003. The U.S. Court of Appeals (DCCir) issued its opinion [16 pages in PDF] in RIAA v. Verizon, reversing the District Court, and holding that a Section 512(h) subpoena may only be issued to an ISP that is engaged in storing on its servers material that is infringing or the subject of infringing activity.
This opinion deprives the RIAA and copyright holders of an expeditious and inexpensive means for acquiring the names of P2P infringers from their ISPs. Other more time consuming and expensive procedures remain available to the music industry. However, since the number of P2P infringers is huge, the opinion is a significant setback for the RIAA and the music industry in their efforts to protect copyrighted material from online infringement.
Background. The Recording Industry Association of America (RIAA) represents music companies whose copyrights are being infringed by people using peer to peer (P2P) file sharing systems.
When the RIAA and others failed to obtain orders from courts enjoining producers of decentralized P2P programs, they adopted a strategy of pursuing individual infringers.
The RIAA possesses only Internet Protocol (IP) number information on infringers. This does not reveal the identity of the infringers. However, internet service providers (ISPs), such as Verizon Internet Services, which provide internet access for the P2P infringers, possess information that would associate subscriber information with IP number information. That is, obtaining the ISP's information enables the RIAA, or its members, to file complaints alleging infringement against the individual infringers that names the individuals. It also enables them to contact the individuals before filing a complaint in court.
ISPs, such as Verizon, that provide broadband internet access, derive considerable revenues from people who subscribe to their services, in whole or in part, to be able to use P2P systems to obtain copyrighted music without paying for it. These ISPs have opposed the efforts of the RIAA.
The RIAA cannot sue these ISPs for infringement, because of the safe harbor provisions of the Digital Millennium Copyright Act (DMCA).
The RIAA has obtained subpoenas from the Clerk of the Court of the U.S. District Court for the District of Columbia, pursuant to 17 U.S.C. § 512(h), and served them upon ISPs.
Statute. § 512 provides ISPs a safe harbor from liability for infringement based on the activities of their users. There are four specific limitations on liability. § 512(a) pertains to "transmitting, routing, or providing connections for, material through a system or network controlled or operated by or for the service provider, or by reason of the intermediate and transient storage of that material in the course of such transmitting, routing, or providing connections". § 512(b) pertains to "the intermediate and temporary storage of material on a system or network". § 512(c) pertains to "material that resides on a system or network controlled or operated by or for the service provider". And, § 512(d) pertains to "referring or linking users to an online location containing infringing material or infringing activity, by using information location tools, including a directory, index, reference, pointer, or hypertext link".
Subsection 512(h) then provides, in part, that "A copyright owner or a person authorized to act on the owner's behalf may request the clerk of any United States district court to issue a subpoena to a service provider for identification of an alleged infringer in accordance with this subsection." The statute then provides that the requester should also provide a copy of the 512(c)(3) notice, a proposed subpoena, and a sworn declaration.
The 512(c)(3) notice must include, among other things, an "Identification of the material that is claimed to be infringing or to be the subject of infringing activity and that is to be removed or access to which is to be disabled, and information reasonably sufficient to permit the service provider to locate the material." (See, 512(c)(3)(a)(iii).)
However, the statute does not expressly limit the availability of 512(h) subpoenas to 512(c) situations.
Subsection 512(h)(5) then provides, in part, that "Upon receipt of the issued subpoena, ... the service provider shall expeditiously disclose to the copyright owner or person authorized by the copyright owner the information required by the subpoena, notwithstanding any other provision of law and regardless of whether the service provider responds to the notification."
District Court. In August of 2002, Verizon filed a complaint in the District Court challenging some of the first of these subpoenas. See, stories titled "RIAA Seeks to Enforce Subpoena to Identify Anonymous Infringer" in TLJ Daily E-Mail Alert No. 499, August 27, 2002; and "Verizon and Privacy Groups Oppose RIAA Subpoena" in TLJ Daily E-Mail Alert No. 501, September 4, 2002.
The District Court has issued two major opinions in this case. First, on January 21, 2003, the District Court issued its opinion ruling that copyright holders can obtain subpoenas pursuant to 17 U.S.C. § 512(h) that require internet service providers (ISPs) to reveal the identities of their customers who infringe copyrights on peer to peer filing sharing systems. Verizon had argued that 512(h) subpoenas were only available with respect to infringers who stored infringing content on the servers of the ISP.
See, story titled "District Court Rules DMCA Subpoenas Available for P2P Infringers" in TLJ Daily E-Mail Alert No. 588, January 22, 2003. This opinion is also reported at 240 F. Supp. 2d 24.
Second, on April 4, 2003, the District Court issued an opinion [58 pages in PDF] holding that the issuance of a subpoena by a Clerk of the District Court pursuant to § 512(h) to obtain the identity of an anonymous peer to peer infringer from his ISP does not violate either the First Amendment of the Constitution, or the justiciability requirements of Article III.
See, story titled "District Court Rules That A DMCA § 512(h) Subpoena for the Identity of an P2P Infringer Does not Violate the Constitution" in TLJ Daily E-Mail Alert No. 649, April 25, 2003. This opinion is also reported at 257 F. Supp. 2d 244.
Court of Appeals. Verizon appealed both decisions to the Court of Appeals, raising three issues. The Court summarized these three arguments as follows: "(1) § 512(h) does not authorize the issuance of a subpoena to an ISP acting solely as a conduit for communications the content of which is determined by others; if the statute does authorize such a subpoena, then the statute is unconstitutional because (2) the district court lacked Article III jurisdiction to issue a subpoena with no underlying ``case or controversy´´ pending before the court; and (3) § 512(h) violates the First Amendment because it lacks sufficient safeguards to protect an internet user’s ability to speak and to associate anonymously."
The Court of Appeal accepted Verizon's first argument regarding statutory construction, and therefore reversed. It did not decide the other two issues, regarding justiciability and the First Amendment.
The Court wrote that "The issue is whether § 512(h) applies to an ISP acting only as a conduit for data transferred between two internet users, such as persons sending and receiving e-mail or, as in this case, sharing P2P files. Verizon contends § 512(h) does not authorize the issuance of a subpoena to an ISP that transmits infringing material but does not store any such material on its servers. The RIAA argues § 512(h) on its face authorizes the issuance of a subpoena to an ``[internet] service provider´´ without regard to whether the ISP is acting as a conduit for user-directed communications. We conclude from both the terms of § 512(h) and the overall structure of § 512 that, as Verizon contends, a subpoena may be issued only to an ISP engaged in storing on its servers material that is infringing or the subject of infringing activity."
The Court reasoned that "Section 512 creates four safe harbors, each of which immunizes ISPs from liability for copyright infringement under certain highly specified conditions."
It recited each of the four safe harbor provisions of 512(a)-(d), and then observed that "Notably present in §§ 512(b)-(d), and notably absent from § 512(a), is the so-called notice and take-down provision. It makes a condition of the ISP's protection from liability for copyright infringement that ``upon notification of claimed infringement as described in [§ 512](c)(3),´´ the ISP ``responds expeditiously to remove, or disable access to, the material that is claimed to be infringing.´´"
"The RIAA's notification identifies absolutely no material Verizon could remove or access to which it could disable, which indicates to us that § 512(c)(3)(A) concerns means of infringement other than P2P file sharing", concluded the Court. "In sum, we agree with Verizon that § 512(h) does not by its terms authorize the subpoenas issued here. A § 512(h) subpoena simply cannot meet the notice requirement of § 512(c)(3)(A)(iii)."
This opinion prevents the RIAA and other persons and entities asserting copyright infringement from using the relative simple and streamlined Section 512(h) process to obtain subpoenas directed to ISPs to obtain subscriber information, in most situations. It does not prevent the use of other legal procedures to compel ISPs to produce subscriber information, such as the filing of lawsuits against infringers whose names are not known (also know as John Doe lawsuits), and then seeking production of ISP information with a Rule 45 subpoena.
Nor does this opinion in any way limit or dispute earlier opinions that have held that the individuals who use P2P systems to copy copyrighted works, without authorization, are infringers.
Judge Douglas Ginsburg wrote the opinion of the Court, in which Judges Stephen Williams and John Roberts joined.
This case is Recording Industry Association of America (RIAA) v. Verizon Internet Services, U.S. Court of Appeals for the District of Columbia, Nos. 03-7015 and 03–7053, appeals from the U.S. District Court for the District of Columbia, D.C. Nos. No. 02ms00323 and 03ms00040, Judge John Bates presiding.
Cary Sherman, President of the RIAA, stated in a release that "This is a disappointing procedural decision, but it only changes the process by which we will file lawsuits against online infringers. This decision in no way changes our right to sue, or the fact that those who upload or download copyrighted music without authorization are engaging in illegal activity. We can and will continue to file copyright infringement lawsuits against illegal file sharers."
He added that "This decision is inconsistent with both the views of Congress and the findings of the district court. It unfortunately means we can no longer notify illegal file sharers before we file lawsuits against them to offer the opportunity to settle outside of litigation. Verizon is solely responsible for a legal process that will now be less sensitive to the interests of its subscribers who engage in illegal activity."
Consumer Electronics Association (CEA) P/CEO
Gary Shapiro stated in a
that this "ruling is an important victory for privacy, free expression, and
technological innovation. The tactics of the copyright holders, now blocked by the
Circuit Court, created an Orwellian world of privacy invasion, secret police and no
judicial oversight. Generally, under the initial ruling, anyone claiming to be a
copyright owner could obtain the identity of Internet users without any prior legal
determination that the user had engaged in an illegal activity."