Criminal enforcement of copyright

Kim Schmitz cropped and edited
Kim Dotcom, head of, indicted for copyright infringement

My perspicacious coauthor and I recently accepted an offer from the North Carolina Journal of Law and Technology to publish our article “Criminal Copyright Enforcement Against Filesharing Services,” which I mentioned here last week. In honor of that, I’d like to share the introduction of the article, sans footnotes:

In January 2012 an elite squad of New Zealand anti-terrorism officers, under the direction of the United States Department of Justice, stormed Kim Dotcom’s lavish $24-million mansion. Equipped with body armor, tactical firearms, dog units, and a helicopter, the squad uncovered Dotcom hiding in a specially designed saferoom. As he was whisked to a police van, Dotcom asked the charges against him. The answer was two words: “Copyright infringement.”

The indictment of Dotcom and his infamous filesharing service, Megaupload, marked the start of a new battle in what reporters have christened the “copyright wars.” Yet it is not the federal government’s only recent foray into the fight against online filesharing services, which, viewed as hotbed for copyright infringement, have been under a decade-long siege of civil litigation from media companies. In 2010, for example, the Department of Homeland Security mounted “Operation in Our Sites” to seize the domain names of websites providing access to infringing content, and the operation has since resulted in the seizure of more than 400 domain names. The issue more recently caught the attention of Capitol Hill, where bills were introduced in both the House and Senate to target foreign websites that link to or host infringing content.

But these efforts have not always been effective. For many of the domain names seized by the Department of Homeland Security, the same infringing content quickly appeared on sites with only slightly modified web addresses, and a few sites even grew in popularity. And the backlash against the two new bills was fierce: many popular websites staged a “blackout” in protest, including the online encyclopedia Wikipedia, citing fears that they would face sanctions merely for linking to controversial sites, even in informational articles.

Meanwhile, other countries have seen some success in directly prosecuting the operators of filesharing services. First, Japan convicted Isamu Kaneko, a computer-science researcher who developed Winny, an early peer-to-peer filesharing system. Kaneko arguably fostered dubious uses of his service by collecting feedback and announcing updates through an anonymous Internet forum dedicated to filesharing. But although Kaneko was convicted by a Japanese district court, the Osaka High Court reversed the conviction after concluding that Winny was “value neutral”—essentially, capable of non-infringing uses—and that Kaneko did not offer Winny primarily to promote infringement, even if he knew that it was probably being used for that purpose. This decision touches on a key question in this article: if a filesharing service is known to have rampant infringing uses, at what point do the service’s operators open themselves to criminal sanctions?

More successful was Sweden’s prosecution of the operators of the Pirate Bay, then one of the Internet’s largest peer-to-peer filesharing services. The operators of the Pirate Bay mocked their contribution to infringing activity, often publishing and ridiculing complaints from copyright organizations. Although Sweden once had a reputation for relaxed copyright laws, the country amended its Copyright Act in 2005 to make it a crime to transfer copyrighted content without permission. When prosecutors then indicted four operators of the Pirate Bay in 2008 for “complicity” in violating the Act, the operators raised the same arguments as Kaneko: that their services had noninfringing uses, and that they were ignorant of any specific infringing activity. But the court found them guilty, emphasizing that they had profited from infringing content by collecting advertising revenue and that knowledge of specific infringing content was unnecessary given that they had created conditions that fostered infringement and ignored notices of infringing content. The defendants were sentenced to one year in prison each and ordered to pay restitution of $4.3 million.

The success of this prosecution has been heralded as harbinger of ones like the action against Megaupload. Yet criminal prosecution of filesharing services is a new development in the United States, and only time will tell whether this new approach proves effective, or under what circumstances it should be used. The future holds many questions: What pushes a legitimate online file-storing business over the edge to criminal enterprise? How might criminal copyright enforcement differ materially from civil enforcement? We seek to answer these questions in this article. We focus on those online businesses enabling users to share infringing content with others online, and we refer to these businesses simply as “filesharing services,” intending this definition to cover diverse types of technology—including “cyberlockers” like Megaupload, which host files on servers controlled by the service, and “torrent” sites like the Pirate Bay, which provide links to connect users to infringing files stored by their peers.

In the end, we conclude that criminal enforcement actions should be limited to those filesharing-service operators that, in order to profiteer from infringing content, foster infringement by egregiously defying the established boundaries of copyright law and civil means of copyright enforcement.

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