Megaupload, the file sharing service shut down by the the U.S. government in January, is fighting for its life to avoid prosecution.
Meanwhile, the millions of people who used it have good reason to be nervous, wondering if they will be sued for illegally downloading copyrighted movies.
- DoJ must prove Megaupload intentionally promoted copyright violations
- Individual users can be liable for illegally downloading movies and music
- Music industry went on massive suing spree last decade to protect its copyrights
Some 175 million people used the program Megaupload to share movies and other files. It got so big that, for a time, Megaupload traffic accounted for 1 per cent of all internet usage in North America. The dream came crashing down this January, however, thanks to a federal indictment against the company for massive copyright infringement.
Now, Megaupload is demanding the charges against it be dropped, on the grounds that it is based in New Zealand and had no address in the United States. The lack of a physical address is just another wrinkle in a criminal case that is already complicated and difficult to prove, based on exactly who is and who isn’t responsible for content piracy and copyright violations.
The 1998 Digital Millennium Copyright Act appears to protect service providers from illegal activity on their networks as long as they take down copyrighted material on request. Without the DMCA, sites like Youtube or Google could never exist because they would be liable for every illegal result that they hosted or linked to due to the actions of someone else. However, the DMCA does have limits when the host appears to be encouraging the sharing of copyrighted material.
“It’s a tough burden for the government,” says Enrico Schaefer, founder of the Internet law firm Traverse Legal. “The concept where you can have both illegal and legal downloads on a torrent site is nothing new. What is new is federal government doing something about it criminally.”
“Companies like Megaupload have been getting away with this for a long time,” Schaefer says. “The government coming in criminally sends a petty strong signal to website owners, even though you have DMCA notice provisions, if a good portion of the material is copyright-protected, or you’re encouraging that, you have a problem. Something the government knows that we do not that makes this [Megaupload case] special.”
Cranky Music Industry
While the government’s case against Megaupload will be interesting to follow in its own right, another legal question to arise is the liability of individual consumers who shared copyrighted material over the network. The Motion Picture Association of America initially indicated that it wanted to save identifying information to prepare for lawsuits against individual users, though it has backed off its threats somewhat.
“Any consumer uploading or downloading copyright-protected materials puts themselves directly in harms way,” Schaefer says. “If you see a movie that you want to watch, there’s a presumption that you know that it is copyrighted material.”
If the music industry is any precedent, individual users caught downloading copyrighted movies could be in for it. When file-sharing technology became prevalent around the turn of the century with programs like Napster, Kazaa and others, the Recording Industry Association of America blanched at the thought of millions of people getting songs for free and started the lawsuits flying. Not only did the RIAA sue the offending technologies, usually successfully, they took the war directly to consumers who were downloading the illegal material.
The RIAA’s effort was backed by the Supreme Court, first in the 2005 ruling MGM vs. Grokster, where the court found that a program created and distributed with the intent of copyright infringement could be liable for the content shared by its users. Then the court last month allowed a $675,000 verdict against a college student who shared 30 songs on a peer-to-peer network. By law, copyright holders can sue for up to $150,000 per song. Talk about a chilling effect.
In total, the music industry brought lawsuits, or threatened to, against some 30,000 people. Most were settled for less than $10,000. The RIAA didn’t, and couldn’t, go after every single person who illegally downloaded music, but they stung enough people, and made it hurt, to give future listeners reason to think twice before downloading.
Where the RIAA once went, the MPAA could follow. In some cases, movie-downloaders have already been hit. In particular, consumers who download pornographic movies have been targeted, perhaps with the belief they will be less likely to mount a defence due to the embarrassment of being identified.
The producers of the movie “The Hurt Locker” sued over 24,500 people for pirating illegal copies of the film, though they eventually dropped 90 per cent of the defendants from the suit. At question is how accurately plaintiffs can identify people using copyrighted material when they only have an IP address to go on. However, as the music industry showed, it can be valuable to offer to settle for a few thousand dollars, which can be less than the cost of defending a lawsuit in court.
“There’s no question that movie industry has been a lot less aggressive [than the music industry], but it’s still a huge liability,” Schaefer says. For people who download illegally, “You’re asking for trouble.”
Do you think the movie and recording industries should sue individuals who download copyrighted materials? Share your opinion by leaving a comment below.
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