Literal falsity about independence of tests/test results supports $18 million in disgorgement (incl. interest)

Posted on April 11, 2019 by rtushnet

Dyson, Inc. v. SharkNinja Operating LLC, 2019 WL 1454509,
No. 14 C 9442 (N.D. Ill. Mar. 31, 2019)
Dyson sued SharkNinja in 2014 for false advertising.  SharkNinja won summary judgment except for
Dyson’s literal falsity claim for the period from August 2014 through December
2014. A jury returned a general verdict finding SharkNinja liable and that its
false advertising was willful, and awarding Dyson an accounting of SharkNinja’s
profits: $16,410,681. The court granted prejudgment interest, adding a couple
of million to the tab, and denied SharkNinja’s various motions to get out of
the verdict as well as Dyson’s motion for attorneys’ fees.

The key claims were that independent lab tests conducted under the ASTM F608
standard proved that SharkNinja’s NV650 vacuum cleaned carpets better than
Dyson’s DC65 vacuum. Dyson had two theories of literal falsity: first, that the
tests weren’t independent, and second, that part a SharkNinja infomercial was
false in that it combined a voiceover about independent tests with a bar graph displaying
data from internal tests finding that
on one type of carpet, SharkNinja’s NV650 picked up 42 grams of dirt to the
Dyson DC65’s 37 grams.
SharkNinja argued that the juxtaposition of two true claims
couldn’t be literally false, but at worst was ambiguous.  But “[w]hen two statements are presented
together, they contextualize each other and can thus communicate a different
message in combination than they might in isolation.” The grams graphic appeared
in the infomercial “at exactly the same time” that the narrator said,
“independent lab tests prove.” The court’s excellent analogy is worth quoting
at length:
[D]irect narration is not the only
way to eliminate ambiguity; context works just as well. Suppose a car is
approaching a traffic light. Viewed from the direction the car is traveling,
the light is red, but the passenger says, “The light is green.” Taken in
isolation, the statement is true: The light is green when viewed from the cross
street. In context, however, the statement is unambiguously false. Just as the
direction in which the car is traveling determines which side of the light the
driver will understand the passenger to be referencing without the passenger’s
saying so, so too does the timing of the voiceover relative to the grams
graphic communicate that the graphic displays the results of independent tests
without the narrator’s saying so—or so a reasonable jury could find.
[I might’ve gone further: it’s hard to see how a reasonable
jury could have found otherwise.]
SharkNinja argued that “a barely visible footnote to the
grams graphic attributing the data to tests performed on a ‘multi-level carpet
sample’” introduced ambiguity because it contradicted the voiceover’s reference
to independent tests conducted “on four of the most commonly owned carpet types
in America.” But even if “a barely visible footnote contradicting a voiceover”
could avoid literal falsity—about which the court was dubious—there wasn’t even
a contradiction here; a reasonable viewer could think that SharkNinja tested
four but displayed one.
SharkNinja next disputed materiality, which required a
showing of likely influence on purchasing, not actual influence. But
SharkNinja’s CEO testified that the graphic was meant to “show visually the
amount of dirt that we each pick up,” “which he thought would make an impact on
consumers.”  And  SharkNinja decided during the infomercial
editing process to stick with the multilevel carpet results used in the graphic
rather than using plush carpet results showing a slightly larger margin of
victory because of the “perception of 42g vs. 37g” for the multilevel carpet
test as opposed to 48.5 grams vs. 42.9 grams for the plush carpet test. As the
document explained: “We like us being in the 40’s and them being in the 30’s.” Since
SharkNinja thought the grams graphic would affect viewers, “the jury reasonably
could have found the same. And from that finding, it reasonably follows that
SharkNinja’s credibility-enhancing representation that the graphic reflected
independent test results was likewise material.”
SharkNinja argued that the grams graphic was immaterial
because the truth would have been just as good, as the independent testing
would have shown a four-gram difference totaled across all four carpets, which
was no different from the five-gram difference in the graphic.  The jury wasn’t required to agree, given the
evidence above and given that “[t]he graphic used in the infomercial showed
Dyson’s vacuum picking up only 88 percent (37 grams divided by 42 grams) of
what SharkNinja’s vacuum did, while a graphic constructed from Intertek’s tests
on all four carpets would have shown Dyson’s vacuum picking up 98 percent
(166.8 grams divided by 170.9 grams) of what SharkNinja’s vacuum did, making
the difference appear much less significant.” 
[It would’ve wanted to use the four carpets added together because Dyson
beat SharkNinja on at least one of the carpets.]
Next, SharkNinja argued that no reasonable jury could have
found that the independence representation was literally false. Basically, it
told the testing entity to use a particular setting when testing all four types
of carpets, in contradiction to what the user manual said and what the testers
initially did.  Though it was a closer
question, “a reasonable jury could have found that SharkNinja effectively
controlled the tests by dictating to Intertek which setting to use, thus
rendering the tests not independent and the independence representation false.”
[Later, it changed the user manual so that those settings were actually
recommended for those carpet types; a previous decision had held that this
change, once made, rendered the ad claims not literally false going forward,
which is a bit weird technically—the testing was either independent or it wasn’t—but
perhaps one could say the lack of independence was no longer material once the
tester did what users were supposed to do.]
The court rejected challenges to the disgorgement calculation.
The $16,410,681 award appears to have come from starting with SharkNinja’s
$18,138,000 in gross profits and deducting $1,727,319 in non-advertising
expenses (commissions, deliveries, customer service call centers, warehouses
and fulfillment, credit card processing fees, and bad debt) identified by
SharkNinja’s economics expert. SharkNinja argued that (1) unrefuted evidence
showed that, due to its substantial advertising expenses, it lost money on the relevant
model during the relevant period and thus had no profits to disgorge, and (2)
even if it made a profit, the jury irrationally failed to apportion the profits
to award Dyson only the share attributable to false advertising.
But the various SharkNinja financial documents shown to the
jury were created for the instant litigation because the company didn’t
ordinarily prepare product-specific financial statements. Those documents
differed from each other a bunch, including one document reporting a $30.6
million net profit versus two others reporting net losses of $14 million and
$16 million, and also contained substantial errors.  Dyson provided expert testimony challenging
their accuracy and reliability, e.g., noting that one SharkNinja
profit-and-loss statement included data for two more months than a second
document yet reflected fewer total sales. She opined that, as a result, the
documents did not provide a “sufficient [basis] to subtract any amount of media
expense” for the challenged model. “The jury thus was free to disbelieve
SharkNinja’s fuzzy and inconsistent accounting and find that it did not prove
any of its claimed advertising expenses as deductions from its gross profits,
much less that its overall profit was zero.”
SharkNinja maintained that not all of its profits from that
model resulted from false advertising, so that apportionment was required.  But that didn’t mean that, as it argued, the
proper amount was zero, and it offered no middle ground.  At trial, SharkNinja didn’t suggest any way
for the jury to apportion profits other than zero; this strategic choice couldn’t
be revisited now.
Its motion for a new trial or remittitur suffered the same
fate. Among other things, SharkNinja challenged the jury’s willfulness finding
as against the weight of the evidence, reasoning that its witnesses testified
that the grams graphic was a placeholder accidentally left in the infomercial. But
the jury reasonably could have found that “when SharkNinja decided to keep the
grams graphic in the infomercial because it ‘like[d] us [SharkNinja] being in the
40’s and them [Dyson] being in the 30’s,’ it was at least reckless as to the
truth of the voiceover’s representation that the graphic reflected independent
testing,” especially since the graphic used data from multilevel carpet, and the
independent testing showed Dyson beating SharkNinja on multilevel carpet. And
the willfulness finding could also have been based on the independence representation.
On disgorgement, SharkNinja made similar arguments to those
above.  But once disgorgement was
justified, SharkNinja had the burden to distinguish between profits
attributable to its false advertising and profits attributable to legitimate
business activities. The jury certainly could’ve concluded that SharkNinja’s
profits didn’t result entirely from false advertising, but SharkNinja only
argued that its profits were zero; even after trial, it insisted that apportionment
was required without suggesting a percentage. 
Even if that gives Dyson a windfall, “that result accords with Seventh
Circuit precedent recognizing that the proper apportionment ‘often cannot be
ascertained with any reasonable certainty’ and that the resulting windfall risk
should be borne by the defendant, not the plaintiff.”
Dyson did fail to get the case deemed exceptional. A
willfulness finding doesn’t inherently make a case exceptional. And this case involved
challenged ads some of which were exonerated. The violation here, though
willful, wasn’t “especially egregious.” The false claims “were just part of its
advertising campaign,” lending credibility to otherwise true claims about lab tests
that were onscreen for only about twenty-four seconds of a twenty-two-minute
infomercial.  The falsity was in the
details.  “This would have been a
different case had SharkNinja run its advertisements without ever testing its
vacuum’s performance, or had SharkNinja said that the tests showed that its
vacuum cleaned carpets better than Dyson’s when in fact they showed the
opposite.”
Nor did alleged litigation misconduct rise to a level
justifying a fee shift.
However, Dyson did get prejudgment interest.   The
Seventh Circuit has adopted a presumption in favor of awarding prejudgment
interest “to victims of federal law violations” because, “[w]ithout it,
compensation of the plaintiff is incomplete and the defendant has an incentive
to delay.” Prejudgment interest “is simply an ingredient of full compensation
that corrects judgments for the time value of money.” Letting SharkNinja keep
the economic return it “made (or could have made) by investing” those funds
between 2014 and the date of judgment “would leave it unjustly enriched.”
Although SharkNinja won partial summary judgment, “defended
itself in good faith,” and did not engage in “outrageous, flagrant or
malicious” conduct, none of that mattered.  There’s a presumption in favor of awarding
prejudgment interest, and that presumption can’t be overcome by showing that
this is just an ordinary case; that would be nonsensical.  The court added $2,251,202 in prejudgment
interest, making the total award $18,661,883.

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burger case involves unclean hands (ew) and literal falsity about beef amounts

Posted on April 11, 2019 by rtushnet

In-N-Out Burgers v. Smashburger IP Holder LLC, 2018 WL
7891028, No. SACV 17-1474 JVS(DFMx)
(C.D. Cal. Dec. 21, 2018)
As relevant here, In-N-Out alleged that Smashburger falsely
advertised its Triple Double hamburger as containing “Double the Beef” because
the burger’s two patties together contain the same amount of beef as the single
patty in Smashburger’s regular burgers. The court here addressed Smashburger’s
unclean hands defense based on INO’s claims that its meat has “No Additives,
Fillers or Preservatives,” even though its meat contains antibiotics. INO’s
claims regarding its meat, as well as its claims regarding “freshness,” also
allegedly falsely suggested to prospective customers that its food was healthy,
or at least a healthier alternative to other fast food restaurants. 
Does Twiqbal apply to affirmative defenses? The court here
thought no: under Rule 8(a), factual plausibility is necessary to state a claim
because the pleader must “show” entitlement to relief, but under Rule 8(c), a
party pleading an affirmative defense only needs to “state” — not show
entitlement to — its defense. Also, “strong policy reasons exist for a
different standard. A plaintiff has unlimited time to compose a complaint, but
a defendant only has 21 days to respond and assert affirmative defenses.”  Thus, the court applied the fair notice
standard instead, and under that standard, the affirmative defense of unclean
hands was sufficiently pled in part and deficiently pled in part.
First, even if it was literally true that In-N-Out’s meat is
free from “additives, fillers, or preservatives,” “such a claim could be misleading
to consumers who treat is as a claim that the meat is free from any added
substances (such as antibiotics) or byproducts of those substances.”  The identification of specific statements in
INO advertising, and of reasons that was allegedly misleading, satisfied Rule
9(b).
“Freshness” challenges were insufficiently pled because consumers
couldn’t plausibly equate “freshness” with “healthfulness” “in the context of a
quick-service restaurant serving burgers and fries.”
Unclean hands requires clear and convincing evidence (1)
“that the [non-asserting party’s] conduct is inequitable;” and (2) “that the
conduct relates to the subject matter of [the non-asserting party’s] claims.” On
relatedness, the court found that the defense was “premised on allegations that
In-N-Out misrepresents the nutritional characteristics and composition of its
burgers, while In-N-Out’s false advertising claim is premised on allegations
that Smashburger misrepresents the quantity of beef in its burgers. Therefore,
the unclean hands defense pertains to the same conduct, false advertising, as
related to the same competing products, the parties’ burgers.”   In addition, it was wrongful enough to
qualify for unclean hands. “Neither Supreme Court nor Ninth Circuit precedent
requires that defendants prove that a plaintiff’s conduct was ‘egregious,’ ”
and “a defendant can succeed on an unclean hands defense if it proves that a
plaintiff engaged in a ‘willful act concerning the cause of action which
rightfully can be said to transgress equitable standards of conduct.’ ”
In-N-Out Burgers v. Smashburger IP Holder LLC, 2019 WL
1431904, No. SACV 17-1474 JVS(DFMx) (C.D. Cal. Feb. 6, 2019)
Smashburger added the “Triple Double” burger to its national
menu. Its Triple Double, Bacon Triple Double, and Pub Triple Double each have
two beef patties that are supposed to weigh 2.5-ounces each prior to cooking,
using the patties also used for the “Kid Burger” and “Small Burger.”
Smashburger’s Classic Smash burger is made with a single patty that is supposed
to weighs 5.0 ounces prior to cooking. The Triple Double burger costs $0.30
more than the Classic Smash. INO’s counsel bought a Triple Double and a Classic
Smash in Culver City; the Triple Double’s two cooked patties weighed 1.5 ounces
each, while the Classic Smash had a single cooked patty weighing 2.8 ounces.
Smashburger used a number of slogans, including, but not
limited to: “Double the Beef,” “Triple the Cheese, Double the Beef,” “Triple
the Cheese, Double the Beef in Every Bite,” “Triple the Cheese, Double the
Beef, Triple the Options,” and “Classic Smash™ Beef Build with triple the
cheese & double the beef in every bite,” along with slogans that denote two
times the beef, including “2x Fresh Never-Frozen Beef.”  (Some locations seem to have changed
sizing—and increased pricing for the Triple Double—so that the Triple Double
Smashburger has twice the quantity of beef as the regular Classic Smash, and
INO didn’t argue falsity as to those locations with changed serving sizes.)
The court found that “Classic Smash™ Beef build with triple
the cheese & double the beef in every bite” was literally false.  Smashburger made some bad arguments about why
it wasn’t: double the beef in every bite doesn’t mean “two layers of beef in
every bite” but rather “unambiguously refers to the amount of beef in the
burger.” And it’s a direct reference to the Classic Smash, so Smashburger’s
attempt to create FUD using survey data regarding industry standards or
consumer expectations, such data was insufficient to create a genuine dispute
of fact as to literal falsity. Nor was it literally true because the Triple
Double had two times the amount of beef contained in a Classic Small
Smashburger, an option that was removed six months before the Triple Double
launched; the only single 2.5-ounce patty on the menu was the Kids Smash, which
the slogan at issue didn’t reference.
Similarly, Smashburger’s argument that its “double the beef”
claim was literally true because the Triple Double contains double, or more
than double, the beef of many other competing fast food single burgers,
including INO’s, failed because the slogan had no reference to competitors’
burgers, but unambiguously a comparison to Smashburger’s own. And its argument
that the Triple Double was smaller in diameter and taller than the Classic
Smash, making it possible that it would contain more beef per bite even with an
equal beef content, was “unpersuasive” in context. 
There was a genuine dispute of fact as to the falsity of the
other slogans that didn’t explicitly refer to the Classic Smash: “the remaining
slogans could plausibly be interpreted by consumers as a reference to products
offered by Smashburger’s competitors.” INO didn’t submit evidence on implicit
falsity at this stage.
“Statements that are literally or deliberately false create
a presumption of deception and reliance.”
Smashburger argued that it rebutted the presumption of
deception because the Triple Double and the Classic Smash were close in price,
and therefore no reasonable consumer could be deceived into believing they were
getting twice the amount of beef. The court didn’t agree that “a defendant can
rebut the presumption of deception by arguing that its false advertising is too
egregious to be believed.”
Materiality was also shown as a matter of law. Smashburger’s
false advertising pertained “to the very nature” of its product. “Consumers
rely on perceived value in deciding which products to purchase; therefore,
consumers are more likely to buy a product if they believe they are getting
twice as much of that product than they actually receive.”  No consumer surveys or testimonials were
required to find materiality as a matter of law.  Nor did it matter that “millions of people” bought
the Triple Double: “Smashburger does not present any evidence that there were
no returns or customer complaints regarding the Triple Double, and the fact
that millions of people purchased the Triple Double does not in and of itself
create a genuine dispute of fact for the jury.”
INO also moved for summary judgment on injury, but the court
found a genuine issue of material fact because of a dispute about how
competitive the parties were. A 2014 customer survey conducted by Smashburger showed
that 48% of Smashburger customers were extremely or very likely to go to
In-N-Out in the next month, and that 72% of Smashburger customers had visited
In-N-Out within the past three months. There was also evidence of geographic
overlap and a 2017 Marketing Update identifying In-N-Out as one of
Smashburger’s six competitors in the “U.S. Better Burger Landscape.”
But depositions from INO marketing folks suggested that INO
didn’t consider Smashburger a direct competitor or think its marketing mattered
to INO. And there were “significant” differences between the parties’
offerings. For example, INO only offers beef, while Smashburger offers four
types of protein; Smashburger offers varying patty sizes, while INO doesn’t;
Smashburger offers build-your-own burgers, pre-set burgers, and regional
“special” burgers, while INO only offers a hamburger and a cheeseburger.  (Hey, wasn’t there a whole thing about the secret
menu?)  And over four years elapsed since
Smashburger’s customer survey, weakening its evidentiary weight.

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statements about patent license status can violate Lanham Act’s false advertising provisions

Posted on April 9, 2019 by rtushnet

Au New Haven, LLC v. YKK Corp., No. 15-cv-3411-GHW-SN, 2019
WL 1437516 (S.D.N.Y. Mar. 31, 2019)
Au holds the patent to a water-resistant zipper, and YKK had
an exclusive “field of use” license that it allegedly exceeded, resulting in
this lawsuit for patent infringement, breach of the license agreement, deceptive
marketing under the Lanham Act, and deceptive practices under the Connecticut
Unfair Trade Practices Act.
In this summary judgment ruling, the court found that patent
invalidity was subject to disputes of material fact, as did infringement.
Breach of contract failed because the “the license only gives permission to
sell into the non-excluded markets and does not contain a corollary prohibition
of sale into the excluded markets,” though it would hold oral argument on the
question of whether the implied covenant of good faith and fair dealing implies
a covenant not to compete in a patent license. Au had the burden to “prove not
merely that it would have been better or more sensible to include such a
covenant, but rather that the particular unexpressed promise sought to be
enforced is in fact implicit in the agreement viewed as a whole.” “Given the
absence of an express promise by the licensee, and the protections otherwise
afforded to Plaintiffs by patent law in the United States and abroad, the Court
harbors serious doubts that Plaintiffs can meet that burden,” but the court
didn’t make a final ruling.
Lanham Act claims: There were triable issues on laches, a
fact-intensive issue. Au delayed filing suit for many years, but the parties also
made years-long efforts to come to agreement on a new license.
YKK argued that the challenged statements weren’t commercial
advertising. Though the challenged statements weren’t pure commercial speech,
that meant that a jury would have to address “factors such as whether the
communication is an advertisement, whether the communication makes reference to
a specific product, and whether the speaker has an economic motivation for the
communication.” The motivation in particular was a disputed material fact.  [I think the real issue is whether the
challenged statements were “commercial advertising or promotion,” a subset of
commercial speech.]
“The challenged statements, while not literally false, do
falsely imply that YKK had an unlimited license.”  YKK argued that implied falsity requires a
consumer survey, but intentional misleadingness can substitute for survey
evidence. A statement about YKK’s right to sell the zippers also  involved “an inherent or material quality of
the product.”
Connecticut Unfair Trade Practices Act: Not time-barred;
CUTPA has a three-year statute of limitations. The first allegedly misleading
statement was made in 2003, but Connecticut doesn’t “insulate standardized or
repeated unfair trade practices from challenge once they had been instituted for
three years.” So Au could reach back three years from before it sued, and some
of the statements were re-made within that period.

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Section 512 roundtable, open mic

Posted on April 9, 2019 by rtushnet

Open mic
Janis Pilch, Rutgers U: domestically it seems obvious that
litigation on 512 can’t change the systemic problem of infringement and the
impossibility for most rightsholders to litigate. 512 sets up a permanent
conflict b/t service providers and rightsholders.  Illusion of balance. Need to amend to create
a balance that favors rightsowners. 
Second, internationally, the same conflict plays out.  EU Directive makes platforms more responsible
versus rich tech companies fighting laws constraining their profits.  Those companies are using dominant economic
position, made possible in part by 512, to distort public perception of law through
misinformation and through academics & civil society organizations, paid or
otherwise motivated.  Also those groups
hacked … somebody?  USCO site was
compromised in 2016 when written comments on 512 were due.
Q: do you contend that anyone was precluded from filing
comments?
Pilch: no. But 92,000 comments were bots.  We see South African reform heavily influenced
by US tech interests but presented as creator focused.  
Kupferschmidt: The problem isn’t that © owners shoulder most
of the burden, it’s that they have very little to show for doing so, b/c the
material goes back up online. Whackamole. 
The result of the burden placed on the creative community is that we
aren’t achieving the balance Congress intended. 
On fraudulent notices: what we are doing to educate creators—Copyright Alliance
website has FAQs and does presentations across the country.  [Unfortunately, and this really applies to
all parts of this problem as well as many others, it’s really hard to deal with
bad faith uses by trying to educate the ignorant; it tends to misdiagnose the
problem.]  If you’re worried about
paucity of challenges, support the small claims copyright act—it would be a lot
less expensive in that context.  On red
flag knowledge: no ISP could come up with one example that was red flag knowledge
that wasn’t actual knowledge.  Proves our
point.  Not sure it was intended to be
narrow.  [Obviously I think that’s wrong—among
other things, I think my example of getting told about a full copy creates a
reason to investigate, but it’s not actual knowledge until I check and see if
the report is accurate.]  Small
businesses can’t afford to do this, Fourth Estate requires registration.
Q: opinion doesn’t mention 512. [And you don’t need a
registration to send a notice!]
Rasenberger: one writer spends 50% of her time dealing with
piracy; most give up. Mean author income is $20,000/year for fulltime authors;
they don’t have the resources to fight.  There’s an absence of creators here b/c this
was billed as an update on the case law and most creators don’t know the law
well.  Step back and decide whether we
want to protect © as a country; if we do, we need to amend 512. This is about
who bears responsibility and risk; big ISPs have drained money out of the
content industries.  The balance isn’t
working.  We need no other proof than the
transfer of wealth that’s already happened. The EU has the courage to take it
on; we can too.  512(j) isn’t used b/c
the relief is so narrow and b/c of the uncertainty over its application given
what courts have done with other sections.
Google’s site demotion has been helpful to authors to do
massive takedowns, but it doesn’t address the problem when the users know the
name of the site and can just type it in.
Pariser: we may never get to STMs, but we should know
factually what’s out there—that could help move the conversation so we won’t be
discussing whether filtering tech exists in the abstract.  In the reply comment notice, CO asked are
there any neutral principles? Our answer 2 ½ years ago was: look to notices.
There’s a huge amount of notices, not dropping, and it can’t possibly be the
case that the system is working, because if it were, piracy would be dropping,
which would lead to fewer notices. Now notices are dropping, and we have changed our minds about what counts as
evidence.  Notices are dropping not
because piracy is dropping but because © owners have notice sending fatigue,
and b/c Google’s demotion system has led © owners to focus on sending notices
for top of search.  Piracy landscape is
shifting from p2p to streaming and other forms of piracy, resulting in fewer
notices. Torrents can generate 10s of 10,000s of noticeable links for a particular
work, and you can send those notices if you have the resources. As piracy
shifts to streaming, that will be 10, 20, 30 links b/c a site is doing all the
aggregating for you. 
Q: does that make the notice system easier to enforce
against streams?
A: of course not!  Titles
still repopulate instantaneously. There are more streaming services and they
proliferate easily. Finally, look at money: tech services are paying billions,
and a rising tide is lifting all boats. 
But the fact is that’s not true. Tech companies are making vast amounts
of money, and becoming most profitable businesses, while content is shrinking
relative to what it has been. The industry is worth $1 billion on an adjusted
basis and it would have been worth $21 billion [if nothing else had changed but
we extrapolated growth from the highest-growth period of the industry and
people still bought records and didn’t play video games]. Without piracy, it would
be different.  ISPs are spending a tiny
fraction of revenue on takedowns, response to notices, etc. 
RIAA, Vicki Schekler [sp?]: Counternotices/notices to search
engines—our experience is quite different as shown in comments submitted in the
past.  96% takedown rate with Google, and
4% are those weren’t ever indexed. We send millions of notices annually.  Pariser mentioned the evolving nature of piracy,
and our members experience streamripping. 
Pirate sites circumvent DRM and then distribute the audio. Some of these
sites don’t have a static URL so there’s no deeplink notice to send.  We’re happy to see recording revenues
starting to rise again, but they’re nowhere near their peak in inflation
adjusted dollars.  [I wish Glynn Lunney
were here.]
Hatfield: Downward economic pressure that free access places
on the entire ecosystem for creating music. No one can compete with free,
especially not with our own music.  Eric
Priest: what happens when © owners can’t monetize works at consumer value
points—example of the music/movie industries in China—inability to monetize
copies of works harmed monetization opportunities for smaller producers; market
signals sent to producers are distorted; producers are disproportionately
exposed to peculiarities of markets/exploitation by intermediaries.  The dystopian future is unchecked piracy +
consolidated platforms, despite crocodile tears about startups. If & when a
winning platform reaches monopsony standards, it will have little reason to
maximize royalty payments.  If music is
devalued anywhere, it’s devalued everywhere. 
No musician now has more live gigs than they used to have. Famous acts
now charge opening acts for exposure rather than paying them. We thought we
were replacing greedy record company executives with the internet, but at least
they invested in us.  [Where is that $6
billion Google pays going?]  Now they
want to take a percentage of our tour money instead of giving us tour support.  Who wants a device devoid of access to interesting
content?  We want a fair percentage of
the revenues our works generate. 1998: music business was $15 billion; last
year it’s $9.8. Now the internet is a trillion dollar industry.  Pay us less than 6/1000 of a cent per spin,
and it’s less on YouTube.  [Really, read
Glynn Lunney on this issue.]
Goldman: statement that no one can compete with free was
contradicted by Polis who told us exactly what he does.  Has been confused about red flag discussion:
9th Circ. has cleanly held that third party notices can constitute
red flag knowledge: Shelter Capital, etc. 
There’s been a lot of FUD today about red flag knowledge.  Google and FB are not the internet! There’s a
whole lot of internet—the regulatory temptation is to think Google and FB need
correction so we should regulate the whole internet. Please don’t do that.  Finally, 230 relationship: 230 excludes IP,
but important to remember that it protects all kinds of curation and steps
about what to publish, what to prioritize, what metadata to show. That’s helped
sites understand what they can and can’t do. 
512: if it starts as third party content, it should stay as third party
content unless there’s evidence that the user no longer wants it up.  If the site makes the publication decision,
not the user, then the site should be responsible—Batzel—but 230 is a good model
for understanding what makes the transition from content submitted at the
direction of the user to content not being at the direction of the user.
Levy: Representative list/red flag precedents may mean that notice
has to ID the location. Lenz may also prevent the use of automated systems.
This means publishers and songwriters are effectively prevented from protecting
their works and many have given up. [Why hasn’t the Lenz liability risk
deterred all those millions of automated notices to Google, including the 4%
that weren’t ever on Google?  Interesting
to hear from RIAA about what gives them such confidence to send so many notices
that don’t identify an infringing link on Google even after Lenz.] We’ve heard
that filtering works [and that it doesn’t]. We have a problem and the tools to
fix it, and we need to rebalance the DMCA with the EU Directive as a positive
roadmap to shift the burden of policing the internet from the © owner to the
user.
Lavizzari: European countries don’t have anything to learn
from the US on human rights, especially economic/social rights and healthcare. [I
disagree in relevant part but appreciate his clear moral stance.] Our European
report: what has been done in the Directive is relatively little. What’s not
been done yet is implementation into national systems we’re trying to
harmonize.  New art. 17: understands the
concerns of tech companies & civil society organizations, but it’s also an
issue of harmonizing secondary liability law, which we don’t have b/c we don’t
have a common tort law. These are not perfect provisions, the result of very
complex lawmaking. Harmonization is driven by cultural politics—France, which
is not the most conservative gov’t in the union, negotiated the Directive
through its Ministry of Culture, not Economic Growth or Development.  That’s a significant difference from the US.
What motivated the Parliament majority was not the former art. 11/13 but the
new exceptions, which get significant play in the new Directive—educational exceptions
and text/data mining exceptions.  Read
the final Directive—what motivated Parliament in the overall approval was the
new rights that are being granted to authors and performers—the idea that the
Parliament is run by socialists/democrats and it’s suspected that the majority
will not be there at the next election. Platform regulation, data transparency,
etc. are coming in the next iteration. 
Wolff: Notice & takedown isn’t adequate; professionals
can’t spend their lives doing it. Need to stop infringement and encourage
licensing that works.  Discourages real
activity between content creators and ISPs. [Again, note who counts as “content
creators”—in this version, not the people using the sites!] Filtering works;
image recognition works. ISPs worry that they will lose protection if they do
too much—perhaps should clarify that they won’t.  And should define STMs better b/c TMs aren’t
done by broad consensus; they come out of different sectors that are familiar
with their own type of content. What works for music might not work for visual
arts.
Greenberg: does the statute allow industry specific STMs?
Wolff: unclear. Developed by broad consensus in multi-industry
standard process. That’s not how it has worked.
Q: couldn’t multi-industry just mean ISPs + visual artists
etc.?
Wolff: possible but it hasn’t happened in 21 years.  DMCA has discouraged platforms. There could
be better content if there was more curation/working with content
creators.  [Also I would like Google to
give me a pony.]
Gellis: Q about the data from Sky is Rising: industry data; sources listed
in report.  These aren’t hypothetical,
idealized citizen creators; these are real people who need access to these
platforms.  Mavrix: she thinks this was a
wrong turn, given that the follow up decision moved away from it. Error was “at
the direction of” the users. That’s creating the universe. The platform may
then shrink the universe of what content is stored, but that doesn’t change
whether what remains was “at the direction” of the user.  What we see is a conflict developed b/t 230
and 512: fear of liability leads platforms to crack down on speech—widespread damage
from FOSTA/SESTA where large swathes of legal, lawful content were taken down.
Isbell: didn’t 230 already exempt criminal activity?
Gellis: why did they bother w/FOSTA when 230 already did the
job? Good question!  Some ISPs thought
that the unnecessary statutory change created enough uncertainty about the
immunity that platforms reacted by sealing off areas, e.g., Craigslists adult personals.  We should be very reluctant: small changes
have huge impacts on speech.  Finally, on
Mavrix: moderation in general shouldn’t disable 512. The idea seems to be ‘you’ve
seen the infringement’ but the same challenges that happen with any takedown
notice appear—was there ownership, was there fair use, was there authorization—LJ
moderators don’t have access to that information. For these protections to be
useful & valid they have to be robust & reliable.
Band: agree w/ EU colleague: he supports Medicare for
all.  (1) Don’t ignore the societal
context of access to the internet. (2) note that we are living through an
explosion of great content.  Netflix
& Amazon & podcasts—we’re overwhelmed with content.  Rightsholders complain about piracy, but they
also complain about how much competition there is from other musicians, photographers,
etc. The barriers to entry have lowered, and that’s not a bad thing, especially
from the CO’s perspective.  (3) Publisher’s
right: they claimed not to want to regulate facts, free expression, quotation
right, access to news. They did say that 4 words from a headline would be an
infringement. That’s terrible.  [Note that
they tried and failed on the same thing with databases; let’s not take our cues
from that—or let’s take our cues from the US treatment of the sui generis database
right, which is to say ignoring it out of embarrassment.]  EU Directive does have a couple of good
things: preservation right for cultural heritage organizations, and contract
overrides protecting exceptions from being removed by contract.
Gratz: (1) MP3tunes case: a Q about what a real world
example of red flag knowledge; that case gives us one.  They knew that Beatles songs weren’t licensed
anywhere; that was red flag.  (2) Long v.
Facebook, a month ago: reflects the flexibility of courts taking into account the
different facts. 
Greenberg: how unique was that case to the facts? They said
5 days was expeditious, but FB was receiving over 100 notices from one user.
Gratz: FB was receiving a lot of different communications
from this user, and asked him which he wanted to deal w/first. That’s specific
but there may be other situations, including ones where 5 days is too long and
where that’s way too short, for example when there are layers of service providers. 
Castillo: definition of ISP is too broad.  It’s difficult to imagine any online service
the definition wouldn’t encompass, per one court. AAP has proposed including an
element of good faith into the definition of service provider for eligibility for
the safe harbor.  [Yay litigation costs!]
Carver: Snoop Dogg says 360 deals involve the labels taking
360% of everything!  He works w/Google’s Content
ID team & wants to give his experience. Across all Google products, we probably
receive more abusive notices in a week than everybody else in a year. If we
didn’t screen, Justin Bieber would be off YouTube.  One example from very recent history: Feb. 11
with “YouTube
Extortion”—small game creators got fraudulent takedowns. We were fooled
initially; we removed the videos/applied strikes. But once there was publicity
we saw the fraud. When one provider decided to automate its process, over ½ of its
notices were abusive.
Q: do you abide by them?
Carver: we try to detect and prevent them.  Another point about counternotices: 2% on YT
is copyright removal request instead of Content ID—between 1-2% of removal
requests get a counternotice. Small creators really are scared to counternotify
even when they think they’re in the right. Polis is not particularly common
among small creators in willingness to counternotify. But we also see some
counternotification problems; we review them even though the law doesn’t
require it.  If a takedown is from a
composition copyright owner, then your objection that you sang the song
yourself won’t work—we refuse to forward that counternotification, which is now
more than half of the counternotifications we receive. To spare rightsholders
from obvious misunderstandings of the process.

Vast majority of YT users never get a strike; the vast majority who get a
strike only get one strike. Of those who do go on to have 3 strikes, the vast
majority reach that point w/in 90 days of account creation. Two very different
groups: people who don’t understand much but want to do the right thing v.
those who are dedicated. Having one policy on repeat infringers doesn’t address
that separating equilibrium.  Reasonable in
the DMCA allows us flexibility.
Willen: The idea that we should redefine ISP to add good
faith is inconsistent w/ the law—Shelter Capital, Fung etc already disable
services that induce infringement from access to the safe harbor. 
Q: why not exclude all bad faith actors?
Willen: need to know what good faith is; opens the door to
something impossible to implement. The Q of whether a service acts in good or
bad faith can be answered through the way the courts are already applying the
standards.
Troncoso: adversarial content v. tech tone is bad—not a zero
sum game.  There’s a tremendous range of
diversity on the 512(c) side alone. We’ve heard about a few providers, but a
huge range of others could be threatened by sweeping changes. On the users: for
particular users the DMCA works/doesn’t work for particular reasons.  Prof. Tushnet has talked a lot about the fan
fiction community and how filters could be problematic for them; the same from
open source software developers.  Bear in
mind stakeholder diversity w/in categories.
RT: what counts as content stored at the direction of the user?
When I’m on the bus home and I pull the cord, the bus driver stops at my
direction even though she is the one hitting the brake and opening the door,
and she may even decide not to stop immediately depending on the conditions;
it’s still at the user’s direction when she does. 

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Section 512 roundtable, part 4: International

Posted on April 8, 2019 by rtushnet

SESSION 4: International Developments     
Carlo Scollo Lavizzari International STM Association: (Scientific
Technical Medical publishers, also arts & humanities publications.) Internet
hasn’t been static. Dynamic developments in Europe from platform liability and
safe harbor to one of responsibility, not just from legislation but case law in
cases from Germany, Italy, France, Spain, Britain, ECJ. The Q is not how to fix
a broken whackamole system but how do platforms discharge their duties based on
the risk they introduce, not one size fits all [just two sizes, I guess].
Stan Adams Center for Democracy & Technology: Directive
provisions are fundamentally problematic and unbalanced v. 512. The internet is
an incredible tool to market content, but it’s also the default option for
sharing and expressing between people. 512 is foundational; the EU removed that
foundational stability.
Eric Cady Independent Film & Television Alliance: Global
problem, massive online infringement w/no way to stop the proliferation of illegal
copies.  Encouraged by the new Directive:
need to rebalance framework for sharing service providers, which haven’t had
incentive to discourage users from uploading infringing content.
Danielle Coffey News Media Alliance: Yay Directive.
Alec French Thorsen French Advocacy: 512 was the price we
paid for the rest of the DMCA [which we would now like to not pay any more, though
we’d definitely like to keep 1201, thanks!] 
Directive distinguishes small and big UGC sites; innovation by startups
wouldn’t be impacted by requiring companies w/over $500 million in market cap
to secure licenses.  Limiting 512 to
startups would not prevent innovation but would stop allowing multibilliondollar
companies to ignore and profit from infringement w/impunity. 
Ashley Friedman Information Technology Industry Council: innovation.
Joshua Lamel Re:Create: Coalition members are very
concerned: impacts not just on European consumers & innovators but American
investment. Many smaller startups can’t meet the startup test; US creators will
have a lot more trouble reaching the American market. Two things have changed:
(1) profits are up in the creative industries, and (2) piracy is down—those are
worth noting. Exponential increase in creators foregoing traditional intermediaries
and choosing Amazon, YouTube, TikTok, etc. Approx. 17 million Americans are
creating & distributing content online w/o traditional intermediaries, some
of which are small businesses; Europe threatens them all.
Stan McCoy Motion Picture Association EMEA: Supports the EU
approach to no fault injunctive relief from the 2001 directive. Liability: look
to ECJ case law, not new EU directive as the model. The original clarification
of communication to the public was good, but we dislike the emphasis on licensing
over enforcement and dislike the UGC language contradicting the Commission’s own
language.
Corynne McSherry Electronic Frontier Foundation: © policy is
speech policy and innovation policy. If we see upload filters across Europe,
they’re inevitably going to flag lawful content—we have a decade of experience
w/Content ID, in which YT has invested millions of dollars. Still routinely
misidentifies birdsong, public domain works, and other types of content. At
300,000 videos a day, 1/10 of a percent is 300 lawful posts blocked per
day. 
Katherine Oyama Google: We do agree that the DMCA has allowed
an explosion of creativity and economic growth. Enables more than 27.7 trillion
in global ecommerce. Balanced US legal approach has driven billions to the entertainment
industries that could have been lost to piracy. Global music revenue and box
office revenue is up.  Directive will set
Europe backwards.  Unlike recently passed
Music Modernization Act, which was win-win-win, the Directive poses the
potential for massive and dramatic overblocking of content. Details will matter
as will implementation. Will work with Member States.
[I really want to hear more about who gets this
Directive-mandated license money. It sounds a lot like French photographers are
going to get money from online use of photography in France, but won’t have to
distribute it outside Europe and in particular won’t have to send it to US photographers
whose works might well make up a big chunk of the works used under “license,”
if the collective licensing works the way it has to date.]
Christopher Randle Facebook: Reiterate strong support for
the US framework. Our measures are enabled by the strong & balanced US
approach.  We’re excited by our new
tools/partnerships, such as video matching/Rights Manager, alongside with use
of Audible Magic.  Important
illustrations of how collaboration can work, but only if it’s voluntary,
adaptable and flexible. Developing strong partnerships with rightsholders in
all segments. 
Steven Rosenthal McGraw-Hill Education: WHOIS has conflicted
with GDPR restrictions on access to information.  We’ve seen a number of instances where
identifying data previously available was suddenly redacted. We’ve seen a
proliferation of content delivery networks like Cloudflare anonymizing
providers under the pretense of security. DMCA subpoena provides no alternative
solution b/c they lead to useless, inaccurate ID info self-reported by the
infringer. Negatively affect rightsowners’ ability to enforce rights.
Matthew Schruers Computer and Communications Industry
Association: EU and US approaches starting to diverge.  Sky is Rising shows numerous 3d party industry
organizations reporting growth across sectors, showing that notice &
takedown is working. The new Directive provisions, by contrast, are out of step
with the US/increasing international norm, creating great uncertainty, which we
should regard w/skepticism.  Deters
investment/creates risks to free speech.
Lui Simpson Association of American Publishers: Encourages
CO to take into account effects of website blocking on pirate sites. In Europe
alone, 1800 sites have been blocked and the internet hasn’t been broken.  US should have additional meaningful tools to
block piracy as a mere takedown is not enough.
Sherwin Siy Wikimedia Foundation: Lots of uncertainty about
the new Directive both in its provisions and in its implementations in Member
states. There’s tension b/t the recitations and provisions, and tensions w/in
the provisions themselves that recapitulate what we’ve been discussing
today.  Wikipedia/Wikimedia commons
occupy an interesting space in this discussion: large, prominent websites with
a small staff and a large userbase/contributor base; exists for specific
purposes that aren’t often discussed. Need to talk about sites that don’t fit
the model of a general purpose sharing sites.
Abby Vollmer GitHub: Puts the internet at risk; we were able
to secure a carveout for open source, but people are building a lot of stuff
w/open source that isn’t exempt.  This
demonstrates the difficulty and ham handedness of what they’re trying.
Rachel Wolbers          Engine:
Startup exemption isn’t workable. Will have to rethink startups worldwide/
restrict UGC.
Strong: how will this affect doing business in Europe, and
then how will it affect doing business here?
Lavizzari: (1) to what extent will it codify the ECJ case
law on active platforms/structurally infringing platforms that can’t hide behind
the user and are carrying out communication to the public. YouTube and Elsevier
cases are pending before the ECJ.  (2)
different standards for platforms’ responsibilities: will that change?  ECJ has different standards depending on
whether you choose to have unidentified/anonymous users—higher standard.  We hope that case law isn’t impaired by the
promises of licensing that Article 17 also created.
Simpson: we don’t think Art. 17 is a problem b/c it’s
intended to clarify existing EU law. German cases: Rapidshare case was a clear
enunciation of the principle that if you’ve set up a platform to facilitate
infringement, you have responsibilities. Implementation uncertainties, but fundamentally
EU caselaw is sound on platform responsibility and not just mere liability.
Vollmer: Number one problem from our perspective is
filtering.  Our carveout for github
itself is not enough for software development/innovation. Reality is that the
requirements will make platforms filter to avoid crushing liability. Why is
filtering bad?  Github is the home of
open source software. Software developers who use © by using open source
licenses embrace four freedoms: to study, use, modify, and redistribute.
Rightsholders sharing code want it to be shared. If you’re going to legislate
on this level, think about how content varies and whether your requirements
help all rightsholders. If open source software disappears, that harms rightsholders.  And code has dependencies.  If a filter mistakenly detects a block of
code, a whole set of programs/functions can collapse.
Siy: Online encyclopedias are only parts of our projects; we’d
want to argue that our other projects should also be excluded, but we are
concerned about whether that’s a risk. There’s an unresolved tension b/t what
it means to make best efforts to obtain authorization for media we don’t intend to have on our platform.
Wikimedia commons is devoted to hosting content that is public domain or licensed
for free use (not even all forms of CC license qualify). We have no intention
of hosting even fair use works.  The Q of
what it thus means to seek permission for those uses is an open question—and to
make best efforts to ensure their unavailability while also not resulting in
prevention of lawful uses.
Cady: Art. 17 isn’t perfect, but it’s good b/c it’s premised
on getting authorization, and b/c larger platforms have to prevent future uploads
of notified works. 
Q: given worldwide nature of your members, say a little more
about what “shall obtain” a license means?
Cady: we license exclusively, so the premise of these
platforms obtaining authorization may not work out.  It does have the potential to impact the way
members finance their productions.
Lavizzari: one of the beauties of the emerging case law and
art. 17 is creates an incentive for rightsholders and platforms to cooperate
lacking in 512. Rightsholders do want works to be available [not Cady’s
members, he just said], so there are policies that won’t stifle free expression
or make works unavailable. We use artificial intelligence to deal w/plagiarism,
but there are more sophisticated options/identifiers and we’re eager to work
w/incentivized platforms to devise a system that will work for everyone.
McCoy: Berne-inconsistent notification requirements:
structure says that OSPs shall be liable unless … they act expeditiously upon
receiving sufficiently substantiated notice. 
That requirement is a formality under Berne. [Wow.]  We would have preferred to wait until the ECJ
ruled.  Second, emphasis on licensing
over enforcement: for many rightsholders, the idea of licensing UGC platforms isn’t
something they’re interested in b/c they have exclusive distribution models.
Enforcement is the key for them. Licensing leaves us concerned about how it’s
going to be implemented for the benefit of those rightsholders who want
enforcement, though filtering along the lines of Content ID is one promising
step [except for all the shit rightsowners shovel on Content ID for not being
good enough].
Oyama: Our primary concern is conflict b/t the two frameworks,
EU and US. Direct liability for any type of conduct uploaded by anyone imposes
lots of fear and risk. One place we’d like to focus on in implementation is
making more clear what is sufficient notice for platforms.  Final version had some positive steps beyond
Parliament—platforms making a good faith effort shouldn’t face direct liability
based on best efforts, but there’s a need for clarity about what that would
be.  UGC is hugely beneficial. Even 5
years ago, the concept of beneficial UGC was more controversial; on YT, the
vast majority now choose to monetize instead of block, and more than 50% of the
revenue we send to the music industry comes from claims against UGC. The risk
is harm to US creators as well—68% of US users’ views come from outside of the
US. Significant risk of overblocking.
Schruers: Obligations in Directive conflict—ensure the
availability of parody (but not satire) and ensure the unavailability of infringing
conduct. Unmanageable filtering obligation, as well as an obligation to prevent
upload of future infringing works, when the only technologies that even imperfectly
do that deal with AV works, but the Directive is a mandate for all works.  Tech that doesn’t exist.
Simpson: The EU is already about proportionality and
reasonableness. There’s no general obligation to filter in Germany, but once
you’re notified about specific works you have to take measures to prevent reupload
of infringing content. There isn’t yet an effective filter for all types, but
surely legislation can get us to that point. [!]  We have a framework to move us to find a
workable, reasonable, and proportionate solution.  Let’s not yet look to the Directive as a
problem; we have 24 months to see if they’ll get it right or mess it up. The
case law is already there; this clarifies/codifies it. Extremely problematic,
though, is that it seems to say that rightsholders have to put up with whatever
is being done w/their content; contrary to the fundamental right to control.
When you have no choice but to monetize or take it down, that’s not what © is
for. But given that’s our world, we need the tools.
McSherry: copyright owners have the right in many instances
to control how their works are used, but those rights aren’t unlimited—subject to
limitations and exceptions.  Moving to a licensing
regime ignores the lots of uses that don’t need permission. Robots are very bad
at telling the difference.  May work for
some kinds of content, but it’s not a good answer overall. Art. 13’s
negotiation involved a lot of uncertainty about whether filters were required;
lack of clarity is a feature though now we are hearing filters were definitely
going to be required.  Third, we have a
competition problem.  Google and FB will
be fine. But the platforms that could emerge & compete in the social media
space are not protected by the size exemptions. 
An investor will ask how they plan to comply w/Art. 13: the business
plan will always have to include the ability to filter, and that’s expensive
and unaffordable for many [and again may be completely irrelevant to what the
service actually does!].
Wolbers: the concept of having to build different platforms
for each country isn’t feasible, plus the cost of implementing filters. We’ve
seen in Art. 17 a number of exceptions, and it’s politically popular to say we’ll
carveout the small guys, but that actually doesn’t help startups.  3 years, $10 million in turnover, 5 million
users—those are tiny & create perverse incentives to stay under the
threshold. And when you create carveouts like this for open source/wikis, you
are not futureproofing the legislation but are instead creating anticompetitive
situations—the legislation now protects incumbents like Google and FB against
new entrants. 
Isbell: the purpose of the Digital Single Market was to
create a single platform, not 27 different platforms. But don’t we already have
that issue? Germany requires you to monitor hate speech. Thailand requires
anything derogatory to the king to be taken down. Isn’t that just the cost of
doing business? In the analog world, you have to comply w/each country’s safety
laws.  [We have a whole lot of law of
jurisdiction governing this; unless you actively screen, you can’t stay out of
Germany with your website the way you can decide not to sell your widget to a German
address.]
Wolbers: we’ve worked with Kickstarter, and Bandcamp, and
Soundcloud: a lot of the content doesn’t involve the German hate speech law. It’s
not a fundamental shift in the way UGC is uploaded in the same way as Article
17.
Lamel: Not all creators are the same or want the same
things.  EU didn’t hear enough from
actual creators, and we haven’t heard from enough creators here today.  Europe has very different view of issues like
fair use than the US. In over 50% of European countries, there is no
educational exception so that showing a YouTube video to the class is
technically infringing. Thai king mention: the US should stand up for free
speech around the world, not assist in that suppression.
Coffey: Springer, one of their members, gets a © over its
news that create efficiencies similar to music. More complicated w/US publishers—will
they be able to assert the right in the EU? 
They want to!
Adams: This will cause harm in the US. For some subset of
startups, the decision will be if I stay in business I build to the most
stringent standard, with filtering and licensing, both of which conflict with
fair use here.
Lavizzari: you shouldn’t build a startup that will be a victim
of its own success. If your business is from works being shared on your
platform then you should build compliance in early on. If you have a bakery
that doesn’t principally attract users from works of others, you’ll be safe.
[This point deserves more emphasis: these descriptions of
social media/similar sites are quite elitist, despite the rhetoric.  Almost every post on my FB feed is a “work,”
and those that aren’t, aren’t because they’re too small; every picture on
Instagram is a “work.”  He equivocates on
“works shared on your platform,” because there are lots of sites that involve lots
of “works shared on the platform” of which very few are unauthorized, much less
infringing.  So it is probably right to
say a bakery that doesn’t allow public comments probably doesn’t have too much
to worry about, but that is very much not the point about the burdens on sites
that aren’t even causing problems by the copyright industries’ own lights.]
Siy: wikipedias of all languages are blocked in Turkey b/c
of a dispute over government’s characterizations. Sometimes we make that call.
Distinction b/t © and these discussion of lese-majeste, hate speech, etc. is
that those aren’t ex ante.  Anonymity/privacy:
wikis are available all through the world and we take privacy very seriously,
including in restrictive regimes. The considerations today do exist in a larger
sphere in which privacy is relevant.
Schruers: there are sites where content that might violate
lese-majeste laws appears even in nations that have such laws. There’s a huge
difference b/t that and having to install filters in year 3.
Oyama: we are interested in giving publishers maximum
control. Where rights are not waivable, that leads to unintended, regrettable
consequences across the board.
Q: injunctions?
McCoy: we support the EU model.  [site blocking] Injunctions plus takedowns can
give you flexible tools to address piracy. Not sufficiently implemented in some
countries, but still good. By no means cutting off access to legitimate sources
of film & TV.
Q: have you noticed a difference in use of injunctions
across systems?
Simpson: publishers have taken advantage of European remedy
in 6 countries. Main goal is to disrupt the availability of that service in
that country. There are limits to the effectiveness of this remedy. Sometimes
the operator moves to a different server, but now we don’t have to redo the
entire process; can just amend the order to cover the masking sites as
well.  Notice and takedown doesn’t need
to be accounted for.
Oyama: hard to say we never encounter instances of abuse,
where legit sites are targeted. Australian implementation is recently passed;
not aware of any orders actually issued. One approach we’ve taken in search: if
there is a site blocking order that an ISP receives, even if a link showed up
in search they couldn’t access the site, but we also have search ranking demotion
that works with the DMCA.
McCoy: MPAA likes the Google demotions. Doesn’t know if
there’s any correlation b/t site blocking and take downs. Panels this morning
drew out experience on expense of notice & takedown, so rightsholders are
selective about what they target. In some cases availability of injunctive relief
might provide a way of addressing worst of the worst in markets that aren’t a
high priority for notice and takedown.
Q: has heard that Mexico without legally required notice
& takedown still sees informal use of that practice.
Schwartz: for a long time, before the Canadian system was implemented,
an informal industry agreement enabled informal notice forwarding. We’ve seen
that in other markets, where intermediaries don’t want their services to be
perceived as places for misuse. Allows more capable services to invest more.
Important takeaway: absence of statutory mandate doesn’t mean that services
aren’t implementing misuse and misconduct policies.
Simpson: when we were successful in enjoining SciHub in SDNY,
Chinese operator actually recognized the judgment and did block the site in
China for its subscribers. If no mandate is in place, though, an ISP will
choose not to act if there’s no obligation. 
[Which is contradicted by …] We sent the copy of the judgment to the Chinese
operator, and it was unavailable w/in 2 days. Totally informal—just sent notice. 
Lanza: CRTC denied website blocking and said there were alternatives.
Agree/disagree? 
Strong: or thoughts about Canada’s notice and notice regime
from 2015?
Simpson: We obviously think that’s notice and nothing. In
the past there were some private cooperation agreements that were favorable,
but notice and notice alone won’t do anything. 
[Stats?]
[I got distracted by a side issue.  I missed some discussion of various countries’
systems.]  McCoy: Belgium ISPs will do
voluntary takedowns. 
Lamel: US ISPs are less competitive than other countries’ broadband
service providers.
Simpson: One size solutions don’t fit all. We don’t have an
adequate definition of an OSP or an ISP. If you just manage the pipes your
responsibilities will be very different from an online service provider. Need
to be a parsing out of what these types of intermediaries are.
Q: for those of you who want 512 outside the US, do you
support an obligation to have a repeat infringer policy? In some countries,
they tend to take it to mean adjudicated infringer.
Simpson: Adjudication can take years—strips out what makes
notice & takedown workable (though it’s not workable now) [the food is so
bad and the portions so small].
Isbell: couldn’t you do both, go to court and notify?
Simpson: yeah but why.
Schruers: statute says repeat infringer, not repeat alleged
infringer. That being said, has seen many online services operate a far more
strict process that functionally encompasses accusations. That’s reasonable in
an arms length relationship in the private sector, a user who causes a lot of
problems might lead the intermediary to discontinue services. Many online TOS
terminate users long before the statutory definition comes into play. But that doesn’t
change the words of the statute.
McSherry: world has changed; people are reliant on internet
service in the way they weren’t 2 decades ago. A household can rely on the internet;
cutting it off b/c of one person’s behavior has serious consequences that have
to change how we think about this. And in the US we don’t have a lot of
choices, particularly for high speed services. Our approach to repeat
infringers needs a rethink. Bad idea to go in the direction of making it easier to cut people off—far beyond
speech, to work and education and other interests.
French: strongest justifications for safe harbor involve
need for access to the internet. Promoting startup innovation. But those two justifications
apply to online access providers, not to UGC sites, not to digital media
services, not to anyone who doesn’t get you online. And once a provider has
$500 million market cap and $100 million in the bank, they don’t deserve that
protection any more.  [Interesting
variation on what the actual carveout in the new Directive is; really makes the
point that we should be talking about antitrust law, not copyright law.]
Directive is really narrow: only applies to UGC sites that are
consumer-oriented.  That would be useful
to US law. 
Lamel: these © policy conversations are happening around a
larger conversation about internet policy generally. Just as disconnection
destroys your ability to participate in the economy/politics, far beyond the
jurisdiction of the CO—also privacy and cybersecurity policy. There are other
important issues in play. 
Vollmer: it’s really hard to find a working example of a
startup that would actually be protected, so be careful when you talk about
those carveouts being real.
Amer: do you see internet access concern mitigated by voluntariness
of the system?  ISPs have the choice
whether or not to participate, but if they do participate they get a limitation
against monetary liability. In exchange for that benefit, we ask them to do
something otherwise against their economic interest: terminate repeat
infringers.
Vollmer: access is not fair collateral damage. The goal of
notice & takedown is to prevent infringement. We’ll voluntarily take steps
but the cost is great.  Counternotice
exists, but it’s such a small fraction for a lot of reasons; accept the cost of
things coming down/becoming inaccessible.
Siy: the idea that it’s a voluntary system isn’t practically
true, if the alternative is strict liability/statutory damages.  ISP v. OSP: we don’t think that distinction
is good. Access to knowledge is important even though we aren’t a conduit.
Schruers: need to distinguish b/t (a) and (b)-(d) services—the
calculus for those constituencies is different. We shouldn’t necessarily ask
(b)-(d) businesses about the incentives for (a) businesses, who aren’t
represented on this panel.
Lamel: Consumers also need to be part of the conversation.
Second, we’re seeing integration b/t ISP and content providers, and that has to
be taken into account.  Comcast & AT&T
have huge shareholders that are content providers. This integration changes the
economic incentives.
McCoy: the whole point about not taking away access speaks
to the larger balancing of interests that has to take place. Jurisprudence in
Europe/ECJ have taken very seriously the obligation to weigh the different
rights at stake [though not fair use] and concluding that site blocking that
meets certain basic criteria is consistent w/fundamental rights.

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Section 512 roundtable part 3

Posted on April 8, 2019 by rtushnet

SESSION 3: Domestic Developments
           
Richard James Burgess American Association of Independent
Music: Not much different from 2016. Notice and takedown hasn’t helped with
staydown; still need to send lots of notice. Optimistic about EU Copyright
Directive.
Alex Feerst Medium: Runs Trust & Safety—moderators’
dilemma and the way that red flag knowledge hangs over a team trying to make a
thoughtful and civil space while taking down violent/terrorist content.
Devlin Hartline Center for the Protection of Intellectual
Property, Antonin Scalia Law School, George Mason University: 512 is not intended
to be solely notice and takedown regime; incentives to cooperate to detect
& deal with © infringement. Service providers were to play a role in
preventing infringement, finding and removing it w/o input from © owners,
through red flag knowledge standards. Lose safe harbors if aware of
facts/circumstances from which infringing activity is apparent. Courts have
read this so narrowly that a fire engine on fire would be necessary. Google’s
ability to index the Pirate Bay is an example. Properly understood, red flag knowledge
is general knowledge of infringement on the platform, not specific
infringements, and the burden of investigating should fall on the service
provider.
Catherine Gellis The Copia Institute: Don’t let the sky is falling rhetoric skew the recommendations.
The sky is rising—the pie is growing, there is more revenue, more works due to
the internet. Really careful not to kill the golden goose. Copia Institute just
released a report aggregating a lot of the data providing the evidentiary
record.  There’s still cause for alarm
about pressures on platforms and individual creators: the effect of
unadjudicated claims of infringement. This is the only area of law where
reactions are required where there is never any adjudication.
Eric Goldman Santa Clara University School of Law: 512(f): pulled
all of the cases since 2017; about 25 such cases, less than ½ substantively
analyzed. I didn’t find any cases where a plaintiff actually won in court
during the period; not inconsistent w/past jurisprudence, w/only 2 512(f) victories
in 21 years.
Joseph Gratz Durie Tangri LLP: Not that many cases since the
last set of roundtables. The system is basically working; the players have reached
a rough modus vivendi leading to less large-scale litigation on the order of
Giganews or Viacom.  The case law shows
the flexibility of current law and the ability of courts to take into account
specific situations, whether that is in the context of repeat infringers,
expeditious removal, willful misrepresentation.
Jared Polin FroKnowsPhoto: YT channel/photographer.  I built everything off of free, hoping people
will support me with what I sell.  I have
two full time employees from the channel. 
Tamber Ray NTCA ― The Rural Broadband Association: 850 rural
broadband providers, covering 33% of the US landmass, the sole provider in many
of their communities. Hard to reconcile Cox/Grande and Peckingham cases. They
have followed through on suspending repeat infringers, but are still getting
the same number of infringement notices. Want guidance on responsibilities.
Robert Schwartz Consumer Technology Association: Toleration,
accommodation, and implied license matter a lot. Overenforcement would hurt the
creators it intended to help.
Christian Troncoso Business Software Alliance: Dual
interests—content providers & hosts. There are frustrations on content
protection side, but enterprise cloud service operators also have frustrations—tends
to show that the compromise was fair in the end. End users are also important
stakeholders subject to the outcomes here.
Kate Tummarello Engine: American ecosystem is thriving due
to laws such as the DMCA. Startups support safe harbors to avoid ruinous
infringement claims. Bad actors send false notices to startups and that’s a
problem but we support the overall framework.
Ping Wang Freelancer/writer: user involvement.
Nancy Wolff   Digital
Media Licensing Association: Fingerprinting tech is available, but little
incentive to do any type of filtering, and little incentive to develop
licensing systems. Curation makes a better website, but there aren’t licensing
models.  [I have the sad feeling that
most of the people here don’t know what Livejournal is/was; the description in
the case comes close to describing the specific community at issue but has no
relationship whatsoever to the journaling function that the site mainly and
overall supports.]
Q re 512(f).
Gratz: not a sufficient deterrent for many kinds of abusive
notices and counternotices. There haven’t been many litigated cases b/c what’s
at stake isn’t always enough to support litigation. We may be seeing a greater
number of those cases even under the current standard, not b/c of Lenz, but b/c
of increasing and new ways that internet intermediaries are part of economic
activity, as on Etsy. The competitive incentives to send bogus notifications
and counternotifications will become so large that they’ll provide economic
incentives for litigation.
Isbell: Etsy alluded to fraud in notices/counternotices; use
for harassment.  Goldman mentioned
several cases since we last heard from people but no plaintiffs have won.  Is that a good thing/bad thing?  Problem w/law or courts?
Goldman: data suggest that either there aren’t abuses worth
litigating or that the law is miscalibrated to protect against those abuses,
and the evidence suggests the latter. There’s no real incentive to do homework
before sending a notice. There’s also often a lot of background dispute
information, e.g., a dispute over a screenplay. The ISP is not in a good place
to resolve that. The notice is a way for the parties to fight.
Greenberg: relatively few counternotices are filed; abusive
counternotices exist too. 512(f) case of Johnson v. New Destiny Community Church—courts
apply the same standards to both?
Goldman: correct. There are so many things that have to go
right for a counternotice to be filed in the first place—the user has to know
their rights and be willing to take the risk. 
The system has little to encourage that.
Smith: if you’re focused on users being educated & confident
enough, then would it make it harder for users to file counternotice if you
loosen up standard for liability for false notices?
Goldman: they’re a nonfactor today so it wouldn’t have a
material effect on the filing of counternotices. Focusing on abuses of notices
is the place to start.
Polin: YT hits me with claims—many times I have permission
or it’s fair use. It’s simple to file a counternotice on YT.  I generally win b/c we try to stick to good
practices including on fair use.  YT does
a good job for us.
Wolff: visual content online: the counternotice really puts
the content owner at a disadvantage, particularly if the counternotice is in
bad faith, b/c you can’t afford to go to court and file a claim w/in 10 days.
If you don’t have a © registration before that, you have to spend $800 and find
a lawyer. Improper counternotifications are harmful.
Wang: EU’s Directive provides an answer.  YT is only part of the ecosystem.  100s of my pieces are taken on other
sites.  Google can fix it easily but they
don’t because they earn money.
Q: where are these posted?
Wang: around the world where there are Chinese communities—different
websites.  I don’t blame small forums w/a
couple hundred people but Google has an easier solution.  I shouldn’t have to file a notice. They
should have to ask permission before they use my stuff. 
Gratz: counternotices v. notices.  It’s not that anyone who fails to send a counternotice
worries about 512(f). They worry about whether it will lead to litigation, even
when they’re very certain they’d prevail. Even if you’re really sure that the
dragon is wrong, you’re waking a sleeping dragon.
Gellis: Notice gaming is a problem—people are sending
notices to ensure that speakers use up their strikes. The more important it is
for a platform, esp. the larger platforms, to have a specific rubric about how
many complaints they have to receive before they terminate a speaker, the
easier it is to game that to eliminate a speaker that someone doesn’t like.
Greenberg: are there studies on this?
Gellis: anecdotal accounts. 
[I
collect these.  One
link.  Another.
There are also a bunch mentioned in Google’s additional comments from last time
around.  EFF also submitted additional comments
on this last time around, e.g.:
One OSP surveyed in the study by
U.C. Berkeley School of Law researchers described “cases where allegedly
abusive ex-husbands have filed DMCA complaints against images their ex-wife had
posted as a means of attempting to get her current address.” According to an
amicus brief filed on her behalf in Lenz v. Universal Music, when YouTube
creator Rebecca Prince considered filing a counter-notice in response to an
abusive notice, she “feared that gaining her sensitive information was in fact
what this person wanted so he or she could use it to ‘dox’ her – that is, to
release her identifying information online to further harass and intimidate her
…
[RT continues: the most recent empirical study
of which I am aware suggests that there are a lot of ungiven counternotices
for plausibly noninfringing content, but that study doesn’t get to the level of
sorting abuse v. mistake.  We also have a
qualitative decision to make about how much we care about one instance of
doxxing per X instances of accurate or wrong-but-reasonable notifications.]
Hartline: of course bogus takedowns are a problem, but
hyperfocus on this misses the forest for the trees. Google’s transparency
report: over 4 billion URLs, vast majority of which are illegit [which gets
back to the basic point, which is that not everyone is Google—like Amazon
Kindle, many sites receive more bogus takedowns than legit takedowns. If you
make © policy for Google, you will ensure that only Google survives.]. Lenz was
wrong b/c not having bad faith is not the same thing as having good faith.
Feerst: when we get a notice that seems defective/doesn’t
seem to make sense, we often engage w/ the sender. There’s a large number of
folks who don’t get the gravity of sending a takedown—they say things like “I’m
not gonna do your job for you” and don’t provide a URL or a name.  We want to help folks give us information if
content is truly bad. But the relative sloppiness of what we get is just a
frustration.
Smith: it sounds like the “expeditious” flexibility you have
is helping you figure out what’s really going on.
Feerst: the way you’re framing it, the risk that we have to
take on is that “expeditious” might be defined later. We do take on additional
risk to help folks.  Whether that’s fair
is another Q.
Smith: you’re comfortable with the risk.
Feerst: not how he’d put it.
Isbell: automated notices v. forms: any change?
Burgess: concern about emphasis on hearsay and rumor.  Small content owners have given up.
Polis: as a small content creator, doesn’t want the gatekeepers
shutting the gates again.  Some musicians
may not be making as much money, but you have to use what’s here today. Lots of
the musicians I photograph, I have a larger online presence than they do.
Q: re automated notices.
Ray: we get notices from multiple sources and can’t verify
that they’re all legit. Or we get multiple notices for the same song for the
same user and we can’t determine what is duplicative.  If we get multiple notices from different
email accounts for the same user and same content, a P could say “you got 100
notices about this account on the same day and acted only on one.”  Huge recordkeeping burden.
Wolff: we’ve always had a level of human involvement—have to
check whether a work was licensed or not. 
She recommends that members say they considered fair use in their threat
letters. The problem is the system itself; many have given up.
Greenberg: numbers of notices as strength v. weakness?
Gratz: not here for Google, though previously represented
them. The number verges on meaningless b/c the vast bulk are for sites or items
that were never indexed in the first place. People use the Google search result
takedown form as a general “I haven’t seen this on Google, but this link
infringes” form. So the number isn’t likely to be particularly meaningful
especially at the difference between double-digit millions primarily sent by
automated systems.
Troncoso: Ideal structure for takedown framework: part of
the difficulty is the sheer diversity of stakeholders under the statute—search engines,
social media, enterprise cloud companies that provide services to other 512(c)
systems—coming up w/ a single system that works for all is different. So too
with content, types of industries, types of licensing. That’s why we think the
DMCA has done a fairly good job allowing for bespoke systems to arise. Google
is doing things not required by the statute, like deindexing content before it
appears. Google has the incentive to make sure they’re limiting the resources
they have to throw at the problem before the links populate. Balancing the
interests of all actors is not easy but all things considered the DMCA is
pretty good.
Schwartz: Google is also a member of CTA, whose view has been
that w/all these variables and difficulties the burden for initiation has to be
on the rightsholder.
Goldman: a lot of activity is outside the scope of (c) and
(f) altogether—the waning scope of both of those laws. First, the fastlane for
rightsholders—more trusted interactions w/ the service and their actions aren’t
covered by (c) or (f).  Second,
prefiltering-type removals aren’t within those provision either.  Could we develop an optimal scheme for (c) or
(f)?  First we have to recognize the
decreasing percentage of these interactions actually covered.
Wong: Google claims to pay lots to creators and to remove
links, but never tell us how much money they made by using content w/o
permission.
Hartline: Lenz is wrong: absence of good faith isn’t bad
faith. Wrong as a matter of policy: if you don’t have to consider fair use, why
don’t you have to consider the other defenses? Even w/in Lenz, you can use an
algorithm to assess whether you can take something down. It’s much harder to
assess whether something is noninfringing than it is to assess whether it’s infringing.  [This is an obviously nonsensical statement
that is justified by the larger explanation that fair uses are
infringing-but-excused, but that’s not true even if you disregard the words of
the statute (which you should not) and just think about the broader difference
between a defense and excuse.  It is
particularly interesting to find this argument made alongside the argument that
the absence of good faith isn’t bad faith. 
That one’s actually more understandable!]

Gratz: a good heart and an empty head is not good enough for 512.
Burgess: the DMCA is not working according to any content
creators I know.  [The 1936
Literary Digest poll might have some lessons.]
Isbell: 512(h) and (j)?
Gellis: we’ve also ignored 512(h).  There hasn’t been a ton of caselaw
percolating.  Not convinced there’s
adequate protections built in for users, however we consider the subpoena
interests. Due process right to anonymous speech should be meaningful.
Gratz: a large number of subpoenas from Strike 3 Holdings!
In a number of other cases where subpoenas issued, many courts have because of
potentially embarrassing nature of material at issue put protections in place
to allow cases to proceed w/o permitting the public disclosure of the identity
of the accused infringer. That’s an important development that helps separate
out © from anonymity interest and protects against reputation threats used as
leverage.
Wolff: porn cases skew decisions. Uploading content shouldn’t
be equivalent to engaging in speech, if it’s not your own.  [I’ll remember that the next time I recite
the kaddish.]  Can’t necessarily determine
whether someone is even in the US.
Goldman: 512(h) is an artifact of a different time; wouldn’t
be drafted the same way today. We don’t provide court-unsupervised access to
others’ identity in other situations. Elsewhere, identifying a tortious actor
requires a court’s permission. That’s not the deal we’d strike today; an anachronism.
The fast lane has become a source of copyright trolling—lawsuits with the sole
intent of extracting settlements. Noteworthy when a judge said that wouldn’t be
allowed.  In the WHOIS context, the availability
of info about domain name registrants won’t automatically be given, and most
registrants use a privacy service. 2010s model would give more weight to
privacy.
Isbell: 512(j): is that just DOA? Do we care? Should we
care?
Goldman: Has logged every 512(j) case he’s seen; was
supposed to be integral part of the structure. It was supposed to let ISPs
avoid financial liability but allow ©
owners to get injunctive relief. They could do that and he doesn’t understand
why that hasn’t been more widely explored.
Ray: 512(h): echoing previous statements—subpoenas are used
not to protect © but to gain access to personal information used to threaten embarrassment.
We want help figuring out what to do; some targets may be outside the court’s
jurisdiction.

Gratz: puzzled about the same thing as Isbell. 
Lack of 512(j) cases is an indication of how cooperation has happened
between OSPs and takedown senders, not in the sense of holding hands and trying
to do best possible solutions, but instead in that 512(j) allows you to force
the OSP to do what it is otherwise incentivized to do—to take things down, terminate
subscribers who are habitual infringers. Because those things happen anyway w/o
the injunction, we don’t see a lot of those injunctions; their purpose has
already been achieved.
Isbell: repeat infringers?
Tumarello: appreciate the flexibility of Motherless, but
some certainty is really important for startups who want to know they’re doing
the right thing, tell investors.
Isbell: what would do that? Statutory reform, best
practices?
Tumarello: anything that was consensus-based and reflected
the views of small companies. We’d want startups to have input.
Schwartz: We got into Cox as amicus on contributory infringement
side. Generally, one thing that hasn’t been mentioned is the terrific abuse
that was part of the notices that Cox received. They rejected the ones that had
license offers attached to them; the courts have generally taken a dim view of
those types of “notices.” That’s not to justify the other unfortunate things
Cox did.
Gellis: Cox dealt with this head-on: Cox’s argument was that
accruals for termination shouldn’t be contingent on anything but adjudicated
claims. The problem w/ the system is that an allegation can have such an effect
on a speaker and on a platform. The Cox court wasn’t worried but it is a big
problem, because it turns into a prior restraint based on a nonadjudicated
claim. Undercurrent: sometimes infringing is black and white, and sometimes
noninfringing is, but often it’s not. Seeing a watermark, for example, is
ambiguous.  You need more information in many
cases! The senders are getting it wrong; if the senders do, the platforms have
no hope of doing so either. They’re forced to defer to the complaint and
presume it legitimate, which is hostile to expression and to the future rights
of users—YouTube strikes accrued are serious concerns for speakers because
their entire channel can be taken away.
Smith: Cox isn’t really about the expression of repeat
infringers.  If we don’t want the perfect
to be the enemy of the good, is there any room for these policies?
Gellis: as Schwartz says, there were significant problems
with huge numbers of the claims Cox received and the district court rejected
many of those notices.  But the court
ignored the impact of having such a barrage of bad claims on Cox’s duty to
regard the remainder of them as valid, despite its experience showing that so
many were invalid in form and substance. 
The court didn’t like Cox blacklisting Rightscorp but didn’t discuss why
it had been blacklisted. Even if we want to treat filesharing differently, we
can’t ignore the abuse there—and we can’t just transfer those rules to social
media where there’s a lot more expression.
Gratz: yes, a continuum is critically necessary in the context
of repeat infringer policies. Different kinds of ISPs, different kinds of
subscribers, different kinds of activities—all factor into what kind of policy
is reasonable and whether a particular user should be terminated. ISPs that
care take that all into account, wanting to get rid of abusers but not noninfringing
speech or users who make mistakes. The difference between conduit ISPs and edge
services is very important here. 
Consider the Copyright Alert system: a way of doing graduated response
where the ultimate sanction was very serious: conduit termination. The reason
Packingham is important is not necessarily b/c the First Amendment imposes
limits on Congress’s ability to act here, though it may, but b/c it points out
as a policy matter that these other things of importance to us as a society—child
abuse—yield to the necessity of access to the internet.
Greenberg: (a) and (c) have different requirements in the statute,
though Cox may change obligations of (a) services. How are conduits reconciling
that their obligations may be not that different?
Gratz: From the POV of a conduit service—it’s still not a
notice and takedown situation; it factors
into whether someone is a repeat infringer.
Ray: Qs: what are our obligations to forward notices? Do we
have to forward settlement demands? A big Q for our members.  Invalid DMCA notices, e.g. when they’re sent
to our non-DMCA agent—can we disregard those when we have a valid DMCA agent
& address?  Members are concerned
w/Grande.  It put a pretty hefty obligation
on ISPs w/o taking into account concerns about number of valid/invalid email
addresses and notices. Also, what do we do with public wifi?  Tech helps some for P2P networking—availability
of streaming services has changed member behavior—but what happens when
members/subscribers have open wifi?  Subscribers
are often happy to operate open wifi & another person can sit on the street
and use it. What are we to do?  Also a
need for coordination w/states/FCC.  Service
is considered a fundamental service so disconnecting someone is a big deal to
avoid trouble w/states.
Feerst: strategic uses of batching/attempts to silence
users: we do see it in our Lumen notices. It’s not frequent but it’s real.  An investigative journalism publication out
of Ecuador was using Flickr photos of politicians posted by the gov’t of
Ecuador. Gov’t send takedown notices and a request to ban account for
infringement.  That’s marginal now but
suggests potential for mischief around repeat infringer policy.  The risk of having to go to summary judgment
is a six-figure cost that can be deadly for a startup.  He had no guidance in making that risk
determination.

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Section 512 Roundtable part two

Posted on April 8, 2019 by rtushnet

Jonathan Band Library Copyright
Alliance: Motherless & Mavrix show problems with moderation –including
compliance w/new EU rules—threatening to remove safe harbor.
Sofia Castillo
Association of American Publishers: still bad.
Stephen Carlisle Nova
Southeastern University: has one client, a small music publisher, and can’t
keep stuff down.  Red flag knowledge
should come from having a full song + album cover on YouTube.
Caleb Donaldson
Google: DMCA is balanced and supports $6 billion of YT ad revenue to music
industry alone, along with 17 million Americans selling their creativity
online.
Kenneth L. Doroshow
Recording Industry Association of America: Not good enough. Motherless: evident
problems w/takedown practice didn’t preclude safe harbor.
Douglas T. Hudson Etsy:
2 million microbusinesses & creators not fully represented in these
discussions.  Have seen dramatic increase
in false takedowns, phishing and scamming, and other abuses.  Have seen false counternotices.  Need more teeth in antifraud, including
512(f). Should simplify DMCA for microbusinesses w/small library of materials.
Prefilters don’t work for everyone. When you deal in physical goods, creative
services that don’t match digital content, it’s not a viable solution; 512’s
flexibility allows all creative endeavors, not just digital audio/video
Keith Kupferschmid
Copyright Alliance: mass © infringement is regular and ISPs are routinely
shielded from liability. 2 years: more of the same; red flag has been written
out of the statute. Repeat infringer decisions are no panacea. Fourth Estate
compounds the problem by adding a registration requirement to the DMCA notice
requirements.  New limits on WHOIS
database = we are worse off than two years ago.
Arthur Levy
Association of Independent Music Publishers: Whack a mole is still a
problem.  Lack resources to enforce
rights=DMCA offers no remedy. Should seek legislative rebalancing.
Peter Midgley Brigham
Young University: we’re content owners and a big ISP for our students/faculty;
administrative burdens and uncertainty following Cox and Grande are
problematic.
Sasha Moss R Street
Institute: DMCA is better than the alternatives.
Mary Rasenberger      Authors Guild: Ebook piracy is big.  512 isn’t incentivizing cooperation and
notice and takedown is ludicrous. Authors’ main issue is that we can’t address
ebook piracy sites—hide behind 512. 
Switch burden to ISPs as EU Directive does.
Amer: repeat
infringer policies: general Q: to what extent have recent decisions affected or
clarified the state of the law?
Midgley: we want
clarity on what that policy should be. We do our best to forward the notice to
the user, but we can’t always do it given the dynamic nature of our network.
Students get a scary legal notice & show up in my office denying any
knowledge. Now the question is: what’s my obligation?  I could start having hearings but I don’t
know what burden I bear as an ISP.
Amer: elaborate more
on the notices. P2P?
Midgley: We get
notices styled as (c) but they’re really (a)—this is content that flowed through
our network but we have no way of verifying whether it was actually there since
we don’t store the content, as per 512(a)’s requirements. We can refer it to
our Honor Code department and allow a student to dispute.
Smith: you take them
as data indicative of infringement.
Midgley: we have, but
we don’t know what’s an adequate repeat infringer policy. We’re doing what we
think is reasonable and hoping we’re eligible for the safe harbor.
Amer: would you favor
more specificity?  One size fits all has
come in for criticism.
Midgley: 512(e) for
educational institutions is basically worthless; he’d like clarifications.
Isbell: does your
university either post a policy or get back to rightholders after a complaint?
Midgley: it’s posted
online and visible to students and public. We have Higher Education Opportunity
Act, which has © specific provisions and we send out an annual notice to every
member of the community making them aware of the policy etc. 
Band: libraries are
another kind of ISP—the place where many people get internet access is the
library. It’s very important to recognize that the standards for Verizon &
Cox are not the right standards necessarily for policy across the board.  We don’t see a need for statutory amendment;
we think the language as is provides enough flexibility with “appropriate
circumstances.”  Internet access has a
constitutional dimension but also a practical concern—30-40% of the population
has broadband only at the public library because there is a lot of poverty/lack
of coverage in America. Access to the internet goes beyond the 1A to the
ability to function in society. You can’t apply to Medicaid/meet work
requirements unless you file routinely online. That assumes you have access!
Smith: should
libraries educate about copyright?  You
have to repeatedly infringe to risk termination.
Band: libraries take
education seriously, particularly in higher ed. 
When we’re balancing issues on terminating internet access, it goes
beyond “the First Amendment” to life, liberty and the pursuit of happiness.
Isbell: Does LCA view
the fact that libraries provide the physical facilities to access the internet
as making them 512(a) ISPs?
Band: yes.
Greenberg: do you
still think ISPs are applying a higher standard than the law requires? Last
time, ISPs were saying that repeat infringer means adjudicated infringer and
Cox said otherwise.
Band: there’s lots of
different kinds of ISPs and they have different opinions. It seems to him that
an infringer is an infringer, not an alleged infringer, according to the plain
language of the statute, but courts do seem to be going in a different direction
and they have Article III authority.
Amer: What do you
want from us?
Band: Not congressional
intervention, as long as courts don’t start restricting “appropriate
circumstances” to allow libraries and universities to craft specific policies.
Amer: statute contemplates
that at some point repeat infringers will be terminated.  Take your point about the need for that to vary
depending on nature of ISP, especially given the importance of internet access,
but statute does seem to contemplate. Do any ISPs not need to comply?
Band: No, but what’s
appropriate for a public library/university may be different from what’s appropriate
from a large commercial provider.  [So
very tempted to try to get a notice sent to the CO’s public internet to make
that point, except that I don’t actually know where the kids are getting their
downloads these days.]
Castillo: Disagree
w/notion that it was difficult for Cox & Grande to implement a repeat
infringer policy. Cox had a policy & decided not to implement it; Grande
just decided to ignore notices.  It’s not
about difficulty levels.  ISP should
meaningfully & consistently enforce its own policy, whatever that policy is.  (Cox.) 
Grande: ISP should be keeping a log of repeat infringers to reasonably
implement a policy.  ISPs should prevent
terminated users from opening a new account using a different email address or
username. [This is one of the things where operating a website gives you a very
different perspective. It’s not that damn easy to prevent a terminated user from
resurfacing.  In fact it can be
impossible.]  512(i)(1) requires ISPs to
inform users/subscribers of a repeat infringer policy. The policy “anything
legal stays” doesn’t convey to users that there’s a potential for termination if
they repeatedly submit infringing content. Motherless was also wrong in
allowing personal judgment of operator, w/o a log, to satisfy the statute.  The Cox decision requiring meaningful and
consistent enforcement is more in line w/Congress’s intent to share
responsibility.
Midgley: Unlike Cox
or Grande, we do receive notices from subscriber that there is no infringement.
What do we do with conflicting info? Whose word are we supposed to take?  512 refers to system or network; we provide a
network and also provide a system, which is how the students access their
education.  Do we have to terminate both
of those? That’s an important distinction for us.  Nonprofits are notoriously risk averse.
Uncertainty makes it v. difficult for nonprofits to provide a robust
environment that we all depend on.
Donaldson: Cox & Motherless show judicial involvement in
appropriateness tailored to size of platform. This shows how it would be a bad
idea to write a single regulation for all. The size/resources available dictate
that repeat infringer policies have variation—even w/in Google’s 512(c)
products, of which there are many, we tailor policies to the purpose of the
platform.
Doroshow: Importance of repeat infringer policy: very
important, but just to make the point that there was a failure here, the rights
owners had to send millions of notice. Unreasonable up front burden on © owner.
Amer: how do you provide this information?
Doroshow: variable: we send DMCA notices to 512(a) and
512(c) providers.
Rasenberger: best practices could help for repeat infringer
policies and for red flag notice.
Moss: some possibility for CO to offer assistance to
rightsholders.
Smith: our public information office does answer 100,000s of
queries.
Kupferschmidt: Doesn’t disagree w/one size doesn’t fit all
for ISPs, but that’s also true for the creative community. Doesn’t work for the
notice system either. 
Q re human moderation.
Band: muddied the law—Mavrix went in a bad direction, Motherless
improved it. Treading in very dangerous area—the issue of moderation and what’s
appropriate goes way beyond copyright to what we want the internet to look
like.
Smith: 512(c) says ability to control.
Band: but you can’t condition eligibility on monitoring under
512(m): Congress in 1996 and 1998 wanted no monitoring requirement; encouraging
people to moderate content is good.
Amer: But you think Mavrix muddied things.
Band: yeah, there’s a spectrum. If you let most stuff
through, that doesn’t seem appropriate to call the ISP the publisher. If you
screen out 90%, then it starts to look more like a publisher.  Motherwell to some extent corrected the broad
suggestions of Mavrix but we don’t want to put platforms in the impossible
place where if they try to look at whether the stuff is appropriate they lose
the safe harbor.
Castillo: Motherless was “anything legal stays” screening.
The court found this still user-directed storage. The screening in LJ was
different – it was substantive.  [This is
a non sequitur.  Whether the content is
legal is substantive, it’s just smaller.] 
If the ISP is screening for substance but not for infringement, it may
lose the safe harbor.  We also disagree
w/512(m) interpretation—the intent was to protect privacy by preventing ISPs
from violating privacy laws when they were pursuing efforts to address
infringement, not to keep them from having any obligation to monitor.
Greenberg: Does that mean if you’re screening for child porn
and snuff films, do they lose safe harbor? If not, what do you mean?
Castillo: screening for illegal content was what Congress
could not have meant to discourage. If you’re screening for illegal content including
© infringement they shouldn’t lose their safe harbor.
Greenberg: but what if you’re only screening for porn/snuff
[not all of which is illegal]?
Castillo: that’s a closer question. 
Carlisle: to get songs heard, I put my songs on Reverb Nation.
I had to warrant that my songs were noninfringing.  A lot of problems w/red flag knowledge could
be solved w/looking at whether user claims to be the owner. [I wonder how many
websites Carlisle thinks don’t have this in their TOS already.]
Amer: doesn’t Google require people to affirm they have the
right to upload?
Donaldson: yes, it does.
Strong: what happens when people use ContentID—how do you
connect copyright owner and alleged infringer to take their dispute
offline? 
Donaldson: ContentID resolves 98% of disputes on YT;
Copyright Match allows smaller creators to find matches and file takedown
notices.  400,000 smaller creators;
continuing to expand eligibility. We’ve seen good results. Beyonce songs: a
demonstration that the label wants the songs on the platforms. They’re licensed
under ContentID. If Beyonce monetizes a fan upload, we’re happy to help with
that.
Smith: is it clear Beyonce opted to leave that up?
Donaldson: not easy for public to find out, but we have 1000
deals w/music groups, and the vast majority is licensed. There is a huge music
industry problem w/incomplete data: labels, collecting societies, etc. can’t or
won’t tell you the list of © they represent.
Levy: Content ID and Match rely on representative lists,
which is fine for publishers w/direct arrangements w/YT, which our independent
publishers/songwriters don’t have, so they can’t submit a representative list.
Donaldson: Content Match/ID doesn’t rely on a representative
list, but on ingesting the music itself.
Amer: Individual creators complained that Content ID wasn’t
available to them. Has that changed? [As I recall, G’s position was that it
wasn’t true then.]
Donaldson: growth of 3d party aggregators; Copyright Match
as better tailored to small creators.
Amer: why not Content ID?
Donaldson: it’s inordinately powerful & complicated.
Allows partners to specify threshold amounts they’re willing to allow use.  Even from our partners, we’ve seen a user who
isn’t experienced take down or wrongly monetize a broad swath.
Q: could you take it all down through Content ID instead of
monetizing?
Donaldson: yes.
Doroshow: if you screen for illegal content but not ©
infringement, what is the rule? Our position is that if the ability to screen is
there, then you have the obligation to do so. [Sigh.]  The availability of these tools exists—there are
other solutions than Content ID.
Greenberg: last time we did the Roundtable, you said $60
million investment in Content ID; now $100 million.  Is that right?
Donaldson: it was more than 60 million; he thinks that’s
accurate. 
Greenberg: he’s sure more has been developed [though we have
nothing specific on that, but ok], but what else has changed?
Donaldson: Content ID is not static; subject of major ongoing
investment.  $40 million over 3 years
seems like a reasonable number to him. Are they STMs?  No, not under the statute. They’re not in widespread
use. 
Hudson: Dealing w/long tail—small creators, nondigital
content—filtering is just not going to be comprehensive. So now how much
filtering will be enough? We’re moving the question but the uncertainty still
remains. That’s why flexibility of the current regime needs to be taken into
account. Changing to add a filtering requirement won’t solve the problem.
Amer: how do you respond to the argument that you could
filter entire works?  Why couldn’t filtering
tech capture full works?
Hudson: what if the full work is a quilt?  You’re thinking about digital content, but a
lot of the content shared/discussed isn’t digital. The picture may be digital,
but not the content. Inordinately complex once you get beyond a full copy of a
movie or an audio work, where tech work has been done. The point is that there’s
a huge long tail that is significant in volume and that the tech doesn’t work
on.
Greenberg: full image of a movie poster on a t-shirt—could it
be screened out?
[RT: this is the New
Zealand shooting problem again: small changes in images make a big difference,
especially when deliberately created.]
Hudson: it depends on the tech. There are also issues with
things that are old and things that are new. 
A vintage T-shirt or poster; we’re not in a position to know what’s
correct.  [Also see 113(c) protecting use
of images incorporated into useful articles.] 
We don’t handle goods, don’t do drop shipping, don’t handle content—don’t
think Zazzle is relevant. We do have
repeat infringer/counterfeiting policies.
Kupferschmidt: filtering: perfect shouldn’t be enemy of
good. There’s a middle ground. There can be monitoring that can be done in a
way that takes into account different concerns & types of examples.  Full movie that isn’t licensed to anyone: if
you notify a platform that shouldn’t be up, that should never require a
takedown again [wants notice and staydown, but this time without any messy
congressional intervention].  Photo ID:
why don’t we ask the user whether they consider this fair use if they’re trying
to upload a photo with a watermark.  Sites
use CAPTCHA so they could ask you this.  [I
wonder how awesome he’d find this if applied to every post he made on FB.]
Band: Repositories may want some degree of moderation to
make sure they’re getting the right content. Should not lose your 512 safe
harbor for checking whether the content is appropriate for the site—SSRN for example
checks to see if it’s basically an academic paper. 
Amer: that sounds like volitional conduct.  [I don’t think he is familiar with
SSRN.]  If I were just to email you some
materials, and you post 100% of them, there’s an argument that you’re the one
who says yes or no. 
Band: 512(c) purposes: that’s at the direction of the
user.  [If I pull the string on the bus
for my stop and the bus driver opens the doors, I would say that’s still done
at my direction, even if the bus driver needed to push the button to open the
doors.]  Very different from traditional
publishing model.  They’re not choosing 1
out of 100 or 1 out of 1000. 
Rasenberger: Terms of service aren’t enough for affirming
that you have the right to post. Whenever you upload to any site, you should
have to say you own it, you licensed it, or you believe it’s fair use.  [Again, I encourage her to apply this to her
own internet use—and by the way, since we’re talking all 512 here, we’re
talking about her emails too.]
512 is really ineffective against bad actors.  [So we should break it for the good actors.]  ebookbike: founded Pirate Party in Canada,
principal members of Copyism religion—the sacrament is copying is a sacred duty.
Hides behind 512.  To upload content you
have to become a member, and most members are part of/related to the Piracy
Party.  Instructed on how to buy ebook,
strip out DRM, upload it, then return it. We’ve sent notices to the site, the
server provider [it switched servers], and to Google.  Can’t do anything but litigate, and
litigation costs too much. [It really sounds like 512 is not the problem.  Suppose there were an EU style law—you would
still have to litigate against his defiance.]
Isbell: do we really think Congress intended to cover those
sites?
Rasenberger: of course not, but Viacom/Youtube and Veoh make
it possible for the bad actors to be protected. It’s possible that we can win a
lawsuit, but that’s expensive.
Isbell: but is the answer to get rid of 512 for everyone?
Rasenberger: Best practices; Congress should clarify red
flag is not just knowledge of a specific infringing item at a specific location—knowledge
that your site is a place for piracy should take you out of 512. You should be
able to win that on summary judgment.
Amer: 512(f)?
Moss: Filters aren’t working the way people say: EU parliamentarian
had her own content taken down as infringing even though it was a public
speech. 

Levy: Lenz requires us to consider fair use before sending a takedown but doesn’t
say what that means.  A timebomb for
small publishers/ songwriters who may have massive amounts of infringing examples
out on the internet, to engage in a 4 point analysis before sending each notice
is very expensive.
Smith: do you interpret that case as imposing one size fits
all standard or does it matter who the © owner is?
Levy: the ruling doesn’t help us.
Greenberg: automation in making assessment? We heard some
sense that there’s room for automation.
Hudson: as intermediaries, we don’t have access to the
information that the users or the senders have. 
That’s why 512(f) enforceability is important for platforms to enable
users to express their own creative content while protecting other © owners.
Carlisle: for small creators, independent musicians, Lenz is
good news/bad news. Fair use is incredibly complex, and it’s burdensome to do
that analysis before sending a takedown when sophisticated companies profess
they have no idea whether something is red flag.  It’s easier to figure out something is
infringing than it is fair use.  [§107
says a fair use is not an infringement of copyright.]
Amer: isn’t that the premise of the statute, that the burden
is on the © owner to send the notice?
Carlisle: yes, and that’s unfair to make them monitor the entire
internet.
Smith: 512(f): if it’s complicated, then you shouldn’t have
a problem with an honest mistake.
Carlisle: material misrepresentation/ultimate standard is
not clear.  Lenz court struggled w/whether
Universal, a very sophisticated actor, was misrepresenting.
Smith: but for the little guy, isn’t “knowingly” very
helpful?
Carlisle: yes, but the creative person may know something
about copyright—musicians can get very aggressive about asserting © and
sometimes they’re right and sometimes they’re wrong. A lot of musicians hear
any similarity as infringement.
Castillo: takedowns of legal content by filtering: for those
cases we have the counternotice system that is working. [Citation needed.] That’s
not a reason to avoid filtering. [Also, filtering doesn’t actually give you
access to counternotice as currently set up.]
Band: Courts are very good at figuring out who’s a good guy
and who’s a bad guy; they tend to find ways to hold bad guys liable.
Rightsholders aren’t always as careful as they should be in selecting defendants
or misperceive who’s the bad guy (Google, HathiTrust).
Rasenbergers: good actors [with lots of money] can keep
pirate books off their sites. Amazon is pretty successful at keeping pirate
copies off their sites.

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U.S. Copyright Office, Section 512 Study Roundtable

Posted on April 8, 2019 by rtushnet

Opening Remarks
Karyn A. Temple, Register of Copyrights and Director, U.S.
Copyright Office
Nat’l and int’l changes since 2016 roundtable—looking for
updates.  [Congrats on her first official
event as Register!]  Tale of two cities:
very different perspectives on how DMCA is working/not working—have those perspectives
changed on the voluntary or caselaw or int’l side? 
CO: Regan Smith, general counsel
Brad Greenberg
Kevin Amer
Kimberly Isbell
Maria Strong
SESSION 1: Domestic Developments          
Erich C. Carey National Music Publishers’ Association: BMG
v. Cox is important: opportunity for successful importance of plain language
where service enabled repeat infringement on massive scale. But music community
hasn’t changed its mind about DMCA: that was an extreme situation with millions
of notices sent and $8 million in fees. Not feasible for enforcement—heavy burden
for major publishers and individual creators. Enforcement system is gamed to
confuse notice senders.  Rigged system.
DMCA was supposed to help development of fledgling internet; service providers
and © owners would cooperate to deal w/infringement. Has helped to create some
of most powerful companies, but onus still on © owners to police. Building has
been built; time for the scaffolding to come down. Look internationally.
Ken Hatfield Artist Rights Caucus of Local 802 of the
American Federation of Musicians: Unfair loophole that allows profit from mass
infringement. Litigation alone won’t solve the problems with the safe harbors.
At odds with Congressional intent: neither active cooperation w/platforms nor
STMs have materialized. Reform is needed to restore rights/livelihood of
musicians.
Mike Lemon Internet Association: over 40 of the world’s
leading companies.  DMCA works in encouraging
creation and dissemination. 
Mickey Osterreicher National Press Photographers Association:
recent study estimates that more than 2.5 billion works are stolen every day,
23% in the US. A takedown notice is the only alternative photographers have.
But notices are encumbered by Lenz fair use considerations [the horror],
counterclaims, and counterclaim nightmares. New EU obligations for OSPs should
inform our conversations.
Jennifer Pariser Motion Picture Association of America: if
you were wondering if anything has changed in 2 years, these intros let you
know. Cases in the last few years about repeat infringers are promising but
infringement continues to devastate the industry. [See The
Sky Is Rising for some actual numbers.]  Takedowns
have marched on w/o red flag notice or representative lists.
Meredith Rose Public Knowledge: vast and delicately balanced
body of copyright law; 512 is just a part. We must reckon w/broadband, 512, and
SCt’s Packingham decision recognizing a 1A interest in being able to speak and
be spoken to online. 50 million Americans have only one broadband provider—accusations
shouldn’t be enough to cut them off of access. That affects knowledge standard
for secondary liability.
Aws Shemmeri ImageRights International, Inc.: LiveJournal
decision is a step in the right direction—scrutinize relationships ISPs have w/user
communities. Interactive/curated relationship w/users benefits them, leaving
out content generators. There’s still a circuit split and so case law alone won’t
resolve it.
Rasty Turek Pex: Technical challenges: rightsholders bear
the cost of takedowns. Even if there’s a tech solution, platforms push against
active measurements like crawling to ID content. As such, there’s a disbalance.
Platforms have to be more accountable.
Rebecca L. Tushnet, Organization for Transformative Works: The
case law tells us the same thing as the UC Berkeley
study of takedown practices: There are many successful models out there,
and even very big sites like ours with very active creators and millions of
works can receive very few legitimate takedowns. Amazon’s Kindle Worlds, for
example, mostly receives anticompetitive takedowns from competing writers [reflecting
the difficulty of fighting back at the individual level, only one 512(f) case
of which I’m aware, Quill
Ink, has been brought based on a Kindle Worlds takedown].  Generally, 512 and its implementation by
different platforms have encouraged an explosion of expression; by contrast,
rules written as if YouTube is the model would crush the alternatives and ensure
there was only YouTube.  
[citation: Testimony of Stephen Worth, United States
Copyright Office Section 512 Study, Public Roundtable, May 13, 2016, at 248,
http://bit.ly/2IkiER5
(“[W]ith Kindle Direct publishing, authors routinely try to climb to the top
spot in their category … by issuing bogus notices against higher ranking
titles. And this for us actually accounts for more than half of the takedown
notices that we receive.”).]
[AO3 is the 316th most popular US website,
according to Alexa.]
Brian Willen   Wilson
Sonsini Goodrich & Rosati: DMCA works and continues to work. Basic bargain
is the right one. Fosters cooperation: real obligations on platforms but main
burden is on © owners who have the most knowledge of their works and benefit
from them.  Motherless case in 9th
Circuit: example of getting it right. Real sites that are home to original
works thrive, while piratical sites mainly encouraging/inducing infringement
have faced consequences.
Mr. Winterton NetChoice: DMCA applies obligations to
least-cost avoider.  Don’t have to be
aware of all © content; a cottage industry of monitoring services helps with
this.  512 has empowered platforms for
artists and all Americans to express themselves. W/o 512 we would get lock in for
major services.  Europe’s Art. 13: must
know every piece of © content in existence. Protect American innovators,
artists and platforms: lead in opposing these efforts.  US should work to incorporate 512 in trade
agreements to protect free speech and creativity.
Smith: Pariser mentioned repeat infringer. Are Cox &
Grande & Motherless right?
Pariser: the first two were correctly decided as far as they
went for repeat infringers.  Contributory
liability/jury instruction part of Cox they have an issue w/.  Why are these bright spots? B/c a court said
the DMCA means what it says, and that hasn’t happened before b/c courts have
not required a representative list or applied red flag notice. Repeat infringer
= must act on multiple notices for the same user, ending in terminations.  Motherless: mixed bag.  We take issue w/ the notion that any kind of
policy that a service can dream up is ok—written, unwritten [this was a one-man
ISP, by the way]—most troubling part is that the operator doesn’t need to keep
track of the notices.  He used his
memory.  The good news is that he
actually terminated 2000 individuals. 
RT: Motherless is important b/c it deals w/ the incredible
variety of sites out there. This is a one-man shop; if he has a server failure
& loses all his records, he shouldn’t lose all DMCA cases in the
future.  Flexibility in what is required is
important.  Even big sites like AO3
receive very few DMCA notices—there is a big variety of sites out there and not
just in the small/long tail segment of the market.
Smith: is there a bare minimum on a repeat infringer policy?
Willen: the courts have focused on strikes; that creates a
clustering. For repeat infringer policies, you want to get bad users off the
site but you also want to educate users who are fans v. pirates. Flexible
policies can use first/even second strike as vehicle for educating users.  You can also be attentive to consequences of
loss of broadband v. loss of access to a site.
Carey: Industry perspective: Uphill battle getting these
cases off the ground to reverse engineer an ISP’s own infringer policy.
Requires massive discovery and tech knowledge. 
[Note how this implicitly treats a subset of ISPs as the full set of
those who have and need DMCA policies: even if it’s true that the cases that
get to discovery are complicated—in significant part because small sites and
even big ones like Veoh buckle under litigation costs—that doesn’t mean that he’s
diagnosed a problem with the structure of 512 or that an alternative would be
better for the system.] You’re lucky to be able to litigate.
Smith: so should the burden be on the © owner?
Carey: No. 
Smith: does the newer case law shift the burden on repeat
infringers?
Carey: no, just a proper balance according to what the
statute intended. If these circumstances (Cox and Grande) weren’t failure to
enforce repeat infringer policies, nothing would be. 
Hatfield: IANAL, but having different standards for an ISP
individually run sounds reasonable, but not if it’s applied to the giants. [Note
that a small ISP can have a big footprint, like our all-volunteer site.] Solutions
should be focused on upload filters—make sure all music has IRC codes.  Cloudflare gives complete anonymity to users.
Cost of litigation–$1500 to $3000 for a takedown, while litigation is up to $2
million. It’s virtually impossible for musicians to do it. Prime earning time
for new music is 18 months, but cases are slower than that.  512 implemented/interpreted in ways that
create fertile ground for dragging cases out. 
[Of course all of that precedent came from P-favorable rulings that made
it impossible to resolve these cases early.]
Rose: 512 applies to broadband and platforms, and those have
very different stakes.  We don’t often
say that ISPs are our friends at PK, but it’s US policy to increase access to
internet.  To eject someone from their
only broadband network is a very serious issue, and Packingham recognizes the
profound First Amendment interest just in access to social media.
Amer: 512(a) and (c) have differences. Pre-Cox, we heard
from 512(a) ISPs that their practice was to reject notices under (c); Cox obviously
casts some doubt on that practice. Does anyone have a sense of which practices
have changed in light of Cox/other cases?
[Nobody knows.] Carey says there’s general sense that
practices have changed, and Charter case is currently being litigated/litigation
against others is ongoing. Is it effective means of enforcement/repeat
infringer policies? Still figuring this out.
Isbell: Rose says Packingham indicates 1A interest in
access. Do you see terminations pursuant to a repeat infringer policy as being
state action?
Rose: not state action directly. But you must in order to
avail yourself of a safe harbor. As a practical matter it becomes equivalent
b/c the potential damages are so big. There’s some gradation.
Greenberg: voluntary measures negotiated in the shadow of 512?
Rose: policy concerns there. 
Packingham: sex offender registry, and still not good enough to cut him
off of social media access entirely.
RT: NYT v. Sullivan: the scope of the rights the state
enables have 1A implications b/c the judiciary is a state actor.
Pariser: an appropriate repeat infringer policy takes
account of the statutory command that termination should be in “appropriate”
circumstances—you can take into account the nature of the service. Policies can
vary provided that they are actual policies. 
First Amendment: repeat infringer obligation doesn’t implicate 1A
concerns b/c there is no state action; unlike in Packingham, though there are
some rural areas w/a single provider [50 million people!], in general termination
from one ISP isn’t a death knell.
Smith: LJ v. Mavrix case. 
Shemmeri: Prior to that appeal, there wasn’t a lot of
success against non-pirate-oriented ISPs. This decision, on the heels of BWP
where some users were deemed independent contractors—this case rightly held
that editorial posts/staff uploading their own material have an intricate
relationship w/users in which they’re curating the content, seeing that it’s
favorable/profitable on their end.  Sites
are profiting from the content and there is some review, so it’s natural not to
give 512 protections. [Note collapse of vicarious and contributory liability: exactly
the problem, where you get one from column A and one from column B and that’s
enough.]
Willen: any pre-upload moderation should not take you out of
512(c): Motherless helpfully clarified that pre-upload review and moderation to
look for illegal material, material that doesn’t fit w/in the service. 
Smith: would it make a difference if they screened only for
cute cat videos/banned only cute cat videos?
Willen: it shouldn’t. We know from 230 that Congress wanted
and encouraged OSPs to remove inappropriate content.  The idea that services that are doing exactly
what 230 encourages should lose 512 protection isn’t good for society, for users,
for copyright owners.
Amer: Mavrix’s standard: if the ISP’s activities were narrowly
directed at enhancing accessibility of the posts, that’s still at the direction
of the users.  Is there any room for
curation w/in that standard?  Kicking out
cat videos.
Willen: there is and there has to be room for curation.  Viacom case: the use of related/suggested
videos. That’s a form of curation/moderation—you like this, you may like that.
More broadly, every service now does some form of “curation”—what we mean is
some effort to help users sort through a mass of UGC and find things they like.
The idea that you shouldn’t be able to do that and have safe harbor protection
means we get a bunch of junky, useless sites [the 230 point is really strong
here].
Amer: Scalia’s Aereo dissent: isn’t it an administrable rule
to say that if someone is choosing the content, that will ordinarily tip them
into direct infringement?
Willen: distinguishes LJ: people are submitting things but
they don’t go live. The ultimate decision about what is posted is made by the platform.  That degree of ex ante selection makes you a
traditional publisher.  That does start
to put pressure on 512(c). But there’s a fundamental distinction b/t that and
sites that essentially let people mostly put stuff up that they want and then
performs sorting operations after that. 
At the same time, those services are increasingly saying we don’t want
terrorist content, porn, etc. whether or not they’re “legal.” The idea that making
those kinds of selections jeopardizes safe harbor is very very troubling.
Isbell: reading 512 in a way that negates 230 doesn’t make
sense. But Congress explicitly carved out IP from 230—so shouldn’t the approach
be different?
Willen: 230 is relevant even though it’s not applicable to
IP b/c it clearly says Congress gave ISPs a right to/encouraged them to remove
content b/c they find it objectionable whether or not it’s legal. 
Smith: can you reconcile that w/UMG’s statements about
active involvement in content selection?
Willen: there’s language in the cases that goes both ways,
but no case of which he’s aware holds that by making decisions about what’s
good/bad content you fall outside of 512(c). 
That interpretation is inconsistent w/incentives Congress tried to
provide in 230 and w/public policy generally. What kind of internet do we want?
Pariser: Objects to the notion that “a moderator curating
content implies no safe harbor” is bad for content.  Now all these sites that would otherwise have
been filtering content stop doing it—that’s not true! The reality is that
nobody is curating for copyright at this moment. They’re picking and choosing
content that they like & do not like for reasons of their own.  Porn/violence/low quality files, but
infringing content can stay until there’s a takedown notice. The notion that a
service provider would lose safe harbor seems entirely right if they
demonstrate that it is going into the content that is being supplied by users
& picking & choosing among those files, it should have the obligation
to go after infringing files.
Smith: where would you draw the line? Pre-posting or
post-posting?
Pariser: no distinction. If you choose to curate, that is
the moment you need to filter for infringing content. Disagree that you end up
w/ a lot of junky sites; you end up with a lot of sites w/filters that are
inexpensive. 
There is a continuum.
Amer: did Motherless get it right?  It would create bad incentives to say that a
site that decides to screen out the worst content loses the safe harbor. The
court distinguished Mavrix, which is much more focused on choosing the content.
Pariser: makes perfect sense given 512. Part of our position
is that the court started veering off the correct interpretation of 512(c) and
it should always have been the case that if a site demonstrates that it can control
its content, it should be filtering. Given that the law didn’t develop that
way, Motherless makes sense to distinguish b/t truly curated and more
pedestrian filtering for child porn.
Greenberg: say we have a new 512. Your position is filter
for anything = must filter for © too?
Pariser: demonstrates the ability of the site to filter.
Lemon: content moderation is a very difficult subject. Vast
majority of content moderation is fueled by users flagging objectionable
content, which is largely the way the DMCA also works. Platform’s resources may
be enough to give it proactive content moderation ability, but the idea that
they can take a child porn hash and that using it would thereby trigger a ©
filtering requirement is really problematic. 
If you can filter, then you must—then we have to fight over “can.”
Smith: Zazzle case: putting it on a physical product. Is
that different?  Line at a physical product?
Lemon: there are different legal implications if you
proactively take a © work and market it on a physical product.
Smith: is there a difference b/t that and marketing for
eyeballs?
Lemon: complicated—depends on volition/human involvement in
making decisions. Much of what platforms do is automated. Those processes don’t
always make the right/best calls; they’re not human, and humans also error. That’s
why we have a back and forth process with user, platform, and © claimant. We
need to take into account the sheer number of things posted—reddit, between 2016/2018,
had 625% increase in takedown notices. 
It’s a very quick ramp-up.
Greenberg: what about having thresholds for size/staff?
Lemon: first, companies ramp up very quickly.  GDPR example: they get big quickly. All the
metrics are terrible.  Monthly users:
varies month to month.  More than 2
moderators: you’ll never hire the 3d. 
Winterton: Filters are not inexpensive. We were told that
internet sales tax programs would be cheap. That’s not true when you rely on it
for your business/have to integrate it into the rest of your systems. Also true
of filters. Larger platforms can and do make different efforts. 
Hatfield: the people is monetizing the content, not whether
it goes up or not.  YouTube has different
rules for different artists.  STMs: once
available, company can’t block—if Google has developed the technology, it can’t
be that expensive to implement it.
Carey: software costs are prohibitive to © owners, and we’re
also deprived of ability to send representative list, red flag is read out of
the statute, so we have to go URL by URL for each piece of content. 
Osterreicher: NMPA encourage musicians to put code in; we
encourage photographers to watermark; you should be able to recognize a watermark
on an image.
Smith: would a platform have an obligation to screen for
watermarks?
Osterreicher: at a minimum, yes.  Metadata often stripped out, but watermarks
are hard to do/should be obvious to anyone that someone owns it and who that
someone is.
Smith: are you encouraged about standards for photography?
Osterreicher: the tech is getting there, and hopefully will
not be able to separate the info.
Greenberg: how would the ISP know whether the use was
licensed? If it was my wedding, how would they know it was ok for me to upload
my wedding photos?
Osterreicher: that’s a problem, but the service should be
able to recognize there was a watermark.
RT: Specific child porn hash values from known images are
different from finding a watermark. New Zealand shooting gives us a tragic
example of how that generalized “ability” to filter has been vastly overstated.  If you want a law regulating Alphabet on
antitrust grounds and governing how YouTube can treat musicians, the Department
of Justice knows how to do that, but mandatory filtering is not the right legal
tool.  Our site will terminate users for
harassing other users and for engaging in commercial solicitation.  We get well under 10 DMCA notices per year
for millions of works.  We are not
curators; our users are curators.
Greenberg: a watermark as red flag?
RT: we don’t filter. So we wouldn’t see a watermark. And our
users might well put their own watermarks on their photos so that when their cosplay
pictures show up on Instagram they get the attribution—we shouldn’t have to go
to war against our users. And Google won’t sell us a filter.
[A dialogue on red flag knowledge.  I resisted the idea that you could get much guidance
from extreme examples, like harassthem.com/stolencelebritypics.com because that’s
not what most people are doing.  It may
be a very small set and hard to generalize.  And it’s natural that red flag knowledge is hard to generalize–for example, a full length movie on Dropbox is perfectly likely to be a legit backup of a purchased movie, which is what I do for my iTunes purchases because of bad past experiences.  A video that gets 10,000 hits in an hour might be a video of a recent police shooting.  It really depends on all the other facts & circumstances.]
Smith: has red flag knowledge been read out of the statute?
Lemon: no opinion.
Smith: if you can filter, should you filter?
Lemon: there’s a lot of collaborative work. Some of our
companies have won Oscars, Grammys, Golden Globes—our interests align in
important ways to figure out best practices. 
We don’t think our best practices should be the law for everyone b/c it
doesn’t make sense for different platforms.
Osterreicher: wedding photos—if you put a watermark on, and
it’s your image of someone else, there should be a standard that would trigger
further investigation.  [Can I make him
answer the angry user emails?] [And by the way, “find a watermark and an image
of a person” is a very different machine learning task than “match the hash value
for this entire image.”]
Turek: The technology is there: ContentID is not the state
of the art.  [He sells the
technology.]  There’s not much left—671 hours
of content uploaded to YT every minute, growing 100 hours a year.  Eventually, you have to find a way to deal
with it.  Once you engage in one kind of filtering,
you should be forced to look at the others. 
You can’t have innovation in isolation. 
Rights holders used nontechnical POV on measures, and picked the most obvious
ways, but you can’t get the state of the art w/o the backing from more than
rightsholders.
Willen: shade thrown at red flags is being thrown at Viacom.  Isn’t the specific/general distinction.  Subjective/objective is the line. Red flag:
the facts and circumstances would lead a reasonable person to find
infringement.  That’s not reading it out
of the statute.
Smith: what’s red flag w/o a notice?
Willen: every court that has looked at it has come to the same
conclusion: this is a narrow provision. It’s in the statute, it just doesn’t
happen very much. Legislative history: congresspeople said it means something
apparent from a brief and casual viewing. Subjective or objective knowledge
standard is in fact narrow—the main vehicle for removing content was never
meant to be unilateral ISP action, but cooperatively. And it reflects that
these determinations are very difficult, not like figuring out whether something
is child porn; requires knowledge that ISPs very rarely have. Having a
watermark doesn’t distinguish photos from others on the internet—[almost] every
photo on the internet has a © that belongs to someone, but that just starts the
inquiry.
Amer: what if a user has a username “PiratedSongs”: is that
even red flag knowledge because it’s not specific enough?
Willen: YT case has a huge factual record showing that a
number of clips like “leaked song” had actually been posted by © owners/their
agents as part of stealth/viral marketing. Concrete examples to show that some
video description is not a very good guide.
Smith: if the standard is objective, isn’t Stolen Sgt.
Pepper enough to investigate?
Willen: sure, if you find a full-length movie. But this
conversation isn’t about those examples, but rather about an attempt to say
that courts are getting it wrong when they say that red flag is narrow.  That view fundamentally ignores the reality
of what’s on these sites, almost all
of which is copyrighted.
Isbell: are you presupposing that YT doesn’t use its own
site?  If you type in Beyonce, a lot of
lyric videos, many of which aren’t put up by the record company.  [Isn’t that … covered by YT’s licenses?]  Pinterest uses a lot of images from other
sites.  Since I am likely to pin other
people’s sites and not my on why shouldn’t Pinterest know that?
Willen: YT is licensed at this point.  Some of these issues on bigger platforms have
been dealt with.  Pinterest generally (he
represents them): the other part of the equation is fair use.  Social bookmarking has a big fair use component.  Using thumbnails/versions can constitute fair
use.
Pariser: Goal keeps moving from content owners’ perspective.  Porn: the P says you should have known that
it was infringing b/c it was so well produced. 
Court disagrees. Court holds up professionally produced studio movie as
paradigmatic example of what would confer knowledge. But when a Marvel movie is
the subject, there’s some other reason it wouldn’t be sufficient notice, such
as lack of ID’ing a particular file.  YT
involved unlicensed, full length music videos for which the site didn’t get
specific URL notices. Have to understand that in the context of representative
list.  Zazzle: sent a catalog of photos
and the court said that wasn’t good notice.
Shammeri: we don’t discourage use of © notices in works.
ISPs w/human curation can retain red flag knowledge—celebrity/historical photos
where it’s obvious they don’t own © to an image in the 1970s or 80s.  That raises a red flag of very likely
infringing or not owned by the user. 
[Those are not the same things.]
RT: a brief note on repurposing sites: You don’t know what
your users will do.  Pinterest &
vaccine denial/political use of Instagram—be careful you don’t assume what
sites are for. 
Smith: but what about Isbell’s point that eventually you know?
RT: There are a bunch of different YouTubes.  [A better answer would be Mao’s purported
answer about the effects of the French Revolution: “too soon to tell.”  Instagram and Pinterest are still figuring
out what kind of sites they are, and having struggles with, e.g., political content and vaccine denial content, and the fact that Pinterest is a particular
kind of site for you doesn’t mean it’s the same site for anyone else.]
Representative list: we get a search string that’s
dynamically generated and looks different when we look at it. We get a claim
listing one photo that says the entire [X] fandom is infringing.  This is not one-sided as a problem.
Hatfield: ISRC codes are good.
Osterreicher: this is a tale of two takedowns. Plight of
individual creators.  [Including ours, BTW.]

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“more predictive, consistent, stable” is puffery, but misrepresentation of what credit score you’d get isn’t

Posted on April 4, 2019 by rtushnet

Fair Isaac Corp. v. Trans Union, LLC, 2019 WL 1436018, No.
17-cv-8318 (N.D. Ill. Mar. 30, 2019)
FICO sued TransUnion for breach of contract, breach of good
faith and fair dealing, copyright infringement, conversion, and false
advertising. Since 1989, TransUnion, one of three major credit bureaus, has
been licensed to use FICO’s scoring algorithm to sell credit scores (FICO
Scores) to its customers. TransUnion also uses FICO’s software in applying the
algorithm to an individual’s credit data.
In 2015, FICO allegedly learned that TransUnion committed
several contractual infractions: underpaid royalties, copyright infringement
and conversion, and breach of several written agreements, as well as false
advertising related to VantageScore, a FICO-rival credit company created by
TransUnion, Experian, and Equifax. 
The breach of contract/copyright claims survived a motion to
dismiss. Conversion claims failed: it is well established that “Illinois courts
do not recognize an action for conversion of intangible rights.” Even if, as
FICO argued, its conversion claims were connected to “tangible” written code,
conversion as a cause of action requires “an absolute right to immediate
possession of the property” which TransUnion refused to return. But the
agreements at issue, as alleged, provided for TransUnion to use the software
and did not provide for their return at the termination of the parties’
agreement.
False advertising: VantageScore’s website contained
statements such as: “Getting a card? Run your credit check before the bank
does,” and “Buying a car? Kick the tires on your credit before the dealer
does.” The ads had links labeled “Show Me My Score [and] Report Now” that would
produce VantageScore in-house scores. FICO alleged that these statements
mislead reasonable customers to believe that they would be “obtaining the same
score [FICO Scores] that their lender would obtain and rely upon in deciding
whether to extend them credit.” Further, an ad claiming that VantageScore 3.0
“generates consumer credit scores that are more predictive, more consistent,
and more stable by using industry-leading analytics to parse credit files
differently than older, other models do” falsely implied that VantageScore
outperformed FICO scores.
TransUnion first pointed to Fair Isaac Corp. v. Experian
Information Solutions Inc., 645 F. Supp. 2d 734 (D. Minn. 2009), as mandating
issue preclusion. But though FICO alleged false advertising there, “the
difference in context, timing, and language of the advertisement distinguish
the issues.” For example, the statements at issue in Experian included: “Most lenders would view your creditworthiness
as very poor,” “Know where you stand no matter which credit bureau your lender
checks,” “the same type of score that lenders see,” and “Most lenders offer
their ‘good’ rates to consumers in this category.” Experian found that these statements did not imply “that an
appreciable number of lenders use the in-house scores of VantageScore in making
lending decisions.”
This case was different. 
In Experian, FICO claimed that
the prior statements falsely conveyed that many lenders use VantageScore’s
in-house scores, but here it argued that VantageScore’s ad implies that
consumers were actually getting FICO scores. Second, this case doesn’t involve
statements about a consumer’s specific score (poor/good/etc.). Nor did Experian “consider the internet
display’s effect in causing confusion between receiving FICO Scores as opposed
to VantageScore in-house credit scores.” No estoppel would apply.
That said, the superiority statements were puffery as a
matter of law. Claims that VantageScore’s model “generates consumer credit
scores that are more predictive, more consistent, and more stable by using
industry-leading analytics to parse credit files differently than older, other
models do” “are clearly overexaggerated marketing claims … One would expect
these types of subjective nonquantifiable statements to be posted on a
company’s website. That is the very purpose of advertisement.” [The very
purpose of ads is to puff?  Sigh. There’s
also an interesting contrast here to the lawyer advertising case I just wrote
about, where claims that a legal case would be simple/easy were not held to be
puffery.]

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“more predictive, consistent, stable” is puffery, but misrepresentation of what credit score you’d get isn’t

Posted on April 4, 2019 by rtushnet

Fair Isaac Corp. v. Trans Union, LLC, 2019 WL 1436018, No.
17-cv-8318 (N.D. Ill. Mar. 30, 2019)
FICO sued TransUnion for breach of contract, breach of good
faith and fair dealing, copyright infringement, conversion, and false
advertising. Since 1989, TransUnion, one of three major credit bureaus, has
been licensed to use FICO’s scoring algorithm to sell credit scores (FICO
Scores) to its customers. TransUnion also uses FICO’s software in applying the
algorithm to an individual’s credit data.
In 2015, FICO allegedly learned that TransUnion committed
several contractual infractions: underpaid royalties, copyright infringement
and conversion, and breach of several written agreements, as well as false
advertising related to VantageScore, a FICO-rival credit company created by
TransUnion, Experian, and Equifax. 
The breach of contract/copyright claims survived a motion to
dismiss. Conversion claims failed: it is well established that “Illinois courts
do not recognize an action for conversion of intangible rights.” Even if, as
FICO argued, its conversion claims were connected to “tangible” written code,
conversion as a cause of action requires “an absolute right to immediate
possession of the property” which TransUnion refused to return. But the
agreements at issue, as alleged, provided for TransUnion to use the software
and did not provide for their return at the termination of the parties’
agreement.
False advertising: VantageScore’s website contained
statements such as: “Getting a card? Run your credit check before the bank
does,” and “Buying a car? Kick the tires on your credit before the dealer
does.” The ads had links labeled “Show Me My Score [and] Report Now” that would
produce VantageScore in-house scores. FICO alleged that these statements
mislead reasonable customers to believe that they would be “obtaining the same
score [FICO Scores] that their lender would obtain and rely upon in deciding
whether to extend them credit.” Further, an ad claiming that VantageScore 3.0
“generates consumer credit scores that are more predictive, more consistent,
and more stable by using industry-leading analytics to parse credit files
differently than older, other models do” falsely implied that VantageScore
outperformed FICO scores.
TransUnion first pointed to Fair Isaac Corp. v. Experian
Information Solutions Inc., 645 F. Supp. 2d 734 (D. Minn. 2009), as mandating
issue preclusion. But though FICO alleged false advertising there, “the
difference in context, timing, and language of the advertisement distinguish
the issues.” For example, the statements at issue in Experian included: “Most lenders would view your creditworthiness
as very poor,” “Know where you stand no matter which credit bureau your lender
checks,” “the same type of score that lenders see,” and “Most lenders offer
their ‘good’ rates to consumers in this category.” Experian found that these statements did not imply “that an
appreciable number of lenders use the in-house scores of VantageScore in making
lending decisions.”
This case was different. 
In Experian, FICO claimed that
the prior statements falsely conveyed that many lenders use VantageScore’s
in-house scores, but here it argued that VantageScore’s ad implies that
consumers were actually getting FICO scores. Second, this case doesn’t involve
statements about a consumer’s specific score (poor/good/etc.). Nor did Experian “consider the internet
display’s effect in causing confusion between receiving FICO Scores as opposed
to VantageScore in-house credit scores.” No estoppel would apply.
That said, the superiority statements were puffery as a
matter of law. Claims that VantageScore’s model “generates consumer credit
scores that are more predictive, more consistent, and more stable by using
industry-leading analytics to parse credit files differently than older, other
models do” “are clearly overexaggerated marketing claims … One would expect
these types of subjective nonquantifiable statements to be posted on a
company’s website. That is the very purpose of advertisement.” [The very
purpose of ads is to puff?  Sigh. There’s
also an interesting contrast here to the lawyer advertising case I just wrote
about, where claims that a legal case would be simple/easy were not held to be
puffery.]

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