This article looks at file sharing and the law, including controversies, copyright issues, legislative regimes, and notable cases.

Since file sharing can be used for both uncontroversial and controversial purposes, this article focusses upon the latter, where file sharing is being used and a significant or predominant proportion of material shared is subject to copyright in the same or another country.

Background

File sharing

Main article: File sharing

The debate on peer to peer and file sharing is a global phenomenon. Peer to peer ("P2P") technology allows people worldwide to share files and data; however a significant proportion of the data shared is material passed freely between users that is (or should legally be) subject to copyright or other restrictions. Different legal systems, and different technologies, handle this differently. Some of the key background and distinctions are as follows:

P2P file sharing is used both legitimately (to distribute with permission or non-copyright materials), and illegitimately (in breach of copyright). It is highly popular and effective, with some estimates being that 15 - 35% of all internet traffic is P2P usage in some form or other.

P2P systems vary - some rely upon a centralized server, others are decentralized with no one site operating the system. Recent systems often have anonymity or obfuscation built in, making it harder to identify senders, recipients and material, and providing a degree of plausible deniability.

In some file sharing systems, the owner of a sharing system directly distributes files themselves. In others, notably BitTorrent, the organizer is not in fact distributing any copyright material. rather, they act like a cataloger or co-ordinator, indexing files instead of themselves offering any such material. A typical such file might provide a filename, a location it can be downloaded from, and various checksums that can be used to verify the file's integrity when downloaded. It does not, itself, contain any media material, whether legal or otherwise.

Copyright law

Main article: Copyright

A copyright in the United States consists of the rights enumerated under 17 USC 106.

The four largest record companies, working together under the leadership of the RIAA, seek to stop peer to peer file sharing by attacking the use of 'shared files folders'. They claim that the making of files available for sharing on a P2P network infringes on their right under 17 USC 106(3) "to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending". Critics have argued that the RIAA has failed to show (a) dissemination, (b) of actual phonorecords or copies, (c) "to the public" (as opposed to a limited group), or any (d) sale, transfer of ownership, rental, lease, or lending..... all of which are required components of a 17 USC 106(3) "distribution".

Legal issues relevant to file sharing

The challenges facing copyright holders in the face of file sharing systems are quite novel historically and have highlighted many new challenges in both theory and practice:

Ambiguities in the interpretation of copyright law

The new challenges posed by international communications and varying legislations

Mass litigation and the development of processes for evidence and discovery

Rapidly developing new technologies and uses

Low barriers to entry by would-be sharers and the development of a mass usage of the technologies

File sharing approaches developed in response to litigation against sharers, which obfusticate or hide the fact that sharing is happening, or the identities of those involved. For example: encryption and darknets.

Further challenges have arisen because of the need to balance self-protection against fair use. A perceived overbalance towards protection (in the form of media that can't be backed-up, can't be played on multiple systems by the owner, or contains rootkits or irksome security systems inserted by manufacturers) has led to a backlash against protection systems in some quarters. For example, the first cracked AACS encryption key in December 2006 came about because:"I just bought a HD-DVD drive to plug on my PC, and an HD movie, cool! But when I realized the 2 software players on windows do not allowed me to play the movie at all, because my video card is not HDCP compliant and because I have an HD [high definition] monitor plugged with DVI interface, I started to get mad... This is not what we can call "fair use"! So I decide to decrypt that movie..."

Cases and case law

The Basic Copyright Law Issues

At this time the development of the law in this area is in its infancy.

In the United States, for example, a record industry trade association, the RIAA, on behalf of the four (4) largest worldwide record companies, has launched an estimated 30,000 cases over a 4-year period, all against people whose internet access accounts have, according to the plaintiffs, been associated with peer-to-peer file sharing accounts using FastTrack technology, e.g., Kazaa, LimeWire, Gnutella, iMesh, and others. The suits are based upon a report of an internet investigator who claims to have detected a "shared files folder". At the core of these cases is the allegation that the defendants "made available for distribution" the song files in a shared files folder. See, e.g. Elektra v. Barker and Warner v. Cassin, two pending cases in which the legal viability of that accusation is being tested, for an examination of the legal issues. So far only one case against an alleged infringer is known to have gone to trial, and no other fully contested cases are known to have been determined by a trial, summary judgment motion, or otherwise. The trial which did go forward took place in October, 2007, and resulted in a verdict of $222,000 for "making available" 24 song files having a total retail value of $23.76, or less. The defendant is moving to set aside the verdict, and if that does not succeed will be filing an appeal. So the question of whether 'making files available' over a peer to peer network is actionable, is an open question in the United States.

Primary Infringement Liability

The fundamental question, "what use can a P2P file-sharing network's customers make of the software and of copyrighted materials without violating copyright law", has no answer at this time, as there has been almost no dispositive decisionmaking on the subject.

This issue has received virtually no appellate attention, the sole exception being BMG v. Gonzalez, a decision of the U.S. Court of Appeals for the Seventh Circuit, which held that where a defendant has admitted downloading and copying song files from other users in the P2P network without permission of the copyright holders, she can't claim that such copying is a "fair use". Since Gonzalez involves a defendant who had admitted to actual copying and downloading of songs from other unauthorized users, it is of limited applicability in contested cases, in that it relates solely to the reproduction right in 17 USC 106(1), has no resembleing on the 17 USC 106(3) distribution right, and does not deal with defenses other than "fair use".

A case which has broad implications, not only for the subject of P2P file sharing but for the internet at large, is Elektra v. Barker, an RIAA case against Tenise Barker, a Bronx nursing student. Ms. Barker moved to dismiss the complaint, contending, among other things, that the RIAA's allegation of "making available" did not state any known claim under the Copyright Act.. The RIAA countered with the argument that even without any copying, and without any other violation of the record companies' distribution rights, the mere act of "making available" is a copyright infringement, although the language does not appear in the Copyright Act, as a violation of the "distribution" right described in 17 USC 106(3). Thereafter, several amicus curiae were permitted to file briefs in the case, including the MPAA, which agreed with the RIAA's argument, and the Electronic Frontier Foundation (EFF), the U.S. Internet Industry Association (USIIA), and the Computer & Communications Industry Association (CCIA), which agreed with Ms. Barker. The US Department of Justice submitted a brief refuting one of the arguments made by EFF, but did not take any position on the RIAA's "making available" argument, noting that it had never prosecuted anyone for "making available".. The Elektra v. Barker case was argued before Judge Kenneth M. Karas in Manhattan federal court on January 26, 2007, and as of this writing is awaiting decision.

There is at least one indication that the RIAA may be abandoning its "making available" theory. In a San Diego, California, case, Interscope v. Rodriguez, where the Judge dimissed the RIAA's complaint as "conclusory", "boilerplate", "speculation", the RIAA filed an amended complaint which contained no reference at all to "making available". In subsequent cases, the RIAA's complaint abandoned altogether the "making available" theory, following the model of the Interscope v. Rodriguez amended complaint.

Meanwhile, in its first jury trial, the RIAA prevailed upon the trial judge to give the jurors an instruction which followed its "making available" theory, over the protestations of the defendant's lawyer.

Secondary Infringement Liability

Secondary liability, the possible liability of a defendant who is not a copyright infringer but who may have encouraged or induced copyright infringement by another, has been discussed typically by the United States Supreme Court in MGM v. Grokster, which held in essence that secondary liability could only be found where there has been affirmative encouragement or inducing behavior. On remand, the lower court found Streamcast, the maker of Morpheus software, to be liable for its customers' copyright infringements, based upon the specific facts of that case.

Under US law "the Betamax decision" (Sony Corp. of America v. Universal City Studios, Inc.), holds that copying "technologies" are not inherently illegal, if substantial non-infringing use can be made of them. Although this decision predated the widespread use of the Internet, in MGM v. Grokster, the U.S. Supreme Court acknowledged the applicability of the Betamax case to peer to peer file sharing, and held that the networks could not be liable for merely providing the technology, absent proof that they had engaged in "inducement."

A little over a year later, the RIAA initiated the first major post-Grokster, secondary liability case, Arista v. Limewire, in Manhattan federal court. Lime Wire denied the allegations, and counterclaimed, charging the major record companies with antitrust violations and other misconduct."Lime Wire Sues RIAA for Antitrust Violations"

A secondary liability case in Australia, under Australian law, was Universal Music Australia Pty Ltd v Sharman License Holdings Ltd [2005] FCA 1242 5 September 2005, which was settled out of court.

More

The Electronic Frontier Foundation (EFF) is a donor-supported group which seeks to protect and expand digital rights. Its activities include litigation, political lobbying, and public awareness campaigns. The EFF has vocally opposed the RIAA in its pursuit of lawsuits against users of file sharing applications and supported defendants in these cases. The foundation promotes the legalization of peer-to-peer sharing of copyrighted materials and alternative methods to give compensation to copyright holders.

More details by legislative regime

Europe

Main article: EU Copyright Directive

In the European Union (EU), the 2001 EU Copyright directive, which implemented the 1996 WIPO treaty ("World Intellectual Property Organization Copyright Treaty"), prohibits peer-to-peer, claiming it is a violation of the directive. However, not all European member states have implemented the directive in national legislation. Notably, on December 22, 2005, after discussing the EU directive, the French parliament passed two amendments legalizing the exchange of copies on the Internet for private use. In a later proceeding, the French government withdrew the article in question and made illegal any p2p client obviously aimed at sharing copyrighted material. The term "obviously" was not defined. The project of law (called DADVSI) has still to be discussed by the French Senate and, if the decision differs from the Assemblée Nationale's, it will be debated on second lecture back at the Lower House.

Canada

Interestingly, Canada stands out by authorizing, at least until the projected copyright reform, downloads on peer-to-peer networks under the "private copying" exception. See File sharing in Canada.

Important cases

USA

Sony Corp. v. Universal City Studios (The Betamax decision)

MGM v. Grokster

The AACS encryption key controversy of 2007

Sweden

The 2006 raid on The Pirate Bay.

Singapore

Odex's actions against file-sharing