VERIZON VOWS APPEAL OF ORDER THAT IT COMPLY WITH RIAA SUBPOENA

Decision has “troubling ramifications for consumers, service providers and the growth of the Internet,” Verizon Vp-Assoc. Gen. Counsel Sarah Deutsch said. It “opens the door for anyone who makes a mere allegation of copyright infringement to gain complete access to private subscriber files without the due process protections afforded by the courts.” That will have chilling effect on e-mail and other private communications, she said. Deutsch said Verizon wasn’t yet ready to seek rewrite of Digital Millennium Copyright Act (DMCA) on which RIAA action was based, but wouldn’t rule that out either. She said implications of decision went beyond records being sought by RIAA and meant that “anyone who makes a mere allegation [of online piracy] gets a total right to access” ISP customer records, or that decision could be extended to pursue individuals who might recently have visited suspicious Web sites.

Case against Verizon arose when RIAA sought subpoena under DMCA seeking identity of Verizon customer said to be pirating music via peer-to-peer file-sharing system. Verizon refused to comply, saying that because material was merely transmitted over its networks, not stored there, DMCA subpoena provisions didn’t apply.

But ruling in RIAA’s favor, court said Verizon’s interpretation of DMCA provisions was “strained.” Suit is “a test case on the DMCA subpoena power,” wrote U.S. Dist. Judge John Bates, D.C. Verizon’s argument to contrary, he said, court concluded that DMCA Sec. 512(h) “applied to all [ISPs] within the scope of the DMCA, not just to those service providers storing information on a system or network at the direction of a user.” After analyzing in detail applicable DMCA provisions, court held Verizon to be included in law’s definition of service provider. Verizon’s strained interpretation of DMCA, Bates said, “disregards entirely the clear definitional language of subsection (k),” which defines ISPs.

Moreover, court said, Verizon’s construction didn’t square with Congress’s “express and repeated direction to make the subpoena process ‘expeditious.'” DMCA contemplates speedy subpoena process aimed at quickly identifying and stopping infringers, court said. Buying into Verizon’s argument, court said, would mean copyright holders would have to determine first whether infringed material was being stored on or only transmitted over ISP’s system -- something that’s guaranteed to cause delays and complications. Nor does Verizon’s argument make sense from policy perspective, court said, because there’s no “sound reason” why Congress would “enable a copyright owner to obtain identifying information from a service provider storing the infringing materials on its system, but wouldn’t enable a copyright owner to obtain identifying information from a service provider transmitting the material over its system.” In short, court said, Verizon’s reading would create “huge loophole” in Congress’s effort to stop Internet copyright violations.

DMCA was Congress’s way of balancing liability protection for ISPs against need for broad protection for copyrights on Internet, court said. Act involved trade-offs on both sides, it said. If ISPs needed only to turn over identifying information when infringing material was stored on their systems, court said, then those ISPs would be protected under act but would have no corresponding obligation to help copyright owners find infringers: “There is no logical connection between the line Verizon seeks to draw and the objective Congress sought to achieve through the DMCA.”

Nor did court buy Verizon’s argument that RIAA could seek subpoenas by filing “John Doe” cases in federal court. “Not only are John Doe actions more burdensome and less timely, but in several important ways they are less protective of the rights of service providers and Internet users that is the Section 512(h) process,” court said. Court relied in part on the recent U.S. Supreme Court decision in Eldred v. Ashcroft. “With copyright legislation such as the DMCA,” Bates wrote, “[t]he wisdom of Congress’ action… is not within [court’s] province to second guess.”

Decision validates RIAA’s interpretation of law, Pres. Cary Sherman said. “Now that the court has ordered Verizon to live up to its obligation under the law,” he said, “we look forward to contacting the account holder whose identity we were seeking so we can let them know that what they are doing is illegal.”

ISPs and privacy advocates voiced disappointment over decision and said it could prompt Congress to revisit DMCA. Not only did ruling demonstrate some of “additional difficulties” decision in Eldred would put in path of those trying to find balance in copyright law, but it also “speaks strongly” to fact that DMCA might need reconsideration, American U. law prof. Peter Jaszi said.

Decision comes down to very narrow point of law, said David McClure, pres. of U.S. Internet Industry Assn, which filed amicus brief supporting Verizon. Court has allowed RIAA to use faster, less expensive method for identifying infringers, he said. ISPs believe method creates due process and privacy problems, he said, but now that court has ruled, they will adjust. Decision is small step toward trying to sort out how DMCA should be implemented, McClure said. Either courts will work that out, he said, or Congress will have to take another look. “It’s certainly not the end of the world,” he said.

As for technological solutions to get ISPs off hook for traffic in unauthorized content on their networks, one is being developed by Macrovision and Websense, company that develops employee Internet management (EIM) software. “Going after the little guy is a little painful,” said Brian Dunn, Macrovision senior vp-business development, alluding to attempts at copyright infringement litigation against individuals. Nonetheless, MPAA and RIAA are determined to continue lawsuits, and so-far successful subpoena of Verizon opens possibility other ISPs will find themselves in same shoes. “Is there a compromise?” Dunn asked rhetorically. “If the ISPs adopt monitoring technologies, is there a safe harbor for them?”

Macrovision apparently believes so, as Dunn described “multidimensional approach” to defending against unauthorized distribution of copyrighted content that went beyond straight copy protection and DRM by adding content filtering. “Companies have looked at Web-crawling technologies to find their content, and lately file-blocking to stop its spread. But enterprise networks such as ISPs need something so they can say they are monitoring their networks.” He said Internet delivery of content to PCs could grow with addition of wireless devices and game consoles with Internet connections. With right combination of security technologies “[content] owners can service these business models,” Dunn told us.

Macrovision’s proposal would combine its patented digital signatures and watermarks with Websense’s EIM. Websense already provides content filtering to corporations, enabling them to determine parameters of what employees can and can’t access at workplace, such as pornography. Last Oct., Macrovision and Websense announced joint development of Liability Protector add- on module for Websense that shielded employers from potential copyright litigation by searching corporate servers for content found to have Macrovision copy protection removed or bypassed.

System developed for private networks could be adapted and expanded for enterprise networks such as ISPs, Dunn said. Once content owners have embedded Macrovision signatures and watermarks in software, Websense filtering would enable ISPs to identify traffic in copyrighted material among subscribers on network, he said. Depending on content owners’ wishes, content either could be blocked from use or DRM technologies could be applied to control use. Dunn told us system could even search for and identify hacked content from which copy protection or other identifiers had been stripped, then block hacked content from use.

“We've had talks with the studios and they like it,” Dunn told us. Macrovision and Websense now are developing system and hope to introduce it late this year. Companies also are in discussion on Web-crawler/content-blocker developers Media Defender and Over Peer on integrating their technologies to system. Dunn said Macrovision would take role of approaching and marketing system to ISPs, and Websense would sell system as upgrade to existing ones.