ISPs Win a Round in File-Swapping Tussle

In a win for Internet service providers (ISPs) that were forced to reveal identities of customers accused of music piracy, a U.S. Court of Appeals for the District of Columbia has struck down a lower-court ruling on the issue.

The decision, released Friday, is a blow to the Recording Industry Association of America’s (RIAA) efforts to combat piracy by suing online music file-swappers. But the group vowed Friday it would fight on with its strategy of filing copyright infringement lawsuits against file-swappers.

The decision reverses a January ruling by a U.S. District Court that ordered Verizon to comply with the RIAA’s subpoena request to reveal the identities of customers who allegedly infringed copyrights using peer-to-peer (P2P) file-sharing networks.

The subpoena was issued though a provision of the 1998 Digital Millennium Copyright Act (DMCA) that allows copyright holders to issue subpoenas that have not been reviewed by a judge and requires no notice to, or opportunity to be heard by, the alleged infringer. Unlike a usual subpoena, which requires some underlying claim of a crime, under the DMCA a subpoena can be issued by a court clerk who only checks to make sure the subpoena form is properly filled out.

On the basis of that ruling, the RIAA has issued more than 3,000 subpoena requests to ISPs and filed almost 400 copyright infringement actions.

“We conclude that a subpoena may only be issued to an ISP engaged in storing on its servers material that is infringing or is the subject of infringing activity,” the Appeals court ruled, further stating ISPs acting as a “mere conduit for the transmission of information” are not subject to the DMCA subpoenas.

“This decision removes the threat of a radical, new subpoena process that empowers copyright holders or anyone merely claiming to be a copyright holder to obtain personal information about Internet users by simply filing a one-page form with a court clerk,” said Sarah Deutsch, vice president and associate general counsel for Verizon. “This harmful procedure exposes anyone who uses the Internet to potential predators, scam artists and crooks — including identity thieves and stalkers.

A defiant RIAA vowed to continue it campaign to sue individual file-swappers.

“This decision is inconsistent with both the views of Congress and the findings of the district court,” said Cary Sherman, president of the RIAA, in a official statement. “It unfortunately means we can no longer notify illegal file sharers before we file lawsuits against them to offer the opportunity to settle outside of litigation. Verizon is solely responsible for a legal process that will now be less sensitive to the interests of its subscribers who engage in illegal activity.”

Verizon originally argued that the DMCA subpoena only applied in cases where an ISP stored the copyrighted material on its servers. Because people using P2P networks store the material on their own hard drives, Verizon said it was exempt from the DMCA subpoena.

Verizon subsequently expanded its case to the actual constitutionality of the DMCA subpoena, privacy rights violations, the potential dangers of the subpoena being misused by non-copyright holders and even the future growth on the Internet.

“Today’s ruling is an important victory for Internet users and all consumers. The court has knocked down a dangerous procedure that threatens Americans’ traditional legal guarantees and violates their constitutional rights,” Deutsch said. “Copyright holders seeking personal information about Internet subscribers will now have to file a traditional lawsuit. These requests will undergo scrutiny by a judge, thus preserving the privacy, safety and legal rights of every Internet subscriber.”

The RIAA contends the DMCA subpoena was legal and agreed to by ISPs during the 1998 negotiations over the DMCA. One of the central issues then was the liability of ISPs for the possible copyright infringements of their customers.

The DMCA gives ISPs liability protections in exchange for assisting copyright owners in identifying and dealing with infringers who misuse the service providers’ systems, including complying with an expedited subpoena process for copyright owners who want to pursue legal action against infringers. Neither side ever anticipated the development and explosive growth of peer-to-peer networks.

“Regardless of this decision, we will continue to defend our rights online on behalf of artists, songwriters and countless others involved in bringing music to the public,” Sherman said. “We can and will continue to file copyright infringement lawsuits against file sharers who engage in illegal activity.”

Wendy Seltzer, staff attorney for the Electronic Frontier Foundation (EFF), hailed Friday’s decision as a victory for Internet users.

“The effect of the appeals court decision is that we do not lose our privacy simply by connecting to the Internet. The ruling stops the record labels from taking our free speech rights as collateral damage in the campaign against the American music fan,” Seltzer, who filed an EFF amicus brief supporting Verizon on behalf of 45 consumer, privacy, and Internet industry groups, said.

Dave McClure, president of the U.S. Internet Industry Association added the decision protects the “personal privacy and security of online consumers. It was never the intent of the Congress that copyright holders should have the right to invade the personal privacy and security of American consumers on the basis of allegations, and without due process under the law.”

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