The recent Department of Justice decision to indict Megaupload for copyright infringement and related offenses raises some very thorny questions from a criminal law perspective.  A few preliminaries: I’m responsible for the musings below, but I thank Robert Weisberg of Stanford Law School for taking the time to talk through the issues and giving me pointers to some relevant cases. Also, an indictment contains unproven allegations, and the facts may well turn out to be different, or to imply different things in full context.

DMCA SAFE HARBOR: BELIEVE IT AND IT WILL BECOME REAL: As a matter of criminal law, the discussion of whether Megaupload did what it needed to do to qualify for the DMCA Safe Harbor misses the point. Did they register an agent? Did they have a repeat infringer policy? These are all interesting CIVIL questions. But from a criminal law perspective, the important question is did Defendants BELIEVE they were covered by the Safe Harbor? This is because criminal infringement requires a showing of willfulness.  The view of the majority of Federal Courts is that “willfulness” means a desire to violate a known legal duty, not merely the will to make copies.

In other words, for criminal liability, it doesn’t really matter whether the service qualifies, so long as Defendants believed it qualified. If so, they were not intentionally violating a known legal duty, and so their conduct would not satisfy the willfulness element of the offense. For criminal liability after the DMCA safe harbor, as in horseshoes, close may be good enough.


The heart of this case is whether and when an enterprise can be held criminally liable for the conduct of its users. (For example, both copyright infringement claims (Counts 4 and 5) identify aiding and abetting as a basis for the charge.)

Aiding and abetting is something like the civil liability inducement theory the U.S. Supreme Court created in the 2005 Grokster case.  Experts opine that the indictment makes out a pretty good inducement case against Megaupload. But the first question from a defense perspective has to be “Can the Grokster theory of CIVIL liability even be the basis for CRIMINAL copyright claims?” This has never been decided by any Court.

However, the pending Second Circuit case of Puerto 80 Projects v. USA (“Rojadirecta“), raises the issue squarely. There, the plaintiff is challenging the ICE seizure of its Rojadirecta domain names based on an allegation of criminal copyright infringement. For background on the case, and on the ICE domain seizures, check out Techdirt’s coverage.

Rojadirecta’s lawyers at Durie Tangri have challenged the U.S. Government’s assertion that criminal liability arises from linking to infringing content. The lawyers argue that judge-made secondary infringement liability theories, including Grokster style inducement, cannot be the basis for a criminal copyright violation because the criminal copyright statute doesn’t mention secondary liability. Congress considered and rejected statutes that would have created such liability, in COICA and PROTECT IP. In sum, due process doesn’t allow incarceration under a civil legal theory that the Supreme Court dreamed up in 2005. The issues yet to be decided in Rojadirecta apply to the Megaupload case as well.

AGREEMENT + CIVIL VIOLATION = PRISON?: Count 2 is a conspiracy to commit copyright infringement claim, and references unknown parties as members of the conspiracy. Conspiracy entails an agreement to commit an offense and an overt act in furtherance of that agreement.  The act in furtherance need not itself be illegal, but there must be an agreement to do an illegal act. The list of overt acts show that the object of the conspiracy was infringement by Mega users. If Defendants agreed with each other to induce others to infringe, and Rojadirecta’s lawyers are correct that inducement is not a crime, there’s a conspiracy only to violate a CIVIL law. If the idea is that Mega conspired with its users to infringe, those users may or may not have been criminally infringing copyright. They were located all over the world, and may or may not have acted willfully, i.e. intended to violate U.S. law. Again, the government would basically have alleged an agreement to violate a U.S. CIVIL law, including by many people who are not subject to U.S. rules.

Is it a federal crime to conspire to induce others to violate a U.S. civil law?

The answer to that is an obvious “no”. The conspiracy statute itself makes clear that the object of the conspiracy must be an offense or fraud against the United States, in other words, a federal crime. 18 U.S.C. 371. It is true that Oliver North and John Poindexter were prosecuted for conspiracy to violate Boland Amendment, which prohibited Defense Department spending on the Nicaraguan Contras, but was not itself a crime. And there is a 1979 case (U.S. v. Ruffin, 613 F.2d 408 (2nd cir. 1979), where the defendant was convicted of conspiracy when he convinced an unwitting person to divert federal funds to the defendant’s personal benefit. But both cases constituted fraud involving U.S.taxpayer dollars, which is also a basis for conspiracy liability. Civil violations simply are not.

For these reasons, prosecuting this case against Mega, especially if Defendants get good criminal lawyers who also understand copyright law, is going to be an uphill battle for the government.

A few other points. Some direct infringement convictions look easy, but COUNT 4 IS WEIRDLY INCOMPLETE: I agree with the copyright law experts interviewed by Ars Technica that the most damning allegations in the indictment are the claims of direct infringement, particularly for the prerelease movies. Interestingly, the indictment identifies four films that the defendants supposedly distributed before release: The Green Hornet, Thor, Bad Teacher, Twilight–Breaking Dawn Part 1. But Count 4 only charges one such act of prerelease infringement, the movie Taken.  What about the other films? Why were those not also charged?  

Finally, this case is extremely interesting from a JURISDICTIONAL standpoint. One of the very first issue to be litigated will be extradition to the United States. Does the United States have jurisdiction over anyone who uses a hosting provider in the Eastern District of Virginia? What about over any company that uses PayPal? That’s a very broad claim of power, and I expect it will be vigorously contested.

UPDATE: Texas Instruments failed to stand behind their misguided claim that calculator hobbyists violated copyright law by having public, online discussions about techniques to get more functionality from TI calculators. Yet the company continues to dig itself into new holes by issuing more improper take-down letters.

Great article on my Texas Instruments dispute in the IEEE Spectrum magazine, with a picture of one of my clients: For Texas Instruments, Calculator Hackers Don’t Add Up.

One of my new projects is defending researchers and bloggers discussing how to put custom operating systems on TI calculators. The press release and explanatory blog post are on the EFF site.

TI, Leave Those Kids Alone | Electronic Frontier Foundation.

Last Tuesday, something fantastic happened. The U.S. 10th Circuit Court of Appeals gave the First Amendment some oomph in Golan v. Gonzales. The case, brought by Larry Lessig and lawyers with the Stanford Law School Center for Internet and Society, challenged section 514 of the Uruguay Round Agreements Act, or URAA, which removed thousands of books, films and musical compositions from the public domain. The 10th Circuit held that, following the Supreme Court case of Eldred v. Ashcroft, if Congress changes copyright’s “traditional contours,” courts must conduct a First Amendment review to ensure that those changes do not overly burden free expression in an unjustified manner. Removing works from the public domain is one such traditional contour, so the court sent the Golan case back to the District Court to determine whether the URAA goes too far in burdening speech.

I wrote about this case, which I was involved in when I was Executive Director of CIS, for this week’s Wired News column. You can read the full column here.

Cellphone users try to wrest some of carriers control – The Boston Globe

I’m quoted in this story about cell phone companies efforts to keep their customers from switching services or buying unaffiliated hardware or ringtones. My quote sounds pretty awkward, but if you want to read more about this, you can check out our (successful) filing with the Copyright Office about cell phone unlocking.

News: In a great article (download here (pdf) —I’m asking for permission to post in full reproduced by permission of Warren Communications News,, 800-771-9202) by Louis Trager for Communications Daily, Tracfone is claiming that I received personal favoritism from the Copyright Office. I. Received FAVORITISM. From the COPYRIGHT OFFICE! Stop laughing and keep reading.

Background: Every three years, the Copyright Office holds a rulemaking for exemptions to the Digital Millennium Copyright Act’s anti-circumvention provisions. The statute prohibits circumventing digital locks that control use of copyrighted works. Intended to stop crackers from cracking DRM on music and movies, phone companies were using the statute to stop people from unlocking cell phones they had purchased so that they could use them on other wireless communications providers’ networks. CIS and the Cyberlaw Clinic applied for an exemption for cell phone unlocking on behalf of an individual and a recycling business, The Wireless Alliance. After a long, hard battle, we won, and our exemption was granted. I wrote two Wired News/Circuit Court columns about unlocking, Free The Cell Phone! and Cell Phones Freed! Poor Suffer?.

Following our win, Tracfone sued the Copyright Office, claiming violations of due process, constitutional separation of powers and the Administrative Procedure Act.

Details: Apparently, at a California State Bar conference, Copyright Office General Counsel David Carson criticized Tracfone for filing its objections seven months after the public comment period had closed, and for failing to provide a satisfactory explanation. TracFone attorney Jim Baldinger lashed out at Carson, and then at me. Here’s the quote from Trager’s article:

Baldinger suggested that the Copyright Office went to unusual lengths to accommodate exemption proponent Jennifer Granick, exec. dir. of Stanford Law School Center for Internet & Society, to the extent of flying out to stage one of 2 hearings in the proceeding at the law school. The other was in D.C. Asked how he reconciled suspicions of favoritism with Carson’s having had nothing good to say about Granick’s boss, Prof. Larry Lessig, Baldinger said he couldn’t: “I don’t understand why the Copyright Office did what it did… I’m shocked by the way the whole thing has transpired.”

The fact is, we beat TracFone fair and square. There’s nothing unusual about the Office flying out for hearings. In the previous rulemaking, they held sessions in Los Angeles and D.C.

And, their late submission was not strategic as a piece of advocacy. TracFone basically proved everything we were saying was true, which was that cell phone locks were “technological protection measures” covered by the anti-circumvention statute, that there was a current risk of harm to unlockers, and that the industry was flat out unable to point to any way in which the exemption would promote copyright infringement, the prevention of which is the point of the statute. TracFone proved for us that they were using the DMCA to protect their prepaid business model, which was not what Congress intended or what the Copyright Office is supposed to promote.

I didn’t need and I didn’t get Copyright Office favoritism. I guess Baldinger can’t imagine that a lone clinical teacher with eight students and a small office in the basement of Stanford Law School could beat his big law firm and rich client. But we did.

Wired News: Patently Bad Move Gags Critics

Yesterday, RFID access device company HID Global got IOActive researcher Chris Paget to pull his talk from Black Hat DC because they claimed that demonstrating how to clone RFID cards violated their patents in card readers. Are they nuts? Unfortunately, IOActive, which probably holds several patents of its own and wants to look like an upstanding respecter of intellectual property rights, backed down and the talk went unmade. While I am not a patent lawyer, the claim seems both colorable and totally weak. Colorable, because if the card reader patents are valid and the claims are drafted broadly enough, then a homebrew card reader just might infringe. Totally weak, because even if the patents are valid, and the reader infringes, and HID Global decided to pay expensive patent lawyers to sue, the damages in the case, even if trebled, would be achingly small (the licensing fee for a single device). My Wired News column today is about this brouhaha. In the column, I heap scorn upon HID, but I do wish that IOActive had pushed the issue. I’m sure a flurry of lawyers would have rushed to their defense.

More on the issue from Ryan Singel, Rob Lemos and Brian Krebs.

This week’s Wired News column is entitled Cell Phones Freed! Poor Suffer? After winning a DMCA exemption for cell phone unlocking, TracFone lawyers called to to explain how the DMCA helps them keep handset prices low for grandmothers and immigrants. They said my exemption helps phone arbitragers who buy subsidized TracFones low, unlock them, and sell them overseas at below market price. These people, TracFone says, are criminals, maybe helping terrorists and need the threat of a criminal law like the DMCA to make them stop. The column is a serious look at these claims.

Readers may also be interested to know that during the rulemaking the Librarian of Congress had decided not to consider TracFone’s late comments opposing my exemption. I’m not sure this refusal was the reason I won, because the Copyright Office recommendation to the Librarian did consider, discuss and dismiss TracFone’s comments and nonetheless recommended granting the exemption.

Today, the TracFone lawyers sent me this lawsuit [pdf] filed under the Administrative Procedures Act against the Copyright Office. The lawsuit claims procedural errors denied TracFone an opportunity to be heard on the issue. Stay tuned.

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