OTCQB: RIHT June 25, 2017

The Law

Is File-sharing Illegal?

The law states:

17 USC § 106 - Exclusive Rights in Copyrighted Works

. . . the owner of copyright under this title has the exclusive rights to do and to authorize any of the following:

(1) to reproduce the copyrighted work in copies or phonorecords;

(2) to prepare derivative works based upon the copyrighted work;

(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;

(4) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and motion pictures and other audiovisual works, to perform the copyrighted work publicly;

(5) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and pictorial, graphic, or sculptural works, including the individual images of a motion picture or other audiovisual work, to display the copyrighted work publicly; and

(6) in the case of sound recordings, to perform the copyrighted work publicly by means of a digital audio transmission.

“Filesharing” software violates both the reproductions rights in (1) and the distribution rights in (3).

thumbnail-dmca.jpg In 1997, The Digital Millennium Copyright Act (DMCA) heightened the penalties for copyright infringement on the Internet and established the eligibility for Safe Harbor from liability of the providers of on-line services for copyright infringement by their users. 

The United States Code 17 U.S.C. 504. states:

Remedies for infringement: Damages and profits (2) In a case where the copyright owner sustains the burden of proving, and the court finds, that infringement was committed willfully, the court in its discretion may increase the award of statutory damages to a sum of not more than $150,000.

In trying to combat P2P copyright infringement, the music industry has  spent  millions  of  dollars  searching for  a  technology  breakthrough  to  protect  copyrighted  works.  These technologies were often referred to as Digital Rights Management (DRM). DRM technologies attempt prevent digital music player technology from allowing reproduction. DRM suffers from the inherent common sense problem that if a reasonably talent technology person can listen to a music file; they can always find a way to make a copy that does not have the DRM technology. These efforts failed to stem the tide of illegal downloading, and the industry turned  to  aggressive  litigation  tactics.

Beginning in 2002, the Recording Industry Association of America (RIAA), the trade group that represents the U.S Music Industry, filed the first lawsuits against individuals who were suspected of illegally downloading music.  

Even with 30,000 lawsuits filed and millions of dollars collected, P2P traffic had still grown worldwide to represent more than 40% of all consumer internet traffic in 2008.  Then in December 2008, the RIAA announced that it would stop suing individual infringers..[3]

As of February 2012, most of the 30,000 cases settled out of court for between $3,000 and $5,000[4], two cases have been tried.  Jamie Thomas received a judgment for $1.5m for distributing 24 songs and Joel Tenenbaum received a judgment for $675,000 for downloading and distributing 31 songs.


ISP Safe Harbor

Courts have found businesses that have been involved in contributing to copyright infringement liable for damages. In Fonovisa vs. Cherry Auction[5], a swap meet run by Cherry Auction was held liable to Fonovisa (the copyright owner) for damages. “As the Court observed, ‘it would be difficult for the infringing activity to take place in the massive quantities alleged without the support services provided by the swap meet,’ including the provision of space, utilities, parking, advertising, plumbing and customers…The Ninth Circuit expressly rejected defendant's argument that the financial benefit prong of the test for finding vicarious liability could only be satisfied if the defendant earned a commission directly tied to the sale of a particular infringing item.”

Section 512(i) of the DMCA states as follows:

•       (i) Conditions for Eligibility —

–      (1) Accommodation of technology — The limitations on liability established by this section shall apply to a service provider only if the service provider

•       (A) has adopted and reasonably implemented, and informs subscribers and account holders of the service provider’s system or network of, a policy that provides for the termination in appropriate circumstances of subscribers and account holders of the service provider’s system or network who are repeat infringers; and

•       (B) accommodates and does not interfere with standard technical measures.

Rightscorp has developed a technology and a process for sending ISPs notice of repeat infringement and to monitor the termination of repeat infringers. This is the proven key to the company’s opportunity.


[1]RIAA: Goodbye BearShare, Hello $30M”, WebProNews, May 5, 2006

[3]No more lawsuits: ISPs to work with RIAA, cut off P2P users”, ArsTechnica.com, December 19, 2008