Amicus Curiae Brief — Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd.

62) JAN 2 4 2005 |

OFFICE OF THE CLERK

No. 04-480 bats

IN THE

Gnited States Supreme Court

pr<¢

METRO-GOLDWYN-MAYER STUDIOS, INC., ET AL.,

Petitioners,

GROKSTER, LTD., ET AL.,

Respondents.

On Writ of Certiorari to the United States Court of

Appeals for the Ninth Circuit

BRIEF OF AMICI CURIAE INTERNATIONAL

RIGHTS OWNERS SUPPORTING PETITIONERS

ank L. Goldsmith ALLEN N. DIXON

hristopher Wolf* General Counsel

OSKAUER ROSE LLP International Federation of

233 20th Street, N.W. The Phonographic Industry

Suite 800 54 Regent Street

ashington, DC 20036 London

02-416-6800 WI1B SRE

United Kingdom

O11 44 207 8787903

Counsel of Record

[BEST AVARABLE COPYT

TABLE OF CONTENTS

PAGE

TABLE OF AUTHORITIES............. ERA OES

INTEREST OF THE AMICI ..cccsssssssssssssvessssssssssssssssssssesessssse

SUMMARY OF ARGUMENT ...cssssssscscssscsccssccccccscseceseesseeeee5

I. DENYING INTERNATIONAL RIGHTS

OWNERS EFFECTIVE MEANS OF

ENFORCING THEIR RIGHTS AGAINST

MASSIVE INFRINGEMENTS ON PEER-

TO-PEER SERVICES CONTRAVENES

INTERNATIONAL AGREEMENTS TO

WHICH THE UNITED STATES IS A

PARTY

Il. THE DECISION BELOW STRIPS

INTERNATIONAL RIGHTS OWNERS OF

AN EFFECTIVE MEANS OF ENFORCING

THEIR RIGHTS

Ill. THIS DECISION WILL BE TAKEN

INTO CONSIDERATION AS COURTS

OUTSIDE THE UNITED STATES

GRAPPLE WITH THESE ISSUES

COIN LIIIUIN .cccsscecscasessosecesesconesstionsesnipmmasononenainsiesoennsisinelt

TABLE OF AUTHORITIES

CASES

A&M Records, Inc. v. Napster, Inc.,

239 F.3d 1004 (9th Cir. 2001), affirming 114

F. Supp. 2d 896 (N.D. Cal. 2000) .........cccccccceeseesseees 18

Alexander Murray v. Schooner Charming Betsy, 6

U.S. (2 Cranch.) 64 (1804)... cccccccccescesesesseeseseeeees 14

Asia Media Inc. v. Yang,

No. 2002KAHAP77 (Suwon Dist. Ct.,

Seongnam Branch, First Civil Dep't, July 9,

SUG Z) ....cccccccnescsssevsnsensetineibsenniidamniainnnnnannnnnnnnn 19

China Steel Corp. v. United States,

264 F. Supp. 2d 1339 (Ct. Int'l Trade 2003)............ 11

Fed. Mogul Corp. v. United States,

63 F.3d 1572 (Fed. Cir. 1995)..........c.ccscssesssssessssseses 14

Global Digital Tech. Co.,

92 Sue Tze No. 728 (Shi-Lin Dist. Ct.,

D086. 4, 2BGS) ..cocsccesecesecestsenssianiemuninmanisaaananae 20

Hopson v. Kreps,

622 F.2d 1375 (9th Cir. 1980)..........:cccccceeseeeseeeeeseees 10

In re Aimster Copyright Litig.,

334 F.3d 643 (7th Cir. 2003)........:cccccccesseeceereeseesenees 16

In re Charter Communications, Inc.,

2005 U.S. App. LEXIS 31 (9th Cir. Jan. 4,

2005) .....ccccecssccncecsessesssessssintaieiiatinsane 6

Interim Application of Fashion-Now Co., Lid. et al.,

92 Sue Tze No. 2146 (Taipei Dist. Ct.,

GE 20

MGM Studios, Inc.,

259 F. Supp. 2d 1029 (C.D. Cal., 2003),

aff'd, 380 F.3d 1154 (9th Cir. 2004)........... 1,6, 15,17

Nippon Columbia Co. v. Yugen Kaisha Nippon MMO.

2002 (Wa) Case No. 4249 (Tokyo Dist. Ct.,

29th Civil Div. Jam. 29, 2003) .......cccccccccceeeseenennenees 19

PAM. S.p.A. v. United States,

265 F. Supp. 2d 1362 (Ct. Int'l Trade 2003) ............ 11

Parfums Givenchy, Inc. v. Drug Emporium, Inc.,

38 F.3d 477, 484 (9th Cir. 1994) ooo ccccccceeeneees x

Rock Records (Taiwan) Co. v. Fashion-Now Co.,

92 Tsai Chueng No. 20 (Taipei Dist. Ct.,

Rock Records (Taiwan) Co., v. Global Digital Tech. Co

92 Tsai Chueng No. 2082 (Shi-Lin Dist. Ct.,

rn 20

Sony Corp. v. Universal City Studios, Inc.,

464 U.S. 417, 104 S. Ct. 774 (1984)... 14

“Timken v. United States,

240 F. Supp. 2d 1228 (Ct. Int'l Trade 2003) ............ 11

United States v. Moghadam,

175 F.3d 1269 (1 1th Cir. 1999). cccccceceeeenenes u

iii

STATUTES

UE, GB. FY accncsnsumepsuneneiintiihiaiindiieednta 9

SF ULERL. © Bi ccnccssnsesssivtsimentetestnensienitaedammsiiadnaiaaaeaai 7

57 ULB. © BBG ane... annsinciniedinieniatgemieinels 8

SF UBC. 8 OUR cencecoucsssstnicteieraenininaiaeeaeen 10

57 WAL. § B00 ncsesestuminivtsiitisasiaiiiitia ene 9

OTHER AUTHORITIES

4 NIMMER ON COPYRIGHT § 18.06[B][2] .............-cccccccceceeene 9

H.R. REP. No. 103-826, 103d Cong., 2d Sess., pt. 1

Eee Shenstiantianeipiienhisnsuigbineitiiiatindinbiiianients 15

H.R. Doc. No. 103-316, 103d Cong., 2d Sess.(1994)......... 15

A. Dixon, Jnternet Copyright Litigation: Non-U_S.

Development, BNA World E-Commerce & IP

SRS, SUID SEED cencecenictinnininhieniiaitnaiiaiatieateniiensiinnss 18

Agreement on Trade related Aspects of Intellectual

Property Rights, Marrakesh Agreement

Establishing the World Trade Organization,

Annex Ic, Apr. 15, 1994, 1869 U.N.T.S. 299,

33 LL.M. 1125, reprinted at

http://www.wto.org/english/docs e/legal_e/2

Re Re ee 7

iv

Berne Convention for the Protection of Literary &

Artistic Works, July 24, 1971, U.S. Senate

Treaty Doc. 99-27, KAV 2245, | B.D.LE.L.

TOD cconnnesnsasserrsesiaitnsntinnieapsinastnithiitataciiadmutiindienilioaen 7, 8,9

Certain German Interests in Polish Upper Silesia,

[1926] PCI) Rep., Series A, NO. 7 .........ccccceseeseeeeees 13

Convention for the Protection of Producers of

Phonograms Against Unauthorized

Duplication of Their Phonograms (Geneva,

1971), Oct. 29, 1971 25 U.S.T. 309, T.LAS.

7808, 888 U.N.T.S. 67, reprinted at

http://www. wipo.int/clea/docs/en/wo/wo023.

India - Patent Protection for Pharmaceuticals

Protection & Agricultural Chemical

Products, No. 95-0000 (WT/DS50/ABIR,

Sane ae 12, 13

P. Geller, | Int'l Copyright Law & Practice, ¢ 3{3\(b) .......... 8

P. Geller, 1 int'l Copyright Law & Practice, 3{4\(a) ........10

RIAJ Press Release, Court decided Japan MMO, a

file sharing service company, for illegality,

available at http://www.riaj.com/e/news/

20030129. html (Jan. 29, 2003)

Report of the Panel, Unites States-Section 110(5) of

the U.S. Copyright Act, Case No. 00-2284

(WT/DS160/R, June 15, 2000) 9

Report of the Panel, Unites States-Section 337 of the

Tariff Act of 1930 (BISD 36S/345, Nov. 7,

i) ee 13

Request for Consultations by the United States,

European Communities - Enforcement of

Intellectual Property Rights for Motion

Pictures & Television Programs, No. 98-

1824 (WT/DS124/1, IP/D/13, May 7, 1998) .....11, 13

Request for Consultations by the United States,

Greece - Enforcement of Intellectual Property

Rights for Motion Pictures & Television

Programs, No. 98-1813 (WT/DS125/1. -

SS Re es wee 11,13

Universal Copyright Convention (Paris text, 1971)

| B.D.L.E.L. 813, reprinted at

http://www.unesco.org/culture/laws/copyright

FORE SRG Be cscainnnsnttieninemetinniaiaienasitinaial 8

Uruguay Round Trade Agreement. Texts Of

Agreements, Implementing Bill. Statement

Of Administrative Action & Required

Supporting Statements, in H.R. Doc. No. 103-

316, 103d Cong., 2d Sess. (1994) 0000... cccccccceseeeeees 15

WIPO Copyright Treaty, S. Treaty Doc. No. 105-17,

at 1, 36 LL.M. 65 (Geneva, 1997), reprinted

at http://www.wipo.invtreaties/documents/

WIPO Performances & Phonograms Treaty, S.

Treaty Doc. No. 105-17, at 18, 36 LL.M. 76

(Geneva, 1997). reprinted at

http://www. wipo.inUtreaties/documents/engli

a 8.9

BrRieF OF AMICI CURIAE INTERNATIONAL

RIGHTS OWNERS IN SUPPORT OF

PETITIONERS

INTEREST OF THE AMICI

All parties have consented to the filing of this amicus

brief.'

The parties joining this amicus brief, listed below

(the “International Rights Owners”) are trade associations

and professional organizations based outside the United

States, representing hundreds of thousands of owners of

copyrights and related rights all over the world. Specifically,

amici represent record companies, producers and

distributors; music and literary publishers; composers and

authors of a variety of protected works; rights societies; film

From the perspective of amici, this case is primarily

about ensuring that the United States does not falter in its

responsibilities under various international agreements and

norms, by permitting a safe haven for entities to set up

businesses deliberately designed to enable copyright

infringement on a massive scale. That is a perspective we

hope the Court will find informative.

Bureau International des Sociétés Gérant les Droits

d’Enregistrement et de Reproduction Mécanique (“BIEM”),

founded in 1929 and headquartered at Neuilly-sur-Seine.

France, is the international organization representing 44

mechanical rights societies in 42 countries, which societies

license the reproduction of songs includiig musical, literary

and dramatic works. One of BIEM’s principal missions is to

negotiate compensation for its members, the licensors of

copyrighted works, for the uses of their works by others.

International Confederation of Societies of Authors

and Composers (“CISAC”), founded in 1926 and

headquartered at Neuilly-sur-Seine, France, is a non-

governmental, non-profit organization with a membership of

207 authors’ societies in 109 countries, which societies

represent more than 2 million creators of musical, dramatic,

and literary works, as well as works involving the visual and

graphic arts. One of CISAC’s principal objectives is to

watch over. safeguard and contribute to the legal interests of

creators, both in the international sphere and in national

International Confederation of Music Publishers

(“ICMP/CIEM”), established as an association under Swiss

law in Lausanne, Switzerland, is the umbrella non-profit

trade organization which globally represents, through its 32

members — national, regional and international music

publishers’ trade associations in Europe, Northern and Latin

2

America, Australasia and Africa —- most of music publishing

throughout the world. Taking action against unauthorized

Internet usage of copyrighted music is one of the priorities

for ICMP/CIEM within its mission of promoting the value of

songs and of the people who create, and who help to create,

music. ICMP/CIEM has observer status at the Geneva-based

WIPO.

International Federation of Actors (“FIA”), founded

in 1952, is an international non-governmental organization

registered in the United Kingdom. FIA currently represents

the interests of 104 performers’ unions, guilds and

associations in 76 countries around the world, from North

and Latin America, to Europe, Africa and Australasia. FIA

is a recognized non-governmental organization at UNESCO,

the International Labour Organization (ILO), the World

Intellectual Property Organization (WIPO), the International

Theatre Institute (ITI) and the Council of Europe. FIA’s

affiliates represent hundreds of thousands of professional

actors, singers, dancers, choreographers, broadcast

professionals and other artists on a wide range of issues

relating to the social and professional protection of

performers, including their intellectual property rights.

International Federation of the Phonographic Industry

(“IFPI”), founded in 1933 and having its registered office in

Zurich, Switzerland, is a non-profit trade association

representing the international recording industry. IFPI’s

approximately 1,450 record company members, located in 75

countries, own copyrights and related rights in sound

recordings. IFPI's activities focus on combating traditional

hard goods and on-line piracy, promoting legislation that

protects the rights of intellectual property owners, and

encouraging healthy trade and electronic commerce in

recorded music.

International Federation of Film Producers

Associations (“FIAPF™), founded in 1933 and based in Paris,

France, is made up of 30 national producers’ organizations in

27 countries. FIAPF’s mission is to defend and promote the

economic and legal interests of film and audiovisual

producers on a global basis. FIAPF participates in copyright

and neighboring rights’ protection activities, anti-piracy

efforts, the promotion and maintenance of audiovisual

technology standards. and incentive policies for film

production/distribution.

International Publishers Association (“IPA”), based

in Geneva. Switzerland, established as an association under

Swiss law in 1896, represents the worldwide book and

journal publishing industry (print and electronic) through its

78 national and specialized member associations in 66

countries. One of IPA’s main objectives is to promote a

chain of strong and enforceable copyright laws around the

world. including for electronic publishing. IPA enjoys

observer status at the United Nations and its agencies, such

as the Geneva-based WIPO and Paris-based UNESCO, and

participates in developments at the Geneva-based WTO.

International Video Federation (“IVF”) is a non-

profit international association established in 1988 under

Belgian law. with the aim of providing national video

associations with international representation of their

members’ interests as publishers and distributors of pre-

recorded video cassettes and DVDs. Based in Brussels,

Beigium, the IVF represents thousands of video publishers in

numerous international fora. including the European

Communities. WIPO. WTO and the United Nations

institutions. Like the other amici, IVF has a strong interest

in protecting the worldwide rights of its members, and

supports the promotion and fostering of consistent and

effective international enforcement of copyright.

SUMMARY OF ARGUMENT

The decision below is inconsistent with international

agreements to which the United States is a party. Under

these agreements. the United States has an obligation not

only to recognize the intellectual property rights that are

violated by unauthorized uses of copyrighted works on the

Internet, but also to provide rights owners—particularly

foreign rights owners such as amici—adequate and effective

means of enforcing such rights.

The decision below raises two major concerns for

international rights owners as to the enforceability of their

rights.

The first concern is whether they will be able to

enforce their rights effectively and protect them from being

infringed, on a massive and unprecedented scale, in the

United States, if the decision below is not reversed. Far from

promoting effective enforcement of copyright. the decision

below immunizes parties that are responsible for the

infringement of copyrighted works on a massive scale, and

effectively holds that in the face of such copyright

infringement, copyright owners have no effective recourse

whatsoever against such parties.

The Ninth Circuit’s decision thus severely limits the

practical ability of right owners such as amici to enforce

their rights effectively against one of the most virulent

species of online infringements — those carried out using

peer-to-peer networks designed to facilitate infringement —

and thereby threatens to place the United States in breach of

its international obligations and responsibilities. This is

particularly true in the context of what the Ninth Circuit

called today’s “quicksilver technological environment,”

where infringements are possible, and are occurring, on a

scale across the globe that nobody could ever have imagined,

only a short while ago. (380 F.3d at 1167).

The second concern is the potential spill-over effect

that the Ninth Circuit's decision could have for enforcement

of copyright and related rights outside the United States,

especially against the unauthorized distribution, use and

reproduction of material emanating from the United States.

Rights owners have always faced the problem of pursuing

counterfeit or infringing copies. produced in countries with

lax copyright enforcement practices, that cross borders and

infiltrate markets in other countries. If United States law is

now perceived to allow businesses, like defendants’ to

function without restraint, or is perceived as inconsistent and

unreliable. this spill-over problem will be global, massive

and impossible to reverse.

The Ninth Circuit noted that defendants did not “seriously

contest” that of the millions of files copied and distributed

through their services, “the vast majority are exchanged illegally

in violation of copyright law.” 380 F.3d at 1160. The District

Court similarly found that it was “undisputed” that defendants”

software and networks were being used to carry out direct

infringements of copyright (which of course includes

internationally guaranteed exclusive rights). 259 F. Supp. 2d at

1034: 1037: see also In re Charter Communications, Inc., 2005

U.S. App. LEXIS 31, *7 (9 Cir. January 4, 2005)

(“Approximately 90% of the content on [peer to peer] systems is

copyrighted movies, software, images and music disseminated

without authorization. It is estimated more than 6.2 billion

allegedly infringing music file are downloaded monthly.”).

6

ARGUMENT

I. Denying International Rights Owners Effective

Means Of Enforcing Their Rights Against

Massive Infringements On Peer-to-Peer Services

Contravenes International Agreements To Which

The United States Is A Party.

International rights owners such as amicis’ members

are protected in the United States by a number of

international agreements concerning the protection of

intellectual property (all of which are reproduced in the

appendices to Professor Nimmer’s treatise). The main

agreements of relevance here include:

e the Berne Convention for the Protection of

Literary and Artistic Works (protecting “authors”

and their representatives and assignees in all

fields),’

e the World Trade Organization's Agreement on

Trade-Related Aspects of Intellectual Property

Rights (protecting a range of rights owners on

substantive 2.1d enforcement issues),”

> July 24, 1971, U.S. Senate Treaty Doc. 99-27, KAV 2245, |

B.D.1.E.L. 715, 17 U.S.C. § 104; also reprinted at

http://www.wipo.int/clea/docs/en/wo/wo00len.htm (the “Berne

Convention”).

7 Agreement on Trade Related Aspects of Intellectual Property Rights,

Marrakesh Agreement Establishing the World Trade Organization,

Annex IC, Apr. 15, 1994, 1869 U.N.T.S. 299, 33 LL.M. 1125, 1197,

reprinted at

http://www.wto.org/english/docs_e/legal_e/27-trips 01_e.htm (the

“TRIPs Agreement”).

7

e the WIPO “Internet Treaties” (protecting authors,

producers and performers on Internet and other

matters).

e the Universal Copyright Convention (protecting

authors in parallel with the Berne Convention).°

and

e the Geneva Phonograms Convention (protecting

producers against unauthorized reproduction of

their phonograms).

A host of other international legal obligations of the

United States require similar or related protections.* All

these international agreements guarantee non-U.S. owners of

rights in intellectual property substantive rights, which have

been enacted into law.” These include rights to authorize or

WIPO Copyright Treaty, S. Treaty Doc. No. 105-17, at 1, 36 LL.M.

65 (Geneva. 1997), reprinted at

http: www .wipo.inUtreaties/ documents english/word/s-wet.doc

(cited as “WCT™ herein); WIPO Performances and Phonograms

Treaty. S. Treaty Doc. No. 105-17, at 18, 36 I.L.M. 76 (Geneva,

1997). reprinted at

http: www .wipo. int treaties documents english’ word/s-wppt.doc

(“WPPT”).

(Paris text. 1971), July 24. 1971, 25 U.S.T. 1341, T.LA.S. 7868, 1

B.D.1.E.L. 813. reprinted at

a - ‘www .unesco.org culture/laws copyrighv/html_eng/page!.shtm!

(“UCC”).

Convention for the Protection of Producers of Phonograms Against

Unauthorized Duplication of Their Phonograms (Geneva, 1971),

Oct. 29, 1971, 25 U.S.T. 309, T.1.A.S. 7808, 888 U.N.T.S. 67,

reprinted at http://www .wipo.int/ clea docs/en/wo/wo023en.htm.

See generally P. Geller, | Int'l Copyright Law & Practice, 3{3\(b)

(outlining United States treaty ratifications and implementation in

the international copyright area).

See 17 U.S.C. § 104(b) (foreign author may claim U.S. copyright

under certain circumstances). cited in Parfums Givenchy, Inc. v.

Drug Emporium, Inc., 38 F.3d 477, 484 (9th Cir. 1994).

8

prohibit reproduction,” distribution,'' Internet transmission'*

and other substantial uses of their works and other protected

material. The agreements allow for exceptions or limitations

to these rights, but only in certain special cases that do not

conflict with the normal exploitation of the material, and that

do not unreasonably prejudice the legitimate interests of the

rights holders."

The TRIPs Agreement, which provides “the highest

expression to date of binding intellectual property law in the

international arena” (United States v. Moghadam, 175 F.3d

1269, 1272 (11th Cir. 1999) (citation omitted)), for the first

time also imposes far reaching requirements in the

enforcement of intellectual property rights.'* Thus, Article

41(1) of the TRIPs Agreement requires:

'© Berne Convention, art. 9; TRIPs Agreement, art. 9, 14; WCT, art.

1(4) (incorporating Berne requirements); WPPT, arts. 7, 11; UCC,

art. IV bis( 1); Geneva Phonograms Convention, art. 2.

Berne Convention, art.- 14(1) (distribution of cinematographic

works); TRIPs Agreement, arts. 11, 14(4) (rental of computer

programs, cinematographic works, phonograms); WCT, arts. 6-7,

WPPT, arts. 8-9, 12-13; UCC, arts. V, VI; Geneva Phonograms

Convention, art. 2.

“ These rights, encompassed under general provisions of earlier

treaties, are embodied explicitly in WCT, art. 8; WPPT, arts. 10, 14.

Berne Convention, art. 9(2); TRIPs Agreement, art. 13; WCT, art.

10; WPPT, art. 16; UCC, art. 1V; Geneva Phonograms Convention,

art. 6; See generally 17 U.S.C. § 107; World Trade Organization,

Report of the Panel, United States — Section 110(5) of the U.S.

Copyright Act, Case No. 00-2284 (WT/DS160/R, 15 June 2000)

(interpreting Berne Convention art. 9(2) and TRIPs tests).

“TRIPs stands unique among international copyright compacts in the

sophistication of its enforcement mechanisms . . . . [G]iven that

TRIPs contains enforcement provisions far more efficacious than

those extant under Berne, it can be anticipated that TRIPs will set the

international standard for enforcement.” 4 Nimmer on Copyright

§ 18.06[B][2], at 18-67.

14

9

Members shall ensure that enforcement

procedures as specified in this Part are

available under their law so as to permit

effective action against any act of

infringement of intellectual property rights

covered by this Agreement, including

expeditious remedies to _—s— prevent

infringements and remedies’ which

constitute a _ deterrent to _ further

infringements. (emphasis supplied)'*

Amici do not argue here that any of the particular

international intellectual property agreements of the United

States should be given “direct effect.”'® The application of

the “direct effect” doctrine is a complex issue. which is not

necessary to resolve with respect to any particular

international agreement here.'”

Nevertheless. courts have viewed international

obligations like the WTO TRIPs agreement as “persuasive

authority” in interpreting questions that arise under its

'S The WIPO Internet Treaties contain a similar requirement. See, ¢.g.,

WCT, art. 14: WPPT, art. 23.

° See generally Hopson v. Kreps, 622 F.2d 1375, 1381 (9th Cir. 1980)

_ (discussing “direct effect” and self-execution concepts).

'” See generally Geller, | Int'l Copyright Law & Practice § 3{4\(a), at

INT-89: “The situation in the United States is ambiguous. The

United States Congress made abundantly clear its intent to leave the

Berne Convention without any self-executing force. At the same

tmme, the U.S. Senate acknowledged both the courts’ exclusive

power to decide “the question of whether a treaty is self-executing’

and the courts’ responsibility for enforcing ‘appropriate domestic

law’ to protect the rights of Berne claimants. The Congressional

intent—in so many words, as the U.S. Copyright Act [17 U.S.C. §

104(c); Now states. to preclude any ‘reliance upon . . . the provisions

of the Berne Convention’—cannot therefore be read to compel an

ostrich-like refusal by the courts to consult any Berne text at all”

(citations omitted).

10

implementing legislation.'* Indeed. “plaintiffs are free to

argue that Congress would never have intended to violate an

agreement it generally intended to implement without

expressly saying so.” China Steel Corp. v. United States,

264 F. Supp. 2d 1339, 1367 (Ct. Int'l Trade 2003)

(reviewing WTO Agreements’ obligations in dumping area),

citing Timken v. United States, 240 F. Supp. 2d 1228, 1238

(Ct. Int'l Trade 2003).

Traditionally, in the international arena, the United

States has sought more stringent. rather than less stringent.

respect for intellectual property rights, and it has consistently

taken the position in its negotiations with its WTO partners

that “effectiveness” of a party's enforcement and remedies

means enforcement and remedies that “work in practice.”

The one formal WTO dispute in the copyright area

involving the “effectiveness” requirements of Article 41 of

TRIPs is highly instructive.'” In May, 1998, the United

States requested consultations with Greece and the European

Communities under the WTO dispute-settlement procedure.

The United States claimed that Greece and the EC were in

violation of, inter alia, Article 41 not only because of

statutory shortcomings but also because the remedies on the

books had had no practical effect on the problem of

widespread piracy.

18 PAM. SpA. v. United States, slip. op. 2003-48, n.13 (Ct. Int"! Trade

May 8, 2003).

See Request for Consultations by the United States, European

Communities — Enforcement of Intellectual Property Rights for

Motion Pictures and Television Programs, No. 98-1824

(WT/DS124/1, IP/D/13, 7 May 1998), Request for Consultations by

the United States, Greece — Enforcement of Intellectual Property

Rights for Motion Pictures and Television Programs, No. 98-1813

(WT/DS125/1, IP/D/14, 7 May 1998).

1]

19

As evidence of this, the United States cited the facts

that a “significant number” of television stations in Greece

regularly broadcast copyrighted United States films and

television programs without authorization of the copyright

owners. and that infringement occurred repeatedly and

continuously despite efforts by United States rights holders

to pursue their claims in Greece.” The United States

claimed that “effective remedies against copyright

infringement do not appear to be provided or enforced in

Greece” and that “this situation appears to be inconsistent with

the obligations of Members under Articles 41 and 61 of the

TRIPS Agreement.” *'

The dispute ultimately ended by mutually agreed

settlement. which documented both legislative and law-

enforcement initiatives undertaken to remedy the piracy at

issue. as well as to monitor the actual effectiveness of the

actions taken and remedies available. that is, significantly

reduced levels of television piracy in Greece.

Judicial decisions such as this one. moreover, form

an important part of the analysis of whether a particular

country is in compliance with its TRIPs obligations.

Particularly relevant to a consideration of the TRIPs

requirement of “effective action™ to prevent and deter piracy.

the WTO Appellate Body in /ndia -- Patent Protection for

Pharmaceutical Protection and Agricultural Chemical

Products repeated the principle from a 1926 Permanent

Court of International Justice case instructing that national

compliance be evaluated broadly on the basis of numerous

factors. including judicial decisions.

From the standpoint of International Law

and of the Court which is its organ.

20

See Requests for Consultations by the United States. supra.

Id

2!

12

municipal laws are merely facts which

express the will and constitute the activities

of States, in the same manner as do legal

decisions and administrative measures. The

Court is certainly not called upon to

interpret the Polish law as such; but there is

nothing to prevent the Court’s giving

judgment on the question whether or not, in

applying that law, Poland is acting in

conformity with its obligations towards

Germany under the Geneva C onvention.””

It is particularly appropriate in this case to apply the

principle that judicial decisions, among other state actions,

can play a key role in determining whether “in applying [its]

law. [the United States] is acting in conformity with its

obligations” under the TRIPs Agreement.

The decision below essentially renders unavailable

to rights holders an important enforcement mechanism

(vicarious or contributory liability) rooted in the statutes,

and which has been repeatedly articulated by the courts, the

result of mapping common-law principles to that particular

terrain of copyright law. To the extent the decision below

works to make “effective action” against online

infringement “unavailable” to rights holders, including by

denying expeditious preventive remedies and undermining

deterrence, United States compliance with its international

obligations could be called into question. A reversal, on the

22 India ~ Patent Protection for Pharmaceuticals Protection and

Agricultural Chemical Products, No. 95-0000, (WT/DSS0/ABIR, 19

Dec. 1997) 4 65, at 25, citing Certain German Interests in Polish

Upper Silesia, [1926] PC1J Rep., Series A, No. 7, at 19; see also id.

© 67, at 25-26, citing Report of the Panel, United States—Section 337

of the Tariff Act of 1930 (BISD 368/345, 7 Nov. 1989) (panel

conducted detailed examination of United States legislation and

practice, including court proceedings).

13

other hand. would be both (a) a proper application of

domestic law (as Petitioners and others assert); and (b)

would comport well with the U.S.’s obligations to provide

its partners effective enforcement in the copyright area.

Finally. Congress should be assumed to have

intended that “effective enforcement” as required under

international copyright agreements would be available in the

United States, including under the contributory and vicarious

liability doctrines.” “GATT [now WTO] agreements are

international obligations, and absent express Congressional

language to the contrary, statutes should not be interpreted to

conflict with international obligations.” Fed Mogul Corp. v.

United States, 63 F.3d 1572, 1581 (Fed. Cir. 1995). citing

Alexander Murray v. Schooner Charming Betsy, 6 U.S. (2

Cranch.) 64. 118 (1804) (act of Congress ought never to be

construed to violate the law of nations, if any other possible

construction remains).

There is no statutory language or other expression of

Congressional intent anywhere in the history of United

States accession to the WTO or the WIPO Internet Treaties

that suggests that Congress wished to derogate from the

international obligations assumed by the United States

government in a way that would deprive international rights

owners of effective means of enforcing their rights against

As Petitioners have demonstrated, the situation requiring effective

enforcement here is very different from the situation presented in

Sony Corp of America v. Universal City Studios, Inc. 464 U.S. 417,

104 S. Ct. 774 (1984). Among other things, the underlying activity

at issue here is widespread, massive infringing reproductions and

distributions occurring at the speed of light, across the globe, not

substantial “fair use.” and the intermediary has an ongoing

relationship with the direct infringers.

14

the sort of infringements at issue here. Indeed, the indicia of

legislative intent are directly to the contrary.”*

II. The Decision Below Strips International Rights

Owners Of An Effective means Of Enforcing their

rights.

Amici are principally concerned that the decision

below in practice leaves international rights holders without

an effective means of enforcing their rights against what both

Courts below characterized as widespread infringements

involving millions of individuals, promoted by services that

“clearly know that many if not most of those individuals who

downloaded their software subsequently use it to infringe

copyrights” (259 F. Supp. 2d at 1037) and that defendants

“may have intentionally structured their businesses to avoid

secondary liability for copyright infringement, while

benefiting financially from the illicit draw of their wares”

(id. at 1046).

** Hence, when legislation to implement the TRIPs Agreement was

presented to Congress by the U.S. Administration in 1994, the

Agreement was described as “establish[ing] comprehensive

standards for the protection of intellectual property and the

enforcement of intellectual property rights in WTO member

countries,” and “ensur[ing]} that critical enforcement procedures will

be available in each member country to safeguard intellectual

property rights.” Uruguay Round Trade Agreement, Texts Of

Agreements. Implementing Bill, Statement Of Administrative Action

And Required Supporting Statements, in H.R. Doc. No. 103-316,

103d Cong., 2d Sess. (1994) at 981, Uruguay Round Trade

Agreements Act, at 312. While, understandably, the focus of

legislative consideration was on how the TRIPs Agreement “will

dramatically improve protection and enforcement of U.S. intellectual

property rights abroad,” H.R. Rep. No. 103-826, 103d Cong., 2d

Sess.. pt. | (1994) (“Benefits of the Uruguay Trade Agreements”).

there was nothing to indicate that this benefit was to be obtained at

the cost of denying effective enforcement for domestic and

international rights holders under U.S. law.

15

If such knowing facilitators of and contributors to

massive infringement cannot be stopped and ordered to act

responsibly with respect to copyrighted material, what

effective enforcement mechanism is realistically available?

The decision below leaves few, if any, practical options. For

example, even if the alternative of bringing suits against

large numbers of individual infringers may be a possibility

for large and well-funded rights owners, many of amicis’

members are small or otherwise insufficiently funded for that

ever to be a real option.

If unauthorized mass reproduction and distribution

via the Internet cannot be stopped in the United States at the

hub of such activity -- the services that knowingly promote,

assist and profit from massive infringements -- it would put

rights owners in the untenable position of having to chase

every unauthorized copy and transmission to every one of

the other countries to which they are distributed. Such a

result would be unnecessary, unwarranted and potentially

devastating as a practical matter, to amici.

The doctrines of vicarious and contributory liability

evolved precisely in order to provide rights owners an

effective remedy against massive infringement in situations

where they otherwise would not have it. As Judge Posner

said in /n re Aimster Copyright Litig., 334 F.3d 643, 645 (7th

Cir. 2003):

Recognizing the impracticability or futility

of a copyright owner's suing a multitude of

individual infringers (“chasing individual

consumers is time consuming and is a

teaspoon solution to an ocean problem,”

Randal C. Picker, “Copyright As Entry

Policy: The Case of Digital Distribution,”

47 Antitrust Bull., 423, 442 (2002)), the law

allows a copyright holder to sue a

16

contributor to the infringement instead, in

effect as an aidor and abettor.

In making its judgment in this case, this Court

should give careful consideration to what remedies are

available for rights owners to enforce their rights effectively

against what are probably the most widespread

infringements in history, in a world where infringement

increasingly knows no borders.”*

25 As noted by the Petitioners below, the District Court's finding that

“substantial noninfringing uses” exist for defendants’ services and

software because people might use them “in ceuntries where it is

legal” (259 F. Supp. 2d at 1035) does not appear supported by the

record. In any event, it cannot seriously be contended that the

behavior of any “lowest common denominator” country—one that

might refuse to follow international agreements requiring the global

protection of intellectual property rights—should constrain those

nations that seek to provide the required protections.

“17

lil. This Decision Will Be Taken Into Consideration

As Courts Outside The United States Grapple

With These Issues.

The Ninth Circuit’s decision will have a deleterious

ripple effect on similar cases involving so-called

“decentralized” peer-to-peer file transmission and copying

services in other countries. Although courts in every country

apply their own national laws and look to their own legal

precedents and authorities-they also are informed by judicial

decisions in the United States involving new Internet issues.

Parties (including amici) do provide information on United

States court judgments and raise arguments from United

States court decisions as persuasive authority in other

jurisdictions.

The importance of the judicial decisions from the

United States in the international arena cannot be overstated.

For example. United States courts dealt first with the issues

surrounding so-called “centralized” peer-to-peer services in

the Napster litigation.® Since then, cases brought and

decided so far in Japan and Korea have reached the same

result against similar services.*’ In both cases, the parties

submitted information on the decisions of the District Court

and the Ninth Circuit in Napster, and the reasoning of these

decisions appears to have been taken into account in the

foreign courts’ judgments.

A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004 (9th Cir. 2001),

affirming A&M Records, Inc. v. Napster, Inc., 114 F. Supp. 2d 896

(N.D. Cal. 2000).

See A. Dixon, IJnternet Copyright Litigation: Non-U.S.

Developments, BNA World E-Commerce & IP Report, June 2003, at

5. 6-7. The following case reports are taken from the referenced

article.

18

In Nippon Columbia Co., Ltd., et al. v. Yugen Kaisha

Nippon MMO.** defendant Japan MMO operated a peer-to-

peer service used by approximately 42,000 persons, who

collectively made available about 80,000 files at any one

time. Like Napster, Japan MMO created an index of files

available for download, and users transmitted and copied

files directly to each other. The court found, both at the

preliminary injunction and “interlocutory judgment” stage,

that not only were users violating plaintiffs’ exclusive right

under the copyright law of “making transmittable” plaintiffs’

works and recordings, but Japan MMO itself played a role in

the infringing acts. Japan MMO was enjoined from offering

the service on April 9, 2002, and was found liable on the

merits on January 29, 2003.

In Asia Media Inc. et al v. Yang et al.,”* members of

the Recording Industry Association of Korea (RIAK) filed

civil claims against the Korean “file sharing” service

Soribada on February 8, 2002. On July 9, 2002, the court

issued an injunction requiring the peer-to-peer service to stop

letting users download the plaintiffs’ recordings, to stop

operating the service on the Korean Data Centre's servers,

and to pay a $170,000 guaranty.”

8 2002 (Wa) Case No. 4249 (Tokyo Dist. Ct., 29th Civil Division,

interlocutory judgement 29 Jan. 2003). See RIAJ Press Release,

Court decided Japan MMO. a file-sharing service company, for

illegality; Interlocutory judgment by the Tokyo District Court,

http://www.riaj.com/e/news/20030129.htm! (29 Jan. 2003).

No. 2002KAHAP77 (Suwon Dist. Ct., Seongnam Branch, First Civil

Dep't, 9 July 2002).

RIAK also filed parallel criminal proceedings, and the prosecutor

indicted the two operators, in August 2001, charging them with

aiding and abetting infringement. The criminal case was dismissed

on May 15, 2003, on the ground that the charges did not adequately

specify how Soribada aided and abetted copyright infringement. The

prosecutor has appealed this dismissal to the High Court, and the

appeal is pending.

29

30

19

Pending in Taiwan at present are criminal and civil

proceedings against the subscription peer-to-peer services

EzPeer and Kuro, which started out as “centralized” services

using Napster-based technology but which are migrating to

“decentralized” and encrypted technology. To date, the

Taiwan courts have issued injunctions requiring removal of

105 copyrighted recordings from both services.’ As part of

the proceedings. however. Kuro has asked the trial court to

consider the Ninth Circuit's ruling in Grokster — perhaps

predictably without any mention of the Seventh Circuit's

ruling in Aimster — as authority for Kuro’s proposition that

all decentralized peer-to-peer services should be immune

from liability in Taiwan.”

As courts like these outside the United States begin

considering Internet issues involving the new generation of

peer-to-peer services like Grokster, it is in the interest of

amici and all affected parties that United States law provide

helpful and consistent guidance. on how massive

infringements on services like these can be stopped, and in

particular, how key enablers and facilitators such as

defendants can and should be held responsible.

This will help to promote consistent international

treatment of Internet-based activities, a key goal of the

evolving international treaty structure in the intellectual

property field. Only after effective and consistent

Rock Records (Taiwan) Co. Lid et al. v. Fashion-Now Co., Lid., 92

Tsai Chueng No. 20 (Taipei Dist. Ct.. injunction issued Dec. |,

2003): Rock Records (Taiwan) Co., Lid. et al. v. Global Digital

Technology Co., Lid, 92 Tsai Chueng No. 2082 (Shi-Lin Dist. Ct.,

injunction issued Dec. 11, 2003). See also Fashion-Now Co., Lid et

al., 92 Sue Tze No. 2146 (Taipei District Ct., criminal indictment

issued Dec. 1, 2003): Global Digital Technology Co., Lid. and

others, 92 Sue Tze No. 728 (Shi-Lin Dist. Ct., criminal indictment

issued Dec. 4, 2003).

Interim Application of Fashion-Now Co., Lid, 92 Sue Tze No. 2146

(Taipei Dist. Ct., filed Aug. 31, 2004).

20

enforcement mechanisms are in place against infringement

can the legitimate on-line use of copyrighted materials

ultimately and best be developed and maintained in the

international arena.

CONCLUSION

For all the foregoing reasons, amici respectfully

submit that this Court reverse the judgment of the Court

below.

Respectfully Submitted,

Hank L. Goldsmith Allen N. Dixon

Christopher Wolf* General Counsel,

Proskauer Rose LLP International Federation Of

1233 20" Street, N.W. The Phonographic Industry

Suite 800 54 Regent Street

Washington, DC 20036 London

(202) 416-6800 W1B 5RE

United Kingdom

011 44 207 8787903

*Counsel of Record

21