Piracy, File Sharing ... And Legal Fig Leaves

• Author: John Lambrick
• Position: General Counsel, RMIT University Melbourne, Australia john.lambrick@rmit.edu.au
• Pages: 185-195

This article was originally published in Kierkegaard, S. (2008) Synergies and Conflicts in Cyberlaw. IAITL

Page 185

1. Introduction

Piracy has always been a source of aggravation for those holding rights in intellectual property, but grudgingly acknowledged by them as a consequence of doing business in that field. The emergence of the internet, where valuable digital products can be copied with ease and widely distributed, has created an increased threat to copyright owners and distributors.

Until recently, technical difficulties associated with transferring large files offered some protection against the piracy of music and video over the internet. However, the development of MP3 and other compression technologies has meant that rich and bandwidth intensive files are now more vulnerable to copyright breach and piracy over the internet. The International Federation of the Phonographic Industry ("IFPI") has estimated that almost 20 billion songs were illegally downloaded in 2005 ¹ and Music Industry Piracy Investigations ("MIPI") has estimated that in Australia around 2.8 million people, or 18% of the population illegally download music through file sharing every year ²

In terms of motion picture films, the Motion Picture Association of America ("MPA") has estimated that through piracy its member companies lose in excess of $US 896 million in potential revenue annually in the Asia Pacific region alone³. Piracy of motion picture films has to a large extent been effected by the illegal burning of digital video disks, but applications which distribute both music and video through peer to peer file sharing have added a very effective string to the bow of the audio-visual pirate.

2. What is Peer to Peer (P2P) Computing?

P2P computing involves the sharing of resources between computers by direct exchange between those computers. Unlike traditional network architecture which is based around client and server, the P2P network relies on the processing power of its individual computers. There is no reliance upon a centralised server, and each user's computer effectively becomes a server. In terms of file sharing, P2P computing enables users to connect to the hard drives of other users and to share files⁴.

Whilst P2P computing has gained notoriety for facilitating internet piracy, it does have legitimate uses. In fact, Ashwin Navin, the President and Chief Executive of BitTorrent Inc. which provides the BitTorrent delivery Page 186 platform, has expressed the view that P2P is fundamentally the only way to deliver content on the internet without breaking the internet itself!⁵ (The contrary assertion is that BitTorrrent hogs bandwidth, and at times accounts for fifty percent of internet data traffic⁶). In any event, legitimate uses of P2P computing include:

* Data co-ordination. P2P technology can be used by organisations to provide workers with data and coordinate activities on large projects where little infrastructure exists. For example, humanitarian groups operating in Iraq have used P2P technology to synchronise the distribution of aid.⁷

* Lawful sharing of copyright and public domain material. Through file sharing, P2P technology enables content publishers who wish to make significant content available to large numbers of people to distribute that content at minimal cost.⁸

* Distributed computing. P2P technology enables idle disk space and processing power to be utilised, meaning that organisations can create a virtual supercomputer by aggregating unused computing resources (eg. desktops).

Because online file sharing utilising P2P technology effectively involves participants providing open access to the contents of their hard drives, the technology is not without risk. These risks include⁹:

* Breach of privacy/loss of personal information. Many people store highly sensitive personal information (bank account details, financial statements etc.) which can become available to others who access their hard drive.

* Spyware. P2P applications can be used by hackers to install spyware on a person's computer. Spyware can monitor keystroke activity and therefore ascertain passwords.

* Viruses. Viruses are often spread through P2P applications.

* Exposure to legal risk. Injudicious use of P2P file sharing can result in users being subjected to legal action where their use involves the unauthorised downloading or distribution of copyright material, or the unintentional downloading of illegal material (eg. child pornography).

P2P file sharing technology has become the distribution mechanism of choice for the internet copyright pirate. This paper will examine why this has occurred, the legal implications for those involved, likely future trends, and recommendations for those involved in the distribution of copyright material over the internet.

3. Why does P2P File Sharing make Rights Holders Nervous?

P2P file sharing has created considerable nervousness amongst rights holders, as evidenced by the following statement by MIPI:

"In the last few years, sites that facilitate P2P file sharing have proliferated on the internet, resulting in hundreds of millions of dollars in lost revenues to artists and rights holders around the globe. These P2P sites are depriving the recording artists, composers, authors and record companies of the right to choose the value of their creative property in a free and open market."¹⁰

The reasons for such nervousness are both technical and legal.

3.1. Technical Issues

3.1.1. A decentralised environment

The first significant P2P copyright breach case was the Napster case11. Napster utilised a web site and P2P file sharing software to facilitate the swapping of MP3 music files. Many of those files were not authorised for distribution. Importantly, the Napster site contained a central directory which informed users as to what music was available for download from other users, although the files themselves were not stored centrally by Napster. Napster was (on the basis of United States copyright law) found liable for contributory infringement and to be Page 187 vicariously liable for direct breaches by its users. On general copyright principles, it was always going to be difficult for Napster to avoid accountability for copyright breaches by its users.

However, P2P platforms can and now do operate in a highly decentralised manner. Many post-Napster networks are not maintained by a central body. Rather, the platform establishes users as a network of nodes which interconnect with each other12. Whilst the lack of centralisation does not necessarily mean that those establishing a P2P platform can avoid accountability where users breach copyright (the Kazaa decision¹³ illustrates this) the less centralised that a P2P platform may be, the more difficult it is for rights holders to close it down where copyright breaches are involved.

3.1.2. Ability to distribute very large files - BitTorrent

For a time, the impracticalities (mainly significant delay) associated with transferring very large files over the internet provided some protection to the motion picture industry against internet based copyright breach. That is no longer the case. The BitTorrent¹⁴ P2P content delivery platform has become a highly efficient means of distributing very large files over the internet, and with high quality. Downloads using BitTorrent are rapid because the process involves the downloading of the file in small portions from a number of different computers until the entire file is obtained. The effect is that a number of BitTorrent users share the bandwidth burden required to download a file which may otherwise take a number of days to download using another P2P platform such as Kazaa15.

BitTorrent involves the use of a "tracker" file which contains specifications of the file downloaded and a history of the users who have previously downloaded the file16.

3.2. Legal Issues

3.2.1. Jurisdiction

To date, rights holders have been quite ready to take legal action against the creators or providers of the P2P platform¹⁷ or against the individual file sharers themselves¹⁸ for copyright breaches effected through P2P file sharing. But this is not without difficulty. Creators or providers of P2P platforms can establish those platforms in jurisdictions with comparatively less restrictive copyright laws than the jurisdiction of the rights holder19. The jurisdictional problem is well illustrated by the now defunct (but once popular) Russian file-sharing service, AllofMP3 which...