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«JOURNAL OF LAW, ECONOMICS & POLICY VOLUME 10 SPRING 2014 NUMBER 2 EDITORIAL BOARD 2013-2014 Steve Dunn Editor-in-Chief Crystal Yi Meagan Dziura Sarah ...»

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Peer-to-peer (P2P) systems allow users to share files with other users who are simultaneously logged onto a common network.26 P2P systems are advantageous because they provide faster file transfers, conserve bandwidth, and reduce or eliminate the need for the central storage of files.27 For example, Napster, the pioneer P2P file-sharing service, connected users who were logged onto the network through a central indexing server, enabling them to share music files.28 As a result, users could access copyrighted music files virtually free of charge.29 Thus, P2P technology can also violate a copyright holder’s exclusive rights of distribution and reproduction when users share copyrighted music files.30 Subsequent P2P systems have further decentralized the file-sharing process31 by eliminating the need for even the central indexing server upon which Napster relied and substituting it with supernodes, or mini-indexing servers, throughout the network.32 P2P technologies continue to advance and resolve inefficiency problems from which earlier P2P models suffered.33 On one hand, P2P systems are beneficial because they lower the costs of sharing content.34 On the other hand, P2P systems provide uncontrolled 25 See Deborah Platt et. al, Peer-to-Peer file-Sharing Technology: Consumer Protection and Competition Issues, 2005 WL 154111, at *2 (F.T.C.) [hereinafter Peer-to-Peer]; Sascha Segan, What is PCMAG.COM (Jan. 20, 2012, 10:43 AM), Megaupload?, http://www.pcmag.com/article2/0,2817,2399133,00.asp.

26 Pushin,’ supra note 19, at 619.

27 Peer-to-Peer, supra note 25, at *2. Rather than storing files in a central server to which users must connect to retrieve files, P2P allows users to share directly with other users. As a result, P2P also allows for faster file transfers and conservation of bandwidth. Id. at *4.

28 See Annemarie Bridy, Is Online Copyright Enforcement Scalable?, 13 VAND. J. ENT. & TECH.

L. 695, 699 (2011); Pushin,’ supra note 19, at 618.

29 Other examples of P2P systems include Limewire and µTorrent.

30 Pushin,’ supra note 19, at 619.

31 In P2P systems, “files are not uploaded to a provider’s server; they remain instead on the users’ own systems, from which other users directly retrieve them.” Bridy, supra note 28, at 717. This decentralization makes it difficult to regulate under the DCMA’s safe harbor provisions because the act only covers (1) transitory digital network communications, (2) system caching, (3) storage on behalf of users, and (4) information location. Id. at 716–17.

32 Id. at 699–704. For example, the problem of free riding was solved through the introduction of a BitTorrent file-sharing protocol that made it impossible for any user on the network to “take without giving.” Id. at 701.

33 Id. at 699.

34 Peer-to-Peer, supra note 25, at *22 (“[P2P systems] reduce the marginal costs of distributing digital content to zero or near-zero.”).

–  –  –

access to digital content, some of which may be copyright-protected.35 As a result, such systems can have detrimental effects on the incentive for innovation and creativity.36 If the exclusive rights of distribution and reproduction of artists, musicians, and other copyright holders are not protected, they would have little incentive to create new works or to share them with the public.

2. Cloud Computing” and Online File-Hosting Services P2P systems have continued to evolve, but users are also turning to other sources of media sharing.37 According to the National Institute of Standards and Technology, cloud computing is a model for enabling ubiquitous, convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction.”38 With “cloud computing” file-hosting, “everyday processes and information that are typically run and stored on local computers—email, documents, calendars—can be accessed securely anytime, anywhere, and with any device through an Internet connection.”39 In addition, recent file-hosting services such as Megaupload40 allow users to upload files to a centralized server and allow anyone else to download the file by using a unique link.41 RapidShare is another file-hosting service and works very similarly to Megaupload. Its servers “automatically generate a unique download link (a URL) for each uploaded file and send 35 Id.

36 Id.

37 Bridy, supra note 28, at 704.

38 Peter Mell & Timothy Grace, The NIST Definition of Cloud Computing (Special Publication 800-145), NAT’L INST. OF STANDARDS AND TECH. 2 (Sept. 2011), available at http://csrc.nist.gov/publications/nistpubs/800-145/SP800-145.pdf.

39 Ilana R. Kattan, Note, Cloudy Privacy Protections: Why the Stored Communications Act Fails to Protect the Privacy of Communications Stored in the Cloud, 13 VAND. J. ENT. & TECH. L. 617, 622 (2011) (quoting ECPA Reform and the Revolution in Cloud Computing: Hearing Before the Subcomm.

on the Constitution, Civil Rights, and Civil Liberties of the H. Comm. on the Judiciary, 111th Cong. 2 (2010) (statement of Richard Salgado, Sr. Counsel, Law Enforcement and Information Security, Google, Inc.)). Cloud computing also eliminates the need for a user to be tethered to a desktop computer. William Jeremy Robison, Note, Free at What Cost?: Cloud Computing Privacy Under the Stored Communications Act, 98 GEO. L.J. 1195, 1199 (2010).





40 Other examples of cloud file-sharing websites include MediaFire, RapidShare, and Dropbox.

41 Segan, supra note 25.

2014] INNOVATIONS IN CRIMINAL COPYRIGHT INFRINGEMENT 495 that link to the user who uploaded the file.”42 The user can then share the link, and others can access the file from RapidShare’s servers.43 Megaupload and RapidShare are examples of online file-hosting services known as “cyberlockers” or Direct Download Links.44 Like P2P systems, cloud computing and online file-hosting services have legitimate uses that are beneficial to users sharing information online.

File-hosting services provide a mechanism for sharing files—with little or no transaction costs—that users can access “anytime, anywhere,” and that protects users from data loss due to hardware malfunctions.45 Furthermore, unlike P2P systems, services such as RapidShare do not “index user materials and [do] not allow users to search for specific files.”46 However, users may still share copyrighted material using the unique link to their uploaded file, whether by sharing the link through email or by posting it on a website, thereby violating copyright holders’ exclusive rights to distribute and reproduce their works.47 C. Evolving Interpretations of the Rules: Expanding the Application of the Federal Rules Technology has continued to evolve, and as a result, the criminal activities that those technologies facilitate have also evolved. Accordingly, procedural jurisprudence has adapted to remain relevant to advancing crimes. For instance, in an increasingly interconnected world, the notion of an American court’s personal jurisdiction has expanded to confront the realities of foreign activities that are directed to and have an effect in the geographical boundaries of the United States.48 However, in some aspects, American procedural rules are still lagging behind criminal innovations.

Such legal vulnerabilities leave an opening for criminal opportunism.

42 Luke M. Rona, Off With the Head? How Eliminating Search and Index Functionality Reduces Secondary Liability in Peer-to-Peer File-Sharing Cases, 7 WASH. J. L. TECH. & ARTS 27, 41–42 (2011) (quoting Perfect 10, Inc. v. RapidShare, No. 09-CV-2596 H, at *2 (S.D. Cal. May 18, 2010)).

43 Id. at 42.

44 Bridy, supra note 28, at 705.

45 See Kattan, supra note 39, at 622; Segan, supra note 25. For example, these services can be used to permit shareware and freeware developers or independent musicians who otherwise may not be able to afford the cost of bandwidth to share their work. Segan, supra note 25.

46 Rona, supra note 42, at 41–42.

47 Pushin’, supra note 19, at 619.

48 See discussion infra Part I.C.1.

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In the American legal system, a court must have personal jurisdiction over the parties.49 Personal jurisdiction can be either general or specific.

General jurisdiction applies when a defendant’s contacts with the forum are systematic and continuous, and thus, the defendant could reasonably anticipate defending a claim there.50 Specific jurisdiction exists when the defendant has “certain minimum contacts [with a forum state], such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’”51 Minimum contacts can be established if the defendant purposefully availed himself of the privilege of conducting business in the forum by creating “continuing relationships and obligations with citizens of another state.”52 Alternatively, if a defendant purposefully directs his acts toward a forum state, and those acts are expected to have an effect within the state, the defendant could reasonably anticipate defending a claim there.53 However, in the Internet age, geographically-based principles of jurisdiction are difficult to apply.54 Because websites can be accessed from wherever there is an Internet connection, and because information travels through cyberspace, there is not necessarily a physical jurisdiction that covers an Internet address.55 Nevertheless, courts have found jurisdiction to exist in cases based on minimum contacts with a forum state through an Internet website. In Zippo Manufacturing Co. v. Zippo Dot Com Inc.,56 the court used a “sliding scale” to measure specific personal jurisdiction based on Internet activity.57 An Internet website could be (1) passive, (2) interactive, or (3) integral to the defendant’s business.58 Passive websites are only informational and do not provide a means to interact with the site owner.59 Courts do not ordinarily exercise personal jurisdiction for such sites.60 An interactive website allows viewers to communicate with the site owner, whether by telephone, mail, or email.61 Depending on the level of interacGenerally, a defendant can be sued under copyright law where there is personal jurisdiction.

See Symposium, Copyright Disputes Involving Online Activities, 717 PLI/PAT 299, 311 (2002) [hereinafter Copyright Disputes].

50 See Int’l Shoe Co. v. Washington, 326 U.S. 310, 318 (1945).

51 Id. at 316.

52 Burger King Corp. v. Rudzewicz, 471 U.S. 462, 473 (1985).

53 Calder v. Jones, 465 U.S. 783, 789 (1984).

54 Copyright Disputes, supra note 49, at 321.

55 Id.

56 Zippo Mfg. Co. v. Zippo Dot Com, Inc., 952 F. Supp. 1119, 1124 (W.D. Pa. 1996).

57 Id.

58 Id.

59 Id.

60 Id.

61 Id.

2014] INNOVATIONS IN CRIMINAL COPYRIGHT INFRINGEMENT 497 tivity and the commercial nature of the site, courts may or may not exercise personal jurisdiction for such sites.62 Finally, sites that are integral to the defendant’s business are those that are actively used to conduct transactions with persons in the forum state.63 Such sites generally fall under the specific jurisdiction of the forum state.64

2. Rule 4(c)(3)(C) of the Federal Rules of Criminal Procedure

Another facet of American procedural laws can be found in the service of process requirement. The United States Court of Appeals for the Fourth Circuit has described service of process as the “procedure by which a court having venue and jurisdiction of the subject matter of the suit asserts jurisdiction over the person of the party served.”65 A federal court must fulfill the service of process requirement before asserting personal jurisdiction over a party.66 According to the Supreme Court, “[s]ervice of process, under longstanding tradition in our system of justice, is fundamental to any procedural imposition on a named defendant.”67 Both service of process and personal jurisdiction must be satisfied before a suit can go forward.

Although they are “inextricably intertwined, since service of process constitutes the vehicle by which the court obtains jurisdiction,”68 they are also “distinct concepts that require separate inquiries.”69 Rule 4(f) of the Federal Rules of Civil Procedure provides means for

serving an individual in a foreign country:

Unless federal law provides otherwise, an individual... may be served at a place not within

any judicial district of the United States:

(1) by any internationally agreed means of service that is reasonably calculated to give notice, such as those authorized by the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents;

62 Zippo Mfg. Co., 952 F. Supp. at 1124.

63 Id.

64 Id.

65 Harding v. Williams Prop. Co., 1998 U.S. App. LEXIS 21268, at *12 (4th Cir. Aug. 31, 1998) (quoting Miss. Publ’g Corp. v. Murphree, 326 U.S. 438, 444–45 (1946)).

66 Id.

67 Murphy Bros., Inc. v. Michetti Pipe Stringing, Inc., 526 U.S. 344, 350 (1999); see also Harding, 1998 U.S. App. LEXIS 21268, at *12 (“In the absence of service of process (or waiver of service by the defendant) a court ordinarily may not exercise power over a party the complaint names as defendant.”).

68 United States v. Chitron Elecs. Co., 668 F. Supp. 2d 298, 304 (D. Mass. 2009) (quoting Miss.

Publ’g Corp. v. Murphree, 326 U.S. 438, 444-45 (1946)).

69 Peay v. BellSouth Med. Assistance Plan, 205 F.3d 1206, 1209 (10th Cir. 2000).

–  –  –

(2) if there is no internationally agreed means, or if an international agreement allows but

does not specify other means, by a method that is reasonably calculated to give notice:

–  –  –



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