Daniel Bunting Street Performers on the Information Superhighway: A

Daniel Bunting

Street Performers on the Information Superhighway: A Secondary Liability Theory for

Mediashare on Twitch

I. INTRODUCTION

Perhaps no industry has had more trouble coping with emerging technologies than the music industry. In a field once dominated by sales of records and CDs, the ease with which the

Internet allows potential customers to access files free of cost has fundamentally altered the relationship between musicians and consumers. In some cases, musicians can ally themselves with emergent technology and seek some share of the benefits. The industry has done a marvelous job doing this with YouTube, for example. 1 In other cases, such as Napster, the music industry has had to seek legal remedies to protect its interests. 2 Every time a new technology potentially infringes the rights of copyright holders, those copyright holders have a spectrum of legal and business options to deal with the threat; the above examples represent the poles of this spectrum.

The decision on how to proceed with any given technology is driven by a variety of legal and business considerations including what the legal options actually are, how much economic benefit there is to any one option, and whether that solution is going to be a permanent fix to a problem to name only a few. This paper deals with this question of copyright holders’ options in the context of StreamLabs’ mediashare program for use on the multimedia platform Twitch.

The first part of this analysis breaks down the parties involved and explain the role they play in the analysis. The second part of this analysis outlines the legal theories which form the

1 Robert Elder, YouTube Distributed Over $1 Billion in Ad Revenue to the Music Industry This Year, Business Insider, http://www.businessinsider.com/youtube-pays-out-1-billion-to-music-industry-2016-12. 2 A&M Records, Inc. v. Napster, Inc, 284 F.3d 1091 (9th Cir. 2002).

basis of any action against StreamLabs. The final part of this analysis discusses the application of those legal theories to StreamLabs’ mediashare program.

Twitch is a multimedia website similar to YouTube, but focused on hosting live-streaming content rather than videos. There is no legal distinction between a live-stream and a video for the purposes of copyright; the differences are more factual in nature. The Twitch service consists of both a video window displaying live-streamed content and a text-based chatroom that viewers can use to discuss the live-streamed content in real time. The chatroom is one of the key elements distinguishing Twitch from YouTube; it allows viewers of a broadcast to discuss what is happening on a stream both with each other and with the streamer in real time. This feature creates a dynamic where viewers can impact a broadcast while it is happening by having real time discussions with a broadcaster. This has the effect of massively increasing the audience’s emotional investment in a particular broadcaster by creating a much more personal relationship than exists in traditional pre-recorded media. While not as large as YouTube, Twitch has grown rapidly and now hosts 15 million active daily users watching content produced by over 2 million individual broadcasters or

“streamers.” 3

Streamers are like street performers on the information superhighway. They broadcast live streams on websites like Twitch or YouTube, and those streams are freely accessible to any who want to watch. Many of these streamers attempt, either successfully or not, to make a living out of their broadcast through various methods of monetization. Mediashare is one of these methods of monetization, but not the only one. Members of a streamer’s audience can “subscribe” to a particular twitch streamer for a small monthly payment, part of which goes to the Twitch website

3 Twitch, https://www.twitch.tv/p/about (last visited Oct. 29, 2017).

and part to the streamer. 4 Streamers also often have links on their page through which audience members can donate money if they enjoy a particular broadcast, similar to throwing a few dollars into a street musician’s guitar case. The viability of these methods of monetization, which rely significantly on audience generosity, is tied to the personal relationship created between a streamer and his or her audience.

Viewers are those people who choose to watch a streamer’s broadcast. For the purposes of this analysis there are two types of viewers: the purchasing viewer and non-purchasing viewer.

The non-purchasing viewer is essentially just a passive audience member, all he or she is doing is watching the broadcast. The purchasing viewer is one who chooses to pay money through the mediashare program in order to have his or her chosen song play live on stream. The key difference between these two types of viewers is one of passivity versus activity. A viewer is a passive consumer of a streamer’s media, while a purchasing viewer is taking active steps to impact the broadcast as it happening, particularly the affirmative step of sharing a song using the mediashare program. Which song a purchasing viewer chooses will likely depend on that person’s individual tastes, but there are no technological limits to what a viewer can choose as long as the song is on

YouTube. This purchasing viewer’s action will constitute the direct act of infringement because mediashare is totally inert until a viewer chooses to pay money in order to play a song on stream.

Without this direct act by the viewer no copy will be made; it is the equivalent of, for example, using a word processor to copy and paste the text of a novel. The word processor may technically be creating the copy, but that act of creation is instigated by the person operating the technology.

That same example holds in the case of mediashare as well.

4 Id.

The growth potential of Twitch and its ability to have a significant impact on the market has been recognized by larger entities, and in 2014 Twitch was acquired by Amazon for $970 million.5 All of this potential growth is driven by Twitch’s streamers and the interactivity, which differentiates them from static videos. Twitch encourages streamers to engage with their viewers and create an interactive community, giving preferential monetization treatment to those streamers who accomplish this. 6 The most common example of interactivity is as simple as streamers answering questions that viewers pose through the live chat. Interactivity may also include a streamer raffling off prizes like gift cards, computer components, or video games to members of chat that are present to enter the raffle. An example of interactivity at issue in this analysis is mediashare itself, which allows a purchasing viewer to play a song of his or her choosing and receive an instantaneous reaction from a streamer.

StreamLabs is a company that develops software tools that help streamers interact more effectively with their viewers. 7 StreamLabs only directly monetizes through the sale of its subscription pro service, which offers a wider variety of streaming tools than the free to use base

StreamLabs program. 8 The StreamLabs company’s product is also called StreamLabs, and taken as a whole they offer such services as having the name of viewers who donate money appear on screen in real time, having the names of people who purchase Twitch subscriptions appear on screen in real time, and other such real time alerts. 9 The value of these alerts is tied to the

5 Douglas MacMillan and Greg Bensinger, Amazon to Buy Video Site Twitch for $970 Million, WallStreet Journal (Sept. 27, 2017), https://www.wsj.com/articles/amazon-to-buy-video-site- twitch-for-more-than-1-billion-1408988885. 6 Twitch, https://www.twitch.tv/p/about (last visited Oct. 29, 2017). 7 StreamLabs, https://streamlabs.com/features (last visited Nov. 13, 2017). 8 StreamLabs, https://support.streamlabs.com/hc/en-us/articles/223485348-Streamlabs-PRO (last visited Nov. 13, 2017). 9 Id.

importance of the real time chatroom that accompanies a Twitch viewing window. Having his or her name show up on screen draws attention to one particular viewer and allows that person a moment of appreciation from both the streamer and other audience members. One particular facet of the StreamLabs product platform is a program called mediashare. 10

Mediashare is a program that allows viewers who donate money to a Twitch streamer to attach a YouTube link to their donation and then have the audio for the music from that link automatically play on stream for all viewers to hear. 11 This technology transmits song data from

YouTube to an individual streamer’s computer and from there to that streamer’s entire audience at the behest of a purchasing viewer. This process also leaves neither individual streamers nor

StreamLabs any control over the data that is routed through mediashare; the underlying data exists on on YouTube and cannot be modified by an individual streamer or Streamlabs. Individual streamers enabling mediashare set the rate for this service on a dollars-per-second basis. 12 A streamer has full control over the specific cost-per-second that playing a song on stream will cost; the rate is set within the mediashare program. StreamLabs offers a webpage with an in-depth guide on how to set up and run mediashare, and this page mentions nothing whatsoever about copyrighted material. 13 It seems strange that a viewer of a stream would pay money to play a song that is freely available on YouTube, but this view ignores the emotional connection between streamer and audience as well as the importance of the chatroom. Purchasing a song allows a viewer to inflict something of his or her own personality back onto the streamer; the point is not to listen to the song but rather to share the song live on stream for both a streamer and that

10 StreamLabs, https://support.streamlabs.com/hc/en-us/articles/218311447-Media-Sharing-for- Donations (last visited Nov. 13, 2017). 11 Id. 12 Id. 13 Id.

streamer’s entire audience to hear. The value is in allowing a particular viewer to draw more attention to him or herself. For the sake of clarity, for the remainder of this analysis “StreamLabs” refers to the company while “mediashare” serves as a shorthand for StreamLabs’ product. This is not entirely accurate because mediashare is only one facet of StreamLabs’ product but it is a useful shorthand to make the analysis clearer.

Because the mechanics of this were somewhat opaque at first, the author tried the system himself. The author set up a StreamLabs account and linked it to both his Twitch account and paypal then had a colleague send him a one-dollar donation. The author set the rate at five-cents- per-second prior to receiving the payment and had his colleague use the mediashare program link to play the song “Shake it Off” by Taylor Swift. The purchasing viewer in the author’s experiment clicked on the mediashare link provided by the author, paid $1 and attached a YouTube link for

“Shake it Off”. After the donation finished processing through PayPal the name of the purchasing viewer appeared on screen on the stream and the song chosen by the purchasing viewer began to play. This entire process occurred automatically, beyond any control of the author. The YouTube video itself was embedded into the author’s web browser app, invisible to his stream which was broadcasting a different window, but perfectly audible as background music.

For the purposes of this experiment, the author was just streaming a browser window displaying The New York Times website home page while electing not to display the browser window. Streaming technology allows a streamer to choose which specific window to display (in the author’s case a web browser showing the NYT home page) while not displaying others. For this experiment the author ran the browser tab showing the NYT and the browser tab containing mediashare information in separate windows and chose to show only the NYT window. A streamer could potentially display the browser window showing a mediashare video if he or she elected to,

but in most cases a streamer will be displaying a video game window while hiding all others. The video played for the twenty seconds that one dollar paid for at the 5 cents per second rate the author had set and then stopped.

The author had the option to skip the song if he wanted to but no steps were available to the author to filter out potentially copyrighted music in advance. Skipping a song after it has already been paid for does not refund the purchasing viewer and it is probably meant more as a way to protect a streamer from having racist or otherwise intolerable audio played on his or her stream by a malicious viewer. The skip function is meant as a built-in safeguard against the massive breadth of YouTube content that a purchasing viewer can draw from, not all of which is fit for live broadcasting. Additionally, no YouTube ads were played when the mediashare song began to play on stream. The lack of YouTube ads in the video seemed odd at first, until the author realized that his web browser’s ad blocker program was still running when he performed the test.

After realizing this, the author tried the same test again with the ad blocking software disabled but once again reached the same result. Somehow the mediashare software was preventing YouTube advertisements from playing.

This paper proceeds from the perspective of a holder of a valid United States copyright who has had his or her copyrighted material used for monetary gain by a Twitch streamer using

StreamLabs’ mediashare program. Specifically, this paper sets out a secondary liability theory against StreamLabs as the developers of the mediashare program and then analyzes to what extent a secondary liability suit would be the preferred option for copyright holders. In undertaking this secondary liability analysis, the paper first aalyzesn whether the use of mediashare by streamers constitutes direct infringement and if so whether the activity is protectable as fair use. Second, the paper determines whether StreamLabs is secondarily liable for this infringement, and if

StreamLabs should qualify for the Digital Millenium Copyright Act’s safe harbor provision for

Internet Service Providers. Once this analysis is fully completed, this paper makes clear that

StreamLabs could likely be found secondarily liable for publishing and promoting the mediashare program and that a secondary liability suit against StreamLabs would be the best permanent solution to the problem that mediashare represents.

II. DIRECT INFRINGEMENT

A viewer paying to share a copyrighted song on stream with a streamer and his or her audience likely constitutes a direct infringement of that copyright under the Copyright Act. The act of sharing a song on stream through mediashare is an act of distributing copies of that song to both an individual streamer and that streamer’s entire audience. There can be no secondary liability suit for copyright violations against any party unless there has been a direct act of infringement against a copyright holder by someone.14 It is therefore necessary to establish that the use of mediashare constitutes an act of direct infringement by at least one of the parties involved in order to establish a secondary liability theory against StreamLabs. Section 106 of the Copyright Act gives copyright holders exclusive rights to certain actions in connection with their copyrighted works, including the exclusive right to reproduce their work (reproduction right) and the exclusive right to perform their works publicly (performance right). 15 An act of infringement occurs any time a third party violates any of these statutorily granted exclusive rights. Additionally, any time direct infringement is at issue it is necessary to determine whether that act constitutes fair use. The following analysis discusses each of these issues and concludes that the use of mediashare is a

14 Gershwin Pub. Corp. v. Columbia Artists Mgmt., Inc, 443 F.2d 1159, 1161 (2d Cir. 1971). 15 17 U.S.C. § 106 (2002).

commercial use of copyrighted creative expression which violates both the reproduction right and public display right given to copyright holders.

a. Public Distribution Right

Section 106(3) of the Copyright Act gives copyright holders the exclusive right to “distribute copies or phonorecords of the copyrighted work to the public.” 16 Section 101 of the Act defines copies as “material objects . . . in which a work is fixed by any method now known or later developed and from which the work can be perceived, reproduced, or otherwise communicated.”

17 To establish infringement of the public distribution right, a copyright holder must show that an infringer has distributed copies of his or her copyrighted material to the public. 18 As the author’s experiment shows, mediashare takes a copy of a copyrighted work from YouTube and embeds it verbatim into a streamer’s browser window for broadcasting live on-stream. While the video itself does not necessarily get broadcast live, the underlying audio does. Verbatim reproduction of copyrighted music in this way certainly constitutes the creation of a copy, and clearly the copy can be perceived; it is meant to be heard. The act of paying money to share a song with a streamer and that streamer’s audience is an act of distributing that song with that entire audience. It is this act of distribution which constitutes a violation of the public distribution right. When viewers play a song to a broadcast audience they are distributing copies of that work in violation of a copyright owner’s right to control public distribution of his or her work.

b. Public Performance Right

16 17 U.S.C. § 106(3) (2002). 17 17 U.S.C. § 101 (2010). 18 Walt Disney Productions. v. Filmation Associates, 628 F. Supp. 871, 878 (C.D. Cal. 1986).

Section 106(4) also gives copyright holders the exclusive right “to perform the copyrighted work publicly.” 19 According to section 101 of the Copyright Act, the performance right is infringed whenever a third party “perform[s] or display[s] [the work] at a place open to the public or at any place where a substantial number of persons outside of a normal circle of a family and its social acquaintances is gathered.” 20 This formulation of the public performance right is meant to give maximum breadth to the rights of a copyright holder without impeding the ability of a small group of friends or family to play music in their own home or in normal social settings. Although the public performance right does not extend to sound recordings, a song is subject to copyrights for more than just the sound recording. 21 Songs can also be subject to copyrights for the lyrics and the musical composition; the verbatim sharing of the sound recordings through mediashare also implicates these related copyrights.

In the case of streaming, the public performance goes well beyond a normal circle of family and friends. Streams are meant to reach the largest number of viewers possible; the more viewers a streamer can broadcast to the better their odds of monetizing effectively. Just as street performers will try to occupy the busiest space they can in order to maximize the number of people who may give them money, streamers must try to maximize their number of viewers as much as possible.

There is no real upper limit to the number of people who can be gathered in a single stream, and no way for a streamer to exert any control over who enters. Unlike a normal social gathering where relatively strict control is exerted over who can be present (people tend not to let strangers into their homes). A live stream certainly qualifies as both open to the public and outside a normal

19 17 U.S.C. § 106(4) (2002). 20 17 U.S.C. § 101 21 17 U.S.C. § 114

circle of friends and family, and so distribution of a work through this medium violates the public performance right granted by the Copyright Act. 22

c. Fair Use

Section 107 of the Copyright Act states that “the fair use of a copyrighted work, including such use by reproduction in copies . . . for purposes such as criticism, [or] comment . . . is not an infringement of copyright.” 23 This section of the Act was designed from the ground up to be the first statutory codification of the longstanding judicial doctrine of fair use, and was not meant to proscribe or narrow that doctrine in any way.24 The four factors laid out by the Copyright Act to determine whether use of a copyright qualifies as fair use are the purpose and character of the use, the nature of the copyrighted work, the amount and substantiality of the portion used in relation to the copyrighted work as a whole, and the effect of the use upon the potential market for or value of the copyrighted work.25 Because fair use derives from a judge-made common law doctrine, courts have done a great deal to flesh out proper analysis of fair use. In Campbell v. Acuff-Rose 26 the Supreme Court analyzed a parody of a song that had been published and distributed publicly.

27 According to the Court, fair use analysis is done on a purposive, case-by-case basis which takes all four factors together as a whole analyzed in light of the purposes of copyright law.28 The following analysis examines each fair use factor as it applies to the use of mediashare on Twitch.

1. Purpose and Character of the Use

22 Id. 23 17 U.S.C. § 107 24 H.R. REP. No. 94-1476, at 66 (1976) (Conf. Rep.). 25 17 U.S.C. § 107 26 Campbell v. Acuff-Rose Music, Inc, 510 U.S. 569 (1994). 27 Id at 577. 28 Id. at 577-578.

The first factor of fair use analysis is “the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes.” 29 It is clear that streamers’ use of copyrighted music on their streams with mediashare is commercial use.

Mediashare relies on a payment to the streamer as the trigger for starting a copyrighted song. It works in many ways like a jukebox; there is no free use of this technology. The purpose of mediashare is to help streamers monetize their channels more effectively. Use of mediashare is explicitly and exclusively commercial, which counts against a finding of fair use.

The first factor is not based entirely on the commercial nature of use. Aside from looking at the commercial or non-profit character of use, this factor also seeks to determine to what extent use of a work is “transformative.” 30 A finding of transformative use is not determinative of a finding of fair use, but transformative use typically furthers the goal of copyright law to promote the useful arts and strongly favors a finding of fair use. 31 The purpose of use in the mediashare context may in fact be very different from the normal purposes associated with music. Music has different purposes depending on who is engaging with it. Musicians often use their music as an outlet of creative expression, while consumers of music are often passive listeners. Passive here does not mean that listeners are not engaging with music in an intensely personal way, it means only that they are not actively shaping the music they listen to.

When a purchasing viewer pays money to play music on a stream he or she is engaging with the music in an expressive way. In this context they have stepped beyond the role of passive listeners and are using the music as a way to imprint their personality on the stream and express themselves. Streamers on Twitch place a high value on establishing a personal connection with

29 17 U.S.C. § 107(1) 30 See Campbell, 510 U.S. at 579. 31 Id.

their audience because this connection will lead to retaining more viewers and having more viewers express their generosity through subscriptions or donations. When a streamer knows that a viewer has gone to the length of paying money to play a song on stream it provides an incentive to listen closely to the song and engage in a dialogue as a way of providing more value to a paying viewer. Although the purpose of playing music on stream may be more interactive and somewhat different from simply listening to music, this does not change the fact that mediashare takes music and uses it verbatim for money. The Court in Campbell found in favor of the defendant on the first factor of fair use analysis because of the parodic nature of the defendant’s song. 32 In the case of mediashare, there is no parodic expression or intensive, creative process that goes into providing commentary. Commentary that a streamer provides on music played through mediashare does nothing to change the underlying work in a way that would be transformative.

The question of whether a work is transformative does not exist in a vacuum; there are concerns other than to what extent a new work is different in substance or purpose. Furtherance of the underlying purposes of copyright law undergirds much of any court’s analysis of fair use. 33 To this end, the question should be to what extent a new purpose given to a work furthers the progress of the useful arts. In the case of mediashare, even though it is a way to increase interactivity between viewers and streamers, it is also an extraordinarily efficient monetization model of copyrighted content. There are ways to provide commentary, even interactive commentary, that do not involve the verbatim use of a song for monetary gain. This activity does little to further the useful arts, it is providing a low level of commentary but at a cost that far outweighs the value it provides. Although the Campbell Court says that the quality of expression is irrelevant to whether

32 Id. at 582. 33 Id. at 579.

that expression is fair use, the type of infringing expression at issue in Campbell is fundamentally different from what is at issue here. 34 In Campbell, there is a creative artistic twist on the expression at issue that furthers the useful arts, a quality which is utterly lacking in the case of mediashare. 35 The first factor should weigh against the use of mediashare on Twitch being fair use.

2. The Nature of the Copyrighted Work

The second statutory factor of fair use analysis is “the nature of the copyrighted work.” 36 This factor is a statutory recognition that some types of copyrightable works fall more closely within the core of copyright protection than other types. 37 This means that certain types of copyrighted works, like those that are purely creative expression, receive broader protections than others. 38 In this case the copyrights at issue are for musical works. Musical works are one of those purely creative types of expression that are given the strictest protection by the Court, as seen in

Campbell.39 The Supreme Court gave musical works the most complete protection possible under factor two as one of those types of expression closest to the core of copyright protectability. 40 The second factor leans against a finding that the use of mediashare is fair use.

3. The Amount and Substantiality of the Portion Used

The third statutory factor of fair use analysis is “the amount and substantiality of the portion used in relation to the copyrighted work as a whole.” 41 In cases of parodic expression like

34 Id. at 583. 35 Id. at 582. 36 17 U.S.C.A § 107(2) 37 See Campbell, 510 U.S. at 586. 38 Id. 39 Id. 40 Id. 41 17 U.S.C.A § 107(3)

Campbell or in other cases where a defendant has made changes to the work, courts have gone to great pains to enunciate how to determine factor three. 42 This factor also factors in whether an accused infringer has infringed against an entire work or only part of it. For example, whether an accused infringer plays a 5-second clip of a song or an entire song. In the case of mediashare, this analysis is relatively straightforward. The amount of a copyrighted work streamers use depends on how much a viewer is willing to pay for, but there is no upper limit. If a viewer can afford the price a streamer is charging they can easily pay for an entire work to be played on stream. Because mediashare copies a work verbatim it runs as afoul of the “substantiality” prong of the factor as is possible. The third factor leans against a finding that mediashare is fair use.

4. The Effect of the Use on the Value of the Copyrighted Work

The fourth statutory factor in fair use analysis is “the effect of the use upon the potential market for or value of the copyrighted work.” 43 This factor is relentlessly facts-driven and often a thorny issue at trial. A full market impact analysis on mediashare is both beyond the scope of this paper and probably impossible in this context because it is highly reliant on the individual aspects of a specific case. This analysis, though, is not necessary in this particular case.

The Supreme Court in Sony v. Universal Studios, Inc. dealt with the whether use of Sony’s new Betamax technology for time-shifting in a person’s own home was fair use.44 The Court stated that a copyright plaintiff need not show current harm from a potential infringer, only future harm and that where “the intended use is for commercial gain, that likelihood may be presumed.” 45 As this paper has already established, mediashare is only used for commercial gain. The commercial

42 See Campbell, 510 U.S. at 586-587. 43 17 U.S.C. § 107(4) 44 Sony Corp. of Am. v. Universal City Studios, Inc, 464 U.S. 417 (1984). 45 Id. at 451.

gain is built into the inner workings of the program; the trigger for prompting a song to begin playing is a monetary payment. The Supreme Court’s finding that commercial use automatically makes it likely that a copyright holder will suffer at least future harm means that the fourth factor weighs against a finding that mediashare is fair use.

d. Conclusion on Direct Infringement

It is clear that both the distribution right and right of public performance are violated by the use of copyrighted music during a Twitch broadcast. The additional context of mediashare takes that copyright violation and moves into a purely commercial context which hurts it badly and undercuts any finding of fair use. All four statutory fair use factors weigh against a finding that mediashare use is fair use. Even the purposive context-driven nature of fair use analysis can not improve mediashare’s position. 46 The use of mediashare by streamers for copyrighted music likely constitutes a direct infringement of those copyrights and is not fair use.

III. CONTRIBUTORY AND VICARIOUS INFRINGEMENT

A showing of direct infringement can allow a potential plaintiff to target whichever party has infringed his or her copyright, but it would not allow a plaintiff to sue a third party service like mediashare which merely facilitates breaches of copyright. In order to reach StreamLabs for the direct infringement of another party, a potential plaintiff must argue that StreamLabs is secondarily liable. Contributory infringement is not expressly laid out in the Copyright Act, rather, it is a doctrine that has been imported judicially from other areas of the law. 47 In order for a defendant to be contributorily liable for the infringement of another party, he or she must, “with knowledge, of the infringing activity, induce[], cause[], or materially contribute[] to the infringing activity of

46 See Campbell, 510 U.S. at 577-578. 47 See Sony 464 U.S. at 435.

another.” 48 This standard does not require a third party defendant to have actual knowledge of infringing activity, it is enough for the third party defendant to “have reason to know” infringement is taking place. 49

The area of contributory liability in copyright law, particularly in the context of technology, is governed by two seminal cases: the Sony case referenced above and Metro-Goldwyn-Mayer

Studios v. Grokster. 50 The Sony case is the first example of the Supreme Court directly laying down the standards for contributory infringement in the specific context of the copyright law. 51

Grokster qualifies the Sony decision and further elucidates the Supreme Court’s thinking on the subject. Although there are many other cases dealing with this subject, the following analysis deals only with these two seminal cases for two main reasons. First, these cases are the keystone cases in the area of contributory liability for copyrights. Second, these cases both have significant similarities with the fact pattern presented by mediashare which make them particularly helpful in determining how the law should apply.

Following the analysis of Sony and Grokster, this paper discusses the potential applicability of the Digital Millenium Copyright Act safe harbor for internet service providers to StreamLabs

a. Sony v. Universal Studios

Sony arose out of a controversy over the Sony Betamax video player’s recording function. 52

The Betamax was capable of recording live programs for its users to watch later, similar to the

VCR that would eventually manage to win out as the market standard. This capability meant that users of the Betamax could record permanent copies of copyrighted television programming to

48 Id. at 487. 49 Id. 50 Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913 (2005). 51 Id. at 435. 52 Id. at 420.

watch later at their leisure. The plaintiffs in Sony sued Sony under a theory of contributory liability, alleging that the sale of the Betamax materially contributed to the infringement of their copyrights.53

To begin, the Court runs through the history of contributory liability in copyright law and states that even though “the Copyright Act does not expressly render anyone liable for infringement committed by another,” the concept of “vicarious liability is imposed in virtually all areas of the law, and the concept of contributory infringement is merely a species of the broader problem of identifying the circumstances in which it is just to hold one individual accountable for the actions of another.” 54 With this statement the Supreme Court begins the process of importing the doctrine of contributory liability from other areas of the common law into copyright law.

The Court in Sony relies heavily on patent law doctrine in resolving the controversy, most likely because of the technological issues at stake and the similar Constitutional and policy underpinnings of both copyright and patent law. Although the copyright and patent laws are different, the Court recognizes that the interest of both areas of law in providing adequate protection to a monopoly may require courts to look beyond direct infringers to the technologies that make infringement possible. 55 The Court specifically nods to the Patent Act’s express provision for “active inducement” when discussing the importation of contributory liability for copyrights. 56 Because the Sony case deals with an item that is already widely used in commerce, and any time a claim for contributory infringement relies entirely on the sale of an item “the public interest in access to that article of commerce is necessarily implicated,” the Court turns to the

53 Id. 54 Id. at 435. 55 Id at 442. 56 Id.

patent law staple article of commerce doctrine for help resolving this case. 57 The staple article of commerce doctrine holds that unless an article of commerce is “unsuited for any commercial noninfringing use,” its maker cannot be held contributorily liable for infringement. 58 Drawing heavily upon this patent law doctrine, the court holds that “the sale of copying equipment . . . does not constitute contributory infringement” as long as it is “capable of substantial noninfringing uses.” 59

The “substantial noninfringing uses” test creates what is called the Sony safe harbor; a rule protecting parties engaged in the sale of articles of commerce from contributory liability for copyright infringement as long as their product is capable of substantial noninfringing uses. 60 The rule in Sony is a fairly relaxed one as it concerns defendants; it is generally not hard to come up with noninfringing uses of a product even if that product also has significant infringing uses. A perfect example is the Sony case itself. The Court in Sony applies this new rule to the Betamax and finds that “time-shifting,” or recording programs for the purpose of watching them at a different time than their normal air time, is a substantial non-infringing use. 61

The key question for the purposes of this analysis is whether mediashare falls into the Sony safe harbor or not. Mediashare differs from the Betamax in several key ways, many of which directly implicate the Court’s reasons for finding Sony not liable. Mediashare is much less widespread, it has fewer potential applications generally, and it likely does not have a compelling noninfringing use like the “time-shifting” use that carried so much weight in Sony.

57 Id. at 440. 58 Id. at 442. 59 Id. 60 Id. 61 Id. at 455.

It is clear by the bare fact that the Court chose to make use of the staple article of commerce doctrine that the Justices were sensitive to the impact their decision might have on people who had purchased a Betamax to use for home video recording. The staple article of commerce doctrine necessarily involves, as the Court states, “the public interest in access to [an] article of commerce.”

62 That public interest is not present in the distribution of mediashare. To begin with, mediashare does not even constitute the entirety of StreamLabs’ product; it is one part of a suite of features offered by StreamLabs. Additionally, the Betamax enjoyed much wider public support than mediashare does. In 1984, the year the Sony decision came down the Betamax sold 2.3 million units. 63 This widespread reliance of the public on the Betamax recorder is one of the key reasons for the Court carving out a safe harbor for it. StreamLabs does not publish its user numbers, but

Betamax was a public phenomenon while mediashare remains a niche technology catering to a niche crowd of people who make their living live streaming online. It is unlikely that this public reliance factor would work in mediashare’s favor.

Additionally, mediashare has few if any applications outside of those which potentially infringe. Because mediashare necessarily involves payment in its use, it has no real applications for things like teaching or sharing copyrighted content in a fair way. Without this pay wall, there may be applications for mediashare in other contexts. It is essentially just a service for sharing audio with a broader audience; that technology could be used by online teachers to share audio clips with their class, or for people in the class to broadcast an audio clip to everyone for the purpose of fostering discussion. The technology is perfectly capable of this, except that, as the author’s personal experiments showed, the technology only works when a payment is made by one

62 Id. at 441. 63 Jon Healey, Sony Finally Throws the Betamax on Scrapheap, Los Angeles Times (Nov. 10, 2017), http://articles.latimes.com/2002/aug/28/business/fi-beta28.

party to another. It would be feasible to use this technology to foster better discussion in an online classroom, it would not be feasible to require a student to pay each time he or she wanted to contribute. This monetary burden, and the fact that it is built into the technology, hurts mediashare’s chances of being protected by the Sony safe harbor.

Mediashare is unlikely to fall into the protection of the Sony safe harbor because it lacks both the public reliance theory which underpins the entire Sony decision and also because it lacks any substantial noninfringing uses. Even though the Sony standard is relatively favorable to defendants, it is unlikely that courts will look favorably upon mediashare if only because it is so strictly commercialized. The standard may be favorable, but the fact patterns in the two cases are too different. Sony had strong policy interests working in its favor, a factor which mediashare simply lacks.

b. Metro-Goldwyn-Mayer Studios v. Grokster

Metro-Goldwyn-Mayer Studios v. Grokster 64 is a case in which the Court qualifies its holding in Sony and differentiates between claims for contributory liability and vicarious liability. 65 The defendant in Grokster was a peer-to-peer file sharing service that arose after the collapse of

Napster. 66 The technology at issue allowed Grokster users to share files between one another, with the Grokster website acting as a sort of catalogue allowing users to find the specific files they wanted to download. 67 Grokster intentionally advertised and distributed its software to be used for the express purpose of sharing files freely. 68 Discovery during the trial showed that the primary purpose of Grokster’s technology was to distribute copyrighted works and that nearly 90% of the

64 Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913, (2005). 65 Id at 936. 66 Id at 919. 67 Id. at 920. 68 Id.

files available on Grokster’s database were copyrighted works. 69 Additionally, Grokster did not receive direct payments from its users; the Grokster business model relied on growing its user base in order to increase the amount of revenue generated by advertisements. 70

Taking this fact pattern, the Court qualified its Sony holding and distinguishes between contributory liability and vicarious liability. 71 The Court states that the Sony rule applies only to cases where culpable intent can only be imputed from the design of a product and not from any other factors. 72 The Court in Grokster states that “where evidence goes beyond a product’s characteristics or the knowledge that it may be put to infringing uses, and shows statements or actions directed to promoting infringement, Sony’s staple-article rule does not preclude liability.”

73 Put more simply, if there is evidence outside of a product’s design that shows an intent to promote or induce infringement, then the Sony safe harbor is inapplicable. This distinction is the fundamental difference between contributory liability and vicarious liability. Contributory liability applies in cases where a technological development contributes to infringement of copyrights while vicarious liability applies when an entity is actively inducing infringement of copyright.

The Court takes the active inducement doctrine from patent law and applies it to copyright, holding that “one who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties.” 74 The Court points to several factors which can lead to a finding of this intent to induce infringement such as advertising the infringing

69 Id. at 922. 70 Id. at 926. 71 Id at 936. 72 Id. at 934. 73 Id. at 935. 74 Id. at 936-937.

capability of a product, instructing users on how to accomplish infringement with a product, failure to develop or attempt to develop filtering software to prevent copyright infringement, and the exact method of monetizing a potentially infringing product. 75 The Court at no point indicates that these are the only factors that can point to an intent to induce infringement, and the analysis of whether or not a defendant has clearly expressed, through affirmative steps, an intent to induce infringement is holistic and factually-based.

Applying this test and these factors to Grokster, the Court finds that “[t]he unlawful objective

[was] unmistakable.” 76 Grokster directly advertised itself as a replacement to Napster, a known copyright infringer, and these advertisements served as affirmative steps towards encouraging copyright infringement. 77 Additionally, Grokster’s monetization model relied upon growing its user base as much as possible in order to maximize their ad revenue; the Court takes this in tandem with the evidence that 90% of Grokster’s library was copyrighted content to show that Grokster’s business model relied upon inducing users to infringe copyrights. 78 Finally, the Court notes that

Grokster at no point took any steps to filter or prevent copyrighted music and video from being shared using its service. 79 This trifecta of offenses was enough for the Court to state that Grokster’s intent to induce infringement was “unmistakable.” 80

The Grokster test and Grokster factors are a significant problem for StreamLabs’ mediashare service. StreamLabs’ product and conduct both fall almost directly within the factors enunciated by the Court in Grokster. The most significant affirmative step taken by StreamLabs is the tutorial

75 Id. at 938-940. 76 Id. at 940. 77 Id. at 938. 78 Id. at 939-940. 79 Id. at 939. 80 Id.

posted directly on their website teaching users how to set-up and run the mediashare technology.

81 This webpage features both a freely accessible video and a printed guide with photos showing how to work the mediashare technology. Using this guide, the author was personally able to get mediashare working in under twenty minutes. Although the Court in Grokster focuses primarily on advertisements, it mentions “instructing how to engage in an infringing use,” in the exact same sentence which implies a connection between the two. 82

This is not like the innocent purposes such as “technical support or product updates,” that the

Court exempts in Grokster, this is much more an instruction on how to use the technology for infringing purposes. 83 This tutorial page does not arise as a way to fix a bug, or as an answer to a common problem users are having; it is a set-up guide for technology whose use is primarily to infringe. Contributing even further to this finding is the fact that, organizationally, the guide to setting up mediashare is listed under the “guides” section of StreamLabs’ website rather than the

“troubleshooting” section. The similarities with Grokster extend even further. The Court in

Grokster points to the fact that the overwhelming bulk of files available through Grokster’s service were copyrighted and connects this to Grokster’s advertisements to show that the advertisements were not in fact innocent but were instead evidence of an intent to induce infringement. 84

This analysis of mediashare lacks the wealth of record evidence that enlightened the Court’s opinion in Grokster, but it is safe to say that an enormous amount of the musical content on

YouTube is copyrighted. Mediashare does not use its own library, it draws directly from YouTube for access to copyrighted content, and just as the plaintiffs in Grokster conducted a survey to show

81 StreamLabs, https://support.streamlabs.com/hc/en-us/articles/218311447-Media-Sharing-for- Donations (last visited Nov. 13, 2017). 82 See Grokster 545 U.S. at 936. 83 Id. at 937. 84 Id. at 940.

that 90% of the files in Grokster’s library were copyrighted content, a similar survey could serve the same purpose in litigation involving mediashare. 85

Not only has StreamLabs taken affirmative steps to educate users about how to use the mediashare program to infringe copyrights, but it has also failed to take steps to prevent copyrighted content from being shared using its service. The Court in Grokster lists this as one of the factors which can serve as evidence of intent to induce infringement. 86 The Court does not even require that a defendant successfully develop tools to prevent the distribution of copyrighted content, only that a defendant attempt to develop these tools. 87 Although it is possible that

StreamLabs did attempt to develop these tools, nothing in any of its public statements or records shows this. These tools are hardly novel; they are in widespread use with one of the primary services StreamLabs works in conjunction with. Twitch uses an automated algorithm to identify and mute copyrighted music in the videos produced by broadcasters on its site. 88 StreamLabs could use a similar algorithm to identify and prevent copyrighted music in the mediashare service.

Alternatively, StreamLabs could use the YouTube copyright strike system to filter out any content marked as copyrighted. StreamLabs is not required to adopt any specific method for filtering out copyrighted content; these examples merely serve to show that there are methods already commonly available which further serves to make StreamLabs’ failure to attempt to develop any filtration system more egregious.

85 Id. at 922. 86 Id. at 939. 87 Id. 88 Twitch, https://help.twitch.tv/customer/portal/articles/1824967-twitch-music-faq (last visited Oct. 27, 2017).

Finally, the Court in Grokster pays attention to Grokster’s monetization scheme which relied on growing their user base to the largest extent possible in order to drive ad revenue. 89 The Court then connected this to the clear desire, evinced by the overwhelming amount of copyrighted content in Grokster’s library, of Grokster users to share copyrighted content to show that Grokster had created for itself a monetary incentive to induce infringement. 90 As discussed above,

StreamLabs’ “library” is similarly filled with copyrighted content, and StreamLabs monetizes on a similar model to Grokster. StreamLabs monetizes entirely from sales of their “Pro” subscription service which offers a wider variety of tools for streamers to use. 91 The entire base of support for

StreamLabs’ software suite is streamers seeking to improve and ultimately monetize the popularity of their broadcast. This means that StreamLabs only makes money if streamers consider it useful enough to purchase the “Pro” subscription. The mediashare program is undoubtedly useful for any streamer wanting to monetize his or her broadcast; the program allows a streamer to collect money directly from the audience in exchange for playing a song and therefore to see a very direct benefit.

This direct benefit is likely to make streamers much more likely to see the software as beneficial enough to purchase the “Pro” subscription. It follows that StreamLabs has created a monetary incentive to induce infringement amongst users of its technology, just like Grokster did.

StreamLabs’ mediashare technology fits squarely within the Grokster factors almost as comfortably as Grokster itself, and the Court found that the weight of evidence against Grokster was enough to make the intent to induce infringement “unmistakable.” 92 That is extremely powerful language for the Court to use, and it does not do StreamLabs any favors. If the evidence

89 See Grokster 545 U.S. at 940. 90 Id. 91 StreamLabs, https://support.streamlabs.com/hc/en-us/articles/223485348-Streamlabs-PRO (last visited Nov. 13, 2017). 92 See Grokster 545 U.S. at 940.

led to such a strong conclusion in Grokster, it must lead to a similarly strong conclusion in the case of StreamLabs because of the many significant similarities shared by the two entities. Such striking similarities with the facts in Grokster are extraordinarily damning for StreamLabs’ case;

Grokster is an many ways the textbook example of contributory infringement and similarities with the facts in that case will likely prove fatal to any defense put up by StreamLabs.

c. Digital Millenium Copyright Act

Passed in 1998, the Digital Millenium Copyright Act (DMCA) 93 was an attempt to modernize the copyright law in response to technological changes. 94 The DMCA, among other things, carved out an exemption from being held liable for contributory infringement for internet “service providers.” 95 The statute defines a “service provider” as “an entity offering the transmission, routing, or providing of connections for digital online communications, between or among points specified by a user, of material of the user’s choosing, without modification to the content of the material.” 96 The DMCA then exempts these service providers from liability for copyright infringement for “transmitting, routing, or providing connections for, material through a system or network controlled or operated by or for the service provider,” as long as several conditions are met. 97 These conditions, in relevant part, require that the transfer of information be initiated by a party other than the service provider; that the transmission process be automated and not involve selection of material by the service provider; that the service provider does not choose the recipient of any of the copyrighted material passing through its network; and that no copy of the material is

93 Digital Millennium Copyright Act, Pub. L. No. 105-304, 112 Stat. 2860 (1998) (amending title 17 of U.S.C.). 94 Robert J. Delchin, Musical Copyright Law: Past, Present and Future of Online Music Distribution, 22 Cardozo Arts & Ent. L.J. 343, 355 (2004) (Discussing purposes of DMCA). 95 U.S.C. § 512 (2010). 96 U.S.C. § 512(k)(1)(A) (2010). 97 U.S.C. § 512(a) (2010).

made on the service provider’s system or network for any longer than is reasonably necessary to carry out the transmission. 98 Put simply, the DMCA is meant to shield those entities which merely provide a conduit for users and which do not themselves post or modify copyrighted content.

In addition to meeting the above requirements, a service provider must also establish a reasonable policy which prevents repeat offenders of copyright law from continuing to use the service. 99 Not only must a service provider create and implement this repeat infringer policy, but it must also inform users of the service about the existence and tenets of the repeat infringer policy.

100 These requirements are protections for the interests of copyright holders in the face of what would be breathtakingly broad exemption from liability for service providers under the bare requirements of § 512(a).

The first question is whether StreamLabs qualifies as a service provider under the statutory definition. The first requirement, that a service provider be an entity that provides for the routing or transmission of data between two specified points is certainly met by StreamLabs.

101StreamLabs’ software transmits data from YouTube to an individual streamer’s computer and thence to viewers. This prong of the definition of service provider is broad and encompasses the activities being performed by StreamLabs.

The second prong of the service provider definition requires that the service provider not control the start or end point of information transmitted through their system; the beginning and end points must be controlled by the users. 102 In the case of mediashare, users have total control over the beginning and end points for the data. Purchasing viewers will choose which YouTube

98 U.S.C. § 512(a) 99 17 U.S.C. § 512(i) (2010). 100 Id. 101 17 U.S.C. § 512(k)(1)(A) 102 Id.

link to use and then choose which stream to route that information to. This process also speaks to the third prong of the definition of a service provider which requires that users exercise total control of the content that passes through the service provider’s system.103 Purchasing viewers, in this case, choose whichever song they want from YouTube with no input from StreamLabs.

StreamLabs plays no role in this process and therefore meets the second and third prongs of the definition for service providers.

The final prong requires that content not be modified in any way while it is being transmitted from one point to another.104 There is no way to modify the YouTube videos that mediashare transmits. Neither the viewers nor StreamLabs can modify the content that passes through the mediashare system because neither of those parties has any control over the underlying content, which is controlled by YouTube and YouTube’s users. This satisfies the fourth and final prong of the statutory definition. StreamLabs does indeed meet the requirements of a service provider under the Digital Millenium Copyright Act.

Even though StreamLabs is a service provider under the DMCA, it must also meet the requirements for safe harbor laid out in § 512(a) in order to qualify for safe harbor. The first three conditions under § 512(a) are that the transfer of information be initiated by a party other than the service provider, that the transmission process be automated and not involve selection of material by the service provider, and that the service provider does not choose the recipient of any material passing through its network. 105 These all mirror the requirements for being an internet service provider discussed above. StreamLabs does not initiate the transfer of information, select the material for transfer, or choose the recipient of that information; purchasing viewers serve all of

103 Id. 104 Id. 105 17 U.S.C. § 512(a)

those functions. The mediashare process is entirely automated and requires no action on the part of StreamLabs to function. All of these first three requirements for safe harbor under § 512(a) are met by StreamLabs.

The final requirement for safe harbor under § 512(a) is that no copy of copyrighted material is made on the service provider’s network for any longer than is reasonably necessary. 106 Mediashare does create a copy of whichever YouTube video is transmitted through it because it embeds that video into a streamer’s web browser. The issue is therefore whether this copy lasts longer than is reasonably necessary for StreamLabs to accomplish its goal. Key to this point is recognizing hat mediashare directly links the amount of time a copy will last to the amount of money paid by a purchasing viewer. This indicates that the copy lasts exactly as long as reasonably necessary and no longer. The author’s own experiments with the technology show that the embedded video disappears from the web browser as soon as the paid for time frame ends. Whether or not any copy remains anywhere on StreamLabs’ server is not something the author could determine, but the length of time the copy lasts on a streamer’s browser is completely dictated by the amount of money a purchasing viewer pays and the amount of money a streamer chooses to charge per second of play time. This fact shows that the copy of copyrighted material created by mediashare does not last longer than reasonably necessary. StreamLabs likely meets all of the requirements for safe harbor under § 512(a).

There is, however, one more requirement that StreamLabs must meet in order to receive safe harbor protection under the DMCA: the repeat infringer policy requirement under § 512(i). The

DMCA requires that any party seeking safe harbor protections must implement a policy to prevent

106 Id.

repeat infringers of copyright law from having continued access to its system. 107 This requirement is one that StreamLabs falls short of. Nowhere in any of StreamLabs’ publicized materials was there any repeat infringer policy advertised. Even if such a policy is in place internally, the DMCA requires that a service provider make the repeat infringer policy known to its users, and StreamLabs has made no effort to do this. 108 Even the author’s attempt to reach out to StreamLabs for comment on this issue went without a response. Having met all of the other requirements for safe harbor protection under the DMCA, StreamLabs has failed in the requirement to institute an effective repeat infringer policy and therefore does not qualify for protection from liability under the

DMCA.

IV. OPTIONS FOR POTENTIAL PLAINTIFFS

The unique nature of the mediashare software and its functionality create a wealth of options for aggrieved parties seeking redress for the violation of their copyrights. These options run the gamut from cheap to expensive, from simple to complex, and from temporary to permanent. This analysis lays out the various options available to parties whose copyrights have been violated using mediashare and point out the various benefits and drawbacks of each option. The viability and desirability of each of these options will depend primarily on the position of the copyright holder.

After describing the various options this analysis presents copyright holders as falling on a spectrum of resources, their position on which will be the predominant factor in determining which form of redress best suits their needs. More resource-rich copyright holders will see more benefit from more complex, more expensive, and more permanent solutions while more resource-poor copyright holders will be better off seeking cheaper, simpler, and more temporary solutions.

107 17 U.S.C. § 512(i) 108 Id.

a. Four Available Options

Copyright holders seeking to protect their rights against infringement through the use of mediashare have four basic options. Presented in ascending order of expense and complexity these options are (1) to use YouTube’s DMCA notice and takedown system to remove their copyrighted material from YouTube; (2) to file a suit against an infringing purchasing viewer; (3) to file a suit against an infringing streamer; and (4) to file a suit against StreamLabs. Each of these options has various benefits, costs, and risks associated with them. Each option also addresses the underlying mediashare issue with varying degrees of permanence. This analysis discusses each option individually.

The first option, to use YouTube’s notice and takedown policy to remove the copyrighted content from YouTube, is definitely the cheapest and easiest of the options. Because mediashare operates using YouTube links, removing a video from YouTube effectively removes it from the reach of mediashare entirely. The entire process can be done effectively in minutes, and YouTube even has an automated web form which requires minimal effort to flag a video for copyright infringement. 109 This process may not even require a lawyer, although submitting a copyright complaint against a video does require a good faith consideration of whether that video constitutes fair use which goes somewhat beyond the knowledge base of an ordinary copyright holder. 110

Balancing out the ease and low expense of using YouTube’s takedown procedure to remove copyrighted content is the fact that this is, at best, a highly temporary solution. YouTube’s permissive policy towards user uploads ensures that a new video can very quickly replace one that is removed using the takedown procedure. This interaction is like the hydra of copyright law; every

109 YouTube, https://www.youtube.com/copyright_complaint_form (last visited Nov. 3, 2017). 110 Lenz v. Universal Music Corp, 815 F.3d 1145, 1153 (9th Cir. 2015).

time a copyright holder removes one video three more can be uploaded in its place. Because of this dynamic the easy process of removing one video must be multiplied ad nauseum to represent the true difficulty of using YouTube’s copyright takedown policy as a way to prevent mediashare from accessing copyrighted material. Additionally, YouTube videos in the context of YouTube viewership may have non-infringing uses that do not exist in the context of mediashare. A fair use analysis of a YouTube video is much different from that same fair use analysis in the context of mediashare if only because mediashare is so commercial in nature. Copyright holders have to take into account whether a YouTube video is fair use before sending a takedown request under the

DMCA. 111 Even if the the use of a YouTube video through mediashare would not constitute fair use, the option of removing that video with a takedown request under the DMCA may not be available if that video constitutes fair use in the context of YouTube.

The second option for copyright holders is to file an infringement suit against purchasing viewers. This entails all the difficulty and expense of a lawsuit, but also represents the easiest target of a lawsuit. Individual purchasing viewers commit a direct act of copyright infringement and so do not require the complex legal analysis of contributory liability. Individual viewers are unlikely to be particularly sophisticated in their legal defense and equally unlikely to be able to afford the very best counsel to provide that sophistication for them. Unlike using takedown notices on

YouTube, this also provides the promise of some kind of monetary relief for a victorious copyright holder but that relief is almost certain to be fairly limited. This option provides somewhat more permanent relief from infringement through mediashare than copyright takedowns because it prevents at least one viewer from committing an act of infringement again. It may also prevent others from using mediashare if it becomes clear that they may suffer reprisals for using the

111 Id.

technology. These potential upsides are conjectural but have the same theoretical underpinning as prosecuting individuals for acts of internet piracy; the goal is to stop the behavior by scaring individuals away from it.

The downside of targeting a purchasing viewer in a suit for copyright infringement is, to begin with, the difficulty in tracking down a specific individual to sue. It can certainly be done, mediashare payments are electronic and can be tracked, but it is much more difficult than suing a well defined and public person or entity. Secondly, individuals are unlikely to have very much in the way of monetary resources for a copyright holder to receive at the end of the suit. Any lawsuit is going to involve significant expenses for the plaintiff and if the defendant lacks the resources to make that investment worthwhile then there is very little reason to pursue him or her in court. The assumption that a purchasing viewer has very little money may not be true in every circumstance and a wealthy purchasing viewer as the defendant could change this equation entirely. A wealthy defendant does nothing to make the solution a more permanent one, unless a larger damage reward better serves the purpose of scaring others away from using mediashare, but it does help make the plaintiff’s investment worthwhile.

The third option is to bring a suit against an individual streamer. The entire analysis of secondary liability applied to StreamLabs above could be applied to streamers with few alterations.

This solution offers a significantly better chance of being a permanent solution than a suit against an individual purchasing viewer alongside many of the same advantages. Streamers are just as unlikely to be sophisticated in their legal defense as purchasing viewers and may often offer deeper pockets to draw from in a damage reward More significantly, while a suit against a purchasing viewer will prevent one person from participating in mediashare in the future, a suit against a streamer will prevent that streamer’s entire audience from doing so. Streamers are a much smaller

community and their well being is dependent on the success of their stream; it is much more likely that streamers will be scared away from using mediashare after a lawsuit than it is that purchasing viewers will. Streamers are also the main vehicle by which StreamLabs makes its money; if streamers begin to be targeted by lawsuits for using StreamLabs’ product it may make them less willing to use it. This will in turn affect StreamLabs’ only revenue stream and may cause it to withdraw mediashare as a service entirely.

The primary downside of suing a streamer is that the suit will have to proceed based on a secondary liability theory which is an extremely complex and expensive theory to prove at a trial.

As the analysis above shows, it involves a number of intermingled statutes and cases, many of which do not involve clean bright line rules that could make the discovery and arguments easier.

A plaintiff targeting a streamer under a secondary liability theory could target StreamLabs under that same theory, and a suit against StreamLabs is likely to yield a much more significant reward.

Although a streamer is less likely to put up a highly sophisticated legal defense than StreamLabs is, it still remains difficult to show secondary liability for copyright infringement. The very nature of the analysis for secondary liability, that highly fact-driven and holistic approach, makes discovery costs alone skyrocket. The question, as always, is whether this investment is worthwhile.

The advantages are potentially great but also uncertain.

Finally, the fourth option for copyright holders is the one discussed by all of the foregoing analysis: bringing a suit for copyright infringement against StreamLabs itself. This approach has all the same advantages as bringing suit against a streamer but with far more certainty. Where a suit against a streamer may have an effect on StreamLabs’ conduct, a suit against StreamLabs certainly will. Where targeting a streamer could prevent an entire audience from engaging with mediashare, a suit against StreamLabs could shut the program down entirely. StreamLabs is a

successful company which has raised over $17 million in venture capital funding. 112 Unlike purchasing viewers and streamers, StreamLabs’ ability to pay a significant monetary reward is certain rather than conjectural. As a target for suit StreamLabs offers the most permanent solution of any of these options.

A suit against StreamLabs would also be the most expensive and complex option. Just as

StreamLabs’ ability to pay is certain, its ability to put up a sophisticated and dogged legal defense is certain. There is a significant amount of venture capital funding tied up in the StreamLabs venture, and this means that StreamLabs will have significant sources of revenue to draw on for its legal defense. While purchasing viewers and streamers could likely not afford the best legal counsel to defend them, StreamLabs can. All the complexity of proving a secondary liability theory will be contested at every step by capable legal professionals. As a target StreamLabs is the consummate example of high risk, high reward. Adding to this problem is the fact that StreamLabs could, with very little effort on its behalf, solve many of the problems which plague its defense.

The institution of a repeat infringer policy for copyright infringement could be enough to place them within the protection of the DMCA safe harbor. Removing the guide on using mediashare and instituting some sort of systemic filter for copyrighted content would remove enough of the similarities to Grokster to potentially shield StreamLabs from a secondary liability theory’s applicability entirely. Therefore, a suit against StreamLabs is not only a matter of expense and complexity but also one of timing before these measures are put in place.

Each of these options has advantages and disadvantages, but the extent to which any of them is a good idea for a given copyright holder ] depends on that copyright holder’s circumstances.

Only one of these options is simple or cheap, and of the more complex and expensive options the

112 PitchBook, https://pitchbook.com/profiles/company/103637-80 (last visited Oct. 30, 2017).

complexity and difficulty vary wildly. The final part of this analysis will attempt to impose a structure on these characteristics of an individual copyright holder.

b. Spectrum of Plaintiff Resources and the Impact on Legal Options

Every copyright holder is unique. Copyrights are given in response to artistic or creative expression, and this means that a copyright can arise amongst people with access to an enormous variety of resources. Resources in this context does not only mean monetary resources. Resource is a shorthand for all of those things which dictate a copyright holder’s ability to interact with the legal system in a meaningful way: money, time, sophistication, access to legal backing, renown, and others too numerous to list. Every copyright holder falls somewhere on the spectrum of access to resources from the unknown starving artist at the low end to immensely famous musical superstars at the high end. Where a copyright holder falls on this spectrum will largely determine which of the four options laid out above best suits his or her needs.

At the outset, there is one key assumption needed for this approach to work. This assumption is that every copyright holder would, if able, seek a permanent end to the infringement caused by mediashare. This may not be true in reality for a variety of reason; every copyright holder is going to engage with the world in accordance with personal beliefs and values and no broad spectrum can encompass those. For some less well known copyright holders the exposure gained through mediashare may be more valuable than any of the harms it causes. As stated above, every copyright holder is unique in more than situation, and so this broad assumption is needed to put some boundaries on the human element in all of this.

The further a copyright holder falls to the resource-poor end of the spectrum, the more appealing the first option is. This option requires virtually no monetary investment, little time investment, and little sophistication. Copyright holders on this end of the spectrum are forced into

the ignoble situation of being essentially unable to pursue any of the more complex options available because of the real world expenses those would involve. Time is a major constraint on this end of the spectrum as well. A copyright holder with little access to resources is going to be spending time in pursuit of those resources. A protracted lawsuit is an enormous drain on time that could be better spent on more enriching ventures. Access to the option to simply remove copyrighted content from YouTube with relative ease is a good safety valve on a problem that, for copyright holders with little access to resources, may otherwise be unsolvable.

Copyright holders with more access to money or access to counsel through a talent agent, record label, or some other vehicle occupy a middle-ground on the spectrum. Copyright holders so situated may find that a suit for direct infringement against a purchasing viewer is the best option. A suit against a streamer involves almost the same expenditure of resources as a suit against

StreamLabs and so is almost never going to be the ideal option over suing StreamLabs itself.

Purchasing viewers, however, involve a significantly less complex legal theory to prove and are therefore demonstrably cheaper to bring a suit against than streamers or StreamLabs. This path is most likely to appeal to a copyright holder who feels aggrieved by infringement of their rights through mediashare and who wants to make it clear that he or she will aggressively defend those rights. Rather than scaring off purchasing viewers from using mediashare entirely, this path may instead demonstrate that one specific copyright holder is off-limits because bad things can and will happen to a purchasing viewer who infringes against that person.

The highest end of the spectrum of resources is where the analysis becomes the most interesting because at this furthest edge the interests of the music industry as a whole may be implicated. It is at the highest end of the spectrum that an underappreciated aspect of resources becomes paramount: renown. A highly renowned artist acts as a sort of icon for the music industry at large.

If a superstar artist gets involved in a lawsuit against StreamLabs over the use of mediashare it is likely that the music industry as a whole will involve itself as well. This adds even more resources to an artist that is already flush with them. Additionally, the involvement of industry groups allows the artist to continue spending his or her time in pursuit of artistic achievement and leave the thorny legal issues to paid representatives. Not only can resource-rich artists afford the finest counsel and bear the extraordinary costs of pursuing complex secondary liability litigation against a well- funded opponent, they can also afford to have others pursue that goal for them. This means that the monetary and renown resources can take the strain off the time resource that so constrains artists falling on the more resource poor end of the spectrum.

Because of the immense complexity and cost associated with a suit under a secondary liability theory it is only those copyright holders falling at the most resource-rich end of the spectrum that can pursue this legal theory. This also means that there are few, if any, occasions where the ideal target for litigation is an individual streamer. Streamers involve all the costs of pursuing complex secondary liability theories without any of the guaranteed rewards for that investment. For any copyright holder equipped to take on a secondary liability suit, the potential rewards are simply too small in comparison to the much richer target of StreamLabs.

This theory is well supported by the circumstances in other famous secondary liability cases.

The two most famous are Sony and Grokster, both of which had to be pursued all the way to the level of the Supreme Court. It is not a coincidence that production studios, among the wealthiest corporate groups commonly involved in copyright disputes, were the plaintiffs in both of those cases. 113 114 It requires a level of resources that most individuals will never achieve to win a

113 Sony Corp. of Am. v. Universal City Studios, Inc, 464 U.S. 417 (1984). 114 Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd, 545 U.S. 913 (2005).

secondary liability suit; the legal theories involved are extraordinarily complex and pitfalls await plaintiffs at every step. Additionally, those copyright holders which have the most access to resources are also those with the greatest monetary interest in defending those rights. Copyright holders at the resource-rich end of the spectrum are those which have enjoyed the greatest success and therefore those with the greatest vested interest in protecting their copyrights aggressively.

This interest extends beyond simply policing individual acts of infringement and targeting underlying sources of infringement. This is another reason that resource-rich copyright holders are far more likely to see a benefit from a secondary liability suit against StreamLabs despite the costs involved.

The spectrum of resources is a useful shorthand for determining where a copyright holder’s best interests lie and which options are feasible for individual copyright holders to pursue.

Ultimately, this issue of resources extends to the legal system in general; it is an unfortunate reality that the courts are a pay-to-play system and the greater access to resources a party has, the greater its chances of success. In the context of StreamLabs’ mediashare technology, it would take a copyright holder with extraordinary wealth in resources to succeed in a suit, but the potential for success is certainly there for any party who can reach for it.

V. CONCLUSION

Copyright holders have always sought to enforce their monopoly in the face of emerging technology, and the law has traditionally struggled to provide adequate options to copyright holders engaged in this pursuit. The case of StreamLabs’ mediashare is one in which the law does offer several viable options for copyright holders. StreamLabs’ mediashare is a textbook case for applying secondary liability theory. Mediashare’s remarkable similarities to the Grokster case make it abundantly clear that the mediashare program is wide open to a lawsuit under a vicarious

liability analysis. For copyright holders unable or unwilling to undertake that complex lawsuit, the law offers multiple other options to prevent the ongoing infringement of their statutory rights.

Although copyright law traditionally struggles to keep up with the rapid pace of technological advancement, mediashare is one issue which the copyright laws as they exist handle brilliantly.