Vanderbilt Journal of Entertainment & Technology Law

Volume 2 Issue 2 Spring 2000 Article 2

2000

Fighting the Phantom Menace: The Motion Picture Industry's Struggle to Protect Itself Against Digital Piracy

S. E. Oross

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Part of the Intellectual Property Law Commons

Recommended Citation S. E. Oross, Fighting the Phantom Menace: The Motion Picture Industry's Struggle to Protect Itself Against Digital Piracy, 2 Vanderbilt Journal of Entertainment and Technology Law 149 (2020) Available at: https://scholarship.law.vanderbilt.edu/jetlaw/vol2/iss2/2

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tPndustry's struggle to protect iself - gin-st digital piracy

fade in on a typical college dorm room. A

student sits in front of a desktop PC, mouse in

hand, while two others watch a nearby TV

from the comfort of the couch. A few simple

clicks later, the student takes a place on the

couch. The TV is turned off, the lights are

dimmed, and all eyes turn to the computer

monitor. As the unmistakable orchestral sig-

nature of John Williams fills the room, the

words Star Wars, Episode I: The Phantom

Menace scroll up from the bottom of the screen.

For the next two hours or so, the students

enjoy a free private screening of a blockbuster

movie that everyone else has paid eight dollars

to see at a theater.

This seemingly innocuous scene is the

model of film piracy in the 21st century, and it

by s.e. oross has the Motion Picture Association of America (MPAA) scrambling for answers. Digital technology, com- average of $2.5 billion each year to worldwide piracy.5 bined with the influence of the Internet, represents an Despite the damage caused by traditional methods of increasingly dangerous threat to the protection of copy- piracy, the industry has proven itself at least somewhat 6 rights in the global marketplace. Industries like capable of fighting back. With leads given by tipsters Hollywood with business models based primarily on sell- and the help of the FBI, the MPAA has sent powerful ing and/or licensing intellectual property have much to messages to would-be video pirates. In the early 1990s, lose if that protection falters. raids on suspected pirates seized more than one million Jack Valenti, the president of the MPAA, knows this illicit video copies worth a total of over $60 million. 7 In all too well. In recent testimony before the House 1996, a task force dubbed "Operation Copy Cat" infiltrat- Subcommittee on Telecommunications, Trade and ed and ended what was the largest video piracy ring in Consumer Protection of the Commerce Committee, he United States history.8 Originating in New York, the described how the growing availability of certain digital pirate operation used 17 locations throughout the city to technology could turn online piracy into the bane of the produce and sell nearly 100,000 pirated films per week.9 motion picture industry.1 Noting that Internet pirates In the course of the sting, law enforcement officials have already succeeded in bringing movies such as Eyes arrested 36 individuals, seized over 800 VCRs, and con- Wide Shut, Toy Story II, and Star Wars, Episode I: The fiscated nearly 80,000 bootleg videos. 10 While such Phantom Menace to viewers-in some cases before they efforts represent merely the tip of the billion-dollar ice- were even released in theaters-Valenti commented, berg, similar operations also resulting in arrests and "Currently our films are protected by two factors-the seizures offer hope in the traditional anti-piracy fight. amount of time needed to download a full-length motion Digital piracy, however, represents a new species of picture and the lack of unprotected digital copies of our threat, one that began years ago with a solution to a dif- works."2 Nevertheless, he advocated stronger measures ferent problem. As anyone who's made the switch from for enforcing copyrights in the digital age, adding, "One vinyl or cassettes to CDs knows, the debut of digital of the nation's greatest trade assets is at risk. If you can- recording technology meant significantly better quality 3 not protect what you own, then you own nothing." and reproducibility than was possible with conventional This Note will examine in detail the reasons behind analog techniques. Audio and video captured in a digital Valenti's warning, beginning with a look at the technolo- format could also easily be stored, modified, and played gy itself and its initial effects on the industry. Next, the back using common personal computer equipment. The analysis will turn to the legal avenues currently avail- trouble with digital recording, whether audio or video, able for fighting the new forms of piracy, discussing the was that it took up space-a lot of space. Just a few sec- inadequacies of each, particularly in the realm of enforce- onds of CD-quality sound, for example, required roughly ment. Finally, it will draw from some early industry respons- the same amount of space as this entire document. Add es to the online threat in an effort to find possible alternative a bit of video, and the sizes quickly became unmanage- means of countering, or at least subduing, the rising threat of able for the average user, especially if the data had to be the "phantom menace" known as digital piracy. downloaded from a remote server located across the globe. High-volume storage media and faster connection the technologyof piracy speeds alleviated some of the problem, but they couldn't reconcile the increases in quality with the attendant Film piracy itself is nothing new to the motion picture increases in file size. industry. For years, the MPAA and its international That answer came in 1988 when, in response to the counterpart, the Motion Picture Association (MPA), have growing need for manageable digital audio-visual stan- coordinated efforts with law enforcement agencies in the dards, the International Organization for United States and abroad to stop the flow of bootleg films Standardization 1l formed a group known as the Moving 4 that accompanied the rise of video recording devices. Picture Coding Experts Group (MPEG). 12 Its mandate From so-called "back-to-back" copying, whereby video was to create a universal means of delivering high-qual- distributors make several illicit copies from a single ity digital audio and video in as small a package as pos- authorized original, to more extensive black market sible. The 1992 solution, known as MPEG-1, used a sim- enterprises, Hollywood studios estimate they lose an ple strategy to compress the size of the file without com- promising the quality of the audio-visual data contained with successive generations of ordinary VHS videotapes.18 therein. The trick was just that-a trick. Essentially, But that was only the beginning. The second phase in MPEG compression standards perform a trompe l'beil of the expanding frontier of digital piracy grew out of the sorts whereby redundant information is simply discarded explosion of the Internet in the mid '90s. Building on the without the user's ever knowing. For instance, since MPEG foundation was Microsoft's Media Player, a free video often consists of live action in front of a static back- program capable of playing all varieties of compressed drop, MPEG-1 video records only the changes from one audio-video files. Then came the flood of "codecs," new frame to the next, rather than the full content of each compression and decompression utilities that delivered frame. The result, however, is dramatic: digital MPEG-1 files of greater length and quality in even audio/video files that can be reduced to as little as 1/50 of smaller packages. The last step-one that even now has their original size. yet to be fully realized-is the advent and increased The implications for some copyright holders quickly availability of broadband connections, such as cable and proved to be just as dramatic. Layer III, a component of digital subscriber lines (DSL), that give users the capa- MPEG-1 developed to accommodate audio portions of the bility to download hundreds of megabytes in a matter of MPEG standard, was the first shot fired in a minor revo- minutes. Suddenly, the physical exchange of pirated lution against the recording industry. Offering CD-qual- ity sound in relatively small files, 1 3 MPEG-1, Layer III files, otherwise known as MP3s, opened the doors for an vi e ntl or fils are proece ob unprecedented rush of unauthorized copying of popular music. The Recording Industry Association of America (RIAA) watched in horror as entire CDs traded hands again and again via the Internet-completely free of charge. To this day, MP3s remain a serious obstacle to p it read t l k o n el the traditional business model employed by the music industry, which continues to struggle with the conse- quences of the widespread unauthorized distribution of 4 its products. 1 The initial effect of new digital technology on the motion picture industry was nowhere near as damaging. gra Aan s Vs a s at f But even in the early days of MPEG, enterprising pirates urnprte ctvaedtialcpeso.u saw the potential of compressed digital video in the form of Video Compact Discs or VCDs. All but overlooked in the United States, VCDs gained widespread popularity in Asian markets following the MPEG advances. 15 From a technology standpoint, the principle couldn't have been simpler. VCDs took existing audio CD formats and, with the help of MPEG-1, added full-motion video that could Hollywood machine, then the current Internet culture is then be viewed by anyone with a personal computer a downright terror. With current MPEG-i and codec equipped with a CD-ROM drive and readily available video software components. 16 The effect on the movie technology, a full-length feature film can be condensed into a file as small as 600Mb, with relatively minimal industry, however, quickly proved to be as complex as it losses in sound and picture quality.1 9 While such file was subtle. Pirates who were accustomed to dealing in sizes still mean download times of several hours (or pos- bootlegged videos could now re-record and encode the sibly even days) for ordinary V.90 phone modems, users bootlegs as MPEG-1 files, which could then be burned 17 onto a VCD. From there, the normal channels of dis- with high-end broadband connections can download the tribution followed, but with one major difference. Having latest films in about the same amount of time it would been converted to a digital format, the bootlegged VCDs take them to drive to the nearest theater. The supply no longer suffered from the decreased quality associated side is handled by a new breed of digital pirates who use a combination of traditional Internet protocols such has grown immeasurably richer. Internet Relay Chat (IRC) and anonymous File Transfer Protocol (FTP) in addition to websites to promote and enforcing intellectualproperty rights distribute their wares free of charge. By offering hit in the digital age movies such as American Pie, Austin Powers: The Spy Who Shagged Me, and The Blair Witch Project within The question for Hollywood and the MPAA now mere days of their theater release, pirates like the infa- becomes how to secure what is rightfully theirs. But mous EviliSO20 have already gained worldwide attention while few wonder where the equities lie in most cases of by offering users some of Hollywood's biggest hits free of piracy, the success and innovations of the digital pirates charge. Perhaps the most anticipated film of the decade, cast some doubt on the present laws' effectiveness. In The Phantom Menace quickly became as prevalent and some ways, recent legislation has attempted to correct popular online as in theaters, much to the ire of creator the problem. In other ways, unfortunately, it has failed George Lucas. Reportedly, the newest James Bond to do so. movie, The World is Not Enough, found an Internet audi- The Constitution grants Congress the authority "to 2 1 ence even before its theater release. promote the Progress of Science and useful Arts, by The more mainstream threat could come from attacks securing for limited Times to Authors and Inventors the on Hollywood's own technological advances. Based on exclusive Right to their respective Writings and the relatively new MPEG-2 standard, Digital Versatile Discoveries." 24 Throughout the years, copyright has Discs () offer better compression of better pictures been recognized as a limited monopoly right necessarily and sounds. When DVDs were proposed, the film indus- arising from this language. 2 5 The primary benefits, 26 try found itself in a dilemma. On one side, the new tech- however, are meant to be public rather than private. nology combined digital audio and video to allow the As the Supreme Court noted in one landmark case, "the most faithful representation of a film outside of a theater. limited grant [of monopoly privileges via copyright] is a On the other side, and of extreme importance to an means by which an important public purpose may be industry already plagued by piracy, the potential for dig- achieved. It is intended to motivate the creative activity ital copies solved the film bootlegger's primary problem of authors and inventors by the provision of a special of the degenerating quality of analog copies. The com- reward, and to allow the public access to the products of promise was to protect DVDs through an encryption sys- their genius after the limited period of exclusive control '2 7 tem known as (CSS). In other has expired. words, CSS was intended as Hollywood's way of protect- During the period of limited monopoly, however, the ing its intellectual property rights in the digital age. owner of a copyright holds several exclusive rights But as all software publishers know, is regarding the use of the protected subject. 2 8 The devel- almost always short-lived. CSS proved to be no exception opment of copyright law since the passage of the 1897 Act when a 16-year-old Norwegian hacker seeking to create a has seen a steady rise in the criminal consequences DVD player developed a program called DeCSS attached to violations. 29 Whereas infringement once con- that stripped DVDs of their protective shell and allowed stituted only a misdemeanor, revisions quickly trans- copies to be made. 2 2 Despite the rapid legal and techno- formed it into a felony, with increasingly severe penalties 30 logical responses described below, the spread of DeCSS to in the 1909, 1976, 1982, and 1997 versions. Willful all corners of the world via the Internet has opened the copyright infringement for commercial purposes, such as floodgates for DVD piracy. It's not difficult to see what the sale of bootleg films, now constitutes a criminal path this will take. With over 4,000 films currently avail- offense 31 punishable by fines and jail terms proportional able on DVD in the United States and over 40 new titles to the value of the pirated works. 32 On the proper set of being added every month, the DVD format is a critical facts, courts have little difficulty applying the law to the part of the industry's future. 23 DeCSS places that future full benefit of copyright holders.3 3 In fact, some courts on the same unsteady technological footing as audio CDs. have been willing to affirm copyright infringement con- Would-be pirates need only "rip" the contents and burn victions based on simple circumstantial evidence. 3 4 As them onto blank CDs-or simply offer them for direct one court put it, "Nothing in the record suggests that downloading. In either case, the digital pirate's treasure motion picture copyright holders ever grant permission to other persons to copy and distribute their products influence of copyright infringers, especially those operat- without receiving anything in return, let alone to video ing on the Internet. 3 7 CCIPS's staff of roughly two dozen 3 5 store owners, one of their most important markets." attorneys with specialized technical knowledge organizes One of the problems in obtaining a conviction lies with and executes plans in coordination with various enforce- finding the defendant. Often transporting and market- ment agencies aimed at stopping high-tech crimes such ing their wares from foreign countries, modern-day as digital piracy.38 In 1996, CCIPS began its first major pirates are adept at avoiding law enforcement agents. anti-copyright infringement initiative, called "Operation Even when a group or individual is located, studios rou- Counter Copy."39 By April 1997, its efforts had produced tinely must choose between being denied domestic judi- 35 indictments throughout the United States, including cial relief because of jurisdictional limitations, or taking several based on the illegal copying and/or distribution of 40 their chances with the often inadequate relief offered by films. In addition to Operation Counter Copy, the DOJ foreign courts. 3 6 Pirates operating online are even more has also recently coordinated its anti-piracy efforts with elusive, immune from a legal framework that never the FBI and United States Customs officials in a joint anticipated their presence-or rather, their omnipresence. Intellectual Property Rights Initiative started in July True "phantom menaces," they can appear and disappear 1999.41 Focusing especially on known problem areas, at will, cross all the world's borders at once, and cause mil- including domestic ports in New York, New Jersey, and lions of dollars' worth of damage with a day's work. South Florida, where intellectual property crimes tend to One possible solution has been increased regulatory be the most prevalent, the new task force aims to combat 42 efforts. This is the aim of the Department of Justice, the problem both domestically and internationally. whose Computer Crime and Intellectual Property Moreover, the industry itself has consistently sought Section (CCIPS) was created to battle the ever-expanding to defend its own products against acts of piracy.

DivX and Wraoster-

It's easy to see why Hollywood loves sequels. Relatively easy of hackers who took existing software and modified it to serve to produce and even easier to market to a predisposed audience, an unintended purpose. The Wrapster revelation involves 'wrapping" files so that they appear movies are the closest the industry can come to a to be MP3s, the only cur- sequels to hit 5 sure thing. But as digital pirates begin to craft their own fol- rency that Napster users are able to trade. Once this is done, like DeCSS, only one thing is sure: Hollywood any type of file, including everything from software applica- low-ups to "hits" 6 won't love these sequels. tions to movies, can be exchanged through Napster. Built on new MPEG technology, DivX is the latest word in The MPAA's preliminary success in combating DeCSS may audio/video compression.' Its authors, two hackers known only hint at a short lifespan for both DivX and Wrapster. But with as "MaxMorice" and "Gej," combined MPEG-4 video output new tools of piracy springing up virtually every week, it may with an MP3 audio stream to create the basic compression stan- not matter much. In either case, Hollywood can look forward to dard.2 From there, playback of DivX files required only a sim- another season of sequels appearing soon on PCs everywhere. ple modification to Microsoft's Media Player. The audio-visual CHRON., March 28, improvements were readily apparent in a recent test conducted ISee Online Movie-swapping Sites Spring Up, HOUSTON by CNET.com. According to CNET's report, a 667 MBDivX ver- 2000, at 4. As noted there, this DivX bears no relation to the recently aban- sion of Mars Attacks! Managed VCR-quality playback even in doned DVD timed.rental scheme. 3 2 5_ John Borland, Hacked Video Technology Provides Look at MP3-like Films full-screen mode. Another recent sequel is gaining much more notoriety, how- (visited on March 27, 2000). ever. Some of the attention no doubt comes primarily 4 reflection of that focused on the original-the infamous 4See P.J. Huffstutter & Greg Miller, Hackers Find New Uses for Song-swap Napster. By allowing users to pool their collections of MP3s in 2000, at C1. a single shared network environment. Napster quickly became Software, L.A. TIMES, March 24, 5 See Fiona Harvey, Inside Track: Alarm over Wrap'Music, FIN. TIMES one of the most popular and most controversial Internet appli- (LONDON), March 28, 2000, at 16. cations. 4 Its unofficial successor, Wrapster, seems capable of 6S ueid. displacing Napster in both areas. Like DivX, Wrapster is work Predictably, the MPAA and MPA have led the way. As While promising on paper, the amendments have been noted earlier, the MPAA and its international alter-ego somewhat less effective in practice. Since its passage in direct a comprehensive worldwide anti-piracy effort. By 1997, the NET Act has produced a grand total of one fed- working independently and through local authorities and eral conviction-that of a University of Oregon student legal systems in numerous countries, the organization sentenced to two years conditional probation for provid- acts as a strong advocate for the American motion picture ing for download a number of pirated software programs, 52 industry's intellectual property rights. In addition to the films, and audio recordings. Pirate groups such as MPAA, individual studios and producers have occasion- EviliSO remain hidden away in the numerous dark cor- ally taken steps to defend their interests in their prod- ners of the global network, insulated from laws that can- ucts. Most recently, and most notably, George Lucas and not punish virtual defendants. Even assuming an even- Lucasfilm, Inc. adopted a hard-line stance against tual discovery, it remains unclear whether the albeit threats of digital piracy. Even prior to the release of expansive definition of "financial gain" in the Act actually Lucas' long-awaited Star Wars, Episode I: The Phantom covers intangible benefits like fame among fellow pirates. Menace, the studio began issuing notices to various web- If notoriety is all that a given pirate receives or expects to site operators, warning of the consequences of online receive for his efforts, will the NET Act be enough? copyright infringement. When reports of pirated copies Perhaps not wanting to bet its future on the answer, of the film surfaced, attorneys for Lucasfilm sent cease- the MPAA has centered most of its recent infringement and-desist orders to several website operators who had claims around another new legislative enactment 43 posted infringing material on their sites. designed in part to combat digital piracy. Passed in 1998, Another possible solution to the problems of enforce- the Digital Millennium Copyright Act (DMCA) was ment came in the form of the No Electronic Theft (NET) quickly hailed as the revolutionary panacea of which the Act, which closed some of the holes of traditional copy- evolving global electronic marketplace was in sore 5 3 right law.44 Before the 1997 passage of the NET Act, need. While portions of the Act may represent Title 17 of the United States Code criminalized only will- advances in Internet law, several sections raise doubts of ful copying intended to bring about some tangible form of whether even such omnibus legislation could ever match financial gain.4 5 Consequently, in United States v. the versatility and creativity of the digital pirates. LaMacchia, the defendant, a student at MIT, had created Like the NET Act, the DMCA has an attractive ring to a software piracy ring where users could post and down- it-especially to the ears of the MPAA, RIAA and 46 54 load illegal copies of popular software applications. Software and Information Industry Association (SIIA), While recognizing the economic harm of LaMacchia's all of which lobbied heavily for its passage. But, as with actions, the court, restrained by the language of the the NET Act, the value of the DMCA to the film industry statute then in effect, concluded that the case had to be in particular remains largely speculative. The test cases dismissed due to the absence of commercial motivation or that are just now surfacing may present more questions financial gain by LaMacchia. 4 7 On such a rationale, it is about the legitimacy of the DMCA than remedies for easy to see how the same loophole applies to digital aggrieved copyright holders. pirates like EviliSO, whose reward is often merely the Any regulatory solution points back to the familiar fame and prestige obtained in certain circles for their problems of enforcement. Arguably, the DMCA fares no successes. 4 8 To address this "profitless piracy," the NET better than traditional copyright law in this arena, Act amended portions of the Copyright Act, making it thanks in part to its handling of online service provider 55 illegal to reproduce or distribute copyrighted works (OSP) liability. Traditionally, common carriers have whose combined value exceeds $1,00049 or to infringe on been exempt from liability for copyright infringement for any copyright "for purposes of commercial advantage or merely providing the facilities that link sender and private financial gain." 50 The expansive effect of the receiver, as long as they retain no control over the actual 56 amendment truly becomes clear when one reads the def- content of the transmissions. However, copyright law inition of "financial gain," which according to §101, also specifies that assisting another party in its direct "includes receipt, or expectation of receipt, of anything of infringement of a copyright itself can support charges of "contributory" 57 value, including the receipt of other copyrighted infringement. In some early Internet 1 works." 5 copyright infringement cases, aggrieved plaintiffs, unable to track down the direct infringers, sought to use Here again, however, strong enforcement measures the contributory infringement doctrine as a means of are tempered with several lenient sections. Title II clear- gaining relief from the OSPs instead. Landmark cases ly states that qualification for the liability exemptions 5 8 59 such as Sega Enterprises and Playboy Enterprises, does not require an OSP to monitor its service or affir- both of which held OSPs liable for the illegal actions of matively seek out information about copyright infringe- their users, gave copyright holders a powerful weapon ment by its users. This leaves copyright holders like the against infringement-if they couldn't find the actual typical film studio in the familiar position of having to source of the problem, they could simply shut down the investigate and pursue suspected instances of piracy. access point. In reality, however, these cases presented a serious obstacle for the survival and growth of the Internet, one qucl hale as the reouinr that found its remedy in Title II of the DMCA. Subtitled the Online Copyright Infringement Liability Limitation Act (OCILLA), Title II sought to limit the exposure of OSPs to consequences arising from the improper actions of users. It outlines four "safe harbor" areas under which an OSP 6° remains immune from liability for possible needt. h ilen otie f o the at ow contributory copyright infringement. 61 The first area deals with transitory communications, covering all trans- OSthemseilv mileniu relicoprightcurbeve act missions for which the OSP remains a passive conduit -ee ral s ct e s no d b lt s o and refrains from any participation in, or interference spacenance of wifringeeolingslth bsus with, the materials being exchanged. 6 2 The second ec assonitr omathetoldge wasuirmnsorte encompasses caching activities, whereby an OSP might temporarily retain user materials on its system in order to deliver them more quickly to future recipients. 63 The third exemption applies to storage services, providing fatrreai crustaancesf ohrmw e blockih inernp r ates. e la wvty that OSPs may not be held liable for any user's infring- ing materials appearing on their systems as long as the OSPs themselves possess no real incentive beheotshuersev end u omibu aTileislationto curb even OSP has no actual knowledge of the material and derives suspected instances of infringement, so long as the sus- 64 sacoulddivua miatch the veilrstity ahnd no financial benefit from it. The final area covers infor- picion falls short of the knowledge requirements of the mation location tools such as link lists and search statute. Thus, absent notice from the copyright owner, engines, which remain free from liability for any copy- "actual knowledge" of infringement, 7 0 or "aware[ness] of 6 5 right infringement that may occur on a target web site. facts or circumstances from which infringing activity is Despite these rather expansive "safe harbors" for apparent" 7 1 an OSP bears no real risk of liability on OSPs, other provisions of Title II do require that OSPs behalf of its users. The end result is that Title II's mes- abide by copyright law. In order to be eligible for the sage to individual pirates is similarly tepid: when the exemptions discussed above, an OSP must adopt, imple- party gets shut down on one block of the Internet, it's ment, and inform its users of a policy providing for ter- simply time to move on to the next block. mination of accounts that repeatedly make use of infring- So far Hollywood's best weapon has been a different 66 ing materials. Similarly, OSPs must designate an section of the DMCA-Title I's prohibition on circum- agent to receive notices of infringement from copyright venting copy protection systems. Title I, Chapter 12 6 7 holders, then comply with all reasonable requests to specifies in part, "No person shall manufacture, import, remove the infringing content.68 Finally, in what may be offer to the public, provide, or otherwise traffic in any the most powerful single clause of Title II, copyright own- technology, product, service, device, component, or part ers are granted the right to obtain subpoenas requiring thereof, that... .is primarily designed or produced for the the OSP to turn over the account information of an purpose of circumventing a technological measure that infringing user for purposes of identifying and locating effectively controls access to a work protected under this 6 9 that user. title."17 2 These words appear to give the MPAA a strong weapon against the parties responsible for creating and both instances, the court refused to find the requisite ele- distributing DeCSS, a weapon that its members quickly ment of good faith, citing particularly the obvious lack of 8 0 used to gain an injunction against the continued dissem- authorization by plaintiffs. Finally, defendants made a 7 3 ination of the circumvention utility. broadside attack on the DMCA, challenging its constitu- 8 1 In that case, defendants posted copies of DeCSS on tionality on First Amendment grounds. To decide this their websites, one of which even went by the domain issue, the court implemented a balancing test, setting the name, . 74 Upon discovering the public interest in the type of speech (computer programs) 8 2 sites, plaintiffs immediately filed for an injunction, citing against the importance of government regulation. The the irreparable harm caused by threats to the DVD mar- critical concern in striking this balance, and ultimately ket and their overwhelming likelihood of success based in granting the injunction, might just as well have come on the DMCA. 75 Besides attempting to use the OSP from the mouth of MPAA President Jack Valenti himself: exemptions discussed above, defendants utilized two The dissemination and use of circumvention other portions of the DMCA to counter plaintiffs' claims technologies such as DeCSS would permit anyone to make flawless copies of DVDs at little expense. Without effective limits on these technologies, copyright protection in the contents of DVDs would become mean- ingless and the continued marketing of DVDs impractical. This obviously would discourage artistic progress and undermine the goals of copyright. 8 3 Not everyone shares the MPAA's delight with the out- come of the DeCSS case. Private, nonprofit entities such of. - -nrigmetFist deedat sogtt ivk h p ratvestngi eein exepimed T at tlehwihatsing as the Electronic Frontier Foundation (EFF)8 4 and the the prto m am oth sec ure Campaign (GILC)8 5 challenge pat, "acerson who as demulyoansdthrt byus Global Internet Liberty the validity of not only the injunction, but also the whole ogleasta e iv cotrlsacese tofpr of the DMCA's Chapter 12. High-tech brethren of the ACLU, such organizations disagree with the New York district court's appraisal of the equities and constitution- al stakes involved in the MPAAs crusade to protect its to invoke the copyrights. According to a statement issued by GILC, coierstifof infringement. srng andFirst, defendantsdelzigthoermed sought lfteprga reverse engineering exception to Title I, which states in "intellectual property owners should not be allowed to thatesencessaryito acvnopritd ork.de part, "a person who has lawfully obtained the right to use expand their property rights at the expense of free a copy of a computer program may circumvent a techno- speech, legal reverse-engineering of software programs logical measure that effectively controls access to a par- for interoperability reasons, and discussions of technical '8 6 ticular portion of that program for the sole purpose of and scientific issues on the Internet. Whether the identifying and analyzing those elements of the program DMCA will continue to weather these assaults remains that are necessary to achieve interoperability of an inde- to be seen. Even if the Act survives further scrutiny, the pendently created computer program with other pro- MPAA might well wonder if it can safely entrust the grams."76 The court rejected this contention based on a future viability of its entire business model to controver- lack of evidence and on the legislative history of the sial, exception-ridden legislation. DMCA that suggested the reverse engineering provision was intended for "copyrighted computer programs only alternatives to existing avenues and [did] not authorize circumvention of technological of enforcement systems that control access to other copyrighted works, such as movies."77 Next, defendants asserted that their Of course, legislative solutions are hardly pointless conduct was proper under either the provisions for "good endeavors. Attempts to solve the problems posed by pira- faith encryption research" 78 or "security testing."179 In cy through traditional legal avenues must, and certainly will, continue to be pursued. But if even the most com- Perhaps the best path to curtailing the damage caused prehensive attempts at legislation still miss the mark in by piracy lies in realizing its primary cause is over- key respects, the movie industry can't afford to abandon whelming demand. It goes without saying that pirates the quest for better solutions. Where should filmmakers would not act without an audience, but the point here is turn if lawmakers cannot adequately protect Hollywood more subtle. Since 1990, Hollywood's box-office gross has and its intellectual property rights? increased 55 percent, with successively larger annual One possibility lies in the sort of self-help the industry increases occurring every year since 1995. 9 3 Theater has conducted since its inception. The MPAA and its ticket sales have increased dramatically as well in the member studios are no strangers to the tenets of self- last five years,9 4 even though annual admission prices defense. Proactive strategies aimed at thwarting pirates' have consistently outpaced the growth of the Consumer activities, as demonstrated by George Lucas' aggressive Price Index (CPI) over that same period. 95 Meanwhile, defense of The Phantom Menace, both secure immediate studios are releasing roughly the same number of films protection and simultaneously signal to would-be copiers as in years past in response to the increased public a strong and determined legal presence behind a copy- appetite for their products. 96 Also, it is significant that righted work. Unfortunately, the end result still relies the countries where piracy has been the most rampant heavily on the adequacy of the law. Moreover, even the are those that must wait the longest for Hollywood films best plans can backfire-some writers have argued that to arrive. 97 While the market volume filled by pirated Lucas' efforts merely intensified the piracy by creating a films may exceed the true gap between the supply of and stir around what had been a relatively quiet under- demand for movies, Hollywood may well be inviting some 8 7 ground phenomenon. degree of piracy through its own inflexibility. In other A second, and likewise familiar, alternative involves words, when ticket prices steadily rise, global releases utilizing evolving technology to stay one step ahead of lag behind North American releases by weeks or months, the pirates. DVD represented a significant technological and a popular movie takes anywhere from three months advance; CSS, on the other hand, did not. Roundly criti- to a year to find its way from theaters to the home video cized by experts as inferior encryption, CSS begged to be market, is it any wonder that pirated copies of those very cracked. 88 An enhanced system of protection is the next films find such eager audiences? logical step for DVD, but a broader perspective might An alternative presents itself in same place where suggest that Hollywood needs to explore other technolo- alternatives to Hollywood always present themselves- gies as well-such as delivering content online directly independent film. Independent filmmakers have not instead of being beaten to the punch by pirates. only begun to embrace the opportunities that the Already, several companies have begun to explore the Internet provides, but they have also shown a willingness possibilities of offering properly licensed video content to experiment with changes to the tried-and-true straight to consumers over the Internet. For instance, Hollywood business model. One of the more celebrated Sightsound.com allows users to download numerous fea- films of recent years, The Blair Witch Project, lends a ture-length films 89 for a small fee,9 0 then watch them on good example of this trend. What was initially a modest their PCs in much the same way that a pirated film effort by two graduates of the film program at the would be viewed, but with the benefit of higher quality. University of Central Florida became the most profitable Another company, Tranz-send, operates a site called film ever produced by means of a simple, yet revolution- Clickmovie.com, where it eventually plans to enable ary strategy. The film's distributor, Artisan users to view virtually any movie ever made on Entertainment, embraced the Internet, creating a mar- demand.9 1 According to the site's operators, broadband keting phenomenon based almost entirely around the connections and emerging compression technology will operation of a single website. There was no grant of soon allow Clickmovie.com to deliver full-length, DVD- immunity from the pirates; The Blair Witch Project went 92 quality feature films to users in a mere 15 minutes. on the list of conquests as well. But so successful was the While the extent to which Hollywood will utilize such use of the Internet that when the pirated copies merely avenues of distribution remains unclear, they certainly created more buzz about the film, critics and fans won- represent a more desirable, and more profitable, alterna- dered aloud if the filmmakers themselves had intention- tive than that offered by the pirates. ally leaked the copies. 98 Artisan wasn't finished. Even while its film was still enjoying a successful theater run, from similarly afflicted industries, such as music or soft- it organized and executed a highly profitable video ware, do. Because of the unique attributes of film and release to coincide with the Halloween season. This early the social aspects of "a night at the movies," even a per- introduction to the video market not only capitalized on fect copy of a DVD doesn't replace the full scope of what the lingering effects of the original advertising campaign, Hollywood provides. If only because of the big-screen allure but also preempted much of the interim demand tradi- of theaters, the basic Hollywood model is bound to remain tionally filled by pirates. Artisan and the two young film- viable no matter how rampant digital piracy becomes. makers had, in a sense, pirated their own film-and Nevertheless, the dangers posed by the Internet and turned an incredible profit by doing so. the emergence of new technologies have made digital pirates more than just a "phantom" menace. Free, illegal the end copies of films available to anyone with Internet access create a serious threat to intellectual property holders Make no mistake: Hollywood will survive the digital that cannot be denied. Hollywood must respond strong- onslaught just as it and its industry compatriots have ly, but carefully. It must use the laws available to it, survived the many precursors. As one commentator has while realizing that it cannot afford to wager its entire remarked, "During the past twenty five years, copyright future on the illusion that legislation can keep pace with holders have repeatedly preached the coming of the technology. It must continue to use the self-help reme- Apocalypse as new technologies for copying and distrib- dies it has developed over years of battling similar uting works became available. VCR spells doom for threats, while recognizing the ways in which this threat movie producers. Photocopiers will ruin academic pub- differs and tailoring its actions accordingly. Finally, it lishers. Digital audio tape means the end of the music must work to ensure the continued viability of its exist- industry. And so on." 99 Industries founded on creativity ing technologies, while never allowing itself to become aren't likely to roll over in the face of competition. trapped in the inflexible confines of a business model Arguably, the film industry's responses to the digital that may ignore emerging trends in the marketplace. * threat don't even require the ingenuity that responses

1 See Valenti Warns the Dangers of Internet PiracyBefore CongressionalSubcommittee (visited on Oct. 28, 1999) 11 The International Organization for Standardization (ISO) is a non- . governmental entity comprised of roughly 130 member states that develops and implements uniform technological standards. Through 2 Id. subsidiary groups such as MPEG, it provides worldwide standard specifications for everything from paper sizes to credit card formats to 3 Id. film speeds. See Introduction to ISO (last modified May 11, 1999) . 4 See MPA Anti-piracy (last modified June 15, 1998) 12 See Leonardo Chiariglione, About MPEG (last modified May 29, . 1999) . 5 See id. 13 Obviously, MP3 file sizes vary according to the length of the origi- 6 See MPA Anti-piracy Contact/Reward Program (last modified nal audio recording. In general, however, sizes can be estimated November 19, 1999) . The MPAA maintains an informant reward system, ly 1Mb of data. Given that the average pop song (the source of most whereby individuals are encouraged to call a toll-free number (1-800- of the MP3 controversy) ranges from three to six minutes, the average NO-COPYS) or send e-mail with tips concerning suspected piracy. MP3 file will range from 3Mb to 6Mb. Similarly, depending on the Informants may remain anonymous and are compensated for their connection used, download times for such files will generally range seconds for broad- information based on its utility (e.g., only information leading to an from 10 to 20 minutes for phone modems to mere arrest is rewarded; tips on pirate labs carry a higher reward). band. 14 Mark J. Plotkin, The limes They are a Changin: The Digital 7 See MPA Anti-piracy, supra note 4. Performance Right in the Sound Recordings Act of 1995 and The 8 See id. Digitial Millennium Copyright Act of 1998, 1 VAND. J. ENT. L. & PRAc. 46, 48 (1999). 9 See id. 15 Pirate's Paradise,ECONOMIST, Oct. 16, 1999. 10 See id. 16 Special VCD players that operated much like normal VCRs were 35 See id. at 434. also (and continue to be) available and quite popular in other coun- tries. 36 See Meredith A. Harper, InternationalProtection of Intellectual Property Rights in the 1990s: Will Trade Barriersand Pirating 17 One of the limitations of the VCD format, however, is finite storage Practices in the Audiovisual Industry Continue?, 25 CAL. W. INT'L L.J. space. Just as audio CDs are limited to around 74 minutes of audio 153, 161 (1994). recordings, VCDs can hold no more than 70 minutes of video. As a result, feature-length films require at least two, and sometimes three, 37 See CCIPS: What Does CCIPS Do? (last modified February 28, VCDs. Besides giving the desired improvements in audio-visual qual- 2000) . ity, the advanced compression technology used for DVDs provides the See id. solution for the double disc problem. 38

18 See Valenti Warns the Dangers of Internet PiracyBefore 39 See Justice Department, FBI Release First Results of Nationwide CongressionalSubcommittee, supra note 1. Valenti notes, "The Crack Down on Criminal Trademark and Copyright Fraud (May 8, 1000th copy of a digitized movie is as pure as the original, whereas in 1997) . analog each copy is degraded in quality." 40 See id. 19 The goal of the MPEG-1 standard was to maintain a video quality 41 See Justice Department, FBI and Customs Service to Combat comparable to that of VHS videotape. However, once the compromises in sound and picture that accompany most bootlegged originals are Intellectual Property Crime (July 23, 1999) . in quality over their videotape counterparts. 42 See id. 20 Once known as Zorro because of the signature "Z" left at the bot- tom corner of the screen in its bootlegs, the newly re-handled EviliSO 43 See Steve Wilson, Online Piracy Thrns From Music to Movies, N.Y. group has drawn considerable attention due to its prolific efforts to TIMES, July 29, 1999, at 1. spread digital piracy. Assigning a number to such efforts would be mere speculation, but seemingly few of Hollywood's 1999 blockbusters 44 See Wu, supra note 29, at 528. For a look at exactly how the NET like The Phantom Menace and Austin Powers: The Spy Who Shagged Act amended Title 17, see The No Electronic Theft ("NET') Act (last Me have eluded EviliSO. modified March 30, 1998) . 21 Internet PiratesBootleg New Bond Movie, DVDs, TORONTO STAR, Nov. 10, 1999. 45 See 17 U.S.C. § 506, prior to 1997 amendment.

22 Benny Evangelista, Digital Dupes, S.F. CHRON., Jan. 31, 2000, at 46 See United States v. LaMacchia, 871 F. Supp. 535, 536 (D. Mass. B1. 1994).

23 See Universal City Studios, Inc. v. Reimerdes, 82 F. Supp. 2d 211, 47 See id. at 545. 214 (S.D.N.Y. 2000). 48 See Wilson, supra note 43 at 1. 24 See U.S. CONST. art. I, § 8, cl. 8. 49 See 17 U.S.C. § 506(a)(2). 25 See Sony Corp. v. Universal Studios, Inc., 464 U.S. 417, 429 (1984). 50 See 17 U.S.C. § 506(a)(1). 26 See id. 51 See 17 U.S.C. § 101. 27 Id. 52 See Sean B. Hoar, First Criminal Copyright Conviction Under the 28 See 17 U.S.C. § 106. "No Electronic Theft" (NET)Act for Unlawful Distributionof Software on the Internet (visited on August 20, 1999) . Toothless Tiger?, 39 J.L. & TECH. 527, 529 (1999). 53 See Pub. L. No. 105-304, 112 Stat. 2860 (1998, amending sections 30 See id. of Title 17).

31 See 17 U.S.C. § 506. 54 Software and Information Industry Association. This "new" trade association was formed on January 1, 1999, when the Software 32 See 18 U.S.C. § 2319. Publishers Association and the Information Industry Association joined forces. See SIIA Online (last modified March 22, 2000) 33 See generally United States v. Larracuente, 952 F.2d 672 (2d Cir. . 1992) (affirmingdefendant's copyright conviction for making unautho- rized copies of videotapes). 55 See 17 U.S.C. § 512.

34 See United States v. Cohen, 946 F.2d 430, 435 (6th Cir. 1991). 56 See 17 U.S.C. § 111(a)(3). 57 See Gershwin Publ. Corp. v. Columbia Artists Mgmt., 443 F.2d EFFdocs/about eff.html>. 1159, 1162 (2d Cir. 1971). 85 See Global Internet Liberty Campaign Principles(last modified

58 See generally Sega Enterprises. Ltd. v. MAPHIA, 857 F. Supp. 679 July 17, 1998) . (N.D. Cal. 1994). 86 Global Internet Liberty Campaign Member Statement In Defense of

59 See generallv Playboy Enterprises, Inc. v. Frena, 839 F. Supp. 1552 Free Speech on the Internet (visited on January 14, 2000) . (M.D. Fla. 1993). 87 See Wilson, supra note 43 at 1. 60 Under OCILLA, the definition of an OSP varies according to the "safe harbor" limitation being considered. For the first limitation, the 88 See Scott Brader, DVD and the Digital Copyright Act (visited on definition appears quite narrow and may not include new Internet February 4, 2000)

90 SightSound.com's prices vary depending on the title and length of 62 See 17 U.S.C. § 512(a). license, ranging anywhere from $3 for a five-day rental to $20 for a 63 See 17 U.S.C. § 512(b). permanent copy of some films.

91 See Doug Bedell, Coming to a PC Near You: first-run movies begin 64 See 17 U.S.C. § 512(c). to roll into homes, raising chills in Hollywood, DALLAS MORNING NEWS, 65 See 17 U.S.C. § 512(d). Aug. 17, 1999, at 1F, available in 1999 WL 24152985.

92 See id. 66 See 17 U.S.C. § 512(l).

67 See 17 U.S.C. § 512(c)(2). 93 See 1999 US Economic Review: US Box Office (lastmodified March 7, 2000) .

69 See 17 U.S.C. § 512(h). 94 See US Economic Review: US Box Office (last modified March 7, 2000) .

71 See 17 U.S.C. § 512(c)(1)(A)(ii) and § 512(d)(1)(B). 95 See 1998 US Economic Review: US Box Office (last modified March 7, 2000) .

96 See US Economic Review: Films Released (last modified March 7, 73 See generally Universal City Studios, 82 F. Supp. 2d 211. 2000) .

97 For instance, The Phantom Menace was released in the United 75 See id. at 215. States on May 19, 1999. Though pirated versions began to appear in 76 See 17 U.S.C. § 1201(l). Europe and Asia within days, the film was not officially released in many of those markets for weeks. China found itself near the end of 77 Universal City Studios, 82 F. Supp. the release schedule and didn't see its first authorized glimpse of the 2d at 218. h film until November 5 t , nearly seven months after the U.S. release. 78 See 17 U.S.C. § 1201(g). See Release Dates for Star Wars: Episode I - The Phantom Menace (1999) (visited April 2, 2000) .

Studios, the eventual distributor, 80 See Universal City Studios, 82 F. Supp. 2d at 218-19. 98 Both the filmmakers and Artisan denied that this was the case. 81 See id. at 219. 99 Michael J. Meurer, PriceDiscrimination, Personal Use and Piracy: 82 See id. at 221. Copyright Protection of Digital Works, 45 BUFFALO L. REv. 845, 846 (1997). 83 See id. at 222-23.

84 See About EFF (lastmodified April 2, 1999)